[Delivered at a memorial service at the University of Nevada, Las Vegas, January 20, 1995.]
Murray N. Rothbard (1926–1995) was just one man with a typewriter, but he inspired a worldwide renewal in the scholarship of liberty.
”Give me a short description of his thought and contributions,” said the reporter when this free-market giant died at the age of 68. But how do you sum up Beethoven’s music or Dante’s poetry?
In 45 years of teaching and writing, Rothbard produced 25 books, thousands of articles, and three generations of students. He was a teacher who never stopped learning, an intellectual prize fighter who always punched cleanly. He battled every destructive trend in this century—socialism, statism, relativism, and scientism—and awakened a passion for freedom in thousands of scholars, journalists, and activists. At once a genius and a gentleman, his causes were honesty in scholarship, truth in history, principle in politics, and—first and foremost—human liberty itself.
Filled with laughter and principled beyond measure, Rothbard rejected the compromises and pretensions of the modern world. He was unaffected by intellectual fashion, undeterred by attacks, and untempted by opportunism. Quite simply, nothing stopped him. And as the Happy Warrior of economics, as Forbes called him, he made singular contributions to banking history, price theory, monopoly and antitrust, and business cycles, to name just a few areas.
For many years, he taught economics at Brooklyn Polytechnic Institute, working in a dingy, windowless office on the fifth floor, surrounded by Marxists. He never once complained, except to wonder why an engineering school couldn’t make the elevator work. His admirers celebrated his appointment as the S.J. Hall distinguished Professor of Economics at the University of Nevada, Las Vegas.
Teaching in New York, Las Vegas, Auburn, and at conferences around the world, Rothbard led the renaissance of the Austrian School of economics. He galvanized an academic and popular fight for liberty and property, against the omnipotent State and its court intellectuals.
Like his beloved teacher Mises, Rothbard wrote for the public as well as professionals. “Civilization and human existence are at stake, and to preserve and expand it, high theory and scholarship, though important, are not enough,” he wrote in 1993. “Especially in an age of galloping statism, the classical liberal, the advocate of the free market, has an obligation to carry the struggle to all levels of society.”
Rothbard’s theory was his practice. He was involved in nearly every political and social development of his time, from Robert Taft’s presidential campaign to the 1994 elections. His last article, appearing in the Washington Post, warned that Newt Gingrich is more likely to betray the revolution than lead it.
The Mises Institute is honored that Rothbard headed our academic programs for 13 years. He spoke at all our conferences and teaching seminars, edited our Review of Austrian Economics, consulted on our books and monographs, and wrote for our Free Market. Most of all, he taught and inspired our students, who will carry his ideas into the future.
Rothbard has been compared to the greatest minds in social science, but his wisdom and character led him to show gratitude to his predecessors. His formative intellectual event was the 1949 publication of Mises’s Human Action.
“I had gone through all the doctoral courses at Columbia University,” Rothbard wrote, “without once discovering that there was such a thing as an Austrian School, let alone that Ludwig von Mises was its foremost living champion.” But this book “solved all the problems and inconsistencies that I had sensed in economic theory.”
Rothbard attended Mises’s seminar at New York University from its first meeting, and became the student who would defend and extend Mises’s ideas, push the Austrian School tradition to new heights, and integrate it with political theory. He taught the movement how to write, and was also an important cultural influence.
The Austrian School had previously been a largely European intellectual movement. Mises changed that with his migration to this country. Rothbard completed this process, so that the locus of the school is no longer Europe, but America, the nation whose founding principles Rothbard and Mises so deeply admired.
Man, Economy, and State, Rothbard’s great work, was the key to the resurgence of Austrian economics after Mises’s death. Beginning with the philosophical foundation, Rothbard built an edifice of economic theory and an unassailable case for the market. In many ways, the book rescued economics from its mostly deserved reputation. Instead of the dismal, statist, and incomprehensible pseudoscience students are used to, Rothbard gave us a tightly reasoned, sweeping case for the free market that is still used in classrooms all over the world.
