Radical shift: an interview with Argentina’s presidential frontrunner

Hello and welcome to The Intelligence from The Economist. I'm your host, Ora Ogunbiyi. Every weekday we provide a fresh perspective on the events shaping your world. In Berlin, a plan to expand the Autobahn, a renowned highway system, is being met with some opposition from music lovers. And they found an especially noisy way to show their disdain. And in the story of Noah's Ark, God tasks a man with saving two of each animal ahead of a big old flood. Now bring that into the present and swap out the threat of a flood with climate change. Which creatures would you save?

First up, though.

This August, a libertarian right-winger, Javier Milei, emerged as a front-runner in Argentina's presidential election. It was a shocking rebuke to the traditional political coalitions and a surprise in one of the most consistently left-wing countries in the region. The election is due to happen next month. Milei was a fringe candidate, but following the primaries and amid economic turmoil, including inflation of 124%, the race is now wide open. Anna Lankes, The Economist's Latin America correspondent, met Mr. Milei earlier this month at his office in Buenos Aires to find out what a Milei presidency would look like.

This is a really important election in Argentina. The country is in the midst of an economic crisis after two decades of rule, most mostly by a left-wing party, but also by a center-right party. And so something I hear a lot from people that I interview is, I'm sick of everyone, and they're looking for more drastic solutions. In August, there were primaries, and a lot of people thought that the center-right party would win, but Javier Milei, who's much further to the right, ended up leading the primaries.

Now, Anna, we've talked about Argentina's financial problems on the show before, but what exactly is Milei up against?

People don't trust the local currency, the peso, because it loses value really fast. And the reason it loses its value very fast is that the central bank prints far too many pesos. So people save in another currency, which is the US dollar, and the price of the dollar oscillates a lot because there's so much uncertainty in the market. So there's a big currency crisis. And there's an inflation problem and poverty is rising and state spending is too high, but it's also difficult to cut because then you might hurt the poor.

What solution is Milei proposing?

He wants to shrink the size of the government. Milei kind of became famous in Argentina after a number of television appearances in which he talked about economics in quite like a histrionic way. He kind of earned a reputation for shouting bombastic things while on television. But when you meet him in person, he's actually much more like an eccentric academic because he was also an economics professor. He quotes Milton Friedman a lot. The best example is Friedman. Friedman, a liberal classic. And his proposals come from his beliefs in right-wing libertarianism. And he takes his philosophy very literally. So in our interview, he told me that the state was a criminal organization. Because the state finances itself through taxes.

And how serious is he about dismantling the state, or shrinking it at least?

He's running to be the head of a state, so he needs to manage a state, and he's more pragmatic about that. And he says that in order to get to a much smaller state, it will take a decades-long transition. So first, pro-market reforms would be introduced to whittle down the size of the state. So he says he wants to cut public spending by at least 15% of GDP. And he wants to achieve this by doing things like eliminating subsidies, cutting the number of ministries, privatizing state companies. So in our interview, he said, we're going to reduce the number of ministries to 8. We will also promote a reform of the state to reduce public spending, lower taxes, and simplify the tax system, and attack the whole tangle of regulations that Argentina has. Then he wants to reduce or scrap most taxes. He says that services provided by the state, like education and healthcare, would see more competition. He didn't offer a lot of specifics on healthcare, but on education, he said he's in favor of a voucher system for schools. So normally the state transfers funds to schools, but in a voucher system, those funds would be transferred to parents and they can decide what school to send their children to.

And could he actually manage to do all of this?

So it's not entirely clear. Health care and education in Argentina are governed by Argentina's 24 provinces. So it's not really clear that the federal government can do that much anyways. He does have two big policies to address inflation, and they are that he wants to dollarize and in the process eliminate the central bank. Some economists don't think that's feasible because Argentina will probably struggle to attract the greenbacks it needs to convert all the pesos in the system into dollars. And the left-leaning Peronist movement, which is currently in power, is still going to be very strong in Congress. So I think the big question is, if he can't get his proposals through, what will he do?

