Murray Rothbard

"On the free market, everyone earns according to his productive value in satisfying consumer desires. Under statist distribution, everyone earns in proportion to the amount he can plunder from the producers."

- Murray N. Rothbard

Murray Newton Rothbard (March 2, 1926 – January 7, 1995) was an economist, scholar, intellectual and polymath who made major contributions in economics, political philosophy (libertarianism in particular), economic history and legal theory. He developed and extended the Austrian School of economics based on the earlier pioneering work of Ludwig von Mises. Rothbard eventually 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 individualist-anarchists such as Lysander Spooner and Benjamin Tucker with Austrian economics. A new political philosophy was the result, and Rothbard devoted his remarkable intellectual energy, over a period of some forty-five years, to developing and promoting his style of libertarianism. In doing so, he became a major American public intellectual.

Building on the Austrian School's concept of spontaneous order, support for a free market in money production and condemnation of central planning, Rothbard advocated abolition of coercive government control of the economy. He considered the monopoly force of government the greatest danger to liberty and the long-term well-being of the populace, labeling the State as nothing but a "a bandit gang writ large"&mdash;the locus of the most immoral, grasping and unscrupulous individuals in any society.

Rothbard concluded that all services provided by monopoly governments could be provided more efficiently by the private sector. He viewed many regulations and laws ostensibly promulgated for the "public interest" as self-interested power grabs by scheming government bureaucrats engaging in dangerously unfettered self-aggrandizement, as they were not subject to competitive pressures that would temper greed and self-interest with the need to produce goods and services that people actually wanted to pay for. Rothbard held that there were inefficiencies involved with government services and asserted that market disciplines would eliminate them, if the services could be provided by competition in the private sector.

Rothbard was equally condemning of state corporatism. He criticized many instances where business elites co-opted government's monopoly power so as to influence laws and regulatory policy in a manner benefiting them at the expense of their competitive rivals.

He argued that taxation represents coercive theft on a grand scale, and "a compulsory monopoly of force" prohibiting the more efficient voluntary procurement of defense and judicial services from competing suppliers. He also considered central banking and fractional reserve banking under a monopoly fiat money system a form of state-sponsored, legalized financial fraud, antithetical to libertarian principles and ethics. Rothbard opposed military, political, and economic interventionism in the affairs of other nations.

Life and career
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 did not receive any instruction in Austrian economics, and Mises was no more than a name to him. In a course on price theory given by George Stigler, however, he encountered arguments against such then popular measures as price and rent control. These arguments greatly appealed to him; and he wrote to the publisher of a pamphlet that Stigler and Milton Friedman had written on rent control.

Economist
The publisher in question was the Foundation for Economic Education; and visits to this group’s headquarters led Rothbard to a meeting with Ludwig von Mises. Rothbard was at once attracted to Mises’s laissez-faire economics, and when Mises’s masterwork Human Action appeared in 1949, it made a great impression on him. He was henceforward a praxeologist: here in Mises’s treatise was the consistent and rigorous defense of a free economy for which he had long been in search. He soon became an active member of Mises’s seminar at New York University. Meanwhile, he continued his graduate studies at Columbia, working toward his Ph.D. His mentor was the eminent economic historian Joseph Dorfman, and Rothbard received the degree in 1956, with a thesis on The Panic of 1819 that remains a standard work (The Panic of 1819: Reactions and Policies is based on it).

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.

Rothbard soon attracted the attention of the William Volker Fund, the main group that supported classical liberal scholars in the 1950s and early 1960s. 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), was 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, Jr. later won a Nobel Prize.

As Rothbard originally planned Man, Economy, and State, it was to include a final part that presented a comprehensive classification and analysis of types of government intervention. The section also subjected to withering criticism the standard canons of justice in taxation; a brief but brilliant passage refuted in advance the anti-market arguments based on "luck" that were to prove so influential in the later work of John Rawls and his many successors. Unfortunately, the part appeared in the original edition only in a severely truncated form. Its full publication came only in 1972, under the title Power and Market. The complete version of Man, Economy, and State, as Rothbard originally intended it to appear, is now available from the Mises Institute.

