Javier Milei’s Neo-Liberal Vision: Sources of Support and Resistance in Argentina

Introduction

For decades, Latin American political constituents have debated the most effective economic model to follow to ensure sustained economic growth whilst also reducing poverty and inequality. Argentina has experienced alternating cycles of socialism, clientelist economic models promoted by Juan Perón from 1955 until 1973 and then the Kirchner’s from 2003 until 2023, interlaced with brief periods of free-market economic policies supported by institutions such as the IMF, the World Bank, and the economic consensus promoted by prominent faculty members at the University of Chicago. The neo-liberal agenda was pursued sporadically by the dictatorship under Juan Videla followed by the administrations of Carlos Menem and Mauricio Macri.  All three attempts struggled to adhere to the free-market principles prescribed by the Chicago School and have subsequently failed to deliver improved standards of living across society. President Javier Milei, who was elected to office in 2023 on the promise of vastly reforming Argentina’s economy and political structure represents possibly the first time that a Latin American country adopts a neo-liberal economic agenda in its purest form outside the context of a military dictatorship. Milei’s presidency is truly an experiment to see if unfettered free-market policies are able to deliver positive outcomes and whether democratically elected political institutions are strong enough to withstand the societal pressures caused by severe economic hardship until reforms can bear fruit. 

Compared to other libertarian-leaning leaders, Milei stands apart due to the distinctive and radical nature of his neo-liberal approach to public policy. The closest comparison we can draw is with General Augusto Pinochet, who was at the front of Chile’s dictatorship from 1973 to 1990. Both leaders draw from the same libertarian economic philosophy as described by the Chicago School, which advocated for minimal public spending, lower taxes, flexible labor markets, deregulation, strategic privatization, free trade, and floating exchange rates, among others. More importantly, both regimes embraced a radical approach to reforms with the same degree of intensity (Centenera 2024). The key difference between these two experiments is that Chile’s military dictatorship imposed its agenda by curtailing individual liberties, while Milei’s presidency operates in an open democracy. Brazil under Jair Bolsenaro also implemented free-market policies but unlike Milei, his ideological focus was centered on social and cultural issues rather than economic ones. 

This research paper will focus on the extent to which Javier Milei has been able to successfully advance his neo-liberal reforms through Argentina’s political system, specifically the factors assisting and impeding his agenda. For context, it is important to look at examples historically of other attempts to implement a free-market model in Latin America generally and in Argentina specifically to ultimately gauge whether Milei’s economic vision has the potential to take root where past attempts have failed.

Literature Review

Latin America’s Early Liberalism 

In the 19th century, liberal elites, upper-class influential individuals, introduced Latin America to constitutionalism and modern representative governments. Latin American political systems evolved as elected presidents with broad powers replaced monarchs (Negretto and Aguilar-Rivera 2000). However, the road to successful constitutional democracies was a lengthy one as most liberal regimes in the region were unable to achieve co-existence with opposition parties and the necessary expansion of political representation (Negretto and Aguilar-Rivera 2000). The conventional view of the failure of liberal democracies in 19th century Latin America was that elected elites were unable to break with the mentality and the practices inherited from the authoritarianism of the colonial period and that institutions were unable to generate political consensus. Other scholars argue that frail democracies are the product of territorial fragmentation and factional conflict that led to the creation of a centralized government and tight control by the ruling elites. (Negretto and Aguilar-Rivera 2000). Because liberal elites manipulated elections through clientelism or fraud most liberal regimes in the 19th century evolved as oligarchic regimes with extreme inequality between the ruled and the rulers in terms of wealth, social position, and even race (Negretto and Aguilar-Rivera 2000). 

