The Potemkin Village Idiot

The Potemkin Village Idiot

Share this post

The Potemkin Village Idiot
The Potemkin Village Idiot
Grab the chainsaw
Copy link
Facebook
Email
Notes
More

Grab the chainsaw

How long before Britain needs a Millei?

Tom Jones's avatar
Tom Jones
Feb 04, 2025
∙ Paid
3

Share this post

The Potemkin Village Idiot
The Potemkin Village Idiot
Grab the chainsaw
Copy link
Facebook
Email
Notes
More
1
Share

Around a century ago, Argentina's GDP per capita was comparable to that of a European nation. However, the country's economy has stagnated, failing to achieve growth for two consecutive years within a decade. Its GDP per capita has not exceeded 1970s levels and has remained stagnant since 2008.

This piece by Maia Mindel is a great explanation of what went wrong, but broadly, it was almost everything: poor institutions, bad policies, and trade shocks.

But last year, the Argentines elected for radical change and the unorthodox style of Javier Milei. Milei's campaign revolved around a stark and sobering message: after decades of economic mismanagement, Argentina was no longer a wealthy nation, and if it wanted to recover, it needed to live within its means. The country had been relying on unsustainable borrowing to maintain a standard of living it could no longer afford, propped up by outdated and inefficient industries.

Milei proposed drastic solutions: cutting government programs, subsidies and benefits, increasing taxes, and privatizing key public utilities. This meant an immediate - and painful -decline in the quality of life for pretty much everyone, but Milei was pretty successful in convincing the electorate that it was a necessary - if bitter - pill to cure generations of economic dysfunction.

For years, Argentina’s economic strategy revolved around developmentalism. Leaders took on massive debt to fund modernization efforts without clear plans for repayment, maintaining a developed-world façade by borrowing heavily and shielding inefficient local industries rather than fostering competitiveness in the global market. This cycle of overpromising to maintain living standards—and overextending fiscally to deliver—left the economy increasingly fragile, and masked financial problems rather than solving them.

Keep reading with a 7-day free trial

Subscribe to The Potemkin Village Idiot to keep reading this post and get 7 days of free access to the full post archives.

Already a paid subscriber? Sign in
© 2025 Tom Jones
Privacy ∙ Terms ∙ Collection notice
Start writingGet the app
Substack is the home for great culture

Share

Copy link
Facebook
Email
Notes
More