Ethics is not really an economics concept. Sometimes there might be a unit with the word “ethics” in the title. Often introductory, and taught by a professor from the philosophy department, they are sometimes optional (electives). In the real world, on the boards of corporations you will have a lot more talk about profits, growth and legal issues but not much on ethics? Board members don’t usually see that as part of their job.
Sometimes a state might have part ownership of a corporation and may bring social concepts to the board, maybe the board has agreed to respect certain ethical or sustainable practices but all that goes out the window if it seriously affects profits.
Ethics means even less to the Libertarian cult of heterodox economics. Other economic systems, liberal capitalism, social democracy or communism take the concept of “society” seriously. Typically they believe in at least public health, public education systems and other social guarantees for children, pensioners and the disabled or the ill. They might encourage public participation in the formation of policy even at the national or federal level or at least they present a facsimile of same, and they believe, or at least they say they believe, in social advancement saying nice things about equality, human rights and social services and providing a pathway to social advancement even for the really poor or disadvantaged. They also sometimes believe in democracy or at least they say they do (though they may gerrymander to win elections) and they at least pay lip service to the separation of powers; typically between legislative (Senate and House), Presidential (Prime ministerial, sometimes Royal etc…) and the Legal Branch. This has been the basis of the foundation of the nation state at least since the United Nations and their declarations of human rights.
Much of this goes out the door if you elect a libertarian or a far right neoliberal as we have seen in many nations including the two examples used in this book: The United States and Argentina. They are a different beast, they are authoritarian, they may hint at democracy being (or becoming) optional and such things have happened in the past just before World War II in Japan, Italy and Germany for example. They will tell you they love democracy but maybe it is best to look at what they do rather than what they say and understand from this who suffers and who wins.
What libertarians do like is rules, just not rules on commerce. Ethics? Not so much!
Libertarians focus on rules to protect property rights and restrict taxation where possible especially on the rich and on large corporations. They like to have rules against associations of people that might restrict the free hand of capital, this is a long list but includes government departments that are responsible for clean air, rivers or climate change (the US Environmental Protection Agency, EPA, has been intervened by Trump as was the equivalent in Argentina) and various agencies that might restrict the rights (they call it liberty) of corporations. Libertarians protect the liberty of corporations to do whatever they want. No union, human rights, labour or any government office should interfere with the relationship between a corporation and a person working for the corporation, they say even though the relationship, say, between McDonalds and someone who flips a hamburger is not an equal power relationship. Libertarians act against such rights, they reduce labour laws (encouraging flexible contracts and minimal workers rights) even more so than neoliberal governments. A classic example of this is the use of lobbying money in the US to promote right-to-work states which is a misnomer but the interference in politics in the US to try to convert states from having workers rights to becoming right-to-work states and thus restricting those rights. Dark money drives these right to work candidates as has been shown in the United States beyond doubt in the case of Montana as demonstrated in the documentary Dark Money. They also act against ecology and the environments and indigenous people’s as well as worker’s rights.
For a libertarian the relationship between a corporation and their employees is a private matter. The corporation can write whatever labour contract they want with their prospective employees and that must be subject to minimal control by government. Anything else is called “collectivist” (a code word for unions or for any social organisation and many NGOs that may be interested in the common good). They allow corporations to view the natural World as one big dump site or mine. They can get rid of whatever wastes they need to divest (preferably far away from their own house or water supply). Libertarians may not tell you this but if you read their books it is all spelled out.
Hayek was particularly fond of rules and even the enforcement of social norms, the so-called “Hayekian laws”, but a certain class of people is implicitly exempt from such rules and laws. Hayek also knew Pinochet personally and worked with him when he was the dictator of Chile so “Hayekian Ethics” –were such a thing to exist– would be somewhat of a paradox anyway, especially in the southern cone of South America. Javier Milei refers to these exempt people as the good people; la “gente de bien”. For Milei there is also a superhero class above the Gente de bien but which can also be called “good” and these are the entrepreneurs and the private investment behind them. We might call these the very good people.
