As always when a representative of the right wing tells you he or she is campaigning to bring “freedom,” be afraid. Very afraid. For “freedom” in these cases means freedom for the richest financiers and industrialists to do whatever they want.
For them, “Freedom” is for capital, not for human beings without capital to invest. Today’s exhibit is the offensive against working people that is taking place in Argentina, where the new extreme right president, Javier Milei, is determined to see how far capitalist ideology can be pushed. So far, Argentines have pushed back but Milei, cheered on by domestic and international big business leaders, is nothing if not determined to ram through his austerity packages. And he has shown no inclination to allow mere democracy to stand in his way.
Nonetheless, there is no surprise here. President Milei ran on a program of extreme austerity, brandishing a chainsaw at his election rallies. Unfortunately, enough Argentines bought his siren songs, or were desperate enough to try anything given the country’s punishing inflation, to elect him, ending a one-term period in executive office by the ordinarily dominant Peronists. Alas, doing something new for the sake of doing something new, when it is aimed at you, rarely works. And here there is actually nothing new. President Milei simply promoted standard hard right ideology, albeit promoting it with unusual vigor. Snake oil is snake oil, as Argentine working people are already finding out.
People filled the streets of Buenos Aires and Argentina’s biggest cities to demand “memory, truth and justice” for the victims of state violence (photo by Izquierda Diario)
Still waiting for benefits to trickle down, aren’t you? For more than 40 years, the same tired propaganda has been peddled, and has been implemented in various countries, starting with Augusto Pinochet’s murderous military dictatorship in 1973, in Chile, and gaining speed with the election of Margaret Thatcher in Britain in 1979 and Ronald Reagan in the United States in 1980. “Neoliberalism” is the term that the world came to adopt for this vicious austerity. (The term references how the world outside of North America uses the word “liberal” to mean minimal government regulation to enable decisions to be made by market forces; this is termed “libertarianism” in North America. Capitalist “markets,” however, are nothing more than the aggregate interests of the biggest financiers and industrialists and are not the neutral arbiters loftily sitting in clouds even-handedly dispensing justice as conservative propagandists would have us believe.)
The ideology that undergirds austerity programs has a long history and has to be incessantly promoted, all the more so because traditional “laissez-faire” ideas had become discredited during the Great Depression, leading to post-World War II Keynesianism becoming entrenched. The need for capitalists to give concessions to save their system due to the mass revolts of the 1930s and the failure of fascism as a “solution” to capitalists’ difficulties in maintaining profits helped the temporary acceptance of (or resignation to) Keynesianism. Perhaps the most influential ideologue of laissez-faire/neoliberal economics is Friedrich Hayek, who went so far as to assert that solidarity, benevolence and a desire to work for the betterment of one’s community are “primitive instincts” and that human civilization consists of a long struggle against those ideals. “The discipline of the market” is the provider of civilization and progress, he wrote. His most prominent student, Milton Friedman, would supply the Pinochet dictatorship with its economic program, the first modern case of “shock therapy” being imposed with maximum force because there was no other way it could be implemented.
What Thatcherism had in store for Britons was demonstrated by her crushing of the miners’ strike and Reaganism in turn showed its teeth by crushing the air traffic controllers’ strike. Punishing austerity was to follow on both sides of the Atlantic as declining profits and increasingly stiffer and more globalized competition required pushing down wages and working conditions, reducing or eliminating regulations and outsourcing production to wherever labor was cheaper and regulations fewer. Making all this work required dropping barriers to trade, thus bringing on the age of so-called “free trade” agreements that put regulation outside political or democratic control, and cracking open countries outside the capitalist core of the Global North to expose those economies to plunder with legal defenses stripped away by unaccountable multinational organizations. Debt is used to enforce these prerogatives, with multinational lending organizations such as the World Bank and International Monetary Fund imposing draconian conditions on loans that are used to pay off earlier loans, sending Global South countries into deeper debt. The European Union is another neoliberal offensive, a supranational organization run by and for bankers that overrules democratically elected governments at the national level.
The Milei offensive in not new to Argentina
Argentina, although among the biggest countries outside the capitalist core, has suffered multiple rounds of neoliberal austerity. President Milei’s draconian attempts to maximize corporate profits are not new.
