Can New Chef Milei Change Argentina’s Recipe?
I have had the great privilege of knowing folks who worked in the Reagan White House. Their recollections of that speech-making process help to illustrate the completely revolutionary approach to public communication that President Javier Milei is using in Argentina. Milei is facing far worse economic problems than Reagan did as he enters office. The crisis that Milei inherited is deeply rooted and ingrained in the collectivist mentality of Argentina. Milei must constantly be teaching economics while pushing through profound changes to save his nation. Reagan wanted to make it morning again in America and did; Milei needs to save Argentina from continuing, collectivist catastrophe.
Reagan was an active participant in his speech writing. “Mr. Gorbachov, tear down that wall,” came from Reagan himself at the Brandenburg Gate, and in fact ran contrary to the wishes of his staff. Milei clearly does a lot of his own speech writing, and even though there are echoes of Reagan in his rhetoric, he goes well beyond the Gipper in terms of his ability to distill and communicate complex ideas clearly and precisely.
In his most recent speech presenting historic and unprecedented cuts in government regulations and spending to the bloated and sclerotic Argentinian bureaucracy, Milei was part educator, part persuader, and part leader.
He always spends a lot of time explaining how monetary policy has contributed to Argentina’s century-long economic collapse, and here again, he reminded his listeners reasonably and calmly, without the chain saw that had been his trademark, that excess government spending causes inflation and serves as a hidden tax that is particularly exploitative of the poor and working classes, who see their savings eroded and salaries diminished. That same monetary tax leads to other effects including a lack of investment in business. When the government is forced to apply capital controls and high tariffs to defend the monetary debasement, other economic distortions emerge. It’s an endless cycle, and once again Milei elegantly described it to the nation.
But he also explained why aggressive cuts in the Argentine bureaucracy were necessary. He began his speech by saying that Argentina’s problems are not the result of “the chef” in the economic kitchen, but rather the recipe. The long-followed collectivist recipe includes not only excessive fiscal spending and money printing, but something equally problematic that the great F.A. Hayek identified in perhaps his most famous journal article.
“The Use of Knowledge in Society” was published by Hayek in the American Economic Review in 1945, and it contains an essential truth that is not easily understood even by brilliant people, let alone folks on the street. When I discussed the article once with Nobel laureate Vernon Smith he admitted that it took him several readings of the piece to understand what Hayek was driving in it. Hayek argued that knowledge is so localized and specific that public sector officials cannot replicate it. The knowledge is dispersed throughout the public and no one person can possess it, process it, and produce better results than a voluntary market when that knowledge is used individually by the participants. Julia Child couldn’t make this recipe work.
He noted that historically the state has been seen as more important than the citizens. He argued that individuals are merely treated as ends of state planning who must show obedience to their government officials. He said that politicians govern the destinies of the citizens, which has merely led to the politicians becoming richer and the nation worse off leaving them with an impoverished nation. No one in Argentina can do anything productive, work, invest, buy, be educated, without getting government approval and permission.
This was not merely a speech; This was a carefully crafted lesson in economic theory and political history that has direct relevance to his audience. The staggering ineptitude of previous governments has resulted in devastating inflation, which every Argentine since birth has suffered through. But it has also made it impossible for Argentines to live as free individuals. The speech resonates because it directly addresses the reality of destroyed hopes and dreams that his supporters live with, and his solution is clear, consistent, and economically sound. The fact that it ends the privileges of what Milei likes to call “the political caste” is merely icing on the cake. He clearly and directly explains, why he’s doing what he’s doing, why it will work, and why the alternatives have failed.
The same cannot be said for his opponents. The opposition and mainstream Western press are now harping on about protests and “anti-democratic” measures that include limiting protests to not blocking traffic and impeding daily life. There are literally no discussions of alternative economic approaches from either opposition leaders or the press because none exist. Everyone recognizes the reckoning necessary from years of profligate government spending, currency debasement, and outright theft. There are no left-wing alternatives because as Milei clearly outlines in his speeches all of them have been tried and failed miserably. Argentina, like Venezuela, Cuba, and North Korea are the world’s most extreme examples of state-run economies. All are disasters. All the money printing and government spending in the world can’t help them; those activities caused the disaster, and Milei in every speech explains that elegantly and convincingly.
Milei is standing before a nation asking for sacrifice and patience because he understands how difficult this process will be. The intellectual depth that Milei exhibits is remarkable both for his knowledge of the vast literature of liberty, but also for his profound, very Reaganesque faith in his people.
Milei is the first Argentine president who believes in his fellow citizens. He believes in the possibilities and provides a blueprint of hope. He may not be Reagan when it comes to hopeful soaring prose and cities on hills. But the changes he’s trying to implement and the mission he’s undertaken are monumental and will empower the people to be free and productive. Reagan would have appreciated that. Whether he can achieve his political goals remains to be seen, but he’s obviously equipped to defend his policies. Now it’s up to Argentina to decide the next step.
