Despite a landslide electoral victory for Javier Milei, Argentina’s parasites—unions and leftist politicians—are by any means necessary undermining his administration. Unions have been refusing to work, violently protesting, and blocking streets. On February 6 their patrons in the National Congress blocked the reform bill that is crucial for economic recovery.
Milei has the herculean task of transforming Argentina’s decrepit political and economic model. Transformation is difficult because the Peronista model has countless rent-seekers and cronies who want the gravy train to keep rolling. With the rare opportunity he has, Milei must put an end to the parasitism that has been feeding at the trough of citizens and private businesses for generations.
With just two months in office, the incumbent administration has had to face multiple violent blockades by the piqueteros (protest organizations) and the country’s most powerful unions. On January 24 the umbrella General Confederation of Labor (CGT) protested Milei’s deregulation decree and reform bill. Both contained provisions to reduce the economic stranglehold of unions and piqueteros, and the latter threw a hissy fit of vandalism and arson.
With 38 of 257 and seven of 72 seats in the House and Senate, respectively, Milei’s Freedom Advances party has run into an uphill battle when confronting those who favor politics as usual in the legislature. Coalition support from former President Mauricio Macri’s Republican Proposal party has proved insufficient to pass liberalization.
Cronies Prevail over Argentine Freedom
By obstructing liberalizing reforms in Congress, the political class are determined to see Milei fail. They are content to see more economic crises—even entailing violent confrontations—so long as they preserve their privileged status.
After seven decades of Peronismo, the state’s interventionism continues to choke off wealth creation and accumulation. In December 2023 Milei sent the Foundations for Argentine Freedom Bill to Congress. This represented a historic paradigm shift: the executive sought to deregulate the economy and dismantle Argentina’s nanny state.
The bill included the privatization of most state-owned companies. Many of these, including Aerolíneas Argentinas and Ferrocarriles Argentinos (the railways), have bloat and deficits as far as the eye can see. The losses of just a few state-owned enterprises in 2023 amounted to 1 percent of the country’s GDP.
When Milei presented the bill, known as the omnibus bill, it had more than 600 articles. After congressional negotiations, even without Peronista participation, it was down to 386 articles. Due to the elimination of the omnibus bill’s most important proliberty elements, the Milei administration withdrew it temporarily.
🇦🇷 | Adelanto de la entrevista del presidente Javier Milei (@JMilei) con Emma Tucker, directora de The Wall Street Journal: “No hay Plan B”.pic.twitter.com/FS3ptOt2Mx
— La Derecha Diario (@laderechadiario) January 28, 2024
Those elements included state-enterprise privatization, expedited customs, a tax exemption for foreign investments of less than US$100,000, and an end to taxpayer-funded partisan advocacy. Perhaps most chilling to union parasites—whose modus operandi is intimidation—the omnibus bill had stiffer penalties for anyone who blocks thoroughfares and halts commerce and free movement.
The political classes who gutted the omnibus bill are accomplices to the nation’s slow-motion devastation. Many of these deputies come from provinces where the most pernicious Peronismo reigns. They want to retain (and enjoy) the parasitic status quo and pass a bill with only the appearance of reform.
The omnibus bill was by necessity broad, and it was a pivotal first step towards reviving the Argentine economy and softening the pain of austerity. When you have been living off deficits for decades, facing up to reality with fiscal restraint will not be easy. However, crippling inflation is there for all to see, and Argentina needs international credibility to attract foreign investment. Rearranging deckchairs on the Titanic will not fool anyone.
The Union-Piquetero Mafia
The relationship between Argentine politicians and unions has grown evermore symbiotic since the 1940s. After the 1943 coup d’état, Juan Domingo Perón—who learned propaganda from Benito Mussolini’s fascist regime in Italy—became the head of the Labor Department. He partnered with the unions, providing financial aid in exchange for support with his upcoming presidential run. As president, Perón introduced the social-justice model that has now taken his name and led to Argentina’s humiliating fall from grace.
Union leaders have for decades had enormous economic power. Despite not being elected by citizens, an unthinkable 3,000 unions live off mandatory membership dues in various professions. A protectionist, dysfunctional economy frozen in time is the predictable outcome. Some union leaders have been in power for 40 years, and they operate as mafias to extort governments.
In the 1970s unions got to control and administer so-called obras sociales (social works), which are medical-insurance programs for workers. By law all workers are coerced to pay into obras sociales. This has allowed unions to enrich themselves and sink their teeth even deeper into the political process.
Piqueteros are Peronista enforcers—akin to Antifa thugs backing progressive causes in the United States—who exert pressure on any politician who dares to threaten the status quo. Taxpayers fund piqueteros through welfare programs, which are supposed to be direct-aid transfers to these organizations for distribution.
🇦🇷 | Noche de furia por no saber perder: Piqueteros del kirchnerismo y de la izquierda arrojan un contenedor de basura para causar un incendio en frente al Congreso.pic.twitter.com/GsTCHhiKC2
— La Derecha Diario (@laderechadiario) February 2, 2024
Vulnerable citizens, if they want to receive their taxpayer-funded provisions, are at the beck and call of piqueteros and can be recruited for enforcement and intimidation. Piqueteros have now built a clientelist network that strong-arm citizens into demonstrations against market liberalization.
The power of this network is formidable and dangerous. An Infobae report estimates that 20 million citizens depend on state transfers or social plans, administered by unions and/or piqueteros. That equates to a force of around 44 percent of Argentina’s entire population.
These unions care not for worker well-being, and the notion that they serve workers has become laughable. Unions stood unflinchingly by the flagrantly corrupt and economically inept administrations of Alberto Fernández (2019–2023) and Cristina Fernández de Kirchner (2007–2015). While inflation and poverty spiked under the Peronistas, union officials looked the other way.
In a January 28 interview with the Wall Street Journal, Milei contended that there is no plan B regarding liberalization reforms. Facing threats to their lives, Milei and his team are confronting the parasites directly and will enforce the law and liberate the economy as much as possible.
Argentina is suffering the consequences of decades of irresponsible policies. The late University of Chicago economist Milton Friedman had sage advice regarding a liberalization cure: “the bad effects come first, and the good effects only come later.” Argentines will have to learn to get through the initial austerity pain and delay their gratification for a more promising future.
¡Viva la libertad, carajo!
This article reflects the views of the author and not necessarily the views of the Impunity Observer.
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