Advantages of a business closure

It is known that Murray Rothbard is Javier Milei’s fetish author. What is not known is that Rothbard celebrated the closure of businesses. “Business losses are the mechanism by which the market eliminates those who use resources less efficiently. If a company cannot cover its costs, this indicates that society values ​​​​using these resources for another purpose. Bankruptcy is not a failure of the market, but one of its disciplinary functions,” said the hero of the libertarian world People, economy and state. Rothbard warned against this explicitly and consistently Corporate insolvency is healthy and necessary in a market economy. Therefore, this collapse should not be interpreted as a negative phenomenon, but on the contrary: the end of an industry or trade should then be seen as a sign of a correction that allows a redistribution of capital and labor, leading to a more productive economy.

Bankruptcy, which leaves a trail of layoffs and debts, is therefore viewed by the philosophy of anarcho-capitalism not as a failure or mistake, but as purifying learning mechanism for the development of a country. Because Rothbard believed that the job losses that accompanied every company closure represented a trivial harm to a virtuous mechanism of capitalism. And for this reason he was strictly against possible government intervention to prevent the disappearance of a company. For Milei’s most respected and admired author, the government bailout intended to address rising unemployment actually prevented the economy from making the necessary reallocation of resources toward products and services more highly valued by consumers.

In this way, Argentina has become a dangerous experiment in social science and living political economy: the controversial thesis, which until recently was only substantiated by Rothbard in his theory books, is now defended by Milei in real life.

This week, for example, at a company event The Commercial ChroniclerMilei showed that she was reading Rothbard. “How often do we hear that a particular sector will fall if we open the economy, right? We will have a trend towards unemployment. Fake – argued the president–. If you open the economy and one sector goes bankrupt, it is because the goods imported from outside are of better quality and/or cheaper. These savings are spent on other uses. Therefore, there will be no job loss. And as they move to a more productive sector, the economy becomes more productive. In addition, people are happier when they have a larger amount of goods. Of course, the benefactor businessman who wants to defend his benefactor and hunt him in the zoo will be even worse. The question is moral: Do we save a thief who bribed politicians from another time? No. Because he cut off his head. And don’t bribe the media who defend this dirty position against the rest of Argentines.”

But so far the Rothbard thesis advocated by Milei has brought nothing good. Since the beginning of the Libertarian president’s term The number of registered workers in Argentina fell by 276,624 jobs. According to a report published last month by the Center for Argentine Political Economy (CEPA), formal employment fell by 2.81% between November 2023 and August 2025, equivalent more than 432 positions less per day since La Libertad Avanza came to power. The document titled “Analysis of Labor and Business Dynamics” shows that the public sector has been severely affected, consistent with the campaign promise of Milei and his campaign chainsaw, as the “Public Administration, Defense and Compulsory Social Security” category records a loss of 86,982 workers. Despite it, The private sector is hardest hitwith 192,071 jobs lost, with “Construction” (down 76,292), “Transportation and warehousing services” (59,838) and “Manufacturing” (55,941) being the most complicated categories.

Rothbard, Milei’s fetish writer, celebrated business failures.

CEPA is an institute created in 2012 with the aim of intervening in complex economic debates and producing reports, studies and academic works with a high level of technical rigor, based on contributions from the University of Buenos Aires (UBA) and the National University of Rosario (UNR), the Metallurgical Workers Union (UOM), the Federation of Food Workers (FTIA), the Confederation of Industrial Unions of the Republic Argentina (CSIRA) and the Union of Textile, among others Employees and Workers (SETIA). And in his last study The severity of the crisis was reflected in the number of insolvent companies: Between November 2023 and August 2025, the number of companies with registered staff fell from 512,357 to 493,193, accounting for a total of 19,164 fewer companies since Milei’s acquisition. This data confirms that Nearly 30 businesses have closed daily since La Libertad Avanza took office.

On the other hand, also the latest survey by the Argentine Industrial Union (UIA). an important alarm signal is set. The UIA document showed concern in the industry with simultaneous setbacks in activity, employment, supply and financial indicators. The Industrial Performance Monitor (MDI) released last Thursday fell 5.2 points year-on-year and also fell compared to the previous month’s report. All sectors surveyed recorded declines compared to previous surveys and the lowest figures included textiles, metals and footwear. And on the productive level the deterioration was once again clearly reflected: 40.3% of companies reduced their production levels compared to the average of the third quarter, while this only increased by 21.3%. The frequency of companies experiencing declines increased compared to the previous survey and increased year-on-year: most industries exhibited shrinking behavior.

The harmful process that represents Industrial murder for a country, was analyzed in detail by the South Korean Ha-Joon Chang, one of the most influential authors on questions of industrial policy, economic development or what the author calls a criticism of early free trade. In How national industries are being destroyed and what that means for a countryThe economist argues that less developed countries trying to protect their jobs are being harmed by richer countries that have developed by protecting their industries and, once they have become strong, have forced competitors to open their markets, thus destroying their nascent industries. Chang called this paradigm as “Step on the ladder”which in fact promotes the de-industrialization of developing countries.

The professor from the University of Cambridge explains that an industry in a peripheral country can be destroyed by several mechanisms, among which the following stand out: 1. Early business openingbecause the indiscriminate opening of the economy exposes fledgling industries to competition with already efficient global giants; 2. Dismantling the entrepreneurial state, eliminating strategic public companies in the areas of energy, steel, transport, research, disrupting entire production chains; 3. Excessive financial liberalizationthe inflow of speculative capital makes the currency more expensive, favors cheap imports and makes it impossible to compete through exports, leading to finance-induced deindustrialization; and 4. Deliberate lack of protection under international pressureTariff reductions, abolition of subsidies, indiscriminate opening. It must be said that these are exactly the same conditions which are proved by this dramatic hours for the Argentine industry.

The author shows structural consequences that are repeated in almost all countries affected by these “industrial murder” processes. It’s a dangerous circle that starts with a drastic loss of highly productive jobsas the industry is the sector that creates the most skilled and semi-skilled jobs. This phenomenon leads to greater dependence on imports, leading to a chronic balance of payments deficit and macroeconomic vulnerability, which translates into pressure on the dollar, recurrent devaluations and inflation passage and debt cycles. Finally, without work and in the midst of a financial crisis, the average salary begins to fall, informality increases and social inequalities are triggered. It is a paradigm that condemns the country to prioritize exports, which in Argentina is explained by the sale of soybeans, minerals, oil and cheap food or raw materials. It is a reality that Chang describes as “forced re-primarization” and loss of sovereignty due to dependence on external financing and import of technology.

Argentina is quickly falling into this dangerous spiral. But no alarm is going off in the government. On the other hand, the ruling party supports a controversial labor reform that will be discussed in the next extraordinary sessions of Congress and is not concerned about the apparent destruction of jobs. For Milei, the closure of companies is not a problem, but a virtue.