This masterly work was far from exhausting Rothbard’s contributions to economic theory. In a major paper, "Toward a Reconstruction of Utility and Welfare Economics" (1956), he showed that if one takes seriously the fact that utility is ordinal and not cardinal, then the anti-market views of most modern welfare economists must be abandoned. Strict application of demonstrated preference allows one to say that the participants to a voluntary exchange expect ex ante to benefit. Further than this, the economist, so long as he remains value-free, cannot go. His main papers on economic theory are available in the posthumously published two-volume collection The Logic of Action (1997).

Rothbard devoted close attention to monetary theory. Here he emphasized the virtues of the classical gold standard and supported 100% 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. 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.

In making this argument, Rothbard became a pioneer in "Hoover revisionism". Contrary to the myths promoted by Herbert Hoover himself and his acolytes, Hoover was not an opponent of big government. Quite the contrary, the economic policies of the "Engineer in Politics" prefigured the New Deal. Rothbard’s view of Hoover is now widely accepted.

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. The struggle between the competing J. P. Morgan and John D. Rockefeller banking circles figures again and again in his articles in this field, collected in his A History of Money and Banking in the United States (1999).

Austrian School writings
The Austrian School attempts to discover axioms of human action (called "praxeology" in the Austrian tradition). It supports free market economics and criticizes command economies. Influential advocates were Eugen von Böhm-Bawerk, Friedrich Hayek, and Ludwig von Mises. Rothbard argued that the entire Austrian economic theory is the working out of the logical implications of the fact that humans engage in purposeful action. In working out these axioms he came to the position that a monopoly price could not exist on the free market. He also anticipated much of the “rational expectations” viewpoint in economics.

In accordance with his free market views Rothbard argued that individual protection and national defense also should be offered on the market, rather than supplied by government’s coercive monopoly. Rothbard was an ardent critic of Keynesian economic thought as well as the utilitarian theory of philosopher Jeremy Bentham.

In Man, Economy, and State Rothbard divides the various kinds of state intervention in three categories: "autistic intervention", which is interference with private non-exchange activities; "binary intervention", which is forced exchange between individuals and the state; and "triangular intervention", which is state-mandated exchange between individuals. According to Sanford Ikeda, Rothbard's typology "eliminates the gaps and inconsistencies that appear in Mises's original formulation."

Rothbard also was knowledgeable in history and political philosophy. Rothbard's books, such as Man, Economy, and State, Power and Market, The Ethics of Liberty, and For a New Liberty, are considered by some to be classics of natural law and libertarian thought, combining libertarian natural rights philosophy, anti-government anarchism and a free market perspective in analyzing a range of contemporary social and economic issues. He also possessed extensive knowledge of the history of economic thought, studying the pre-Adam Smith free market economic schools, such as the Scholastics and the Physiocrats and discussed them in his unfinished, multi-volume work, An Austrian Perspective on the History of Economic Thought. Rothbard writes in Power and Market that the role of the economist in a free market is limited, but the role and power of the economist in a government which continually intervenes in the market expands, as the interventions trigger problems which require further diagnosis and the need for further policy recommendations. Rothbard argues that this simple self-interest prejudices the views of many economists in favor of increased government intervention.

Rothbard also created "Rothbard's law" that "people tend to specialize in what they are worst at. Henry George, for example, is great on everything but land, so therefore he writes about land 90% of the time. Friedman is great except on money, so he concentrates on money."

Self-ownership
In The Ethics of Liberty, Rothbard asserts the right of total self-ownership, as the only principle compatible with a moral code that applies to every person&mdash;a "universal ethic"&mdash;and that it is a natural law by being what is naturally best for man. He believed that, as a result, individuals owned the fruits of their labor. Accordingly, each person had the right to exchange his property with others. He believed that if an individual mixes his labor with unowned land then he is the proper owner, and from that point on it is private property that may only exchange hands by trade or gift. He also argued that such land would tend not to remain unused unless it makes economic sense to not put it to use.

