20/12/2024
‘The public sector is the illness’: Javier Milei on his first year in office
Kate Andrews
issue 14 December 2024
Buenos Aires
‘I never wind down,’ says Argentina’s President Javier Milei when we meet in his Presidential Office at the Casa Rosada. ‘I work all day, practically… I get up at 6 a.m., I take a shower and at 7 a.m. I am already at my desk working. And I work all the way until 11 p.m. I enjoy my job. I enjoy cutting public spending. I love the chainsaw.’
It was a photo of Milei with a chainsaw – who was then the insurgent candidate – that propelled him to international fame last year. He waved it on the campaign trail as a symbol of what he would do to government regulations and bureaucracy if elected to the presidency. He had previously gone viral in a video showing him shouting ‘Afuera!’ (‘Out!’) while ripping names of government departments off a whiteboard.
‘That level of joy is too much for me. Removing 44 regulations within a single day is sheer bliss’
These stunts drew attention to his election promise: to wage war on socialism and bring free markets to Argentina. He started at 16 per cent in the polls, but his pledges to curb inflation, abolish price controls, shrink the state and get the country back on a strong fiscal footing won over the majority of Argentinians, who were ready for change. He won the attention of leaders across the world, too.
Milei is proud of his global reputation as a state slayer. For many years as an economist, commentator and self-described ‘anarcho-capitalist’, he had been the country’s biggest critic of socialism. In 2021 he founded his libertarian coalition, La Libertad Avanza (Freedom Advances). This month marks one year since Milei took office, elected with a mandate to overhaul 100 years of socialist rule – and he’s eager to trumpet the results.
‘Let me tell you a fun story. I was in a bilateral meeting with Indian Prime Minister [Narendra] Modi,’ he tells me through his official interpreter. In the meeting at the G20 in Brazil last month, Milei sang the praises of his deregulation minister Federico Sturzenegger, who was also in attendance. Milei told Modi that the minister had cut four regulations in Argentina that very day. ‘Minister Sturzenegger didn’t correct me, because if I had known the actual figure, I would probably have started to celebrate on top of the table. Because he hadn’t removed four regulations, but 44 of them.’
A proud, grateful look spreads across the President’s face. ‘I can assure you that if he had corrected me on the spot, I would have got up and given him a big hug, because that kind of level of joy is too much for me. Removing 44 regulations within a single day is sheer bliss.’
Slashing bureaucracy is his idea of a good time. ‘I derive pleasure from removing the state,’ he says. ‘I feel, that way, we become more free, that I am giving freedom back to the people.’
You don’t hear other world leaders, even right-wing ones, speak about government institutions as Milei does. At least not in public. But not every country has experienced economic turmoil like Argentina. At the turn of the 20th century, it was one of the richest countries in the world. Going into the 21st century, socialist policies had transformed it into a poor one.
‘One thing about me is brutal honesty and my remarks on air are consistent with my remarks off air,’ he says. ‘But then again, I’m an outsider. I see this as a job, you see.’
That job seemed impossible when he entered office. Nonstop money-printing meant Argentina was experiencing another round of high inflation: it had a monthly inflation rate of more than 25 per cent. By October, that had slowed to 2.7 per cent.
The journey has not been pain-free. The economy shrank by 3.9 per cent in the first half of the year – a recession Milei warned was inevitable if Argentina was going to get inflation under control. Still, after a mid-year dip in approval ratings, the President has recently bounced back in the polls, buoyed by indicators that the country has turned a corner. The local stock market has surged by 130 per cent, as investors grow increasingly confident about Argentina’s economic prospects. JPMorgan has said that the economy has been growing at an annualised rate of 8.5 per cent.
‘People used to say that if we implemented the very harsh stabilisation programme, there would be huge costs in terms of economic activity and employment and salaries,’ Milei explains. ‘We’re going to close the year with GDP higher than what we had when we first took office. At the same time, there hasn’t been a substantial loss of jobs despite the strong cuts we introduced in the public sector.’
The Casa Rosada – the ‘Pink House’ – is noticeably quiet. A few officials scurry between rooms. Several school tours walk through the building. Otherwise, the hallways are empty. ‘We [are dismissing] about 50,000 civil servants; we terminated about 200,000 contracts,’ he says.
‘In the last 123 years Argentina had a fiscal deficit… during the ten years it supposedly had a surplus, it was because it defaulted on its debts, so Argentina actually never had a surplus.’ Now a surplus has been achieved – a staggering turnaround from a $1.3 billion deficit in October last year to $500 million in the black one year later.