In the subsequent period, notably around the 1840’s, Latin American nations adopted foreign constitutional models to fit their local needs by adopting doctrines of federalism, or the division of powers (Negretto and Aguilar-Rivera 2000). In Argentina, specifically, the enactment of the constitution of 1853 was at the center of several political disputes. One of which was between Buenos Aires, which opposed the federal form of government, and the rest of the provinces, which believed it was the only viable means of organizing the national state (Negretto and Aguilar-Rivera 2000). Only in 1853, after the military defeat of Buenos Aires by the governor of Entre Rios, were the provincial governors able to enact a federal constitution. The Constitution was somewhat successful as it created formal institutions that helped solve the problem of national integration and consolidation of state authority. It also created a system of agreements among the elites regarding the division of power which helped gradually create more stability (Negretto and Aguilar-Rivera 2000). Despite these advances, the elites maintained control over the electoral process, which is why Argentina became an illiberal democracy at best (Zakaria 1997).  Not only was the electoral process tightly controlled, but statist and clientelist economic models were important levers to retain political power.

The Evolution of The Union Civica Radical and Peronism in Argentina

As constitutionalism across Latin America continued to unfold, it wasn’t until 1890, amid an economic crisis, that an organized opposition against the oligarchic regime in Argentina emerged in response to the political illegitimacy of the status quo. This overthrow gave rise to The Union Civica Radical, which became a dominant political force advocating for democratic reforms and broader electoral participation (Negretto and Aguilar-Rivera 2000). This political activism paved the way for a new electoral law that was enacted in 1912 during the presidency of Roque Sáenz Peña. The law established secret, and mandatory male suffrage along with a system of distributing seats in Congress that provided two-thirds of the total seats to the majority party and one-third of the total seats to the second most-voted party (Spruk 2019). After the law was passed, Argentina saw a significant increase in voter registration and voter turnout (Sabato 2001). It wasn’t until 1916 that the leader of the Union Civica Radical, Hipólto Yrigoyen, won the first presidency under The Sáenz Peña Law, which truly marked the end of an oligarchic regime and the beginning of a more inclusive and representative democracy (Spruk 2019). Ideas such as separation of powers, rule of law, and respect for individual rights fostered the political legitimacy that gradually replaced the authoritarian and colonial model (Negretto and Aguilar-Rivera 2000). 

However, these advances were short-lived, when in 1930, a military coup ousted President Yrigoyen which marked the beginning of the Infamous Decade which was characterized by electoral fraud, state interventions, and economic instability all of which were exacerbated by the Great Depression (Spruk 2019). In response, General Juan Perón was elected to power in 1946. Many scholars would argue that Péronism was the birth of populism, where political leaders promised immediate improvements in living standards in exchange for political support, even if the long-term effects were understood to be sub-optimal. This approach was disguised as an alternative to both capitalism and socialism. As a result, the Peronist movement became extremely influential, mostly attracting support from the working class, military sectors, and the Catholic Church (Spruk 2019). The movement was centered around what Juan Perón referred to as “justicialismo”, which emphasized social justice as a prime mover of national unity (Ciria 1974). 

In the economic field of his presidency, the state played a dominant role in order to quickly deliver benefits to constituents. Perón supported light and intermediary industries while large enterprises that could exercise political power were nationalized. The economy became inward-looking due to import-substitution industrialization policies, including raising tariffs and taxing exports (Huddle 1997). Perón also reduced foreign dependency and increased the production of goods domestically by providing local industries with subsidies and intervening to manage said industries (Huddle 1997). As a result of these economic policies, trade deteriorated making the import of capital goods, industrial raw materials, and fuel more expensive (Ciria 1974). This led to foreign reserves dropping and large public deficits prompting the government to increase paper currency printing and borrowing funds. As the monetary base increased, so did inflation (Huddle 1997).   

Peron faced the economic crisis with increasingly authoritarian and oppressive measures, which contributed to his downfall. By 1955, during Juan Perón’s second term as president, opposition had already begun to take shape, with discontent arising among sectors within the military, the middle classes, and the students (Ciria 1974). This growing dissatisfaction culminated in Perón’s ousting by a military coup later that year. Although Perón returned to power in 1973, the economic model he represented was again unable to deliver economic prosperity or stability.  Following Juan Perón’s death during his third term as president, his wife, Isabel Peron took over as president. Her presidency was short-lived as she was overthrown in 1976 by General Jorge Videla, who was committed to undoing Peron’s legacy. Although Peronism has undergone significant changes over the past few decades, it has maintained its position of being one of the largest political parties in Argentina, along with Union Civica Radical. 