Egalitarianism
The title essay of Murray Rothbard’s 1974 book Egalitarianism as a Revolt Against Nature and Other Essays held that “Equality is not in the natural order of things, and the crusade to make everyone equal in every respect (except before the law) is certain to have disastrous consequences.” In it Rothbard wrote, “At the heart of the egalitarian left is the pathological belief that there is no structure of reality; that all the world is a tabula rasa that can be changed at any moment in any desired direction by the mere exercise of human will.” Rothbard also expressed his views that statists suppressed academic research on race in order to support their goal of using the state to enforce egalitarian goals.

In a 1963 article called the “Negro revolution” Rothbard wrote that “the Negro Revolution has some elements that a libertarian must favor, others that he must oppose. Thus, the libertarian opposes compulsory segregation and police brutality, but also opposes compulsory integration and such absurdities as ethnic quota systems in jobs.” According to Rothbard biographer Justin Raimondo, Rothbard considered Malcolm X to be a “great black leader” and Martin Luther King to be favored by whites because he “was the major restraining force on the developing Negro revolution.” Rothbard also compared U.S. President Lyndon Baines Johnson’s use of troops to crush urban rioters in 1968 after King’s assassination to Johnson’s use of American troops against the Vietnamese.

Anarcho-capitalism
Rothbard began to consider himself a private property anarchist in the 1950s and later began to use "anarcho-capitalist". He wrote: "Capitalism is the fullest expression of anarchism, and anarchism is the fullest expression of capitalism." In his anarcho-capitalist model, a system of protection agencies compete in a free market and are voluntarily supported by consumers who choose to use their protective and judicial services. Anarcho-capitalism would mean the end of the state monopoly on force.

Rothbard was equally condemning of relationships he perceived between big business and big government. He cited many instances where business elites co-opted government's monopoly power so as to influence laws and regulatory policy in a manner benefiting them at the expense of their competitive rivals. He wrote in criticism of Ayn Rand's "misty devotion to the Big Businessman" that she: "is too committed emotionally to worship of the Big Businessman-as-Hero to concede that it is precisely Big Business that is largely responsible for the twentieth-century march into aggressive statism..." According to Rothbard, one example of such cronyism included grants of monopolistic privilege the railroads derived from sponsoring so-called conservation laws.

Free market money
Rothbard believed the monopoly power of government over the issuance and distribution of money was inherently destructive and unethical. The belief derived from Ludwig von Mises and Friedrich Hayek's Austrian theory of the business cycle, which holds that undue credit expansion inevitably leads to a gross misallocation of capital resources, triggering unsustainable credit bubbles and, eventually, economic depressions. He therefore strongly opposed central banking and fractional reserve banking under a fiat money system, labeling it as "legalized counterfeiting" or a form of institutionalized embezzlement and therefore inherently fraudulent. He characterized the government-enforced prohibition on citizens using commodity currencies as legal tender a compulsory Ponzi scheme, a Ponzi scheme from which no citizen could escape.

He strongly advocated full reserve banking ("100 percent banking") and a voluntary, nongovernmental gold standard or, as a second best solution, free banking (which he also called "free market money").

In relation to the current central bank-managed fractional reserve fiat currency system, he stated the following:

"Given this dismal monetary and banking situation, given a 39:1 pyramiding of checkable deposits and currency on top of gold, given a Fed unchecked and out of control, given a world of fiat moneys, how can we possibly return to a sound noninflationary market money? The objectives, after the discussion in this work, should be clear: (a) to return to a gold standard, a commodity standard unhampered by government intervention; (b) to abolish the Federal Reserve System and return to a system of free and competitive banking; (c) to separate the government from money; and (d) either to enforce 100 percent reserve banking on the commercial banks, or at least to arrive at a system where any bank, at the slightest hint of nonpayment of its demand liabilities, is forced quickly into bankruptcy and liquidation. While the outlawing of fractional reserve as fraud would be preferable if it could be enforced, the problems of enforcement, especially where banks can continually innovate in forms of credit, make free banking an attractive alternative."

Other pursuits
Rothbard ranged far beyond economics in his historical work. In a four-volume series, Conceived in Liberty (1975-1979), he presented a detailed account of American colonial history that stressed the libertarian antecedents of the American Revolution. As usual, he challenged mainstream opinion. He had little use for New England Puritanism, and the virtues and military leadership of George Washington did not impress him. For Rothbard, the Articles of Confederation were not an overly weak arrangement that needed to be replaced by the more centrally focused Constitution. Quite the contrary, the Articles themselves allowed too much central control.

