In The Theory of Money and Credit, Mises provided the basics for the long-sought explanation for that mysterious and troubling economic phenomenon — the business cycle.
In The Theory of Money and Credit, Mises provided the basics for the long-sought explanation for that mysterious and troubling economic phenomenon — the business cycle.
Tom Woods discusses the life of Murray Rothbard with Lew Rockwell:
Jeff Deist and David Gordon discuss Murray N. Rothbard’s life from an insider’s perspective, touching on Rothbard’s experience founding the Cato Institute, his relationship with Mises and the areas where they disagreed, his time with Ayn Rand and her Objectivist followers, and more.
Historian Julian Zelizer writes that Watergate-style investigations are OK sometimes, but we shouldn’t go overboard in being mistrustful of the government. After all, “faith in government,” Zelizer writes, “is necessary for a healthy society.” As Rothbard notes below, the watergate scandal was an excellent event precisely because it undermined faith in government. Zelizer, however, tells us to “banish the memories of Watergate” so we can get over all this unhealthy suspicion of government.
Often, this outlook [of suspicion of government] has salutary effects by encouraging politicians to make sure that similar levels of corruption don’t happen again.
But, too often, as many would say has been the case with the IRS, stories of administrative mismanagement are blown out of proportion, consuming Washington’s time and taking their attention away from major problems.
The worst effect of Watergate is that it created a climate where Americans fundamentally don’t trust their government. It is one thing to be suspicious, another to reject altogether. Recent approval ratings for Congress tanked to 7% and for the President 29%. This is part of the broader trend we have seen since the 1960s.
It is extremely difficult for government to do its job or for voters to have the kind of faith in government, which is necessary for a healthy society.
Writing in 1973, on the other hand, Murray Rothbard took a rather different view. In his “Notes on Watergate” Rothbard early on saw some of the benefits of the scandal, and comparing Rothbard’s view here with the current situation we can draw a few conclusions:
Notes on Watergate The Libertarian Forum Volume V, NO. 5, May, 1973 by MNR
NOTES ON WATERGATE
By Murray N. Rothbard
This first appeared in The Libertarian Forum, Volume V, NO.5, May 1973
No doubt about it: we were dead wrong in pooh-poohing the political significance of Watergate (Nov. 1972). In our defense, however, Watergate remained a minor caper of piddling proportions until James W. McCord, Jr., under the hammer blows of Judge “Maximum John” Sirica, broke and began to implicate the higher-ups.
Mises Daily Weekend by Murray Rothbard
A stateless society is not a lawless one. Apologists for the state maintain that state-made legislation is indispensable, but in this essay, Rothbard explores Bruno Leoni’s call for a return to the ancient traditions and principles of “judge-made law” as a method of limiting the state and insuring liberty.
[A selection from Power and Market.]
By Murray N. Rothbard
Laborers may also ask for geographical grants of oligopoly in the form of immigration restrictions. In the free market the inexorable trend is to equalize wage rates for the same value-productive work all over the earth. This trend is dependent on two modes of adjustment: businesses flocking from high-wage to low-wage areas, and workers flowing from low-wage to high-wage areas. Immigration restrictions are an attempt to gain restrictionist wage rates for the inhabitants of an area. They constitute a restriction rather than monopoly because (a) in the labor force, each worker owns himself, and therefore the restrictionists have no control over the whole of the supply of labor; and (b) the supply of labor is large in relation to the possible variability in the hours of an individual worker, i.e., a worker cannot, like a monopolist, take advantage of the restriction by increasing his output to take up the slack, and hence obtaining a higher price is not determined by the elasticity of the demand curve. A higher price is obtained in any case by the restriction of the supply of labor. There is a connexity throughout the entire labor market; labor markets are linked with each other in different occupations, and the general wage rate (in contrast to the rate in specific industries) is determined by the total supply of all labor, as compared with the various demand curves for different types of labor in different industries. A reduced total supply of labor in an area will thus tend to shift all the various supply curves for individual labor factors to the left, thus increasing wage rates all around.
Immigration restrictions, therefore, may earn restrictionist wage rates for all people in the restricted area, although clearly the greatest relative gainers will be those who would have directly competed in the labor market with the potential immigrants. They gain at the expense of the excluded people, who are forced to accept lower-paying jobs at home.
Murray Rothbard writes in today’s Mises Daily:
The “realism” of the goal can only be challenged by a critique of the goal itself, not in the problem of how to attain it. Then, after we have decided on the goal, we face the entirely separate strategic question of how to attain that goal as rapidly as possible, how to build a movement to attain it, etc.
