That is the age-old dilemma when comparing athletes in any sport across different eras.
Developments in science and technology certainly change things. Certain skills needed in order to be successful fall away while new ones emerge as well.
In F1 specifically, the best drivers in the early years tended to come from engineering and mechanical backgrounds. Fangio specifically was working as a mechanic's apprentice at the age of 13, and by the age of 16 was the ride-on mechanic for racing drivers (in those days there was both a driver and mechanic). Prior to the emergence of aerodynamics and the rise of electronics (~70s), technical knowledge and understanding of how a car worked was of great benefit to a driver. It also explains why the better drivers of this period (30s through 60s) tended to be older, more experienced drivers. They understood what made a car work from a mechanical side. No computers, no magic tyres, no Ron Dennis working magic with aerodynamics. Bruce McLaren and Jack Brabham coming from mechanical backgrounds and going on to be successful racing drivers turned car builders/team owners is no coincidence.
Nowadays however, it is more akin to fiddling with a computer while you drive, an entirely different concept to what Fangio would have been familiar with. You can legitimately let someone spend years ''playing'' on a simulator like iRacing and they would be able to climb into a racing car and do reasonably well, while having next to no technical understanding of how a car actually works.
I also think safety plays a part here as well. Drivers from yesteryear knew acutely well that every time they climbed into their car it could be the last time, and this weighed heavily on them when it came to risks taken and how fast they drove (Lauda lost the '76 title to James Hunt because he retired from the last race of the season, citing unsafe conditions). Jackie Stewart recounted that after winning the '68 German GP in torrential rain, the first thing he asked Ken Tyrrell was who had died, because there was no way someone didn't crash in those conditions and the track was known to be deadly. Modern drivers still take risks, but the levels of safety (car and track) are not even comparable. Taking Copse, Eau Rouge or 130R flatout now vs even 20-years ago is not as risky.
All the above aside, my take is -
- Max Verstappen beats Fangio if they are both driving an RB19 around a modern parking lot track.
- Put Max in a Fangio's 250F and unleash the two around the original Nurburgring and Fangio wipes the floor with him.
Small thing, but I think you are referring to the 1988 McLaren, the MP4/4. That's the one that won 15/16 races.