Argentina: Shock Therapy, Resistance, and the Role of the Left

With Congress likely to approve Milei’s neoliberal agenda, the only limits to his onslaught will come through mass mobilization, coordinated strike activity, and other forms of social unrest.

January 24, 2023

The inauguration of libertarian President Javier Milei on December 10, 2023. (Presidency of Armenia / Wikimedia Commons / CC BY-SA 3.0 DEED)

Just over a month after President Javier Milei took office in Argentina, his economic policy is a textbook case of shock therapy. The plan laid out by Finance Minister Luis Caputo seeks to eliminate the fiscal deficit, now at 5.2 percent, through a drastic reduction in public spending, the suspension of all public infrastructure projects, and a reduction in subsidies to energy and transportation. During its first week, the government devalued the national currency by 50 percent, one of the largest devaluations in the country’s history. Aided by the liberalization of prices as well as high unemployment and poverty rates, this sharp depreciation of the peso quickly translated into a reduction of income for the majority of the population—an estimated fall of 15 percent in the average salary’s purchasing power in only one month.

The economic plan was followed by an all-encompassing presidential decree issued on December 20, affecting issues as diverse as labor law, health care, foreign trade, private property, and mining. The general thrust of it is very clear: an attack on workers’ rights, the liberalization of the economy, the strengthening of big business through market deregulation and numerous incentives, and the erosion of protections for tenants, the environment, and small businesses. One of the key components of the decree is a labor reform that lifts fines and penalties for informal employment (roughly 40 percent of the labor force), extends the probationary period for new employees from three to eight months, and limits union meetings during work hours.

The decree also seeks to undermine workers’ power by severely constraining the right to strike, banning picket lines that block the entrance to the workplace, and undercutting unions’ financial resources in two ways: on the one hand, by eliminating agency fees, and on the other, by allowing private health insurance companies to compete for (formal) employment-linked health insurance funds, historically and legally in the hands of unions.

Furthermore, the decree changes the legal status of all state-owned companies, allowing for their privatization down the road. It lifts all restrictions to the purchase of land by foreigners, and opens the market for satellite internet “to allow companies like Starlink to provide their services” said Milei, in an explicit nod to Elon Musk during his announcement.

Anticipating widespread discontent, the government put in place a new “security protocol” to repress street protest. Heading the Ministry of Security is Patricia Bullrich, the 2023 presidential candidate for the conservative coalition Juntos por el Cambio. The new protocol targets, in particular, roadblocks, a method of protest and resistance that has become key for social organizations and the unemployed in Argentina since the late 1990s.

Milei Drops the Anti-Establishment Mask

During the presidential campaign, Milei railed against the “political caste,” a term used to refer to career politicians from establishment parties. Milei employed this anti-establishment rhetoric as a demagogic device to capitalize on the widespread rejection of the two parties that have dominated Argentinian politics for the past 10 years: the Kirchnerist/Peronist coalition Unidos por la Patria, formerly Frente de Todos, and the center-right Juntos por el Cambio. Although this was arguably his biggest appeal, Milei’s public statements during his campaign also included a radical free-market program and an ultra-conservative social agenda that, among other things, derided human rights, opposed the right to abortion, denied climate change, and promised to drastically roll back welfare policies. 

In the lead-up to the runoff against Peronist candidate Sergio Massa, however, Milei met with former neoliberal president Mauricio Macri and struck a deal that would redefine his program. He no longer talked about the "political caste"—and when he did, it was to refer to union leaders or public employees. Over the weeks that followed, Milei abandoned his most extravagant ideas and toned down his message, ostensibly following Macri’s counsel and the word of foreign business ideologues and columnists from Foreign Affairs or The Economist who advised: forget the culture wars, ditch the fringe rhetoric, and focus on the free-market program.

The transformation from anti-establishment candidate to free-market president at the service of the capitalist class was complete. Immediately after the presidential decree was published, all major business organizations—including Unión Industrial Argentina, Asociación Empresaria Argentina, and others—came out in support of the package. The International Monetary Fund (IMF) has also expressed full support for Milei’s economic policy. During his public speech at the World Economic Forum last week, Milei praised free-market capitalism and addressed businessmen directly, calling them “heroes” and proclaiming Argentina as an “unconditional ally.”

“You are social benefactors,” Milei declared in Davos. “You are the creators of the most extraordinary period of prosperity we have ever seen.”

Will the Plan Go Through? 

Since it was issued, the decree faced several legal challenges, with parts of it, such as the whole labor chapter, suspended by the courts. Many constitutional experts agree that the content of the decree does not meet the requirements for such an instrument. Government officials can hardly explain why the erosion of workers’ rights or the lifting of restrictions on foreigners to buy land, among others, qualify as “urgent needs,” and therefore bypass the legislative process.

However, attention has now shifted to a mirror bill presented to Congress, which includes all issues contained in the decree, plus a request of extraordinary powers to the executive for a period of four years. This accumulation of power in the hands of the president does not sit well even among allied parties, but we can expect members of the “friendly opposition”—Unión Cívica Radical, Hacemos Coalición Federal, and other remnants of the now defunct Juntos por el Cambio—to support the bill in exchange for minor concessions. Behind closed doors, the government and allied parties are tweaking the bill to secure its approval. The sum of these forces will likely suffice to pass the bill in both the House of Deputies and the Senate.

Street protest is a common feature of political mobilization in Argentina. Here, a December 2017 protest against neoliberal pension reform instituted by former president and current Milei ally Mauricio Macri. (Flickr / Emergentes / CC BY-NC 2.0 DEED)

January 24: General Strike!

