The Next Steps for Argentina’s Renaissance

Last month, I shared this minute-long video to celebrate Javier Milei’s accomplishments but also to explain that more reforms are needed to unwind the 80-year disaster of Peronism.

I won’t rehash Milei’s accomplishments in this column, other than to direct people to my 10-part series (here, here, here, here, here, here, here, here, here, and here).

And for my left-leaning friends, I especially want them to notice what has happened to poverty since Milei took office and started shrinking government.

But the focus of today’s column is not on what has happened, but on what still needs to be done.

And we’ll begin by looking at what President Milei said in a just-released interview with Niall Ferguson for the Free Press.

…Our goal is to become the world’s freest country, and the second-generation reforms are the tax reform, the labor reform, and greater opening up to the world in terms of trade. And here the sequence is also very important. First, I will lower taxes, as that will make us more competitive and foster growth. Then, I will make the labor market more competitive in line with the tax reform, which allows for the creation of new jobs with better wages, which in turn allows me to open up the economy without creating unemployment. That virtuous circle leads to more growth, bringing down public spending relative to GDP. So I can again lower tax, and again move toward a better labor reform. And I can open the economy even further, and I can generate growth.

I’m very excited about his list of reforms because they match up exactly with the three policies that I identified in follow-up videos.

Here’s Part II in the series, explaining the need to liberalize labor markets.

Part III discusses the need to reduce Argentina’s tax burden.

Last but not least, Part IV explains the need to eliminate protectionism.

To achieve these three goals, it will be important for Milei to have more allies in Argentina’s Congress (the Peronists still dominate the legislature).

Fortunately, the outlook for the mid-term elections later this year is largely positive.

I’ll close by citing more of the interview. Milei isn’t just trying to change policy, he’s trying to change the culture.

…we are fighting to change the direction Argentina was going in for the past 80 or 90 years, almost 100 years, I would even say. Basically, that means breaking up the status quo. There are many groups that benefit from the old system. This includes not only thieving politicians; it also involves crony businesspeople and corrupt media. It also involves trade union leaders. And it also involves a whole bunch of professionals who try to set the agenda, and who are also subservient to that party of the state.

Peron’s statism was disastrous. Fixing 80 years of failure doesn’t happen overnight, but what Milei already has achieved is amazing.

Barring political setbacks, he could turn his country into another Hong Kong (the pre-China-crackdown version). It’s surreal to think that Argentina could become a global template for economic renaissance.