Argentina’s Shock Therapy: Precipitous Shift to the Right Sparks Protests and Polarization

Lyndon Porter

Summary: Argentina’s new far right libertarian president Javier Milei sparks a wave of opposition by working people in response to austerity measures. – Editors.

illustration by MGLima-Hipergrafia Studio Dec. 30, 2023, reproduction rights free to noncommercial sites.

On December 10, 2023, 53-year-old economist and self-described “anarcho-capitalist” Javier Milei took office as president of Argentina. He takes over from unpopular center-left president Alberto Fernández. In the short time Milei has been in office, there has been increasing polarization and discontent among the Argentine people as they recognize his policies as a continuation of far-right reaction.

Political Rise Amid Argentina’s Economic Crisis

Javier Milei’s rise must be understood in the context of the decades-long structural problems of the Argentine economy, especially the extremely high inflation rate, which squeezes wages and thus makes the material living conditions of the working class much worse, even more so with the global economic downturns and the COVID-19 pandemic. It also demonstrates the bankruptcy of the reformist alternative, which in Argentina was manifested by Peronism, which postulates, in a very brief summary, just like the legacy of Getulio Vargas in Brazil, a capitalist development with social protection measures for workers. Milei, on the other hand, is a radical free-trader who proposes the total freedom for capital to exploit labor, without any state intervention, or, saying with Marx, “the unfettered movement of capital,” freed from all shackles (see “The Chartists”, published in The People’s Paper, August 10, 1852).

Milei rose to fame as a television talking head known for his aggressiveness and vulgar insults against rivals in televised debates that got him into several controversies. In 2021, as part of the ultra-conservative coalition La Libertad Avanza (Freedom Advances), he earned a place as a national deputy representing the City of Buenos Aires. This jump into national politics would create the foundation for his rising popularity as he voiced his stances against “parasitic politicians” and Peronism.

He began his presidential campaign in June 2022 as a member of the Libertarian Party. By March 2023 he had become a recognized contender, winning over a good percentage of under-30 voters who grew up in the great depression of the 2000s. As inflation rose in the middle of 2023 so did Milei’s popularity in the polls which would continue growing. In the primary elections, Milei came out as a leading candidate with 30% of the votes and was praised by many right-wing figures across Latin America. He won in a landslide in the runoff election against center-left finance minister Sergio Massa with 55.69% of the vote.

Like many right-wing leaders operating in the neoliberal paradigm, Milei relied on a populism fueled by anti-establishment sentiment and anti-left-wing rhetoric to bring him to the top of the polls. He has championed many standard far-right positions such as deregulation, privatization, anti-trade unionism, anti-socialism, anti-abortion, and climate change denial. He also adopts many typical right-wing libertarian views like the legalization of drugs and prostitution, free love, deregulation of firearm ownership, and indifference to same-sex marriage. These views combined with his eccentric character and bizarre public acts, like carrying around a chainsaw to symbolize the cuts he intends to make and singing strange rock songs, have given him the public image of a rebellious far-right leader who intends to disrupt the current system and usher in a new era of Argentine society.

Milei’s rising popularity and presidential victory are no doubt tied to the growing economic crisis in Argentina and discontent with the status quo. He has made attacks not only against left-wing leaders but also traditional conservatives, both of whom he believes form a political caste of “useless and parasitic” politicians. He has made clear that his solution to bring Argentina out of its crisis is a shock therapy economic plan with huge fiscal adjustments and cuts that will fall on the state. As he said in his inauguration speech, “There is no alternative to a shock adjustment”.

Milei’s Turbulent Start in Office

Following his inauguration, Milei introduced several austerity measures meant to combat the growing inflation and poverty rate in Argentina. At the top of his list of reforms are plans to privatize state-owned firms including the currently state-owned oil company YPF. Another measure he intends to pass is raising taxes for Argentina’s grain exports, which has met opposition from many farmers who state that it would hurt the industry. In the first weeks in office, Milei issued a decreto de necessidad y urgencia changing more than 300 laws (this kind of decree has immediate validity but needs to be approved by the Parliament afterwards). Among the decree are plans to replace the peso (currently devalued by 50%) with the dollar, suspend public works, and change landownership laws to allow foreign investment. Milei’s policies are essentially anti-labor. Until now, the measures he established by decrees include suppressing the legal duties to register workers, to pay workers´ severances, reducing maternity leave days, and the most impressive one, allowing to pay salaries in bitcoins or in natura (in meat, for instance).

