The Nightingale’s Song – Argentina under Milei

In 1995, Robert Timberg captured the intersecting lives of John McCain, James Webb, Oliver North, Robert McFarlane, and John Poindexter in The Nightingale’s Song.

This story covered the experiences of these five men, all graduates of the US Naval Academy at Annapolis, in Vietnam, and how that sorry foreign affair continued to shape their lives and haunt America and its various entanglements, including the Iran-Contra scandal, in the decades following. The book’s title was explained this way, ‘Did you know that a nightingale will never sing its song if it doesn't hear it first? If it hears robins or wrens ... it will never croak a note. But the moment it hears any part of a nightingale song, it bursts into this extraordinary music, sophisticated, elaborate music, as though it had known it all along ... ‘.

Ronald Reagan was the nightingale whose tune of patriotism made these men come alive in various positions in and around the White House and with varying stories of success and failure. Webb became the Secretary of the Navy in between a distinguished writing career, his book Fields of Fire is considered a classic of Vietnam war literature,  McFarlane, a US national security advisor, Admiral Poindexter, a succeeding national security advisor, Ollie North an aide to the national security team, one of those at the centre of the Iran-Contra mess, and John McCain, who survived a Hanoi prison cell, a Senator and the 2008 Republican nominee for the US presidency.

Argentina has endured one nightingale in Juan Perón, whose political message of assertive nationalism became the political pride before the country’s economic fall. Eighty years since Peron’s rise, Javier Milei, the surprising winner of the 2023 election, promises to be another. His level of public support especially among younger Argentines has shocked the political establishment, whom he has denigrated as a ‘caste’.

But Milei’s success will depend not only on the tune but, as Reagan and Peron remind, its substance.

Legendary Success, Ignoble Failure

‘You must always try to be the best, but never believe you are,’ said Juan Manuel Fangio of his lesson about life. Argentina has its fair helping of legends, in politics as in sport, especially football, from Alfredo Di Stefano to Maradona and, more recently, Lionel Messi. One of its national heroes is Fangio, who won five World Championship Formula One titles in the 1950s, even though he entered the top echelon of what was probably the most dangerous era of the sport only in his late 30s. Unusually for motorsport, very few competitors would have publicly doubted his primacy in his era, probably the ultimate definition of success as a driver, an accolade perhaps only since shared with the Scotsman Jimmy Clark in the decade following.

Yet Fangio’s career path was, even for the 1950s, an unusual route to the top, one hardly blessed with a civil spoon, his origins a long way metaphorically and literally from the famous tracks of Europe where his global fame and fortune were eventually made.

Born into modest circumstances to immigrant parents in the town of Balcarce, today a five-hour drive to the south of Buenos Aires, Fangio dropped out of school at the age of 13 to work in a local garage, hopeful initially of a career as a footballer, his schoolboy nickname El Chueco, the bandy-legged one, referring to his skill in bending shots on goal.

After finishing his compulsory military service where his driving prowess was recognised by his appointment as the personal chauffer of his commanding officer at VI Cavalry Regiment of Campo de Mayo, Fangio opened his garage in provincial Balcarce and started in motorsport, making his name in epically tough long-distance road-races in the 1930s driving modified American saloons. These were rough if garishly painted machines, two seats in a stripped-down saloon, the fuel tank lodged where a back seat would have been, cut-back mudguards, a basic three-speed gearbox transmitting power from a heavy, asthmatic six-cylinder engine, extra-lighting crudely rigged through the front quarter-windows, rudimentary suspension, and no safety equipment at all. It took real skill to coax speed from these racers, and extraordinary resilience and stamina to keep it together and on the road for up to three weeks with no support save from the co-driver, and dollops of resourcefulness.  

Government helped, giving Fangio a step up the motorsport ladder. Having recovered from a near-fatal accident on the 1948 South American Grand Prix, which cost the life of his co-driver, a 20-day event spanning a distance of 9,580 km race from Buenos Aires to Caracas through Argentina, Bolivia, Peru, Ecuador, Colombia and finally Venezuela, Fangio got his big break in Europe with the intervention of President Juan Perón himself, turning heads in a Ferrari purchased with the support of the Argentine government. Repainted in the national racing colours of blue with a yellow engine cover (the same as the famous Boca Juniors football team), the car was unusual for that era in being emblazoned with decals of YPF, the national oil company.

