A Rothbardian Dissection of Javier Milei

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A Rothbardian Dissection of Javier Milei – Part I

By Oscar Grau
May 21, 2024

Introduction

Do you hate the State? Javier Milei, the current president of Argentina, seems to. “The State is a killing machine.” “The State is a criminal organization.” “Taxation is theft.” “Philosophically, I am an anarcho-capitalist.” These are quotes from Milei, a man who offered Argentina a “true liberal option”—classical liberalism. He claims to be a “liberal-libertarian” and an admirer of Murray Rothbard (1, 2, 3). He has said he is a minarchist in the short run, but willing to embrace anarcho-capitalism in the long run.

Rothbard asked why there should be any significant political disputes between anarcho-capitalists and minarchists in our statist world. “We could and would march hand-in-hand in this way if the minarchists were radicals, as they were from the birth of classical liberalism down to the 1940s. Give us back the antistatist radicals…” Milei himself appears to be an anti-statist radical.

A libertarian may not be so consistent as to be an anarchist (an anarcho-capitalist), but must at least be a minarchist and an anti-statist who radically confronts the statist status quo—both at the national and international levels, for a libertarian defends his ideals for the people of all nations.

Libertarianism and Austrian economics have become more widespread than ever since Milei won the presidency. He and his actions have come to represent libertarianism in the global political scene, which is why it is crucial to promote a correct understanding of libertarianism and an appropriate assessment of what’s happening in Argentina. I will also discuss what Rothbard would have thought of Milei. Theory is insufficient for this, it will be necessary to talk about Rothbard as a political activist and commentator as well. So, in the context of Rothbard’s writings in the ’90s and the comments of Lew Rockwell, I will compare Pat Buchanan with Milei before he became president. Buchanan was the last famous politician who received Rothbard’s clear support and esteem in the last years of his life.

Milei and Buchanan

When the Soviet Union collapsed, it seemed necessary to Rothbard to rethink the basis of American policy. Yet no rethinking among the shapers of American or even world opinion occurred. US foreign policy went on as if the Cold War had never ended. Buchanan, the paleos, and others urged that American intervention be guided by the national interest. But then, the alliance of liberals and neoconservatives pretended to agree and redefined the national interest itself.

Having led the movement against the Gulf War, Buchanan earned Rothbard’s respect. Rothbard expected him to lead a break from conventional conservatism and support a program against the welfare state and warmongering of the American government. Rothbard was enthusiastic about his speeches and his calls for the return of the troops. It was good of Buchanan that he opposed Rockefeller to rescue Mexico, but he should not have rejected Rothbard’s free-market thinking. Rothbard’s political realism, as Rockwell wrote, “led him to examine all programs and plans by a single acid test: will this person or policy move us closer to, or further from, the goal of freedom.” Rockwell also pointed out that many saw in Buchanan the political embodiment of “paleoism,” an intellectual movement allying paleoconservatives (known for their supposed non-interventionism and advocacy of localism) and paleolibertarians (a term used for several years to distance the libertarians who cared about stopping federal consolidation and American imperialism from the ones who did not). They were united by their opposition to the welfare state and the warmongering of the neoconservatives who dominated on the right.

Rothbard noted that the ruling class wants to lull the masses to sleep and wants a “measured, judicious, mushy tone,” not a Buchanan—“not only for the excitement and hard edge of his content, but also for his similar tone and style”—or a Milei. Buchanan often got angry, as did Milei (1, 2). And since Buchanan was not only a right-winger but hailed from a designated oppressor group (white, male, Irish Catholic), his anger, according to Rothbard, could never be seen as righteous rage.

The liberal and neoconservative American establishment and especially the Kirchnerist-Peronist faction of the Argentine establishment have been similarly willing to viciously attack Buchanan and Milei. Though Milei has not always been comfortable with the right-wing label—in fact, he rejected it for years (1, 2)—he got used to associating himself with the right since he entered politics.

In Rothbard’s view, Buchanan was a genuine rightist spokesman, who had managed to escape the neoconservative anathema which had come to lead the broader conservative movement. Still, with the Cold War over, the movement was mutating. National Review no longer monopolized power on the right. New rightists, the young and others, were springing up everywhere—Buchanan for one, the paleos for another. Rothbard rejoiced: “The original right, and all its heresies is back!” But the original right had never used the term “conservative.” Rothbard explained two main problems with it: (1) it connotes the preservation of the status quo; and (2) it “harks back to struggles in nineteenth-century Europe, and in America conditions and institutions have been so different that the term is seriously misleading.” Besides, not choosing the term served to separate libertarians from the official conservative movement that had been largely taken over by the enemies of libertarianism.

When Israel and its extensive “amen corner”—as Buchanan called it—were beating the drums for the destruction of Iraq, the toppling of Saddam Hussein, and more, Buchanan distinguished himself as the most prominent critic of the Iraq War, calling for a return to the non-interventionism of the Old Right. For Rothbard, it was no accident that the Anti-Defamation League (ADL) “picked the occasion of Buchanan’s hard-hitting critiques of the war hawks to unleash its dossier, to issue and widely circulate a press release smearing Buchanan as anti-Semitic, which was then used as fodder for an extraordinarily extensive press campaign against Buchanan.” Since the end of World War II, the ADL adopted a key strategy: “to broaden its definition of anti-Semitism to include any robust criticisms of the State of Israel.” The ADL and the rest of the organized anti-anti-Semitism had formed “a mighty praetorian guard focusing on Israeli interests and Israeli security.” Saddam Hussein was not a threat to America, but he did pose a threat to Israel. The rest is history.

Defining anti-Semitism, Rothbard offered a personal definition for someone who hates all Jews, a political definition for someone “who advocates political, legal, economic, or social disabilities to be levied against Jews.” It was obvious to him that Buchanan could never possibly fall under this label. Rather than trivializing anti-Semitism, these definitions clarified the issue and showed it to be virtually non-existent in the United States. Hence, it was simply a vicious calumny to call Buchanan anti-Semitic, an attempt to smear a political leader who would not adhere to what Rothbard called “the victimology of the Israel First lobby.” Be that as it may, Rothbard saw in Buchanan a man who would not bow to the victimological blackmail of neocons and liberals.

Other than some back-and-forth with certain people who are now back on his team, Milei is not the kind of man who bows to critics and political opponents. He has not always been right, but he has stood his ground against defamation, criticism, and recurrent pressure from various sectors in Argentina. Milei, however, has responded to some people who have called him a Nazi by suing them for the “crime” of trivializing the Holocaust. In demanding compensation from people who have not violated his property rights, Milei seeks injustice. No libertarian should resort to the repressive apparatus of the State to punish others in such a case. Nevertheless, to call Milei a Nazi was absurd: he is a popularizer of libertarian ideas, who has demonstrated a notable appreciation toward the Jewish people and Judaism for many years.

Coming back to the ’90s, after denouncing Hillary Clinton in a speech, Buchanan noted that she had compared the institution of marriage to slavery. Believe it or not, Milei’s opinion is just as negative as Hillary Clinton’s. He has criticized this social institution for years (1, 2, 3), and has come to call it “an aberrant institution.” Meanwhile, Rothbard wrote that monogamy “may be demonstrable as absolutely the best form of marriage for developing the emotional characteristics of the human personality and also for child rearing.”

