Javier Milei’s “Chainsaw Revolution” Is Just Neoliberalism in a New Costume
In Argentina’s 2023 presidential election, voters signaled a desire for a clean break from the status quo. After years of weak growth, chronic inflation, and a long-standing Peronist incumbency—all of which many Argentines blamed for the country’s serial crises—public frustration reached a boiling point. Into this vacuum of discontent stepped Javier Milei, an eccentric libertarian economist with a penchant for theatricality. His image, characterized by his unruly hair, leather jackets, and a literal chainsaw on the campaign trail, was a visual and rhetorical embodiment of disruption. His slogans, like “la casta tiene miedo” (“the caste is afraid”), captured the public’s fury and promised to purge what he cast as a corrupt political elite.
Once in office, Milei’s economics turned out to be far less revolutionary than his rhetoric suggested. Behind the anti-establishment show lies a familiar neoliberal program: shrinking the state, loosening regulations, and tightening monetary policy to fight inflation. His government’s flashy style has served a strategic purpose: it provides political cover for a conventional austerity plan that previous leaders could not push through.
Dollarization: From Non-Negotiable to Non-Starter
One of Milei’s most headline-grabbing campaign promises was dollarization of Argentina’s economy: replacing the peso with the U.S. dollar and effectively surrendering control of monetary policy to the Federal Reserve. Leading up to the election, the Buenos Aires Times called dollarization and the closure of the Central Bank the two “keynote proposals” of Milei’s La Libertad Avanza party.
But once in office, the hard limits of implementation set in. In its early months, Milei’s administration pivoted away from dollarization. The turning point came when Emilio Ocampo, the economist chosen to head the Central Bank and the chief evangelist for dollarization, declined the job over policy differences, an unmistakable signal that the plan was being shelved.
The obstacles to dollarization were always clear. To replace the peso, Argentina would need enough liquid foreign assets, mainly dollars or dollar-denominated reserves, to exchange for every peso in circulation. By October 2023, however, net foreign reserves were deeply negative. CNN reported a $7.5 billion shortfall, meaning the central bank owed more in foreign currency than it held. Without sufficient hard-currency reserves, there was simply no credible way to back a full switch to the dollar. Legal hurdles compounded the problem: the president of Argentina’s Supreme Court publicly stated that eliminating the peso would be unconstitutional.
For all its campaign drama, dollarization was shelved within the first year. It had served its rhetorical purpose and was soon replaced by more feasible policies.
What Actually Happened
Dollarization aside, Milei’s government has pursued a more conventional stabilization agenda. Behind the language of anti-elite revolt lies a familiar economic formula: deep fiscal cuts, monetary tightening, and sweeping deregulation.
Since taking office, Milei has moved aggressively to eliminate Argentina’s fiscal deficit. Federal spending fell by roughly 30 percent year-over-year in the first half of 2024, driven largely by reductions in energy subsidies, down about US$2.7 billion in the first seven months alone. These cuts, though painful, were central to restoring market confidence and signaling a break from the deficit financing that fueled inflation under previous administrations.
On the monetary front, Milei paired fiscal austerity with a sharp, one-time devaluation of the peso. Rather than allowing a free float or moving immediately to dollarization, his team adopted a “crawling peg,” letting the currency depreciate gradually at a pre-set pace. The approach provided a controlled adjustment path, tempering inflation expectations while avoiding a full currency collapse.
At the same time, the administration began dismantling regulatory barriers and lifting price controls, framing these moves as steps toward “freeing the markets.” A sweeping emergency decree (DNU, Decreto de Necesidad y Urgencia) authorized wide-ranging deregulation and paved the way for privatizations.
Taken together, these measures amount to a textbook case of neoliberal stabilization: fiscal restraint to close deficits, tight monetary policy to curb inflation, and structural reforms to restore investor confidence.
Neoliberalism, or Something Else?
Critics argue that Milei’s agenda is not merely a replay of 1990s neoliberalism, the market-first mix of austerity, deregulation, privatization, and tight monetary discipline associated with the Washington Consensus and the Menem era. They contend that his reforms go further, moving at unusual speed and severity, and they point to his extensive use of emergency decrees and deregulation across sectors largely untouched in the 1990s, including labor rules, cultural institutions, scientific research, as evidence of a break with orthodox neoliberalism. Reflecting this view, commentators have taken to calling him an “anarcho-capitalist.”
This critique has merit. The concentration of Milei’s reform package and his reliance on decrees indeed raise legitimate concerns about democratic checks and balances. His governing strategy reflects a willingness to override institutional constraints in the name of rapid market liberalization. These features differentiate him politically from earlier neoliberal technocrats who operated within more pluralistic frameworks.
Still, while his politics may be combative and populist, his economics remain orthodox. At its core, Milei’s program, ending monetary financing of deficits, restoring positive real interest rates, and allowing relative prices to adjust freely, follows classic neoliberal prescriptions aimed at stabilizing inflation and rebuilding credibility. The novelty lies not in what he proposes but in how he sells it: rhetorically aggressive, and socially disruptive. Milei’s project is best understood as neoliberalism in form but not in tone, a continuation of market orthodoxy packaged within a populist, anti-establishment narrative that seeks to redefine who controls economic reform and how quickly it should occur.
Conclusion: The Chainsaw and the Playbook
Milei rose to power on a promise to break decisively with Argentina’s past. His campaign projected the image of a radical outsider wielding a chainsaw against a corrupt political “caste.” Yet governing has proven a different task than campaigning. Confronted with harsh economic realities and institutional limits, Milei has ultimately turned to a familiar economic playbook, orthodox stabilization through fiscal contraction, deregulation, and monetary restraint, though executed with unprecedented speed and theatricality.
In this sense, the “Milei experiment” is less a clean rupture than a new chapter in a recurring Argentine story: governments embracing orthodox adjustment under the guise of revolution. The chainsaw, then, is not the substance of the program, it is the cover.
The populist spectacle surrounding Milei’s reforms serves a strategic purpose. The dramatic rhetoric, executive decrees, and constant confrontation with institutions act as a political shield for austerity. Painful measures, namely cuts to public spending, subsidy reductions, and real wage erosion, are framed not as technocratic necessities, but as acts of moral purification: the cleansing of a bloated and corrupt state. This narrative allows the administration to reframe hardship as sacrifice in the pursuit of national redemption.
By turning stabilization into a moral crusade, Milei deflects responsibility for the social costs of adjustment. Rising prices and declining living standards are cast as the inevitable price of destroying the old order. Each decree, veto, or confrontation becomes a symbolic strike against the “caste.”