Today Fangio, known as El Maestro (‘the master’) and El Caballero del Camino (‘Knight of the Road’), is revered as a national hero, and was accorded a state funeral on his passing in 1995. A race track and world-class museum were created in his name in Balcarce, still a sleepy provincial farming town famed for its potato production and Alfajor confectionaries, with a population of just 45,000.

In the 1930s, when Fangio was growing up, Argentina was ranked the sixth-largest economy worldwide, much of this based on a combination of natural resources and rapid immigration from Europe. Technology helped – particularly the advent of refrigerated shipping – to fuel the 50-year Argentine ‘Golden Age’ from 1880, making possible frozen beef exports. By 1914, 80% of Argentina’s exports were agriculture products, 85% of which were shipped to Europe, and not all of it meat. Grain and oilseed exports increased exponentially, from a total of some 17,000 tons in 1880 to over one million tons a decade later; by 1910 Argentina was second only to America in wheat exports.

The so-called ‘Revolution of ‘43’, signalled a change that has since shaped Argentine politics and economics whatever the regime type, civilian or military, left and right coalescing around a brand of Argentine populism in Perónism, essentially a political addiction to overpromising and overspending. This has led to frequent crises and deep-seated economic problems including high inflation and indebtedness.

The coup of 1943 created a government modelled after Benito Mussolini’s fascist regime. Among the military leaders was Colonel Perón. Jailed briefly, he took power in democratic elections in February 1946, continuing where the junta had left off with a ‘corporatist’ strategy, focused on drawing the political and working classes closer together through mobilisation of the unions, and adopting a radical import substitution industrialisation and economically redistributive policy to create social peace and a firm political constituency among the poor to whom goods flowed and the elites who profited from his patronage and preferences.

Please Pay for Me, Argentina

Aided by his wife, the charismatic Evita, Perón’s regime delivered improvements through redistribution, nationalising the central bank, electricity and gas, urban transport, railroads, and the telephone. This economic philosophy has been perpetuated in Argentine politics, fuelling impossible expectations, a perennial habit of overpromising and overspending. High inflation and indebtedness have inevitably followed, as has political turbulence.

Perón was ousted in 1955 by another coup. Further putsches followed in 1955, 1962, and 1966, interspersed with periods of military government. Perón regained power in 1973, but died a year later, passing control temporarily to his third wife, Isabel, toppled by yet another military coup two years later. The populism of Perón perpetuated through all these regimes, a tendency of weak institutions and strong personalities, where power supplanted ideology as the guiding principle.

Between 1946 and 2023 Perónist candidates won ten of the 14 presidential elections in which they were allowed to participate, encompassing the periods of Juan and Isabelita Perón (1946-55 and 1974-76) and, more recently the husband-and-wife presidencies of Nestor Kirchner and Cristina Fernández de Kirchner (2003-07 and 2007-15 respectively). Additionally, presidents Hector Campora (1973), Carlos Menem (1989-99) and Eduardo Duhalde (2002-03) are all considered Perónists, despite their varying ideological tendencies. After a short interregnum of the Cambiemos (‘Let’s Change’)  government of Mauricio Macri, the former Mayor of Buenos Aires, between 2015 and 2019, the Perónists came back with Alberto Fernández, and his deputy, the seemingly politically immortal Cristina Kirchner.

Then followed the break signalled by Milei’s election victory in November 2023.

Encompassing fascist, liberal and left-wing regimes, Perónism represents less of an ideology than a political platform. It is akin to a ‘restaurant chain where each venue has a different theme,’ says the strategist Franco Moccia. In the words of law professor Emilio Cardenas who served as Menem’s Ambassador to the United Nations, Perónism is an ‘empty capsule’, which can ‘be filled with virtually any ideology that you want, especially if you disguise yourself as a Christian. You can be Perónist and Marxist, or a military government and Perónist. It tempts politicians continuously.’ 

And while Perónism, which mixes elements of nationalism, statism, and labourism with populism, has proven robust as a political formula to gain power in Argentina, it has proven less so as an effective political and governance means to run the economy. The International Monetary Fund has, as one measure of this economic train-smash, overseen 21 bailouts to Argentina, including its largest-ever programme in 2017, and one that ended the 2002 default. Like the barman to the alcoholic, the Fund is warming up for a last bailout in 2025.