Corruption in Markets is really a problem not just for libertarians, but for the extreme right in general. A market cannot be a corrupt because markets are perfect. Just in the first six months of Trump’s second term he and his family made over 3 Billion dollars out of crypto investments. There were also sharp movements on the stock markets just before he announced his import tariffs.
Milei’s extreme version of libertarianism is the Rothbardian sect, named after Murray Rothbard. One of Milei’s Mastiff dogs is called Murray. He also has one called Milton after Milton Friedman. Milei likes to refer to his dogma as anarchocapitalism but even Murray Rothbard himself (who coined the phrase) admits that this was a misnomer.
Rothbard’s ideas are sometimes described as propertarianism (focused on property rights) so the correct term for anarchocapitalism is Rothbardian propertarianism; it is about as far away from anarchy as is intellectually possible. As the most dogmatic of the libertarian cults, everything is seen in terms of property rights; yes, even corruption!
Rothbard and Corruption
A little more terminology is required to see how corruption is framed in libertarianism. Then we’ll take a look at a real corruption example from Argentina in 2025 to illustrate the theory.
When one brings in a new ideology one first has to explain what is wrong with the old ideology; this usually involves finding someone to blame and labeling them the bad guys.
According to Curtis Yarvin’s US terminology the “Cathedral” is to blame. The Cathedral is the government, made up of academics, civil servants and politicians who sustain the status quo. They are everything that is bad about politics, education and and government regulation. Milei uses the word “Casta” for essentially the same group. There is an obvious omission. Neither Casta nor Cathedral include the “good people”, the 1%, the owners of most stuff, like the shares of the corporate sector.
Rule number one: never blame the private sector, the problem must lie elsewhere!
The aim of elections is to replace a government and put in your own people. Milei managed to do this in December 2023, Trump got back into power in 2024. First you need to attack the corruption of the previous government; then you take power. The problem with this theory is pretty obvious and it is brought to the surface when corruption doesn’t stop.
If there is corruption in government and embezzlement of public funds, that corruption typically was made possible by paying a bribe. The bribe is paid by the corporate contractor to the government (or other corporation) typically to the person responsible for purchasing. The idea is that the contractor, paying the bribe, will get their bid chosen for business. The contract can be overpriced leaving room for a donation but why stop there?
For Milei and Yarvin and obviously also for Trump (who is Casta-Cathedral and the 1% combined) omitting the elite is blatantly intentional; remember rule number one the private sector is sacrosanct. Think-tank and political logic requires that the message be consistent but why bite the hand that feeds you. If your libertarian party needs funding then it is easier to get the funding from the people who have funds: the 1%. In fact it goes a bit deeper than that since libertarianism was invented by the 1% before the 1% became a thing but that is a longer story.
Libertarians and extreme neoliberals laud markets. They see all intelligence for trade and price setting as coming from markets. Everything else is negative bureaucracy except that which is absolutely necessary to preserve property rights: the military, police forces, the judiciary and jails.
The rest of what is now the government is the purview of the markets. The 1% own the actors in the markets, they own the corporations. The corporations and the millionaires and billionaires giving funds to the CATO and Heritage Foundations have an aim. They have recently been very successful. The political messaging went down well, it distorted elections so that certain political actors get elected to put policy in place that favours them. Job done! The Heritage foundation like the think tanks in Argentina that put Milei in power, funded by local corporations, are happy! Now they want their legislative changes and they want tax cuts while keeping their subsidies.
Milei is enamoured with entrepreneurs. He attributes a Godlike intuition to this superhero class; traditional economists, like the Scotsman Adam Smith, used to call this the invisible hand of capital. The entrepreneurs may be in it for themselves but there will be a little trickle down for everybody. A rising tide lifts all boats and all that. In practice this rarely happens and growth in the gap between the rich and the poor is proof this does not work.
This notion of laissez faire markets became very popular under the first neoliberal leaders in the 1980’s like President Richard Nixon in the US and UK Prime Minister Margaret Thatcher and Carlos Saul Menem in Argentina. Milei reveres all of these especially Thatcher and Menem. It’s no longer fashionable outside of the US to declare your support for Tricky Dicky Nixon since he was kicked out for corruption after Watergate.
