On the 100th anniversary
of Murray N. Rothbard’s birthday

“It is no crime to be ignorant of economics… But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”

 

Murray N. Rothbard
March 2, 1926 – January 7, 1995

TAKE AWAY

Even without teaching at one of the prestigious US universities, Murray N. Rothbard could still reach out to a wide audience of scholars, students, and the general public. Arguably among the most seminal minds of the predominately US based 5th generation of the Austrian School, he was a central figure in the US Libertarian movement and a prolific author with over 20 books and hundreds of scholarly essays to his credit. His work includes classics like Man, Economy, and State (1962), America’s Great Depression (1963), Power and Market (1970), For a New Liberty (1973), Conceived in Liberty (1976), The Ethics of Liberty (1982) or The Mystery of Banking (1983). Rothbard’s scholarship comprised a variety of scholarly subjects. His literary output was unified by his passionate, yet thoughtful dedication to the study of individual freedom, including the intrinsic problem of Self-Ownership. He died in New York on January 7, 1995.

Birth and early years

Always ready to take on an argument, the ever young and enviably prolific Murray N. Rothbard was born exactly 100 years ago in New York City on March 2, 1926. However, sadly and much too early he died at age 68 of cardiac arrest in his home town just a bit more than 30 years ago. On the 100 th anniversary of Rothbard’s birth, a few brief commemorative pages are in order.

Rothbard was born into a family of eastern European immigrants and grew up in the Bronx, one of the 5 boroughs of New York City where a deeply leftist milieu dominated the culture of the Jewish middle-class. Because he was bullied in public schools Rothbard’s parents put him into the private Birch Wathen Lennox School, where he soon started to thrive academically and developed an interest in the anti-militaristic and state-skeptical works by Ayn Rand (1905-1982) or Albert J. Nock (1870-1945) and others. While most of his friends were stuck in naive socialist perceptions, Rothbard began to study free market literature. He attended Columbia University in New York and received his BA in mathematics in 1945, but switched to economics the same year. His PhD dissertation on The Panic of 1819, was delayed for almost 10 years due to an unfair and unprecedented academic obstruction procedure at Columbia comprising a combination of ideological conflict with his advisor, the historian Joseph Dorfman and the rebuff of his thesis by Arthur Burns (1904-1987). Burns, a family friend of the Rothbard’s who later served as chairman of the Federal Reserve (FED) held up his dissertation mostly on grounds of Rothbard’s firm rejection of economic interventionism in mainstream economics. Rothbard could only advance his academic career after Burns left Columbia in 1953 to head Eisenhower’s Council of Economic Advisors.

George J. Stigler (1911-1991, Nobel Prize 1982), at the time at Columbia introduced Rothbard to the newly established think tank The Foundation of Economic Education (FEE), where he was attracted to the works of Ludwig von Mises (1881-1973) and a number of libertarian journalists such as Henry Hazlitt, Leonard Read (founder of FEE), Albert Jay Nock, Rose Wilder Lane or Frank Chodorow. When L.v. Mises at last was permitted to conduct his weekly seminar at New York University in 1949, Rothbard immediately signed up and tried hard not missing one session. This seminar and the so-called Circle Bastiat, where Rothbard, Leonard Liggio, Ralph Raico, George Reisman, Robert Hessen, Ronald Hamowy, Israel Kirzner or Bettina and Percy Greaves among others regularly met, provided an important focal point for making the Austrian School of Economics known in the US. These meetings coincided with the publication of Mises’ Human Action. A Treatise on Economics (1949), the English translation of his magnum opus Nationalökonomie. Theorie des Handelns und Wirtschaftens (Geneva 1940, 1984, 2013). Although first published in neutral Switzerland, but due to the Nazi terror and WWII raging across Europe the German original could not reach a wider readership.

Academic struggles and major works

Over the years, Rothbard’s uncompromising position of rejecting any socio-economic state interventions and his radical anti-state views branded him an academic outsider. His unyielding stand made it impossible for him to find even a minor teaching job. However, following Mises’ recommendation, the private William Volker Fund employed Rothbard first as a Book Reviewer and several years later as a Senior Analyst with the task of writing a textbook that could be used to introduce college undergraduates to the Austrian School of Economics. For well over 10 years the Volker Fund’s patronage allowed Rothbard to work mostly from home as a freelancer. Among the countless important essays on economic history, on economics and methodological problems, only his 1956 essay ‘Toward a Reconstruction of Utility and Welfare’ should be mentioned here. Building on the theoretical framework of the Austrian School he showed that utility is something that we can know only by observing individual preferences revealed through human action. Utility, for him is a strictly ordinal and subjective concept that cannot be aggregated.

However his main task at the Volker Fund resulted in his seminal book Man, Economy, and State. A Treatise on Economic Principles (1962). This is a comprehensive critique of government coercion that was praised by L. v. Mises as “an epochal contribution to the general science of human action, praxeology and economics.”

Just a year later he published yet another classic: America’s Great Depression (1963), where he not only blamed the U.S. government policy failures for causing the destructive Great Depression, which lasted roughly from 1929 to 1939. Here he also rejected the still prevailing view that free markets were unstable and thus needed the state to intervene. Applying Carl Menger’s theory of the development of monetary institutions, E. v. Boehm-Bawerk’s theories of capital and time-preference of interest, and Mises’ methodology and his trade cycle theory, he made it clear in these two works, that neither recessions nor depressions are an inevitable part of free market systems. More to the point, he argued that these crises were mainly caused by central bank inflationary policies, the corresponding distortion of interest rates and malinvestment of capital and price increases that go with it.

