Milei's economic shock therapy echoes Argentina's dark dictatorship era

Argentina's economic policies under President Javier Milei are drawing comparisons to those of the 1976–1983 military dictatorship. Both periods prioritised market liberalisation and state retrenchment, though under very different political circumstances. The parallels extend to wage suppression, privatisation drives, and a focus on stabilising the economy at the expense of workers' purchasing power.

The 1976 military coup installed a brutal regime that broke with earlier military governments by abandoning industrial protectionism. Instead, it pursued radical neoliberal reforms under Economics Minister José Martínez de Hoz, a civilian with deep ties to Argentina's economic elite. His policies included price deregulation, scrapping import restrictions, and a 90-day wage freeze—measures that crippled domestic industry and slashed real wages. The dictatorship's goal was clear: crush labour's power and permanently weaken the industrial working class.

State-owned enterprises (SOEs) expanded under the dictatorship, but not for industrial growth—instead, they served as tools of control. The 1990s under President Carlos Menem then saw massive privatisations, selling off oil (YPF), telecoms, and airlines to cut debt and embrace neoliberalism. After the 2001 economic crisis, partial renationalisations under Néstor and Cristina Kirchner reversed some of these sales, such as YPF in 2012. Milei's government, since taking office in 2023, has revived the privatisation push, targeting remaining SOEs like Aerolíneas Argentinas and public media. His policies mirror the 1990s in seeking deficit reduction through deregulation, but they unfold amid an ongoing economic crisis. While inflation has eased under Milei, this shift is also tied to changing global conditions. Like the dictatorship, his administration has overseen a sharp decline in workers' purchasing power, reinforcing the state's role as a guarantor of capitalist interests—though through different methods.

The economic strategies of Milei's government and the 1976–1983 dictatorship share key features: wage suppression, market opening, and a reduced role for the state in economic life. Both periods have left workers with diminished purchasing power, even as inflation rates stabilise. The long-term effects of Milei's reforms, however, will depend on how Argentina's economy adapts to renewed liberalisation and global pressures.