Why Graduate Students Not Only Should, but MUST Read Rothbard's Man, Economy and State

|Peter Boettke|

When I teach my PhD course in the Austrian Theory of the Market Process I assign four required books that in my opinion students must master to make a contribution to the this literature --- Mises, Human Action; Hayek, Individualism and Economic Order; Kirzner, Competition and Entrepreneurship; and Rothbard, Man, Economy and State.  I have written before about how Rothbard's vision has guided much of my own research and teaching career despite what others may believe, here and here.

But in stressing the captivating aspects of Rothbard's vision of a free society, I run the risk of giving the impression that I discount the analytical contributions that he made to economics in Man, Economy and State.*  An important point to stress is that at the time of its publication, Rothbard's book represented the state of the art in what Henry Hazlitt called "orthodox economics".  The young Rothbard had read and absorbed not only the teachings of the classical economists and the writers in the Austrian tradition, but was completely aware of all the developments in property rights economics, law and economics, public choice, Chicago economics, and of course he was deeply knowledgable of his intellectual opponents from Marxist, to Institutionalist, to Georgists, and of course Keynesianism.  The footnotes in Man, Economy and State demand very careful study to get a full sense of the amazing range of Rothbard's learning as an economist and social philosopher.  The first 66 pages of the book might still be the most straightforward discussion of the economic way of thinking one can find anywhere.  And, of course, there are great discussions of price formation (as opposed to determination), production and entrepreneurship, competition and monopoly, money and the business cycle, and public economics and political economy.

My copies of Human Action; Man, Economy and State; and The Wealth of Nations are held together with masking tape and various efforts at rebinding for a reason.  The Road to Serfdom, The Constitution of Liberty, and Individualism and Economic Order are pretty worn, but nothing like the condition of those other 3 books.  Only Don Lavoie's National Economic Planning is the other book on my shelves that is in that same condition due to continuous reading and consulting over the years.  Graduate students who do not devote themselves to serious study of Man, Economy and State, will do themselves a great disservice in their economic education, perhaps one they will never be able to recover from and thus they will be lesser economists as a result.

-------------------------

*Chris Coyne and I attempt to highlight Rothbard's contributions to the economic analysis of socialism in theory and in practice here.  In writing that paper, again the amazing and awe inspiring fact was how much Rothbard had mastered in the literature on comparative economic systems, and also how he anticipated subsequent developments in the field in the 1960s-1980s.

Comments

[Lode Cossaer]

Maybe related. I often make the point that, concerning economic theory, there is no such thing as a 'Rothbardian', only 'Misesians', in the sense that the relevant differences between Rothbard & Mises aren't big enough to talk about a big shift (as the differences between Mises and Bohm-Bawerk or Menger are).

Of course; discussing names is often irrelevant, but I was wondering if you could shed some light on that.

Totally unrelated: why do you read Wealth of nations so much? What's in there that is worth searching for, given the fact that there are oppurtunitycosts to reading and studying it?

Anyway: awesome post.

[Niko]

I doubt there were any significant advancements in economics in the last 50 years. Just as the Soviet Union, economics muddled through, always promising new ways by which the state could increase its revenue and your neighbor won’t get richer than you are.

Looking at new forms of economics, like institutional, geographic, experimental, asymmetric something etc, there is nothing that can stand the test of time. I once said here that Stiglitz and Samuelson made no contributions to their science and I still maintain my position. Krugman is largely an error, raised to preeminence because of the state of extreme primitivism in which economics was when he made his splash. Experimental economics is largely useless, has no head or tail and Vernon Smith, when he is intelligible, sounds like Luther talking about predestination. Modern monetary theory is a huge mess, and Bernacke is its best product. He is applying state of the current art and this art fails miserably.

Every five or so years something comes along, creates a big splash and some new perennial candidates to a memorial Nobel prize, only to fail again. Huge computational power is committed to calculate the future, based on the past or some other holly grails and yet there are still crises and unemployment.

They say it is good to have a Nobel prize, so there will always be some form of credential to people that say that price fixing is wrong, yet it is OK to fix interest rates and have minimum wages and protectionism and socialized health care. And they wonder why some real scientists are ashamed to stay near them at Nobel decoration.

Useless science, with stupid people too full of themselves to see the pain they caused. There were more peopled killed by wrong economic theories than by nuclear bombs and dynamite and, worst yet, most in peace time. A bunch of psychopaths.

PS: I don't think there is something more ugly and dangerous than current economic science.

[Ryan M]

"Maybe related. I often make the point that, concerning economic theory, there is no such thing as a 'Rothbardian', only 'Misesians', in the sense that the relevant differences between Rothbard & Mises aren't big enough to talk about a big shift (as the differences between Mises and Bohm-Bawerk or Menger are)."

Yeah going from minarchism and utilitarianism to anarchism and deontology is very trivial.

[Peter Boettke]

Lode,

On Smith --- social cooperation under the division of labor; knowledge and power problems; political economy and the economic role of the state.

Smith is very worthwhile to read.

Niko,

Couldn't disagree more about the science, though in agreement on how failures in the policy application of certain political-philosophical ideas cause great pain. But you need mainline economics to counter these bad ideas and I don't see how your perspective helps in that endeavor. See Hayek's essay "The Trend in Economic Thinking" for the dilemma we face then and now.

[Niko]

I was not clear. I don't disagree with the science, but with its products, its current embodiment, with its mainstream practitioners, being neoclasical, neoricardian, new ..., post ... etc. They are all in the mainstream. You cannot mainline anything if they don't listen, they don't understand and so on. Today there isn't even such a thing as economics, only math, and a bad one at that too. And all of us have to suffer because a bunch o bozzoes, used as excuses to extract more wealth from those who work, think they are God.

They wont give up until we'll all be hungry, and then they'll ask us to thank them, without them it would've been worse. I've seen this, and after the tragedies, those idiots are still here, giving advices and living well. They don't even think is their fault, they saved us from ourselves.