The first organized mobilization against the government was called for by the Left, including the Workers’ Left Front and piquetero and social movements, just a week after the Milei took office. Although relatively small in number, many thousands defied the strict security protocol and flooded the streets in protest, setting a precedent for future actions and emboldening protesters against the threat of repression.

Since then, there have been widespread “cacerolazo” protests (using pots and pans), and spontaneous assemblies have appeared in neighborhoods and workplaces across the metropolitan area of Buenos Aires and other major cities. For example, Unidxs por la Cultura, an arts and culture movement, organized a “cacerolazo cultural” in more than 80 cities across the country, featuring concerts, drum sessions, and other artistic expressions in repudiation of the government’s plans to gut funds in these areas.

Most importantly, after dragging their feet for a week or two, the General Confederation of Labor (CGT, Confederación General del Trabajo) called for a general strike for January 24, which the smaller but more combative Argentine Workers Central (CTA, Central de Trabajadores Argentinos) swiftly agreed to support. The reaction from the government and most of the media was predictable: why is the CGT calling a strike only 45 days into Milei’s presidency, when they didn’t call a single strike during the four years of Alberto Fernández and Cristina Fernández de Kirchner’s government?

This retort contains a grain of truth: national union leaders saw the incomes and working conditions of their own members deteriorate over the past four years, and did not use labor’s most powerful tool, the strike, to try and reverse this trend. But in the face of the all-out attack on workers’ rights being unleashed by Milei, anything less than a general strike would be a losing response.

The general strike on January 24 will feature a march on Congress with an expected attendance of over 100,000 people. The massive mobilization will inevitably fill the streets of Buenos Aires and challenge the government’s security protocol, showing the strength of working-class people when they strike together. But the fight will not end there. Because figures in Congress are favorable to the passage of the bill, any check on Milei’s reactionary program will be the result of class struggle; the disruption brought about by mass mobilizations, coordinated strike activity, and other forms of social unrest.

Despite the move to strike, we can expect CGT leaders to relinquish the fight in exchange for a few concessions, as they did during the privatizing spree and labor reform under former president Carlos Menem in the 1990s. Specifically, if union leaders get to keep agency fees and the monopoly on health insurance funds, it is likely that they will fold up their tents and let the bulk of the labor reform go through.

Who will Pick up the Gauntlet?

Meanwhile, the Peronist opposition is still licking its wounds after the electoral defeat, immobilized in internal conflict and absent from the main expressions of resistance welling up. Former President Alberto Fernández and Cristina Fernández de Kirchner are nowhere to be seen. The same goes for Sergio Massa and the main Kirchnerist current within Peronism, La Cámpora, leading Pablo Moyano, one of the heads of the CGT, to ask rhetorically, “Where are Alberto, Cristina, and Massa?” None of them has supported the general strike or made calls to action against the government’s onslaught.

Instead, the most prominent Peronist leaders have taken an elusive attitude, advising citizens to wait for the moment when support for the President wanes before calling for any demonstration against the government. Only a few days before the strike, the governor of the province of Buenos Aires, Axel Kicillof, expressed support for the action.

Milei won the runoff with 56 percent of the vote, but this does not mean there is wide agreement with the austerity and liberalizing policies advanced by the government. The figure is inflated by the obvious fact that there were only two options left in the runoff; in the general election, Milei only garnered 30 percent. Studies show that only about a third of his supporters are hardcore defenders of his anti-state, pro-market, and anti-progressive ideas. The rest is a loose conglomerate of anti-Kirchner or anti-Peronist votes, partial support for some of his proposals, and hopes that he will be able to rein in the devastating levels of inflation. In fact, recent polls show that 54 percent of the population opposes the decree and 59 percent of respondents oppose the omnibus bill, with only 31 percent in favor.

In this scenario, the Left will play an important role in organizing the resistance, providing energy and leadership, and joining efforts with wide sectors of the population to defeat Milei's plan. A singularity of Argentina is that the revolutionary left holds a high profile in national politics. With five seats in Congress, a strong presence in dozens of unions, and public figures that are recognized at the national level, the Workers’ Left Front—Unity (FIT-U, Frente de Izquierda y los Trabajadores – Unidad) is a recognized political force. This is the result of its bold involvement in class struggle in recent decades while maintaining unwavering political independence from Kirchnerism, at a time when most other organizations were being coopted. The FIT-U’s 2023 presidential candidate Myriam Bregman, a renowned Human Rights lawyer, was the most resolute detractor of Milei’s neoliberal program during the presidential debates. She and her running mate, Nicolás del Caño, are widely recognized as combative, anti-capitalist members of Congress.

Members of the FIT-U are not only recognized figures in key sectors of the labor movement, such as the Buenos Aires subway system, the food industry, and public education, but they also participate in a growing number of neighborhood and workplace assemblies—fledgling bodies of self-organization that hold unimaginable disruptive potential, especially if they continue to grow and build spaces of coordination across sectors.

The current government has declared war on workers, women, human right activists, the environment, and more. The goal is clear: to make tabula rasa of all past gains and concessions to the working class, and reset the conditions for profits through the unrestrained exploitation of labor. A determined, organized, and massive resistance will be necessary to preserve the rights that are today under attack. The outcome of these battles will have implications for many years to come.

Juan Cruz Ferre is an MD and PhD in Sociology, and a 2023-2024 postdoctoral fellow at the Program in Latin American Studies at Princeton University.

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