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Is Javier Milei the First Chief of State to Talk—and Walk—Radical Capitalism?

By Walter Donway

January 27, 2025

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“The world described by Ayn Rand in Atlas Shrugged has become a reality.”

—Javier Milei, to the World Economic Forum, Davos, January 23, 2025

 

In the late 19th and early 20th centuries, Argentina was hailed as a nation destined for unparalleled prosperity. The phrase “Rich as an Argentine” captured the popular perception of and confidence in its future. “By 1896, Argentina had achieved remarkable parity with the United States in terms of per capita income. By 1913, its income per capita was at the same level as Western Europe’s and exceeded that of Italy, Spain, and Portugal by a wide margin.”

But decades that followed utterly thwarted those bright hopes and confident predictions.

Since its promulgation of the 1853 Constitution, Argentina had experienced strong economic growth and institutional modernization…. In the aftermath of the war, Argentina’s income per capita fell from a level approximating that of Switzerland to its current middle-income country status.

Numerous theories have been used to explain Argentina’s transition from a rich country to the underdeveloped one….The general thrust…emphasizes the role of the closing of the frontier expansion…immigration policies, underinvestment in human capital, the comparative advantage in agriculture and its adverse implications for technology, and the role of culture acting as a brake…

Argentina never finished the transition to the open democracy supported by the rule of law.

…Argentina’s institutional development differed from the United States, Canada or Australia in several key dimensions…Argentina never finished the transition to the open democracy supported by the rule of law. When the military formally broke the constitutional order in 1930, Argentina embarked on the path of unstable institutional development…transitions between dictatorship and democracy…it molded government-backed favoritism of dominant interest groups and encouraged pervasive rent-seeking instead of productive economic activity. [It]…condemned Argentina to decades of stagnant productivity and poor economic growth.1

Successive governments struggled to mount (or perhaps just identify) sustainable economic policies, but more often resorted to short-term fixes that briefly satisfied politics but exacerbated underlying problems. Call these “economic challenges”; more often they seemed to be a series of economic disasters and political tribulations. As a result, Argentina has grappled for nearly a century with endemic economic instability, sky-high inflation, and recurring debt crises.

 

The Milei Alternative

Against this backdrop, Javier Milei emerged as the first truly radical alternative to the political status quo in Argentina’s modern history, vowing radical overhaul of Argentina’s economic system and in particular imposition of chronically absent fiscal discipline. In November 2023, when 53-year-old Milei was elected president with close to 56 percent of the vote in a decisive run-off (his left-wing rival, Sergio Massa, winning 44%) Argentina was deep in economic crisis, which had seen annual inflation rise to 143% and 40% of Argentines living in poverty. The newcomer’s victory was called “a political earthquake.”2

Javier Gerardo Milei, born in 1970 in Buenos Aires and growing up in the Palermo neighborhood (where he played fourth-division soccer and was chief vocalist for a rock band), conceived an early interest in economics and politics. He studied economics at the Universidad de Belgrano, later earning advanced degrees from the Instituto de Desarrollo Económico y Social (IDES) and the Universidad Torcuato Di Tella. But his commitment to free market economics, including the Austrian School, was not the discovery of a undergraduate. The transformation did not come until some 20 years into his career as an economics professor. He remembers that in 2014:

…one of the people who worked on my team suggested I read an article by Murray Newton Rothbard called “Monopoly and Competition”…I remember reading it like it was today, and after reading it carefully, I said, “Everything I’ve taught about market structure in the last 20 years in courses on microeconomics is wrong.” This caused a very strong internal commotion in me. [Someone] recommended a place to buy Austrian School of Economics books, and I remember I bought at least 20 or 30 books…

…I started to read very intensively, and I remember, for example, the experience of reading Human Action by Mises…. I started to read this book right from the first page, and I didn’t stop until I finished it, and that was a true revolution in my head…. [I read] Rothbard, Mises, Hayek, Hoppe, and Jesús Huerta de Soto, or others like Juan Ramón Rallo, Philipp Bagus, and Walter Block, for example.

