Milei’s Challenge is Slaying the Dragon

by | Nov 29, 2023 | Argentina, Biden Administration, Blog Articles, Economy, Finance, Geopolitics

image credit: Natacha Pisarenko/AP

To recover the stolen loot and fair maidens held in the dragon’s lair, the heroic knight must first slay the dragon. Merely injure him, and the fire-breathing monster will turn and devour the knight. So too it is when an outsider challenges an entrenched and corrupted government and political system as President-elect Javier Milei seeks to do in Argentina.

Last week, the trained economist and self-described anarcho-capitalist won the Argentinian presidential election in a landslide, capturing 56 percent of the vote. The lopsided victory revealed that the Argentinian people are fed up with the status quo. Milei’s anti-statist and libertarian economic views won wide support from a diverse group of voters exhausted and impoverished by decades of Peronist state socialism and rampant inflation. Milei campaigned on a platform that includes shuttering the central bank, dismantling the government bureaucracy by eliminating many of its inefficient and costly ministries, privatizing state-owned enterprises, closing the national deficit, and tying the monetary system to the United States dollar, explicitly affirming that the local currency (the peso) has already been rendered worthless and repudiated by Argentine citizens and businesses alike.

Milei acknowledges that the task will not be easy. The transition to a free-market economic and new monetary system will be painful and impose substantial short-term costs, including what could be a severe economic recession as the money supply is crimped to stop inflation. Milei’s challenges include gauging how much pain Argentinians are willing to endure (and for how long), notwithstanding the fact that they voted for it. The potentially more formidable obstacle is how much of a resistance the entrenched and powerful interests—which have benefited from the corruption and chaos—will mount to stop him.

When Donald J. Trump won the 2016 U.S. presidential election, the deep state was mobilized and worked tirelessly in a coordinated effort to undermine his struggle for transformation of the government, including his campaign promise to “drain the swamp” of the permanent bureaucracy in Washington D.C. While President Trump effectively accomplished a substantial number of his policy objectives, the relentless attacks, many of which were highly illegal and grossly immoral, were able to distract his administration and sabotage many of the most fundamental and far-reaching reforms. On the whole, the country was made better off under President Trump, but the dragon survived and determined to take revenge on the knight and his followers, which are still suffering from its wounded rage to this day.

President-elect Milei has surely taken note. He will face a similar guerilla insurgency in the form of a gobierno desde abajo (government from below), led by those whose power and wealth are threatened by Milei’s revolutionary zeal and far-reaching campaign promises.

Because he was so clear-cut in articulating his objectives, and his means to achieve them, Milei has lost the element of surprise. The counter-revolution is already plotting how to best stymie his policy ambitions. In a different political environment, the United States could have been allied and provided significant help in aiding the pro-market reforms through massive economic, financial, and trade support. However, by having aligned with MAGA and other conservative political movements around the world, Milei is unlikely to receive more that token and lukewarm lip-service from the Biden administration. Any substantive assistance from the U.S. may be more than a year off, an eternity in politics. These points aren’t made in criticism but merely to acknowledge the situation as it is.

Milei must therefore rely on speed, capturing the momentum the electoral victory has brought. He must bring to bear all the expertise that he can muster, and quickly, while at the same time keep the populist base that brought him to power mobilized and energized. “We the People” must peacefully yet forcefully kick up as much dust as possible to pressure the bureaucrats and moneyed interests. Milei must seek to build alliances both domestically and internationally, while keeping one eye on the military and intelligence services, which may prove to be a wild card in the transition, either for good or for ill.

What happens from here in Argentina matters greatly for the U.S. and for countries throughout Europe and Latin America. Argentina, once the crown jewel of Latin America, now lies sullied in the mud. If the nation can be restored to her former greatness, Argentina can be a shining “city on a hill” for the continent, and serve as an example for the United States going into the next presidential term. The next few years may be the last chance for both Argentina and America to rebuild what has been devastated by years of statist socialism and corruption.

President-elect Milei, the eyes of the world are on you.