[More than 100 economists including Thomas Piketty and Jayati
Ghosh publish open letter ahead of country’s 19 November election ]
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ECONOMISTS WARN ELECTING FAR-RIGHT MILEI WOULD SPELL
‘DEVASTATION’ FOR ARGENTINA  
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Uki Goni and Tom Phillips
November 8, 2023
The Guardian
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_ More than 100 economists including Thomas Piketty and Jayati Ghosh
publish open letter ahead of country’s 19 November election _

Javier Milei describes himself as an anarcho-capitalist., Photograph:
Rodrigo Abd/AP

 

The election of the radical rightwing economist Javier Milei as
president of Argentina
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further economic “devastation” and social chaos on the South
American country, a group of more than 100 leading economists has
warned.

In an open letter, published ahead of Argentina’s crunch 19 November
election, the economists said they understood the “deep-seated
desire for economic stability” among voters, given Argentina’s
frequent financial crises and recurring bouts of very high inflation.

Four in 10 citizens currently live in poverty and annual inflation is
close to 140% – a crisis Milei has vowed to fix by defeating his
rival, Argentina’s finance minister, Sergio Massa, and taking
dramatic measures such abolishing the central bank and dollarizing the
economy.
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“However, while apparently simple solutions may be appealing, they
are likely to cause more devastation in the real world in the short
run, while severely reducing policy space in the long run,” warned
the letter, whose signatories include influential economists such as
France’s Thomas Piketty, India’s Jayati Ghosh, the
Serbian-American Branko Milanović and Colombia’s former finance
minister José Antonio Ocampo.

The letter said Milei’s proposals – while presented as “a
radical departure from traditional economic thinking” – were
actually “rooted in laissez-faire economics” and “fraught with
risks that make them potentially very harmful for the Argentine
economy and the Argentine people”.

On the campaign trail, Milei – a self-described anarcho-capitalist
– has brandished a chainsaw to symbolize his desire to slash
subsidies and drastically reduce state expenditure on social
programmes. He has also repeatedly claimed “taxes are theft” and
called the “social justice” programmes they finance an
“aberration”. “The state was invented by the devil, God’s
system is the free market,” he has said.

But in their letter the economists warned that “a major reduction in
government spending would increase already high levels of poverty and
inequality, and could result in significantly increased social
tensions and conflict.”

“Javier Milei’s dollarization and fiscal austerity proposals
overlook the complexities of modern economies, ignore lessons from
historical crises, and open the door for accentuating already severe
inequalities,” they wrote.

Ghosh, a development economist from the University of Massachusetts
Amherst, said she and the letter’s other two co-authors, Piketty and
Milanović, worried Milei’s policies “would be deeply damaging for
Argentina and very unfortunate for the entire continent”.

“This is not just the social chaos that could be generated by
extreme right positions but also the economic chaos that would ensue
from a decline in both public revenues and public spending,” Ghosh
added.

“Argentinians are going to vote in an election where there are these
very tough choices. But a libertarian solution that vilifies the
public sector will only add to the suffering.”

With less than a fortnight until one of the most important elections
in Argentina’s recent history, the election looks too close to call.

Milei was widely considered the frontrunner before last month’s
first round, although he unexpectedly finished second
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29.9% of votes to Massa’s 36.6%. Since then, however, the eccentric
economist has been endorsed by two prominent conservatives: the
third-placed candidate, Patricia Bullrich
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and the former president Mauricio Macri. Fuel shortages have also
undermined Massa’s campaign.

Juan Cruz Díaz, the managing director of the Buenos Aires-based
consulting firm Cefeidas Group, said that as they entered the final
straight the two candidates needed to spin the election in different
directions.

Milei needed to focus the debate on the economic failings of his
opponent’s Peronist movement which has held power for 16 of the past
20 years.

Massa meanwhile needed to concentrate on Milei’s volatile character
and convince voters not to support an “extravagant, angry, crazy”
loose cannon such as his rival. “He will try to show him as
emotionally unstable and a violent and aggressive and extremely
polarizing and divisive figure,” said Díaz, who was not sure such
efforts would be enough given Argentina’s economic woes. “If you
ask me, Milei has an edge.”

Milei, who bursts into uncontrollable fits of rage at the mere mention
of the 20th-century English philosopher and economist John Maynard
Keynes, is unlikely to be impressed by the open letter. Milei
considers Keynes, who challenged the idea that free markets could
provide full employment and economic growth, a Marxist.

A new podcast by the Spanish newspaper El País interviewed one of
Milei’s former neighbours who, in an attempt to make small talk,
mentioned Keynes in the lift. “But you are a communist piece of
shit,” Milei reputedly shouted at the woman all the way up to the
10th floor. Milei has also attacked Piketty in the past, calling him a
“turd” and “a criminal disguised as an intellectual”.

_Uki Goñi is a writer based in Argentina and the author of The Real
Odessa: How Nazi War Criminals Escaped Europe.  Tom Phillips is the
Guardian's Latin America correspondent._

* Argentina
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* Javier Milei
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* Right-Wing Extremism
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* Economic Policy
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