From 1857 to 1930, 6.2 million Europeans, primarily from Italy and Spain, emigrated to Argentina, shaping its economy and society.
By 1913, Argentina had one of the highest per capita incomes in the world, surpassing France, Germany, and Spain.
In "Wealth, Poverty and Politics," Thomas Sowell wrote, "As of 1914, foreigners — who were about 30 percent of the Argentine population — owned 72 percent of the commercial businesses in Argentina, and 82 percent in Buenos Aires." While immigrants played a dominant role in Argentina’s economy, Sowell argued that the nation’s political institutions remained under the control of native Argentines, whose policies ultimately led to economic decline.
The Great Depression shattered Argentina’s export-driven economy, and unleashed political instability.
Amid this crisis, Juan Perón rose to power, championing state control, nationalization, and an expansive welfare state — reshaping Argentina’s political and economic institutions.
Economies typically rely on three major growth models: export-led, investment-led, and consumption-led. Argentina leaned heavily on agricultural exports, often combining them with state intervention.
In contrast, China emphasized investment-led development, while the United States has long relied on consumption-led growth.
Many South American nations influenced by Simón Bolívar pursued investment-led models. But Argentina, Chile, and Peru — liberated by José de San Martín — followed a different historical path.
Author Webster Browning drew a sharp contrast between South America’s two great liberators. Browning wrote that he admired San Martín more than Bolívar:
"He sought no personal gain or advantage and, like the great Liberator of the north, laid aside his authority when he felt that his peculiar work was done and that a longer tenure of power on his part might engender strife and jeopardize the success of the movement. . .
"His respect for the rights of the individual nation made impossible his acceptance of the idea of Bolivar for the federation of all around one central power."
Since 1990, Chile stands out as one of the most successful economies in Latin America. Through free-market policies, fiscal discipline, and strong rule of law, Chile’s success underscores the importance of institutional strength for long-term stability.
Argentina, by contrast, has suffered repeated crises due to overreliance on exports, excessive government spending, underinvestment in the private sector, and weak domestic consumption.
A former military officer, Juan Perón served as a military attaché in Italy from 1939 to 1940, where he studied Mussolini’s regime. Elected in 1946, Perón adopted a corporatist economic model marked by state intervention, powerful unions, and nationalized industries.
While Perón never identified as a fascist, his policies reflected many of its core features.
After his ousting in 1955, Argentina oscillated between Peronist and anti-Peronist regimes.
Decades of economic mismanagement, debt crises, and hyperinflation followed —culminating in nine sovereign defaults and an erosion of investor confidence.
As of May 2025, Argentina owes $40.2 billion to the International Monetary Fund, which more than any other country owes. The second-largest IMF debtor is Ukraine, at $10.8 billion.
The total debt owed to the IMF is almost $118 billion dollars as of May 2025.
President Javier Milei, elected in 2023, represents the strongest anti-Peronist shift in modern Argentine history. Milei was elected in part because inflation exceeded 200% in 2023.
In addition to its inflation, Argentina’s debt is at 78.5% of GDP, making debt restructuring and IMF negotiations essential. Argentina’s chronic reliance on money printing to fund deficits makes monetary stabilization just as critical as fiscal reform.
According to Ian Vásquez of the Cato Institute, early indicators suggest that Milei’s policies are beginning to deliver results. Vasquez wrote:
"Milei cut the budget by about 30 percent and balanced it one month into his term. That facilitated more disciplined monetary policy and the reduction of inflation from 25 percent per month when the president came to office to 2.2 percent in January 2025."
The poverty rate in Argentina has dropped from 52.9 percent in the first half of 2024 to 36.8 percent in the second half of 2024.
In April 2025, the IMF approved a new 48-month, $20 billion Extended Fund Facility (EFF) for Argentina. The deal, which includes a $12 billion immediate disbursement, reflects the IMF’s confidence in Milei’s reform agenda.
Yet Milei faces deep political headwinds. Millions of Argentines still depend on subsidies.
Sudden austerity could provoke social unrest.
As the birthplace of tango, Argentina knows it takes two. For Milei’s vision to succeed, Peronists and anti-Peronists alike must learn to dance in step and work together.
Argentina’s experience offers a cautionary tale: no nation can rely indefinitely on a single engine of growth. The U.S., too, faces risk from overreliance on consumption-driven expansion and mounting deficits.
Whether in Buenos Aires or Washington, the lesson is the same: economic freedom and fiscal discipline are hard-won — and easily lost.
Robert Zapesochny is a researcher and writer. His work focuses on foreign affairs, national security, and presidential history. He's been published in numerous outlets, including The American Spectator, The Washington Times, and The American Conservative. When he's not writing, Robert works for a medical research company in New York. Read Robert Zapesochny's Reports — More Here.
© 2025 Newsmax. All rights reserved.