Argentina’s Dictatorship: Introduction to Neoliberal-leaning Economic Policies 

The period under Jorge Videla, referred to as the ‘Dirty War,’ was characterized by widespread human rights abuses and the abduction of citizens by authorities with an estimated 10,000 to 30,000 people killed during this time (Hayner). Due to inflation that accelerated under Juan Perón’s last term, Videla was faced with a collapsing economy marked by soaring inflation. In response, Videla largely left economic policies in the hands of Minister Alfredo Martinez de Hoz, who attempted to restore economic growth by reversing Peronism in favor of a free market economy (Hayner). Whilst Videla may have embraced a few neo-liberal economic principles, such as liberalizing trade, he also borrowed heavily from foreign banks in order to fund rising public deficits due to a failure to curb public spending, a pronounced departure from the Chicago School recipe.  

Following the dictatorship and until the 2000s, Argentina experienced a gradual shift to neoliberalism as a response to the pressing debt crisis and its dependency on foreign borrowing.  This transition in Argentina mainly played out under Alfonsin’s and Menem’s presidencies.  Other Latin American countries began to embrace neo-liberal policies in response to the debt crisis that reached its peak in the 80’s (Huddle 1997). Countries started deregulating, privatizing, and opening themselves up to trade competition. Between 1985 and 1992 more than 2,000 publicly owned firms including airlines, public utilities, banks, and insurance companies, were privatized throughout the region (Huddle 1997). However, as neo-liberal policies grew in frequency and intensity, poverty and inequality grew across the region: 80% of new jobs after 1990 were created in the informal sector of the self-employed (Huddle 1997). 

The challenge faced by most countries is that it takes time for neo-liberal reforms to generate sustained growth, low and stable inflation, and permanent increases in wages. Sebastian Edwards, the World Bank Chief Economist for Latin America, stresses that free-market reforms produce greater macroeconomic stability and open up new avenues for development and growth. Nonetheless, Edwards acknowledges that the transition can be difficult and painful and may require short-term alleviation of dislocation in order to ease the impact. On the other hand, Duncan Green, author of Silent Revolution, argued that neo-liberal reforms in Latin America were excessively costly, as countries were forced into longer recessions than necessary in order to generate the trade surpluses required to meet debt and interest payments (Huddle 1997). Additionally, he argues that the bad far outweighs the good as restrictions in public sector programs hurt the poor and worsened income distribution across Latin American countries. These discrepancies between Edwards and Green reflect a much larger debate in society on whether the short-term losses and damages inflicted by neo-liberal policies are justified by the long-term benefits in the economy. This is the debate raging in Argentina today.

Backlash and shift to the left 

In the 2000s, this neo-liberal movement faced backlash regionally but more so in Argentina, where a balance of payments crisis resulted in the collapse of the currency peg in January 2002, which had supported the value of the peso since 1991 as part of an effort to combat hyperinflation and stabilize the economy (Spiegel). As a result, Argentine household savings were decimated with depositors unable to withdraw their savings as the Central Bank struggled to contain further capital flight. This economic crisis led to political chaos and eventually to a resurgence of a brand of Peronism characterized by extreme government intervention in all aspects of the economy. Initially championed by Néstor Kirchner, his wife and successor, Cristina Kirchner, took interventionist policies to new levels during her term.

After several years of falling living standards capped by a public corruption scandal engulfing Cristina Kirchner´s administration, Mauricio Macri, the former mayor of Buenos Aires, was elected president and served between 2015 to 2019. Macri, a liberal right-wing conservative, believed that the gradual implementation of economic reforms was needed in order to maintain support and avoid the most painful consequences of fiscal austerity. However, a gradualist approach was unable to deliver balanced budgets, which were critical to generating investor confidence and curtailing capital flight. Consequently, despite its initial success, political support for Macri’s reforms wavered once numerous economic risks began to materialize (Kovalski 2019).

Although Milei’s neo-liberal reforms may resemble those that Macri attempted to introduce, Macri barely got across the starting line, while Milei is already in a full sprint on the path to a pure neo-liberal economic model. 

