Argentina’s president-elect Javier Milei defines himself as an “anarcho-capitalist” who believes in the free market above all things. He has defended legalizing organ sales — and described selling children as “just another market” — as well as the deregulation of the gun market.
Milei’s ideas are inspired by the Austrian school of economic thought, which espouses the idea that individual actions are the sole motor of social phenomena. The Austrian school’s concepts are not currently in the economic mainstream in terms of academia or public policy: they have never been fully applied in any country and Milei’s interpretation of its concepts has received its fair share of criticism.
But what are his main economic proposals?
Milei’s flagship economic proposal consists of abolishing the Central Bank, eliminating the Argentine peso, and adopting the US dollar as the country’s legal tender. He has sometimes suggested in interviews he would allow the peso to “freely compete” with every other currency.
Be that as it may, per his electoral platform Milei’s ultimate stated goal is to dollarize the Argentine economy.
The dollarization proposal has sparked criticism from economists worldwide across the political spectrum. According to a letter signed by 170 prominent economists, dollarizing would cause spiraling inflation, a sharp recession, and high unemployment without solving the country’s underlying economic problems.
With net reserves at negative US$10.5 billion, adopting the currency would mean an excessively high exchange rate, meaning a devaluation is bound to happen before the measure is applied. Milei has said that if the peso plunges, it would be “easier” to dollarize. He has even called the peso “excrement,” fueling a run against the currency.
The move would mean the country would have no monetary policy of its own — Chief Argentine Supreme Court Judge Horacio Rosatti said the plan is “unconstitutional.”
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International market: no protections, no relations with China or Brazil
The president-elect has deemed the state protection of national industry as a series of “privileges” that should be eliminated. “They will have to compete — earn their bread by the sweat of their brow or go bankrupt,” he said in an interview with Peruvian journalist Jaime Baily.
The head of the Argentine Industrial Union (UIA, by its Spanish initials) Daniel Funes de Rioja said such a forceful opening of the market would mean exposing national companies to the global market “with their hands tied.”
The president-elect has also called for cutting diplomatic ties with Brazil and China, the country’s main trading partners because he considers them to be “communists.” He has, however, said commercial ties would be allowed to continue — although international trade is heavily reliant on agreements between states.
Milei has referred to his myriad of promised austerity measures as his “chainsaw plan” — an image that permeated his campaign — pledging to “end the omnipotent presence of the state” in his victory speech. The president-elect contends that such measures would impact “the political sector” and not the general population.
In a famous video published on his X (formerly Twitter) account, he said he would eliminate 11 government ministries and agencies such as Argentina’s National Cinema Institute or the CONICET, the country’s prestigious scientific institution.
He has consistently stated that if elected, he would quickly make cuts equivalent to 15% of the country’s GDP in the first year of his administration by withdrawing public investment in infrastructure works, monetary transfers to the provinces, and economic subsidies. He also pledged to close all state-owned companies.
However, according to a report by the fact-checking website Chequeado, the expenses Milei vows to eliminate make up 4.7% of the GDP and not 15%.
LLA’s electoral platform also includes offering early retirement for people in government jobs to leave those offices empty, as per Milei’s goal to shrink the size of the state. Other economic proposals include unspecified “tax cuts” and the elimination of export duties which would further defund the state.
A potential Milei administration would also eliminate state-funded public schools and healthcare with a plan to replace them with a “voucher system” designed to subsidize whoever needs them, according to his government plan.
Milei has also proposed getting rid of severance payments owed to people fired without cause, and replacing it with unemployment insurance, sparking the ire of trading unions.