PS: I know Hayek's essay.

[Lode Cossaer]

Ryan,

I was explicitly talking about the economic part of Rothbard's contribution, not his political philosophy. And on the political philosophy part; Rothbard is like the intro-course; there are better libertarian philosophers than Rothbard. Just my two cents. :)

[Niko]

@Lode Cossaer:

"there are better libertarian philosophers than Rothbard."
Can you name them? I'm curious.

[Lode Cossaer]

Well; Roderik Long, David Schmidt, Hans-Hermann Hoppe, Frank van Dun, Anthony De Jasay, Tom Palmer and, to a certain extend, Henry Hazlitt, to name a few.

[Niko]

@Lode Cossaer:

Not a convincing list in being better than Rothbard. And economics and politics go hand in hand. You cannot advocate free markets and be a supporter of Stallin, as an extreme example.

[Steve Horwitz]

I'd take a few off Lode's list, but I'd add:

Loren Lomasky
Robert Nozick

And I'd certainly echo David Schmidtz

Rothbard was an excellent economist and an (if not THE) outstanding theorist of liberty, but that doesn't mean he was a good or world-class philosopher. Libertarians have to have a realistic perspective on our own favorite thinkers if we're going to be taken seriously by the larger world. Calling Rothbard a great philosopher, or even the best libertarian philosopher, pushes us toward hagiography.

[Niko]

I don't think Rothbard ever was a philosopher or ever considered himself this way. Today's libertarians consider him this way, but he was always an economist and a part time historian (a very good one).

I would not rate Nozick pretty high. All his theories can be easily dismembered.

[The Cuttlefish of Cthulu]

Kinda surprised no one has mentioned Jan Narveson.

[Lode Cossaer]

Sure; economics go hand in hand, but that doesn't mean that Rothbard's contribution on political philosophy are that impressive. I like MES and I'm found of Ethics of Liberty; but it's not as good as some of the work of the people I've mentioned.

I acknowledge Rothbard's contribution's; but that doesn't mean he doesn't get surpassed by others in several fields.

[Lode Cossaer]

I echo Jan Narveson and Robert Nozick. I was just making a list of people who had, to a certain extend, convincing and more careful thought out arguments in favor of liberty. And I'm adding Lomasky to my list of things to read. :)

I also endorse Prof. Horwitz perspective on Rothbard's contributions.

[Wonks Anonymous]

From surveys I've seen, most economists oppose the minimum wage & protectionism.

[Steve Horwitz]

I also think it's important to draw the same distinction here that Pete has drawn between AUSTRIAN economics and Austrian ECONOMICS.

I'm much more interested in good libertarian PHILOSOPHERS than I am in good LIBERTARIAN philosophers. I want libertarian philosophers who are good philosophers first and libertarians second. If we judge quality by ideological usefulness, we're also going to run into trouble.

[Lode Cossaer]

Point granted.

I would add though that I'm sort of frustrated by the lack of general knowledge I encounter in lots of philosophers, e.g. John Rawls. Even if you go along with his philosophical assumption - which I think are unjustifiable - he explicitly makes the assumption that all kinds of economics and rules are evenly efficient, which is, really astonishing.

I could be biased and obviously I haven't read all philosophers, but it's really irritating that other philosophers don't let their utopias constrained by the limits set by economics. But hey; maybe there are other philosophers, who don't have libertarian tendencies, who do have some acknowledgement of economics.

[Rob]

I'm trying to carve through "Man, Economy and State" right now. I've also got through "Competition and Entrepreneurship", "Individualism and Economic Order", and most of "Human Action". I also read Lachmann's "Capital and its Structure", really good book. I have to finish Rothbard before I get back to the Neoclassical express in a couple weeks.

Question: I agree Rothbard's work is quite masterful, could it be used for an intermediate micro class as a primary textbook? This assumes the other faculty members don't have a problem with it.

[Peter Boettke]

Rob,

I have used it as a supplement with Principles, with Intermediate Micro, and in PhD courses. I think it depends on how you select the reading from it, and also what you emphasize in it. Also, I think it depends on what you use alongside of it. Whenever I have taught Intermediate Micro for example, I have tended to use Jack Hirschleifer's textbook, sometimes D. McCloskey's text. Both worked with M, E, & S. After a while, though, I did more or less focus on using Hayek's Individualism and Economic Order as the supplemental text for Intermediate Micro, and kept Rothbard for the Principles supplement.

Pete

[Mario Rizzo]

As one who thinks that Rothbard produced much trash -- from an economics point of view -- later in life, I do think "Man, Economy and State" is a great book. It takes Austrian economics (pre-revival) and systematizes it. Mises "Human Action" is all over the place. At first, Rothbard was attempting to write a more accessible version of Human Action but he ended up doing much more. Nevertheless, I do believe that most of MES is fairly static compared to more recent Austrian work.

[Rob]

Thanks Professor for the response. I prefer Lansburg's book for intermediate micro myself.
@ Professor Rizzo
I think most people come to MES with the background knowledge that Rothbard was an anarchist who contributed a lot of controversial work. His later work may still be quite valuable, but I think this feeds into the perception that if you want to appreciate Austrian insights you have to be a libertarian. The bias precludes one taking the time to understand the deep insights of Mises, Hayek and especially Rothbard.

[Lode Cossaer]

Is the fact that MES is 'static' really a big problem? Given the fact that the bulk of the book is on production and the prices of the factors in the ERE (or where they tend to in a marketeconomy), it's quite obvious why it 'has' to be static. His chapter on entrepreneurship doesn't seem that bad and it's true he doesn't stress the dynamic concept of coordination and competition (like Hayek does in 'the meaning of competition); but that wasn't the purpose of his book in general.

[Niko]

@Lode Cossaer:

Probably professor Rizzo wants to say that today's works are more shallow, so they make for a fast read, while in Rothbard's case you have to spend a little more time.