Thus, William Lloyd Garrison was not being “unrealistic” when, in the 1830s, he raised the glorious standard of immediate emancipation of the slaves. His goal was the proper one, and his strategic realism came in the fact that he did not expect his goal to be quickly reached. Or, as Garrison himself distinguished,
Urge immediate abolition as earnestly as we may, it will, alas! be gradual abolition in the end. We have never said that slavery would be overthrown by a single blow; that it ought to be, we shall always contend. (The Liberator, August 13, 1831)
By Murray N. Rothbard
[Rothbard's 1991 introduction to "Freedom, Inequality, Primitivism, and the Division of Labor," which was written in 1970.]
In the two decades since this essay was written, the major social trends I analyzed have accelerated, seemingly at an exponential rate. The flight away from socialism and central planning begun in Yugoslavia has stunningly succeeded over the entire “socialist bloc” of Eastern Europe, and there is now at least rhetorical allegiance to the idea of privatization and a free-market economy. More and more, Marxism has become confined to the academics of the United States and Western Europe, comfortably ensconced as parasites upon their capitalist economies. But even among academics, there is almost nothing left of the triumphalist Marxism of the 1930s and 40s, with their boasts of the economic efficiency and superiority of socialist central planning. Instead, even the most dedicated Marxists now pay lip service to the necessity of some sort of “market,” however restricted by government.
Working for the Volker Fund during the 1950s and early 1960s provided Murray Rothbard with the opportunity to read and write reviews and memos on hundreds of books on the social sciences, especially economic theory and political economy. Happily this amazing treasure trove of Rothbardiana is available in the Rothbard archives housed at the Mises Institute.
While employed by the Volker Fund, Rothbard was also hard at work researching and writing his great treatise on economic theory, Man, Economy, and State. Rothbard thus was not only reading widely but also thinking deeply about economic theory and method, as he sought to deduce new theorems to advance the mainline Austrian theoretical tradition originated by Carl Menger. This tradition included not only native Austrians like Bohm-Bawerk, Mises, and Hayek but Anglo-American economists such as Philip Wicksteed, Edwin Cannan, Lionel Robbins, William Hutt, John Bates Clark, Frank A. Fetter, and Herbert Davenport.
In 1960, the 34-year old Rothbard read an economic textbook by Clark Lee Allen, James M. Buchanan, and Marshall R. Colberg. In a memo to Ivan R. Bierly of the Volker Fund, Rothbard wrote: “The more I read of the general, all-around works of the ‘Chicago School’ of economics, the less I am impressed.” Regarding the Allen, Buchanan, and Colberg book in particular, Rothbard commented, “I was impressed neither by the technical economic analysis nor by the more politico-economic sections.” Read More→
Writing in Forbes, Bill Bonner notes that “the financial scam that every American falls for” is the one in which politicians promise to improve economic outcomes using politics. “Rare was the man,” he writes, “such as Robert Lucas or Murray Rothbard, who pointed out that you could not really improve economic results with political means.” He continues:
There are economic means, and there are political means. There is persuasion and there is force. There are civilized ways and barbaric ones. Read More→
How Murray Rothbard Became a Libertarian
Editor’s Note: This is a transcript of this video recorded in 1981.
NARRATOR: A prolific author and Austrian economist, Murray Rothbard promoted a form of free-market anarchism he called “Anarcho-Capitalism.”
In this talk, given at the 1981 National Libertarian Party Convention, Rothbard tells the story of how he came to learn about economics and Libertarianism as he grew up in the Bronx and attended Columbia University in the 1930s and ’40s. He reminisces about meeting Frank Chodorov, Baldy Harper, George Stigler and Ludwig von Mises, and takes a number of audience questions.
ANNOUNCER: You’ve read a lot about Murray. You’ve probably read some of the things he’s done for the movement, some of the things that he’s always been so excellent at, keeping us in line. He’s radical, he’s charming, and he is warm. And also, he and I can see eye to eye, so we don’t have to adjust the microphone.
Now in ebook format or paperback: The Gold Standard: Perspectives in the Austrian School
The world’s financial system is in a precarious state, and everywhere the cry is heard for reform. But a reform to what? More government created fiat money under a new name? The contributors to this notable anthology think not and argue for one particular sort of reform, a return to the gold standard. They all agree that a genuine free market would gravitate toward a gold standard.