Buchanan denounced the “Clinton and Clinton agenda” of radical feminism, abortion on demand, “homosexual rights,” discrimination against religious schools, and sending women into combat. In 1991, Buchanan lashed out with one of the best responses to complaints about the predominance of male senators that Rothbard ever heard: “All right, why don’t some of you big fat [male] liberals resign and get women appointed?” Milei has long clashed with feminists. In a presidential debate, he responded to his contender on the wage gap hysteria in a way that Rothbard would have enjoyed: “If you were right and the damned exploitative capitalists to whom you allude only want to make money… you would have to go into a company, and they should all be women.”

In the 1992 election, Buchanan stated, “There is a religious war going on… It is a cultural war… And in that struggle for the soul of America, Clinton and Clinton are on the other side, and George Bush is on our side.” Rothbard replied, “Yes! Yes!” For him, the orgy of hatred toward Buchanan in which the media promptly indulged showed that his speech was correct. And it was Buchanan alone, of all the attendees at both conventions, who mentioned one of the defining events of 1992—the riots in Los Angeles. Buchanan talked about how the federal troops took back the streets, proclaiming, “We must take back our cities… our culture, and take back our country.” Rothbard again responded, “Yes, yes, yes!” Thus, we see why Buchanan “drove the liberals into frenzy.” It was not just the “war” but the taking back, “the trumpet call to become openly and gloriously reactionary.”

Similarly, Milei has preached about a cultural battle and once said that being a classical liberal means burning the current dungy Argentine constitution and going back to the constitution of 1853. Rothbard would have taken much pleasure in Milei’s cultural battle and reactionary side in general.

During his 1992 run for the presidency, Buchanan was denounced for betraying the Republican administration and Bush. The paleos enthusiastically supported Buchanan in the primary. After his defeat, Buchanan came out in favor of Bush’s reelection, and the paleos and Rothbard did the same. Rothbard did not support Bush in an absolute sense—no one had denounced Bush more for his wars and increases in federal power. He supported him as a better alternative to Bill Clinton. Rothbard knew that a change in strategy never meant a change in principle but only in method—his core views were always the same. He went through no real “periods,” said Rockwell, “but rather altered his strategies, emphases, and associations based on what the times and circumstances required.” His goal was always a principled promotion of liberty. Yet the same neocons and official conservatives who had denounced Buchanan stabbed Bush in the back and sided with Clinton. In response, Rothbard asked, “Which strategy was more honorable? Or more defensible in the long run?”

With the North American Free Trade Agreement on the table, the Clinton-Bush line argued that NAFTA promoted, and was indeed indispensable to, “the lovely concept of free trade, which had become an article of conservative Republican faith during the Reagan administration.” In his characteristically ironic style, Rothbard wrote that the “only opposition” to NAFTA “came from an alliance of confused or more likely evil protectionists… Even worse, were their allies the hate-filled protectionist xenophobes, racists, sexists, and heterosexists, such as Pat Buchanan.” But Buchanan baffled the pro-NAFTA forces by pointing out that purist free-traders—such as Rockwell, Rothbard himself, and the Mises Institute—opposed NAFTA because it was a phony free-trade measure that piled numerous new government restrictions on trade. Furthermore, it added international, intergovernmental restrictions, which were to be imposed by new agencies accountable to no voters of any nation. Although Buchanan was indeed a protectionist, his opposition to NAFTA put him again at odds with the bipartisan establishment.

Ironically, given his stated commitment to free market ideas, Milei supported the idea that Donald Trump, another protectionist, was actually a friend of free markets (1, 2). Beyond explaining the evils of a customs union like NAFTA, Milei left out the truth about Trump’s NAFTA 2.0. While “breaking” with NAFTA (as Trump, according to Milei, wanted to do) would have been wonderful for free trade, this could only happen if the customs union was truly eliminated. In reality, Trump was attempting to replace NAFTA with a new agreement of the same style. The USMCA went into effect in July 2020 and included, like the previous NAFTA, the United States, Mexico, and Canada. Trump’s position on China was protectionist too, but Milei defended it, even excusing the tariff hike.

According to Rockwell, by 1995, Rothbard had had enough and issued a warning that Buchanan’s protectionism “was mutating into an all-round faith in economic planning.” In the battle between power and the market, as most of Buchanan’s later writings showed, he was increasingly on the side of power. For Rockwell and Rothbard, it was time to move on.

Nevertheless, Rothbard never seemed to lose hope in Buchanan. In an article published in February 1995, talking about the 1996 election, he still believed that Buchanan wanted to take America back “for the old culture and the Old Republic,” and that he was one of the few candidates—if not the only—who was not controlled by the Rockefellers or the neocons and who would take a principled paleo and pro-American position. The important thing for the paleos was finding as soon as possible someone “who will lead and develop the cause and the movement of right-wing populism, to raise the standard of the Old, free, decentralized, and strictly limited Republic.” For Rothbard, Buchanan had the opportunity to lead the cause, and still had “the principles and the intelligence to do it.” Rothbard, however, wondered, “Does he have the will?”

Milei and Rothbard’s Right-Wing Populism

Rothbard’s paleolibertarian activism gave us a populist strategy for the right. Mutatis mutandis, we will summarize the eight points of Rothbard’s strategy and grant Milei’s presidential campaign the following four: (1) slash taxes, (3) abolish group privileges, (4) crush criminals, and (6) abolish the central bank of Argentina. What about the other four?

(2) Slash welfare. This is not achieved by maintaining welfare programs and proposing to shift the financing of healthcare and education toward demand financing (1, 2). Regarding education, Milei has advocated a system of vouchers (1, 2), but Rothbard opposed such systems because they have a tendency to creep into other markets, including housing and food. For Rothbard, vouchers were nothing more than “a slightly more efficient freer form of welfare state, and it would be especially pernicious in diverting libertarian energies to enshrining and sanctifying that State.”

(5) Get rid of the bums. A long-term plan to get people off welfare is not enough, because welfare incentivizes people to remain on it. Milei even called welfare recipients “victims of injustice,” but most people are not forced to be on welfare. In any case, apart from State agents, those who live entirely and voluntarily off the work of others are the furthest from being victims of the State.

(7) Argentina first. No one who supports Washington’s imperialist narrative (1, 2) (pro-NATO, pro-Ukraine, and pro-Israel) can be a true anti-globalist and non-interventionist, but Milei’s foreign policy for his eventual presidency was announced in such terms.

(8) Defend family values. Family values can only be defended by slashing welfare programs, so that the State does not assume responsibility for families, and by holding marriage to be a fundamental institution.

Milei advocated for the right to bear arms for years (1, 2, 3), but he softened his position before the elections and declared that the issue was not part of the campaign or even his platform. He did not put aside his plans to combat crime in the streets, but his official proposal for point (4) was not very strong or radical for a so-called libertarian.

Milei and Abortion

Rothbard was pro-choice. Milei is pro-life. While Milei has always received substantial support from the pro-life religious Right and proposed in his campaign to resolve the controversy at the national level through a referendum, Rothbard believed in a coalition between pro-choice libertarians and the pro-life religious Right. Since libertarianism is against taxpayer-funded healthcare anyway, and since “it is peculiarly monstrous” to force those who detest abortion to pay for it, he proposed a union of pro-choicers with pro-lifers “in upholding the freedom to choose of taxpayers, and of gynecologists, who are under increasing pressure by pro-abortionists to commit abortions, or else.”

