In a scene that is probably a small taste of what is to come, socialist activists and workers unions carrying images of Che Guevara and Eva Peron converged on Buenos Aires to protest Javier Milei’s impending “austerity” cuts. The cuts are a part of Milei’s sweeping economic measures that will erase or rewrite over 300 rules regulating and restricting private enterprise within the nation.
Deregulation, protesters say, will pave the way for big business interests while reducing welfare programs and protections for the public. The protests are of course built upon a number of assumptions and are reactionary at best, given that Milei has been in office for a mere two weeks.
“The goal is to start along the path to rebuilding the country… and start to undo the huge number of regulations that have held back and prevented economic growth,” Milei said in a televised speech from the presidential palace.
The protests and anger from leftist elements within Argentina illustrate the numerous pitfalls of allowing socialism to be rooted within any country for any length of time. Though Milei’s opposition often argues that Argentina has never been “truly socialist,” the government policies that have been in place for decades certainly are. It is a classic far-left deflection: Whenever a socialist government or economy fails, claim it wasn’t real socialism. Rinse, and repeat.
Any effort to free up markets within such a system immediately faces an array of hurdles. Opponents argue that the reforms will destroy the economy (the economy which has already been destroyed by socialism) and that the people will suffer without entitlement programs (which the country cannot afford). Government handouts and welfare promises create a deep and dangerous addiction within a population.
The country’s national debt has climbed to over $400 billion US dollars and they are struggling with a $44 billion IMF loan. However, the real threat is their triple digit inflation which is igniting a mounting economic crisis. It is the same crisis that has resurfaced multiple times since the crash of 1990.
Latin America’s third-biggest economy is on its knees after decades of debt and financial mismanagement, with annual inflation at 140 percent and 40 percent of Argentines living in poverty.
Milei’s first action has been to reduce government waste, cutting over 5000 bureaucratic workers with more layoffs pending. He is also working to cut a number of public works programs and to curb overall spending. His announcement of huge cuts to state subsidies on fuel and transportation are the likely cause of the recent protests, with millions of citizens heavily reliant on government assistance.
The real test will be his efforts to introduce free market enterprise and to boost the Peso while making the shift as painless as possible. Even the most optimistic analyst expectations suggest a chaotic downturn within the economy during the policy adjustments, which will no doubt be exploited by pro-socialists. Milei’s opponents were already declaring his efforts a failure after only a few days in office.