The fascistic military dictatorship of 1976 to 1983 laid waste to the Argentine economy while unleashing horrific human rights abuses. Upon seizing power, the military handed over economic policy to a well-connected industrialist, José Alfredo Martínez de Hoz, who ruthlessly implemented a severe neoliberal program of shock therapy, backed by a savage campaign of torture, “disappearances” and killings waged by the military and two allied fascist groups. The CGT union federation was abolished, strikes outlawed, prices raised, wages tightly controlled and social programs cut. As a result, real wages fell by 50 percent within a year. Because of the collapse of internal consumption caused by this austerity, ten percent of Argentina’s workforce was laid off in 1976 alone. For the last five years of the military junta, 1978 to 1983, Argentina’s foreign debt increased to US$43 billion from $8 billion, while the share of wages in national income fell to 22 percent from 43 percent.
Upon the return of formal democracy, the debt did not go away. A civilian president, Carlos Menem, imposed an austerity program in the early 1990s in conjunction with selling off state enterprises at below-market prices. This fire sale yielded $23 billion, but the proceeds went to pay foreign debt mostly accumulated by the military dictatorship — after completing these sales, Argentina’s foreign debt had actually grown. The newly privatized companies then imposed massive layoffs and raised consumer prices. By 1997, about 85 percent of Argentines were unable to meet their basic needs with their income. In contrast, banks underwriting Argentine government bonds earned an estimated $1 billion in fees between 1991 and 2001, profiting from public debt. As one example, an investment bank that arranged a restructuring of Argentina’s debt, under which a brief pause in the payment schedule was granted in exchange for higher interest payments, increasing Argentina’s debt, racked up a fee of $100 million.
It all finally imploded at the end of 2001, when the government froze bank accounts and the country experienced so much unrest that it had five presidents in two weeks. The last of these presidents, Néstor Kirchner, suspended debt payments. Had Argentina resumed scheduled payments in 2005, interest payment alone on the debt would have consumed 35 percent of total government spending. Kirchner announced that Argentina intended to pay only 25 percent of what was owed and any group that refused negotiations would get nothing; in the end, Argentina paid 30 percent to bondholders who agreed to talk.
Almost all of Argentina’s debtors accepted the 30 percent, seeing 30 percent as better than nothing. Many of Argentina’s creditors were not the financial institutions that originally made the loans; much of the debt had been sold to speculators. There were two notable holdouts, however — the hedge funds Elliott Capital Management and Aurelius Capital Management. These two speculators demanded full payment of the face value of the debt that they bought for pennies on the dollar. How to extract money out of a country where living conditions had already sunk to perilous lows? The head of Elliott Capital and its NML Capital affiliate impounded an Argentine Navy ship docked in Ghana, tracking the ship and waiting for it to reach the country that would be most favorable to its tactic of seizing an asset. This was no aberration; that speculator, Paul Singer, has a documented history of buying debt owed by poor Global South countries for pennies on the dollar and demanding to be paid full face value, no matter how dire that country’s condition.
The speculators on Argentine debt could use the tactic of impounding ships because a U.S. federal judge had issued a series of rulings declaring that Argentina must pay the full amount to the holdouts. Those rulings were not isolated instances of an out-of-control judge; the U.S. Supreme Court would later issue two rulings that fully backed the speculators. The Foreign Sovereign Immunities Act of 1976 is supposed to bar lawsuits in U.S. courts against non-U.S. governments, but a 7-1 bipartisan majority of the Supreme Court decided that the law is malleable when not convenient. The Argentine bonds had been sold with a provision that New York law would be used to settle disputes related to them, which gave U.S. courts the excuse needed to extend U.S. law to Argentina. In essence, the high court ruled that financiers are more sovereign than a national government.
Standing up to finance capital
Nonetheless, the administrations of Néstor Kirchner and Cristina Fernández refused to kneel. Their left-wing populism has been overstated — they left capitalist relations untouched and at best merely tolerated the movement of recovered factories — but they did consistently put the interests of Argentine working people ahead of international financiers. That came to an end when a new right-wing president, Mauricio Macri, took office and fulfilled his campaign promises to put an end to the country’s sovereignty. As a reward, Buenos Aires was again allowed to borrow on international financial markets — so that it can borrow money for the sole purpose of paying billions of dollars to speculators. The Macri administration committed itself to paying $6.4 billion to the holdouts, which could only be paid off by more borrowing.