Rothbard presented a “prudential consideration” for this approach. He explained that “a ban on something as murder is not going to be enforceable if only a minority considers it as murder.” For this reason and others, although considering the right to abortion legitimate, his (paleo)libertarian message to pro-lifers was to stop trying to pass a constitutional amendment and instead work to radically decentralize political and judicial decisions, do away with the despotism of the Supreme Court and the federal judiciary, “and return political decisions to state and local levels.” Rothbard knew that asking for this meant renouncing the federal government protecting that right, but it was more important to get rid of federal judicial tyranny.

The Argentine analogy would be as follows: Let Córdoba and Formosa restrict or ban abortion, and let Buenos Aires and San Luis not do so. If, someday, there are localities within each province making such decisions, then the conflict will be largely defused. Those who want to have or perform abortions can travel to San Luis (or the municipality of Candelaria) or Buenos Aires (or the municipality of Lanús). The feminist grievance that poor women would not have money to travel is a redistributionist argument, and the agenda of organized pro-abortionists in favor of socialized medicine and collectivism would become even clearer.

Milei and Trump

That Trump was a protectionist was already common knowledge before Milei accused libertarians of being “functional” to the left for criticizing Trump’s trade war. But if that was not enough, when in September 2023 Tucker Carlson asked Milei what advice he would give Trump, Milei said,
He should continue his fight against socialism. Because he is one of the few who truly understood that we are fighting socialism, that we are fighting statists. He understood perfectly that the generation of wealth comes from the private sector… So I’d say, if I could humbly offer advice, all I could say would be to double down on his efforts in the same direction: defending the ideals of freedom and refusing to give an inch to the socialists.​

Yet Trump was the president who shut down American society for a manageable flu and set off a destructive crisis that affected the lives of millions. He did little to free America from its socialist welfare programs, his plans to downsize the federal government were always weak despite his remarkable anti-socialist rhetoric, and his deregulations were modest at best. He did not pardon Assange or Snowden, and the usual suspects—the CDC, the FDA, the NSA, and so on—were all unharmed by his presidency. In short, Trump was absorbed by the deep state he denounced. While Trump did implement substantial corporate and personal income tax cuts, he then imposed billions in tariffs on Chinese imports. His trade war cost American consumers a lot, and when China began imposing their own tariffs in retaliation, he bailed out—with billions in taxpayer money—the American farmers who found it increasingly difficult to export. His tariffs not only constituted new taxes but also a policy of picking winners and losers in the economy.

The Trump administration did not start new wars, but came closer to fighting new ones than ending them. It bombed Afghanistan, Syria, Somalia, and Iraq, conducted special operations in North Africa, and promoted naval strengthening in the Pacific. Trump even vetoed ending military aid for the Saudi war in Yemen. Military spending notably increased during his presidency, thus favoring the expansion of the military-industrial complex. Ultimately, Trump was just another warmonger in chief of imperialism, NATO, and Zionism.

In sum, Trump has as much blood on his hands and statism in his veins as most American presidents. How can an “anti-statist” show such devotion toward him? If not suspicious, Milei’s views are disconcerting. Instead of promoting actual libertarians for the presidency, he not only promotes Trump but also defends and praises him with libertarian and Austrian-economics arguments.

Milei, Zionism, and American Imperialism

Milei demonstrated his commitment to Zionism at least as early as June 2022 when he promised to move the embassy to Jerusalem if he won. In his visit to Israel as president, Netanyahu considered Milei “a great friend of the Jewish State” and was delighted with his decision about Jerusalem. Netanyahu said they both “champion” free markets, but he must have forgotten that a free market for land is almost non-existent in Israel and the Israeli government interferes with trade in the West Bank and Gaza Strip. Israel has oppressed Palestinians in almost every way imaginable for decades, and the assault on Gaza that began in October 2023 has resulted in the massacre of tens of thousands of innocent people under the pretense of defending itself from a terrorist group.

Firstly, attacks on Israel are usually responses to Israeli foreign policy. The conflict did not start in 2023—there is a story behind. Nevertheless, apart from defending “Israel’s right to legitimate self-defense,” in March 2023, Milei said that Hamas’s attack requires “exemplary responses” and stated that everything Israel is doing is “within the rules of the game”—that “Israel is not committing any single excess despite the excesses committed by Hamas terrorists.”

How can we defend Milei when thousands of children—who, by definition, are not combatants—have been killed by the Israel Defense Forces? How would Rothbard have responded to Milei? He would, at the very least, respond as he did to the American Jewish leaders in 1982:
And so American Jewish leaders consider it their role to support the State of Israel come hell or high water. How many deaths would it take? How many murders? How much slaughter of the innocent? Are there any conceivable acts that would turn off the American Jewish leadership, that would cause these people to stop their eternal apologetics for the State of Israel? Any acts at all?​

If the killing of the unborn is an aberration, as Milei says, then does he consider killing fully formed children excessive? Today, in the midst of Israel’s genocide against Gazans, consecutive war crimes, and airstrikes in the Middle East—all with the complicity of the U.S. government—Rothbard, who always defended the Palestinian resistance and their right to their land, would abhor Milei’s words and consider him an indefensible fraud. In the meantime, Milei has received praise, awards, and celebration from Jewish organizations, Israeli authorities, and others (1, 2, 3).

Not surprisingly, for Milei, understanding “the link between freedom and Israel is fundamental,” because it is a people that has achieved “the conjunction of the spiritual and the material.” And when asked in May 2024 about the protests at American universities in favor of Palestine, Milei responded that he finds “the anti-Semitic behavior” occurring at the universities “aberrant,” and stated that he stands on “the right side of history” (of the U.S., Israel, and the West), and that they will use “all resources” to defend themselves against terrorists.

In February 2022, Milei made clear his views on the war between Russia and Ukraine. Having denounced on TV the “totalitarian vocation of Putin,” he came out in favor of the “free world” and against those who are against freedom. He criticized the Argentine government for not taking the opportunity to condemn the Russian invasion of Ukraine and for its “lack of understanding of how the world works,” and went on to say, “I don’t make deals with murderers, I said no with China, no with North Korea, no with Russia, no with anyone who doesn’t respect the free world.”

But since Putin’s reign of power, American-Zionist imperialism has murdered millions and displaced many more by waging war in the Middle East. Milei continued with “a moral question” about war: “When what is happening is wrong, you cannot adopt a neutral position because you are an accomplice, that is, if you see—this is an example, please—that Tato was hitting Florencia, you have to go out and defend Florencia because you know that’s wrong.”

Rothbard would have responded that the libertarian position is the opposite of interventionism—that is, non-interventionism. When State power grows and crosses national boundaries into other States, “this is the foreign counterpart of the domestic aggression against the internal population.” However, libertarianism is about minimizing State power as much as possible (down to zero), and non-interventionism is the expression in foreign affairs of the domestic objective of reducing this power. Rothbard saw these two parts as united, and would have seen problems in Milei’s positions.

Milei presumes that if you see Tato beating up Florencia, you should rush to defend her. But there might be mitigating circumstances: Florencia might have just beat up Tato’s kid, and Tato might be retaliating—that is, Florencia might have started the fight, which could only be known through a historical investigation of the Florencia–Tato relationship. Milei assumes that the Ukrainian and Russian States rightfully own the territory they purport to. If Russia invades Ukraine, then Ukrainian territory—the rightful property of the Ukrainian State—is taken by the Russian aggressor. But for libertarians, States do not have any rightful property. No government owns properly and justly the entire land area of the country—the land should be properly and justly owned by individuals. States have no just claim. If the Russian State crosses the border and fights the Ukrainian State, this by itself does not make the Russian State any more of an aggressor than the Ukrainian State. They are both aggressors over their subject populations. The idea that every government should defend Ukraine entails the global escalation of a local conflict and an enlargement of the original aggression.

