This week we talk about Peronists, Milei, and Argentina’s inflation rate.
We also discuss Justicialism, Bullrich, and military coups.
Recommended Book: Future Starts Here by John Higgs
Peronism, sometimes called Justicialism, after the Justicialist party, whose name is derived from the concept of social justice, and which is the main Peronist party in Argentina, has been the dominant political force in the country since the mid-20th century.
The word Peronism comes from the labor secretary-turned-president of Argentina, Juan Perón, who's wife, Eva Perón you might have heard of, but Juan came into that labor secretary position after playing a role in a military coup in 1943, and was then elected president in 1946.
His platform was broadly predicated on new social programs, support for unions, and supporting his wife's efforts to attain rights for migrant workers, among other, adjacent efforts.
In 1955, though, under the Peróns' leadership, the country was experiencing high levels of inflation and other economic issues, alongside political repression from the Peronists—making it difficult for anyone else to step in and take any of their power, basically, despite being ostensibly democratic—so the military overthrew them in 1955, and the party was banned until 1973 when open, non-military-controlled elections were held again; and Perón won that election, returning to the presidency after nearly two decades.
Juan died a year after returning to office, and his widow, his third-wife Isabel, who was also his vice president before he died, stepped in to run the country, but she was overthrown by the military in another coup in 1976.
Argentina was then run by a military dictatorship until 1983, when democracy returned, political parties were able to function again, and from that point forward, Peronist parties have dominated Argentine politics, their candidates holding the presidency for 28 of the 40 years between then and today, despite the very mixed record of Perón and others who have run as Peronists.
And fundamental to that mixed record is the Peronist party's seeming inability to manage Argentina's economy.
The Peronists have always promised a great deal to Argentinian voters, including social benefits, allowing workers to negotiate as unions with their employers, and offering legal protections and the other benefits of citizenship to people and groups that have traditionally been disenfranchised—all of which was has earned them accolades over the years from groups across the political spectrum.
That said, the party and all its offshoots have also been accused of being authoritarian, coasting to power on populist messages and demagoguery, stripping would-be political opponents of their rights and sicing their supporters on them, initiating violence against them, in some cases, and in general creating an ideology that sounds great on paper, but which, when put into practice, is often tainted by the power-hoarding efforts of those in charge; and all these efforts, on top of those other issues, tend to be unsustainable, leaving Argentina in precarious economic situations over and over again.
That economic unsustainability is part of what has made Argentina something of an outlier in South America; despite having all the ingredients of a decently successful, burgeoning state—like its neighbor to the north, Brazil—it somehow, over and over again, has stumbled into economic catastrophe, leaving it drowning in debt, stagnating, suffering from chronic inflation, and generally declining even when its regional peer-nations have enjoyed economic boom-times.
What I'd like to talk about today is Argentina's 2023 presidential election, the people and ideas involved, and what a November run-off might mean for the country's fortunes, moving forward.
On October 22, 2023, Argentina held a general election, during which voters cast ballots for most government positions, including provincial governors, all the way up to President.
That election for the top-billing role has been especially closely watched by the international community, as the main contenders leading up to the vote included the current Minister of the Economy from a Peronist party called the Renewal Front, a National Deputy and minor celebrity from Buenos Aries, who was the candidate for the Libertarian Party, and the former Minister of Security running under the banner of a center-right party called Republican Proposal.
In the country's August primaries, the Libertarian candidate, a shock-jock-style economist named Javier Milei, took first place, alarming pretty much everyone in established Argentine politics, and the international economic community, because of his radical and unusual ideas about how economics and the government should work in the country.
But he took first place in those primaries, with the center-right candidate, Patricia Bullrich, taking second, and the Peronist Renewal Front candidate, Sergio Massa, took third place; the first time the candidate from the Peronist party has been relegated to third place in the country's primaries.
And that made the October general election quite the event, as there was reason to believe the two parties that typically vie for government leadership, the authoritarian-left Paronists and the center-right Republican Proposal, might be usurped by this radical outsider who has wild ideas and has been favorably compared to former US President Donald Trump for his outlandish statements and on-camera antics.
As it turned out, though, once the votes were cast—and voting is compulsory in Argentina, for people ages 18 to 70, and citizens ages 16 and 17 are allowed, but not required, to vote—the Peronist candidate took first place with nearly 37% of the votes, the firebrand Milei got almost 30%, and the conservative Bullrich took not quite 24%.
That third-place position means Bullrich will not be able to participate in the runoff election scheduled for November 19, which has been disappointing for many international analysts, as she was thought to be the adult in the room, so to speak, in all things monetary, as her proposed policies have been generally more in line with international standards in countries that don't suffer from the wild levels of inflation and other economic catastrophes Argentina has seen on a near-continuous basis since the mid-20th century.