The criticisms surrounding Milei’s ascent to power have not been limited to his economic policies. Shortly after taking office, he received opposition from Jewish organizations in Argentina for appointing a former neo-Nazi, Rodolfo Barra, as head of the Treasury’s prosecution office. He received further criticism for appointing his sister, who managed his campaign, as General Secretary of the Presidency by modifying a previous law that would have prevented this form of nepotism.

Despite the controversy and outrage surrounding Milei, recent polls show that at least 50% of the Argentine people had a good opinion of him. It seems that the upper class and those with capital investments believe that Milei’s plans will be able to bring back stability to the economy. Other supporters who do not own capital seem to believe that even if things will be difficult for some time, they are willing to take the chance for a way out of the economic hell they are experiencing.

A Nation Divided Over Austerity and Protest

However hopeful his supporters may be, his short time in office has already seen resistance in the form of mass protests. On December 20th thousands of protestors took to the streets of Buenos Aires to demonstrate against the new government. However, the turnout was not as big as expected due to Milei’s restrictions on protests and a large police presence dispersing the crowds.

That night, after the presidential address announcing the mentioned decreto de nececessidad y urgencia, thousands of protestors once again took to the streets. Despite the government’s threats to strip away state benefits for those caught protesting and obstructing traffic, the pronouncement had set off a spontaneous outburst of anger that could not be contained. Groups of employed and unemployed workers marched across the city carrying kitchen utensils, engaging in what is called “cacerolazos,” a noisy form of anti-government protest symbolic in Argentina. Protestors outside the congress plaza made chants calling Milei a dictator against the working people and declaring the austerity measures to be anti-democratic. Although police had trouble stopping protestors from blocking the streets, the protests remained mostly peaceful with some organizers later calling for a general strike led by the trade unions.

Milei’s response was to take to the radio to say the protestors “suffer from Stockholm syndrome” and are attached to the old economic model that impoverished them, promising that even more drastic changes lay ahead. He had already declared new measures to limit protests, forbidding protestors to carry any kind of stick, cover their faces, bring children, or block traffic. In addition, the security minister, Patricia Bullrich, the former candidate of the so-called center-right, has introduced new protocols to allow police to break up street protests without a judicial order and identify protestors using video technology to fine or prosecute them later. These protocols have been called an unconstitutional criminalization of protest by Argentinian labor and human rights groups but are overwhelmingly supported by the right wing.

Although the circumstances surrounding Milei’s rise to power and his eccentric character have caused many to attribute to him some uniqueness, he does not represent a completely new force of reaction. Milei has been compared to other 21st-century right-wing reactionaries like Donald Trump and Jair Bolsonaro in the U.S. and Brazil, who have been known for their brazenness and fake rhetoric against corruption and the left-wing; nevertheless, it is important to recall an important difference between them, as Bolsonaro and Milei are against protectionism. He has cited the Austrian school of economics and Margaret Thatcher as figures of admiration.

What Milei represents is a continuation of an ongoing reactionary effort to manage the capitalist crisis, as with neoliberal leaders trying to keep the moribund system on life support through austerity measures that embolden the capitalist class. Of course, these measures will never be able to reconcile the contradictions of capitalism.

As Dunayevskaya reminds us concerning Marx’s absolute general law of capitalist accumulation, the “accumulation of capital at one pole” follows the accumulation of “misery and unemployment at the other” (Philosophy and Revolution, pp. 92-93). This absolute is now being demonstrated in Argentina, where the more drastic austerity measures become the more is paid in the life and blood of the working people, and the greater the struggle for an alternative to capitalism grows. Although it is still too early to say what the future of Argentina will look like under the new government, Milei’s time in office is certainly sure to be met with more working-class resistance as his shock therapy policies push the already impoverished Argentinian people into further hardship.




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1 Comment

  1. Paulo Morel

    Good synthesis. One thing that I believe is always important to stress about the situation in Argentina is the role of the press in the Neoliberal ideological dictatorship we see everywhere today. A campaign of fear and disorientation preceded and prepared the election of Milei, as it happened with Bolsonaro in Brazil. Without years of public lies and deceit by the industry of communications the election of fascists would not be possible. In this sense, Milei didn’t fall from the sky. What he is doing now is literally a coup d´etat, an attempt to regime change towards open dictatorship. Neoliberalism can´t stand even a weak form of bourgeois liberal democracy.