“Market failures do not exist” and “the State is a criminal organization” are phrases that the Argentine president, Javier Milei, usually recites with few variations and without fear of the litany. The far-right leader managed to rise and triumph in last year’s elections by presenting himself as a prophet of the free market, with the promise of solving all the country’s problems through the deregulation of the economy, the elimination of taxes, the adjustment of public spending and the liquidation of the state apparatus. But just after completing five months in office, his Government has encountered the limits that reality imposes on its creed: with the purpose of containing both inflation and social discontent, it resolved to reverse the increases in company rates. of private medicine and postpone the planned increases in public gas and electricity services. Now the State that Milei leads intervenes to limit the freedom that Milei himself offered to the market.
The president who defines himself as “anarcho-capitalist” launched economic liberalization from the beginning of his mandate, last December. First with a decree of necessity and urgency that imposed hundreds of reforms, repealed laws, eliminated controls and enabled the privatization of public companies. Later, with other measures—and with projects that are still being debated in Congress—he moved toward his goal of “dismantling the enormous amount of regulations that have impeded, hindered, and stopped economic growth,” to “return freedom and autonomy.” to individuals, getting the State off their backs,” he said.
Milei spoke those words on December 20, in a speech broadcast on national television, and today, a few months later, his officials take measures to control the market. How did it go from one thing to the other? The most obvious case is that of companies that provide private medical coverage. That initial decree by the president deregulated prices in the sector and the result was an immediate general increase: 150% between last December and March, it is estimated. The brutal increase, in a period in which inflation was around 90%, caused concern and social complaints, particularly in the middle and wealthy classes, who are the majority among the six million users of prepaid healthcare. It was in this context that the Ministry of Economy ordered companies to partially reverse the increases and calculate rates based on the inflation index. At the same time, the Superintendency of Health Services appeared before the Court and requested that the companies, in addition to rolling back the excessive increases, return what they had already collected: a judge accepted the requested protection.
From saying to fact
“Milei’s speech began to clash with political reality. Economic needs are beginning to change the social mood and the government is backing down because it began to receive signs of rejection,” evaluates Elsa Llenderrozas, director of the Political Science degree at the University of Buenos Aires. For her, the contrast between the ideas of the leader of La Libertad Avanza and the exercise of the government “shows the incongruity” that Milei embodies as president: “The State is the enemy to be destroyed, it is by nature corrupt, and he himself is the boss.” of State, the head of that institution to be destroyed.”
The marches and countermarches of the Argentine Government are also verified in the decision to postpone the planned increases in gas and electricity services, which have already increased between 150 and 400% in recent months. To try to sustain the decline in inflation, the Ministry of Economy decided this month to suspend the monthly rate indexation mechanisms: the political objective prevailed over economic logic. Likewise, in search of financing for the public coffers, the government is promoting the restoration of the income tax (known in Argentina as the profits tax), a tax that thousands of dependent workers had stopped paying last year. past. “Taxes are theft,” is another of Milei’s favorite phrases.
Political scientist Ernesto Calvo observes that in many leaders of the new right “there is a Jacobin part of the discourse that is not there to be believed, but to be negotiated. In Donald Trump, for example, that is clear, he manages a strategic ambiguity, today he can say one thing and tomorrow something else. But the Argentine president does not allow himself to be confined to that set. “Milei is an ideologue, he has a mystical fervor for an economy that does not exist. So now he finds himself with the limits of reality,” says Calvo, professor at the University of Maryland (USA). Pragmatism, which in a political leader is usually considered a virtue, in Milei’s case appears displaced towards others: “Milei is convinced of his extreme positions. For him, if reality does not adapt to his ideas, it is reality that is wrong. He never negotiates, because he does not operate like politicians operate. But, at the same time, Milei’s extremism allows his ministers and officials to negotiate better.” The old good cop, bad cop tactic.
From this perspective, the “reverse” that the Milei government’s interventions to regulate the market would imply can be reinterpreted. “While it may seem like the government is rehearsing and backtracking, in truth this is only partly the case. With each advance it leaves anchors that are not removed later. The destruction of the purchasing power of salaries, for example, has no regression,” says Juan Martín Gené, political scientist and public opinion analyst. The sliding of the limits caused by the extreme right in the economic sphere has a correlation in the social sphere. “Milei’s government is betting on attacking basic consensuses such as public education and health, work as an organizing institution, and environmental sustainability. The popular majorities are coerced in two ways, with economic discipline and political repression… When all this is over, he warns, how much damage to the fabric of society will be irreversible and irreparable?
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