Murray Rothbard

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Western Economists
20th-century Economists
(Austrian Economics)
Rothbard circa 1955
Name: Murray Newton Rothbard
Birth: March 2, 1926 (Bronx, New York, USA)
Death: January 7, 1995 (New York City, New York, USA)
School/tradition: Austrian economics
Main interests: Economics, Political economy, Anarchism, Natural law, Praxeology, Numismatics, Philosophy of law, Ethics, Economic history
Notable ideas: Founder of Anarcho-capitalism, Rothbard's law, largely influenced Agorism
Influences: Mises, Menger, Böhm-Bawerk, Molinari, Hayek, Say, spooner, Tucker, Bastiat, Spencer, Nock, Oppenheimer, Locke, Laozi, Mencken, Burke, Kuhn
Influenced: Hoppe, Friedman, Rockwell, Konkin, Narveson, Heath, Callahan, Raico, Salerno, Sobran, McElroy, Tucker, Bylund, Long, Caplan, Murphy, Lottieri, Woods, Kinsella, Nozick, Molyneux, Thornton, Horton, Hülsmann, Raimondo, DiLorenzo

Murray Newton Rothbard (March 2, 1926 – January 7, 1995) was a highly influential American economist, historian and natural law theorist belonging to the Austrian School of Economics who helped define modern libertarianism and anarcho-capitalism.[1][2] He was son of David and Rae Rothbard. On January 16, 1953, he was married to JoAnn Schumacher in New York City.

Contents

[edit] Life

Rothbard was born into a Jewish family in the Bronx. "I grew up in a Communist culture," he recalled. [Raimondo p 23] He attended Columbia University, where he was awarded a Bachelor of Arts degree in mathematics (1945), a Master of Arts degree (1946), and a Doctor of Philosophy degree in economics in 1956.

In the course of his life, Rothbard was associated with a number of political thinkers and movements. During the early 1950s, he studied with the Austrian economists Ludwig von Mises and George Reisman. Then he began working for the William Volker Fund. During the late 1950s, Rothbard was briefly an intimate of Ayn Rand and Nathaniel Branden. In the late 1960s, Rothbard advocated an alliance with the New Left anti-war movement, on the grounds that the conservative movement had been completely subsumed by the statist establishment. However Rothbard later criticized the New Left for not truly being against the draft and supporting a "People's Republic" style draft. It was during this phase that he associated with Karl Hess and founded Left and Right: A Journal of Libertarian Thought with Leonard Liggio and George Resch, which existed from 1965 to 1968. From 1969 to 1984 he edited the Libertarian Forum, also initially with Hess (although Hess' involvement ended in 1971). In 1977, he established the Journal of Libertarian Studies, which he edited until his death in 1995.

During the 1970s and '80s, Rothbard was active in the Libertarian Party. He was frequently involved in the party's internal politics: from 1978 to 1983, he was associated with the Libertarian Party Radical Caucus (later reorganized as the Rothbard Caucus), allying himself with Justin Raimondo, and Bill Evers and opposing the "low tax liberalism" espoused by 1980 presidential candidate Ed Clark and Cato Institute president Edward H Crane III. He split with the Radical Caucus at the 1983 national convention, and aligned himself with what he called the "rightwing populist" wing of the party, notably Ron Paul, who ran for President on the LP ticket 1988. In 1989, Rothbard left the Libertarian Party and began building bridges to the post-Cold War right. He was the founding president of the conservative-libertarian John Randolph Club and supported the presidential campaign of Pat Buchanan in 1992. However, prior to his death in Manhattan of a heart attack, Rothbard had become disillusioned with the Buchanan movement.

In addition to his work on economics and political theory, Rothbard also wrote on economic history. He is one of the few economic authors who have studied and presented the pre-Smithian economic schools, such as the scholastics and the physiocrats. These are discussed in his unfinished, multi-volume work, An Austrian Perspective on the History of Economic Thought.

