Argentina’s libertarian experiment under President Javier Milei is testing whether free-market shock therapy can pull a crisis-prone nation back from the brink.

Milei, a libertarian economist and former media commentator, won the presidency in 2023 on a promise to return Argentina to economic freedom after decades of interventionism, debt, and inflation. Once one of the world’s wealthiest societies, Argentina has endured three sovereign defaults since 2001 and recurring crises that turned the old saying “as rich as an Argentine” into a bitter joke. He was elected with a mandate to dismantle what he calls a corporatist system that has throttled growth for more than 80 years.

Often described abroad as a right-wing populist, Milei defines himself as an anarcho-capitalist who views the state as fundamentally coercive. Analysts at the Cato Institute have instead called him an “anti-populist” because his central message is that Argentines must accept short-term pain for long-term gain. In his inauguration speech in December 2023, he warned the country “no hay plata” (there is no money) after years of fiscal deficits and money printing. Unlike his Peronist predecessors, he has refused to finance spending by creating new pesos.

The impact has been most dramatic on inflation. When Milei took office, annual price growth was running above 200%. Government figures now put it at around 30%. Measured month-to-month, inflation has fallen from roughly 26% at the start of his term to below 2%. Inflation has been Argentina’s constant enemy, and a destroyer of savings, and while it remains high by international standards, the reversal has become a central pillar of Milei’s claim that his programme is working.

From his first day in office, the president has paired monetary restraint with what Argentines dub “chainsaw politics”. He immediately cut the number of ministries from 18 to nine and moved to shrink the bureaucracy. His administration says it has slashed public spending by about 30% and removed thousands of regulations seen as obstacles to growth. Officials argue that these measures have helped deliver a resurgent economy and the country’s first fiscal surplus in 123 years.

The deregulation push is led by Federico Sturzenegger, a former central bank governor serving as minister of deregulation and state transformation. His portfolio has focused on rewriting rules across sectors to open markets and reduce the scope of the state, a very different understanding of “transformation” to that found in South African policy debates.

Milei’s approach has drawn attention from free market advocates worldwide who see in his administration a test case for whether libertarian ideas can survive contact with democratic politics. Critics of libertarianism often argue that, while attractive in theory, it cannot survive electoral incentives that reward politicians who promise benefits funded by others. Supporters say Argentina now offers a counter example where voters have backed a leader explicitly promising cuts, austerity, and deregulation.

For Milei, the answer lies in how classical liberal movements relate to power. In a June 2024 interview with journalist Bari Weiss of The Free Press he argued that libertarians must stop standing on the sidelines. “You need to understand that power is a zero-sum game, and if those of us who are on the right don’t have it, then the left will have it. So, libertarians who only criticise are cowards because they never wanted to really get into the mud that politics is,” he said.

That willingness to engage in hard politics has also shaped his foreign strategy. After a defeat in provincial elections in September 2025 triggered a sell-off in Argentine bonds and a slide in the peso, Milei spent a large share of the country’s United States (US) dollar reserves defending the currency. He then sought explicit backing from US President Donald Trump, meeting him at the United Nations in September 2025.

Following that meeting, and four days of talks in early October between US treasury secretary Scott Bessent and Argentine finance minister Luis Caputo, Washington announced a $20 billion currency swap framework with Argentina’s central bank, alongside a separate $20 billion credit facility backed by private banks and sovereign wealth funds. The peso and Argentine dollar bonds rebounded after the deal, stabilising markets ahead of the end of the year, while Peronist opponents accused Milei of selling out to “US imperialism”.

Milei’s loss in provincial elections was tempered the following month, in October 2025, when his La Libertad Avanza party emerged as the largest party in mid-term elections, making it the single largest bloc in the lower house of Argentina’s parliament. A number of other smaller parties also support Milei’s reform agenda meaning he now has the support of a majority of the Argentinian legislature, giving his reform agenda an important boost.

At the beginning of 2026, Argentina remains deeply polarised over the scale and speed of Milei’s reforms. Yet his administration has already shifted the bounds of the country’s economic debate, embedding a libertarian agenda in the heart of a major Latin American democracy and offering a live experiment in whether state power can be used to cut itself down to size.