A group of over 100 prominent economists have cautioned that if the radical rightwing economist Javier Milei is elected as president of Argentina, it could lead to additional economic “devastation” and social turmoil in the South American nation.
In a public statement released before Argentina’s critical election on November 19th, the economists acknowledged the voters’ strong yearning for economic stability due to the country’s history of frequent financial crises and persistent periods of high inflation.
40% of the population currently resides in poverty, while the annual inflation rate is nearly 140%. Milei has promised to address this crisis by defeating his opponent, Argentina’s finance minister Sergio Massa, and implementing drastic measures such as eliminating the central bank and adopting a dollarized economy.
“Though attractive, seemingly straightforward solutions may lead to greater harm in the present and limit future policy options,” cautioned a letter signed by prominent economists including Thomas Piketty from France, Jayati Ghosh from India, Branko Milanović from Serbia and José Antonio Ocampo, former finance minister of Colombia.
The correspondence stated that Milei’s suggestions, though advertised as a significant deviation from standard economic thought, were actually based on laissez-faire economics and carried potential dangers that could be detrimental to the Argentine economy and its citizens.
During his campaign, Milei, who identifies as an anarcho-capitalist, has used a chainsaw as a representation of his goal to cut subsidies and greatly decrease the government’s spending on social programs. He has also frequently stated that taxes are a form of stealing and referred to the social programs they fund as a deviation. He has expressed his belief that the state was created by evil forces and that the free market is the preferred system according to God.
However, the economists cautioned in their letter that cutting government expenditures drastically would exacerbate the already prevalent poverty and inequality, and potentially lead to heightened social unrest and strife.
According to them, Javier Milei’s suggestions of dollarization and fiscal restraint fail to consider the intricacies of contemporary economies, disregard the teachings from past disasters, and could potentially worsen existing inequalities.
According to Ghosh, a development economist at the University of Massachusetts Amherst, she and the two other co-authors of the letter, Piketty and Milanović, expressed concern that Milei’s policies could have harmful effects on Argentina and the entire continent.
Ghosh stated that the consequences of extreme right views go beyond social turmoil and could also lead to economic turmoil due to a decrease in government income and spending.
Citizens of Argentina will participate in a voting process that presents difficult decisions. However, resorting to a libertarian approach that demonizes the government will only increase hardship.
With less than two weeks until one of the most crucial elections in recent history in Argentina, the outcome seems too uncertain to predict.
Before the initial round of voting last month, Milei was seen as the leading candidate. However, he ended up with second place, receiving 29.9% of the votes compared to Massa’s 36.6%. Following this outcome, Milei has gained support from two influential conservatives: Patricia Bullrich, who came in third place, and former president Mauricio Macri. Massa’s campaign has also been hindered by fuel shortages.
According to Juan Cruz Díaz, the director of Cefeidas Group in Buenos Aires, as the election reached its final stages, the two candidates had to approach it from different angles.
Milei aimed to center the discussion around the economic shortcomings of his adversary’s Peronist movement, which has been in control for 16 out of the last 20 years.
Meanwhile, Massa had to focus on Milei’s unpredictable personality and persuade voters to not back his rival, who he described as an “eccentric, enraged, and irrational” wildcard. “He will likely portray him as emotionally unstable and a violent, aggressive, and highly divisive figure,” stated Díaz, who was uncertain if these tactics would be sufficient in light of Argentina’s economic struggles. “In my opinion, Milei has the advantage.”
Milei has an intense hatred for John Maynard Keynes, a 20th-century British philosopher and economist. As such, he is not likely to be swayed by the open letter. According to Milei, Keynes’ beliefs about free markets and employment contradict those of a Marxist.
A recent episode of a podcast produced by El País, a Spanish newspaper, featured an interview with a former neighbor of Milei. The neighbor brought up Keynes in conversation while riding in the elevator, to which Milei reportedly responded by shouting insults at her until they reached the 10th floor. In the past, Milei has also openly criticized Piketty, referring to him as a “turd” and “a criminal pretending to be an intellectual.”