Murray Rothbard

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Murray Rothbard
Western Economists
20th-century Economists
(Austrian Economics)

Rothbard circa 1955
Full name Murray Newton Rothbard
Birth March 2, 1926(1926-03-02) (Bronx, New York, USA)
Death January 7, 1995 (aged 68) (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
Influenced by
Influenced

Murray Newton Rothbard (March 2, 1926 – January 7, 1995) was an American economist of the Austrian School who helped define modern libertarianism and founded a form of free-market anarchism he termed "anarcho-capitalism".[1][2] Rothbard took the Austrian School's emphasis on spontaneous order and condemnation of central planning to an individualist anarchist conclusion.[3]

An individualist anarchist of the Austrian School of economics, Rothbard associated with the Objectivists in his early thirties before allying with the New Left in the 1960s and eventually joining the radical caucus of the Libertarian Party.

Contents

[edit] Life

Rothbard was born to David and Rae Rothbard, who raised their Jewish family in the Bronx. "I grew up in a Communist culture," he recalled.[4] 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. On January 16, 1953, he married JoAnn Schumacher in New York City.

In the course of his life, Rothbard was associated with a number of political thinkers and movements. During the early 1950s, he studied under the Austrian economist Ludwig von Mises, along with George Reisman. Then he began working for the William Volker Fund. During the late 1950s, Rothbard was an associate of Ayn Rand and Nathaniel Branden, a relationship later lampooned in his unpublished play Mozart Was a Red. 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 Williamson 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 Libertarian Party ticket in 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.[citation needed]

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 studied the pre-Adam Smith 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, 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 F. Buckley, Jr., 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 an early supporter of the U.S. Libertarian Party, despite initially opposing it on grounds that it was premature. 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 typology "eliminates the gaps and inconsistencies that appear in Mises's original formulation."[5]

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.[6]

[edit] Anarcho-capitalism

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Main article: Anarcho-capitalism

Capitalism is the fullest expression of anarchism, and anarchism is the fullest expression of capitalism.

—Murray Rothbard[7]

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."[8] Of Spooner and Tucker, Rothbard wrote:

“ 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.[9] ”

Like the nineteenth century individualists, he believed that security should be provided by multiple competing businesses rather than by a tax-funded central agency.[10] 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 containing 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.[11]

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." Instead, he called his philosophy "anarcho-capitalism", though Kevin Carson notes that few contemporary individualist anarchists retain a belief in the labor theory of value, and that "most people who call themselves 'individualist anarchists' today are followers of Murray Rothbard's Austrian economics."[12] Anarcho-capitalist Wendy McElroy, for example, refers to herself as a "Rothbardian and an individualist anarchist."[13]

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

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. In his Power and Market (1970), Rothbard described how a stateless economy would function. He held that 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 a 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 total 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.

Rothard's conception of anarcho-capitalism differed from that of others, most notably that of David D. Friedman, who advocates that law itself—and not merely defense services—be bought and sold on the market. 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] Tactics

Rothbard criticized the "frenzied nihilism" of left-wing libertarians but also criticized right-wing libertarians who were content to rely only on education to bring down the state; he believed that libertarians should adopt any non-immoral tactic available to them in order to bring about liberty.[17]

[edit] Rothbard's law

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

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."

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.[3]

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.[4]

[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,[18] is an attack upon Keynes' economic ideas and personage.

Rothbard was also severely critical of, among others, 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 a chapter of Power and Market 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."[19][20]

[edit] Activism

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Rothbard was highly active in libertarian, Libertarian Radical Caucus, Libertarian International Organization, and especially U.S. Libertarian Party causes. He wrote many of the party's initial manifestos, and, despite initial skepticism on its timeliness, was its first Presidential nominee in a preliminary vote (he declined). He was heavily involved in its first strategic plan, and in using it with the Party as a springboard for what he called 'intellectual entrepreneurship' in building a Libertarian intellectual superstructure. These included activities such as the CATO Institute, the Center for Libertarian Studies, plus a variety of magazines, scholarly dialogues, colloquia, scholar and candidate mentoring initiatives, and journals. He defined Libertarianism as "the interdisciplinary study of individual rights," and wrote several cross-discipline histories detailing many long-forgotten libertarian-interest scientists or events, and co-organized the first international conferences on the subject.

[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.
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Books by Murray Rothbard

[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. ^ Noce, Jaime E. & Miskelly, Matthew (2002). Anarchism. Political Theories for Students (p. 7). The Gale Group, Inc.
  4. ^ Life in the Old Right by Murray N. Rothbard
  5. ^ Ikeda, Sanford. Dyamics of the Mixed Economy: Toward a Theory of Inteventionism. Routledge UK. 1997. p. 245
  6. ^ 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
  7. ^ "Exclusive Interview With Murray Rothbard" The New Banner: A Fortnightly Libertarian Journal (February 25, 1972)
  8. ^ Blackwell Encyclopaedia of Political Thought, 1987, ISBN 0-631-17944-5, p. 290
  9. ^ "The Spooner-Tucker Doctrine: An Economist's View" [1]
  10. ^ (2002) in William Outhwaite: The Blackwell Dictionary of Modern Social Thought, 2nd, Malden, MA: Blackwell Publishers. ISBN 0-631-22164-6. 
  11. ^ Rothbard, Murray. The Spooner-Tucker Doctrine: An Economist's View [2]
  12. ^ Carson, Kevin. Mutualist Political Economy, Preface
  13. ^ McElroy, Wendy. The Passion of Ayn Rand's Critics: The Case Against the Brandens (2005)
  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"
  17. ^ Lora, Ronald & Longton, Henry. 1999. The Conservative Press in Twentieth-Century America. Greenwood Press. p. 369
  18. ^ Full text at mises.org
  19. ^ Why Intellectuals Still Support Socialism - Peter G. Klein - Mises Institute
  20. ^ Chapter 7-Conclusion: Economics and Public Policy

[edit] Further reading

[edit] External links

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