Milei’s efforts to slash the state and balance the books contrasts with what has been happening across Europe since the pandemic. While right-wing parties have been growing in popularity, this shift has not been driven by any libertarian movement. Instead, the demand is for security: the state needs to be bigger and more involved than ever, to keep its citizens safe.
Javier Milei and Kate Andrews at the Casa Rosada, Buenos Aires
Meanwhile a consensus has developed in Britain that more investment is needed to fix public services, as evidenced by Labour’s first Budget. I ask Milei how optimistic the United Kingdom – and other countries pursuing this agenda – should be that another cash injection will make the state work as it should. ‘Well, we are proof-positive that that doesn’t work,’ he says. ‘We have 123 years of history that that doesn’t work, that the state is not the solution, that the state is the problem.’
He quickly caveats his answer: ‘All I can do is share the Argentine experience and talk about how problems are fixed through the libertarian lens. But, of course, countries are sovereign, so I wouldn’t venture to give opinions on the policies of other states. That’s up to them and to the people who live in them, so there is no reason why I should get involved. But let me tell you, in Argentina those ideas failed.’
His warning is stark: ‘The public sector is the illness. If a body has something that is harming it – a virus, a germ, a bug, a parasite – you extract the parasite, you don’t feed [it]. If you feed the parasite you are going to end up poorly off… in our experience it’s clear, we have got the state out of the way, things are working better.’
In speeches and interviews, Milei effortlessly pulls out quotations and themes from great free-market works, such as Friedrich von Hayek’s The Fatal Conceit or Ludwig von Mises’s Socialism. He talks about the ideas and philosophers that shaped his libertarian thinking. But what attracted him to those ideas in the first place?
‘The modern-day Edison, the Leonardo da Vinci of the modern age, is Elon Musk’
‘I am a true libertarian,’ he says. ‘I see the state, government, as an oppressive machine which destroys rights, which destroys liberty. I see taxes as theft, I see the state as an organised criminal gang.
‘[Conventional politicians] like to wield power. All they care about is power and the next election, and after the next election, the next thing they worry about is the next election. So perhaps people might be the 25th priority.’ Milei has a metric in mind when he’s judging how much freedom he’s returning to Argentinians. ‘The best way to see if I’ve given people the power back or not is to see whether I’ve shrunk the state… and I have shrunk the size of the state by one third.’
This is a leader who was originally described by outlets such as the BBC as ‘far-right’. Yet the policy announcements in Milei’s first year point to a radical libertarian experiment taking place. ‘I [asked] for the vote in order to give power back to the people,’ says Milei. ‘I believe in freedom. I believe in individuals.’
His daily drive to dismantle the state seems supported by his confidence that the individual knows best – but even without that belief, he says, he could never be a central planner. ‘The task of planning is literally impossible because it involves having perfect knowledge about the preferences of every individual, present and future… you would need to be God and [if] there’s one thing that’s clear to me it’s that politicians are not God.’
Milei’s opponents dismiss him as an eccentric. Yet the man who is about to become, once again, the most powerful leader in the world is interested in his ideas and looking to replicate some of them. Milei was the first world leader to meet President-elect Donald Trump after the election – an experience at Mar-a-Lago which he describes as ‘fabulous’. How did the meeting come about? ‘That was actually raised in coordination with my foreign minister,’ he says. ‘All of the people who are going to be government officials for Trump knew me or knew about me, and I really get on very well with the modern-day Edison, the modern-day Michelangelo, the Leonardo da Vinci of the modern age, who is Elon Musk.’
Milei’s Department for Deregulation and State Transformation is being used as inspiration for Trump’s new Department of Government Efficiency (Doge), which Musk and the entrepreneur-turned-politician Vivek Ramaswamy are running in an attempt to cut $2 trillion from federal spending.
It seems both Trump and Musk think Doge can learn from Argentina. ‘They [gave] me a very prominent role at the meeting because I had a chance to speak,’ Milei says. ‘But also [Trump] praised my address and the things we are doing in Argentina: Making Argentina Great Again!’
There is an obvious difference between the Trumpian worldview and Milei’s, however. The week I arrive in Buenos Aires, Milei has announced he’s slashing tariffs, raising the tax-free limit on imported packages from $1,000 to $3,000. Trump, meanwhile, says he’s planning to slap tariffs on his friends and foes. Has Milei had the opportunity to tell Trump what a bad idea tariffs are?
‘If you will allow me,’ he replies, ‘that’s part of the distortion perpetrated by the press.’ The problem goes back to the 2008 financial crash and subprime mortgage crisis, he says, when China was playing fast and loose with its exchange rates and trade rules. Its behaviour of ‘[exporting] its own imbalances to the rest of the world’ was overdue for confrontation. ‘Trump asked China to revise its monetary policy to no longer keep a fixed exchange rate since it’s a huge, important country that plays by international trade rules. China decided not to modify its exchange policy. Of course it’s entitled to do that as a sovereign country, and Trump’s response… was to correct the problem via tariffs.’