Although Rothbard usually found himself in close agreement with Mises, in one area he maintained that Mises was mistaken. Mises contended that ethical judgments were subjective: ultimate ends are not subject to rational assessment. Rothbard dissented, maintaining that an objective ethics could be founded on the requirements of human nature. 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 his system of political ethics, self-ownership is the basic principle. Given a robust conception of self-ownership, a compulsory government monopoly of protective services is illegitimate; and Rothbard endeavors to refute the arguments to the contrary of supporters of a minimal state, Robert Nozick chief among them. He contributes important clarifications to problems of libertarian legal theory, such as the nature of contracts and the appropriate standard of punishment. He explains why Mises’s instrumental argument for the market does not fully succeed, though he finds much of value in it; and he criticizes in careful detail Hayek’s view of the rule of law.

Noninterventionism
Believing like Randolph Bourne that "war is the health of the state" Rothbard opposed aggressive foreign policy. He criticized imperialism and the rise of the American empire which needed war to sustain itself and to expand its global control. His dislike of U.S. imperialism even led him to eulogize and lament the CIA-assisted execution of Marxist revolutionary Che Guevara in 1967, proclaiming that "his enemy was our enemy". Rothbard believed that stopping new wars was necessary and knowledge of how government had seduced citizens into earlier wars was important. Two essays expanded on these views "War, Peace, and the State" and "The Anatomy of the State". Rothbard used insights of the elitism theorists Vilfredo Pareto, Gaetano Mosca, and Robert Michels to build a model of state personnel, goals, and ideology. In an obituary for historian Harry Elmer Barnes Rothbard explained why historical knowledge is important:

"Our entry into World War II was the crucial act in foisting a permanent militarization upon the economy and society, in bringing to the country a permanent garrison state, an overweening military-industrial complex, a permanent system of conscription. It was the crucial act in creating a mixed economy run by Big Government, a system of state-monopoly capitalism run by the central government in collaboration with Big Business and Big Unionism."

Rothbard discussed his views on the principles of a libertarian foreign policy in a 1973 interview: "minimize State power as much as possible, down to zero, and isolationism is the full expression in foreign affairs of the domestic objective of whittling down State power." He further called for "abstinence from any kind of American military intervention and political and economic intervention." In For a New Liberty he writes: "In a purely libertarian world, therefore, there would be no 'foreign policy' because there would be no States, no governments with a monopoly of coercion over particular territorial areas."

In "War Guilt in the Middle East" Rothbard details Israel's "aggression against Middle East Arabs," confiscatory policies and its "refusal to let these refugees return and reclaim the property taken from them." Rothbard also criticized the “organized Anti-Anti-Semitism” that critics of the state of Israel have to suffer. Rothbard criticized as terrorism the actions of the United States, Israel, and any nation that "retaliates" against innocents because they cannot pinpoint actual perpetrators. He held that no retaliation that injures or kills innocent people is justified, writing "Anything else is an apologia for unremitting and unending mass murder."

Political views
Rothbard modified the famous dictum of Marx: he wished both to understand and change the world. He endeavored to apply the ideas he had developed in his theoretical work to current politics and to bring libertarian views to the attention of the general public. One issue for him stood foremost. Like Randolph Bourne, he maintained that "war is the health of the state"; he accordingly opposed an aggressive foreign policy.

His support for nonintervention in foreign policy led him to champion the Old Right. John T. Flynn, Garet Garrett and other pre-World War II "isolationists" shared Rothbard’s belief in the close connection between state power and bellicose foreign policy.

The situation was quite otherwise with postwar conservatism. Although Rothbard was an early contributor to William Buckley’s National Review, he rejected the aggressive pursuit of the Cold War advocated by Buckley and such members of his editorial staff as James Burnham and Frank S. Meyer. He broke with these self-styled conservatives and thereafter became one of their strongest opponents. For similar reasons, he condemned their neoconservative successors. He followed a pragmatic policy of temporary alliances with whatever groups were, at a given time, opposed to militarism and foreign adventures. He set forward the basis for his political stance in a key essay, "Left and Right: The Prospects for Liberty". This appeared in an important scholarly journal, Left and Right (main page), which he established. This contained major essays on revisionist history and foreign policy, but unfortunately lasted only from 1965-1968.

