Galtland Index

Is Milei's Government Libertarian?

17 min read

Is Milei’s Government Libertarian?

Argentina’s government has cut spending, deregulated at speed, and posted the largest one-year gain in the 2026 Index of Economic Freedom — while keeping the central bank, restoring an income tax, borrowing from the IMF and the US Treasury, and launching much of the programme through a declared emergency. The question is what that combination is called.

Asked about the man, the question cannot be answered. Whether Javier Milei sincerely holds the doctrine he cites is unknowable from outside his head, and the answer would not change a single Argentine’s tax bill. Ryan McMaken, sifting Milei commentary at the Mises Institute, made that the condition of saying anything useful:

What should interest us, however, is what Milei actually does and what specific policies he supports or rejects. We don’t know—and we are unlikely to find out—what he actually believes.

— Ryan McMaken, “We Can Praise Milei’s Policies without Praising the Man”

Asked about policies, the question becomes decidable — and the tradition Milei names supplied the test long ago. Murray Rothbard set it out in the strategy chapter of For a New Liberty, for exactly this case — a partial measure, enacted by a state, that falls short of the goal:

There are two vitally important criteria for answering this crucial question: (1) that, whatever the transitional demands, the ultimate end of liberty be always held aloft as the desired goal; and (2) that no steps or means ever explicitly or implicitly contradict the ultimate goal.

— Murray Rothbard, For a New Liberty

One distinction does most of the work below. The left-right axis records which way power is pushed, not how far it extends — and most of the argument about Milei is two camps each reporting one of those measurements. The record is public, and after more than two and a half years it can be scored rather than forecast.

Criterion One: The Goal Held Aloft

On the first criterion the government passes about as clearly as an officeholder can. Milei states the maximal position in his own voice — in the interpreted English of the published transcript, which is the translation of record rather than his literal Spanish:

Strictly speaking, I am an anarcho-capitalist. I despise the state government. I despise violence.

— Javier Milei, interviewed by Lex Fridman, “Lex Fridman Podcast #453” (19 November 2024)

And states the transitional one in the same conversation, without pretending it is the goal:

So in real life, I am a minarchist. I advocate for minimizing state size. I try to remove as many regulations as possible.

— Javier Milei, interviewed by Lex Fridman, “Lex Fridman Podcast #453” (19 November 2024)

That is the structure the criterion asks for: an ultimate end named, and the present programme offered as a way station rather than a destination. Minarchism is not the position argued for here — the market-anarchist case holds even the night-watchman state to be an unjust coercive monopoly — but a head of state who publicly ranks anarcho-capitalism above his own office is holding the banner about as high as the office allows.

The deregulation record backs the rhetoric. Ian Vásquez’s account for Cato reports roughly two deregulations per day through the first year, alongside first-year bureaucracy cuts that reduced ministries from eighteen to eight and abolished about a hundred secretariats and sub-secretariats. The Ministry of Deregulation, which began operating after Ley Bases, brought a standing question to each rule it reviewed: whether the state should be involved at all. The sectoral results are what price-control analysis predicts on repeal: rental supply up sharply and real rents falling after decontrol — an episode scored on its own terms in Argentina’s 2023 Rent Decontrol, verdict: endorsement — import-licensing repeal followed by a 20 percent fall in clothing prices and 35 percent in appliances, satellite internet reaching regions that had none.

Nor did the drive stop when the emergency delegations lapsed. In February 2026 the labour-market reform cleared the Senate 42–28 after passing the lower house 135–115: relaxed hiring rules, working arrangements of up to twelve hours a day managed through time accounts, more predictable severance, and limits on the right to strike in critical-infrastructure sectors. In May 2026 the Chamber of Deputies passed the Ley Hojarasca, repealing more than sixty norms the government considers obsolete, 138–96 with nine abstentions.

Criterion Two: Where the Means Contradict the End

The second criterion is demanding on purpose: a new imposition is a fresh act of aggression, and cuts elsewhere do not license it. Five contradictions show up in the record.