Methodology

To assess whether Milei has successfully advanced his neo-liberal reforms through Argentina’s political system, I conducted primary research by interviewing key political figures and opinion leaders in Buenos Aires during the summer of 2024. These included heads of government secretariats, union leaders, NGO directors, and Argentine professors specializing in political science. In total,  I conducted eight interviews which allowed me to gain a diverse range of voices and perspectives. Before conducting the interviews, I researched in depth the interviewees and prepared around ten questions for each of them. For each of the interviews I also voice recorded the conversation and later translated the recording into English. These transcripts were useful in the terms of notetaking and synthesizing my research but also for cumulating quotes from the interviewees. This variety of perspectives has been largely shaped by the country’s long history of polarization which has formed the complex political landscape in present-day Argentina. These diverse perspectives help explain why many of Argentina’s institutions have supported and facilitated the implementation of Milei’s aggressive plan despite historical opposition to free-market policies, while others have clearly resisted a departure from Peronism. These diverse views mirror the debate between Edwards and Green on whether the short-term losses and pain inflicted by neo-liberal policies are justified by the long-term benefits in the economy. In this case, however, the stakes are particularly high, as the future of Argentina’s economy is on the line. The economic policies implemented in the coming years will determine whether Argentina’s economy will continue to decline or if it will begin its path to recovery. 

Who is Javier Milei?

A combination of the interchanging cycles of Peronism and neo-liberal leaning economic policies, Videla’s dictatorship, and the discrediting of Peronism as interpreted by the Kirshner’s all contributed to the poor and vulnerable conditions in which the 2023 general presidential elections took place. A decade of poor economic management resulted in inflation that was over 135%, a poverty rate above 40%, and a GDP growth of -2.5% (European Parliament). In this environment, against conventional wisdom, President Milei, also given the name El Loco– The Madman- won the 2023 elections. Milei, a trained economist with a degree in economics from the University of Belgrano has navigated diverse careers, from being the lead singer of a Rolling Stones cover band called Everest, to becoming a well-known economic pundit on Argentine TV (Phillips). And just five years ago, he embarked on his political journey, being elected as a national deputy in 2021 under his party, La Libertad Avanza. 

During Milei’s campaign, “he brandished a chainsaw at rallies to symbolize his plans to slash government spending, dressed up as a superhero who sang about fiscal policy and told voters that his five cloned English mastiffs, which he reportedly consults in telepathic conversations, are his ‘best strategists’” (Bergengruen and Werning). The self-described ‘anarcho-capitalist’ pledged that if he won office he would eliminate the nation’s central bank, dollarize the economy, and dismantle the corruption-riddled state controlled by parasitic career politicians  (Bergengruen and Werning)(Kozuel-Wright). Milei in an interview with the Times writer Vera Bergengruen said, “‘Argentina will become a model for how to transform a country into a prosperous nation… I have no doubt’” (Bergengruen and Werning). 

Milei won the second round of the general election with 55.69% of the votes, surprising many of his critics. According to analysts, Milei’s votes primarily came from the middle and lower classes, especially young people (European Parliament). Milei’s political rhetoric since his campaign has “aimed to address the simmering anger and frustration within a society worn down by persistent economic crises and instability” (Belgrano). This message strongly resonated with many vulnerable groups, who felt angered by the difficult circumstances created by the last four years under the administration of Alberto Fernandez, a Kirchner acolyte. Milei has addressed the public by using a populist-style discourse, particularly employing an anti-establishment message by blaming the “political caste,” referring to the elites, for Argentina’s economic, social, and political crisis (Buenos Aires Times). Through Milei’s populist rhetoric and limited political experience, he has portrayed himself as a leader who serves as a representative of the people. Milei has conveyed a message of empowerment and freedom to young people, sparking a profound cultural shift. He has inspired younger generations to embrace their potential and achieve prosperity. This message and cultural transformation have resonated strongly due to Argentina’s desperate situation. In a conversation with the Secretary of Small and Medium Businesses, Marcos Ayerra remarked, “we were so close to being like Venezuela.” Argentina has been so weakened by poverty, and people have reached their breaking point. Macri didn’t have the cultural and social determination that the people have now. Now, however, people have reached their threshold, and it has driven them to take the lead in shaping a new cultural direction, and Milei is at the face of this change.  