Before entering politics, Milei served as chief economist for several financial firms and taught economics at various universities in Argentina. He also gained widespread recognition as a media personality, frequently discussing economic issues on television and radio. Known for his fiery rhetoric and blunt denunciations of the political establishment, he built a reputation as a staunch opponent of government intervention in the economy.

Both on television and on the campaign trail, he has employed showmanship that puts President Donald Trump to shame.

Milei is not married, describing himself as too dedicated to his work to pursue personal relationships. (But he shares his home with four English mastiffs.) His unconventional persona and willingness to challenge mainstream economics, politics, and public policy have made him a figure both polarizing and highly influential in Argentine politics. (As a kid, he picked up the nickname “El Loco.”)

Both on television and on the campaign trail, he has employed showmanship that puts President Donald Trump to shame. On TV, he once smashed a piñata representing the central banks—while a member of the Chamber of Deputies, he raffled off his salary to supporters every month on social media—and during his campaign for president, he carried a chain saw!

 

Adam Smith and the “Austrians”

His economic tenets of radical individual freedom, spontaneous social/economic order, and the futility and danger of state interventionism—essentially libertarian positions—are explicitly aligned with Austrian economics but traceable to the intellectual tradition of Adam Smith. He frequently references Smith in his speeches and writings, underscoring Smith’s influence on his economic philosophy.

In a 2024 address at the World Economic Forum in Davos, Milei emphasized the moral and practical superiority of free-market capitalism, echoing Smith’s melding of moral and economic principles. He stated, “Far from being the cause of our problems, free-trade capitalism as an economic system is the only instrument we have to end hunger, poverty and extreme poverty across our planet.”

The sentiment aligns with Smith’s assertion in The Wealth of Nations that free individuals, acting freely, collectively produce economic prosperity: “…the natural effort of every individual to better his own condition…is so powerful a principle, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions.”

“I’m talking about the world described by Ayn Rand in Atlas Shrugged, which unfortunately has become a reality.”

In an interview with U.S. podcaster Lex Fridman, Milei numbered himself among classical liberals, with whom, “for example, Adam Smith or Milton Friedman himself could fit.” He is a self-described “libertarian and minarchist” but also an “anarcho-capitalist.” At Davos earlier this month, he told the world’s “elite” leaders:

I’m talking about the privileged corporations, the bankers who were bailed out during the sub-prime crisis, the majority of media outlets, the indoctrination centers disguised as universities, the state bureaucracy, the unions, social organizations, and the crony businesses that thrive off the taxes paid by hard-working individuals and taxpayers.

I’m talking about the world described by Ayn Rand in Atlas Shrugged, which unfortunately has become a reality. It is a system where the big winner is the political class, which becomes both a referee and stakeholder in this redistribution game.

In an interview with the Buenos Aires Times, Milei ticked off some of his policy plans and personal convictions:

  1. Elimination of the Central Bank: Milei advocates for abolishing Argentina’s Central Bank, viewing it as a source of economic instability. He argues that the institution enables inflationary practices that erode citizens’ wealth. In his words, “Last year the Central Bank robbed six points of gross domestic product via its inflation tax and this year it will rob six more points. So it’s a fraud and that happens because inflation is not a tax approved by Congress.”
  2. Strategic Alliances: Milei emphasizes strengthening ties with nations that share Argentina’s values of freedom and democracy. He has stated, “My allies are the United States and Israel and, what’s more, I’ll move the embassy from Tel Aviv to Jerusalem.”
  3. Organ Trade: Milei supports the legalization of organ sales, framing it as an issue of individual autonomy. He contends, “My first property is my body. Why am I not going to be able to dispose of my body? There are 7,500 persons suffering as they await transplants so something isn’t working right. We are seeking market mechanisms to solve this problem.”
  4. Abortion: Firmly opposing abortion, Milei bases his stance on the principle of the unrestricted right to life. He asserts, “As a liberal, I believe in the unrestricted right to life based on the defense of life, liberty and property. I defend life, biology says that life begins with conception.”
  5. Social Welfare: Milei challenges the concept of social justice, arguing that it leads to unequal treatment under the law. He states, “Its maximum expression is that aberration called social justice which is unjust because it implies unequal treatment in the face of the law.”

