Javier Milei’s Radical Reform: The Man with the Chainsaw
Buenos Aires, September 2023 — The crowd roared, flags waved, and smartphones flashed as Javier Milei, dressed in a black leather jacket, lifted a chainsaw high above his head. The symbolism was clear: Argentina’s new firebrand candidate was ready to slice through what he called the country’s bloated government.
This electrifying rally in Buenos Aires’ San Martín district took place just a month before Argentina’s presidential election. The man in the spotlight, with wild hair and a fierce expression, wasn’t just another populist. He was an economist turned showman who promised to “cut through the corruption” and take a literal and figurative chainsaw to the state’s sprawling bureaucracy.
Milei argued that Argentina’s government had become an overfed machine, weighed down by debt larger than the nation’s entire economy. His message was simple: instead of “trimming the fat,” he would obliterate the excess.
From Fringe Libertarian to President
Milei was no stranger to theatrics. In 2019, he appeared dressed as a “libertarian superhero”, claiming to represent a mythical tax-free land called Liberland. A year earlier, he smashed a piñata of the Central Bank live on television — a symbolic act of defiance against what he called “the root of Argentina’s financial decay.”
By December 2023, as inflation surpassed 211% annually and 40% of Argentines lived in poverty, Milei’s promises of radical change struck a chord with millions fed up with traditional politics. Years of uncontrolled spending, money printing, and ballooning debt had left the economy on the verge of collapse.
When Milei took office that December, he faced an enormous challenge. Yet, less than two years later, Argentina’s macroeconomic numbers tell a startling story of recovery:
-
The country recorded its first fiscal surplus in 14 years.
-
Inflation dropped from over 200% to roughly 36%.
These results stunned both critics and international observers.
Global Recognition — and Controversy
Milei’s economic “shock therapy” has gained global attention. UK Conservative leader Kemi Badenoch praised his reforms as a “template” for future right-wing governments, while U.S. President Donald Trump called him “my favourite president.”
Milei and Trump are set to meet in Washington, D.C., this week, marking a high point in Milei’s international diplomacy.
Foreign investors, too, have shown renewed confidence in Argentina — though that optimism recently wavered. The United States’ decision to swap $20 billion in U.S. dollars for Argentine pesos, backed by the International Monetary Fund (IMF), was seen as a major endorsement of Milei’s fiscal discipline.
But while the international community applauds, Argentina’s streets tell another story — one filled with anger, hardship, and resistance.
Protests and the Human Cost of Reform
Milei’s economic overhaul has sparked mass protests across the country. Demonstrators have clashed with police, who have used tear gas, rubber bullets, and water cannons to control crowds.
“Milei promised that the cuts would target la casta — the wealthy elite, the corrupt politicians,” said Mercedes D’Alessandro, a left-wing economist and senate candidate. “But the truth is that it’s the working class paying the price — pensioners, hospital workers, and everyday families.”
Critics argue that while Argentina’s balance sheet may look better, ordinary people are suffering. The reforms have led to job losses, declining public services, and shrinking household budgets. Economists now warn that Argentina could soon slip into another recession.
The Paradox of Success
Milei’s presidency presents a paradox. On paper, he’s achieved what many economists deemed impossible — stabilizing Argentina’s finances and taming hyperinflation. But politically, his popularity has waned.
With midterm elections scheduled for October 26, Milei faces a pivotal moment. If voters turn against him, it could not only cost him control of Congress but also jeopardize the fragile economic gains that have defined his tenure.
“We’re All Going Backwards” — Voices from the Ground
About 700 miles north of Buenos Aires, in Argentina’s Misiones province, tea farmer Ygor Sobol gazes at his drying crops with worry. His family has cultivated yerba mate — a traditional Argentine drink — for generations. But now, he says, “We’re all going backwards economically.”
After Milei deregulated the tea industry and scrapped minimum price protections, Sobol’s crops became worth less than their production costs.
“I had to fire all my workers,” he said. “I can’t even afford to fertilize or maintain the land. Every month, we have to decide what we can live without.”
The Impact on Industry
Argentina’s once-thriving textile industry has also been hit hard. Luciano Galfione, chairman of Fundación Pro Tejer, a nonprofit organization representing textile producers, says the sector is collapsing.
“There are daily closures and layoffs,” he explains. “Milei cut import tariffs, which made it impossible for us to compete with cheap products from Bangladesh or Vietnam. They can pay workers $80 a month — we can’t.”
He adds that rising costs of utilities, healthcare, and education have further weakened consumers’ purchasing power. “When people struggle to pay for basic needs, they stop buying clothes.”
Since Milei’s reforms began, the textile industry has lost more than 10,000 jobs, with many more at risk.
The Economist’s View: Was There Another Option?
Supporters of Milei argue that drastic measures were the only path forward.
Economist Ramiro Castiñeira from the consultancy Económetrica believes that Milei’s austerity was necessary to break Argentina’s inflationary cycle.
“Public spending had become unsustainable,” Castiñeira said. “Society had gotten used to living with inflation, without understanding that it was caused by the same public spending they demanded.”
Before Milei’s reforms, Argentina’s economy was suffocating under decades of government subsidies, price controls, and rising debt — including $31 billion owed to the IMF. Energy and transport costs were kept artificially low, but the government paid the difference through borrowing and money printing — fueling inflation even more.
“Milei recognized that there was no easy way out,” Castiñeira added. “Pain now might mean stability later.”
A Nation Divided Ahead of Elections
As Argentina heads toward the October 26 midterm elections, the stakes couldn’t be higher. Supporters hail Milei as the first leader in decades to tackle corruption and fiscal chaos head-on. Detractors, however, see him as a dangerous ideologue whose economic surgery risks killing the patient.
For now, the “chainsaw revolution” has delivered impressive numbers on spreadsheets — but for millions of Argentines, the recovery feels distant. The question remains: will voters reward Milei for the pain he promised, or punish him for the suffering it caused?