Experts warned of devastation, but free-market policies drive growth and poverty drop.
By Ivo Vegter
Key topics:
Over 100 economists warned Milei’s far-right economic policies risked harm and inequality.
Milei’s free-market reforms sparked strong growth, lower inflation, and reduced poverty.
Critics misunderstood markets, ignoring that Argentina’s past socialist policies failed repeatedly.
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By Ivo Vegter*
Over 100 economists warned against Javier Milei’s economic policies. Over 100 economists were dead wrong.
A friend sent me an article from The Guardian, published shortly before the 2023 election in Argentina won by libertarian candidate Javier Milei. It is headlined: “Economists warn electing far-right Milei would spell ‘devastation’ for Argentina”.
It reports on an open letter, penned by four eminent economists and signed by over 100 others, which warns of “[t]he dangers of Javier Milei’s economic program in Argentina”.
I missed the letter at the time, perhaps because it was published in a Spanish-language newspaper, behind a paywall. That’s a high hurdle, but it’s nothing an Internet Archive and machine translation cannot overcome.
The authors are influential economic superstars: Thomas Piketty, author of the famous (or rather, I should say infamous) Marxist manifesto on inequality, Capital in the 21st Century; and three other neo-socialists, India’s Jayati Ghosh; the Serbian-American Branko Milanović, and Colombia’s former finance minister José Antonio Ocampo.
Their warning was stark: Milei’s proposed policies were, they said, “fraught with risks that make them potentially very harmful to the Argentine economy and people,” and he “ignores the complexities of modern economies, ignore[s] the lessons of historical crises and open[s] the door to the accentuation of already serious inequalities”.
Their problem? Milei’s policies are laissez-faire, but “unregulated markets are not benign: they reinforce unequal power relations that worsen inequality and make it difficult to implement key development policies, including industrial, social and environmental policies”.
Proof, pudding
We’re 18 months on, and the numbers are already proving these eminent economists wrong. If the proof is in the pudding, Milei’s pudding is delicious.
His radical free-market reforms, which included halving the number of government ministries and slashing public spending, pulled Argentina out of a recession. In April 2025, it recorded robust 7.7% year-on-year growth.
Inflation dropped like a stone, from an annual rate of 211.4% in 2023 to 43.5 percent by mid-2025. It is still falling, and the month-to-month rate of 1.5% in May 2025 is the lowest recorded in five years.
Meanwhile, the poverty rate, which even free-market economists expected would rise in the short term, declined from 52.9% in the first half of 2024 to 38.1% in the second half.
In May, the Institute of Race Relations published my paper on Argentina’s remarkable turnaround from a corrupt, stagnant, socialist backwater with one of the worst economies on the planet, and why South Africa can learn valuable lessons from it.
How did over 100 of the world’s most eminent economists get it so wrong?
Study versus control
At the root of this question lies the problem that universities do not present economics as a study of human action and of the choices people make when they set out to satisfy their unlimited needs and wants by the efficient use of scarce resources.
The economics establishment doesn’t view the subject merely as a social study, but as an objective science. Universities teach economics as a means not to study human behaviour, but to control it. They provide economists with the tools by which governments can manipulate economies to achieve political ends.