You can see this reverence for the rich in Milei’s eyes when he speaks to the Buenos Aires Stock Exchange or at “La Rural” the Argentine landowner agro-industrial club. La Rural was founded by a chap called Martinez de Hoz. The club went on to fund the extermination of the native populations in the 1800’s in the “Desert Campaign” led by General Roca (later President). Roca repaid the loan from “La Rural” with 25 million new hectares of arable land for their loan. Not a bad return on investment for a few bullets.
Market fundamentalists situate all trade knowledge in the market. The most extreme cults of market fundamentalists are extreme neoliberals and their libertarian cousins. They venerate the market assigning it a Godlike wisdom. To them the 1% are beyond reproach; they must be venerated. They impart their godlike wisdom. They are the winners in this world and they cannot be questioned — they are la gente de bien. The 1% can’t be Casta because the Casta are the problem. The 1% are the solution; they made it to the top by doing things right, making their money themselves. The Casta are leeches, according to Milei and Yarvin, that feed off the resources of the 1% (often in a corrupt fashion).
There is no place in this theory for workers who turn the ideas of the entrepreneurs into reality. The possibility that the 1% feed off society, reducing wages to make themselves even richer or outsourcing their components costs to countries with cheaper labour forces, is not even considered and anyway, were it to be considered, the “gente de bien” deserve everything they get, in a Darwinian Alpha-Male kind of way. Also they often parrot Margaret Thatcher to counter this by saying that society does not exist. So why protect it?
If a blind eye is cast to corruption in extreme neoliberal political economics, the libertarians take things further and legitimise corruption explicitly using their theory of property rights. The libertarians also incidentally laud monopolies which neoliberals (at least in theory) are against. Neoliberals argue that monopolies should be broken up as there is no market if there is only one choice. Libertarians advocate that monopolies should not be broken up because they are perfect; if this were not the case, they argue, the company would have competition and the new competitor would win out in the end or at least take part of the market and recreate the power of the market in an organic private sector kind of way. Think a Coke buy out by Pepsi or vice-versa. Because Libertarians don’t believe in government intervention they cannot advocate for anti-trust break-ups of monopolies. Which companies do well or badly is a matter for the private sector to decide. Governments should not interfere, ever!
Rothbard and Corruption; Property-based Theory of why corruption is OK
Milei is not a creative person. His policy suggestions are pure libertarian dogma; they come right out of Rothbard’s books like “The Ethics of Liberty”(sic), from Chapter 17 which defines what his libertarian sect thinks about corruption.
Mr. Black wants to sell a contract to XYZ company. Black thinks he needs to pay a bribe to Mr. Green (purchasing manager at XYZ Corp.) to get that contract: “Legally, there should be a property right to pay a bribe […] The illicit action here is, instead, solely the behaviour of Green, the taker of the bribe. For Green’s employment contract with his employers implicitly requires him to purchase materials to the best of his ability in the interests of his company. Instead, [Green] violated his contract with the XYZ Company by not performing as their proper agent: for because of the bribe he either bought from a firm which he would not have dealt with otherwise, or he paid a higher price than he need have by the amount of his rebate. In either case, Green violated his contract and invaded the property rights of his employers.”
The Ethics of Liberty, Murray Rothbard
So as we can see the immunity of elite actors is implicit in the theory too (there is no sanction on the board of the unnamed company selling stuff to XYZ (for whom Mr Black works). This unnamed company can make extra profits and pay that on to their shareholders and that is fine even if they occur only because Mr. Black paid a bribe to Mr. Green. Milei has said this explicitly. Milei agrees that Mr. Black can bribe Mr. Green. If nobody finds out then it’s all well and good, but if it is discovered only Mr. Green (who took the bribe) is guilty. Legally in Argentina both Mr. Black and Mr. Green (if they are proven to be guilty) will go to jail, but in practice this very rarely happens and even if it did Milei would pardon Mr. Black if he could.
