Milei and a Praise of Betrayal

Argentine President Javier Milei.Juan Ignacio Roncoroni (EFE)

Thirty-five years ago, Denis Jeambar and Yves Raucaute published their provocative In Praise of Betrayal. They stated that one of the conditions for a politician's success was the flexibility he had to modify his ideas and promises in order to adapt them to the constraints of reality. The new Argentinian president. Javier Milei is a strict follower of these two Frenchmen, although, it is very likely, he has never read them.

Milei's first week at the helm of the state offers a wealth of evidence about his ability to modify the postulates and promises that sustained his electoral campaign. That plasticity is very striking because he is someone who not only expresses his criteria very vehemently, but also grants them a moral superiority.

The need to adjust its conceptual platform with a string of "betrayals" is due, among other reasons, to an objective problem of Milei's. His most high-sounding statements, his boldest programs, were elaborated with the hypothesis that La Libertad Avanza, his party, would not have to take charge of the government. All this baggage of ideas and projects responded to the hypothesis that Milei's presidential candidacy would not exceed, in the primary elections of August 13, more than 20% of the votes. However, in those primaries he came out on top. The possibility of gaining power began to become plausible. And the proselytizing discourse had to be moderated at full speed. It is possible that, if he had been told that the head of state was waiting for him, Milei would have run a much more moderate campaign. But it's also possible that that campaign wouldn't have given him victory.

The inauguration of Milei's mandate could be put under the slogan Reality Advances. One of the new president's dogmas was always that every time the state intervenes in a market, the quality of the economy worsens. However, the new president appointed Luis Caputo as Minister of Economy. He was one of the heads of the Central Bank during the period of Mauricio Macri. He had to leave that position because of a suggestion from the International Monetary Fund, which did not authorize Caputo to fix the price of the dollar through interventions financed with resources from that multilateral organization.

Milei had promised, as he sought the vote, that he would close the Central Bank. According to him, this institution has a disastrous role because it is subject to the whims of politicians, who take away its technical independence. However, installed in the Presidency, that candidate appointed Santiago Bausili, who is Caputo's partner in the consulting firm Anker Latin America, as head of the Central Bank. Bausili's first move was to set a new parity between the peso and the dollar, promising to maintain it, albeit with a monthly devaluation of 2%.

Milei swore hundreds of times that before raising a tax he would cut off an arm. However, the fiscal plan presented by Minister Caputo on Tuesday last week is based on an increase in the tax burden. Not only is the tax on the purchase of foreign currency increased. The rate of withholding taxes applied to exports also increased. The first liberal-libertarian president in history, as he likes to define himself, inaugurated his reign by increasing the state's tax burden on taxpayers.

During the campaign, the new president had repeatedly defined social justice as a crime through which the state appropriates the fruits of the labor of some citizens to pour resources on others who do not work. The ideologue of this supposed perversity was, for him, Pope Francis, whom he condemned for endorsing "communist governments." However, now that he has taken charge of the government, Milei has appointed Pablo De la Torre, an official very close to the Church, as head of the Secretariat of Social Action, in charge of meeting the needs of the most vulnerable. Horacio Torrendell, the new Secretary of Education, also comes from this sector. The pope communicated with Milei a few days after his election victory. And last week, from Mexico, he relativized the contradictions by saying that it is common for politicians to say one thing when they must win the people's vote, and another when they govern.

Something similar is happening in the international arena. The leader of Argentina's right-wing has vowed to refuse to have any contact with communist governments that deny people's freedom. But necessity has the face of a heretic. Milei received a central bank with negative net reserves of $10 billion. A part of the reserves it has are denominated in yuan, because they correspond to a loan from China, with whose government the president did not intend to have relations. Spurred on by reality, Milei wrote a letter to Xi Jinping requesting that he allow him to make use of those yuan.

This homage to pragmatism, this praise of betrayal, should not be condemned but applauded. It reveals that Milei has a sense of the political limit and is willing to negotiate with that limit. No wonder. History placed him at a very demanding crossroads. With monthly inflation at 12.8%, with no reserves in the Central Bank, with poverty exceeding 40% of the population, it must make a very harsh fiscal adjustment to reduce monetary issuance and curb the inertia that leads to hyperinflation. But that goal must be achieved with almost no institutional resources. Milei's party has 8 senators out of 72, and 37 deputies out of 257. Milei is doomed to give up any rigidity. He must negotiate with the Peronist governors, who have great influence over Congress. With the trade unionists, whose mood is decisive in a context of deteriorating wages due to uncontrolled inflation. With the social movements that organize the poor, informal and unemployed.

Lacking the political and institutional instruments to carry out the normalization to which he is forced by a disastrous economic legacy, Milei has little more resources than the strength of his charisma to seduce a wide swath of Argentines. Self-confident, as if the attributes of power had been given to him by a divine command, he walks steadily toward the center of a mysterious experiment. That of ensuring that this charismatic appeal does not wane despite having inaugurated his government with a slogan that is also a warning: there is no money.

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