[Mario Rizzo]

I assume Niko is joking. However, static does not equal bad. I was just making the point that Austrian economics moved to different issues and concentrated on different themes after, say, 1974.

Kirzner's Competition and Entrepreneurship was published some ten years after MES. It stressed some dynamic aspects of Austrian economics that Rothbard did not emphasize. And then in 1986 Jerry O'Driscoll and I tried to show that the dynamic themes were really at the root of the uniqueness of Austrian economics.

(I do think that Rothbard's apriorism was an unfortunate continuation of the worst parts of Mises.)

[The Cuttlefish of Cthulu]

When people talk about "stessing" the dyanmic nature of competition (say), I assume they mean pointing out certain shortcomings in conventional accounts of competition, as opposing to actually putting forth alternative accounts that truly change the way one views or understands competition. Because frankly, much recent Austrian work seems really more like a list of topics that "good" economics must take into account, but never taking the next step of elucidating this kind of economics.

[Lode Cossaer]

Ow, but than we have a different view; I don't mind the continuation of a priorism and, as far as my inexperienced mind can judge, I think he does a good job at it. Could you make a reference to some work you would endorse (your own or others) on why his a priorism is unfortunate?

Related; I don't think the dynamic point of view is the only thing that makes the Austrian approach so unique; stressing the fact that you can investigate the tendency within an economic system on a fairly a priori way is relevant too. (Or would you consider it to be two sides of the same coin?)

Anyway; thanks for giving your insights.

[Bill Stepp]

M,E&S is great, but the section on money and banking is bad. It ought to be supplemented by Selgin's book on The Theory of Free Banking.
A couple people touched on Rothbard as philosopher without mentioning his great tome The Ethics of Liberty. I think it leaves Lomasky, Machan et al. in the shade.
Rothbard also wrote the three greatest foundational essays on libertarianism, "Justice and Property Rights," "The Anatomy of the State," and "War, Peace, and the State."
Too bad he never figured out free banking, and marred his work with the 100% reserve hokum.

[liberty]

I know Rothbard has made some interesting contributions - but I have a hard time taking him seriously as an economist after reading his "reconstruction of welfare economics." On the plus side, it has helped me to question Austrian economics in general a lot more.

[amv]

I don't think Rothbard was even a good economic theorist. For instance, he didn't understand indifference curves, and he never grasped how economists use them. He really believed that using them indicates the assumption that trade takes place if people attach equal values to a good. The list could be continued .... I just don't see the point in calling him an excellent economist (as done by Steve). Either every Austrian economists is called an excellent economist by other Austrians, some kind social mechanism of self-assurance, or MES must have a secret edition I don't know of. You don't have to agree with them, but by any objective standard excellent economist are guys like Arrow, Hayek, Ostroy, Hahn, Saari, Hicks, Hirshleifer, Alchian, Lucas, Simon, Cochrane, Phelps, Frydman, ....

[Lode Cossaer]

The fact that Rothbard - in your opinion - didn't get indifference curves, doesn't really change his contributions concerning production theory, now does it?

[amv]

it does ... isoquants ...

[Lode Cossaer]

why... does it... change... it's... contributions...?

[Bill Stepp]

Speaking of Arrow, Hayek et al., I just finished one of the strangest books I've ever read, John Kay, _Culture and Prosperity: Culture and Prosperity: Why Some Nations Are Rich but Most Remain Poor_. Lots of stuff about Arrow, Debreu, the fixed point theorem, Samuelson, Hayek, Becker, property rights, spontaneous order, knowledge risk, coordination, who won the "Nobel" Prize in economics in what year, yada, yada.
No mention of Hernando De Soto and his contribution to the subject, but you can learn lots of stuff that has nothing to do with the subtitle.
In the inside of the book I wrote "this book is one massive violation of Occam's razor."
He also has a ridiculous crack about Hayek.

[amv]

Lode,

what is so remarkable in Rothbard's production theory that is not already in Wicksell or Wieser or Robbins? Everything correct isn't new, everything new seem to be incorrect. Further, I bet Wicksell & Co would use the new methods in economics, like Hayek did, which are however ignored or even rejected by Rothbard. You have to judge economists relative to their times.

So what is it that makes Rothbard an excellent contributor to the theory of production?

[The Cuttlefish of Cthulu]

Note that, when challenged on this point, amv changes the subject.

[amv]

Cuttlefish,

if you knew about the symmetry between consumer and producer theory in modern analysis, my hint to level-curves in production theory would tell you how my critique of Rothbard's treatment of level-curves in consumer theory relates to Lode's question.

[Lode Cossaer]

Let me get this straight: you say 'he didn't get indifference curves'. I ask: 'why does that changes his contributions in production theory' and then you ask: 'what is in his production theory that wasn't in Wicksell, Wieser or Robbins?' which is, as the Cuttlefish remarked, a different question.

I have no idea everything that is in Wicksell, Wieser or Robbins, but I do know what is in Rothbard that isn't in Mises: the exhaustive explanation of the pricing of factors would be one of his main achievements and his explanation of the structure of production by starting of a world of specific stages.

So if you say that 'all' of this is already in Wicksell, Robbins and Wieser; feel free to prove so. I don't see what is 'untrue' in Rothbard's production theory, but I'm sure you can link to a published article that refutes it?

I don't see any problem in the way Rothbard did economics in MES; but, again, feel free to provide evidence that it is a disaster?

[amv]

So who is unable to read and answer comments? The opportunity costs are simply to high to show that factor pricing is exhaustively discussed by Wieser, Wicksell, and Robbins. You share the minority view in economics so it is up to you to convince me. As long as Rothbardians ask others to prove them wrong, they'll remain within the sink they are put in. So name me a single original and true statement in MES which is worth discussing!

[Lode Cossaer]

Name me a single and original and true statement *anywhere*? The only way you can be absolutely sure, is when you've read *everything*. Obviously, the bar you are setting, is insanely high.

Again; I value Rothbard on his productiontheory and I have no knowledge of it being discussed anywhere else. So for all practical purposes: that is his contribution.