Rothbard opposed what he considered the overspecialization of the academy and sought to fuse the disciplines of economics, history, ethics, and political science to create a "science of liberty," as reflected in his many books and articles. His approach was influenced by the arguments of Ludwig von Mises in such books as Human Action and Theory and History that the foundations of the social sciences are in a logic of human action that can be known prior to empirical investigation. Rothbard sought to use such insights to guide historical research, especially in his work on economic history, but also in his four-volume history of the American Revolution, Conceived in Liberty.

He was the academic vice president of the Ludwig von Mises Institute and the Center for Libertarian Studies (which he founded in 1976), was a distinguished professor at the University of Nevada, Las Vegas, and edited the Rothbard-Rockwell Report with Lew Rockwell.

[edit] The Austrian School

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Main article: Austrian School

The Austrian School of economics was founded with the publication of Carl Menger's 1871 book Principles of Economics. Members of this school approach economics as an a priori system like logic or mathematics, rather than as an empirical science like geology. It attempts to discover axioms of human action (called "praxeology" in the Austrian tradition) and make deductions therefrom. Some of these praxeological axioms are:

  • Humans act purposefully.
  • Humans prefer more of a good to less.
  • Humans prefer to receive a good sooner rather than later.
  • Each party to a trade benefits ex ante.

Even in the early days, Austrian economics was used as a theoretical weapon against socialism and statist socialist policy. Eugen von Böhm-Bawerk, a colleague of Menger, wrote one of the first critiques of socialism ever written in his treatise The Exploitation Theory of Socialism-Communism. Later, Friedrich Hayek wrote The Road to Serfdom, asserting that a command economy destroys the information function of prices, and that authority over the economy leads to totalitarianism. Another very influential Austrian economist was Ludwig von Mises, author of the praxeological work Human Action.

Murray Rothbard, a student of Mises, is the man who attempted to meld Austrian economics with classical liberalism and individualist anarchism, and is credited with coining the term "anarcho-capitalism". He was probably the first to use "libertarian" in its current (U.S.) pro-capitalist sense. He was a trained economist, but also knowledgeable in history and political philosophy. When young, he considered himself part of the Old Right, an anti-statist and anti-interventionist branch of the U.S. Republican party. When interventionist cold warriors of the National Review, such as William Buckley, gained influence in the Republican party in the 1950s, Rothbard quit that group and formed an alliance with left-wing antiwar groups. Later, Rothbard was a founder of the U.S. Libertarian Party. In the late 1950s, Rothbard was briefly involved with Ayn Rand's Objectivism, but later had a falling out. Rothbard's books, such as Man, Economy, and State, Power and Market, The Ethics of Liberty, and For a New Liberty, are considered by some to be classics of natural law libertarian thought.

Rothbard divides the various kinds of state intervention in three categories:

  1. autistic intervention, which is interference with private non-exchange activities
  2. binary intervention, which is forced exchange between individuals and the state
  3. triangular intervention, which is state-mandated exchange between individuals.

According to Sanford Ikeda, Rothbard's topology "eliminates the gaps and inconstitencies that appear in Mises's original formulation."[3]

Rothbard argued that the entire Austrian economic theory is the working out of the logical implications of the fact that humans engage in purposeful action.[4]

[edit] Anarcho-capitalism

Main article: anarcho-capitalism

"Capitalism is the fullest expression of anarchism, and anarchism is the fullest expression of capitalism." -Murray Rothbard

– [5]

Rothbard was "a student and disciple of the Austrian economist Ludwig von Mises, [who] combined the laissez-faire economics of his teacher with the absolutist views of human rights and rejection of the state he had absorbed from studying the individualist American anarchists of the nineteenth century such as Lysander Spooner and Benjamin Tucker."[6] Rothbard said:

“ Lysander Spooner and Benjamin T. Tucker were unsurpassed as political philosophers and nothing is more needed today than a revival and development of the largely forgotten legacy they left to political philosophy...There is, in the body of thought known as 'Austrian economics', a scientific explanation of the workings of the free market (and of the consequences of government intervention in that market) which individualist anarchists could easily incorporate into their political and social Weltanschauung.[7] ”

