Which Milei will govern?

Argentina has chosen to live through interesting times. In Javier Milei, they elected a president as far from politics as usual as it is possible to imagine. Because Milei is many things: an orthodox libertarian economist, a born-for-TV right-wing provocateur with a larger-than-life ego, a dog-cloning enthusiast with a penchant for esoteric mysticism, and a power-oriented politician willing to build alliances with people he’s spent years berating. The trouble is, we’re not quite sure which one of them is going to end up governing Argentina.

Markets rejoiced at his victory, and it’s easy to see why. After a calamitous 21st century spent mostly in the hands of a retrograde Peronism that has blighted Argentina’s prospects, Javier Milei ran on the promise of a clean break with the past. Argentina’s shocking record of economic and social failure under Peronism left voters hungry for whichever candidate offered the most radical break with the past. And if that’s the game we’re playing, no one can beat Javier Milei.

His campaign was a direct outgrowth of his compulsively watchable appearances as a TV talking head, where his provocateur instincts electrified a public sick to death of the stilted language of traditional politicians. Milei always seemed most at ease when arguing for the most extreme of proposals: ditch the Argentinian peso and dollarize the economy! Close the Central Bank! Privatize everything! Slash public spending by almost half! Simply shut down most government ministries, nobody will miss them!

They sounded like the ranting of a 19-year-old college student who’s just read Ludwig von Mises, the libertarian economic theorist, for the first time. In any normal country, those proposals would have gone down like a lead balloon: too obviously unworkable to be taken seriously. But in Argentina, where the responsible proposals of the grown-ups in the room all came across as tinkering at the edges of a system that was rotten at its core, the message had wheels. Milei stormed into the second round… and then he changed.

Like the seasoned politician nobody suspected he had inside him, he moderated his tone, set out to win allies among Argentina’s more traditional conservatives, and won key endorsements from his erstwhile center-right opponent Patricia Bullrich and former president Mauricio Macri. He took to reading prepared speeches, his reading glasses perched precariously on his nose, rather than ranting off-the-cuff in his usual style.

Pranksters are spreading the joke that the new president’s glasses have some kind of magic power. There seem to be two Mileis: one is the budding statesman with the reading glasses and the other is the ranting ideologue who goes without them. Which one will govern? For Argentina’s sake, we hope it is reading-glass Milei, because the version of him without glasses has no chance to govern effectively.

With or without glasses, the incoming president will face a daunting set of disasters: the government doesn’t have the money to pay either its domestic or its foreign creditors. Out-of-control inflation. Poverty afflicting two out of every five citizens. A large section of the population is fully dependent on the government for handouts. And a fierce opposition that is getting ready to make life very difficult for the new government.

In his acceptance speech, Milei reiterated his core commitment to shock therapy, saying there is no room for gradual change in the face of such a dire situation. I know what he means firsthand: in 1989 I was Venezuela’s Minister of Development, and the new government faced a similarly disastrous situation. Cries for gradualism rang hollow. We simply didn’t have the money to put off drastic reforms. The same can be said about Argentina today. So glass-wearing Milei will soon find out what I learned, too: rushing to dismantle social protections can leave society even more unstable. In Europe, after the fall of communism, the countries that reformed gradually vastly outperformed those who tried to reform their economies all at once: shock therapy set off massive dislocations that reverberate to this day.

Even worse, Milei will have to govern alongside a congress he does not control. He can’t govern without winning over some of the people he’s spent his career pillorying. But the temptation to rip off his glasses and deploy his radical streak will always be there, and faced with enough obstructionism from congress Argentina’s democracy could easily find itself in a dangerous situation: politically gridlocked amid economic chaos, with a president who can be seduced by the bad idea that haggling with his opponents is more trouble than it’s worth.

We’ve seen this dynamic play out in the region many times before, most recently in Peru, where an inexperienced president found himself trying to dissolve congress only to get himself impeached within hours. The best reason Javier Milei has to keep his glasses on may well be simply to avoid this fate.

Good luck Argentina!

@moisesnaim

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