Well, what do you think he'll do based on you having met him?

So he said he's willing to put some of these things to referendum if Congress does not approve them. As much as he says he'll work with Congress and try to build consensus, it struck me in the interview that he has a liberal streak. And you can see this illiberal streak in his foreign policy, too. How so? For example, I asked him if he admires Donald Trump, and he didn't explicitly say he supports Trump, but he said that anyone who fights against socialism is his ally. And he suggested that Trump was fighting against socialism. Closer to home, he also explicitly praised Jair Bolsonaro, Brazil's former far-right president, who copied much of Trump's anti-democratic playbook. He appears to believe in conspiracy theories. Both about Brazil's election last year and the US presidential election in 2020. And he claimed Argentina's own primary election was rigged, even though he won. He bashes China and Brazil because he says they're governed by leftists, but they're also Argentina's top trading partners. And he doesn't seem to realize that what you say on a political level could also affect your trade relations.

So what should we make of all of this? What would life in Argentina be like with Milei in charge?

I think it could be very divisive. I also got the sense that though he has a very clear idea in terms of the philosophy he ascribes to, he hasn't quite thought through the nuts and bolts of some of the very drastic changes he wants to make. So dollarization, he said that they're studying 5 different alternatives depending on market conditions when he assumes power in December. But he didn't want to talk to me about those alternatives. And though he has recently added some very good economists to his team, he also has a track record of firing a lot of people around him in his short campaign. And he seems to get a lot of advice from his sister. So his sister manages his campaign and very little is known about her. So much of what he says about the economy has led Argentines to think harder about the kind of changes that Argentina's economy needs to make. And that's really valuable. However, He has also proposed banning abortion. He has proposed legalizing a market for guns and for the sale of organs. And these are things that nobody was really asking for in Argentina.

And Anna, he's leading coming out of the primary. Do you think he can win?

So it's hard to predict what will happen because though Milei won a plurality of votes in the primaries in August, he didn't win by that much. In the next few weeks, you could get a situation where some of Milei's more outlandish proposals lead people to want to vote for more moderate candidates. You could also get a situation in which the economic context worsens and people look for more radical solutions. And I think right now it's wide open. But the sense that I get from my reporting is that people are really fed up with the status quo. And that is a sentiment that favors Millet.

Anna, thank you so much for joining us.

Thank you, Ori.

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There are a few main things for which Germany is well known.

Kevin Kainés is a producer on The Intelligence based in Berlin.

There's currywurst. Techno music, and of course, the Autobahn, Germany's famous highway system, where through many sections you can drive as fast as you want to. But lately, the Autobahn and techno have been coming into conflict. Earlier this month, thousands of Berliners came together to protest a planned expansion of a highway through the city. And like so many protests in Berlin, they made their point by throwing a massive techno party in the streets. In this case, in the middle of the planned route. The fact that protests in Berlin often involve blaring loud techno music can sometimes feel odd. But this time the techno aspect was very much on point. Building the highway extension would require not only demolishing hundreds of apartments and tear through a residential neighborhood, It would also destroy a number of techno clubs. The result is that in the capital of the land that gave us the Autobahn, there's currently a slow-burning debate about one part of its future. The fight specifically involves what's called the A100, a semicircle highway around Berlin that was long envisioned by planners to become a proper ring road. The history of the A100 goes back to 1955, when, despite the city being divided in two, the West Berlin Senate voted to start building a highway around it, starting with the parts that they controlled. A little over 3 years later, in November 1958, the first 2-kilometer section opened up. And from there, little by little, it was built out. But when the wall went up in 1961, it was obvious that no part of the highway would be built in East Berlin anytime soon. That all changed in an instant in 1989 when the wall fell. In the mid-'90s, with the city newly reunited, government planners confirmed their wish to finish the ring and to give Berliners the chance to zoom around it regardless of which side they lived on. It's a slow-moving decision that is the cause for the protests that you're hearing now. Which are specifically to stop the so-called 17th section of the ring road. This debate is particularly interesting because Berlin is the birthplace of the Autobahn. As early as 1909, a group of automobile enthusiasts had formed a pressure group for the building of a road that would allow cars to drive without interruption. —with no horse carriages or pedestrians blocking the way.