Yet this external tool of discipline has so far enjoyed scant long-term positive impact. Argentina has maintained a boom-and-bust logic of overspending, fuelling a reckless printing of money, rampant inflation, and forex crises despite a surfeit of natural and human resources. 

Ironically, in the 21st century, Perónism was partly saved by the success of the private sector. Farming in Argentina had boomed, bringing prosperity to places like Fangio’s Balcarce, driven by a rise particularly in the price of soya and by higher outputs and efficiencies from investments made by the private sector in agriculture methods and seed and planting technology. The agriculture sector brought in over $50 billion a year in exports by 2023, a windfall which helped to mask the serial failings of various Peronist governments, but regardless, a source of income on which they quickly moved to slap additional export taxes.

Such flaws included the handling of the oil and gas giant YPF, Fangio’s erstwhile sponsor, a company which has remained a target of Argentine nationalism and populism. In 2012 in response to her failed fiscal austerity programme, President Cristina Kirchner proposed the renationalisation of YPF, blaming the Spanish company Repsol, the majority shareholder, for the energy trade deficit. The bill was passed in Congress, consolidating the earlier enforced sale of YPF shares by Repsol to a Kirchner loyalist. The stink of corruption wafted steadily through the corridors of power.

Yet, with few notable exceptions, the private sector has been, for all its complaints about the costs of hyper-inflation and instability brought on overspending, largely complicit or at least largely passive in their relationship with the Perónists, many making their money through protectionist and preferential practices.

In this respect, Perónism has proven more than simply a path to power. Instead, it has represented a system of government in which there are a multitude of beneficiaries, not least the business sector, making money in an environment of ‘assisted capitalism’ – protected by laws and procedures, critical of the administration in one breath while moving their money offshore across the River Plate to Uruguay to avoid taxes in another. 

For this and other reasons, undoing statism is never easy. These policies ensured the political support of the masses through subsidies and preferences. For example, to ensure his 1946 election victory, Perón persuaded the president to nationalise the Central Bank and extend Christmas bonuses. Such spendthrift redistribution, while politically expedient, has served repeatedly to destroy capital accumulation, while attempting to baulk the inevitable reality of internal budget constraints and the underpinnings of global competitiveness.

In the process, Argentina has proven that you can do very badly despite a huge natural resource advantage in agriculture, oil and mining. It is a vast but empty land, the world’s eighth largest with a population of just 46 million. India, the world’s seventh-largest, has a population 28 times greater.

Living beyond Argentina’s means has led inevitably to a rapid accumulation of foreign debt, the growth of an unfavourable balance of payments, increasing in monetary supply, galloping inflation and a decrease in foreign reserves – all of which have ended, usually, in political tears. Regardless, such populism has been a feature of virtually every Argentine government since Perón, except for those of Macri and De La Rúa’s administrations. And yet attempts at overall, strategic reform have usually foundered on an all-too-easy reversion to short-term populist politics and free spending.

Then, suddenly, along comes Javier Milei, the leader of La Libertad Avanza (‘Liberty Advances’), an outsider to the traditional political tussle between the (conservative) Radicals and the (populist and usually left-wing) Peronists. With his election, political supply seems to catch up at last with public demand, especially of younger, angry, connected voters. He won the November second round of the 2023 election with nearly 56% of the vote over Sergio Massa representing the Perónist Frente Renovador (‘Renewal Front’). 

Mile campaigned with promises to take a motosierra ‘chainsaw’ to the state. At his inaugural address, he memorably asserted: no hay plata! (‘there is no more money’) for public spending. Over 55% of the electorate voted for Milei, a wildcard candidate and self-described ‘anarcho-capitalist’, ‘tantric sex guru’, and a libertarian economist. Little wonder that some Argentines refer to him as El Loco – ‘The Madman’.

Not so Crazy – Matching Political Supply and Demand

Outside the sumptuous Four Seasons Hotel in Buenos Aires gathered a small if enthusiastic crowd waiting for the appearance of the Colombian rockstar Camilo, and hoping for the chance of a selfie and an autograph. Camilo, with more than 29 million Instagram followers was another public personality who reflected how careers can be made via social media.

