Chainsaw politics

During campaign rallies last year, Javier Milei, the newly elected president of Argentina, liked to bring out a chainsaw and hoist it above his head. The cheeky visual represented his ­libertarian agenda: slashing the size of Argentina’s government.

Since taking office early last month, Milei has moved swiftly to fulfill that ­promise. He has reduced the number of ­government ministries from 18 to nine. He has devalued the currency by more than 50 ­percent. And on Dec. 30 he overhauled the command structure of the military, forcing 22 army generals into retirement.

On the campaign trail, Milei tapped into public anger at the dismal state of Argentina’s economy, which suffered inflation exceeding 140 percent last year. He won the election with 56 percent of the vote after he referred to politicians as the “parasitic, corrupt, and useless political caste.” While Milei has attracted international attention for his radical reforms in his first weeks in office, it remains to be seen how much long-term change he can achieve. His habit of marginalizing political opponents could work against him.

Milei, 53, is an economist with an eclectic background. A former soccer player and rock band singer, he has successfully used social media to connect with voters, 40 percent of whom live in poverty.

Richard Smith, an American living in Argentina since 2010, says voters flocked to Milei because they fear “if we don’t change, we’re going to be just like Venezuela.”

Unlike many libertarians, Milei made opposition to abortion a trademark campaign issue. Argentina legalized abortion up to 14 weeks of pregnancy in 2020, but Milei has pledged to hold a referendum on the matter. “Abortion is a murder aggravated by the bond [between mother and child] and the difference in strength,” he remarked in an interview with Tucker Carlson last September.

Milei’s most audacious campaign promise, however, was to change Argentina’s currency from the peso to the U.S. dollar and abolish the Central Bank.

Members of the Argentine Workers’ General Confederation protest against Milei’s economic reforms. Mariana Nedelcu/Sipa via AP

The U.S. dollar, more stable than the peso, already plays an important role in the Argentine economy. Larger transactions are often done in dollars. “When we bought our house seven years ago, we had to create a mechanism that was borderline gray in terms of legality to get $45,000 here,” said Smith. “A guy came by my house, opened his trunk and gave me the $45,000 in cash. I had to drag that to the closing.”

Ezequiel Andres, a high school teacher in Buenos Aires, says he has yet to notice any improvements since Milei took office. The currency devaluation has at least temporarily caused prices to increase. In December, gasoline prices rose so fast, Andres’ family decided to top off their vehicle’s half-filled tank, only to find many others had the same idea: He observed lines of 30 to 40 cars at gas stations, he said.

Switching to the U.S. dollar would bring Argentina in line with Panama, Ecuador, and El Salvador, noted Nicolas Cachanosky, an associate professor of economics at the University of Texas at El Paso. Cachanosky and economist Emilio Ocampo, co-authors of the book Dollarization: A Solution for Argentina, were surprised during Milei’s campaign when the candidate announced he would use their ideas as his blueprint for the currency switch.

Cachanosky was particularly surprised because Milei had previously blocked him on X (formerly Twitter) in 2018. Milei had taken offense at a polite but critical op-ed Cachanosky published about him in an Argentine newspaper.

He’s hardly the only person to land in Milei’s crosshairs. “Almost everyone that has dealt with him for enough time has ended up on bad terms,” Cachanosky said. Milei has even publicly feuded with one of Argentina’s most famous citizens, Pope Francis, aiming vulgar language at the pontiff over his perceived left-wing views.

But Milei cultivates his image to appeal to international conservatives. During his interview with Tucker Carlson on X—viewed over 400 million times—he cited Milton Friedman, Friedrich Hayek, and the Bible.

Milei has sent a 664-article omnibus bill to the Argentine Congress that includes wide-ranging reforms and deregulation. It would grant him greater powers until the end of 2025 to address the “public emergency.” And in keeping with Milei’s libertarianism, the bill bans government agencies from using the word “free” to describe their services.

Argentina’s powerful trade unions have taken to the streets to protest a raft of changes Milei instituted by presidential decree, and a three-judge panel suspended some of the decree’s articles connected to labor reform. Milei has said that if Congress fails to approve his executive reforms, he will hold a referendum.

Cachanosky believes Milei’s success will ultimately depend on his ability to build coalitions with members of Congress and other government officials. “Milei has made a career out of getting into conflict with everyone,” he said. “So I don’t know how that’s going to play out.”