Javier Milei did not mince words at the United Nations. Speaking before the General Assembly, Argentina’s president called the UN a “useless organization” and attacked what he regards as an entrenched international bureaucracy. The language is characteristically Milei, but behind the rhetoric lies a more fundamental economic problem: the problem of economic calculation.
It is easy enough to identify things the United Nations does that most people would regard as beneficial. UN agencies vaccinate children, feed people during famines, assist refugees, and conduct peacekeeping operations. Research has found evidence that peacekeeping can reduce civilian casualties and battlefield deaths. Such evidence makes it difficult to sustain the literal proposition that everything the UN does is useless.
But Ludwig von Mises’s critique of bureaucratic allocation points to a different question. Observing a beneficial outcome does not tell us whether the resources used to produce it were economically employed. A program can produce something desirable while consuming resources that individuals would have valued more highly in some other use. Outside a market process, there is no reliable mechanism for discovering the difference.
Where Is the Market Test?
A private business faces an unforgiving test. Consumers decide whether to purchase its product, investors decide whether to risk their capital, and competitors attempt to provide alternatives. Profit and loss provide information about whether scarce resources are being transformed into outputs consumers value more highly than the alternatives sacrificed to produce them.
An international bureaucracy does not face the same test. Its revenues come largely from governments, whose revenues in turn come substantially through taxation rather than voluntary purchases. The taxpayer cannot ordinarily refuse the UN service and retain his share of the money. There is therefore no market transaction revealing that those surrendering the resources value the resulting services more highly than the alternative uses of those resources.
One might instead attempt to measure whether the UN’s “social benefits” exceed its costs, but this encounters the same problem. It assumes that social benefits can be assigned a value and compared with monetary expenditures. Without voluntary exchange and market prices for the relevant outputs, there is no profit-and-loss calculation capable of making that comparison.
$66 Billion Without Profit and Loss
The UN system reported approximately $66 billion in expenses in 2024. About $7.6 billion was classified as “enabling functions,” including executive direction, communications, legal affairs, oversight, information technology, finance, administration, procurement, security, and human resources. These figures tell us how many resources were consumed; they cannot tell us whether those resources were employed economically.
Every large organization requires administrators, accountants, managers, technology, and procurement. The question is how much. In a private enterprise, excessive administrative costs eventually confront profit and loss. If customers will not pay enough to cover the resources consumed, management must change or capital disappears. A bureaucracy can measure its administrative spending and outcomes, but it lacks the same mechanism for discovering whether those resources would have been more valuable elsewhere.
UN compensation illustrates the problem. Professional compensation is benchmarked under the Noblemaire principle against the highest-paid national civil service, currently the US federal civil service. There may be reasonable explanations for relatively high compensation: international organizations compete for specialized workers, employees relocate across countries, and some serve in difficult locations. But in a competitive firm, compensation ultimately confronts a profitability constraint. No equivalent market signal tells the UN whether an additional employee produces value greater than the resources required to employ that person.
What UN80 Can—and Cannot—Tell Us
The United Nations itself is attempting to reduce duplication and administrative costs through its UN80 initiative, which includes consolidating administrative platforms, relocating some functions to lower-cost locations, reorganizing operations, and reviewing mandates accumulated over decades.
Suppose these reforms reduce staffing and expenditures while the UN distributes the same amount of food, vaccinates the same number of children, and performs roughly the same peacekeeping activities. That would provide useful evidence about technical efficiency: the organization previously consumed more resources to produce similar measured outputs. But it would not tell us whether the remaining expenditure is economically justified.
The reverse is also true. If spending reductions resulted in fewer vaccinations or refugee services, that would show that the cuts reduced particular outputs. It would not establish that taxpayers valued the additional output more highly than the goods and services that could have been produced with those resources. Empirical analysis can measure expenditures, outputs, and technical efficiency, but it cannot manufacture the market valuation that voluntary exchange would have revealed.
Milei’s Deeper Point
This is why output should not be confused with economic value. Reports issued, meetings held, vaccines delivered, refugees assisted, and peacekeepers deployed tell us what an organization did. They do not tell us whether the resulting benefits exceeded the opportunity cost of the resources consumed.
Nor can a sufficiently sophisticated cost-benefit model completely solve the problem. Assigning monetary estimates to lives saved, conflicts prevented, or refugees assisted may provide useful information, but those estimates do not reproduce the choices individuals would have made with their own resources.
Milei’s description of the United Nations as useless is therefore too sweeping if interpreted literally. A child who receives a vaccine has received something useful, and a refugee who receives food has received something useful. But usefulness is not the same thing as economic value. A more fundamental economic criticism of the UN is not that economists have calculated its social return and discovered that it is negative. It is that no such calculation is available.
The institution consumes scarce resources without the system of voluntary exchange, market prices, and profit and loss that enables market participants to discover whether resources are moving toward more highly valued uses. UN80 may expose duplication and waste, and those discoveries matter, but it cannot tell us the economically correct size of the United Nations. That is not merely a problem of inefficient management; it is the problem of economic calculation.