The book treated economics as a humane science, not as a branch of physics. Every page took account of the uncertainty of economic conditions, the certainty of change, and the central place of the entrepreneur, while never losing sight of the implacability of economic law. No wonder Henry Hazlitt, writing in National Review, called it “brilliant and original and profound.”
Since its publication, the treatise has only grown in stature. Through it, Rothbard has taught countless students to think like real economists instead of number crunchers. He explained and applied the logic of human action in economic exchange, and refuted its opponents. Like Mises, he looked not at “economic man,” but acting man who deals with the scarcity of time and resources.
Rothbard breathed life into economic theory with his historical works, and refuted the charge that Austrians are only concerned with high theory. He was also one of the few intellectuals on the Right to champion revisionist history. Other historians have since picked up his works and built on them to create entire schools of thought.
He wrote America’s Great Depression, applying the Misesian theory of the business cycle to refute the most common anticapitalist slander: that the market caused the crash and economic downturn of the 1930s. He showed that the villain was government intervention, in the form of credit expansion and Herbert Hoover’s high wage policies. Paul Johnson adopted the thesis for his Modern Times. He also refuted the then-dominant view of Herbert Hoover as a laissez-faire conservative, by showing that he was actually a premature New Dealer. In journal articles, he showed that the New Deal followed logically from the economic regimentation of World War I and the Progressive Era, which gave us central banking and the income tax.
Rothbard was once asked to write a short book of American history. He agreed, and it eventually appeared. But Conceived in Liberty was four large volumes on the period 1620–1780. His purpose was to highlight forgotten events that demonstrate the libertarian character of our history and people. It is masterful, revisionist, and a pleasure to read. But what happened to the original project? Rothbard explained that he had discovered so much (tax revolts! uprisings! betrayals! power grabs!) that was left out of conventional accounts.
The American revolution threw off tyranny, he argued. It was not simply a continuation of British-style statism in another guise, as Hamilton claimed. The new social order would protect communities, properties, and essential rights. Rothbard also proved to be as proficient a military historian as he was an interpreter of ideological history.
Rothbard hardly let a moment go to waste, teaching through the day and writing through the night. His wife of 41 years, JoAnn, tells of being awakened once by his newest discovery: “That bastard Eli Whitney didn’t invent the cotton gin after all!”
In his work, as in his life, he always sided with the pro-liberty forces against the welfare-warfare State. He especially liked the anti-New Dealers, the anti-imperialists, the Confederates, the anti-federalists, the tax resisters, the underground businessmen, the anti-State pamphleteers, and other unsung heroes. Throughout history the power elite has found profitable uses for the State. Rothbard never passed up a chance to name them, to explain how they did it, and to show how their actions harmed everyone else in society.
Conflict was the central theme of Rothbardian political economy: the State vs. voluntary associations, and the struggle over the ownership and control of property. He showed that property must be in private hands and owners must be free to control it as they see fit. The only logical alternative is the total State. There is no room for a “third-way” like social democracy, the mixed economy, or “good government,” and the attempt to create it is always disruptive.
Power and Market, another enduring contribution, zeroed in on this conflict, and attacked every form of government intervention, confounding one antimarket cliché after another, and defending market competition as essential to social peace. Where others looked for “market failure,” Rothbard found only government flops.
The book discussed the most common intervention in the market: taxation, the direct taking of someone’s property by a group claiming a monopoly on coercion, i.e., the State. The taxing power defines the State in the same way that theft defines a robber.
He also showed that there can be no neutral tax, that is, one that leaves the market exactly as it would be without the tax. All taxes distort. And all taxes are taxes on production and hinder it, even so-called consumption taxes.
Taxation takes capital from private hands and prevents it from being used to serve private interests and the consuming public. This is true regardless of the type of tax. Also, the government spends taxes in ways that alter the production patterns of the market. If money is spent on market-oriented projects, it unjustly competes; if it is spent on nonmarket projects, it is economically inefficient.