But to be honest; I gave you examples. If you say that they are already somewhere else, feel free to proof so. Or at least: don't just say that I'm in the minority, proof that I am. As far as my knowledge goes, those are his contributions. If you think I'm the minority; that's fine. We can both keep our own thoughts about it and have happy lives.

And I'm not a 'Rothbardian'.

[The Cuttlefish of Cthulu]

Rothbard's rendition of factor pricing is very different from Wieser's imputation theory. But amv's an adherent of indifference analysis, so I wouldn't expect him to understand this.

[amv]

Lode,

you write:

"Again; I value Rothbard on his production theory and I have no knowledge of it being discussed anywhere else. So for all practical purposes: that is his contribution."

1) production theory is a field of inquiry. I asked for a contribution within this field. you seem unable to provide evidence by naming any of Rothbard's propositions (like on decreasing returns, which is quite good).

2) you go on: "But to be honest; I gave you examples." Where? I went through all of your comments. I could not find any evidence. or what do you mean by 'example'.

3) In light of 1), and 2), and your comments, it seems reasonable to assume

a) that you do not have any degrees in economics,
b) that you encountered the subject as an amateur with a Mises-Rothbard bias,
c) that you even lack the knowledge to defend your position,
d) and that your updating routine is hampered by your repeated insistence that others have to prove you wrong in detail on unsuited platforms.

But I agree on this: "We can both keep our own thoughts about it and have happy lives."

[Lode Cossaer]

I don't feel like getting insulted, so I'm sure you'll find someone else to troll against.

[Senyoreconomist]

Professor Boettke,
I was just wondering if you had an opinion as to why George Reisman's Capitalism never gets mentioned in these sorts of discussions. Thank you very much.

[Niko]

@amv:
Are you that guy that wrote a paper in which he tried to prove that ABCT is not correct because he doesn't agree with it and because it is not taught in schools?

Austrian don't understand indifference because it makes no sense to them. If someone is indifferent to something, then he won't act on it, so no economic problem.

[Niko]

Found it:
"Static Tools for Dynamic Analysis: Ludwig von
Mises’s Business Cycle Theory"

Is this yours?

[Current]

The old writers never said "this is static analysis" or "this is dynamic". It's up to us to work it out. Opinions vary, I've discussed this with AMV before he reads lots of things to be static in rothbard and Mises, that I don't read that way.

[Mario Rizzo]

I don't mind indifference curves. They are a tool for understanding preference and choice, not indifference. Indifference is simply a mental construct. The apparatus is used to show the effect of price changes, income changes on choice. The idea was to replace cardinal marginal utility with an ordinal utility, where the index number of the utility function has only ordinal significance.

This is just one of the misunderstandings perpetrated by Rothbard on unwary readers. That is why, though there is much in MES that is valuable, it should be read with a critical eye.

[Lode Cossaer]

I'm not really convinced by the concept of 'indifference', to be honest. If we adhere to the formal notion of 'preference through action'; I don't see any way in which 'indifference' can be a economic concept. It has some use in psychology (and the link with economics); I'm fairly indifferent between all the chairs I could be sitting in during a lecture, but I have high preference difference between having steak or poison for dinner. But I don't really see it as a tool that is useful; besides as a concept meaning 'very low difference in preference' - but 'indifference'? I don't really see it.

The fact that prices change, has an effect, not because I'm indifferent, but because I'm not indifferent, I would say? Again; feel free to suggest literature. I'm only 21; my mind isn't set yet, but up until this point, I don't really see a relevant use for something like 'indifference'.

[The Cuttlefish of Cthulu]

"I don't mind indifference curves. They are a tool for understanding preference and choice, not indifference. Indifference is simply a mental construct. The apparatus is used to show the effect of price changes, income changes on choice. The idea was to replace cardinal marginal utility with an ordinal utility, where the index number of the utility function has only ordinal significance."

This observation about the ordinal nature of neoclassicist value theory is correct, although even Bryan Caplan in his critique of Austrianism acknowledges that neoclassicist expositions are often not careful enough to avoid conveying the impression of cardinality.

However that is neither here nor there. The point that is overlooked here is that the neoclassicist formulation presupposes that there are value equivalencies between goods. This is why, indeed, utility functions are non-unique up a monotone transformation, so that say a utility value of 2.4 for some bundle has no meaning (except as indicating preference for a bundle with utility 1.8), but the RATIOS of MARGINAL utilities (ie the rates of
marginal substitution) are indeed very meaningful to neoclassicists. They merely *restate* the presupposition that for any good, there is some amount of another good which is equivalent to that good, in the sense of value.

Now, this notion is absent from Rothbard, and I would also argue from Mises, although in MES this is much
more systematic. In MES, the value of a good is the end that must be foregone if that good is removed from an actor's control (or the end attained if the good is acquired). While this doubtless will seem trivial to many, the point is that Rothbard's elucidation of economic science (eg, the law of supply and demand, marginal utility) does not require any recourse to value equivalencies. More: his discussion of factor pricing makes very clear the necessity of calculations in terms of *money prices*, for which equivalencies (in terms of price)
are in fact meaningful. The "symmetry" that exists between neoclassicist consumer and producer theory (of which I'm well aware) is a chimera. Rothbard's contribution here is an important one.

I have to also note here Mario Rizzo's obvious and long-running grudge against Rothbard. There seems to be something personal in his critical remarks and, I would say, not very fair.

[Steve Horwitz]

In what world is the following evidence of an "obvious and long-running grudge?"

"This is just one of the misunderstandings perpetrated by Rothbard on unwary readers. That is why, though there is much in MES that is valuable, it should be read with a critical eye."

Comments like Mario's are *how knowledge advances.* He says there's much that's valuable, yet that we should also read critically.

What exactly is he supposed to do to avoid appearing biased? Claim Rothbard was perfect and the greatest thinker ever? Is any criticism of MNR evidence of bias? What gives?

