by Manlio Graziano
Argentina’s Infernal Cycle
On November 19, Javier Milei was elected as Argentina’s president with a comfortable majority. Two noteworthy confirmations emerge: the first, though less significant, is the increasing unreliability of pre-election polls. The second, and decidedly more crucial, underscores Argentina’s ongoing cyclical struggle, an infernal pattern entrenched since the 1930s when it transitioned from being the world’s most dynamic emerging power to a country unable to recover, despite possessing the most propitious natural conditions in the entire southern hemisphere.
Between 1880 and 1905, Argentina’s GDP multiplied seven and a half times, boasting an impressive average annual growth rate of around 8 percent. During this period, per capita income rose from a third of that of the United States to approximately 80 percent. Many European migrants, especially Italians, favored Argentina over the United States due to its warmer and more Latin environment, anticipating a better life without the cold prevalent in the North American country and its anti-Catholic hostility.
Debates persist among specialists regarding the point at which this growth dynamic faltered. While some attribute it to Argentina’s inability to navigate the 1929 crisis, others point to the failure to break free from the Keynesian mechanism activated post-1929. Argentina bears the unfortunate distinction of pioneering populism: catering to popular demands without assessing financial feasibility. “Peronism,” synonymous with this brand of populism, embodies generosity in distributing resources the country lacks. The November 19 defeated candidate, Sergio Massa, and the Kirchner-Fernandez generation, who appointed him as Minister of Economy, both reference Peronism.
Keynesianism, as a crisis resolution strategy, involves deficit spending – government spending on credit – with the goal of creating jobs (wages) even without immediate economic returns (profit). The aim is to stimulate consumption, therefore production, therefore profit, i.e., wealth creation. In Argentina, however, Keynesianism drained state coffers without replenishing them. Consequently, the recurring infernal cycles feature a Peronist phase of unproductive public spending, depleting coffers or inducing inflation (or both), followed by a “liberalist” phase, striving to reverse the trend through austerity measures, followed by popular discontent exploited by Peronist politicians who promise to reinstate benefits and services without the means to do so, perpetuating the cycle.
At the end of another Peronist term (after Mauricio Macrì’s “liberalist” term), Argentina approached the recent elections with an official inflation rate of 142 percent, likely three times higher in reality, empty coffers, and a debt of 44.5 billion with the IMF. Javier Milei, another clown elected at the head of a desperate country, has pledged to solve all problems and make Argentina “great again.” However, his success is dubious, not solely due to his clownish demeanor, but because history shows that candidates making sweeping promises seldom achieve them. On the other hand, Peronists belong to a subset of populists who fulfill their promises, compounding damage by actually providing what the people demand – money, benefits, and services the state cannot afford – without even trying to revitalize wealth production. An attitude that leads to printing more money and borrowing from the IMF, accompanied by accusations of the IMF being a bloodsucker.
Post the 2008 crisis, Peronism set the standard: in many other countries in the world, public resources that do not exist anymore are spent carelessly to keep voters happy, seemingly oblivious to the eventual consequence, where disillusioned voters may choose another Milei to make them happy.

The opinions expressed in this article are of the author alone. The Spykman Center provides a neutral and non-partisan platform to learn how to make geopolitical analysis. It acknowledges how diverse perspectives impact geopolitical analyses, without necessarily endorsing them.