Which One Is More Peronist? Comparing The Economics of Donald Trump and Javier Milei

When Javier Milei became President of Argentina, many were quick to compare him to former U.S. President Donald Trump. Both men are political outsiders, known for shaking up the establishment and using fiery rhetoric to appeal to voters. While they share some similarities in style, their approaches to governing—and the situations they face—are quite different.

The starting points of their countries are a key factor. Argentina is steeped in Peronist policies, with a government that has long controlled large parts of the economy. The United States, by contrast, has a much stronger tradition of free markets and decentralized power. While Milei is fighting to pull Argentina away from decades of Peronism, Trump’s policies have nudged the U.S. toward Peronist-style populism.

As Peter Zeihan bluntly puts it, “Argentina is led not by a conservative, but by a libertarian, while the United States is moving toward a more Peronist form of government.” This is an interesting point and inspired me to dig deeper to understand these differences in more detail.

Let's Establish a Baseline: What Is Peronism?

Named after Juan Domingo Perón, who ruled Argentina in the mid-20th century, Peronism blends elements of socialism and authoritarian populism. It’s marked by heavy government control of the economy, tight links with labor unions, and policies like printing money to pay for social programs. While it often promises to help the working class, the long-term effects have been disastrous—hyperinflation, economic stagnation, and a failure to harness Argentina’s natural wealth.

For Milei, unwinding Peronism is like trying to dismantle a machine that has run the country for 70 years. Even though Trump’s policies may move the U.S. slightly closer to Peronism, the starting point is vastly different. The U.S. remains far removed from the deeply entrenched systems of control seen in Argentina. Nonetheless, the comparison is worth examining—after all, even small doses of Peronist-style policies can create lasting damage.

Milei’s Libertarian Revolution: Breaking Free from Peronism

1. Slashing Government Spending

Milei has promised to cut government spending drastically, starting with subsidies and social programs that have ballooned under Peronist rule. This is a massive shift in Argentina, where much of the economy depends on state money flowing into certain sectors. By reducing these payouts, Milei aims to stop the cycle of government fueling artificial demand and inflation.

2. Ending Inflation by Reforming the Central Bank

Argentina’s Central Bank has been at the heart of its economic problems, printing money to cover government deficits. Milei has proposed radical changes—either shutting down the Central Bank entirely or severely limiting its powers. This would prevent the government from flooding the economy with pesos and fueling hyperinflation, a hallmark of Peronist economics.

3. Encouraging Private Investment

For decades, Argentina’s Peronist governments have heavily taxed and regulated the private sector, extracting excess capital from businesses and individuals. This capital was funneled into the state’s coffers, allowing a centralized bureaucracy to control investments. However, this approach often led to waste, corruption, and underperformance.

Milei’s libertarian philosophy seeks to reverse this by reducing taxes and regulations, allowing capital to remain in private hands. The idea is that private individuals and businesses—not the government—are better equipped to allocate resources and invest in ways that promote growth and innovation. By shifting the role of the state from an economic gatekeeper to a regulator of fair competition, Milei hopes to unleash Argentina’s private sector.

However, this shift touches on deep cultural differences that may present challenges. In the United States, there is a long-standing cultural acceptance that capital accumulation by private individuals and businesses is essential for investment and progress. Argentina, like much of Latin America, has a more complicated relationship with wealth accumulation. The region’s history of inequality has often fueled skepticism toward wealthy individuals, with many embracing ideologies that prioritize redistribution over private investment.

For Milei’s reforms to succeed long-term, Argentina will need not only policy changes but also a cultural shift. Will Argentines embrace a system where wealth remains in private hands, trusting it will benefit the broader economy? Or will resistance to this idea bring a resurgence of Peronist ideologies? The answer to this question could determine the fate of Milei’s libertarian experiment.

4. Dollarizing the Economy

One of Milei’s boldest ideas is to replace the Argentine peso with the U.S. dollar. This would make it impossible for the government to devalue the currency or print money irresponsibly. While controversial, dollarization could stabilize Argentina’s economy and attract foreign investment. However, it also underscores the depth of Argentina’s financial problems after decades of mismanagement.

Trump’s Populist Push: A Small Step Toward Peronism

Unlike Milei, Trump isn’t attempting to dismantle a system of government control anywhere near as entrenched as Argentina’s. While many Trump supporters feel the U.S. government has overreached in terms of regulation and control, it remains far less centralized than Argentina’s Peronist system. The U.S. economy is still largely market-driven, with a long tradition of private enterprise. Trump’s policies, while nudging the U.S. slightly closer to Peronist-style populism through increased government spending and executive power, represent a shift from a far freer starting point.

1. Big Deficits and Spending Increases

During Trump’s presidency, the U.S. ran some of its largest peacetime deficits ever. Trump promised not to touch Social Security, Medicare, or Medicaid—the biggest drivers of federal spending—and instead expanded government payouts in areas like agriculture, offering $28 billion in subsidies to offset the effects of his trade war with China. These kinds of populist measures are a stark contrast to Milei’s push for austerity.

2. Using Tariffs to Manage Trade

Trump’s tariffs on foreign goods aimed to protect American industries but also gave the government more control over trade policy. This step away from free-market principles reflects some Peronist-style centralization, where the state picks economic winners and losers.

3. Expanding Presidential Power

Trump frequently pushed for stronger executive authority, whether through federal agencies or executive orders. While appealing to his supporters, this approach edges closer to the kind of centralization seen in Peronist systems, where one leader wields outsized influence.

Their Countries Have Different Starting Points

Milei and Trump are pulling their countries in opposite directions, but their starting points are vastly different.

• Argentina starts deeply rooted in Peronism. Milei’s libertarian agenda is a monumental effort to reverse decades of centralized control, bloated government, and inflationary policies. Success could make Argentina a model for reform in Latin America—but it will take time and sustained political will.

• The U.S. starts from a more market-driven system. Even with Trump’s policies tilting toward populism, America’s economy and government remain far from the Peronist model. However, incremental steps toward larger deficits, trade protectionism, and centralized power could lay the groundwork for more significant changes.

What Milei’s Rise Could Mean for Latin America

Milei’s approach is a bold experiment in a region where governments—whether left-leaning or conservative—have often relied on state control. If he succeeds, it could inspire other countries to embrace smaller governments and freer markets. Leaders like Nayib Bukele in El Salvador are already breaking from traditional norms, focusing on technology and innovative policies. We’ll explore these new leadership styles in a future article.

The Takeaway: Two Leaders, Two Directions, Two Very Different Contexts

Despite their outsider status, Javier Milei and Donald Trump are moving in fundamentally different directions. Milei is dismantling a deeply entrenched Peronist system, while Trump’s moves, though significant, represent a smaller shift toward centralized, populist governance in a country still far removed from Peronism.

Can Milei’s libertarian revolution endure? And will the U.S. resist a deeper tilt toward populist economics? Time will tell—but the paths these two leaders are carving reveal just how differently nations evolve based on their unique political and economic foundations.