The currency would collapse. Output would go into freefall. Unemployment would soar, and the IMF would be back in charge quicker than you could say ‘chainsaw’. When Argentina voted into power its libertarian new president Javier Milei there were predictions that his radical free market reforms would quickly plunge the country into chaos. But hold on. In fact, it is not quite going according to the script – instead there are signs that Milei’s harsh medicine might be working.
The Hayek-quoting Milei represents a decisive break from a century of big-state Argentinian politics that turned what used to be one of the world’s richest countries into a synonym for chaos and mismanagement. Milei has already slashed a series of ministries, including the Department of Culture (or Department of Indoctrination as he calls it), abolishing rent controls, and freeing up industry. He hasn’t yet replaced the peso with the dollar, or abolished the central bank, but ruling largely by decree he has made a lot of progress in a very short space of time.
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