I have studied the libertarian movement in 30 countries this year and last year, but in none of these countries have I seen a libertarian movement as strong as in Argentina. Normally, many people go to the far left or far right when their country is in dire crisis, but in Argentina, libertarians are the beacons of hope, especially among young people. Among those under 30, a majority voted for Milei.
Argentina is one of the least free economies in the world
The elections are taking place against the backdrop of a dramatic economic crisis and an inflation rate of over 100 percent, one of the highest in the world. Inflation has been in the double digits every year since 1945 (except the 1990s). Argentina has been run down by statists for decades and is now one of the least economically free countries in the world.
In the “Index of Economic Freedom” it is ranked 144th out of 177 countries – and even in Latin America, only a few countries (especially Venezuela) are less economically free than Argentina. For comparison: Chile, although its position deteriorated after the socialist Gabriel Boric came to power in March 2022, is still the 22nd most economically free country in the world and Uruguay is 27th (the USA is 25th).
Argentinians want more influence from the market
But when it comes to popular sentiment, many Argentines have had enough of left-wing Peronism and are turning away from the statism that has characterized the country for decades. In a survey I conducted last year, Argentina was already one of the countries where people most strongly support the market economy. In Argentina, from April 12 to 20, 2022, a total of 1,000 representatively selected people were surveyed by the opinion research institute Ipsos about the image of the market economy and capitalism.
First we wanted to find out what Argentinians think of the market economy. We presented respondents in Argentina with six statements about the market economy that did not use the word capitalism. It turned out that statements in favor of a greater influence of the state were approved by 19 percent of those surveyed and statements in favor of more market by 24 percent.
We conducted the survey in 34 other countries, but in only five countries (Poland, USA, Czech Republic, South Korea and Japan) was support for the market economy even higher than in Argentina; in 29 countries support for the market economy was lower.
In addition, all respondents were presented with 10 terms – positive and negative – and asked which of them they associated with the word “capitalism” as well as 18 other questions about capitalism. Admittedly, support for capitalism was no longer as great as in the first set of questions on the subject of the market economy, where the term “capitalism” was not used.
But even when the word “capitalism” was mentioned, the image of capitalism is only more positive in seven out of 35 countries than in Argentina, but in 27 countries, according to this survey, people think worse about capitalism than in Argentina.
Think tanks play an important role in mental change
Only against this background can it be understood that an avowed capitalism fan like Javier Milei, Professor of Austrian Economics, has a chance of winning the elections in the country. Milei campaigned on a call to abolish the central bank and allow free competition between currencies, which would likely result in the U.S. dollar becoming the most popular form of payment.
He also called for the privatization of state-owned companies, the elimination of numerous subsidies, a reduction in taxes or the abolition of 90 percent of taxes and a radical liberalization of labor law. In the education sector, Milei called for funding to be switched to a voucher system, as Milton Friedman had already suggested.
Argentina is also an example of the important role think tanks play in preparing intellectual changes that are then followed by political changes. In Argentina, for example, these are the “Fundación para la Responsabilidad Intelectual”, the “Fundación para la Libertad” or “Federalismo y Libertad”. I have met libertarian think tanks in 30 countries, but only in a few countries were they as active as in Argentina. It will be curious to see whether the seeds they have sown will sprout on November 19th.