[The Cuttlefish of Cthulu]

Steve, there's also this comment:

"As one who thinks that Rothbard produced much trash -- from an economics point of view -- later in life, I do think "Man, Economy and State" is a great book"

Indeed, Rizzo speaks highly of MES here. But to call the bulk of Rothbard's later work "trash"? This doesn't seem harsh to you? It has nothing to do with agreeing with every word Rothbard ever wrote (contrary to popular belief, there are a few things I dispute in Rothbard's work), there is just a certain tone I notice in Rizzo's commentary on Rothbard that I find objectionable. E.g., to speak of "perpetuating" a "misunderstanding" suggests not just that Rothbard was wrong, but in engaging in polemical deception.

[Steve Horwitz]

Yes, "trash" is a harsh judgment, but that doesn't mean it's a bias or grudge. I think a lot of Murray's later work was really bad also. If someone has a bias or grudge, why would they say anything nice about MES? That alone is evidence of a lack of bias or grudge. Perhaps "trash" is Mario's considered judgment. (Surely, you'd use that word about someone like Krugman, no? Does that mean you have a bias, or that you have good critical judgment?)

As for "perpetuating a misunderstanding," I read that as Mario saying that Murray could be sloppy at times (e.g., his history of thought books) and for readers not well-versed in economics, and who are pre-disposed to believe what MNR said because they were libertarians, it would be easy to accept whatever Murray said at face value. My experience with many non-academic libertarians is precisely this. (And not just with respect to Murray.)

One could equally well argue that your defensiveness about Rothbard reflects a bias in the other direction! :)

[The Cuttlefish of Cthulu]

OK, fair enough Steve, maybe I overstated a bit. I'll simply note that with your criticisms of MNR, I know exactly what they are and where you're coming from (even if I disagree). That's not entirely clear to me with Rizzo's comments.

[Senyoreconomist]

Professor Boettke,
I was just wondering if you had an opinion as to why George Reisman's Capitalism never gets mentioned in these sorts of discussions. Thank you very much.

[Mario Rizzo]

"I have to also note here Mario Rizzo's obvious and long-running grudge against Rothbard. There seems to be something personal in his critical remarks and, I would say, not very fair."

Personal? Grudge? Not at all. I just refuse to accept his errors when he made them. My language may be harsh, sometimes, but I guess that is a reaction to those who hang on his every word. I also hold Murray to a very high standard because, indeed, he was a genius. But, at a certain point, he found it impossible to process new ideas.

Murray himself would read books very critically. He would put all sorts of not-so-nice words in the margins of books when he disagreed with points an author made.

So I reiterate: MES is a very good book. Read it, to be sure. But read it critically. And if you want to use harsh language when you find errors, please feel free. Murray did.

[Peter Boettke]

Mario just put his finger on the critical issue. The one thing that everyone needs to realize is that individuals such as Mario, Jerry, Roger Garrison, Don Lavoie, Larry White, Richard Ebeling, etc., did was study Man, Economy and State thoroughly. This is also true for myself, David Prychitko, and Steve Horwitz. The same with Mises's Human Action. The points of departure found in these thinkers from others has nothing to do with personal grudges let alone ignorance of the arguments. It has to do with particular and specific disagreements and comparative assessment of arguments found elsewhere that address similar topics.

The narrative that often goes with modern Austrian economics is very wrong on so many margins that it is almost impossible to know where to begin.

I actually have more sympathy to Rothbard's conceptual criticisms of ideas such as indifference, and even externalities, etc. than has been expressed here. But I also think there are a variety of ways to tackle these issues and a conceptual criticism is only one of them.

I don't think any of those who choose to comment took the time to read my linked original posts on Rothbard, but you can I argue in one of them be completely convinced with Rothbard's conclusions but find his path to getting to those conclusions to be unsatisfactory, and thus you are set in a different direction to find more satisfactory answers.

Rothbard was a serious economic thinker in the 1950s and 1960s, but by the 1970s the reality is that his intellectual attention was directed elsewhere and his engagement with the current literature was not as evident as it was in the footnotes to Man, Economy and State. I recommend that those who fancy themselves sophisticated economic thinkers (e.g., amv) to read those footnotes and think about the state of the art of economics discourse in the 1950s. By the time you get to the 1970s let alone the 1980s, you would have to look to others to get that level of deep professional engagement. This is NOT a knock on Rothbard, he was a genius with multiple disciplinary interests and the economics profession did not hold his attention. HIstory and political philosophy, as well as contemporary politics, drew his intellectual energies away. To deny that is to deny that Rothbard faced any intellectual trade-offs, which would imply that not only was he a genius but superhuman.

But when one looks at Man, Economy and State, there is no denying in my opinion that it is the work of superior mind who is completely devoted to the systemic study of a discipline. It is a work synthesizing all the existing knowledge circa 1960 on methodologically individualistic economics. It is logical, and it is bold, and lets not forget that it is a very entertaining read.

Again, graduate students who don't read the book have done themselves a disservice. I actually don't know what higher praise one scholar can give another scholar, so if this is interpreted as a slight to Rothbard then those reading it, haven't actually read. And Rizzo is actually saying the same thing, so please open your eyes and read the words that are being written. Reading critically is the highest praise anyone can give to another work.

[amv]

Peter,

since I'm so friendly mentioned, I answer.

We are talking about a book that is unknown to the vast majority of the economic profession. Since I like Rothbard as an author, including his anger, I actually read some of his works. Based on this insight, I simply disagreed with Steven that he is an excellent economist, and I do not believe that he even applied to such high standards in the 50s or 60s.

Thereby, I judge him as professional economist, taking only his positive contributions into account. Historians of economic thought usually have to make such judgements and I don't see something arrogant in doing so. That's the job of making uses of the past. I believe that Rothbard's positive contributions alone would make a much shorter book, especially if filtered by originality and technical sophistication. Note that the ordinal revolution and Hicks's Capital and Value all appeared in the 30s at the LSE. Since Rothbard put himself into opposition to the LSE approach, he forces the historian of economic thought to make a choice. Who was right, who was wrong? Now, if Rothbard is an excellent economist, what then is Hicks? A super-excellent economist?

