My name is Josh Neuman, and I’m writing from Buenos Aires, Argentina where Peter Thiel’s move is all over the news here. You stay in the middle [redacted]only xx minutes walk from my apartment in Recoleta.
I want to throw in a piece…I argue that Thiel is right to be in Argentina, but not right why. The freedom revolution he thinks he has achieved is not as advertised in the world press. Milei has accomplished some real things since December 2023, such as inflation and the fiscal surplus, the part written by Washington. But the effect of many of his policies has been exaggerated by both supporters and opponents alike, and pessimism has spread across all sections of society.
Much of the Argentinian status quo he sought to abolish remains the same, such as the retention of agricultural exports, union control over the labor market, while many of his reforms have had little impact beyond Buenos Aires, especially in the northern provinces still ruled by entrenched Peronista rulers. Distrust of the peso remains high, while much of the economy remains a black market, and the informal sector still accounts for 40-50% of employment. Queues outside the Spanish and Italian embassies for Argentines to become European citizens are longer than ever, while big business figures like Marcos Galperin are still staying in neighboring Uruguay. Peronism as I’m sure you know has changed several times in the history of every crisis of the time, and will prove to be very strong in the long run as a social identity as a political machine.
Argentina’s reserves are export taxes levied on agricultural goods such as soybeans, wheat, and corn at the point of sale, before the producers receive any revenue, which goes to the government, and is how Argentine governments (especially the Peronistas) have historically paid for the country’s welfare state. This system also acts as a price mechanism because by taxing exports, the government keeps more supplies in the domestic market, depressing domestic food prices. Reserves were not popular among plant producers and landowners, and Milei campaigned for their abolition. He is very conservative, because he needs the income to maintain the surplus that is the core of his plan.
But I think there’s a deeper cultural shift that I’m not sure Thiel understands. Argentina’s youth yearn more for la dolce vita than Weber’s protestant work ethic. They actually want their country to be like Spain or Italy, with a balance of cool life, high entertainment and spending, written under a generous welfare state, even if that model is becoming financially and demographically unsustainable in Europe. I think it’s a perfectly reasonable goal and in many ways admirable, but companies like Paypal, Palantir, and Facebook didn’t come out of Spain or Italy.
Among my Argentine peers, I have never met anyone who wishes to immigrate to the United States. When I tell friends that the American economy has been growing at twice the rate of Europe in recent years, I am met with genuine disbelief. I think Thiel may have been attracted to the small teleological elite in Milei’s inner circle who oversees the country she rules. The average Argentine who voted for Milei did not vote for Austrian economics or the liberal revolution. They voted because they were tired of Peronism, as many Milei supporters were Peronists themselves, as many Trump supporters in the American Rust Belt were former Obama voters.
The real case of Thiel’s Argentina rests on factors that have nothing to do with Milei: a younger population than Europe, a world-class population, abundant lithium and rare earths, and geographical isolation from a major energy conglomerate. He may be right for all the wrong reasons, on a longer timeline than he expects, for more turmoil than the current narrative suggests. Argentina’s no-nonsense attitude is exactly what makes it so appealing to foreigners. But as a project to revive civilization? Unless you’re talking about surviving a nuclear war, no.
I am an Argentinian-American master’s student in international relations at the Universidad Torcuato Di Tella…
Best of all,
Joshua Raoul Neuman
