After 36 years, Argentina won another World Cup. In a country with a history of extraordinary players and where soccer is lived as a national religion, this was long overdue.
Also overdue are the structural reforms necessary for Argentina to fix its economic mess. Just as in the case of soccer, Argentina’s own history can offer its leaders and citizens valuable lessons when it comes to economic success. In the late 19th and early 20th centuries, Argentina had a per-capita income surpassing that of nations such as Italy, Japan, and France. In 1895, it even achieved the highest per-capita income worldwide, according to some estimates. Moreover, Argentina’s six percent GDP growth per annum for the 43 years preceding World War I is the fastest in recorded history.
Argentina’s impressive economic performance was not only based on the export of raw materials. Between 1900 and 1914, industrial production tripled, reaching a level of industrial growth similar to that of Germany and Japan. All of this was accompanied by an unprecedented degree of social progress in the country. In 1869, between 12 and 15 percent of the economically active population belonged to the middle class; by 1914, this number had reached 40 percent. In the same time, the level of illiteracy was reduced to less than half.
The foundations for Argentina’s prosperity had been laid down by Juan Bautista Alberdi (1810-1884), who was the intellectual father of the nation’s 1853 constitution. An admirer of the American founding fathers, Alberdi conceived the constitution so that the government was restricted in its ability to interfere with economic freedom and individual liberties. The Argentine Federal Constitution contains “a complete system of economic policy, insofar as it guarantees, by strict provisions, the free action of labor, capital, and land, as the main agents of production,” explained Alberdi.
Despite the success enabled by the 1853 constitution, an ideological shift toward collectivism began emerging in the first decades of the 20th century. In the 1940s, with the election of General Juan Domingo Perón, Peronism—a local version of fascism—came to dominate economic and social life. Under Perón, the constitution was reformed, free trade was restricted, public spending increased, leading to an explosive surge in inflation, price controls were introduced, and dozens of companies were nationalized.
Unlike other countries that later abandoned the anti-market policies embraced during the 1930s, Peronism became so entrenched in Argentina’s institutions and political culture that the country never managed to restore economic freedom. In 1975, around the time of Perón’s death during his third term as president, Argentina ranked 100 among 106 countries in the Economic Freedom Index published by the Fraser Institute of Canada. In 2020, it ranked 161 among 165 countries.
As a result, Argentina—once one of the richest countries in the world—has become a corrupt, impoverished, rent-seeking society with chronic inflation of over 100 percent a year, a poverty rate of over 43 percent, and a massive exodus of young professionals looking for better opportunities elsewhere.
However, something seems to be changing in Argentina’s intellectual and political climate. A free-market movement has been gathering support, especially among the younger generations. Javier Milei, the movement’s main leader, is a charismatic economics professor who does not shy away from saying that the term “social justice” is merely an excuse used by politicians to steal people’s money, that government is the source of most of the country’s problems, and that the country should dollarize its economy.
Popular support for Milei’s message has grown so rapidly that, in the legislative elections last year, his pro-market coalition “Avanza libertad” became the third largest political force in the city of Buenos Aires. Milei, who was himself elected to Congress, also did surprisingly well among the city’s poorest voters among whom his base of support grew more than that of any other candidate between the 2021 September primaries and the November general elections.
Regardless of whether he succeeds in his presidential bid for 2023 or not, Millei’s message has already changed the political debate in Argentina. Some polls show that 42 percent consider the free-market movement a positive development for the country. This unprecedented shift in public sentiment may indicate that Argentines from all social classes are now willing to support comprehensive free-market reforms. With regime change around the corner and Peronism disintegrating, the chance for Argentinians to emulate their soccer success in the economic arena seems more realistic than ever.
Axel Kaiser is a senior fellow at Atlas Network’s Center for Latin America and a fellow at the Archbridge Institute, in Washington, D.C.
The views expressed in this article are the writer’s own.
This content was originally published here.