Instead, the country's voters will choose between the Peronists—under whose party leadership and policies the country has suffered through a half-decade monetary crisis, and a relative outsider who has suggested, among other things, that the government should end as much spending as possible in order to rush to a balanced budget, including killing off all those social programs, that the country's Central Bank should be abolished, and that Argentina should do away with the peso and adopt the US dollar as its official currency.
Milei has also said that he believes abortion should be banned in all cases, including when a women has been raped, that COVID vaccines are scams, as is feminism, that minority groups are trying to take over the country, using what he calls cultural marxism, which is a conspiracy theory held by far-right nationalist groups around the world, that sex education shouldn't be taught in schools, that climate change is a hoax, that anyone who wants to own a gun should be able to get one, and that taxes should never be increased.
None of which is terribly beyond the norm for far-right, at times extreme far-right groups in other nations, but with rare exceptions those groups aren't typically at the center of political discourse, and aren't winning large portions of the total vote—which Milei has done, in part on the back of votes from young people who seem to enjoy his antics and dramatic, sweeping platform.
Many people have reportedly voted for him, though, based on exit polling and other surveys, because the status quo in the country, currently and for a long while, has just been abysmal for the everyday person.
Some estimates suggest that Argentina will tally an inflation rate of about 140% in 2023, which is just staggering if you think about the implications of what that means for the value of a person's income and savings, and what it implies about how people should behave; for comparison, the wealthy world has been flipping out over inflation rates of medium- to high single-digits, and this is many times that, a situation that incentivizes people to immediately spend or convert into other currencies all money they bring in as soon as possible, because it will be worth substantially less tomorrow if they hang onto it.
And while Milei's many and often radical beliefs aren't everyone's cup of tea, the protest vote—voting against the way things are, today, even if the alternative isn't ideal for other reasons—seems to have been strong during those primaries, and only a little less-potent during the general election that triggered this run-off, because no one attracted the 45% of the votes necessary to win outright, and part of why is that instead of just two serious candidates in the race, Milei presented voters with an opportunity to burn it all down, basically, and nearly a third of the voting population took him up on that.
Massa, who isn't exactly a continuity candidate, since he's heading a party he founded to, in his words, "build the Peronism of the 21st century," is still Peronist enough that many people consider him to be nearly an incumbent, as the presidency is currently held by a Judicialist politician, and the two parties share enough of the fundamentals to make them commodity products in the eyes of many voters.
Probably at least in part because of that similar-enough status, Massa was able to pull in a dominant portion of the general election votes; but while Massa has a core body of enthusiastic supporters, people who really believe in what he's trying to do, evolving the Peronist model to make it work better, basically, some people have said they're voting for him because he's not as crazy as Milei, and thus seems less likely to set fire to the government just for the sake of setting fires. Despite the current state of affairs, then, some voters are seeking continuity not because they like what's happening, but because they fear what could happen under a different guiding hand.
Whomever takes the lead and thus, the presidency, will have a raft of issues to contend with, beyond inflation and economics.
The country is set to undergo negotiations with the IMF in November, the same month as the runoff election, and it has seen the worst grain harvest in about 60 years as a consequence of a significant drought—and grain is its main export, so this could nudge the country even closer to default, and make those negotiations with the IMF even more fraught, as foreign reserve accumulation targets it wants to achieve could drift out of reach if those exports falter too badly and it's unable to procure the necessary volume of internationally tradable currencies.
The Economist ran an editorial following the general election, in which it proposed that the outcome, which will see Massa and Milei in a runoff in late-November, is the worst of all possible outcomes, as it suggests that, first, Argentine voters aren't interested in a non-bombastic alternative vision for how the country could be run, as they relegated the center-conservative candidate Bullrich to third place, and thus, she's no longer in the running, and second that it's just astonishingly difficult to bring outsiders into a political system that has been so dominated by Peronists for so long, despite the shortcomings of the Peronist system that have plagued the country's economy for decades.
That, of course, is a economics-focused perspective, which is perhaps fitting for a publication like the Economist, but because of that focus, it fails to consider the obvious benefits, for many average, non-economist people, at least, of having a government that introduces and protects social safety net and human rights-related benefits, even when doing so isn't economically sustainable; you can absolutely argue that it's short-sighted to burn a candle with an insufficient length of wick, but they've managed to do so for a good long while, even if progress in that department has often been more of a shamble than a steady run.
Argentina is looking down the barrel of its sixth recession in a decade, it has had to go through 22 economic bail-out programs since 1956, and it's in debt to the tune of $56 billion to the IMF.
There's no clear way out of that kind of financial pit, especially considering all the other challenges the country also faces now, and will face in the near-future.
It's possible that at some point a politician will step into power who has a sense of how to both address the pervasive and persistent economic issues the country struggles with, and allow citizens to retain their rights, their social safety nets, and other sticking points that have been traditionally vital to voters; but it seems unlikely, failing some kind of major deviation from their proposed platforms, at least, that either of the candidates still in the running in this election will be that politician.