Inside was a less popular man, measured both in votes and likes, the trim figure of Mauricio Macri, the president elected in 2015 on a mandate of change, defeating the Perónist candidate Daniel Scioli in the first presidential run-off in Argentine history. A civil engineer and president of the Boca Juniors football club, the wealthy Macri became the first democratically-elected non-Radical or non-Perónist president since 1916, and the last before Milei to prise power away from the fiscally catastrophic clutches of the Perónistas. To do so, in 2005, Macri created the centre-right Republican Proposal party, also known as PRO, which formed the Cambiemos political coalition in 2015 including the Radical Civil Union (UCR), and the Civic Coalition (CC).

Despite early hopes, the coalition did not last long, or long enough to carry out his agenda. He lost the election in October 2019 in the first round, becoming the first incumbent president in Argentine history to be defeated in a re-election bid. Macri offered the opportunity to reset a perennial to-and-fro, in-and-out-of-crisis political economy. Instead, he left office and the country with little more than an extra $70 billion of debt. Argentina still kept on its circle of populist overpromises, overspending, collapse, restructuring and, again, overpromising.

‘I didn’t have the chance,’ said the former president, looking older than his 66 years despite the twilight ambience of the Four Seasons, ‘or the skill,’ he adds, ‘to reduce the fiscal deficit by even 1%. I would say to Milei that you have done incredible work, but it's not just a question of beating inflation. You must show something more’. 

Milei’s attractiveness and his message of radical, anti-establishment reform arise from popular unhappiness with how politics has contributed to the logjam of economic reform. Per capita income in Argentina between 1975 and 1990, for example, fell by 1.5% per annum, while the world rate expanded at 1.6%. According to a 2023 study by the Catholic University of Argentina, 43.1% of the population, or 17 million people, lived below the poverty line. Yet as many as 85% of Argentinians polled believe regardless that they are middle class, with the entitlements and expectations that go with this perception, whereas the figure is probably less than half of this amount, creating a tension which bubbles to the political surface when citizens don’t get what they expect.

Over the decade before 2023, according to figures from the World Bank, the economy shrunk overall by 7,3%, and yet during this century the number of people on welfare in Argentina multiplied by 2.5 times. Something had to change, particularly as other regional economies – such as Chile, Peru and Uruguay – continued to grow by attracting foreign and domestic investment.

In admitting that ‘we have no problem except ourselves,’ veteran lawmaker Richard Lopez Murphy says there are several reasons for the rise of Milei. The country had stagnated with a 123-year fiscal deficit ‘in which the old formula of spending with someone else’s credit card had reached its limits’. Milei came in with an ability to connect to voters, mastering social media, understanding his market in terms of levels of disaffection, unafraid of the political class ‘as they won't like him anyway’, and with obvious if eccentric authenticity and self-belief.  As an outsider, he was able to take advantage of the local tendency to recycle figures across the political spectrum by offering a radical alternative. As such he was able to capitalise on his opposition’s weaknesses particularly ‘in having one big idea capable of being implemented quickly.’

Milei’s core idea was to reduce the state to a small rump to carry out essential tasks. ‘We think differently,’ says Professor Martin Rossi, the Secretary of Deregulation in the Ministry of the same name ‘We think from zero [in terms of the laws and bureaucracy Argentina needs]. We think from the basis of need.’

Over its 200-year bureaucratic history, Argentina has accumulated 700,000 decrees, 30,000 laws and 200,000 additional governmental regulations. Thus the state reduction process has two components: Deregulation, which includes reviewing and cutting or rewording regulations, employing a theory of ‘positive silence’, where if you don’t receive an answer to a regulatory requirement in a certain number of days, you become effectively the government. Around 1,000 laws had, by March 2025, been amended or scrapped.

The second body within the Ministry for Deregulation and State Transformation is that which wields the motosierra, in cutting government expenditure, privatising state-owned enterprises and slashing personnel numbers. The aim behind these cuts is to drive down expenditure while driving up speed and efficiency.

At the same time, these measures are supposed to reduce inflation and free up private sector growth. Coupled with an aggressive set of regulations to attract large-scale capital projects, known as the Promotional Regime for Large Investment (RIGI for its Spanish acronym), and a stated intention to liberalise the exchange control environment (known as the cepo) by January 2026, the plan is for the market to supplant the state.

