After 28 years of Peronist presidents plunging the Argentine peso’s value and its people into poverty, the nation has finally ousted the left-wing populists from power. The mandate of Argentina’s new president-elect, classical monetarist Javier Milei, is clear: At last, free Argentina from the tyranny of its central bank and adopt the United States dollar as the country’s currency.
The party in power tried not just to rob the election from Milei but also to put him in prison. After Milei shocked the world with the Libertad Avanza’s victory in the presidential primary, prosecutors charged Milei and his libertarian party with “inciting public fear” at the behest of the current Peronist president. The supposed crime committed by Milei and his camp? Correctly asserting that “peso is the currency issued by the Argentine politician, and therefore it is not worth crap” or worth saving.
In the most literal sense, this is just a matter of basic economics. With a 143% inflation rate, prices in Argentina are currently inflating by double digits each month. The value of an Argentine paycheck currently halves about thrice a year. High school economics students would agree with Milei that his countrymen would be best served either immediately spending their cash to realize its maximum value or to convert it into a better store of value, such as gold or, as is his eventual goal for the country, the U.S. dollar.
As a political matter, the overwhelming majority of Argentina agreed that the peso, as a sovereign currency, was not worth saving. While Libertad Avanza will only have 38 of 257 seats in the lower house of Congress and seven of 72 seats in the Senate, what it does have is the mandate to govern. Few presidential candidates make monetary policy the central platform of their campaigns, and even fewer do so with the promise of eliminating the nation’s ability to print its own currency. But with the Peronist penchant for robbing the value of paychecks to keep its petty bureaucracy afloat, the public was clearly happy to trade the government’s ability to spend in exchange for a modicum of monetary stability.
One hundred years ago, Argentina, whose very name means “made of silver,” was one of the 10 richest nations on the planet, and despite its depressing 40% poverty rate, the country boasts remarkably high social trust, by some measures, the highest of South America. What it needs is a currency that gives its citizens the chance to hope, change, and save for a more prosperous future. Milei told the country a tough truth, that funding the ever-expanding state under Peronism was unsustainable, and the people rewarded him for honesty.