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In recent days, the example of Tony Blair in the United Kingdom has been frequently mentioned, the young leader who modernized the Labor Party during Margaret Thatcher’s long Conservative night. The parallel is not small: Milei identifies himself as an admirer of Thatcher, whose agenda focused on privatization, deregulation and a frontal war on inflation (sound familiar?). Blair built a new leadership by renewing Labour’s economic and social proposal from the grassroots and managed not only to defeat Thatcher but to govern for a decade with broad popular support.
I find the example useful for thinking about a modern economic alternative to Milei’s vision. This alternative may be anchored in our traditions of industrial development and social justice, but it must involve a renewal of our economic ideology and not just be an exercise in nostalgia.
The first point is to give absolute priority to stability – low inflation. Milei understood that society was willing to make great sacrifices in exchange for a clear goal: ending inflation. He was the first candidate to win a presidential election by explicitly speaking of accommodation; in fact, there was no doubt about it: he used a chainsaw as a symbol. This points to a broad social consensus: high inflation seems to be the worst of all worlds, destroying salaries, shortening horizons, paralyzing investments and, above all, hitting workers and the most vulnerable sectors.
Priorities
An alternative agenda must support the three classic objectives of economic policy – stability, growth and distribution – but in that order. Without stability there is no growth, and without growth distribution becomes a permanent conflict. If you try to distribute a pie that doesn’t grow, the ultimate consequence is higher inflation.
An economic policy that prioritizes stability is easy to design but expensive to implement: it requires avoiding macroeconomic imbalances (fiscal and external) at all costs and not taking shortcuts that have already failed and that modern capitalist countries do not apply, for example price controls, holdings in the foreign exchange market, untargeted energy subsidies, withholdings on exports and trade restrictions.
The second point is the construction of a new social order that combines solidarity with performance, inclusion with responsibility. In recent years, well-intentioned measures have been taken that ultimately created the wrong incentives and weakened the work and performance culture. A clear example is the pension moratoriums: by guaranteeing retirement without sufficient contributions, they destroyed the motivation for the self-employed and monotributists to meet their obligations.
Inclusion is an inalienable principle, but the tools must be intelligently designed: incentives are very important. A country that wants to grow needs every person who has reasons to develop their potential, to further their education, to work and to make a contribution. We must return to upward social mobility as the central axis of community progress, combining the role of the state in equal opportunities (with investments in education and public health) but also individual efforts.
State and society
Related to this is a third central element, which is to rethink the role of the state and its relationship to society. The disorder in this area has been enormous in recent decades and reflects the lack of vision and courage to reorganize the state and its institutions. It makes no sense for the national state to build houses and schools or manage completely provincial routes like the Ezeiza-Cañuelas highway. These responsibilities must be transferred to the states and, if necessary, to the municipalities. Likewise, the state should not produce goods and services: these are almost always expensive, inefficient and subject to capture. The Milei government’s deregulation and state reform agenda contains very valuable points. Reviewing it point by point by the opposition and acknowledging what is right would be a gesture of maturity and a clear sign of renewal.
In short, unless you think outside the box, as Blair did, there will be no real renewal. And without renewal, it will be difficult to convince the majority that there is something new, solid and credible to overcome this phase. The economic alternative to the current course cannot be a return to the past, but a modern proposal compatible with work, production and social advancement.
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