The Tax Ledger

Rothbard’s rule for taxes admits no offsetting:

The libertarian looks forward to eventual abolition of taxes. … But the libertarian must never support any new tax or tax increase.

— Murray Rothbard, For a New Liberty

The Argentine fact-checking outlet Chequeado counts more than nineteen taxes eliminated or reduced through late 2025: the PAIS tax on foreign-currency purchases ended, export duties on farm goods cut, tariffs on capital goods and textiles reduced, internal taxes on cars removed. Against that, the 2024 fiscal package restored the fourth category of the income tax on wages — a levy Congress had eliminated in 2023 — the Compre sin IVA rebate lapsed, and the liquid-fuels and carbon-dioxide taxes were raised repeatedly. Oscar Grau logged the same pattern from the Hoppean side as it happened, in mid-2024.

The net direction is down; the composition is what the rule forbids. And the level that remains is the part rhetoric cannot reach. Heritage puts the tax burden at 27.8 percent of GDP with top personal and corporate rates of 35 percent, three-year average government spending at 35.4 percent of GDP, and public debt at 84.7 percent. Chequeado notes what has not moved at all: VAT, the cheque tax, and social-security contributions — which, together with the income tax just restored, are the largest sources of the take. Taxation is the institution the libertarian theory of the state turns on, and it remains substantially intact.

The Money

This is the load-bearing failure, because it is the promise that marked Milei as an Austrian in the first place. He still states the goal correctly:

I’m not strictly talking about dollarization, I’m talking about currency competition and eliminating the central bank.

— Javier Milei, interviewed by Lex Fridman, “Lex Fridman Podcast #453” (19 November 2024)

The central bank has not been eliminated. It remains active and has been repeatedly re-tooled. Maurice Obstfeld’s account of the successive frameworks — maxi-devaluation and a 2 percent crawling peg, then a 1 percent crawl, then the April 2025 band, then a band widening at lagged inflation from January 2026 — describes an institution administering the price of money, buying reserves and defending a corridor. Where the pesos for those reserves come from is the part that matters:

While balanced public accounts are an immense achievement, the government likely will have to run surpluses going forward to accumulate foreign exchange reserves, and these are most likely to be financed by purchases of dollars with pesos—that is, monetary financing.

— Maurice Obstfeld, “Argentina’s fragile monetary framework risks renewed volatility”

Heritage scores monetary freedom — a measure of price stability and price controls, not of who owns the printing press — at 28.9, Argentina’s weakest component by a wide margin. The score does not indict the BCRA’s existence; it records that the monetary disorder the BCRA was promised to end is still the worst thing about the economy.

Two points sharpen this. First, the argument given for keeping the bank is not an Austrian one. Kristoffer Mousten Hansen, working through Milei’s reply to Hoppe, traces it to the asset-backing theory of money defended by Juan Ramón Rallo — a modern real-bills doctrine — and concludes that Milei is not an Austrian.

Second, part of the first surplus came from letting inflation shrink obligations rather than from repealing them. Claudia Zilla attributes it primarily to cuts in, or the absence of, inflationary adjustment to pensions and annuities, which fell around 29 percent in real terms year-on-year by May 2024, with an 83 percent reduction in capital expenditure making a significant further contribution. Both halves of that disjunct concern the adjustment rather than the headline payment — trimming the indexation or skipping it — which is precisely how a nominal obligation shrinks without anyone legislating a cut. In the Austrian usage, inflation is the expansion of money and credit, and its burden falls on whoever meets the new prices last. A state whose obligations are fixed in nominal terms sits on the other side of that transfer. Cutting a legislated obligation is a choice a libertarian can defend; letting the currency do it is collecting on the tax the programme was elected to end.