Taxes are never “contributions,” he argued. “Precisely because taxation is compulsory there is no way to assure—as is done automatically on the free market—that the amount any person contributes is what he would otherwise be willing to pay.” As Rothbard said, it is not utopian to work for a society without taxation; it is utopian to think that the power to tax won’t be abused once it is granted.
No principle of taxation, he argued, can equal a market system of fairness. A progressive tax discriminates on the basis of income; the rich aren’t forced to pay more for bread than the poor. A flat tax forces the same result, since higher incomes contribute a greater dollar amount than lower ones. The least harmful tax is a head tax or equal tax: a flat fee low enough for even the poorest to pay.
As a steadfast believer in free trade, Rothbard argued that peace between nations cannot rest on negotiations between State managers. Peace is kept by the network of exchange that develops between private parties. This is why he opposed false “free trade” such as Nafta and Gatt, which have more in common with neomercantilism, and he was the first to forecast the disaster Nafta has become.
Interventionists have long used the language of markets to advance statism. Consider antitrust law enforced in the name of “competition.” Rothbard showed that the only authentic monopolies are those created by law: the government subsidizes a producer at others’ expense (public hospitals and schools) or forbids competition altogether (the postal service).
Other forms of monopoly include licensure, that is, deliberately restricting the supply of labor or number of firms in a certain industry. Government monopolies always deliver inferior service at exorbitant prices. And they are “triangular interventions,” because they subsidize one party while preventing others from exchanging as they would in a free market.
He showed that unemployment insurance (actually, unemployment subsidies) increases the number of people out of work. Child labor laws, a favorite of unions and the Department of Labor, subsidize adult employment while preventing young people from gaining valuable work experience. Even eminent domain (“a license for theft”) fails under Rothbard’s property-rights strictures.
What about “intellectual property rights”? Rothbard defended the copyright as a contract made with consumers not to reprint a work, resell it, or falsely attribute the source. A patent on the other hand, is a government grant of monopoly privilege to the first discoverer of certain types of inventions to get to the government patent office.
And under public ownership, he argued, the “public” owns nothing, and the ruling officialdom owns all. “Any citizen who doubts this,” Rothbard suggested, “may try to appropriate for his own individual use his allotted part of ‘public’ property and then try to argue his case in court.”
The government sector focuses on the short run, he argued; there is no such thing as “public-sector investment.” It is only the private sector, which is the real public sector, Rothbard said, where property owners take long-run considerations into account. Unlike government, they preserve the value of resources, and do not plunder or waste them.
In his last scholarly article, he developed the idea of the nation as something separate from either the State or the individual, a collective identity based on language, ethnicity, race, and religion. Rothbard celebrated the post-Cold War emergence of the nation as a countervailing power to the State, and presented the hope that “the brutal and repressive state will be gradually dissolved into a harmonious and increasingly prosperous social order.” It was the final hope of a lifetime of hopes.
Many economists think numbers are the sum of the discipline. Rothbard turned the tables to argue that government data are gathered and used for piecemeal planning and the destruction of the economy. Whatever information markets need about economic conditions can be garnered privately.
A good example is the “trade deficit” between nations, which he said is no more relevant than the trade deficit between towns. There is no justification for assuming that trade must equal out in accounts. The important point is that people are benefiting from exchange, whether across the street or across the world.
Aren’t historical statistics useful for research? Many are misleading. The Gross Domestic Product counts government spending as production, when it should be counted as consumption. Also, government taxing is considered neutral when it’s destructive. Deficits, which drain savings and crowd out production, also need to be accounted for when assessing productivity.
Rothbard looked at private production by subtracting out the government component. The result is the Private Product Remaining, or PPR, which has served scholars as a basis for more accurate historical work. Using the PPR, for example, we see national product increasing at a much slower rate than the GDP, thanks to big government.
Even money-supply statistics were in need of revision in Rothbard’s view. Long before people gave up on the Fed’s ability to generate anything useful (the “M’s” are laughable these days), Rothbard proposed his own measure based on the Austrian School theory of money. It counts cash, deposits easily turned into cash, and all other liquid financial assets.