Murray Rothard states that any commodity used as money must have value in a non-monetary use. Roger Garrison dismantles the objection that a paper money is cheaper, and less wasteful, than a gold standard. Joe Salerno untangles the web of international finance . By far the most effective political advocate of the gold standard has been Ron Paul, and here he summarizes his proposals for monetary reform. Other contributors include Richard Ebeling on Mises and the gold standard, Hans Sennholz on Carl Menger’s monetary writings, and Lawrence White on free banking and money.
The Gold Standard presents cutting-edge scholarship on the best and most effective monetary system. If you want to understand the gold standard, you need to read this book.
By Murray Rothbard
[Editor’s Note: This is a Selection from “Nations by Consent:Decomposing the Nation-State”]
The “nation,” of course, is not the same thing as the state, a difference that earlier libertarians and classical liberals such as Ludwig von Mises and Albert Jay Nock understood full well. Contemporary libertarians often assume, mistakenly, that individuals are bound to each other only by the nexus of market exchange. They forget that everyone is necessarily born into a family, a language, and a culture. Every person is born into one or several overlapping communities, usually including an ethnic group, with specific values, cultures, religious beliefs, and traditions. He is generally born into a “country.” He is always born into a specific historical context of time and place, meaning neighborhood and land area.
The modern European nation-state, the typical “major power,” began not as a nation at all, but as an “imperial” conquest of one nationality- usually at the “center” of the resulting country, and based in the capital city-over other nationalities at the periphery. Since a “nation” is a complex of subjective feelings of nationality based on objective realities, the imperial central states have had varying degrees of success in forging among their subject nationalities at the periphery a sense of national unity incorporating submission to the imperial center. In Great Britain, the English have never truly eradicated national aspirations among the submerged Celtic nationalities, the Scots and the Welsh, although Cornish nationalism seems to have been mostly stamped out. In Spain, the conquering Castilians, based in Madrid, have never managed-as the world saw at the Barcelona Olympics-to erase nationalism among the Catalans, the Basques, or even the Galicians or Andalusians. The French, moving out from their base in Paris, have never totally tamed the Bretons, the Basques, or the people of the Languedoc.
It is now well known that the collapse of the centralizing and imperial Russian Soviet Union has lifted the lid on the dozens of previously suppressed nationalisms within the former U.S.S.R., and it is now becoming clear that Russia itself, or rather “the Russian Federated Republic,” is simply a slightly older imperial formation in which the Russians, moving out from their Moscow center, forcibly incorporated many nationalities including the Tartars, the Yakuts, the Chechens, and many others. Much of the U.S.S.R. stemmed from imperial Russian conquest in the nineteenth century, during which the clashing Russians and British managed to carve up much of central Asia.
If you’re still wondering if the US Constitution of 1787 failed to protect liberty, then just look around you. That scrap of parchment is an obvious failure. The US government is the hugest government in the world and meddles in the lives of its citizens (and people worldwide) in every way imaginable. The government accepts no limits on its power whatsoever. The president rules by decree.
This isn’t done under some new constitution. This is all done under the 1787 one. Lots of liberty activists argue that the Supreme Court is just reading the document incorrectly, but one simply cannot deny that virtually everyone in government, as well as most of the general population, is perfectly fine with most of what government does today, and thinks it’s constitutional. If one can plausibly claim that the constitution authorizes most of what the US government does today, then the document’s language is obviously feeble, ineffective, and useless for the purposes of preserving liberty.
Even among those “constitutionalist” types, many of whom are militarists, you’ll find plenty of support for unconstitutional measures such as a standing army, drug prohibition, and other government programs beloved by conservatives, but which are obviously not authorized by the enumerated powers of the constitution.
Rothbard had this figured out a long time ago:
From any libertarian, or even conservative, point of view, it has failed and failed abysmally; for let us never forget that every one of the despotic incursions on man’s rights in this century, before, during and after the New Deal, have received the official stamp of Constitutional blessing.
At a recent meeting of Students for Liberty, John Stossel spoke to some students of Rothbard:
Kelly Kidwell, a sophomore from Tulane University, said, “Regardless of what its intent was, we still have the (big) government that we have now — so the Constitution has either provided for that government, or failed to prevent it.”
Mises Institute President Jeff Deist is interviewed in today’s Mises Daily:
Deist: At the time a small group of Austro-libertarian students had assembled in Las Vegas to study under Murray. With the addition of Hans Hoppe, UNLV clearly had become the top economics program in the US for graduate students interested in Austrian training. I was able to attend a few of Murray’s course lectures, which not surprisingly (to those familiar with his lifestyle) were held in the evening! Needless to say the lectures were fast-paced and filled with references beyond the mainstream, giving only a hint of Murray’s vast range of knowledge. Encouraged by Joe and his excitement for Rothbard’s teaching, I decided to explore further.