For Milei though, if Mr. Green were to be jailed then that’s OK. What Green did was illegal and it affected property rights of the “gente de bien” so Mr. Green did something “wrong” and Mr. Green deserves his jail-time. Mr. Green violated the property rights of his employer, the owners of XYZ Corp. By current Argentine law what Mr. Black did is also illegal. But by libertarian dogma it is not. Rothbard says that this bribe can be considered the cost of business sold.
In the case where a corporation pays a bribe to a government employee to become a government contractor (so that their company might be selected to build a road, for example). Milei has argued that the government employee should be punished for what they do but the company should not as it is the just cost of business sold. So that is the theory but here is the reality.
Stealing money from funds for disabled children
An actual case of alleged bribery came to light in August 2025 in Argentina just before Milei’s first mid-term elections. At the time of writing the case is still ongoing (and may be for years) but the submission to criminal court 11 in Buenos Aires contains the following accusation (reinterpreted in Rothbardian terms):
- Company XYZ in this real example is a small department in the Argentine Ministry of Health called ANDIS (charged with improving the lives of disabled people, a distinctly non-Rothbardian concept). ANDIS purchases pharmaceuticals and some of these are very expensive. Milei assigned his personal lawyer Diego Spagnuolo to be the director of ANDIS. So ANDIS is XYZ. Spagnuolo, as director of ANDIS signed off on contracts (including pharmaceutical purchases) hence in Rothbardian terms Spagnuolo is Mr. Green (as are other people who share the bribes).
An audio recording released to the press just before the mid term elections was of Spagnuolo (Mr. Green) . He is explaining this corrupt purchasing scheme. Spagnuolo was instantly fired when the audio came out which led people to believe that their was some truth to the audio; the legal process will get to the bottom of it if it is allowed to.
ANDIS drug purchases are made, in this case, via an intermediary company. Some drugs have large margins (“discounted” is the term used on the audio) so they have possibly higher margins. These drugs were moved through a company called Suizo Argentina. There was money to be made being an intermediary, especially for highly discounted drugs, so Suizo Argentina was willing to pay a bribe to get this business. - Mr Green in this illicit conspiracy of the private sector and government political actors skimming off the top is Spagnuolo but he does not get to keep all of the bribe as the audio recounts. Spagnuolo takes 1% and divvy’s up the rest paying of the bag-man. The audio mentions a guy called Lule Menem who worked for Karina Milei at the time. The largest cut (3% of the ANDIS drug purchases) according to the audio track goes to Javier Milei’s own sister in the department of the President, Karina Milei. That amounts to over half a million dollars per month for nearly 2 years — one account put that at about $16 million just from one small secretariat in the Department of Health. The private and public operators of the over-pricing arrangement use Mr. Black (the intermediary company “Suizo Argentino”) to move the money. The day after the charges were filed the police raided “Suizo Argentina” (Mr. Black) and found $200,000 in cash USD stuffed into envelopes in their offices (maybe these were August payments that is not investigated). The judge ordered the police to move on Spagnuolo sequestering Mr. Spagnuolo’s telephones.
- Last but not least there is Mr. Black. In the audio tapes this would be the owner of 65% of the shares of “Suiza Argentina”) a gentleman called Eduardo Kovalicker and his sons who own most of the rest of the company. Their company can overprice the drugs, make a profit, and still pay the bribes on this profit — seemingly via the gentleman called Lule Menem— paying these bribes to Mr. Green (Spagnuolo) and other people in government including in the president’s office.
So applying Rothbardian logic to these accusations we can deduce the following if all of the information in the audios prove to be true. The price rise in drugs to the public sector (the private sector prices moved much the same way) would be Eduardo Kovalicker and his sons (the Mr. Blacks of the story) but they are owners of the Suizo Argentina so, presumably, if they are really guilty of paying bribes as indicated, then they were just paying these to make more money from handling the drugs and as they own the company (it is their property). So the Mr. Blacks should definitely be allowed to do this according to Rothbardian logic (albeit that such behaviour is illegal under Argentine law) and entirely unethical in real life.
However the Mr Green of this real legal case, is not just Spagnuolo the director of ANDIS but the other accomplices in the purchasing entity (in this case also working for the government). The arguments is that they should be punished because they’re responsible by paying an inflated price for drugs — in this case for disabled people, paid for by money provided from taxation. By Rothbardian logic they are thus reducing the property rights of the purchaser (the taxpayers funding the state).
