Sunday, March 3, 2024

OP-ED | 02-12-2023 10:18

The beginning of the end?

If the popular vote failed to rally to defend acquired rights against Milei’s chainsaw, it is because those rights have been emptied for too many people falling outside the system.

Last week’s editorial began with congratulations (to president-elect Javier Milei) and condolences (for almost everybody else) along with a couple of other words with the same prefix such as contradiction and contrast while hoping that the prefix itself of “con” does not become the order of things – from the week that followed we could add various other words with that ubiquitous prefix such as confusion, conflict, controversy, control (of prices, now set to vanish) and consensus (still pending) without being able to reach any conclusion while the lingering doubt that this is all a “con” still lurks.

Winston Churchill’s famous verdict on the victory of El Alamein: “This is not the end. It is not even the beginning of the end. But it is perhaps the end of the beginning” could be applied to Argentina right now in an entirely different context and with other undertones. Churchill’s message exuded a cautious optimism that the victory which would indeed be completed 30 months later at enormous cost was on its way and perhaps a similar spirit corresponds here – that 30 months down the road we might see Argentina as a beacon of freedom and prosperity for a world changing in that direction. But perhaps not.

Contrary to the Churchill quote, we are beyond any doubt at the beginning of the end in the narrow sense that this is the final week of the Peronist populist regime nominally headed by Alberto Fernández (anything but a Führer). But whether it is either the beginning of the end or the end of the beginning will depend on how Milei’s resounding run-off mandate pans out in the next few months and the social reactions. Quite apart from respect for electoral verdicts being mandatory for any true democrat (when did the “defence of democracy” being voiced by some ever imply ignoring a vote of almost 56 percent?), it must be understood that Milei’s triumph was no accident and nor did it occur in a vacuum. It reflects a society changing fast amid the rapid global technological revolution accelerated and aggravated by the pandemic but is it changing fast enough to keep pace with the drastic reforms announced by Milei (although yet to acquire the necessary muscle and critical mass) while having the patience for their acceptance?

Milei has on his side a far more visible crisis than the “asymptomatic” one inherited by Mauricio Macri in 2015 with a clearer understanding that the downturn is structural and not merely cyclical. Printing money to throw at problems – a habit-forming feature of the outgoing government – may have given the Fernández presidency two years of growth despite the pandemic as against one for Macri but inflation has taken the average wage down from almost US$2,000 seven years ago to barely US$400 amid rising poverty with Argentina’s stubborn middle-class self-image increasingly fictional. If the popular vote failed to rally to defend acquired rights against Milei’s chainsaw, it is because those rights have been emptied for too many people falling outside the system. Such middle-class watchwords as the work ethic, productivity and meritocracy have been embraced by millions of impoverished youth in rebellion against a future of state handouts and meal deliveries and against a schooling deflected by the teacher unions.

Yet does all this mean that a fatigued society is ready for that other Churchill quote of “blood, sweat and tears” (an explicit promise of Milei who has announced a first year of stagflation as the inexorable result of the outgoing government’s policies)? Millions of voters enthusiastically embraced Milei’s pledge to end “caste” privileges without realising that these are a small fraction of one percent of gross domestic product and that in order to slash public spending by 15 percent of GDP (even with two-thirds in Leliqs), Milei will need to massacre rights as well. The permanent transformation of Chile in the last four decades began with negative growth of minus 14.3 percent in 1982 to clean out the deadwood but that was the work of Chicago boys protected by a military dictatorship – such is Milei’s political weakness that he might even have to preserve caste privileges at the cost of social rights in order to negotiate any reforms at all (just as President Fernández promised to use Leliq interest to improve pensions, only for Central Bank debt to rise from one to 23 trillion pesos with pulverised pensions).

But everything remains to be seen as from December 11 – how will the campaign firebrand and transitional pragmatist begin his presidency? ​


More in (in spanish)