Free Societies

Javier Milei’s rise in Argentina carries a valuable lesson for Americans

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Brad Lips

Brad Lips | CEO, Atlas Network

This op-ed originally appeared in The Hill.

Long-suffering Argentines voted for change on Nov. 19, when they gave a landslide victory to Javier Milei, a self-proclaimed “libertarian” who brought rock-star theatrics to the political stage. Most sensationally, Milei has theatrically wielded a chainsaw to signal his intention to make serious cuts in Argentina’s bloated government.

Can Milei make good on his promise to be a bold agent of economic reform? That remains to be seen. To pass legislation and govern effectively is challenging for any incoming president. It will be especially so for an outsider like Milei, whose agenda threatens the jobs of bureaucrats capable of throwing sand in the gears of government.

Despite the uncertainty ahead, something noteworthy has happened in Argentina, and it offers an important lesson for Americans. It is possible to shift the “Overton Window” — the range of public policy alternatives considered reasonable by the public — to include a fundamental downsizing of the government’s role in our lives.

In Argentina, limited government is sorely, desperately needed. Argentina ranked among the most prosperous nations in the world in 1900, but the quasi-fascist style of government introduced by Juan Perón in the 1940s, after eight decades, has ruined it. Government interference in the workings of the economy has suffocated the vitality of a once-great nation.

Today, Argentina’s annual inflation rate stands at 185 percent. This is forcing citizens to cut back on basic products and endure severe price fluctuations. The Argentine peso, which one year ago traded at 300 for one U.S. dollar on the street, is now 1,000 per dollar. Only 6 million of Argentina’s 45 million people have private-sector jobs, and this number has grown only t3 percent over the past 12 years, compared to a stunning 34 percent growth in the number of government employees.

In these dire circumstances, it’s no wonder an outsider with new ideas has captured the hearts of voters. The economist Milton Friedman once observed that major policy changes tend to happen only during a crisis, and that “the actions that are taken depend on the ideas that are lying around.” We can credit Argentina’s civil society for leaving the right ideas where someone would find them.

Last month, Argentines made sure that a pro-freedom agenda, based on sound economic principles, is “alive and available” when the country needs alternatives to an unsustainable status quo.

Think tanks such as the Rosario-based Fundación Libertad and scholars like Professor Alberto Benegas Lynch have spent decades explaining the advantages of market exchange, compared to the statism that has long dominated Argentina. Another public policy institute in Buenos Aires, Libertad y Progreso, has worked tirelessly to educate the public about the dangers of expansive government, proposing practical, feasible reforms to reduce duplicative government agencies and burdensome regulation.

Meanwhile, Asociación Argentina de Contribuyentes — the Argentinian Taxpayers Association — has become a strong voice on behalf of pro-growth tax reform, winning a tax reduction for millions of small businesses in 2020 and educating citizens on how private enterprise creates jobs. Such efforts may seem small in isolation, but they add up to something greater than the sum of their parts: a deep understanding of the harm that Peronism has inflicted on Argentines.

Americans who believe in limited government should be cheering on the free-market community in Argentina that seeks to undo decades of interventionist chaos and set a new example for the hemisphere. We can also take to heart that we need robust civil society efforts in the U.S. along the same lines, explaining to young people and other audiences the dangers of unwieldy government and the wisdom of the American Founders.

Politicians more often use crises to restrict the Overton Window, while proposing ever-larger government interventions. This moment of hope in Argentina shows us the other side of that coin — that in times of crisis, the Overton Window can shift dramatically in favor of freedom.

Americans should learn from this that we can’t assume our free society institutions will last without our active engagement. The Argentine experience also provides a sobering warning that Milton Friedman may be right — that Americans may not be willing to correct our course until we, too, face an existential crisis.