Sources of support and facilitation of reforms  

Milei’s Unique Approach and Early Economic Success 

Since Milei has been in power, he has implemented significant reductions in public spending, which has greatly contributed to overcoming a period of hyperinflation (Stuttaford).  Monthly inflation has come down from 26% in December 2023 to around 4% in June, where it has remained (Murillo). Additionally, in January, for the first time since 2012, Argentina registered a primary fiscal surplus (Centera 2024). Milei transformed a fiscal deficit of 2.7 percent of GDP into a surplus of 1.2 percent of GDP by freezing pensions and public salaries (Murillo). The Undersecretary of Innovation, Santiago Pordalenne, explains how the public has supported Milei so far as he has shown them “that there is light at the end of the tunnel.” Although Milei publicly shares how he is not a politician and how he will do everything politically incorrect, he tells the public he will do everything in his power to improve their lives, provide better job opportunities, and alleviate them from their misery. This message resonated strongly among the public and especially came through to the younger generations. Pordalenne explains how Milei is convinced that the transformation of Argentina must be abrupt and not gradual, unlike President Macri who considered that the change should be gradual.

Adaption and Reliance on Private Sector

The Secretaries of Entrepreneurship, Small and Medium Businesses, and Innovation have contributed to advancing Milei’s core policies and his neo-liberal vision. They have done this by working on  facilitating conditions and adapting and relying on the private sector to help stabilize key macroeconomic variables, which they believe will lead to microeconomic stability. This is relevant as it has been particularly challenging to create economic conditions that promote business creation and capital formation in Argentina. 

Ayerra, the Secretary of Small and Medium Businesses identifies Argentina’s three primary challenges as a) the macroeconomic problem, b) the labor issue, and c) the microeconomic problem. Ayerra explains that for decades, the Argentinian government practically gave everything away for free, funding subsidies, public services, and low-cost utilities by running sharp public sector deficits funded by printing money. This approach inevitably led to unrealistic expectations and a bloated fiscal budget.

Focus on Human Capital and Training

Milei’s government, in order to reduce public spending, has eliminated most subsidies for public services, the prices of which have spiked. He has also reduced government jobs by as much as 43%. With these job losses, the Secretariat has been working to facilitate the workers’ transition to the private sector. To do this, Pordalenne explains they have been training and forming the population, specifically the vulnerable classes.

Despite record-high unemployment, Argentina has various sectors with numerous job openings that remain unfilled due to challenges recruiting qualified employees. The Secretariat of Small and Medium Businesses has focused on training younger workers, because as Pablo Gutierrez, the Undersecretary of Entrepreneurship, explains, the broader Argentine public educational system from schools to secondary education, as well as post-graduate programs, does not prepare either entrepreneurs or future employees. Gutierrez explains that being an entrepreneur often involves trial and error, making mistakes along the process, and learning from them. He says that this resilience results in high-quality entrepreneurs because they are able to manage obstacles. However, there are a few risk-taking entrepreneurs in Argentina, a situation often attributed to years of socialist and protectionist governments that provided large segments of the population with guaranteed and protected jobs for life.

 Through this training, not only does the SBA hope that it will help transition workers to the private sector, but that it will also reduce informal employment. Ayerra states that “45% of employment is informal, and the SME, which make up 85% of the companies, account for 70% of informal employment.” Ayerra attributes the high informal employment to previous socialist-leaning Argentine governments, which imposed heavy tax and regulatory burdens pushing people to operate informally to avoid these costs. Informal employment comes with inadequate social protection and limits mobility. Additionally, being in the informal sector, makes it difficult for employees to access financial credit as they lack a formal credit history. Gutierrez explains how his Secretariat has been working on training programs, offering online certifications in financial education, and has been collaborating with bank associations to centralize all financial information for businesses interested in credit options, loans, and financing programs.  

Argentina in the Global Economy

Both the Secretariat of Innovation and the Secretariat of Entrepreneurship have also been working on repositioning Argentina in the global economy. Pordalenne states that the previous administration under Alberto Fernández was isolated from the global stage due to close ties with countries that included Venezuela, Nicaragua, and Russia. These relationships coupled with several sovereign debt defaults hindered Argentina’s ability to fully integrate into the global economy. 

