In Argentina, America Secures a Libertarian Client State

Despite shaky polling data and high-profile scandals, President Javier Milei’s La Libertad Avanza Party won a decisive victory in the Argentinian elections earlier this week. Decades of Peronist failures to deliver on economic issues are not so easily forgotten by an electorate that, similar to that of many other countries, is willing to take risks to undo generations of failed establishment policies rather than continue as things had gone before.

What is distinctive about the Argentinian case is how involved Washington was in this election. In a candid moment after the results came in, President Donald Trump said, “In Argentina, I want to congratulate the victor. And he had a lot of help from us.” The Trump administration had proposed a $40 billion bailout from the U.S. that would have been contingent on Milei’s party winning the election. What role this had in deciding the outcome of the contest is not yet known, but it could not have been a small factor considering the size of the promised aid and the uncertain nature of the Argentinian economy.

Despite the affinity between Trump and Milei, populist trends in Argentina and the United States are moving in opposite directions. In Buenos Aires, going against the establishment means embracing free market libertarianism and opposing the grasping hands of an overly regulatory state. In the United States, it means rejecting a 40-year-long economic experiment in open borders, open markets, and neoliberal technocracy. A turn towards national conservativism among both the base and some members of the White House, with tariffs and state investment in critical industries becoming normalized once again, is at total cross-purposes with the Argentinian desire to slim down the state’s role in the economy.

So why is the U.S. putting so much on the line to support this project? An open and honest answer to this question is not easily found on Fox News or in White House statements, but the likely cause can be found in history: Free market economics undermine the sovereignty of smaller states in the international system, and for the U.S., the loss of sovereignty in Argentina is a feature, not a bug.

In the 19th century, global empires such as Britain worked to reduce trade barriers between their various colonies in order to fuel industrialization in the home island itself. The overseas colonies became crop exporters and raw material providers for the development of Britain. Britain had been the first country to industrialize and many of its political elites sang the benefits of free trade to others. It is noteworthy, however, that once other countries caught up (or in the case of the United States and Germany, surpassed) Britain in the late 19th century, it moved increasingly towards protectionist measures in response.

The United States, meanwhile, was a country explicitly founded on breaking free of the British Empire in order to embrace its own separate model of development. Before the Revolution, Americans were in danger of becoming a new Bengal, and the young republic in its earliest years set out to build both an economic and diplomatic system that prioritized non-alignment from global projects and the domestic development of nascent industries.

The protectionist inclination of the U.S. would remain a dominant trend for most of its history, only changing in the late 1970s as events came full circle and the formerly young republic aged into something more like the very British Empire it had once rebelled against. But with the failure of ’90s-style U.S. global hegemony, both military and economic, in more recent times this current phase now seems to be coming to an end. What the U.S. seems to be moving towards is a more modest role abroad while retaining some elements of predominance through securing critical industries at home.

The neoliberal experiment, once touted by the governing classes, had been found to threaten the sovereignty and independence of the U.S. It was a lesson many other countries had learned as rapacious multinational corporations often failed to increase their level of human development while remaining unaccountable to civilian leadership. Meanwhile, the countries that developed most in the post-World War II era were those where a sovereign state retained a tight grip on domestic development. 

Countries like Singapore, South Korea, Taiwan, and, after the rise of Deng Xiaopeng, China, saw the biggest gains for late-coming industrial powers by a process that mirrored the earlier American model. Compare this to the earlier “open door” policies the great powers had forced on a weakened China, which would culminate in them carving out zones of influence directly inside the Qing Dynasty—a tragic fate that in no small part inspired the rapid Japanese industrialization and militarization of the pro-imperial Meiji reforms as a counterreaction.

Whether free trade is a positive or a negative for a developed country is debatable, and beyond the scope of this article. What is relevant to note from historical experience is that sovereignty—the monopoly over a society’s policymaking by its own people or an indigenous elite—is critical to becoming and remaining a developed country. Global trends, multinational corporations, foreign nonprofits, or investors and other powerful individuals in larger nations can compromise the ability of a developing nation to forge its own independent political path. 

Domestic critics of Milei’s governance in Argentina often point towards a loss of industry and the reorientation of its resources away from control by its own people. Argentines who voted for Milei believe this experiment will be successful at reversing their decline in living standards. They may well be correct, but the cost of following this policy is to weaken the sovereignty of Argentina and increase U.S. influence over the nation’s fate.

As the U.S. intensifies its protectionist turn at home, it encourages others abroad to do the opposite, creating a subordinate relationship with smaller countries. What appears to be philosophically incongruous is actually the realpolitik of reindustrializing North America at the potential expense of South America. As more of the world moves back to economic nationalism, we can expect the great powers to sell free market economics in their region to anybody but their own people.

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