The triumph of President Javier Milei in Argentina’s midterm election is certainly good news for those of us who are rooting for the principles of free-market capitalism. “A historic day,” Mr. Milei is calling it. The Associated Press uses the word “decisive” to describe his victory in key districts, a win that “strengthens his ability to carry out his radical free-market experiment with billions of dollars in backing from the Trump administration.”

Mr. Milei’s La Libertad Avanza party won more than 40 percent of the votes, according to the AP, dwarfing the 31 percent of votes that went to the left-leaning Peronist opposition. Mr. Milei’s allies on Sunday picked up 14 seats in the senate and 64 in the lower house of Congress. It bolsters the government’s support in the legislature “enough to uphold presidential vetoes and block impeachment efforts,” the AP reports.

One of the markers of the importance of Sunday’s vote in Argentina is the conditions President Trump put on American support for Argentina. He made it clear that some $40 billion in American support hung on a triumph by Mr. Milei’s faction. Considering how past Argentine leaders had turned to Communist China for financial succor, the outcome of the vote suggests the voters want to cast their lot with America instead. 

The election results, too, furnish Mr. Milei with a renewed mandate for his program of budgetary austerity, lower regulation, freer trade, and lower taxes. The win is all the more gratifying for dispelling fears that Argentina’s electorate had wearied of the short-term sacrifices needed to turn around an economy that had been for decades been warped by the blend of statism, nationalism, and leftism forged by Juan Peron and, later, his wife Eva. 

“We want to be a country that grows,” is how Mr. Milei put it Sunday night, as “the Argentine people decided to leave behind 100 years of decadence,  and to persist on the road of freedom, progress and growth.” Indeed, Mr. Milei’s midterm victory can be seen as building on his landslide presidential victory two years ago, when voters endorsed his plan to stem the inflation that had ravaged the economy of a country that was once among the world’s wealthiest.

While the victory is a moment to savor, the economic challenges facing Argentina are no small problem. Inflation, if tamed, is still high. Prices soared some 32 percent last month over the prior year, the AP reports, which is only good news in comparison to the rate of 289 percent in April 2024. Growth, though, has slowed in recent months, the Financial Times reports, and Torcuato di Tella University is forecasting that a recession could loom. 

Even so, the IMF still predicts Argentina’s economy will expand this year by 4.5 percent, and the election outcome suggests voters are willing to give Mr. Milei time for his reforms to take root. This gives him an opportunity to act on one of his campaign promises by tackling the issue of currency reform. A stable currency, after all, is critical for long-term growth. Candidate Milei had railed against Argentina’s worthless peso, vowing to “dollarize” the nation.

Dollarizing might suggest a return to monetary rigor. Why, though, tether Argentina’s fortunes to a dollar that, as valued in gold, has shed some 99 percent of its value since the collapse of the Bretton Woods system? By restoring honest money — defining in law the peso as a fixed weight of gold or silver — Mr. Milei has a chance to lay the foundation for real growth as opposed to fiat money-fueled expansion that creates but the illusion of wealth.