As more governments enter the fight to defend Ukraine, more innocents will be killed, forced to pay taxes, and conscripted. Minimizing aggression in wars means for no State “to enter into any conflict at all—hopefully for no government to go to war with any other government—and if any government does go to war, for the third, fourth, and fifth party to stay the blazes out.” Moreover, since State boundaries are not justly owned and have always been the results of previous conquests, the “aggressor” State may have a more justifiable claim than the “victim” State.

The very same day of his TV appearance in which he talked about the Russia–Ukraine conflict, Milei posted a message on his Twitter account (now X). It referred to the “Concert of Democratic Nations of the World,” threatened by the military advance of “collectivist authoritarianism,” and continued,
Those of us who unhesitatingly defend a model of Open and Free Society must join forces in favor of an effective strategy to confront the enemies of Freedom… There is no margin for the Leaders of the Free World to stop in sterile and paralyzing debates.​

In 2020, Milei expressed concern about having a “weak” American president in power in a world that is “a powder keg.” Then, he said, “I would almost say that Trump’s fall would be to endanger Western civilization.” But Milei’s allies are the ones spreading powder kegs around the world.

As far as international relations are concerned, in a presidential debate, Milei displayed the well-known democratic discourse of American imperialism, saying,
I have systematically pointed out my alignment with the United States, with Israel, and with the free world… As a State, I am not willing to establish relations with those who do not respect liberal democracy, who do not respect individual liberties… and… peace.​

Indeed, this notion of a free world unequivocally derives from American imperialism’s Cold War propaganda. President Milei’s foreign policy is a clear statement to the world. In less than five months, Argentina has acquired twenty-four F-16 jets for its air force, announced a joint naval base with the U.S., and requested to join NATO as a global partner.

Ideas matter. The predominance of some ideas over others can have fatal consequences. Rothbard considered war and peace to be the most important issues. What is also significant beyond whether Milei’s administration sends troops, weapons, or money to help NATO, Ukraine, or Israel is that the world’s most famous “libertarian” does not favor the great libertarian cause of peace.

Three decades later, Rothbard’s words remain as relevant as ever:
But what animates the neocons first and foremost is foreign policy. The dominant and constant star of that foreign policy is the preservation and the aggrandizement, over all other considerations, of the State of Israel, the “little democracy in the Middle East.” Consequently, they favor massive foreign aid, especially to the State of Israel, and America as the dominant force in a New World Order that will combat “aggression” everywhere and impose “democracy” throughout the world, the clue to that “democracy” being not so much voting and free elections as stamping out “human rights violations” throughout the globe, particularly any expression, real or imagined, of anti-Semitism.​

Milei and the War on Drugs

In 2022, Milei was asked, “What position do you have regarding the issue of drugs and drug trafficking?” He replied that vices are not crimes, then reminded the journalist that we do not live under anarcho-capitalism. There is a welfare state, and this is “the key,” according to Milei. He would legalize the entire drug market only if there were no welfare state dedicated to healthcare. Over the years (1, 2), he has tried to justify his continuing the war on drugs in these terms:
The question depends on whether one bears the costs of his decisions. If everybody pays the bill, you cannot be in favor of liberalization, because it transfers the costs to society, and generates a free-rider problem. Therefore, if there is a welfare state, and you are on drugs and someone else has to pay the bill, things change. Let it be each one’s problem, but if you are going to do it out of someone else’s pocket, then no.​

First, no one is denied tax-funded healthcare due to irresponsible behavior, including those addicted to illegal drugs. Second, net consumers of taxes do not pay any bill. What Milei does not explain clearly is that the tax-funded healthcare system redistributes the overall cost to the economic detriment of those most responsible with their health and benefits those most irresponsible, since it socializes the costs of unhealthy behavior. Furthermore, Milei’s stance against illegal substances opens the door to criminalizing any substance that carries a social cost related to its consumption. Acknowledging that vices are not crimes is really the key, but it is also why his stance is even more contradictory. Of course, it is unjust to be forced to pay for someone else’s health. But what should follow is the abolition of the system in question, not punishing the trade of certain substances.

Milei and the Covid Crisis

During the covid crisis, Milei was skeptical about the vaccines (1, 2), but he finally gave in and was vaccinated for work-related reasons. He had opposed compulsory covid vaccination before, and he continued to do so after getting vaccinated. He also opposed covid certificates like those imposed in Europe, comparing them to the Nazi practice of marking the Jews. Milei was even harshly critical of the national authorities for vaccinating minors against covid. When the draconian measures in Argentina first began, Milei defended the lockdown, but in less than a month, he opposed it, calling it a “caveman quarantine.” He went on to become a good fighter against covid madness in general. So, does all this not prove he is a libertarian? Not necessarily. Perhaps billions of people around the world opposed covid madness, did not take any vaccine, and were against lockdowns and covid certificates—but no serious libertarian would ever think that all these people wanted to abolish the State or radically reduce it. Milei only proved himself to be a libertarian on this particular issue.

Milei and the Planned Program for Liberty

Before elections, Milei’s reform plan presented in 2022 was structured in three generations of reforms to be deployed in a specific sequence. In the first generation, he promised strong reduction in public spending and taxation, increased flexibility for future employment contracts, unilateral free trade, deregulation, and more. The central bank was to be liquidated. The second generation included pension and welfare reforms—to privatize pensions on the one hand, and to restructure welfare to incentivize employment on the other. The third generation included healthcare and education reforms.

Libertarians, however, still have much to learn from Rothbard, who talked about a dangerous temptation in the tendency of some libertarians to appear “realistic” by coming up with some sort of organized plan for destatization. The crucial point is not the number of years, but the idea of setting forth any sort of planned program of transition to the goal of liberty. The problem with such a plan, would say Rothbard, is implying that particular steps should not be taken until other steps are. This is the trap of “gradualism-in-theory.” The planners would fall into a position of seeming to oppose any faster pace toward liberty than the one planned. Indeed, why not an even slower pace?

But there is another grave flaw in the idea of a comprehensive plan toward liberty: The very all-embracing nature of the program, said Rothbard, “implies that the State is not really the common enemy of mankind, that it is possible and desirable to use the State for engineering a planned and measured pace toward liberty.” In contrast, the insight that the State is the major enemy of mankind leads to a very different strategic outlook: That libertarians “should push for and accept with alacrity any reduction of State power or activity on any front. Any such reduction at any time should be a welcome decrease of crime and aggression.” Libertarians should not use the State to embark on a measured course of destatization, but should hack away at all manifestations of statism whenever and wherever they can.[1]



[1] I want to thank Hans-Hermann Hoppe, Octavio Bermúdez, Thomas DiLorenzo, Stephan Kinsella, Daniel Morena Vitón, and Fernando Chiocca, for having helped me with the elaboration of this article.

https://www.lewrockwell.com/2024/05/no_author/a-rothbardian-dissection-of-javier-milei-part-i/

Read part II here
 
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An administration that wants to go in the right direction must repudiate the public debt. If it succeeds, no one will lend to that government, and it will have to adjust taxation and spending to satisfy the people. This administration will have committed to not making taxpayers and future generations pay any more debt, and the taxpayers will have committed to demanding that the next administrations do the same. Having woken up to the truth, the people, faced with the consequences of an international order that opposes their government, would be prepared to finance their diminished domestic commitments without debt. The consequences may include barriers to international trade, but matters could soon improve because the economic incentives of trade would not disappear.


