The man behind Javier Milei's chainsaw

Telegraph

06-04-2025

Penetrating the bureaucracy of one of the world's most bloated states is like finding a way inside the fortress city of Minas Tirith, as imagined in The Lord of the Rings.
So spare a thought for the man whose job it is to slash and burn such a sclerotic civil service from the inside: Argentina's deregulation minister.
'It's insanity, it's like Lord of the Rings,' Federico Sturzenegger said, in reference to JRR Tolkien's capital city of Gondor, adding: 'It's like seven walls, you deregulate one and you find another.'
Mr Sturzenegger is in charge of carrying out the wishes of Javier Milei, Argentina's eccentric president, who has promised to shock the country back to life by shutting entire government departments and dragging the country out of years of Left-wing misrule.
Such is Mr Sturzenegger's eagerness he is said to have become an inspiration to Elon Musk, who has been tasked by Donald Trump to cut trillions of dollars in government waste under the Department of Government Efficiency (Doge). Other leaders are also starting to pay attention.
Argentina's oversized state has over the years become a regulatory labyrinth: supermarkets were told what to stock and at what prices, while radical rent controls caused prices to surge and demand to fall off a cliff.
To tackle these laws, Mr Sturzenegger, who calls Margaret Thatcher his 'inspiration', was brought into the government in July 2024 to head up the new ministry of deregulation and state transformation, which has been moving at a phenomenal pace.
Some 672 regulatory reforms took place in the first year of Mr Milei's presidency, amounting to 1.84 deregulations per day, including weekends, according to analysis by the Cato Institute.
Mr Sturzenegger's fundamental argument for such a level of state transformation lies in the economy: inflation had soared to a staggering 300 per cent annually, while government spending and debt spiralled out of control.
The results of Mr Milei's and Mr Sturzenegger's 'shock therapy' – dubbed 'Chainsaw 1.0' – speak for themselves. Inflation and public spending are down, as is Argentina's debt burden, while confidence in the peso is rising. The country also exited recession towards the end of 2024 – a major milestone for Mr Milei's government.
Such is the perceived success of Argentina's deregulatory mission that it is being credited with inspiring Mr Musk's bureaucracy-slashing drive in the much-hyped Doge.
In fact, Mr Musk was acting directly on Mr Milei's advice, a diplomatic source told The Telegraph.
Asked whether Mr Milei and Mr Musk spoke frequently, Mr Sturzenegger, one of the president's most trusted lieutenants, was coy.
'Milei had several conversations with Musk and he told him what we were doing and how we were approaching this job. I speculate – just my speculation – those conversations made Musk understand how to use the state to reduce the state.'
Yet the relationship between the two bureaucracy slashers is hardly a secret: Mr Milei gifted Mr Musk a chainsaw on stage at the Conservative Political Action Conference (CPAC) in Washington in March.
'This is the chainsaw for bureaucracy,' Mr Musk declared.
As the former president of Argentina's Central Bank and a Harvard professor, Mr Sturzenegger, seems on the surface to be an establishment figure, the kind Mr Milei and Mr Musk are accustomed to rail against.
But he speaks about cutting the size of the state and deregulating Argentina's bureaucracy as a moral mission, claiming, much like Mr Musk, that government intervention makes people's lives worse, not better.
Even beyond their cost-cutting drive, the similarities are uncanny: both share a love of fantasy, with Mr Sturzenegger frequently comparing his mission to Lord of the Rings, while Mr Musk speaks about how The Hitchhiker's Guide to the Galaxy informs his world-view.
On a technical level, Mr Sturzenegger's ministry and Mr Musk's Doge also share similarities. The Argentine frequently refers to his 'chainsaw guys', who operate almost like a government black ops unit, identifying targets and slashing through decades of red tape.
Mr Musk, on the other hand, gave a band of tech protégés an extraordinary level of access to the government, including A-suite clearance to the General Services Administration, to slash spending.
Mr Sturzenegger and Mr Milei's project may even have wider global ramifications beyond just influencing the Trump administration.
Even Sir Keir Starmer has had a crack at tackling Britain's bloated state, abolishing NHS England, slashing foreign aid spending and planning 15 per cent cuts to the Civil Service.
But it is perhaps in Britain where Mr Musk and Mr Sturzenegger diverge: while the Tesla billionaire spent the summer attacking the UK's handling of the grooming gangs scandal and supposed lack of free speech, Mr Sturzenegger speaks of Thatcher as an 'inspiration'.
The former British prime minister is, to say the least, a contentious figure for Argentine politicians, given her role in the Falklands War. Mr Sturzenegger dismisses that, instead revering her economic reforms and referring to her biography as if it were the Bible.
He even compares his mission to Thatcher's: slashing regulation, promoting entrepreneurship and reshaping society in the name of freedom.
'She was an inspiration... in her quest for the free man and woman, in making society freer, but also in her style of government,' he said.
'You have leaders like Nelson Mandela, they're soft-spoken, they rally the masses on peace, then you have the joking guys, like Ronald Reagan, and the fighters, who are responsible for implementing a cultural change.
'I would put Lenin, Roosevelt, Thatcher in that category – and Milei.'
And unlike Mr Musk, who is reported to be on his way out of the Trump administration, Mr Sturzenegger is here to stay, explaining that drastic cuts were just part of phase one and that 'Chainsaw 2.0' was now under way.
'We used one cabinet meeting to decide what a libertarian should do and should not do, and what I have is my chainsaw guys go around the government and they say, 'Are you in the yes or the nos?' If you're in the nos, it goes,' he explained.
Around 20 per cent of Argentina's laws have been scrapped or changed, far below Mr Sturzenegger's target of 70 per cent, while 42,000 civil servants have been sacked.
'It's like air in a balloon that you're releasing. We're cleaning up on the basis of a framework that we've decided,' he said.
While the first phase undoubtedly brought some economic stability back to Argentina, it did not come without its challenges.
Tens of thousands of Argentine citizens have taken to the streets in recent weeks to protest against cuts to pensions. In March, pensioners were joined by football diehards to decry the changes, with police using water cannons and rubber bullets to disperse the protesters.
Critics argue the poor have paid the price for Mr Milei's policies as subsidies, benefits, pensions and social programmes have been cut.
The poverty rate remains high, although it fell from 53 to 38 per cent in the second half of 2024 – an enormous drop. Still, 11.3 million Argentinians live in poverty, including millions of children.
Mr Sturzenegger acknowledges that some cuts require state intervention to compensate those affected. But, he argues, most people don't need such protection and deregulation will ultimately lead to a stronger economy.
Yet, as the government embarks on its second wave of chainsaw-wielding reforms, the risk of deepening economic hardship remains.
The administration may have stabilised inflation and strengthened the peso, but it still faces pressing challenges, including securing an IMF loan to replenish foreign exchange reserves, needed to keep the peso stable and pay off debt.
Uncertainty around the IMF deal has weakened the peso by around 8 per cent in recent weeks.
The administration is in a race against time.
In 2024, Argentina's congress approved the sweeping ley bases bill, giving the government power to issue further deregulatory decrees for at least another year.
To accelerate the process, Mr Sturzenegger launched Report the Bureaucracy, a platform where citizens can highlight restrictive regulations, showing he remains resolute despite a public backlash.
'Argentina was a failed state being led by a dark administration,' he said.
'The people are the victims of this. The quest of the free man or woman is to get over the obstacles of the state. The state imposes more obstacles than the free world.'