It’s similar to the thinking of Donald Trump and his team, including Elon Musk, as they seek also to disrupt and shake up America and its international relations from which, in their belief, their country should profit more. It is summarised by Trump’s Vice President JD Vance, in emphasising an ‘America First’ theme, contrasting Washington's economic and foreign policy orthodoxy abroad and the struggles of those left behind in the American working class at home.

And there are parallels in the method. Milei, with six million Instagram and 3.8 million X followers, has been described by his officials as setting policy and running the government by X, not unlike Trump. Both are at times equally ‘savage’ in pushing culturally as far as they can against perceived wokeism and conventional wisdom.

‘The fundamental problem is not,’ says Luis Lucero, the Secretary for Mining, ‘economic in Argentina, but a cultural problem. We have a very weak notion of what the law should mean – more of a suggestion than a law. As a result, the consequences for non-compliance are very relaxed. The term “accountability”,’ he says, ‘has no Spanish equivalent.’ Given that ‘the root of our economic crisis is in our relationship with the law’, Milei has embarked on Gramscian la batalla cultural (‘a culture war’) supported by the disaffected youth, ‘fed up with old recipes based on the wrong diagnosis’.

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Milei was quick out of the blocks in implementing his radical austerity drive, relying on the issuing of presidential decrees to change the government in the absence of sufficient support in Congress. By suppressing government spending, including firing 40,000 public employees and freezing budgets he was able to deliver Argentina’s first positive (non-deficit) budget in more than a century. While the public sector and unions bleated, unsurprisingly given the risk to their jobs and power base, his leadership style has so far proven both popular and surprisingly effective. But more will have to be done to consolidate the reform advantage.

The Devil is in the Detail

With Milei’s election, the political pendulum swung wildly from one version of populism to another, from leftist Peronism to radical libertarianism. As a consequence, the chief selling point of the right – liberal prudency – has been overshadowed, even though that agenda is now owned by Milei. 

Federico Sturzenegger, the Minister of Deregulation and State Transformation, and previously the Central Bank Governor, reminds that Milei inherited an economy running into hyperinflation, the rate increasing at 50%, or 17,000% annually compounded, and a 50% effective fiscal deficit. During the previous decade, two million Argentines had left the country ‘because they thought there was no hope. ..  I think Argentines realised that if Argentina didn't go for a dramatic change, we were going to all age watching our grandchildren over. Zoom.’

The problem in Argentina was in the government ‘systematically’ spending more than its income, Sturzenegger emphasises, which it had largely financed with debt or printing, both of which either led to painful episodes of debt default and restructurings or by printing money, which generated inflation. This had to change. This ‘outsider from the political system, not constrained by interest, really with this obsessive view that you need to have a stable macroeconomic order for the economy to thrive, that you have to reduce the weight of the state, because everything that the state spends is something that you have to charge the citizens every dollar, every Rand, every peso that a state spends you have to charge citizens to finance that.’

Hence the radical cuts made across government. ‘In one month,’ says Sturzenegger, ‘he cut government expenditure by five percentage points of GDP. He cut all the transfers to the provinces which had really kind of bloated their spending dramatically over the previous 15 years. He cut all public works because most of the public works were provincial and municipal, things that should be done at that level of government, not at the level of the national government … .’ Together with the job cuts this effectively reduced the real wages of public servants. 

‘Once the government achieved the fiscal surplus, it stopped printing money to finance. And so inflation really dropped … down to 1.5% monthly.’ The most important tax they reduced, as he terms it, is the ‘inflation tax  --  a machine of making poor people.’ In the process, he claims that poverty fell in the first 12 months of Milei’s government from 57% to 33%, or some ten million people.

Milei faced many challenges to keeping his agenda moving, not least in the lack of power he has in the legislature, which explains his frequent use of Presidential decrees to make changes. Another is in setting specific goals in deregulation, since getting rid of laws and people has not proven quite as easy it seems as promised.

Part of this stems from the ongoing horse trade between the federal government and the 24 provinces. Though he would like to cut their inflated public service numbers, some 2.5 million of Argentina’s overall four million, they are not on his payroll, so he has to resort to more sophisticated but no more subtle use of sticks and carrots on infrastructure budgets to encourage fiscal rectitude.