So my ears perk up when I hear about this, because I genuinely don't understand what the real life consequences of default are. I do appreciate picking up apprporiate verbiage though - "repudiate". That's going in the same vault with "negligent discharge" instead of "accidental", and "decriminalize" instead of "legalize". It's not default because it was never valid.

Through this pretty hamfisted jargon I can see that the argument against repudiation seems to be that there are barriers to international trade, but the article doesn't perfectly clarify that the barriers would be coming from the OTHER end - it took me a couple readings because Milei has been pretty clear that he wants there to be *no* barriers to international trade. But he only controls one side of the equation.

I think the notion that the incentive to trade would eventually break those barriers down, is contradicted by the facts. Here's a somewhat lower-brow account of how the United States is still clutching onto a trade embargo that was imposed on its ostensible FRIENDS over 70 years ago and is the primary reason why nobody in this country will ever be able to buy Toyota's $10,000 pickup truck, despite the fact that EVERYONE in the United States who learns this is an actual real thing IMMEDIATELY decides he would buy one. In a market where the average cost of a new vehicle is over four times that, there can't possibly be more incentive to allow this trade to happen.

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A Rothbardian Dissection of Javier Milei – Part II


Mises.org
Power & Market
Oscar Grau
05/31/2024

Milei and the Chances of Privatization

Though privatizations have not yet arrived, the state-owned airline is on the agenda. The company was renationalized in 2008, forcing taxpayers to prop up an airline that has been directly bailed out by the government since 2021. For true privatization, all regulation prohibiting competition and all taxation in the industry should be abolished—falling short of this, it should come with deregulation and less taxation. Milei has proposed to give the company’s shares to its employees and thereby transfer ownership to them. They would either bear responsibility for the company or sell their shares. While this may be the most expedient method toward privatization in a country where unions have so much influence and power to negotiate, it is not a just course of action.

According to the homestead principle, assets belong to those who have worked on them, but the airline would not have been possible without the initial aggression against taxpayer property. The government legally owns the airline, but it does not justly own it. As for the workers, their only possible claim concerns their salaries, and even these, and all other costs involved in the operation of the airline, are primarily financed by taxpayers. As a matter of fact, to do what Milei proposes would constitute a moral outrage. Rothbard would state that the principle of privatization that should take priority wherever it applies would require the government “to return all stolen, confiscated property to its original owners, or to their heirs,” because property rights imply above all restoring stolen property to the original owners. Only those who have been aggressed into financing the airline have a justifiable claim to restitution.

If possible, legal ownership should always be restored to expropriated private owners or their heirs of socialized factors of production. But in this case, even though we know that the taxpayers are the rightful owners, legal ownership cannot work in the same way for tax-funded enterprises. The most just and sensible solution would seem to involve the distribution of shares among taxpayers in proportion to the taxes paid since 2008. However, an airline needs hierarchy and expert knowledge on its inner workings. For assets to be used, liquidated, or dismantled, some agreement among the owners about many complicated matters would still be required. Such a process would hinder any possible gains from this solution. If an entire bureau were created to go through tax documents and calculate a fair distribution of shares, this would impose an unjustifiable burden on taxpayers. The perpetrator of the injustice, in charging the victim a price for justice, would commit a further injustice. Moreover, the government, as usual, could err in its task by, for example, giving more or less than is due to the taxpayers, which could complicate the process of getting the company back in business or liquidated.

Benjamin Seevers proposes to combine the joint stock company and syndicalist approaches. Milei, he argues, should cease all government transfers to the airline and eliminate all government-granted privileges. The company should not be pardoned for its willing participation in taxation and expropriation, and taxpayers should be free to make claims against the now private airline. Milei could give the company to the bureaucrats who currently run it, but taxpayers should be able to bring claims against it in civil court for restitution in the form of payments, bonds, or shares. Seevers recognizes taxpayers’ legitimate claims to the company and wants to relegate its division to the “free market” rather than the government—mirroring the syndicalist solution first, turning it into a mixed system afterward. Following Seevers, the airline “should be cut off from the government altogether without caring how the former public employees organize the company,” and some legally binding order (perhaps an executive order) would state that the company’s expropriations of taxpayers are no longer legally protected, allowing them to extract rectification.

Assuming the cooperation of the airline employees and his political opponents, Milei’s plan would be quick, easy, and preferable to the status quo—but it would be unjust. Seevers’ proposal is more just, but it is neither faster nor easier than Milei’s. Besides, justice in Seevers’ plan would depend on the efforts made by the taxpayers, especially as funders of court expenses, while the workers have done nothing to be the first owners of the new company. Furthermore, each claim could only be awarded relative to the potential claims of the other taxpayers, which would require someone to perform the calculations—whether the company, the government, or the claimants. But there is also a more fundamental inconvenience that virtually rules out Seevers’ plan: the more taxpayers seek compensation, the fewer the benefits for the workers. The latter could foresee this problem and require conditions, thus changing the very essence of Seevers’ proposal.

Nonetheless, we can propose another plan, one faster and easier than Seevers’, significantly more just than Milei’s and not necessarily less just than Seevers’. It would be feasible, entail immediate economic benefits, and avoid judicial and bureaucratic efforts. Milei’s administration would sell the company on the market to the highest bidder, and bidding would start at the market price if possible. As a condition, the company could only be sold to taxpayers who have been paying taxes since at least 2008, and the sale would have to be in cash. Of course, the new owners would get total control of the company and have no particular legal obligation to the workers—they could keep them or let them go. One could expect these taxpayers to be happy with their acquisition, because they chose to buy it, and the government would no longer have to run the company and bear its costs. The workers, now free, could accept new contracts from the new owners or anybody else. With the money from the sale, the unemployed would continue to receive half their salaries for a period preestablished in the plan—say, six months—or until they find a new job. They are not victims, but income expectations and pressure from the union will be taken into consideration.

After the period given to the unemployed, the government would burn what cash remains in the most transparent way possible, thereby alleviating inflation and preventing the government from diverting resources to non-market wishes. This way, there would be no time-consuming and painstaking processes of distribution and reassignment, and workers could continue to work in the company or find new value-generating jobs. This plan can also be applied to other privatizations.

Argentina and Peso Hyperinflation

Let us explain the general situation Argentina was already in when Milei assumed the presidency. With the government constantly spending more than it collects, and printing money to finance the overspending, inflation beyond what is normal for the inflationist monetary system was to be expected. As Rothbard’s great teacher, Ludwig von Mises, wrote, “The inflation can continue only so long as the conviction persists that it will one day cease. Once people are persuaded that the inflation will not stop, they turn from the use of this money.” So there is an ultimate limit on inflation, though a wide one, that will conquer any inflation—the phenomenon of hyperinflation.

Inflation from the government and the banking system is usually aided unconsciously by the people, who generally believe that some moderate periodic rise in prices is normal. If prices could decrease due to economic growth (price deflation as an outcome of increased productivity), people would be able to keep more of their income in the form of cash balances for some future advantage not possible in the present—they could plan further ahead and save more money without having to worry about significant decreases in its value. And if the social demand for money increases, any increase in prices could be proportionally less than the increase in the quantity of money.