All this is perhaps wrong and certainly incomplete. But it is a reasonable view. Of course, there is a benefit in reading Rothbard's MES, but no doubt opportunity costs are high in light of all the other contributions in economics. This statement of yours just seems wrong to me:

"It is a work synthesizing all the existing knowledge circa 1960 on methodologically individualistic economics."

synthesizing? all the existing knowledge? how could this knowledge be ever synthesized? and of all economists it is Rothbard who is supposed to have done so?

Since I read it as someone primarily interested in positive economics (as defined by Robbins, not Friedman), I think that for people with similiar interests the costs are prohibitive.

[Steve Horwitz]

One can be an excellent economist without being right about everything.

I don't know if I'd use the word "synthesis," but MES did, in 1962, incorporate the best insights of the methodologically individualistic economics of the prior decades.

Was there a lot that was original in there? Not necessarily, but that wasn't Rothbard's goal. His goal was to present the ideas in Human Action in a form that could be understood by both the rest of the economics profession and the intelligent and willing layperson. In doing so, he also hoped to advance some of those ideas. The fact that few today have read it is not because Rothbard failed in his attempt, but perhaps because others too easily dismissed it.

Pete can correct me if I'm wrong, but I'm pretty sure MES was read by most of the Virginia school folks of that period, including Buchanan, Tullock, Wagner, and Yeager. They had their disagreements, but they recognized that it was enough of a contribution to demand engagement - and critical engagement at that.

Before you dismiss it, understand what it was trying to do.

I don't agree with every word in MES (and I've criticized elements of it in my work), but Pete is quite right that I don't think you can call yourself an Austrian school economist (or even a serious fellow traveler) without reading it as there is much that is very good in there.

Assessments of opportunity costs are subjective of course, but if one chooses to ignore the substantive contributions in MES, one should not be surprised to be (rightfully) called on the carpet by those who do recognize them if one want to be part of the conversation in modern Austrian circles.

[walter Block]

Mario, I'm curious. Which of Murray's publications do you consider "trash?"

[Peter Boettke]

Amv,

I don't want to get into a pissing match on the internet. But Rothbard in the 1950s was published in the AER and the QJE. He was roughly your age at the time. You in there? If so, then you can criticize. If not, then best to sit back and appreciate what Rothbard was able to do as a young economist trying to make his way in the economics profession at the height of the Samuelsonian perversion of economic thought. It is actually inspiring.

Also, Rothbard was very well known to all the methodologically individualistic economists (read anti-Keynesians) at the time, whether we are talking about Friedman and Stigler, or Peltzman and Becker, or Alchian and Demsetz, or Yeager or Buchanan and Tullock). And they also knew of his book. So how is it that you are traveling through time with a modern assessment of a past writer and capturing what was asked of you to capture? The zeitgeist of 1960.

You are I believe as mistaken in your assessment as those who think it is the only book one must read.

You keep saying Austrian's are unheard of --- I find this actually a bizarre claim. Yes, Austrians economics has certain connotations, but it also has an outstanding record of top flight economists in the history of the school. Contemporary Austrian economics is actually having a significant impact on a variety of discussions --- I guess you don't read Bill Easterly!; or John Taylor!; or follow the field of entrepreneurship studies and management.

I really don't see the profession the way you do, and I think I might be a bit more engaged with the profession than you are.

[Bill Stepp]

Mario Rizzo writes:

"(I do think that Rothbard's apriorism was an unfortunate continuation of the worst parts of Mises.)"

Maybe, but the Austrian approach seems to rule out anything but apriorism, no? What else is there?
I still remember reading an intermediate micro text as an undergrad, and seeing a serious discussion (in a box) about the elasticity of demand for a few vegetables. I had taken a course the previous term in logic, and knew enough about physics and the philosophy of science to think I was being snookered. I had not yet discovered the Austrians.

Economists can't figure out what the economics equivalent of Planck's constant is, or what the "elasticity of demand" for string beans is, because there's no such thing other than as a mental construct with no empirical certitude.
There's no there there in econometrics, as Gertrude Stein would have said.
Austrians such as MNR not only understood this, but had the temerity to say it in print.

[amv]

Wow. It's getting personal. I guess this is the coach speaking, so I'm fine and take it as a well-intentioned advice to check my priors. ok. but your reasoning is weak.

1) You write: " But Rothbard in the 1950s was published in the AER and the QJE. He was roughly your age at the time. You in there?

No, of course I did not publish in AER or QJE. As a PhD student in his last year, working on the history of economic thought, I don't feel too bad about it. You invoke modern peer review to point to my non-existence as an economist. Fine. But the very same standards tell me that I need 100 publications in Austrian journals to draw level to one publication in AER. And the very same standards discount Rothbard's contributions much more than I do.

2) You: "If so, then you can criticize. If not, then best to sit back and appreciate what Rothbard was able to do as a young economist trying to make his way in the economics profession at the height of the Samuelsonian perversion of economic thought."

Well, as I said, I never discussed "what Rothbard was able to do as a young economist trying to make his way in the economics profession at the height of the Samuelsonian perversion of economic thought."

As far as I know, Rothbard was a great intellect, a fiercely fighter for liberty and Austrian economics, etc. He was much smarter than me. All granted. But Samuelson was much smarter than all of us. Are we also obliged to "sit back and appreciate" Samuelsonian perversion, as you call it? If you are free to judge Samuelson's case, than I'm free to make up my mind too.

3) You: "You keep saying Austrian's are unheard of --- I find this actually a bizarre claim. Yes, Austrians economics has certain connotations, but it also has an outstanding record of top flight economists in the history of the school."

