Grab the chainsaw

How long before Britain needs a Millei?

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had been relying on unsustainable borrowing to maintain a standard of living it could no longer afford, propped up by outdated and inefficient industries.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.