The Debt

Faced with inherited debts, the government took a 48-month, $20 billion IMF Extended Fund Facility in April 2025 with $12 billion up front, and in October 2025 a $20 billion US Treasury swap accompanied by direct intervention in the Buenos Aires foreign-exchange market. Geoffrey Lawrence’s defence for Reason is the strongest case for it: a swap is a loan, not a gift, and it buys time for the reforms that would make Argentina creditworthy on market terms. That case is about solvency, not liberty. Grau’s objection is the one the Rothbardian frame generates:

Instead of repudiating State debt, he went to the IMF and decided to let the long-suffering Argentinians pay for foreigners and foreign investment funds …

— Oscar Grau, “A Hoppean Dissection of Javier Milei”

Public debt is a claim on future taxation. Official refinancing preserves and extends that claim; repudiation extinguishes it for people who never consented to it. The swap is the narrower case: Argentina drew $2.5 billion and repaid it with financing from a multilateral institution — fully repaid as of the US Treasury’s confirmation on 9 January 2026, so what persists there is the standing line and the dependence it implies rather than an outstanding balance. The IMF facility is the claim that stays on the books — a new constraint on the polity’s freedom of action, not a removed one. Estefanía Pozzo’s reading of the 2026 outlook is blunt about the gap:

President Javier Milei is a unique figure in Argentine economic history — not necessarily due to his libertarian roots, which are more declarative than substantive in his financial decisions, but because he has enacted a policy of fiscal austerity and still remained popular enough to win the midterm elections by a landslide.

— Estefanía Pozzo, “Milei’s economy in 2026: between macroeconomic consolidation and politics”

The Method

The subtlest contradiction is procedural. The programme was launched by DNU 70/2023, a decree declaring a public emergency across the economy, finance, taxation, administration, social security, tariffs, health and social affairs — an emergency that ran to the end of 2025 — and by Ley Bases, which delegated further decree authority to the executive for a year. The Ministry of Deregulation ran against a countdown clock because its power was borrowed emergency power.

The state of exception is Schmitt’s name for that instrument: the authority to decide when normal rules are suspended. Using it to deregulate does not domesticate it — the prerogative that repealed a hundred rules by decree can impose a hundred, and it outlives the occupant who used it benignly. Hayek’s rule-of-law argument reaches the same place from the other side: discretionary administration is the form planning takes, whichever direction the discretion runs. A gain that exists as a revocable executive act has not been secured; it has been rented. The 2026 labour reform stands on firmer ground for being legislation, passed by both chambers of the Congress the October 2025 midterms reshaped; Ley Hojarasca was still travelling that route, through the lower house and on to the Senate.

Powers Added

A government that only ever subtracted would be hard to fault here. This one has also added. In July 2026 a Decree of Necessity and Urgency amended the immigration law to permit barring entry to, or expelling, foreigners who incite or disseminate messages of hatred, discrimination or violence against the Argentine people, or who insult national symbols — with a carve-out stated in the decree for constitutionally protected political, academic and civic criticism. Whatever one’s position on migration levels, that is a new discretionary power over speech and movement, created by decree. On the open-borders analysis, the state’s barrier rather than entry to a consenting owner is the invasive act; protecting the dignity of national symbols is not a property right.

Foreign policy is a second divergence. Non-interventionism is not a garnish on the libertarian position but Rothbard’s derivation from the non-aggression axiom: inter-state war aggresses against the warring state’s own taxpayers, who are coerced into paying for it. Zilla documents the turn — a declared doctrine of strategic alignment with the United States, accession to the Ukraine Defence Contact Group, the Israel-policy reversal, BRICS entry refused. McMaken states the cost plainly: outside domestic fiscal and monetary policy, Milei is largely indistinguishable from countless other mainstream Latin American politicians and displays no particular affinity for anti-interventionist foreign policy.

Third, security: Al Jazeera reports the security budget rose substantially even as ministries closed. Coherent under minarchism — protection is the function the night-watchman keeps — but the state did not simply shrink; it was re-proportioned toward the functions this administration thinks a state should have.

