When I visited Argentina in 2022, 2023 and 2024, I saw firsthand the movement that promoted anarco-capitalist Javier Mairei in the presidency. His leadership has attracted a lot of attention from both left-wing anti-capitalists and libertarians. Some critics argue that his policies are deepening poverty, and his supporters see him as a sign of hope.
Argentina has a tough distinction. No other country has experienced such a dramatic economic decline over the past century. In the early 20th century, Argentina ranked the highest per capita income in the world. Phrases Riche Comme Un Argentin – “Rich as Argentina” – was commonly used at the time.
What can the Argentine experience teach us? Economic conditions often have to deteriorate dramatically before capitalist reformers gain traction.
From the late 19th century to the early 20th century, Argentina's per capita income exceeded that of Italy, Japan and France. By 1895, some estimates ranked the highest in the world. The country also recorded GDP growth of 6% per year for 43 years leading up to World War I. This is the largest sustainable growth in recorded history.
Argentina's economic success is not driven solely by the export of raw materials. Between 1900 and 1914, the country's industrial production tripled, achieving growth comparable to that of Germany and Japan. This boom coincided with incredible social advancements. In 1869, only 12% to 15% of the workforce belonged to the middle class. By 1914, that figure had risen to 40%. During the same period, illiteracy rates fell by more than half.
However, Argentine success stories replaced the unprecedented decline of the century. The country's actual GDP in 2018 had little risen from the 1913 levels. This is the lowest growth in all countries with available data over both years.
From Peronism to Deregulation
During my visit, I met Fausto Spotorno, the chief economist at Centro de Estudios Económicos, consulting company OJF. He shared impressive statistics. Since 1945, Argentina has faced almost continuous double-digit inflation, with one major exception. In the 1990s, President Carlos Menem locked the currency into the US dollar and eliminated inflation for a decade. However, this move has made Argentinean goods less competitive and exports more difficult.
For decades, Argentina has been deeply committed to statistics. Peronism, a government-centered ideology, served as the national religion of the country. But by 2022 I was already able to feel the change in the emotions of the nation.
I have traveled to several cities, including Coriantes, a place that reminds me of the South of France, close to palm trees and one of the largest rivers in the world. There I met Eduardo Tassano, the mayor of the city. I identified him as a Social Democrat, but when asked what he would change about Argentina, he surprised me. Without hesitation, he called for deregulation and tax cuts in the labor market. It's a clear indication that the libertarian idea is gaining traction.
When my survey on perceptions of the market economy was conducted in 2022, the results showed a major shift in public sentiment. More than a year before Mairei's election victory, the majority of Argentina saw the market economy more favorably than people in most other countries.
That same year I met some important politicians from the Mairay movement. Their innovative marketing strategies stood out. Milei attracted widespread attention by launching a lottery ticket. Anyone who registered via social media had the opportunity to earn a final month of council salary. Considering that Argentina's average income was around P60,000, the payment – P350,000, or around $1,800 in May 2022 – was significant.
The idea resonated. Within three months, 2 million Argentina registered for the lottery. Milei wanted to send a clear message, “I didn't enter politics because of money.”
Skepticism turns into self-confidence
I returned to Argentina shortly after the election of Mairei. When I arrived on November 19, 2023, I found two WhatsApp messages waiting on my phone.
“We won,” wrote a representative of the Mairay party. Over the past year and a half I often discussed the rise of Milei and believed he had a high chance of winning.
The second message came from José Fucs, editor of O Estado de S. Paulo, a leading Brazilian newspaper. “You were the first person to say that he had a great support in Argentina, mostly among young people, and that he could win the election,” he wrote.
I wondered whether Argentina would continue to support Mailei, even if his free market reforms initially exacerbated the conditions. Historically, other successful capitalist reforms under Britain's Margaret Thatcher and Poland's Lessek Barcelic have caused short-term economic pain before long-term profits. Do people have the patience and resilience to endure this lean age?
By August 2024, I had returned to Argentina for the third time. The public's sentiment remains promiley, with polls showing that over 50% of the population support him.
In Cordoba, Argentina's second largest city, I spoke at length with Mayor Alfredo Cornejo. A member of the Radical Party, he initially doubted Mairay's approach. But he told me that his skepticism had turned to confidence. In his view, Argentina was now moving in the right direction.
Free brace dosage
In Buenos Aires, I met Agustin Echburn, general director of libertarian think tank Livatado Y Progreso. He noted that Mairay continues to enjoy strong support from the young and poor.
“If they're criticizing him at all,” Etibalun explained. “That's because they believe he's not radical enough. They want him to take even more harsh actions against those who have been despiseed. Casta It ruined the country. ”
When Milei took office, Argentina's inflation rate was about 26% per month. It has now dropped to 2.3%. As I expected, the poverty rate first increased, but by the end of 2024 it was below pre-Millai levels.
One of Milei's most important reforms involved the bypass of intermediaries. Instead of focusing funds through left-leaning political organisations that support the poor but claim to have sucked up money, his government is now allocating aid directly to those in need.
“Mylay gives money directly to the poor, but the leftist organization is left empty-handed,” Etcheburn told me.
This shows the important difference between Mailei and former conservative President Mauricio Macri. Macri strengthened his unintended leftist opponent by distributing large cash payments during his management. By eliminating these intermediaries, Mairay ensured that Argentina's poorest citizens received more direct support than before.
What can the Argentine experience teach us? Like Britain in the 1970s, economic situations often have to deteriorate dramatically before capitalist reformers like Thatcher and Mylay gain traction. But that's not enough. Changes in public opinion must precede meaningful reforms.
Before Thatcher got excited, influential think tanks such as the Adam Smith Institute and the Economic Research Institute helped shape public discourse. In Argentina, libertarian think tanks played a similar role in laying the foundations of Mairei's presidency. Now he is enjoying the benefits of their efforts.
Editor's Note: This article is an excerpt from a new book by Rainer Zitelmann.The Origins of Poverty and the Wealth: Insights from My World Tour and the Global Libertarian Movement. ”