However, Gutierrez explains that a shift towards a more open and competitive economy comes with challenges. Many firms, that have been accustomed to closed protectionist policies, are finding it difficult to compete globally. Many of them complain that they are unable to compete if their taxes aren’t reduced. For this reason, the government has been working on lowering inflation, taxes, and national consumption to address this concern. These tax reductions combined with lower inflation and a reduction in import tariffs will increase efficiency and productivity.

Milei’s government has also been focused on attracting more foreign investment and promoting the export of Argentine technologies and talent. However, it will take some time for multinational companies to start investing in Argentina as they need to see that changes are permanent, and only then will direct investment materialize. Argentina needs to rebuild trust and reinsert itself into the world as a ‘new’ Argentina, reliable, predictable, and with clear rules. 

Challenges and Opposition Facing Milei

Evolving Mindsets: Breaking Free from Socialist and Regulatory Constraints

The private sector’s role in emphasizing human capital and training, as well as repositioning Argentina in the economy, is a challenging undertaking. This is mainly due to the fact that, historically, Argentina has had governments that heavily regulated the economy, imposing rules that the private sector had to follow. This government aims to do the complete opposite, Pordalenne explains. They’ve been working on taking the pressure off the private sector and leaving it to do what it knows how to do, which is invest, generate employment, develop, and export. With its historical record, Argentina faces not only the challenge of addressing the lack of skills of employees but also struggles to change the mindset of the public that has been ingrained by past socialist, regulatory governments. Due to subsidies and free jobs being handed out, the Argentine people have been living a culture of not viewing work, employment, and hard work as a merit, as they’ve been historically oriented with the idea that putting effort and hard work is useless as the state can do everything for you.  

Gutierrez explains that Argentina’s history of having a lot of bureaucratic red tape was often an excuse for a process to be handled by intermediaries connected to corrupt networks who demand guarantees or bribes to approve a process. Despite these challenges, the government has attempted to free the public sector from the weight of the government and give more businesses more freedom and responsibility, by eliminating these processes that reduce corruption, inefficiency, and bureaucracy.  At the same time, Pordalenne states that the government is at the private sector’s disposal, listening to their needs and making the road they have to travel as simple and with as few obstacles as possible. They have been working on easing the process for businesses in the private sector and creating an environment where more opportunities are accessible. 

Labor Unions and Growing Inequality 

Milei has received significant opposition as his neo-liberal reforms support Duncan Green’s argument that such brutal policies exacerbate inequality and harm the middle class. Although there seems to have been progress these last couple of months, the General Secretary of the General Union of the city of Buenos Aires, Hector Daer, explains how in reality, this adjustment has been brutal, especially on the sectors that are bearing the brunt. Daer states, “there are sectors that can’t take it anymore.” Economist Juan Manuel Telechea, would agree with Daer, as he has said that this positive data has created “a false sense of success,” he also questions “‘how much more are we going to be able to cut social programs and pensions?’- and hide the fact that a great social crisis is brewing beneath the surface”(Centenera 2024).

 Milei’s first cut was shrinking the number of ministries from 19 to nine. He also ordered the freezing of almost all public works and devalued the peso by 54%. This adjustment has included a 64% reduction of the multi-billion dollar subsidies which is how the previous center-left government kept public transportation and various utilities- such as electricity, gas, and water at relatively low prices (Centenera 2024). Economist Juan Manuel Telechea says, “Milei is governing the free market and turning his back on society.” With a significant cut in public spending and causing a deep recession, this year among 46 million inhabitants there are almost 5 million who suffer from hunger. As a result, attendance at free community kitchens reached levels similar to that during Covid 19 (Centenera 2024).

As a result of this growing poverty and inequality, Milei has received significant opposition from leftist political parties, labor unions, and social organizations because of his brutal “shock therapy”. On December 20th, two weeks after Milei went into office, Milei issued an emergency decree to alter 366 laws with the aim of privatizing the country. The edict also, took away several worker’s rights, by reducing maternity leave pay and severance pay (Kozul-Wright). The decree immediately sparked protests among workers, following an appeal from the CGT. 