The State and its banking cartel is the worst possible money manager, Rothbard argued, and free enterprise is the best. He produced many studies on the abuse of money and banking by central bankers and the central State. They include his doctoral thesis, Panic of 1819, Mystery of Banking, and papers on the banking debates of the mid and late 19th century, the monetary debauchery of FDR, the fiasco of Bretton Woods, and the following age of inflation and monetary chaos. Just out is his Case Against the Fed, the best book ever written on the subject.
View the Federal Reserve as a counterfeiting syndicate, and we have Rothbard’s theory of the central bank. But, he pointed out, at least the counterfeiter doesn’t pretend to be working in the public interest, to be smoothing out business cycles, and to be keeping prices stable. He was also the first to analyze in depth and from a free-market perspective the special-interest groups that created the Fed.
Rothbard added to Austrian theory a systematic model for how money is destroyed. The State conspires with the central bank and the banking industry to enhance their mutual power and wealth by devaluation, the equivalent of coin clipping. Little by little, society’s money has less to do with its original form, and eventually it is transformed into paper created out of thin air, to best serve the State’s interest.
As a part of this process, the State intervenes to forbid customers from insisting on 100-percent reserves in checkable deposits. From there, it is progressively easier to move from gold to paper, as has happened in this country from the turn of the century.
Like Mises, Rothbard saw inflation as a policy pursued by the banking industry in league with the government. Those who get the newly created money first—banks, government, institutional securities traders, and government contractors, for example—win out because they can spend it before prices go up and investments are distorted. Those who get the new money later lose.
A Rothbardian gold standard is no watered-down version. He wanted convertibility at home and abroad. Only that system—which would put depositors in charge of insuring the financial soundness of the banking system—can prevent the Fed’s monetary depredations, which have reduced the value of the 1913 dollar to 5 cents today.
The ultimate guarantor against inflation is a private banking system with private coinage, a great American system that was squeezed out by the central State. Rothbard’s writings on money and banking—extensive and deep—may eventually become the single most influential aspect of his thought.
Economists rarely talk about liberty and private property and even less about what constitutes just ownership. Rothbard did, arguing that property acquired through confiscation, whether by private criminals or the State, is unjustly owned. (He also pointed out that bureaucrats pay no taxes, since their entire salaries are taxes.)
Ethics of Liberty was his moral defense. “Liberty of the individual,” Rothbard wrote, is “not only a great moral good in itself” but “also as the necessary condition for the flowering of all the other goods that mankind cherishes”: virtue, the arts and sciences, economic prosperity, civilization itself. “Out of liberty, stem the glories of civilized life.”
Once we understand why private property should be inviolable, troublesome notions fall by the wayside. There can be no “civil rights” apart from property rights, because the necessary freedom to exclude is abolished. “Voting rights” are also a fiction, which—depending on how they are used—can also diminish freedom. Even the “right to immigrate” is phony: “On whose property does someone else have the right to trample?” he asked.
Thus, the Rothbardian social order is no ACLU free-for-all. The security of property provides lines of authority, restraints on behavior, and guarantees of order. The result is social peace and prosperity. The conflicts we face today, from affirmative action to environmentalism, are the result of false rights being put ahead of private property.
In defense of capitalism, Rothbard was uncompromising. But he did not see the market as the be-all and end-all of the social order. For him, capitalism was not a “system,” but a consequence of the natural order of liberty. Neither “growth” nor “greed” is the capitalist ideal. In the free economy, leisure and charity are goods like any other, to be “purchased” by giving up alternative uses of time and money.
And with growing prosperity the need for material goods falls relative to nonmaterial goods. “Rather than foster ‘material’ values, then, advancing capitalism does just the opposite.” No society has ever been as grasping and greedy as the Soviet Union, although the Left is still trying to convince us that State power equals compassion.
A Rothbardian world would be a world without politics. But Murray was no dropout, and in fact loved politics. Who else could write a 5,000-word essay on a random week of electoral life in New York City, and make every word fascinating?