President Macri served only one term, with the Peronists regaining office. Now a hard right president is again in power. President Milei wasted no time implementing a program that is a dream for Argentine capitalists; his chainsaw is not an empty metaphor. Acting immediately — after all, “shock therapy” is also not just a metaphor — President Milei devalued the peso by 50 percent, reduced transportation and utility subsidies, lifted price controls and dissolved half of the government’s ministries. He also announced a new “protocol” to limit public protests and the creation of a “registry” under which activist organizations would be sent bills for the expenses of the state repressing their public protests. The purported purpose of this protocol is, you guessed it, to achieve “peace and order.”
This program, naturally, has drawn rapturous praise from business interests. Elon Musk, he of the mass firings, poor pay and notorious hostility to unions and regulations that protect employees, has endorsed President Milei, and “top Argentine CEOs” “heap praise” on him, Bloomberg reports. The president has in turn lavished praise on Margaret Thatcher, calling her “brilliant.”
Those who are at the receiving end of the Milei administration’s attacks, and those who represent them, have a decidedly different take. The General Secretary of the International Trade Union Confederation (ITUC), Luc Triangle, said, “The IMF is celebrating the budget surplus in Argentina, but it’s indefensible to ignore the human cost of this economic shock therapy. Pensions have been slashed, thousands of public sector workers fired, public services are on the verge of collapse, unemployment is growing and food poverty spreading. These kinds of misguided, far-right economic measures deepen inequality and erode democratic foundations. It is no surprise that Milei also wants to bypass Congress and repress civil liberties — this is the anti-democratic ideology at the centre of his regime.”
What is it that the International Monetary Fund is celebrating? Inflation that had reached 160 percent in November, on the eve of President Milei’s inauguration, has steadily increased, reaching almost 290 percent in March. The Organisation for Economic Co-operation and Development (OECD), the club of advanced capitalist countries and large Global South countries, predicts that Argentina’s inflation will be 251 percent for 2024 and that its economy will shrink 3.3 percent for 2024, easily the worst performance among G20 economies.
Democracy? What democracy?
The decrees mentioned above were only the beginning. Days into office, President Milei in December 2023 issued an 83-page “Necessity and Urgency Decree” intended to eliminate hundreds of regulations, erode labor rights and open the door to mass privatizations of state-owned enterprises. Both houses of Argentina’s National Congress must vote in their majorities to overturn the decrees, or they go into effect. The Senate voted it down but has not yet faced a vote in the Chamber of Deputies. In the interim, a court, hearing a challenge by the CGT trade union federation, voided some of the decree, suspending it until the Congress fully considers it. But there was still more to come.
Following up on his decree, President Milei a week later introduced an omnibus bill with the Orwellian name of “Foundations and Starting Points for the Freedom of the Argentine People,” a 351-page document that contains 664 articles. If passed, this bill would declare an “economic emergency” and delegate more than 1,000 powers from the legislative to the executive branch until December 31, 2025. This would enable the president to bypass Congress. Noting that President Milei said “the state is an enemy,” Professor Tom McDowell, writing in CounterPunch, summarized this offensive:
“Grounded in the same logic as neoliberalism’s conventional demand for freedom from the state, democratic institutions increasingly appear as impediments to the logic of the marketplace. … The anti-parliamentarism at the core of the neoliberal theoretical outlook has increasingly transformed into a populist program that mobilizes a general dissatisfaction with politicians against democratic institutions as such. Neoliberal politicians, such as Milei, use this reasoning to manufacture the conditions for the ongoing use of emergency powers and the concentration of authority in the executive branch.”
Following a one-day general strike in which 1.5 million people took to the streets, the omnibus bill was voted down in Congress. The fight was still not over, because the omnibus bill was trimmed and sent back to Congress, with the new version passed by the Chamber of Deputies on April 30. The Senate is debating the bill with a May 25 deadline to act; although the pro-Milei parties do not have a majority in the Senate, one of the left-wing parties that voted against it in the Chamber, Frente de Izquierda, does not have a Senate seat, leaving the outcome uncertain, according to the Buenos Aires Herald. The revised bill would still privatize nine state-owned enterprises, down from 41, implement “reforms” to pensions and labor law, make “maximizing profit obtained from exploiting natural resources” state policy and cut taxes for foreign companies.
