Latin Americans know from bitter experience that the democratic road to socialism is a difficult one. What Argentines have learned after two years under Javier Milei is that the democratic road to free-market capitalism can be just as hard.

The President’s initial success in slashing the budget and reining in Argentina’s triple-digit inflation has been overshadowed in recent months by mounting challenges, especially a corruption scandal that tarnished his crusading image and mounting pressure on the currency after he lost a provincial election last month. As a result, he was forced to come cap in hand to the Trump administration, to the tune of $20 billion.

So yesterday’s midterm elections took on the appearance of an all-or-nothing gamble. On the eve of the vote, polls had Milei deadlocked with the Peronist opposition. Cabinet officials were dropping like Argentine horseflies. If his party lost, the US promise of $20 billion might crash down faster than the East Wing: Donald Trump may be fond of Milei, but he doesn’t help out losers. A crushing devaluation plus a hostile Congress might spell an effective end to the Argentine’s presidency.

That wasn’t what happened. Instead, he cruised to victory, scoring over 40% nationwide — ahead of the 35% threshold analysts had identified as the minimum needed to declare a win — and filling out representation in Congress for his Liberty Advances party, meaning the opposition can’t override a presidential veto.

Markets rallied. Trump’s fist didn’t clamp shut around the $20 billion. Even the bad result from September in Buenos Aires province was reversed, with the ruling party eking out a narrow victory there despite its top candidate having to step down after a corruption scandal. Last night, Milei took the stage at his party headquarters, singing lyrics from an Argentine rock song that has become a favourite among young libertarians: “I’m the king of a lost world.”

While 40% is short of what most would call a “resounding victory”, it’s an impressive result given the scale of the punishment Milei has meted out to his countrymen — tantamount to a national exclamation of Thank you, sir, may I have another? Milei’s chainsaw has made DOGE look quaint: he has slashed the healthcare budget in half, cutting off the supply of free cancer drugs to patients and threatening a leading children’s hospital with closure. These bitter pills — or lack thereof — have been swallowed by a nation grateful, it seems, to the President for taming inflation. But he has to do more than that.

After last night, Milei will have a free hand to reshuffle his cabinet. He will have a larger base in the legislature and greater power from the bully pulpit to push reforms on three fronts: pensions, taxes and labour regulation. These, orthodox economists believe, would have a chance to really unlock Argentina’s potential. Change so far has come mostly from executive action, and on the fiscal front. But analysts still doubt that Milei really has the discipline and political skill to accomplish these reforms. His economic team has proven it can get along well with Wall Street, but what about at home? In his victory speech, he signalled moderation, appealing to non-Peronist third parties and insisting that “a great Argentina is for everyone.” Soon, he will have to prove it.

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Nick Burns is associate editor at The Hedgehog Review and was previously editor at Americas Quarterly.

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