"I'm walking here!

I'm walking here!" A few years later in Berlin, work began on the AVUS—or, in English, the so-called "Automobile Traffic and Practice Road." It was built as a race and test track. But when races weren't happening, it functioned as a toll road for normal traffic. Opened in 1921 and 8 kilometers long, The AVUS had all the features we have come to expect in a highway. It was reserved solely for motor vehicles. It had a dividing lane that separated the two directions of traffic, and it was free of interruptions and intersections. It's a style of road that, of course, soon exploded both in Germany and around the world and reshaped our lifestyles, our cities, and the planet in the process. Official opening for the 140-mile first section of the 160-mile 65-mile Garden State Parkway. The toll road now open from Irvington, New Jersey to Cape May. Not everyone is happy about the new section, and for obvious reasons. Building a highway through a city involves cutting neighborhoods apart and tearing things down in the name of cars. But the fact that it would also be destroying several techno venues has given the protests against the next stage of the A100 a focal point. On a much quieter day, in the same place where the protests took place, I met up with Lutz Leichsenring, the spokesperson of the Berlin Club Commission, which is an advocacy network for clubs in Berlin.

So we are here in Friedrichshain, which is a district in Berlin, and we are right next to the Club Renate, which is an institution in the city.

It's one of the clubs that will be torn down if the highway is built, but it's far from the only one.

Here's Club Ost. At the bridge is Else Club. There is a club called Zukunft, Future, which apparently doesn't have one. So yeah, a lot of culture will be missing in this area and will be replaced by a big street and a lot of cars.

To understand this debate, it's important to know how Berlin has changed in recent years. Thanks to the wall dividing it, for decades Berlin was an economic backwater. Even in the '90s, after the city reunified, Berlin stayed largely poor. But what the city did have was space, and lots of it. And that abundance of space is what allowed Berlin's unique club culture to emerge. But now that era of space is over. Rents are skyrocketing, apartments are hard to find, and cultural venues are increasingly being pushed from the middle of the city to the outskirts. So the highway is just one of many things threatening the club scene in Berlin. But it's not just because it will destroy club culture that people, including Lutz, are against the highway. There's, of course, climate change, not to mention the wishes of the residents who live nearby.

So there are a lot of people who are interested that this develops in the right way. But politics is not really helpful at the moment.

One of the problems is that while many Berliners are against this project, it's the federal government that ultimately gets to decide if it's built. And right now, the federal transportation ministry is in the hands of the pro-Autobahn Free Democratic Party, or the FDP.

My name is Daniela Kluckert.

This is Daniela Kluckert, parliamentary secretary for the Federal Ministry for Digital and Transportation and a member of the FDP. And she agrees that clubs are an important part of Berlin and its identity. But she argues that the Autobahn is needed to make Berlin not only more attractive to business, but for people as well. And maybe most importantly, she argues that Germany is the 4th biggest economy in the world and should have the infrastructure to match. Lutz doesn't disagree that infrastructure is important. But for him, it's not the only thing.

Yeah, I mean, I agree to a certain point that you need infrastructure, but you also need cultural infrastructure. And a lot of cities over the world are jealous about this situation. And they ask us, how do you do this in Berlin to attract so many young people that are well-educated and really want to work here, even if we don't pay the highest wages?

Lutz even agrees that cars will be part of the future of mobility.

But the question is, how much space do you provide to those cars? And how much space do you want to give to bikes, to buses, to other transportation systems that don't need so much space? And we don't want to invite people to buy more cars. We want to invite them to change their habits. And for this, you, you rather invest this money in other resources, in other traffic mobility services. That would be the smarter idea.