The Honest Scoreboard

Both of the following are true.

Argentina is markedly freer than the country Milei inherited. Inflation fell from 211 percent in 2023 to around 31.5 percent by late 2025 on official figures. GDP grew 2.3 percent year-on-year in the first quarter of 2026 on record private consumption, with exports up 9.8 percent. Poverty, after spiking early, has fallen back below the 40 percent range the previous government left — though the measurement is itself contested, with critics arguing the shutdown of the bodies that collect the data skews it.

Argentina is also, on the same measurement, mostly unfree: 57.4 points, 106th of the countries ranked in the 2026 Index. In the quarter consumption set a record, investment fell 11.6 percent year-on-year. The adjustment’s distribution is contested and partly documented — social spending down 17 percent between late 2023 and 2025 on one analysis, disability benefits lost by more than 110,000 people, homelessness in Buenos Aires up around 57 percent, pensioners and students repeatedly in the streets. Swapnarka Arnan’s charge that a liberty-claiming government has restricted rights, and Zilla’s verdict of an authoritarian spirit, are the sharpest objections; read them against the deregulation ledger rather than instead of it. A federal investigation into the president’s February 2025 promotion of the LIBRA token remains open, with no charges filed against him — relevant to the anti-casta pitch rather than to the policy record.

The direction of travel is strongly toward liberty; the distance still to travel is most of it.

What Would Settle It

Four markers, each checkable within a term:

  • Money. Closing the BCRA, or stripping the peso of its legal privileges so that currency competition is real rather than promised.
  • Taxes. A large tax abolished without a new or increased one appearing elsewhere in the same package. That is Rothbard’s rule stated as a test.
  • Emergency power. Whether further reforms are carried as legislation, or delegated decree authority is revived.
  • Debt. Whether the next stress is met with another official facility or with a restructuring that stops charging Argentine taxpayers for creditors’ bets.

Rothbard’s rule cuts against the sectarian answer as hard as against the credulous one: rejecting every step short of the goal renders the goal unreachable. Philipp Bagus, defending the compromises, makes the practical version — a labour reform of this kind had not passed in fifty years, and it is fair to say go faster without pretending nothing moved.

So: not a libertarian government. A government that has cut, deregulated and decontrolled hard enough to post the largest single-year gain in the 2026 Index, while retaining the central bank, keeping most of the tax state, deepening the public-debt claim on its citizens, taking new powers over speech and movement, and doing much of its work through the exception rather than the law. Praise the cuts, name the offsets, and keep the ultimate end aloft — which is what the criterion asks of the observer, and not only of the government.

See Also

  • For a New Liberty - Rothbard’s manifesto, source of the two criteria for judging transitional measures
  • Murray N. Rothbard - the system-builder whose strategy chapter supplies this article’s test
  • Minarchism - the night-watchman position Milei says he occupies in practice, and its standing rival inside libertarianism
  • Taxation - the institution the tax ledger is scored against
  • Inflation - money-supply expansion as the definition, and the inflation tax that eroded pensions into a surplus
  • State of Exception - Schmitt on the decision to suspend normal rules, the instrument DNU 70/2023 used
  • Hayek on Rule of Law - why discretionary administration and liberty under law are mutually exclusive, whichever direction the discretion runs
  • Non-Interventionism - the foreign-policy position the alignment turn abandons
  • Open Borders - Block’s argument against which the July 2026 immigration decree is measured
  • Left and Right - direction versus extent, the distinction the two loud answers each half-report
  • Argentina’s 2023 Rent Decontrol - the one Milei-era policy this wiki has already scored on the merits
  • Hans-Hermann Hoppe - the critic whose central-bank challenge framed the Austrian argument over Milei
  • Price Controls - the decontrol results that make the deregulation record legible
  • Javier Milei

Sources

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Galtland Index. “Is Milei's Government Libertarian?.” https://index.galtland.org/theses/2026-07-31-is-mileis-government-libertarian

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