Due to an unwarranted power struggle within the management of the Volker Fund, F.A. Harper’s and Murray Rothbard’s work contracts were suddenly terminated and the Fund eventually moved to Burlingame (CA) where it dissolved in the late 1970s. This left him without a job for a while. However, it seems as if Rothbard’s uncompromising criticism of interventionist US foreign policy and the Vietnam War made him unexpectedly acceptable for some left-wing academics. It was mainly for these reasons that he finally was offered a modest part-time job teaching economics to engineering students at Brooklyn Polytechnic Institute  starting in 1966. Although this institution had neither an economics department nor an economics majors program and was mainly staffed with hard-core Keynesians and even Marxists, he liked teaching at Brooklyn Polytechnic. Working only two days a week gave Rothbard the time to contribute to many path-breaking developments in libertarian ideas and politics. Rothbard continued to teach there until 1986 when, thanks to a generous endowment made by the successful lumber entrepreneur and free-market philanthropist Sherwood James Hall, he was finally offered a regular and decently paid professorship at the University of Nevada, Las Vegas. He held the title of S.J. Hall Distinguished Professor of Economics until his death in 1995.

Philosophy and political theory

Murray N. Rothbard was an amazingly prolific author with over 20 books, several hundred scholarly essays on economics, methodology or the history of economic thought, let alone countless book reviews or political articles, etc. to his credit. His enormous literary output comprising a vast variety of subjects is unified by one fundamental topic: His passionate, yet judicious dedication to the study of individual freedom, including the philosophically difficult problem of Self-Ownership. For Rothbard, personal freedom is rooted in human nature. Due to the fact that people are equipped with the ability to think, they also are accountable and liable for their actions and behavior. Thus he interprets personal responsibility as self-ownership, in other words people belong to themselves and everything that they create must also belong to them, i.e. they have legal control over the product of their work. This argument is no different from other classic defenses of free markets.

However, Rothbard’s conclusions is different: People who act independently create all the necessary social institutions through agreements and contracts on a voluntary basis, be it courts, police, schools or other cultural institutions. In his major work on political philosophy, The Ethics of Liberty (1982) he clarifies the Principle of Self-Ownership, as an a priori axiom. I.e. if one denies that each human being owns her of his own body, one must logically hold that some people own others, which logically accounts for slavery. Based on this argument, however he claims that states or governments engaging in compulsory measures stand in sharp (and illogic) contrast to their firm rejection of slavery. A military draft, the mandatory taxation or most other government enforced public duties serve as examples. Rothbard’s The Ethics of Liberty is a significant contribution to political philosophy, and yet, at times it leaves the reader plenty of room to disagree.

In his book Power and Market (1970/1977), he expanded L.v. Mises’ comprehensive critique of government coercion by developing three distinctly different and, politically not always very practical categories of state intervention: autistic, binary and triangular. Accordingly, an autistic intervention prevents a person from exercising control over his own person or property, as with homicide or infringements on free speech. A binary intervention for him is a coerced exchange between an invader and her/his victim. He used cases of a highway robbery or the mandated income tax as examples. In the triangular intervention, an invader forces two people to make an exchange or prohibits them from doing so. Here he referred to political instruments such as rent control or the fiercely debated minimum wages.

Libertarianism and institutional legacy

Already from the late 1950s on, but especially during the Vietnam War, which he vigorously opposed, Rothbard endeavored to apply his theoretical work to current politics and developed the political idea of libertarianism. He used this term that first appeared in the literature in the early 1950s, in order to merge the concept of ‘self-ownership’ and the rejection of state tolerated coercion or violence in the forms of drafts or wars on moral grounds with his consistent refutation of any use of state intervention on economic grounds. Although libertarianism by its nature has diverse directions and wings, and like most political theories cannot be viewed as a strictly unified movement, Rothbard played a decisive role in the foundation of the ‘Libertarian Party’. Following intense discussions between Rothbard, John Hospers (USC), Ed Crane, Manuel Klausner among others and financed by David Koch (Koch Industries), the Libertarian Party was founded in 1971 in Westminster (CO). Ed Crane is credited with building the party from scratch. Rothbard’s book For A New Liberty (1973) more or less reflects the political platform of the newly established party and is a popular account of libertarian ideas.

In an effort to widen the influence of libertarian thought in the academic world, Rothbard founded the Journal of Libertarian Studies in 1977 and inaugurated its publication auspiciously with a symposium on Robert Nozick’s path-breaking book, Anarchy, State, and Utopia (1974). The Journal of Libertarian Studies has remained the most important journal welcoming to libertarian ideas, both popular and academic. About 10 years later in 1987 Rothbard founded yet another successful journal, the Review of Austrian Economics. Although it appears since 1997 under the new name Quarterly Journal of Austrian Economics, to date it is still the key academic journal for scholars of all disciplines interested in the Austrian School of Economics.

Murray N. Rothbard, was a wonderfully humorous, pleasant and knowledgeable companion and colleague. His academic and journalistic achievements were exceptional with well over 20 books and hundreds of academic essays and popular articles. He was the primary intellectual influence in founding the U.S. Libertarian Party, whose ‘godfather’ he continued to be until he broke with it a few years before his death.
A sample of his political columns is available under the title The Irrepressible Rothbard (2000). Rothbard died in New York of cardiac arrest on January 7, 1995. Most of his works are still in print and readily available.