A few days later Milei sent a reformation bill, known as the Omnibus Law to Congress- after facing obstacles from both Labor Unions and Congress that impeded his ability to fully enforce his decree. This law called for significant deregulation approaches, the privatization of major state enterprises, and reform of the public education system, etc (Alexandra). In addition to these major spending cuts, the bill sought to undermine the fundamental principles of open democracy by proposing to scrap proportional representation in Congress. It also sought to transfer legislative power to the president in areas such as energy and fiscal policy until 2025 (Kozul- Wright). In opposition to what the public viewed as “power-grabbing measures,” just 45 days after Milei took office, Argentinian workers coordinated by The General Confederation of Labor (CGT) went on a general strike (Kozul- Wright). 

Despite Milei’s challenges in advancing his legislative agenda, with both his Omnibus law and Emergency Decree initially being rejected, he eventually succeeded in getting a significantly scaled-down version of the Omnibus laws passed. This revised version was approved by Congress on June 12th, 2024 and is in force today. 

Daer finds it particularly unjust that Milei’s administration has attacked labor rights purely to transfer wealth from workers to business sectors. When this happens he explains, “we band together, raise worker’s union consciousness, draw strength from the power workers give us and resist to prevent further encroachment on these rights.” Daer also criticizes how the state has just been sitting back, as it believes once the macroeconomy is in order the microeconomy will develop in itself, but hasn’t given the public any direction or support. Daer urges that the state needs to work on creating development conditions that generate social sustainability. 

Argentina’s Political System 

Since Milei has been in power, Argentina’s political system has also appeared to be an obstacle for Milei and his ability to implement his radical neo-liberal agenda. Milei’s party, La Libertad Avanza, which was created by him and his siblings back in 2021 to allow him to run for the presidency, only controls seven out of 72 senators, 38 deputies out of 257, and does not control a single provincial governorship or local mayor’s office (Bergengruen and Werning)(Binetti). Milei’s lack of representation in the government, coupled with the strong presence of Peronist representation in both chambers of Congress deputies, and senators, has proven to be extremely challenging for him to implement his radical structural reform, as any laws he proposes must be approved by Congress. 

This became clear when, following a strike by the General Confederation Labor and the rejection of key measures by Congress, Milei withdrew the Omnibus bill on February 6th.  Milei, however, told the Financial Times, that rather than seeing the bill “shredded,” he planned to wait until after midterm legislative elections in 2025 to try again with a comprehensive package (Nugent and Stott). In speaking with Manuel Solanet, the director of Public Policy at ‘Libertad y Progreso,’ an organization dedicated to public policy research and advocacy for economic freedom and market-oriented policies, he expressed his hope that in next year’s election, Libertad Avanza will secure a larger role in government while Peronism will lose influence. This shift, he believes, would facilitate more approval of legislation proposed by Milei. 

Milei, however, despite the hurdles he has encountered with Argentina’s political system, has pushed to find other ways to implement his radical neo-liberal agenda, including by issuing emergency decrees. Emergency decrees are enacted in response to emergency and exceptional circumstances, as the President bypasses Congress to pass the mandate. A couple of weeks later, and following the several protests that arose, during the CGT appeal, the court deemed Milei’s reform “unconstitutional,” and in March, Argentina’s senate voted to reject the decree. Manuel Solanet explains how emergency decrees have their limits, as although they are designed to allow presidents to respond quickly to emergencies, they also require congressional approval. 

Effects of Subsidy Removal 

Alejandro and Miguel, the executive director and the president of an Argentinian NGO, expand on this perspective. Their NGO, Vivienda Digna focuses on improving housing conditions for low-income families through programs like home improvement microloans, urban development projects, and social construction materials stores. However, upon speaking to them they shared how this reform adjustment has impacted them significantly. Miguel explains how before Milei’s administration the government was a source of finance for Vivienda Digna. Vivienda Digna still has an agreement they signed last year where they were assigned funding to build 50 homes as part of this project that they are just now starting, but the government has completely cut all contributions. 