At the time I was already a committed libertarian, but lacked any real intellectual framework to integrate free market economics with ethics, philosophy, law, and political liberty.
Remember that much of what passed for free-market or libertarian thought at the time remained mired in 1980s Reaganite clichés. Supply-side economics was still the focus of the Right, with many otherwise sensible people talking about the Laffer Curve and maximizing tax revenue! Quasi-utilitarian arguments flourished in the economics mainstream, ceding the intellectual high ground in favor of arguments that free markets merely “worked” better.
Nicholas Kristof writes in the Sunday New York Times about the decline of the public intellectual. “Some of the smartest thinkers on problems at home and around the world are university professors, but most of them just don’t matter in today’s great debates.” As Kristof rightly points out, in many academic disciplines, career success comes exclusively from publications in peer-reviewed journals. Writing and speaking for a popular audience, trying to influence journalists or policymakers, and even using blogs and social media are seen as distractions at best, pandering at worst. I once had a colleague who, as a junior professor, got an opinion piece published in the Wall Street Journal. “There goes his shot at tenure!” was the snarky reply from the senior faculty.
Of course, the great scholars of the Austrian tradition never took this position. Carl Menger started his career as a financial journalist and, after achieving international fame with his Principles of Economics, took a position as tutor to the Austro-Hungarian Crown Prince. Böhm-Bawerk was not only an eminent scholar but a vigorous participant in public debates and three-time minister of finance in the Austro-Hungarian empire. Mises spent most of his career as chief economist for the Vienna Chamber of Commerce, where he spent his days advising businessmen and government officials, his nights and weekends producing his seminal academic articles and books. Murray Rothbard, besides contributing original theoretical and empirical works in economic theory, the philosophy of science, political economy, and US economic history, was a prolific writer of popular articles and books, a frequent speaker, and a tireless organizer for popular as well as scholarly causes.
The Mises Institute has, since its founding in 1982, pursued a three-way mission emphasizing academic research, teaching, and public outreach. Our faculty include top established and emerging scholars in Austrian economics who are working to develop, integrate, and advance the great tradition established by Menger. They publish in our Quarterly Journal of Austrian Economics and other peer-reviewed journals, present and discuss their work at our Austrian Economics Research Conference and other professional meetings, and otherwise keep the Austrian tradition healthy and strong. But our scholars also contribute to our Mises Daily series, they speak at our outreach conferences, and otherwise work to make the lessons of the Austrian school accessible and relevant to the problems and issues of our day. You can also find their work on our blog, on the Mises View, and wherever else good ideas are discussed. Scholarship is central to our mission, but so is relevance. Perhaps Kristof’s lament will spur other academics to do likewise and embrace the role of public intellectual.
by Murray Rothbard
If, as libertarians believe, every individual has the right to own his person and property, it then follows that he has the right to employ violence to defend himself against the violence of criminal aggressors. But for some odd reason, liberals have systematically tried to deprive innocent persons of the means for defending themselves against aggression. Despite the fact that the Second Amendment to the Constitution guarantees that “the right of the people to keep and bear arms shall not be infringed,” the government has systematically eroded much of this right. Thus, in New YorkState, as in most other states, the Sullivan Law prohibits the carrying of “concealed weapons” without a license issued by the authorities. Not only has the carrying of guns been grievously restricted by this unconstitutional edict, but the government has extended this prohibition to almost any object that could possibly serve as a weapon — even those that could only be used for self-defense. As a result, potential victims of crime have been barred from carrying knives, tear-gas pens, or even hatpins, and people who have used such weapons in defending themselves against assault have themselves been prosecuted by the authorities. In the cities, this invasive prohibition against concealed [p. 115] weapons has in effect stripped victims of any possible self-defense against crime. (It is true that there is no official prohibition against carrying an unconcealed weapon, but a man in New York City who, several years ago, tested the law by walking the streets carrying a rifle was promptly arrested for “disturbing the peace.”) Furthermore, victims are so hamstrung by provisions against “undue” force in self-defense that the criminal is automatically handed an enormous built-in advantage by the existing legal system.
It should be clear that no physical object is in itself aggressive; any object, whether it be a gun, a knife, or a stick, can be used for aggression, for defense, or for numerous other purposes unconnected with crime. It makes no more sense to outlaw or restrict the purchase and ownership of guns than it does to outlaw the possession of knives, clubs, hatpins, or stones. And how are all of these objects to be outlawed, and if outlawed, how is the prohibition to be enforced? Instead of pursuing innocent people carrying or possessing various objects, then, the law should be concerned with combatting and apprehending real criminals.