Like the nineteenth century individualists, he believed that security should be provided by multiple competing businesses rather than by a tax-funded central agency.[8] However, he rejected their labor theory of value in favor of the modern neo-classical marginalist view. Thus, like most modern economists, he did not believe that prices in a free market would, or should be, proportional to labor (nor that "usury" or "exploitation" necessarily occurs where they are disproportionate). Instead, he believed that different prices of goods and services in a market, whether completely free or not, are ultimately the result of goods and services having different marginal utilities rather than the fact they contain differing amounts of labor - and that there is nothing unjust about this. Rothbard also disagreed with Tucker that interest would disappear with unregulated banking and money issuance. Rothbard believed that people in general do not wish to lend their money to others without compensation, so there is no reason why this would change where banking is unregulated. Nor, did he agree that unregulated banking would increase the supply of money because he believed the supply of money in a truly free market is self-regulating. And, he believed that it is good that it would not increase the supply or inflation would result.[9] Rothbard said he was "strongly tempted to call [himself] an “individualist anarchist," except he believed that "Spooner and Tucker have in a sense preempted that name for their doctrine and that from that doctrine I have certain differences." So, he chose to call his philosophy "anarcho-capitalism." However, today, the term "individualist anarchism" has in fact not been preempted by the nineteenth century individualists, because a wide range of scholars do say that anarcho-capitalism is a capitalist form of individualist anarchism.[10] According to mutualist, Kevin Carson who subscribes to the old theories, few individualist anarchists still agree with the labor theory of value of the nineteenth century individualists or their theories on money, and as a result, "most people who call themselves 'individualist anarchists' today are followers of Murray Rothbard's Austrian economics."[11] For example, anarcho-capitalist Wendy McElroy refers to herself as a "Rothbardian and an individualist anarchist."[12]

Cover of the 2004 edition of "Man, Economy, and State".
Cover of the 2004 edition of "Man, Economy, and State".

Anarchists who are not individualist anarchists oppose the idea that private defense could be compatible with anarchism.[citation needed] It was in 1949 that Rothbard first concluded that the free market could provide all services, including police, courts, and defense services better than could the State. Prior to this it was advocated by nineteen century individualist anarchists such as Benjamin Tucker, whose writings were an influence on Rothard[13] Prior to this it was advocated by Gustave de Molinari who Rothbard calls the first anarcho-capitalist. Rothbard described the moral basis for his anarcho-capitalist position in two of his books, For a New Liberty, published in 1972, and The Ethics of Liberty, published in 1982. He described how a stateless economy would function in his book Power and Market. According to Rothbard, the difference between a state and voluntary defense is that a state taxes and it enforces a territorial monopoly, over property that it does not own (private property), on the use of defense and punitive force. Private defense relies on voluntary payments and it does not forcefully prevent other private defenders from competing for business. For example, if someone subscribed to private police agency, and someone had broken into that person's home, then that individual could call the private police to come to the home and arrest the intruder and take him to a private jail and private court. A state claims a monopoly over such force on property that anarcho-capitalists do not believe that the state owns (e.g. the person's home); it does not permit this kind of competition, by definition.

In The Ethics of Liberty, Rothbard asserted the right of 100 percent self-ownership, as the only principle compatible with a moral code that applies to every person - a "universal ethic" - and that it is a natural law by being what is naturally best for man.[14] He believed that, as a result, individuals owned the fruits of their labor. Accordingly, each person had the right to exchange his property with others. He believed that if an individual mixes his labor with unowned land then he is the proper owner, and from that point on it is private property that may only exchange hands by trade or gift. He also argued that such land would tend not to remain unused unless it makes economic sense to not put it to use.[15] Rothbard defined the libertarian position through what is called the non-aggression principle, that "No person may aggress against anybody else." Rothbard attacked taxation as theft, because it was taking someone else's property without his consent. Further, conscription was slavery, and war was murder. Rothbard also opposed compulsory jury service and involuntary mental hospitalization.

It must be noted that there are other versions of anarcho-capitalism besides Rothard's version. For example David D. Friedman's anarcho-capitalism advocates that law itself be bought and sold in the market, rather than just defense services. In Rothbardian anarcho-capitalism, there would first be the implementation of a mutually agreed-upon libertarian "legal code which would be generally accepted, and which the courts would pledge themselves to follow."[16] This legal code would recognize sovereignty of the individual and the principle of non-aggression.