I ask Milei if Trump is a conundrum for libertarians. On the one hand, he offers domestic tax cuts and a commitment to free speech. On the other, he proposes tariffs and economic protectionism. Does Milei think the positive case outweighs the negative case, or does he think Trump – who says that ‘tariffs’ is his favourite word apart from ‘love’ and ‘religion’ – is bluffing to secure trade deals?
‘First of all, what I do commend and welcome about Trump is that he understands who the enemy is. He understands that woke-ism is the enemy, he understands that the enemy is socialism, that the enemy is the state… on the second thing, I believe all the accusations levelled against him about the tariffs vis-a-vis China are wrong, they’re incorrect, so I don’t really take that point. I think one should try to understand how the system works.’
Milei’s free-market radicalism is tempered, then, by his realism when it comes to politics and the way the world operates. He calls himself an anarcho-capitalist in ‘philosophical terms’, but in ‘real life’ he says he hovers ‘between a classical liberal or libertarian and a minarchist’. He is critical of the purists, the ‘liberal libertarians who strongly criticise me for not having lifted the currency controls on day one’ – a major move towards liberalisation that still has not happened. ‘If I had done that on the very first day, it would have caused hyperinflation and by January I would have been thrown out.’
‘Trump understands that the enemy is socialism, that the enemy is the state’
Milei is also a fan of Boris Johnson, and the two met in Buenos Aires in October. ‘We had a wonderful conversation,’ he says. ‘[Johnson] brought me his book, and we talked about economics and we discussed the philosophical approach. Naturally, he is closer to being a more classical liberal… I really enjoy having the opportunity to talk to other leaders and I try to internalise the restrictions they face.’
Johnson is not the only former prime minister to have made an impression on Milei. He describes David Cameron as a ‘brilliant individual’ – and he’s spoken to both Johnson and Cameron about his hopes of meeting Mick Jagger when he comes to the UK. ‘I would also like to meet Keith Richards. I have the full collection not only of the Rolling Stones but also of the Beatles.’ Milei often speaks about his love for the Rolling Stones, but his Anglophilia runs much deeper than that.
‘One thing that also brought me very close to British culture was Lord Byron, especially when I read “Don Juan”. I thought it was amazing. In fact, when I bought the book, I had it in English and in Spanish, and when I read it in English I really enjoyed it much better than in Spanish.
‘Of course, Shakespeare also brought me close to British culture. There are many things I find very appealing about the UK, apart from the fact that you invented football but of course we are the best ones.’ Fighting words, I say. We won’t fight about it, he tells me reassuringly, ‘but we are better!’.
Given his enthusiasm for Britain, and presumably his classical liberal belief in the right to self-determination, I wonder how Milei defends Argentina’s position on the Falkland Islands – or what the Argentinians call Islas Malvinas. In a referendum in 2013, 99 per cent of Falklands residents voted to remain British. ‘We have a sovereignty claim,’ he says. ‘We believe that our foundations, in support of the claim, that the Malvinas are Argentine, so we will seek through diplomatic channels to recover them.
‘The people of Argentina elected me as President. In that context I recognise the Malvinas Islands as Argentine, and I will make every diplomatic effort to recover them and that’s part of my policy… you may like my proposals or not, but you won’t say that I’m not consistent.’
On trade, Milei is certainly consistent: the more, the better. He wants to ramp up relations with Beijing, for instance, just as Trump’s America seems to be decoupling from China. He had a sideline meeting with President Xi Jinping at the G20 to discuss further opportunities. How does a libertarian president deal with an authoritarian communist world leader?
‘What is my job today? President of Argentina. And I need to take care of defending the interests of the people of Argentina and improving the quality of life of the Argentine people,’ he says. ‘China is a natural partner for us. And let me tell you something, I was pleasantly surprised by the way that China works with other countries, in that it’s a very friendly partner… it is a trading partner that does not interfere, that causes no nuisance.’
It’s a glowing description of the world’s second-largest economy. ‘Honestly,’ he says, ‘I am very much surprised by the respectful way they have treated us.’ He then remembers the largest economy, and smiles. ‘And at the same time, I am really filled with joy by the way the Republican party in the United States treats us.’ There might come a point, soon, when he has to choose between the two.
Buenos Aires ‘I never wind down,’ says Argentina’s President Javier Milei when we meet in his Presidential Office at the Casa Rosada. ‘I work all day, practically… I get up at 6 a.m., I take a shower and at 7 a.m. I am already at my desk working. And I work all the way until
