Lord Hannan of Kingsclere was a Conservative MEP from 1999 to 2020, and is now President of the Institute for Free Trade.
I knew Javier Milei, the incoming President of Argentina, before he was cool. Actually, that’s not quite right. The leather-jacketed, shock-haired TV personality has always been a lot cooler than any economist has a right to be. But I knew him before he was famous.
It was in 2021, during his first parliamentary campaign, that I came across his catchphrase “¡Viva la libertad, carajo!” (roughly “Long live f***ing freedom!”) We started exchanging texts and, earlier this year, we had a convivial breakfast à deux in Madrid.
The winner of Argentina’s presidential election comes across in private much as he does in public: brilliant, eccentric, sincere, mercurial, impatient, demotic, indignant, mesmeric. As we chatted, I kept thinking of Coleridge’s line: “Beware! Beware! His flashing eyes, his floating hair!”
Milei’s personality, though, is secondary. The real question is how a self-styled anarcho-capitalist came to win 56 per cent of the vote.
No libertarian candidate has previously risen above single figures. In the United States, the Libertarian Party’s best performance was 3.3 per cent in the 2016 presidential election, when voters faced a repulsive choice between Hillary Clinton or Donald Trump. Until Sunday, the libertarian world record was held by New Zealand’s ACT, which got up to nine per cent at last month’s election under the impressive David Seymour.
So what was Milei’s secret? How did a former Tantric sex coach who names his dogs after Murray Rothbard, Friedrich Hayek, and Milton Friedman win such a convincing majority in the world’s eighth-largest country?
For an answer, look at the state of the Argentine economy. Inflation is running at 136 per cent, and interest rates at 133 per cent. Incredibly, these figures are nothing out of the ordinary. Since 1980, Argentine inflation has run at an average annual rate of 206 per cent, making for a total price rise since then of over 900 billion per cent.
Think what it would be like to live like that, and then ask yourself whether Milei’s promise to scrap the central bank, abolish the peso, close down most government departments, slash spending, and dismantle the apparatus of Peronist economic control seems so eccentric.
Argentina is a textbook example of a wealthy country destroyed by worthless politicians. At the end of the nineteenth century, it had a higher GDP per head than the United States, and the expression “riche comme un argentin” was a commonplace in Europe.
But it last had a properly free-market government in 1916. Since then, it has oscillated between left-wing populism and Peronism, broken by occasional bouts of military rule.
Each faction rewarded its client groups, immiserating the country as a whole. Argentina today is not so much socialist as corporatist. Successive governments have preferred regulation to ownership, setting prices and incomes, restricting trade, controlling the exchange rate. Result? Penury, mass emigration – and, refreshingly, an active free-market counterculture among young people.
Foreign media have rushed to liken Milei to Donald Trump, but the comparison is wide of the mark. Where Trump revels in his autocratic tendencies, Milei is a down-the-line libertarian who loves free trade, welcomes immigration, ignores culture wars, and has no problem with trans people (“provided they don’t send me the bill”).
There is, admittedly, a certain tonal similarity. Milei can be deliberately provocative and foul-mouthed, scandalising opponents and pundits, dominating the news cycle, and electrifying his supporters.
But comparable as the men might be in style, they are far apart in substance. The way they keep being lumped together bespeaks the parochialism of those leftists who think that if A and B separately disagree with them, A and B must be the same.
The only two policy areas where Milei is not uncomplicatedly libertarian are, oddly enough, areas where he none the less differs from Trump. Milei is (unusually but by no means uniquely for a libertarian) strongly anti-abortion, taking the view that the “life” bit of “life liberty and property” begins at conception. And, on foreign policy, where Trump is both bellicose and isolationist, Milei is strongly pro-Ukraine, pro-Nato and anti-China.
He takes the view that rows over the Falklands have been a distraction from Argentina’s real problems. As a matter of historical fact, he is correct. Few Argentines knew or cared about their claim until Juan Perón inflamed the issue in the late 1940s, a tactic used by every subsequent government when there is an economic crisis.
While no Argentine government will formally renounce its claim, Milei plainly does not intend to allow the dispute to stand in the way of friendly relations with the UK or of mutually profitable accords on fisheries protection, energy exploitation or infrastructure links.
None of this is going to be easy for him. The Peronist client state will fight furiously to defend its privileges. It defeated the only previous president to have spoken of reforms, Mauricio Macri. Milei, who has had mental health problems in the past, and who lacks organised support, will come under almost unbearable pressure.
When the disease is as far advanced as it is in Argentina, the cure is commensurately severe. Although an impressive number of Argentines, especially younger Argentines, understand that shock therapy is needed, most of the 56 per cent who voted for Milei were simply voting against cronyism and corruption. Their mood may change once cuts begin in earnest.
Yet the market rally suggests that there is at least some expectation that Milei will pull his country back from bankruptcy. And, in truth, he has no option but to push ahead. To let himself defeated, Macri-like, would be to admit that there is literally no way to slim an obese state.
This is going to get rough. As Milei put it on winning: “¡Viva la libertad, carajo! ¡Dios bendiga a los argentinos!”