Argentina’s free market experiment spearheaded by President Javier Milei has once again defied the doomsayers. Figures from the country’s statistics agency published this week show a dramatic decline in the poverty rate.
The share of Argentines living in poverty was 28 percent at the end of 2025. That’s no small improvement. Since he entered the Casa Rosada in December 2023, one of the biggest criticisms of Milei’s free market agenda has been that poverty figures remained stubbornly high. The national poverty rate peaked at 53 percent in the first half of 2024, but it’s been plunging since.
The self-proclaimed libertarian president has made a priority of tackling hyperinflation to kick-start economic growth. His reforms included slashing state subsidies and dramatically reducing the public-sector payroll to create Argentina’s first full-year fiscal surplus in effectively 123 years. Annual inflation fell from a staggering 200 percent when he took office to 33 percent on the year to February.
Formerly an economist — and a disciple of Milton Friedman and Adam Smith — Milei has long understood that socialism leads to poverty and capitalism leads to prosperity. He moved swiftly after his surprise win to break the socialist hold on Argentina, taking up the chainsaw he wielded on the campaign trail against a bloated bureaucratic state.
That bet has paid off, as Argentina reported a 4.4 percent growth rate last year, recovering fast from a brief recession in 2024. Milei will have to grapple with the consequences of the Iran war, which threatens to elevate prices around the world. But bodies like the International Monetary Fund are predicting the country will continue to boast impressive growth rates in 2026 and 2027, substantially outperforming the average rate in Latin America.
Milei’s next battle will be unemployment. The elimination of more than 60,000 public-sector jobs has contributed to a higher unemployment rate of 7.5 percent. But market forces can address the problem as an expanding private sector creates jobs that those workers can fill.
The Argentine president frequently sings the praises of his Minister of Deregulation and State Transformation Federico Sturzenegger, who has now modified or slashed over 14,000 regulations in under a year and a half. That will stoke private investment and growth.
Argentina’s rapid transformation from nearly a century of socialism to free market capitalism continues to prove the superiority of the latter. It is rare that we get to witness such a radical experiment in real time. It is no surprise, however, that it’s working.
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