So we come to a conundrum; it seems a free market cannot exist between the private sector and the public sector. In a way one can see that this could be interpreted as a win for libertarian theory. Rothbard would be proud the state cannot be involved in health because the state is inherently corrupt. But even Rothbard does not advocate anarchy, a small state is necessary, including the military! One must suppose the military will need to purchase from the private sector so what is to happen? Some kind of purchase agreement is necessary, it must be an agreed price which is audited and, well needs to be mandated by the state in the purchase agreement which will also need to be transparent. So we need auditing and price control for the military so we will need it for all state departments. Hence we have reached another paradox.
There seems to be no way for the state to operate (even a minarchist state like Milei wishes to have in Argentina) with a truly free market in arms or drugs. How can one trust a president’s cult-like economic theory if their own family benefits by $16 million from taxpayers to increase their profits? It is a bit of a conundrum on multiple levels, indeed it starts to look more and more like a failed state.
What is another option, how does this work in the real world?
In a non-libertarian state with controls over a market for drugs the state would set the price they are willing to pay for the drugs (or set a range of prices) and then producers would tender competing for the business. The price price would in effect, be fixed by the state. Price controls are a complete anathema for extreme neoliberals and libertarians. Nobody is forced to produce for the state but if they want the business then they need to sell their drugs to the public sector in a certain range of prices and the transactions would have to be auditable. It appears libertarianism is an impossibility and if one tries to implement such a system then the medical sector, in fact all sectors not being subsidised by the state, will be extremely costly. You would in effect have the US health system and the US Pentagon and it would be impossible to audit them.
So what have we learned?
- Corruption exists, liberatrianism advocates a smaller state but that does not remove the possibility of corruption in the state. Even a smaller state can still be corrupt, and in practice and in theory it could even be more corrupt. Also when libertarians take power things can get worse.
- There is no guarantee that Libertarians are not corrupt nor is that the case with any government the only way corruption can be controlled in government is via audits, transparency and the active application of the rule of law (i.e. the markets need to be overseen and regulated).
- The government needs to be active in negotiating prices to protect the resources entrusted to them by taxpayers (and voters) or taxpayers will be defrauded and there will be more inflation and taxation and ethics go out the door.
- Markets require essential regulation (hamburgers cannot contain Y-Coli because kids will die; this is not just theoretical this has happened both in the United States and in Argentina quite recently and so it requires market control).
Equally when purchasing for a government department like health you cannot spend an infinite amount of money on essentials like drugs so a transparent audited and corruption free (no nepotism for example) control is necessary.
Also when it comes to finance and capital (Stock and bond markets for example) the purchasers and the sellers also need security of contract which implies that there be market control. The public markets in the US are controlled by the SEC, in Argentina the Buenos Aires Bolsa (Stock Market) is essentially free of control (except for controls imposed by trusted agents,a strictly limited number of brokers) who can buy and sell shares under certain rules that they are responsible to keep. - Ethics are rarely implemented in neoliberalism but at least laws exist on the books which allow for the enforcement of some ethical requirements.
- In Neoliberalism both the payer of a bribe and the receiver of a bribe are ethically in the wrong and the laws and rules reflect that, indicating that both the payer of the bribe (and the receiver of the bribe) should face punishment. In practice this happens only in countries that implement controls.
- In Rothbardian propertarianism (like Milei is advocating in Argentina, but not implementing) theoretically the payer of the bribe (albeit unethical) should be allowed and doing so should be legal. That is not the case under the current law but the legal system in Argentina is very broken and very large players (la gente de bien) almost never face real punishment.
- Because Argentina is only experimenting with libertarianism the laws are still those of nations which operate under the same rules as neoliberalism though monetary policy is diverging.
- One way to interpret the reality in Argentina and in the US under Milei and Trump is that moving to the far right is at least as corrupt as the previous neoliberalism, in the case of Argentina it may be worse and in the case of Trump ethics seem to be explicitly ignored.
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