Who Is Murray Rothbard

BY DAVID GORDON

Murray N. Rothbard, a scholar of extraordinary
range, made major contributions to economics,
history, political philosophy, and legal theory. He
developed and extended the Austrian economics of Ludwig
von Mises, in whose seminar he was a main participant
for many years. He established himself as the principal
Austrian theorist in the latter half of the twentieth century
and applied Austrian analysis to historical topics such as
the Great Depression of 1929 and the history of American
banking.
Rothbard combined Austrian economics with a fervent
commitment to individual liberty. He developed a unique synthesis
that combined themes from nineteenth-century American
individualists with Austrian
economics. A new political philosophy
was the result, and Rothbard
devoted his remarkable intellectual
energy, over a period of some
45 years, to developing and promoting
his style of libertarianism.
In doing so, he became a major
American public intellectual.
David Gordon is editor of The Mises
Review (DGordon@mises.org).
Murray Rothbard was born March 2, 1926, the son of
David and Rae Rothbard. He was a brilliant student even as a
young child; and his academic record at Columbia University,
where he majored in mathematics and economics, was stellar.
In the Columbia economics department, Rothbard encountered
arguments against such then popular measures as price
and rent control. These arguments greatly appealed to him.
As he deepened his understanding of laissez-faire economics,
he confronted a dilemma. The arguments for market provision
of goods and services applied across the board. If so,
should not even protection and defense be offered on the market
rather than supplied by a coercive monopoly? Rothbard
realized that he would either have to abandon laissez-faire or
embrace individualist anarchy. The choice, arrived at in the
winter of 1949, was not difficult.
He began a project to write a textbook to explain Human
Action in a fashion suitable for college students; a sample
chapter he wrote on money and credit won Mises’s approval.
As Rothbard continued his work, he transformed the project.
The result, Man, Economy, and State (1962), became a central
work of Austrian economics.
Rothbard was entirely in accord with Mises’s endeavor to
deduce the whole of economics from the axiom of action,
combined with a few subsidiary postulates. In much more
detail than Mises had done, he carried out the deduction; and
in the process, he contributed major theoretical innovations to
praxeology. He showed that the socialist calculation argument
applies, not only to a governmentally controlled economy, but
to a single private firm owning the entire economy as well. It
too could not calculate.
He also integrated Frank Fetter’s theory of rent with Austrian
capital theory; and argued that a monopoly price could
not exist on the free market. Further, he offered a brilliant criticism
of Keynesian economics, and he anticipated much of the
“rational expectations” revolution for which Robert Lucas
later won a Nobel Prize.
2 Who is Murray Rothbard?
Rothbard devoted close attention to monetary theory.
Here he emphasized the virtues of the classical gold standard
and supported 100 percent reserve banking. This system, he
held, would prevent the credit expansion that, according to
the Austrian theory of the business cycle developed by Mises
and Friedrich Hayek, led to inevitable depression. He summarized
his views for the general public in the often-reprinted
pamphlet What Has Government Done to Our Money? (1964)
and also wrote a textbook, The Mystery of Banking (1983).
Rothbard showed the illumination that Austrian theory
could bring to economic history in America’s Great Depression
(1963). Far from being a proof
of the failures of unregulated
capitalism, the 1929 Depression
illustrates rather the dangers
of government interference
with the economy. The
economic collapse came as a
necessary correction to the artificial
boom induced by the Federal
Reserve System’s monetary
expansion during the
1920s. The attempts by the government
to “cure” the downturn
served only to make matters
worse.
For Rothbard, banking policy
was a key to American economic
history. Like Michelet, he believed that history is a resurrection
of the flesh; and his discussions are no dry-as-dust
presentations of statistics. He was always concerned to identify
the particular actors and interests behind historical decisions,
as he did in his A History of Money and Banking in the
United States (1999).
In a four-volume series, Conceived in Liberty (1975–1979),
he presented a detailed account of American colonial history
Who is Murray Rothbard? 3
Rothbard believed
that history is a
resurrection of
the flesh; and his
discussions are
no dry-as-dust
presentations
of statistics.
4 Who is Murray Rothbard?
that stressed the libertarian antecedents of the American Revolution.
As usual, he challenged mainstream opinion.
Although Rothbard usually found himself in close agreement
with Mises, in one area he maintained that Mises was
mistaken. His approach, based on his study of Aristotelian
and Thomist philosophy, is presented in his major work The
Ethics of Liberty (1982), his major study of political philosophy.
In an effort to widen the influence of libertarian thought
in the academic world, Rothbard founded the Journal of Libertarian
Studies in 1977. Rothbard established in 1987 another
journal, the Review of Austrian Economics, to provide a scholarly
venue for economists and others interested in Austrian
theory. It has continued to the present, after 1997 under the
new name Quarterly Journal of Austrian Economics.
One last academic triumph remained for Rothbard,
though sadly it appeared only after his death. In two massive
volumes, Economic Thought Before Adam Smith and Classical
Economics (1995), he presented a minutely detailed and erudite
account of the history of economic theory.
Rothbard was closely associated with the Ludwig von
Mises Institute from its founding in 1982 by Llewellyn H.
Rockwell, Jr. He taught at Brooklyn Polytechnic Institute from
the mid-1960s to the mid-1980s; from 1986 to his death on January
7, 1995, he was S.J. Hall Distinguished Professor of Economics
at the University of Nevada, Las Vegas. His combination
of scholarly achievement and engaged advocacy on
behalf of freedom is unmatched.