Argentinians know that their government is always causing inflation, and due to the constant increase in peso prices, they prefer to plan, save, and calculate in another currency—the dollar. They often rush to exchange their pesos for goods or dollars as a store of value for the future. As the social demand for pesos falls, and the social demand for dollars increases, the dollar price rises in terms of pesos. At the same time, the confiscation effect of inflation will be lower than the government expects—that is, a lower demand for pesos will allow fewer resources to be extracted by the government—because the rise in prices means a reduced purchasing power of the peso. At this stage, hyperinflation has already begun—this knowledge of hyperinflation is completely about the actions of individuals as money users (no arbitrary percentage is necessary).

Prices keep rising, and the government causes them to rise even faster. However, the government can still obtain resources because the peso must still be used due to legal tender, as in taxes and other expenses. Additionally, the government imposes several exchange rates to extract even more value from the population’s money, picking losers and winners along the way. Thus, the government imposes a price control on the dollar through the peso. The price of the dollar is too high for the government, so it puts obstacles in front of its price in pesos by hindering its free exchange between buyers and sellers. Since some costs must be paid in pesos, which have become more expensive due to the regulation, there is less of an incentive to invest with the dollar—even exports are discouraged because of this. Exporters are forced to lose dollars when reinvesting their profits. To make matters worse, the government puts obstacles in the way of investors who want to take their dollars abroad, further disincentivizing investments. This control generates excess demand and a shortage of dollars. Imports are also discouraged, because getting dollars to buy abroad becomes more difficult. The economy as a whole is impoverished. This process cannot continue forever under a budget deficit, but because another currency is guiding the Argentine market, and because the government can keep the peso alive, it can continue much longer.

As prices rise at an accelerated pace and the flight from pesos continue, and the government is about to print huge amounts of pesos and does it, in a peak of hyperinflation, if the peso were the only money in the market, the demand and value of the peso would approach zero, causing prices to rise exorbitantly. The consequences for the economy would be disastrous if Argentinians did not have the dollar. And not only do they have dollars but their economy essentially runs on them. Capital, savings, and balances are all already valued in dollars. In addition, the productive sector has the least of incentives to use pesos. State agents, however, as first holders of new pesos, and also aware of the need to get rid of pesos, see their salaries increase more constantly than others. As a result, they obtain clear advantages compared to the productive sector, which receives the new pesos later. Since prices do not rise at the same time and at the same rate, as the peso supply increases, first holders (and others) benefit in relation to the later ones to the extent they use their pesos as soon as possible and do not have to sell anything to obtain them—State agents and artificial creditors are not disadvantaged as the ones who must create value for their incomes.

The main goal of Argentinians as money holders, the less dependent they are on government transfers and privileges, has become getting hold of dollars or goods in exchange for their pesos as soon as possible.

Milei and the Nightmare

Argentina’s peso was already in hyperinflation when Milei took office. Notwithstanding this, the recipe for economic prosperity and justice is not to actively reverse this trend through the government, but to let the economy in general, and the peso in particular, bottom out and let the market be as free as possible. This bottoming out is not equal for all, and the death of the peso is permissible. Although the Milei administration has stopped printing pesos for the Treasury, printing for other activities of the central bank has continued to this day. The inflation is still notable. Hence, in his first week, Milei announced that his top priority was to avoid hyperinflation. Since Argentina was already in it, he could only mean a peak of hyperinflation. We will call this peak “the nightmare,” for he said in April 2024 that avoiding this event prevented Argentina from having a 95 percent poverty rate. But a libertarian and adherent of Austrian economics would never strive for such a goal nor believe in such an event.

First, it must be recognized that Argentina is used to this inflationary hell and that this nightmare, in the short run, would be much less harmful there than it would in other countries that are not used to a similar economic situation. The purchasing power of the peso will tend to zero in the nightmare, but as virtually no one is storing value in pesos, the difference in economic well-being before and after the nightmare will tend to zero too—that is, the availability of all goods and services and social wealth will remain virtually unchanged.

The economy could never break down because of the nightmare. Its market will not revert to an impoverished state of barter, and there will be no need to slowly build up commodities to use as a means of exchange because there is already another general medium of exchange available. If the government gets out of the way and lets the market run the economy, the demand for pesos will eventually fall so low that government money will be worthless, and Argentinians will rid themselves of its inflation burden. Indeed, this is the only legitimate route through which the government could adopt a commodity money exchanged in the free market, the dollar, or a new currency. New government money, however, cannot be established in the market unless it can be exchanged for previously existing money—in this case, the dollar. Moreover, apart from giving Argentinians a way-out of hyperinflation today, economic calculation is already secured through the dollar.

Of course, the nightmare would generate unfortunate effects for the people who most benefit from government transfers and privileges through the peso. For instance, the benefits of peso printing, taxes in pesos, currency-exchange schemes, being a first holder of pesos, and the influence and control that pesos give State agents over the rest of society would be lost in the nightmare. So when Milei warned about the multiplication of poverty, more than that, it was the fact that State agents and other privileged people would be left for a moment without their spurious income. Therefore, it is really the government—the political caste that Milei claims to confront all the time—that benefits most from avoiding the nightmare and reverting the trend.

If Milei’s goal is to get out of hyperinflation and stabilize the peso so that the people can freely demand pesos to plan, calculate, and save, his efforts to achieve this goal through the government must work against actual market desires. Neither a dramatic cessation of the expansion of the peso supply that could turn off the peso tap and decelerate the inflationary expectations of the people, nor a dramatic end to monetary inflation that could induce the people to hold peso balances again, will stabilize the peso until the majority of productive people in Argentina feel as comfortable with the peso as they do with the dollar without any government policy forcing its use.

Milei and the 100 Percent Dollarization

It would be inconvenient for the political caste to abolish the central bank. Any dollarization reform would take away the monopoly on the production of pesos from the Argentine government. But dollarizing also helps advance the hegemony of American monetary imperialism and the menace of its global monopoly on the production of money. Dollarizing may not promote freedom, but it will offer the Argentine economy better monetary conditions, given the fact that the market has already chosen the international reserve currency over the peso.

All that stands in the way of implementing better reforms than dollarization is a lack of political will. But given the Argentine context and background and Milei’s views, there is a good chance that dollarization can be done in a Rothbardian way—that is, by introducing a 100 percent reserve banking system, a reform that seems to be the most feasible and least risky for the current situation. While it would not save Argentina from FED inflation and credit expansion, it would allow its banking system to get rid of credit expansion and other pernicious effects in its own capital structure. It would also lead to more genuine interest rates that prevent distortion and malinvestments, which are inevitable when fiduciary media are injected by a fractional-reserve system. Artificial booms, deep recessions, and huge losses of assets would be essentially avoided, and the national system would be immunized from the sudden contractions of the money supply that the alternative status quo cyclically generates, which cause greater and more painful deflations and recessions.

Milei and his First Five Months as President

We should hope, as Rothbard would have, that Milei takes more steps toward freeing the people from State power than toward enslaving them even more. In addition, he should do so radically and by the most libertarian-oriented policies possible, including going against political centralization. At the international level, he has gone in the wrong direction, but what about at the national level?

Immediately after taking office, Milei signed a decree and reduced the number of ministries from twenty-two to nine. For now, the reduction is still symbolic because it only ordered some ministries to absorb others and did not significantly reduce public employment. Milei has increased taxes on fuels and imports, and extended the scope of a tax to subscriptions of special bonds, and purchases of foreign currency for the remittance of profits and dividends—even though he had promised not to raise or create taxes (1, 2, 3). Hypocritically, Milei supported in March 2024 a call for a tax rebellion in Buenos Aires against the tax hikes from the governor of the opposition.