His political writings date from the early 1950s, when he wrote for Faith and Freedom, a hard-Right, isolationist publication. In articles on the evils of the military buildup, he warned that American liberty would be sacrificed to the Cold War.
That led to his break with the Buckleyites, who ridiculed him and his ideas. They never took him on directly; they were smarter than that. Instead, they smeared him in private, and tried to deny him publishing and speaking opportunities.
As editor of Left and Right and Libertarian Forum, Rothbard also predicted that the Cold War would someday end because Soviet socialism would collapse. But, he said, the American military machine would keep on cranking out the planes and bombs. The real threat, he maintained, was not foreign Communism, but US militarism and socialism, which would do what the Soviets never could: steal our liberty.
Rothbard developed a large and growing audience for such views, and continued with this theme for the Rothbard-Rockwell Report, writing against US military interventions in Panama, the Gulf, Somalia, Rwanda, and Bosnia. As the official Left and Right pushed for a New World Order, Rothbard, exasperated, suggested we save time and just invade the entire globe.
Well, here we are 40 years after Rothbard began his foreign-policy writings. The warfare State is as big as ever, and so is the welfare State. National Review—which has always cozied up to power, and, like other neoconservatives, even holds up the dictators Lincoln and Roosevelt for our admiration—is still cheerleading the Republican establishment to new levels of hypocrisy. And we can see that Rothbard was right all along: right about the military, right about politics, right about the Buckleyite conservatives and their love of State power.
That is why Rothbard has triumphed in the end. Despite its attempt to purge and destroy him, National Review‘s influence on the intellectual world hasn’t come close to Rothbard’s. And when the Buckleyites are long forgotten, Rothbard’s authority will not have begun to peak.
For Rothbard, politics and criminal behavior are largely the same enterprise, to be treated with the same investigative rigor. Every day required another whodunit. His motivation in political writing was exposing crime and denouncing criminals.
Some people say that Rothbard’s politics were all over the map. That is not true. He set the political standard as liberty itself, and worked with anyone who pursued it. At the height of the Vietnam War, for example, when the official Right was countenancing mass murder, he looked to the New Left as a vehicle for stopping this most vicious form of statism.
But as the Cold War ended, Rothbard was overjoyed to reunite with the remnants of the Old Right. After he was in paleoconservative circles only a few months, we began to witness new ideological hybrids springing up: anarcho-Southern agrarianism, anarcho-anti-federalism, anarcho-protectionism, and anarcho-monarchism. Their advocates were his colleagues, and he was their conscience.
Rothbard’s political thought is simple at its core but astounding in its application. He believed that common moral strictures, and standards of evaluation, should apply to the State.
If theft is wrong, it is wrong. The same goes for murder, kidnapping, lying, and fraud. They are as wrong for the State as for everyone else.
“Always and ever,” he wrote, “the government and its rulers and operators have been considered above the general moral law.” It is this that Rothbard’s right-wing “anarchism” was devoted to ending: he wanted to make government subject to the rule of law. But Rothbard was no Utopian; his view was that government power should be limited in any way possible, and he worked to make it so.
His pioneering studies of private courts predated the popularity of private arbiters. (Rothbard wanted to abolish “jury slavery” and force courts to pay a market wage.) His work on private law enforcement predated the popularity of home protection and private security. His promotion of private roads predated their wide use in suburbs and malls. His promotion of private schools predated the anti-public school revolt.
What Rothbard wrote about Mises applies in his case as well:
never would Mises compromise his principles, never would he bow the knee to a quest for respectability or social or political favor. As a scholar, as an economist, and as a person, Ludwig von Mises was a joy and an inspiration, an exemplar for us all.
Like Mises, Rothbard gave up money and fame in academic economics to promote what is true and right. And he set all who knew him an example of how a man should live his life.
The Mises Institute was blessed to be associated with him, and he credited the Institute with having “at last forged an Austrian revival that Mises would be truly proud of.”
Rothbard’s ideas and character, like those of Mises, must be always before us, and before new generations as well. The Mises Institute will ensure that it is so. We are still discovering the breadth and depth of Rothbard’s literary legacy, with the publication of volumes one and two of Rothbard’s history of economic thought, put out by Edward Elgar shortly after his death. It is the most important work of its kind since Joseph Schumpeter’s.