More than anything, he has to liberalise the exchange rate, narrowing the gap between the official and ‘blue’ rates (about 30%), and in doing inspire confidence in the path of reform and facilitate inflows, and not just (as ever) from the IMF. It is estimated that Argentinians have perhaps as much as $500 billion in offshore stashes, which if repatriated would revolutionise the country’s finances. But they won’t bring their money back without guarantees that, this time, collapse will not based on past form, follow reforms, no matter how meaningful and radical these might initially appear.

And he fundamentally has to place Argentina on a growth agenda, which would have to include reducing export taxes to incentivise greater production and also encouraging businesses to invest on a smaller scale than earmarked in the RIGI. This also involves carrying out -- and not just suggesting – a privatisation process.

Even if the route to power has been daunting and the reform process started with zeal, much more will have to be achieved before Milei can be considered a success. ‘He has the advantage of being an outsider,’ says Macri. ‘But if he loses momentum, he will suffer as an outsider.’

In Search of Other Nightingales?

Domingo Cavallo, Argentina’s finance minister who had brought them back from hyperinflation through convertibility, tells the story of Pedro Aspe, the noted finance minister of President Carlos Salinas in Mexico. Aspe wanted to visit Fangio’s museum in Balcarce and was ‘terribly keen’ to meet El Maestro. Domingo called Fangio and all was arranged. Fangio himself picked up Aspe from the airport in Mar del Plata. When they were stopped for speeding on the way to Balcarce,’ laughs Cavallo, ‘the officer asked: “Who do you think you are? Fangio?”

Time will tell if, like Perón, Milei’s brand of charisma will be enough to not only keep him in power but to allow his personality and process to obscure his agenda and goals. Even in an age when narrative is seemingly as important as reality, he will have to keep delivering on his promises while driving up growth and jobs and keeping down inflation. There is only so much runway to be bought by culture wars and political incorrectness. And there are always the Perónistas to fear; if Argentine history is anything to go by, they will not remain forever dormant.

Both Argentina’s transition and Milei’s legacy will require the same outcome, rooting out a way of thinking about the state and economic policy over successive generations. That’s no easy task in a country where the culture of profligacy and the tendency towards crisis is so deep-rooted as to be expectant, not exceptional.  

To do all of this, Milei will need to build a formidable, generational team – which he scarcely has beyond his sister Karina, one adviser in Santiago Caputo nicknamed ‘The ‘Kremlin Magician’, and the Minister of the Economy – to provide the feedstuff for the success stories. He also has to keep support from the right-of-centre parties, not difficult in philosophical terms (since he has eaten everyone’s ideological lunch), while keeping a close eye on the Kirchnerists with their predilection for stirring things among their supporters, from running legislative interference to ugly protest.

But the challenges will not only come from the left. As the political pendulum, inevitably perhaps, swings back, the centre around the likes of Macri and Horacio Laretta will too be positioning itself from any missteps on the part of Milei, which his personality and (lack of) depth of his advisory group might invite. It is certainly the case that Milei has a latent capacity to implode. That is just the way he is. And it seems unlikely that he will change.

‘The biggest strength of Argentina,’ says Macri, who is open about his frustrations in collaborating with Milei and in the process parlaying his parliamentary support to the president, ‘is that 75% of citizens realise that if they do not work, there is no future.’ While he has relied on Macri’s bloc to get things passed, and otherwise used executive decrees, Milei does not accept advice easily. ‘If you want to be a leader, you have to have a team,’ says Macri, whose own team were infamously at each other’s throats, at a cost to his administration. He accepts that Milei is ‘brilliant at setting the narrative, if sometimes a bit violently so, but 50-60% of his team have never met him which is incredible.’

It may be, as Lopez Murphy, a professor, economist, former economy and defence minister, and now parliamentarian, puts it, ‘The only thing worse than Milei, is Milei’s failure.’ His success will depend on much more than grandstanding, and early results, and on more than his personal authenticity and alternate, disruptor role and eccentricities.

José Godoy heads the Tucaman-based Foundation for Federalism and Libertarianism, where Milei, then a low-profile public figure, merged as a political force in his first major public speech in 2014. He believes that Milei’s ultimate ambition was never to be president of Argentina but that it was just a stepping stone for a role as a ‘thought leader, a global influencer’.

To realise this ambition he will have to have ignited other nightingales through the power not only of his tune, but of his ability to permanently change Argentina’s direction.