Milei deregulated the economy to some extent with a decree that removed or modified hundreds of laws, including several price controls. After repealing the rental law that generated housing shortages, the effect was immediate: supply increased, prices remained below inflation, and contracts are now entirely decided by the parties involved, including what currency will be used in the transaction. In comparison, after removing price controls in private healthcare, only four months later of increases in a context of notable inflation, his administration took a wrong turn and decided to force companies to lower their prices according to imposed criteria. The response to accusations of cartelization should be to continue the process of deregulation rather than put up barriers against free pricing. The Argentine economy is largely cartelized, and as Rothbard explained, compulsory cartelization of industries means granting monopolistic privileges. Freeing prices in this situation removes a policy that addresses previous government interventions in regulating the economy, which restrict competition, discourage investing, deprive consumers of a better satisfaction of their needs, and distort the free allocation of market resources. Part of the regulation problem can be dealt with once the law, “Foundations and Starting Points for the Freedom of Argentinians,” is approved in congress. The bill is intended for privatizations, deregulation, labor market fluidity, and consolidating more power in the executive branch. This bill and a tax package—which restores a category of income tax—have already passed one of the chambers. True, Milei has reduced a few tariffs, but his tax hikes are much more significant, do not benefit the economy and should not be seen as a way to escape the crisis.

After an initial devaluation, inflation has decelerated. The interest rates continue to be manipulated periodically by the central bank to cope with inflation. His administration managed to achieve three consecutive budget surpluses and cut some subsidies. Since Milei took office, public construction has ceased to be financed to a great extent. He closed some government agencies such as the National Institute against Discrimination, Xenophobia and Racism, which persecuted free speech. He reduced the amount of money for the National Council for Scientific and Technical Research, and its questionable investigations. A good part of his adjustments hurts the middle class and retirees who, with the increases in services, have to sell dollars to make ends meet. Milei’s cuts are good, but we can criticize him for having expanded welfare programs and intensified the war on drugs.

Milei and the Surplus Fever

Surpluses happen when more money is collected in taxes than spent by the government over a period of time. A surplus could be hoarded by the government or liquidated through deflation. If one hundred pesos are taken from the milk industry and only seventy are spent on paper, taxation is the larger burden, paying not only for the extracted paper but also for the hoarded or destroyed money. The milk industry’s loss should be considered by the government when it imposes burdens in the budgetary process. When expenditures and receipts differ, the fiscal burden on the private sector can be approximately measured as the greater of the two. But the government burdens the public twice: it appropriates the resources of the private sector first by inflating the money supply and then by taxing back the new money. If surpluses are used for repaying debts, the deflationary effect is impossible. And if they are used for redeeming government debt held by the banks, the deflationary effect will not take the form of a credit contraction and will not correct maladjustments brought about by the previous inflation—in fact, it will create further dislocations and distortions.

Surpluses as well as expenditures should be deducted—both extract funds from the private sector. Total government expenditures or total government receipts should be deducted from the net national product, whichever is higher. This will show the approximate impact of fiscal affairs on the economy (a more precise estimate would compare total depredations with gross private product).

It should be common sense to libertarians that the response to surpluses should be to cut taxes. Though government greed is the norm, one would expect a “libertarian” administration to see surpluses as a reason to cut taxes. But if Milei has not cut taxes, returned any money to where it came from, or burned money to reduce the supply, why would libertarians celebrate his surpluses? To favor the economy, fewer resources should be diverted from the productive sector to the public one. If surpluses are used to reduce debts, insult will be added to injury because debts are also imposed on taxpayers. When asked when he would cut taxes, Milei answered that once they stabilize the economy and there are resources to spare, he will cut taxes and not increase spending. The question: How many resources does he need?

Why should maximizing revenues be the government’s objective? They are resources diverted from the productive sector to governmental activities—including cleaning up the balance sheets of the central bank and the Treasury. Rather, libertarians would be interested in minimizing government revenues by pushing down tax rates, but this is not what Milei has done. Surpluses are part of the money supply, and no money disappears from the money supply unless the monetary unit ceases to exist or fiduciary media used as money disappear in a fractional-reserve system. Milei’s surpluses are still used for plans that do not involve public spending, and his fight against inflation is really harming the productive people who are forced to finance a fight for an unwanted currency.

As Rothbard noted, in our age of government deficits, conservatives—and it seems that Milei too—prefer budget balancing to tax reduction and “oppose any tax cut which is not immediately and strictly accompanied by an equivalent or greater cut in government expenditures.” Certainly, cutting taxes may result in an increased deficit that requires more debt. Now, being taxation an illegitimate act of aggression, any opposition to cutting taxes is impermissible and undermines and contradicts the libertarian goal. Rothbard concluded, then, that the time to oppose expenditures and call for drastic slashes is when the budget is being considered or voted upon.

While balancing the budget can be good if it is through less taxation and less spending, Milei is balancing it with more taxation rather than with more cuts in expenditures. Therefore, his policy of decelerating inflation and balancing the budget is favoring comparatively more State agents and welfare recipients, that is, his actions are actually hurting the economy, because his increased taxation harms the productive people once again. Besides, by keeping the dollar-peso exchange control, his actions become even more detrimental to the same people due to legal tender. In view of the stagnant productivity, people have to resort to their savings to cope with this situation—which also discourages investments.

Lowering inflation and inflationary expectations to escape hyperinflation by revictimizing the peso’s biggest victims is not a libertarian-oriented policy, nor is it sufficient if productive people are ever to choose pesos as freely as they choose dollars. There are other factors regarding the quality of money. Due to Argentina’s monetary history, the productive people do not trust the government, making it difficult to foresee an economic future in terms of pesos. They have suffered a lot because of the decades-long history of their currency. Why not just let the peso die? Even if Milei succeeds in stabilizing the peso and abolishes the central bank to put an end to monetary inflation, he will have saved the peso at the expense of the people who suffered the most to get to this situation.

Milei and the National Debt

As libertarians should know, the only legitimate debts are between groups or individuals and involve property rights. No taxpayer personally or voluntarily incurs public debt. It is the politicians who compromise the genuine income of the people. But those who lend to the government are also corrupt criminals. Private and public bankers have a legal privilege to create money that is not the outcome of productive exchange, and can get rich from this counterfeit money. Because these money printers know that taxpayers pay the costs, public debt cannot be morally equated with private debt. Imagine that A needs to finance a project and borrows money from B. Meanwhile, B knows that A can return the money with interest only by stealing from others. B, then, is not a simple lender but an accomplice in a crime. B benefits from the crime by receiving interest over and above the payment of the debt. Now, if A has given B the exclusive ability to generate money without productive exchange, we have today’s state of affairs.

An administration that wants to go in the right direction must repudiate the public debt. If it succeeds, no one will lend to that government, and it will have to adjust taxation and spending to satisfy the people. This administration will have committed to not making taxpayers and future generations pay any more debt, and the taxpayers will have committed to demanding that the next administrations do the same. Having woken up to the truth, the people, faced with the consequences of an international order that opposes their government, would be prepared to finance their diminished domestic commitments without debt. The consequences may include barriers to international trade, but matters could soon improve because the economic incentives of trade would not disappear. Whether this strategy would be more or less convenient in the short run would depend on the size of the debt and of the country’s economy. But only when these unjust debts begin to be repudiated, the people having rebelled against the machinations of their rulers and the global financial system, will we see the rulers of the world fear a loss of power. Giving in to the statist standard can only mean giving up on a more libertarian future.

