Peter Thiel bought a house in Argentina – democracy left it empty

Peter Thiel bought a house in Buenos Aires. Liberal democracy left one empty.

The Silicon Valley billionaire and libertarian thinker has also found something less tangible here. He has found a country conducting one of the world’s most consequential experiments in what happens when people lose faith not necessarily in democracy, but in what democratic politics has delivered.

That distinction matters.

In 2009, Thiel wrote a sentence that has followed him ever since: “I no longer believe that freedom and democracy are compatible.” His argument was not simply against elections. It reflected a deeper conviction that democratic politics had become increasingly incapable of protecting the individual and economic freedom he valued.

Javier Milei comes from a different history and political tradition, but the affinity is evident. Thiel met with Milei at the Casa Rosada in April. Both challenge assumptions about the role of the state that dominated much of 20th-century politics. It is tempting for defenders of liberal democracy simply to reject their conclusions. The more difficult question is why those conclusions have become persuasive.

I have been thinking about that question while reading Daron Acemoglu’s new book, What Happened to Liberal Democracy? Remaking a Politics of Shared Prosperity. Acemoglu, an MIT economist who shared the 2024 Nobel Prize in Economics, approaches the crisis of democracy from almost the opposite direction.

His argument, greatly simplified, is that liberal democracy was strongest when political freedom was joined to a credible prospect of shared prosperity. Industrialisation created a large working and middle class with economic power, social institutions and a stake in democratic government. As deindustrialisation, globalisation, technological change and declining worker power weakened that compact, liberal democracy weakened its own constituency.

Franklin Roosevelt understood an earlier version of this problem. Political democracy required an economic foundation. The institutions built during and after the New Deal did not eliminate capitalism. They helped save it from its own excesses by giving millions of ordinary citizens a greater stake in the society capitalism was creating.

Over subsequent decades, progressive and conservative movements throughout much of the democratic world gradually abandoned important parts of that settlement. Markets increasingly came to be treated as ends rather than instruments. Organised labour declined. Economic inequality widened. The centre-left increasingly ceased to be identified primarily with the economic interests of working people. Liberal democracy continued to promise rights, elections and individual freedom, but for many citizens its economic promise became less convincing.

A house was being emptied.

Argentina’s history is different, which makes our case particularly interesting. Since democracy returned in 1983, Argentines have repeatedly demonstrated a commitment to democratic government. Through hyperinflation, the collapse of 2001, debt crises and repeated economic disappointments, democracy survived. That is an enormous national achievement. But Argentina never built a comparably durable economic compact beneath it.

Peronism presents a particularly Argentine paradox. Its historic power came from placing workers, social mobility and economic inclusion at the centre of national political life. Those commitments became part of Argentina’s democratic expectations far beyond Peronism itself.

Yet over the decades, the movement became divided among personalities, factions and radically different economic programmes. Menem governed as a Peronist. So did the Kirchners. The same political tradition accommodated privatisation and state expansion, market liberalisation and economic nationalism. What endured was the promise of inclusion. What proved far harder to build was an economic order capable of sustaining it. Personalism, factionalism, short-term thinking and corruption further weakened the possibility of a durable project.

Nor did Peronism’s opponents solve the underlying problem. Hyper-partisanship increasingly encouraged each political camp to define itself against the other, making continuity across governments harder precisely where continuity was most needed.

Argentina has spent decades changing tenants without repairing the foundations.

That is the context in which Milei must be understood. He did not overthrow Argentine democracy. Argentine democracy elected him. Whatever one’s judgment of his government, its attempt, however imperfect, to restore fiscal and monetary credibility may prove an essential part of any sustainable future. His rise represents something larger than the triumph of libertarian ideas. It represents the exhaustion of millions of Argentines with what preceded them.

This is where Acemoglu’s challenge becomes more interesting than an argument for returning to the past. Argentina does not need another Roosevelt, another Perón or another political saviour. Nor can a durable democratic economy be constructed during a single presidency.

Argentina needs a 16-year project, not a 16-year president.

A healthy liberal democracy must permit governments to change. But Argentina needs a sufficiently broad national compact that certain commitments survive those changes, including macroeconomic stability, productive investment, education, institutional integrity, opportunity for working- and middle-class Argentines, protection against severe economic insecurity, and an economy capable of producing prosperity rather than merely redistributing scarcity.

Such a project cannot belong exclusively to Peronists, libertarians, Radicals or PRO. It would require dialogue among political leaders, workers, entrepreneurs, universities, provinces, civil society and citizens who disagree profoundly about other things. The goal would not be consensus about everything, but continuity about what matters most.

My interest in this is also personal. I was born in the United States but spent the first 30 years of my life in Argentina. Two years ago, I became an Argentine citizen. I now live and work as a clinical psychologist in California and return to Argentina frequently. In 2027, I expect to cast my first Argentine vote.

I find myself wondering what, exactly, I want that vote to be for. Not simply which candidate, not another political personality, not another swing of the ideological pendulum. I want to vote for the beginning – or continuation – of a project capable of outliving the person who leads it.

That may be the most important response to Thiel. The answer to his scepticism about democracy is not to defend liberal democracy more loudly. It is to make liberal democracy work well enough that ordinary citizens have compelling reasons to defend it.

Peter Thiel has every right to buy a house in Buenos Aires. The more consequential question is why his ideas have found such fertile ground here. Argentina has changed tenants many times since 1983.

Perhaps it is time to rebuild the house so that it can survive whoever receives the keys next.