[edit] Rothbard's law

Rothbard's law is a self-attributed adage. In essence, Rothbard suggested that an otherwise talented individual would specialize and focus in an area at which they were weaker—or simply flat out wrong. Or as he often put it: "everyone specializes in what he is worst at."

Cover from the first volume of the 2006 Mises Institute edition of An Austrian Perspective on the History of Economic Thought
Cover from the first volume of the 2006 Mises Institute edition of An Austrian Perspective on the History of Economic Thought

In one example, he discusses his time spent with Ludwig von Mises,

In all the years I attended his seminar and was with him, he never talked about foreign policy. If he was an interventionist on foreign affairs, I never knew it. This is a violation of Rothbard's law, which is that people tend to specialize in what they are worst at. Henry George, for example, is great on everything but land, so therefore he writes about land 90% of the time. Friedman is great except on money, so he concentrates on money. Mises, however, and Kirzner too, always did what they were best at.

Continuing on this point,

There was another group coming up in the sixties, students of Robert LeFevre's Freedom School and later Rampart College. At one meeting, Friedman and Tullock were brought in for a week, I had planned to have them lecture on occupational licensing and on ocean privatization, respectively. Unfortunately, they spoke on these subjects for 30 minutes and then rode their hobby horses, monetary theory and public choice, the rest of the time. I immediately clashed with Friedman. He had read my America's Great Depression and was furious that he was suddenly meeting all these Rothbardians. He didn't know such things existed.

[edit] Criticism of Keynes and Bentham

Rothbard was an ardent critic of the influential economist John Maynard Keynes and Keynesian economic thought. His essay Keynes, the Man[3], is a scathing attack upon Keynes' economic ideas and personage.

Rothbard, among others, was also severely critical of utilitarian philosopher Jeremy Bentham in his essay, Jeremy Bentham: The Utilitarian as Big Brother published in his work, Classical Economics.

[edit] Economists and the free market

  • Murray Rothbard devotes an interesting chapter of Man, Economy, and State, to the traditional role of the economist in public life. Rothbard notes that the functions of the economist on the free market differ strongly from those of the economist on the hampered market. "What can the economist do on the purely free market?" Rothbard asks. "He can explain the workings of the market economy (a vital task, especially since the untutored person tends to regard the market economy as sheer chaos), but he can do little else." [4]

[edit] Books

Cover of the Mises Institute's 2000 edition of America's Great Depression.
Cover of the Mises Institute's 2000 edition of America's Great Depression.

