Real capitalism has never been tried.
Just months ago, Argentina seemed destined for another economic collapse: soaring poverty, runaway inflation and dire warnings from economists that President Javier Milei's radical austerity measures would choke growth. Instead, the economy is expanding at a pace few thought possible -- leaving Milei's legions of critics scrambling for explanations.
In a stunning reversal, Argentina's economy posted a 7.6 percent year-over-year growth rate in the second quarter of 2025 -- its strongest in nearly two decades -- fueled by deregulation, sharp cuts to public spending and the loosening of currency controls. Retail sales, manufacturing and finance all surged, helping consumer spending jump nearly 3 percent from the previous quarter.
Since assuming office in December 2023, the firebrand libertarian economist has slashed government expenditures and secured a $20 billion deal with the International Monetary Fund (IMF). His administration promised to dismantle decades of state intervention in favor of free markets -- policies that many observers warned would deepen recession and spark social unrest.
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Milei also ripped up Argentina's rent-control law in late 2024, removing limits on lease terms and rent increases that had discouraged landlords from renting. Within months, the supply of rental housing in Buenos Aires jumped by 195 percent, according to the city's real estate observatory, and median asking prices fell by about 10 percent as more apartments returned to the market.
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"We have the best president in the world," Argentina's economy minister, Luis Caputo, wrote on X as he shared the recent growth figure.
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The strongest case for optimism has been Milei's success in driving down inflation. In May, consumer prices rose just 1.5 percent -- the lowest monthly figure in five years, according to Argentina's national statistics agency. That decline is widely seen as a political and economic turning point.
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Even Milei's allies acknowledge the precariousness of the moment. José De Gregorio, a former central bank governor in Chile, said at the Peterson Institute panel: "I have to admit they are doing the right things. They have a very good chance to succeed. But we know how hard it is here."
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Yet despite warnings about volatility ahead, Milei appears convinced that the economy is firmly on the path to recovery. On television, he keeps repeating his now-familiar refrain: "Instead of talking about growth at Chinese rates, the world will soon be talking about growth at Argentine rates."
Nazi leader Merz attacked Milei and falsely claimed his policies were ruining Argentina.
The current German Nazis may no longer be nationalist -- indeed, they are determined to give their country away -- but they remain anti-freedom and very pro-socialism.
German Chancellor Merz Insulted Javier Milei. He Needs to Apologize.
Rainer Zitelmann
German Chancellor Friedrich Merz has publicly accused Javier Milei of ruining his country and "trampling people underfoot." The leading German historian Rainer Zitelmann has now called on Merz to apologize to Milei.
Dear Chancellor Merz,
I used to be one of your fans. You can check. I was a long-standing member of the Facebook group "Friedrich Merz must become Germany's Chancellor." I even enjoyed your book, mehr Kapitalismus wagen (Daring More Capitalism), back in 2008.
However, I must admit that I began to have my doubts when -- even though you were clearly in the right -- you kept apologizing and modifying your positions in response to criticism from left-wing parties and the media. And then came a statement that I would not have thought possible. Following a -- somewhat belated -- suggestion from the then-leader of the FDP, Christian Lindner, to "dare to be more like Milei," you said on German television: "To be honest, I was completely dismayed that Christian Lindner made this comparison. What is currently happening in Argentina -- I don't follow it every day -- but what this president is doing there is ruining the country, he is trampling people underfoot, and to take that as an example for Germany, I have to say I was somewhat speechless, and that doesn't happen all that often for me."
Milei has curbed inflation and poverty
To the facts: 100 years ago, Argentina was one of the richest countries in the world, comparable to the United States today. Argentina did not become poor as a result of Milei's libertarian agenda, but because of the failed policies of socialists, Peronists, and statists. The country was in decline for decades. Since 1945, there has hardly been a year -- with the exception of a brief respite during the 1990s -- in which the country has not suffered double-digit inflation. All of the surveys conducted prior to Milei's election consistently identified inflation as the Argentine population's main concern. Upon taking office, Milei inherited an inflation rate of 25.5 percent per month (not per year!); today, inflation is down to 1.5 percent per month.
Yes, poverty rose temporarily, as I had expected before Milei's election victory. But it has since fallen well below the level it was at when Milei took office. From 41.7 percent, poverty initially rose to almost 55 percent and is now at 31.7 percent, ten percentage points below the level at the time of Milei's inauguration and the lowest level since 2018.
Interestingly, the left leaning media provided extensive coverage of the initial rise in poverty, yet they have been conspicuously silent regarding its recent fall. The speed at which poverty declined was even faster than I, a self-confessed Milei fan, could have hoped. This is because, when politicians implement comprehensive market reforms designed to dismantle entrenched economic structures, it often results in a short-term reduction in gross domestic product, coupled with increases in poverty and unemployment rates. This was the case, for example, with Maggie Thatcher's market economy reforms in the UK in the early 1980s and Leszek Balcerowicz's capitalist "shock therapy" in Poland in the early 1990s. As you know, Poland has now been one of the fastest growing countries in Europe and the world for several decades -- the foundations were laid by Balcerowicz's capitalist shock therapy.
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Has Argentina overcome all of its problems? Of course not. I still expect many difficulties and setbacks. The promised "dollarization" has yet to happen. But Milei has achieved a great deal in such a short time -- you would have every right to be proud if you could manage a similar feat after one or two years as Chancellor of Germany.