 

Remarks at the Hoover Institution

In an address to the Hoover Institution on May 29, 2024, Milei told the audience: “The market is ourselves. When there’s talk of the market, we are the market.” He contrasted the “social cooperation process” where “property rights are voluntarily exchanged,” with state interactions, which are coercive. He went on to criticize government intervention, asserting that regulators often create rules “just to justify their own existence,” which negatively impacts innovation. He emphasized that “state intervention is always bad, because it’s based on coercion, on force, and nothing based on coercion can be good.” This again harks back to Smiths caution against excessive government control over economic activities.

Milei’s economic vision and policies, identified as unconventional and out of step with “current thinking,” are in fact an attempt to realign Argentina with long-known fundamental tenets of economic liberalism.

Milei’s economic vision and policies, identified as unconventional and out of step with “current thinking,” are in fact an attempt to realign Argentina with long-known fundamental tenets of economic liberalism. Milei’s economic reforms have been nothing if not bold and aimed broadly at revitalizing the nation’s economy. If his achievements since assuming the presidency in December 2023, as well as remaining “challenges,” must be summarized in a sentence, one might say that Argentina’s economic “structure” has improved, but the social impact in certain areas remains to be seen.

 

Achievements and Challenges

  1. Fiscal discipline: Milei achieved a budget surplus in just a few months by reducing government expenditures, including laying off some 24,000 federal employees, shutting down whole ministries, and subsidies. He promised on the campaign trail to privatize the Ministries of Education, Health, and Public Works.
  2. Inflation reduction: Inflation on an annual basis fell from 211% when he took office to 193% by October 2024, and monthly rates dropped from 25.5% in December 2023 to 2.7% in October 2024.
  3. Trade surplus and credit rating upgrade: In 2024, Argentina achieved a record $18.9 billion trade surplus. Moody’s then increased the country’s credit rating for the first time in five years, citing the strength of policy shifts and stabilization efforts.

Challenges and Criticisms

  1. Rising poverty and unemployment: The aggressive austerity measures saw a spike in poverty rates as high as 57% in January 2024 but then declined to 38.9% by the third quarter. Unemployment also reflected the deliberate public sector layoffs.
  2. Economic contraction: Argentina’s economy shrank by 4% in 2024, partly due to reduced public spending and external factors like prolonged droughts affecting agricultural output.

 

A Shining City on a Hill

Milei’s reforms are radical and his reliance on Adam Smith’s intellectual legacy and pure Austrian laissez faire surely qualify him as the most ideologically driven leader in recent Argentine history. He remains, too, the teacher of free market economics, traveling widely and speaking in a remarkable diversity of forums. Along the way, he argues against the alleged human role in global warming and for deregulation of guns.

Many a long-suffering advocate of a rejuvenation of the ideology of capitalism—free minds, free men, free markets—come to share the hopes of Patrick Carroll, the managing director of the Foundation for Economic Education:

Argentina could become a beacon for the world, a shining city on a hill, an example of what a country can accomplish with free markets. And then it will be undeniable to everyone in the world that our ideas work, and it will only be a matter of time before the rest of the world follows suit.

Is that a pipe dream? Perhaps. Then again, it could also be an accurate description of the next 10–30 years of world history. And wouldn’t that be something!

Notes

[1] https://latinaer.springeropen.com/articles/10.1186/s40503-019-0076-2.

2 No less than 61 percent of Argentines or 29 million people were living in poverty in the first half of last year, as measured by income or deficient healthcare, housing or education, a Human Capital Ministry report released last Thursday quantified. This percentage outstrips the official figure of INDEC national statistics bureau, which was 52.9 percent for the first half of 2024. The study further highlights that among those aged under 17, multidimensional poverty leaps to 72.2 percent. https://batimes.com.ar/news/argentina/stories-that-caught-our-eye-january-17-to-24.phtml.

 

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