There is, moreover, another consideration which reinforces our conclusion. If guns are restricted or outlawed, there is no reason to expect that determined criminals are going to pay much attention to the law. The criminals, then, will always be able to purchase and carry guns; it will only be their innocent victims who will suffer from the solicitous liberalism that imposes laws against guns and other weapons. Just as drugs, gambling, and pornography should be made legal, so too should guns and any other objects that might serve as weapons of self-defense.
In a notable article attacking control of handguns (the type of gun liberals most want to restrict), St. Louis University law professor Don B. Kates, Jr., chides his fellow liberals for not applying the same logic to guns that they use for marijuana laws. Thus, he points out that there are over fifty million handgun owners in America today, and that, based on polls and past experience, from two-thirds to over eighty percent of Americans would fail to comply with a ban on handguns. The inevitable result, as in the case of sex and marijuana laws, would be harsh penalties and yet highly selective enforcement — breeding disrespect for the law and law enforcement agencies. And the law would be enforced selectively against those people whom the authorities didn’t like: “Enforcement becomes progressively more haphazard until at last the laws are used only against those who are unpopular with the police. We hardly need to be reminded of the odious search and seizure tactics police and government agents have often resorted to in order to trap [p. 116] violators of these laws.” Kates adds that “if these arguments seem familiar, it is probably because they parallel the standard liberal argument against pot laws.”
Kates then adds a highly perceptive insight into this curious liberal blind spot. For:
Gun prohibition is the brainchild of white middle-class liberals who are oblivious to the situation of poor and minority people living in areas where the police have given up on crime control. Such liberals weren’t upset about marijuana laws, either, in the fifties when the busts were confined to the ghettos. Secure in well-policed suburbs or high-security apartments guarded by Pinkertons (whom no one proposes to disarm), the oblivious liberal derides gun ownership as “an anachronism from the Old West.”
by Jacob Huebert
Murray Rothbard, the great libertarian theorist and economist, hated Goodfellas. He especially hated the depiction of gangsters as “psychotic punks” whose violence was “random, gratuitous, pointless.”
He preferred the Godfather films, where the gangsters never engaged in violence “for the Hell of it, or for random kicks,” but only used it to enforce contracts the government police and courts wouldn’t uphold.
For Rothbard, Goodfellas’ unflattering portrait of gangsters was practically a smear on libertarianism itself. According to him, “[o]rganized crime is essentially anarcho-capitalist, a productive industry struggling to govern itself,” which provides consumers with products — such as gambling, drugs, prostitution, imports — that the government has arbitrarily and unjustly made illegal. So he was offended by Goodfellas, where the “organized” criminals are little different from “street” criminals and are defeated by the cops in the end.
Some libertarians may dislike Goodfellas director Martin Scorsese’s latest, The Wolf of Wall Street, for similar reasons.
This film tells the story of a stockbroker, Jordan Belfort (Leonard DiCaprio), who cares about nothing but money and gratifying himself. His startup Long Island brokerage takes off when he and his cohorts start pushing penny stocks on working-class investors by cold-calling them and convincing them they can get rich quick by investing in purportedly great companies that are actually terrible. Belfort makes even more money by using third parties to invest in some of the companies whose stock he pushes and stashes the profits in a Swiss bank account.
Meanwhile, Belfort and his colleagues’ lust for money leads quickly to Caligula-style decadence, with non-stop sex-and-drug parties in and out of the office, which the movie dwells on at length.
Just as Goodfellas never acknowledged the valuable services Rothbard believed the Mafia historically performed, The Wolf of Wall Street never acknowledges the essential service that stockbrokers provide in a market economy. A character played by Matthew McConaughey — who, like Alec Baldwin in Glengarry Glen Ross, appears just once early on to deliver a memorable greed-stoking speech — claims that stockbrokers don’t “create” anything but just pointlessly move money around while taking a cut for themselves.
William Anderson Walter Block Per Bylund John Cochran Jeff Deist Thomas DiLorenzo Carmen Elena Dorobăț Gary Galles David Gordon Jeffrey Herbener Robert Higgs Randall Holcombe David Howden Jörg Guido Hülsmann Peter Klein Hunter Lewis Matt McCaffrey Ryan McMaken Thorsten Polleit Joseph Salerno Timothy Terrell Mark Thornton Hunt Tooley Christopher Westley