In the past, Miguel explains, all the state projects related to assisting the people who needed it the most had not been working. The state was very incapable of solving this issue, they should have been because they had the capability of having a transformative impact but they weren’t. Therefore, with these difficulties, when the state finds an organization like Vivienda Digna, which can manage things in an orderly way and achieve good results, it’s also their interest to work with organizations like them to solve problems they don’t know how to address. However, with the inflation that Argentina was having and is still recovering from, the government has made it very clear to all organizations that there is no money left to contribute. 

Conclusion and looking forward 

Through evaluating sources of resistance towards Milei’s ‘shock therapy,’ it is evident that it has been extremely painful for not just the lower class, as it has deepened inequality and increased poverty, it has also been harmful- although to a smaller degree- to businesses that are attempting to be more competitive and accessible to others. However, despite this pain inflicted on all of the Argentine population most of the population is in consensus that these are the necessary measures needed to be taken to recover Argentina from its economic crisis. Pordalenne often uses the metaphor of a patient who- if he doesn’t do something is going to die. Therefore in order for him to survive he has to undergo surgery and rehabilitation. The rehabilitation is going to hurt, but Pordalenne explains that the necessary surgery is being done to revive Argentina. 

Through this research, I have found that Milei, so far, has managed to sustain popular support, even amid brutal economic adjustments and domestic recession, largely due to his success in reducing inflation and achieving a fiscal surplus (Stuttaford) (Murillo). However, social unrest is starting to fuel, as Milei has yet to address the growing inequality and poverty in the country. 

In order to sustain popular support and advance his transformative agenda, Milei will soon need to address the two primary barriers hindering the full implementation of his neo-liberal policies. These challenges include the rising social unrest driven by growing inequality and poverty, which is being manifested by large labor unions and organizations. Additionally, Milei’s lack of political support and representation in Congress and among provincial governors has become a significant obstacle, preventing Milei from passing many of his reform bills. 

Historically, in Argentina, once social rest reaches a certain point it has often led to governmental overthrows and cyclical periods of political dissatisfaction. Notably, during Macri’s presidency in 2015 and 2019, his attempt to reshape the economy through neo-liberal reforms fell short because of growing discontent from the public. This goes to show that the public won’t tolerate these conditions for too long, and so Milei’s government has to soon address the growing inequality and poverty in Argentina. This is increasingly important as, according to most polls, inflation has dramatically declined as the main problem identified by Argentines and has been replaced by fears of job loss and poverty (Murillo). This shift in public concerns signals that Milei’s policies have been a double-edged sword, as his reduction of social spending has caused high levels of social unrest- including two general strikes and one large protest (Murillo).

On another note, to expand his political influence, Milei could also benefit from forming political alliances with the Peronists and the political party Pro. A trend amongst the interviewees is that most of them agreed on the fact that Milei has to make more of an effort to collaborate with other political parties to gain broader support. The political party Pro, previously led by former president Macri, makes up a wide proportion of Milei’s voter base. Macri’s backing, along with support from Peronists, would be highly valuable for Milei, as Macri’s political coalition, Juntos por el Cambio, and Peronists hold a substantial number of seats in both the Chamber of Deputies and the Senate. This would enable Milei to gain greater legislative influence (Centenera 2024). Although their backing may come at the cost of ‘watering’ down some of Milei’s radical proposals, in the longer run, this political support would ultimately reduce the need for extensive negotiations as Milei gains political support over time. 

Given the macroeconomic success Milei has achieved so far, his government appears to be focusing most of its resources on supporting those in the private sector and fostering business growth, which is argued is necessary to stabilize key macroeconomic variables. However, while continuing to manage Argentina’s macro economy, Milei could allocate some of these resources to alleviate the challenges faced by various sectors of Argentine society. By doing so, he could strengthen political backing from Peronsits and other center or left-leaning political groups, while also reducing the risk of losing some of his existing support. The conventional view of Milei is that he is a ‘crazy, madman.’ Pordalenne states, but “perhaps we needed a profile like that to make a change as the one that is being experienced, a change so strong to get Argentina out of its misery.”

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