Rather than repudiating the national debt, as Rothbard would have appreciated, Milei came to terms with the IMF—thus following the statist recipe of his predecessors. The disbursements from the IMF for carrying out his plans place an unfair burden on the backs of the productive people and future generations. By relying on the IMF, Milei is also favoring the current and future political caste—in Argentina and abroad—that profits from the counterfeiting business. Any deal with the IMF is bound to specific conditions, especially with its main supplier, the United States. Argentina must follow guidelines that would not exist without the agreement, but this can hardly excuse Milei—because he was aligned with the U.S. government interests long before he became president.

Milei’s plans can only come to fruition over a long period, but his administration will not last forever. When the deadlines expire, the IMF’s conditions will apply again, and future administrations could also roll back important improvements made by Milei. This pendulum of democracy alone is sufficient for promoting radical political decentralization and secession, but Milei has not done so.

Milei and his Rhetorical Problems

For the “libertarian” President, there are taxes that are “filthy,” others that have to disappear, and others that depend on the provinces and require tax reform. (It seems that there are taxes that do not have to disappear. Why not radical political decentralization to let provinces compete with their tax conditions?) He said that taxes have gone up, but that they are returning more to the private sector by lowering inflation. (We already know the nature of this deception.) Milei’s idea is to freeze public spending, so that as the economy starts to rebound and grow, the size of spending in terms of GDP will fall. (Why not cut spending further? There seems to be a reasonable percentage of spending to let the economy grow.) Then, the myriad of taxes will move to a simplified system in which there will be about four taxes that are “payable” and “understandable,” and the State will be 25 percent of GDP. (Another tax simplifier? Why not 20 or 30 percent? 25 is good! It seems there are understandable and not understandable taxes. Let us have only the understandable ones!)

There should not be any contradictions in rhetoric as the ones Milei displayed many times—let alone policy recommendations working against the libertarian goal. Even if a libertarian does not feel like calling for some idea at a specific moment, “only harm to the ultimate objective can be achieved by rhetorical flourishes which confuse the public and contradict and violate principle.”

Conclusions

Changes can come from the government when public opinion pushes for them. Whether for anarchy or a less oppressive government, public opinion and pressure are indispensable. Libertarians can go into politics, but they must not give up their libertarian criteria. Milei’s main achievement has been to move the Overton window toward libertarianism, especially in Argentina. Many libertarians around the globe are trying to seize this moment, but an attempt to do so should be criticized if it means supporting Milei without nuances or public corrections of his frequent mistakes. Milei has shown that libertarian ideas can win, and we should recognize that many people have come to libertarianism and Austrian economics because of him. However, as we have seen, this popularization has come with serious problems.

We should point out that an eventual economic transformation is not synonymous with a libertarian transformation. A great deregulation can allow great economic improvement. Regulations can be as destructive of productive output as taxes are. Therefore, as a policy of taxation with less regulation renders a higher monetary return than the same with more regulation, any State might find it appropriate to move in the direction of a more pure taxed and deregulated economy in order to succeed in the international scene. Deregulation seems to be the hallmark of Milei’s presidency. His labor reform will also serve to facilitate formalization vis-à-vis the State and get more people entering the legal market, which will help to collect more taxes. Undoubtedly, to decrease the counterproductive effect of regulations relative to that of taxes can help to achieve more surpluses.

Surely, money from “creditors,” a deregulated economy, and some important reforms will help Milei’s plans. Overcoming the counterproductive effects of politics and getting out of the crisis is possible. Milei’s cuts in expenditures benefit his public image, but a libertarian president would let the economy recover on its own instead of trying to save the peso. According to Milei, “for the first time in Argentina, the righteous do not pay for the sinners.” But as a Yiddish proverb says, “a half-truth is a whole lie.” Instead of radically empowering the people, he is making the productive people pick up the lion’s share of the tab.

It does not take a libertarian president to get out of a crisis, and no libertarian should celebrate a “libertarian” president for doing so when it involves serving statist, warmongering, counterfeiting, genocidal elites. And indeed, Milei is a member of the American-Zionist international establishment of warmongering statism.

Rothbard would have supported Milei enthusiastically in the beginning, when he was a rising figure on TV. He would also have supported Milei’s entry into politics—but not wholeheartedly. He would have begun to notice repeated mistakes and troubling flaws that seem indelible. In time, Rothbard would have had harsh criticism for Milei. Even so, he would have appreciated Milei’s populism, his popularization of Austrian economics and libertarianism, his anger against the political caste, his correct responses to the whining of his opponents, and any reform that went in the right direction.

Rothbard’s populism anticipated Milei’s success. But beyond the similarities, his election manifesto was not “very much in line” with Rothbard’s right-wing populism and paleolibertarianism. Buchanan was not seduced by the Israeli lobby and was viciously attacked by Zionists, but Milei defends Israel and Zionists celebrate him. Rothbard’s support for Buchanan was more or less stable over the years, its backbone being the cause against the liberal and neocon welfare state and warmongering statism. But Milei belongs to that evil group Rothbard fought so hard against. Rothbard would have denounced Milei for his servility to the world’s greatest enemies of peace. And even if he had favored Milei for the presidency in Argentina just as he favored Bush, Rothbard would have become disenchanted with Milei much earlier and more deeply than he did with Buchanan.

As of today, despite the uncertainty of the future, the clear trends and characteristics would likely lead Rothbard to assess and predict Milei’s legacy—being optimistic—as a modest improvement over Reagan and Thatcher. As a matter of fact, Milei admires Reagan and Thatcher (and Churchill), and his foreign policy and deregulation resemble a highly characteristic example of a policy of internal deregulation and increased external aggressiveness as the one provided by Reagan and, to a lesser extent, by Thatcher. We will see if Milei can surpass the “accomplishments” of these two influential leaders. In any event, a “Rothbardian” should have known better than to identify with war criminals. There is a reason why these people are celebrated by the conservatives of the international establishment (the neocons): they take advantage of their anti-communist or anti-socialist rhetoric to support the hegemony of American imperialism. Milei is playing the same role and even failing in promoting a crucial historical revisionism for the libertarian cause.

As an economist, Milei ranks far above the mainstream. He shares many ideas with Austrian economists, including Rothbard himself, despite considering Adam Smith as the Gauss of economics and celebrating him all these years (1, 2, 3)—something Rothbard would have never agreed on. Generally speaking, Milei fails as a “libertarian” president but is better than most presidents. However, it is going too far to call Milei a “full-blown libertarian” and to say that his election signified “a historic day for liberty only comparable to the fall of the Berlin Wall and communism” or even “the rebirth of liberty in Argentina and beyond”.

In consequence, if Rothbard buried Reagan, despite his free-market rhetoric, and did something similar with Thatcher, why would he have let his guard down in the face of Milei’s anti-statist rhetoric? It is completely impossible that Mr. Libertarian would have turned a deaf ear to the resounding bells of truth. Because the truths that have been exposed here are enough to expel Javier Milei from a true libertarian movement, for he is, in reality, a member of the neocons, a regime “libertarian,” a false libertarian—and a fraud.[1]



[1] I want to thank Hans-Hermann Hoppe, Octavio Bermúdez, Thomas DiLorenzo, Stephan Kinsella, Daniel Morena Vitón, and Fernando Chiocca, for having helped me with the elaboration of this article.

https://mises.org/power-market/rothbardian-dissection-javier-milei-part-ii

https://www.lewrockwell.com/2024/05/no_author/a-rothbardian-dissection-of-javier-milei-part-ii/

Read part I here
 
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