[edit] Notes

  1. ^ (1991) in Miller, David: Blackwell Encyclopaedia of Political Thought. Blackwell Publishing. ISBN 0-631-17944-5. 
  2. ^ Wendy McElroy. Murray N. Rothbard: Mr. Libertarian. Lew Rockwell. July 6, 2000..
  3. ^ Ikeda, Sanford. Dyamics of the Mixed Economy: Toward a Theory of Inteventionism. Routledge UK. 1997. p. 245
  4. ^ Grimm, Curtis M.; Hunn, Lee; Smith, Ken G. Strategy as Action: Competitive Dynamics and Competitive Advantage. New York Oxford University Press (US). 2006. p. 43
  5. ^ Exclusive Interview With Murray Rothbard The New Banner: A Fortnightly Libertarian Journal (25 February 1972)
  6. ^ Blackwell Encyclopaedia of Political Thought, 1987, ISBN 0-631-17944-5, p. 290
  7. ^ "The Spooner-Tucker Doctrine: An Economist's View" [1]
  8. ^ (2002) in William Outhwaite: The Blackwell Dictionary of Modern Social Thought, 2nd, Malden, MA: Blackwell Publishers. ISBN 0-631-22164-6. 
  9. ^ Rothbard, Murray. The Spooner-Tucker Doctrine: An Economist's View [2]
  10. ^ Such accounts specifying anarcho-capitalism as a form of individualist anarchism include:
    • Alan and Trombley, Stephen (Eds.) Bullock, The Norton Dictionary of Modern Thought, W. W. Norton & Company (1999), p. 30
    • Outhwaite, William. The Blackwell Dictionary of Modern Social Thought, Anarchism entry, p. 21, 2002.
    • Bottomore, Tom. Dictionary of Marxist Thought, Anarchism entry, 1991.
    • Barry, Norman. Modern Political Theory, 2000, Palgrave, p. 70
    • Adams, Ian. Political Ideology Today, Manchester University Press (2002) ISBN 0-7190-6020-6, p. 135
    • Grant, Moyra. Key Ideas in Politics, Nelson Thomas 2003 ISBN 0-7487-7096-8, p. 91
    • Heider, Ulrike. Anarchism: Left, Right, and Green, City Lights, 1994. p. 3.
    • Geoffrey Ostergaard. Resisting the Nation State - the anarchist and pacifist tradition, Anarchism As A Tradition of Political Thought. Peace Pledge Union Publications
    • Avrich, Paul. Anarchist Voices: An Oral History of Anarchism in America, Abridged Paperback Edition (1996), p. 282
    • Sheehan, Sean. Anarchism, Reaktion Books, 2004, p. 39
    • Tormey, Simon. Anti-Capitalism, One World, 2004. pp. 118-119
    • Levy, Carl. Anarchism, Microsoft® Encarta® Online Encyclopedia 2006 [4] MS Encarta (UK)
    • Blackwell Encyclopaedia of Political Thought, 1987, ISBN 0-631-17944-5, p. 11
    • Gabardi, Wayne of University of California, Santa Barbara. Review of Anarchism by David Miller (London: J. J. Dent and Sons, 1984. pp 216). American Political Science Review Vol. 80. p. 300
    • Review in Journal of Economic Literature (JEL 83-1167, p. 1620) of David Osterfeld's Freedom, Society, and the State, University Press of America, 1983
    • Sturgis, Amy. Presidents from Hayes Through McKinley: Debating the Issues in Pro and Con Primay Documents. Westport, Conn Greenwood Publishing Group, 2003, p.2
    • Love, Nancy Sue. Dogmas and Dreams: A Reader in Modern Political Ideologies Chatham House Studies in Political Thinking. Chatham, N.J. Chatham House, an imprint of Seven Bridges, 1998 p. 357
    • Raico, Ralph. Authentic German Liberalism of the 19th Century, Ecole Polytechnique, Centre de Recherce en Epistemologie Appliquee, Unité associée au CNRS, 2004.
    • Offer, John. Herbert Spencer: Critical Assessments, Routledge (UK) (2000), p. 243
  11. ^ Carson, Kevin. Mutualist Political Economy, Preface
  12. ^ McElroy, Wendy. The Passion of Ayn Rand's Critics: The Case Against the Brandens (2005)
  13. ^ Tucker said, "[D]efense is a service like any other service; that it is labor both useful and desired, and therefore an economic commodity subject to the law of supply and demand; that in a free market this commodity would be furnished at the cost of production; that, competition prevailing, patronage would go to those who furnished the best article at the lowest price; that the production and sale of this commodity are now monopolized by the State; and that the State, like almost all monopolists, charges exorbitant prices." Tucker, Benjamin. "Instead of a Book" (1893). Also, "Anarchism does not exclude prisons, officials, military, or other symbols of force. It merely demands that non-invasive men shall not be made the victims of such force. Anarchism is not the reign of love, but the reign of justice. It does not signify the abolition of force-symbols but the application of force to real invaders." Tucker, Benjamin. Liberty October 19, 1891
  14. ^ Rothbard, Murray Newton. The Ethics of Liberty. NYU Press. 2003. pp. 45 - 45
  15. ^ Kyriazi, Harold. Reckoning With Rothbard (2004). American Journal of Economics and Sociology 63 (2), p. 451
  16. ^ Rothbard, Murray. For A New Liberty. 12 The Public Sector, III: Police, Law, and the Courts

[edit] Further reading

[edit] External links

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