Whereas other texts pretend to be an uninterrupted march toward higher levels of truth, Rothbard illuminated a history of unknown geniuses and lost knowledge, of respected charlatans and honored fallacies.
Later in 1995, a two-volume compilation of his important economic articles, totaling more than 1,000 pages, will appear in Elgar’s “Economists of the 20th Century” series edited by Mark Blaug. In addition, there are unpublished manuscripts, articles, and letters to fill many more volumes.
From Menger to Rothbard, Austrian School economists have argued that man is motivated by much more than mere self-interest and profit maximization. If the neoclassicals emphasize homo economicus, the Austrian School studies homo agens, the person who acts for a wide variety of reasons, including those that have nothing to do with material gain.
Murray N. Rothbard was empirical proof that the Austrian theory is correct. In his professional and personal life, he always put classical virtues ahead of his private interest. His generosity, his constancy, and his faith helped make him not only a giant among scholars, but also a giant among men.
His acts of charity were uncountable. How many times have I seen a student approach him at one or two in the morning at a teaching conference and ask a question about the gold standard, or economics as a purely logical science? He had been asked the same thing a thousand times before, but that student would never know it, as Rothbard enthusiastically explained everything.
Many, myself included, were schooled in economics, politics, philosophy, history, and much more at his feet. If his beneficiaries defaulted on their debts to him, as they so often did, he would shrug it off.
In an age of Limbaughvian self-promotion, Rothbard always pointed beyond himself, and never tired of extolling the greatness of his beloved teacher, Ludwig von Mises.
He never wanted, nor would he have tolerated, a cult of Rothbard. He lived to see the emergence and development of Rothbardian political economy, but he never once acknowledged its existence. Even his demeanor suggested this. Was there ever a genius with so little pretension?
Rothbard took ideas so seriously that he refuted even the most idiotic thoughts from the most irrelevant sources. How few of these people realized that he was paying them the ultimate compliment: treating them as if they were his equals.
Rothbard never sought academic or popular prestige. A first look at his bibliography seems to reveal a prolific genius with little marketing sense. But that was the point: despite his promotion of the free market, Rothbard never let the market determine what he would think or say. He adhered to what is right regardless of self-interest.
Imagine, for example, the courage it took to carry on the American isolationist tradition—almost single-handedly—in a time of hysterical pro-war propaganda.
He could have given up his anti-interventionism in foreign policy and been a big shot in conservatism. He might have been National Review‘s favorite intellectual. Who knows? He might have even made the pages of Commentary. Or he could have given up his free-market and strict private-property views, or at least downplayed them, and been rewarded by the Left. At the height of the Vietnam War, this would have made him a star at the Nation.
Some say that Rothbard’s constancy was a vice, that he refused to change his mind. In fact, no one was more ready for correction. In recent years, to take just one example, he wrote that he had neglected the cultural foundations of liberty, and cheered those who hadn’t.
In a contradictory accusation, others have said that Rothbard’s consistency is a myth, that in his long political life he swung from Right to Left to Right. This is a smear. In moral and cultural matters, he was always a reactionary. In politics, Rothbard’s constancy was based on his belief in the primacy of foreign policy. When a nation becomes an empire, he argued, the prospects for liberty are nil. Look for the opponents of war and imperialism during his life, and there you would find Rothbard.
One final trait of Rothbard’s: he was a man of faith. He believed that there is order in the universe, that natural law is real and intractable, that truth exists and that it can set us free. His faith was the faith of all men who have put ideals ahead of selfish concerns.
If we are to live up to Rothbard’s example, what must we do? Read and research and produce quality scholarship, commit ourselves to promoting liberty and fighting the State, act on our convictions with tireless energy, never sell out, never give in, and never forget that we will win in the end.
We have one other duty. Without him here to object, we can at last tell the truth about the world-historical figure that was Murray N. Rothbard, who now belongs to the ages.