A Berlin engineering office has already been commissioned to plan the 17th construction phase. But at least for now, the clubs have some time. First, the 16th section needs to be finished. And then around 2027, an application for the highway plans needs to be submitted to the Federal Highway Authority. Only after that is approved could the real construction start. So for now, the party goes on. But how long it can continue is an open question.

Which animals should a modern-day Noah put in his ark? It's a bit of a thought experiment that's becoming more real with climate change. The biblical story cuts through those tough decisions with divine intervention as everything just fit. But if a modern-day conservationist was forced to weigh up space, scarcity of resources, and unlimited wants, what do you save?

So this dilemma was originally posed by The Economist Martin Reitzman, who's an environmental economist. He looks at questions about how the environment interacts with the economy.

Gavin Jackson is an economics and finance correspondent at The Economist.

It's not really about biblical interpretation, you know, what was Noah doing, but just creating an economic theory of conservation. What is the strategy that a rational conservationist would follow to maximise both human welfare and natural biodiversity? You know, the scarce resources we have for conservation, how should we use them the best?

Economic lessons from the Bible. Interesting. So what's the calculation Weitzman came up with?

So animals have two sources of value in this model. The first is the utility they provide humanity. Economists call these ecosystem services. This is stuff like bees fertilizing crops, earthworms keeping the soil healthy, you know, all the things that animals do for us. But the second part of the calculation places a direct value on biodiversity, by which Weitzman meant genetic difference. So in this sense, you're not Noah trying to save the natural world from a flood, but a scholar trying to save texts from the Library of Alexandria. All the scrolls might be valuable, but many have information on them that isn't other libraries. There's duplication somewhere. So the aim would be to save those with information not recorded elsewhere. So Weitzmann applies the same logic to animals. Biodiversity has both an aesthetic value but informational one. There's content embedded in the genetics of animals that they share with each other as well.

So when you factor in those two demands, the usefulness to humans and the value of biodiversity, what takes priority?

So this is where it gets tricky. So Weizmann sort of comes to what you might consider a repugnant conclusion. Counterintuitively, the best way to preserve biodiversity is for the resource-constrained ark to pick just one species and squeeze in as many of that species as possible. So because genetic information is shared between lots of animals, preventing just one type of animal from going extinct preserves all of that shared information. If you try to keep two species alive, And you fail, you lose absolutely everything. And the additional species doesn't provide that much extra information over what's on the first one. So the real-world implication of this is that using scarce conservation funds on highly endangered species risks throwing good money after bad. Pandas, you know, they're cute, but they require a lot of effort to keep alive. That money should be spent better off on ones that we can just tip over and keep alive instead, ones that aren't quite as endangered. That's the logical white swan model. For Noah, that means that instead of putting pandas on the ark, fill it with cockroaches. And then at least one creature is going to make it out the other side. And that'll preserve both the cockroach and everything as well that cockroaches share with pandas.

Okay, but Gavin, the stakes are so high and This theory seems pretty risky.

Yeah, so there is a reason to be careful. So let's not value biodiversity. Let's just think about the benefits to humanity. Well, even if you do that, biodiversity still has something to offer: insurance. Now, if Noah fills his whole ark with cockroaches or pandas or anything else, if there's a single virus that that animal is vulnerable to, that can wipe out everything. But if you have multiple species, if one of the species goes extinct, then you have preserved the information with the other one instead, and all of the ecosystem services and so on. So Weizmann himself applied such an approach to climate change, formulating what's known as his dismal theorem. Now, this is the idea that in the presence of sufficiently big risks with a small chance of great harm, the regular cost-benefit analysis is of little use. The same may be true of biodiversity. So extinctions are irreversible and permanently reduce humanity's options. So they should be avoided. Playing at being Noah is one thing, but playing at being God is quite another.

Gavin, thank you so much for joining us.

Thank you for having me.

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