The need to step up the fightback
Despite the militant action that stopped the December decree, opponents of the Milei administration on the Left decry a lack of resolve by mainstream labor organizations. Samuel Karlin, writing for Left Voice, writes that union bureaucracies and center-left parties are containing the ability of the working class to fight back. He writes:
“Months later the law is once again advancing due in large part to the refusal of the CGT — the country’s largest federation of trade unions — to mobilize workers against the attacks. The CGT — in addition to not holding assemblies or promoting the organization of the working class and a plan of struggle until the law falls — negotiates behind closed doors with the government, preventing the workers’ strength from being expressed against the adjustment and the law in the streets and workplaces. The CGT is more afraid of the mobilized workers than of the Milei government itself. Meanwhile, the centrist and center-left Peronists who lead the union bureaucracies and social movements have sought to negotiate the terms of the attacks rather than wage a fight against it.”
Nonetheless, militant pushback is happening, demonstrated by 800,000 students, educators and allies protesting cuts to public universities, including reductions in teacher pay and the closures of some schools. Mr. Karlin notes, “Milei is advancing U.S. imperialist penetration in Latin America and developing the Far Right movement internationally. As Israel becomes increasingly isolated due to its genocide of Palestinians, Milei has become one of the Zionist state’s fiercest allies. Milei wants to use Argentina as a laboratory for his far-right reaction, instead we should use it as a laboratory for fighting back the Far Right.”
Another dangerous initiative of the Milei administration is its denial of the massive crimes committed by the fascistic military regime of 1976 to 1983. The total of those murdered, “disappeared,” arrested, tortured and/or forced into exile likely is in the hundreds of thousands, with an estimated 30,000 killed. The administration’s ministers, including the president himself, either deny the toll the military regime took or attempt to justify it. Thus an annual demonstration in March against the military dictatorship drew large crowds, who had an increased sense of urgency.
What has the new government achieved? Argentina’s poverty rate has risen to 57 percent, the highest rate in two decades. The president openly celebrated firing 50,000 state workers, with plans to fire another 70,000, and the removal of 200,000 from social-benefit programs. In addition, reductions to pensions were the largest in 30 years. The previous hard-right president, Mauricio Macri, took out a $57 billion loan from the International Monetary Fund and the cuts demanded by the IMF in exchange led to austerity, a downward cycle that threatens to accelerate.
Regardless of what country we live in, we all have a stake in the Argentine people’s success in fighting off the Milei austerity package. Industrialists and financiers, and the public office holders who love them, are undoubtedly watching closely the events in Argentina. If a country with one of the most militant working classes can have extreme austerity imposed on them, similar offensives will soon be on the way elsewhere. Capitalists around the world understand well their common class interest. The working people of the world, the overwhelming majority of Earth’s population on whose backs the wealth of those elites is built, need to understand their common interest.
Systemic Disorder 
Greatly informative article, Mr. Dolack. Thank you for standing tall as one of the few remaining voices in the wilderness crying out on behalf of the world’s working class.
As you know as well as anyone America’s working class has been “divided and conquered” for at least 45 years now. It is my belief that your message and the similar messages of people like you (as few as they are) will eventually make their way into the working class. If not by direct reading then by word of mouth.
Your voice matters. A lot. The working class will eventually begin to understand what has been done to them and as they come to realize the power of their numbers changes will occur. Perhaps not in my life time. But it will eventually happen.
And your voice greatly contributes to that awareness and eventual change.
My humble thanks for your kind words, Mr. Herzog. I, too, will perhaps not be around long enough to see the change that must occur but I take seriously my part of our collective responsibility for helping bring about that change. Younger folks are much more open to critiquing capitalism than people of my generation and that is gives me space for optimism.
A very thorough article for those of us wondering how Argentina is faring these days. I am missing, though, an explanation of what went wrong during the long peronista years. I fear Mr. Milei is jusy another neocon, but you gotta admit he inherited a nasty mess.
Greetings, Vera. Argentines, I think it would be safe to say, have gone through some “whiplash” lately as neoliberalism brought on disaster, followed by Nestor Kirchner and Cristina Fernández, then another hard-right neoliberal president, then the Peronists again and now Milei. Perhaps times that are more “interesting” than most in Argentina would like. Milei has inherited a mess, but his hard-right predecessors left much bigger messes for the Peronists to deal with, which is not say that new problems did not occur during those administrations. Inflation became acute during Alberto Fernández’s recently concluded government. At bottom it would be fair to argue that Argentina’s ultimate problem is being a semi-peripheral country at the mercy of a global capitalist system controlled by the Global North on behalf of its multi-national and trans-national capitalists. And I would also argue that Argentina has never fully recovered from the fascistic military junta of the 1970s and 1980s, which laid waste to the Argentine economy and left untold millions destitute.