I bet the connotations cluster around Rothbard, Austrian methodology, etc. But we won't agree on this point. And yes, I read Easterly and Taylor. I distributed Easterly as good as possible. Taylor I like a lot, independent of similarities between his views and Austrian economics (If you dig deeper, there are vast differences. But this of course you know).

[Lode Cossaer]

I guess because it's cool to be a die hard Rothbardian, it's also cool to criticize Rothbard out of hand. Unfortunate evolution, I would add. In both directions.

[Senyoreconomist]

Gentlemen and Gentlewomen,
I don't really think that my question regarding Reisman's Capitalism is off topic, so I am somewhat curious as to why it has, apparently, been ignored. This is a book that received very favorable blurbs from both James Buchanan and Hans Sennholz. It was also given, if my memory serves me correctly, a largely critical review by Israel Kirzner. With these three commenting on it, it must be a somewhat important book. Reisman, unlike many Austrians, has praised both Smith and Ricardo. He has also acknowledged coming up with a theory that closely resembles one that Joan Robinson came up with. Yet, a politely worded question about why his book is never, or rarely, mentioned in these types of discussions is seemingly ignored. How curious...Thank you very much.

[Senyoreconomist]

In my previous post I said that, "...Joan Robinson came up with." That should read, "...Joan Robinson had also come up with." Thank you.

[Lode Cossaer]

If you ask me: I love the parts I've read so far - but it's not the entire book - and I would agree that it's being under evaluated (probably because it's so big) and should be studied. It's definitely on my list, but, again, I've found the time to give it the attention it deserves.

I'm especially curious about his demolition of the ISLM curve. So, Senyore; I agree that it doesn't get the attention it deserves, but me, myself, am not able to comment on it in any substantial way. I can comment on what I did read:

I sort of liked chapter one, but I don't agree with his new definition of economics and his obvious Randian Framework. I didn't like chapter 3 - the environmentalist one - because he makes a lot of points which, I believe, shouldn't be in a economics book. I totally loved his discussion of price controls and the consequences. That's all of the substantial stuf I can comment on.

I know you didn't ask me, but I hope you don't mind me giving mine 2 cents.

[Peter Boettke]

On Reisman --- first, the topic was MES; second, Reisman's book is complicated. It is basically a self-published tome. The section of the book that was pulled to create Government Against the Economy that was published years ago is quite good. The book mixes very good policy judgment with some interesting perspectives in history of economic thought combined with some bizarre claims. I would recommend Kirzner's review essay and also Alex Tabarrok's review. Both know the material inside and out.

I respect what Reisman does for inspiring many individuals to appreciate liberty and free market ideas. But I do not consider this book a serious engagement with the ideas in the economics profession. It is instead the work of a lone wolf who is pretty much disconnected with the reality that is the economics profession today. So it is not a work, I would suggest that graduate students would benefit from studying closely. Laymen would probably benefit much more.

That much said, there are a few graduate students out there that are very influenced by the work and if they build on it and take it in new directions, perhaps they will prove my assessment wrong.

As for my comments to amv, they are not "personal" but instead directed to counter specific claims you make. First, since you are building a career in history of thought --- make sure to publish in HOPE, JHET, and EJHET, and get yourself engaged with the various professional societies --- HES, but for you more importantly around the folks in Paris --- Fontaine, but also reach out to Garrouste at Nice.

But on professional engagement, you cannot be content with just interacting with history of thought scholars in my opinion, but instead the economics profession at large and in the specific field you are working in (in your case money and capital).

I really don't understand the impression you have about "Austrian economics" in the economics profession. You will meet dismissive people throughout this profession --- so what? They dismiss Jim Buchanan, Doug North, Ronald Coase, and Lin Ostrom as well. They are ignorant. Ignorance and arrogance are too often positively correlated. Who cares? Does it prevent you from publishing --- NO; does it prevent you from getting a job --- NO; does it prevent you from teaching --- NO.

My students coming out of GMU have continuously found employment in academics and have been able to publish in very respected journals of our profession -- from JEBO to JLE; from APSR to JPE; from Public Choice to AJES. These kids just work hard, learn how to write for a professional audience, and work on interesting topics.

Perhaps I don't understand the situation you face in Europe. But I've been to the LSE twice and found it fantastic; as well as several other places --- including the Max Planck Institute, which I absolutely loved working at. A friend of mine Stefan Voigt has a chair in Hamburg, other close colleagues in Freiburg, Erfurt, etc. I understand their is a battle going on in Germany (I don't know the full details), but my last book on the Ostroms just got a very favorable review in FAZ by Karen Horn.

Perhaps you could fill us in a bit more on why you think it is so "dark" for these ideas in Europe. When I look around, I see great opportunities from historians of economics to technical economics to political economy and social philosophy.

I would like to learn more about why so doom and gloom.

[Gene Callahan]

You know, before I had any idea who Rothbard was (i.e., I had no clue he was the leader of a libertarian faction) or what the Mises Institute was (i.e., I formed this opinion without any thought of intra-libertarian politics), I began reading MES because I had heard it was a good follow up to Human Action. I got about 100 pages in and thought to myself, "Wow, this is just a second-rate knock-off of Human Action."

First thought, best thought!

[Gene Callahan]

"I don't want to get into a pissing match on the internet. But Rothbard in the 1950s was published in the AER and the QJE. He was roughly your age at the time. You in there? If so, then you can criticize."

Pete, total BS. Groundbreaking geniuses are often ignored until decades after they die, and total cranks get published in top journals. (And vice versa, of course!) After over three hundred years, a distinctly second-rate intellect like Locke still gets more respect than a genius like Hobbes. Citing reputation is a weak substitute for discussing ideas.

[Steve Horwitz]

I am happiest when simultaneously defending Rothbard against his critics and criticizing him to his defenders.

This thread has me overjoyed. :)

[Lee Kelly]

In my uninformed opinion, almost everything that is uniquely Rothbardian about Austrian economics coincides almost perfectly with everything that is wrong with Austrian economics.

[Bill Stepp]

The only thing I can think of off the top of my head that is uniquely Rothbardian is his mythical and erroneous copyright stamp in Power and Market. His monetary theory is not original with him.
Could you cite any other uniquely Rothbardian position that (partially) defines what is supposedly wrong with Austrian economics?

[Lee Kelly]

Bill,

I have been sold on the idea that Mises was not an advocate of 100% reserves as the first best policy. This notion seems to be most strongly Rothbardian, and I think he was wrong on the matter. But I didn't just have in mind the objective content of Rothbard's theories--his abrasive and conceited style seems to have been adopted by many Austrians, particularly amateurs.

In any case, I haven't read enough of Rothbard to give a fuller case, and perhaps I would not want to if I did.

[Bill Stepp]

Lee,

I didn't have Mises in mind as a forerunner of Rothbard. There were other 100% reserve economists before MNR. I never regarded Rothbard's style as abrasive and conceited, but then maybe that's because I loved his essays smashing the cekatS. He would have been the most important influence on me if he had only written "The Anatomy of the State."
If you want examplars of an abrasive and conceited style, look no further than Krugman and especially DeLong.
Rothbard, despite his intellectual warts, is a much better economist than they are.

[Niko]

@Lee:
Paul Samuelson doesn't seam a nice guy even in his "technical" articles. But since you don't know much about Rothbard, which is obvious from you pointing in the 100% idea (a very old one), your opinion has no value.

PS: I've read your blog.

[Bill Stepp]

Right re: Samuelson. He always struck me as arrogant with a capital A. A more literate and less nasty forerunner of Krugman.

I've seen a lot of statists with nasty personalities, but no free market types. Maybe I've encountered too few.

[The Cuttlefish of Cthulu]

I agree with Niko. When asked to provide an example of Rothbard's deficiencies in economic theorizing, Lee Kelly trots out an irrelevant objection to Rothbard's position on 100% reserves and whether it was shared in any way by Mises. And he has the nerve to talk about amatuers?

[Lee Kelly]

Wait, it is obvious that I know little about Rothbard because of my comment about 100% reserves? What about my admission that I am uninformed on the matter, have not read much Rothbard, and might think otherwise if I had? I already broadcast my relative ignorance about the man, so there is no need to restate it.

My original comment was partly motivated by the observation that whenever I disagree with Austrians (amateur or professional), they are normally strong Rothbardians and weak Hayekians--both in the style and content of their arguments. I get the impression that some Austrians feel that almost everything that is uniquely Hayekian about Austrian economics is what is wrong with it.

In any case, I have no desire to defend Samuelson, Krugman, DeLong, etc. as though I am somehow "on their side" in this.

As for my "irrelevent objection to Rothbard's position on 100% reserves," I merely intended to say that advocacy of 100% reserves as a first best policy is not Misesean. Rothbard may not have been the only Austrian to advocate it, but he was certainly the most prominent, and the one who others tend to quote and cite.

PS. Niko, I've read your comments.

[Bruce Koerber]

Rothbard's Brilliance Is A Source Of Illumination.

All signs point to the fact that Rothbard was a genius and fortunately he was also perceptive enough to discover Mises, and then he put his genius to work in the philosphy of classical liberalism and economics specifically. Just because he was a genius and he found the correct methodology for the study of human sciences does not mean that he was perfect and so for those who want to focus on his flaws there are ample examples, but for those who want to focus on his brilliance there are many times more of those types of examples.

Likewise, exposing students of economics to the works of Rothbard may not be the only brilliant contribution made towards their education but it is definitely infinitely better for those individuals and for society than the darkness of standard contemporary philosophical and economic education in these - the Dark Ages of economics.

[nirgrahamUK]

Given his somewhat blunt dismissal of Rothbard's critique of the modern calculus of indifference curves; I would like to know whether Mario Rizzo would consider a scholarly critique of William Barnett II's rather thorough and wonderful paper "The Modern Theory Of Consumer Behavior: Ordinal or Cardinal?" THE QUARTERLY JOURNAL OF AUSTRIAN ECONOMICS VOL. 6, NO. 1 (SPRING 2003)

http://mises.org/journals/qjae/pdf/qjae6_1_3.pdf

[nirgrahamUK]

lol. I meant to write that I would be pleased to see a thoughtful response to Barnett's rather 'Rothbardian' argument (I'm aware I may have not been clear)

[Niko]

@Lee:
1. Your comment on Rothbard shows many things: like the fact that you have strong opinions on stuff you next to nothing.

2. Your comment on 100% reserves shown you have little knowledge about economic history, ideas, contemporary works etc.

3. I've pointed out your blog because I wanted to show I tried to know you before making my judgment.

Have a good day.

[Fee Fee]

"Yeah going from minarchism and utilitarianism to anarchism and deontology is very trivial."

AFAIK there is frankly nothing in Mises's economic writings which actually support his minarchist political opinions. He said there might be a role for the state in defense and possibly a few other things, but he didn't give any reasons why. Rothbard recognized that Misesian ideas leave no place for the state and he wasn't afraid to say so.

Rothbard was not even a complete anarchist, in that he advocated participating in election campaigns to support whichever of the candidates is the most libertarian. Now that Hans-Hermann Hoppe has demonstrated the futility of democracy, I think that most Misesians (or Rothbardians) have moved well beyond either of their great predecessors. But they are all Misesians, not Hoppians.

[The_Orlonater]

I'm a little late, but someone posted on this thread asking what original and true statement Rothbard made in his works or MES(I think the question was). Well one of them is his application of Mises' socialist calculation problem onto the idea of the "one big firm." I think he went further with that and claimed that even if the firm owned a second factor of production, then it can't calculate rationally(or was that Peter Klein? I forgot). Please correct me if I'm wrong, though.

[Lode Cossaer]

It's definitely in Rotbard, in the chapter where he talks about the particular pricing of the factors of production. (Chapter 9)

[Essay Service]

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[Supra Skylow]

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