In an effort to widen the influence of libertarian thought in the academic world, Rothbard founded the Journal of Libertarian Studies (main page) in 1977. The journal began auspiciously with a symposium on Robert Nozick’s Anarchy, State, and Utopia. Down to the present, it has remained the most important journal hospitable to libertarian ideas.

Rothbard established in 1987 another journal, the Review of Austrian Economics (main page), to provide a scholarly venue for economists and others interested in Austrian theory. It too is the key journal in its area of specialty. It has continued to the present, after 1997 under the new name Quarterly Journal of Austrian Economics (main page).

In his comments on current events, Rothbard displayed an ability to digest vast quantities of information on whatever subject interested him. Whether, e.g., the question was competing factions in Afghanistan or the sources of investment in oil in the Middle East, he would always have the relevant data at his command. A sample of his columns, taken from the Rockwell Rothbard Report, is available in The Irrepressible Rothbard (2000; review). Another journal that he founded, The Libertarian Forum (main page), provides his topical comments for the period 1969-1984. He presented a comprehensive popular account of libertarianism in For A New Liberty (1973; text, pdf).

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; volume I. and II. pdf), he presented a minutely detailed and erudite account of the history of economic theory. Adam Smith, contrary to general belief, was not the founder of modern economics. His defense of a labor theory of value, modified and continued by his Ricardian successors, shunted economics onto the wrong path. The heroes of Rothbard’s study were the Spanish scholastics, who long before Smith had developed a subjective theory of value, and such later figures as Cantillon, Turgot, and Say. He dissects the heretical religious thought that prefigured Marxism and gives a mordant portrayal of the personality and thought of John Stuart Mill.

Rothbard was closely associated with the Ludwig von Mises Institute from its founding in 1982 by Llewellyn H. Rockwell, Jr. This organization became the main vehicle for the promotion of his ideas, and he served as its Academic Vice-President.

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.

The "indispensable framework" for the life and work of this creative genius and polymath was his beloved wife, JoAnn Rothbard. His combination of scholarly achievement and engaged advocacy on behalf of freedom is unmatched.

Original text written by David Gordon, used with generous permission of the Mises Institute.

Academic Degrees

 * B.A. Mathematics, Columbia University (1945)
 * M.A. Economics, Columbia University (1946)
 * Ph.D. Economics, Columbia University (1956)

Academic Appointments

 * Instructor, City College of New York (1948-1949)
 * Professor of Economics, Polytechnic Institute of Brooklyn (1963-1985)
 * Vice President for Academic Affairs, Ludwig von Mises Institute (1982-1995)
 * S.J. Hall Distinguished Professor of Economics, University of Nevada, Las Vegas (1986-1995)

Other Positions

 * Senior Analyst, William Volker Fund (1951-1962)
 * Editor, Left and Right (1965-1968)
 * Founder, Center for Libertarian Studies (1976)
 * Resident Scholar, The Cato Institute (1977)
 * Founder, Journal of Libertarian Studies (1977)
 * Editor, Journal of Libertarian Studies (1977-1995)
 * Consultant, U.S. Commission on Gold (1981-1982)
 * Founder, The Review of Austrian Economics (1987)
 * Editor, The Review of Austrian Economics (1987-1995)

Links

 * Biography
 * MurrayRothbard.com
 * Biography of Murray N. Rothbard at Mises.org
 * Media archive
 * Literature archive
 * Daily Article archive
 * The complete Rothbard bibliography
 * A Scholar in Defense of Freedom, a bibliographic essay
 * Reflections on Murray Rothbard
 * Tributes and Essays to Rothbard by Walter Block, Hans Hoppe, Lew Rockwell, Jeffrey A. Tucker, and Joseph Salerno
 * Murray N. Rothbard: In Memoriam (PDF) Ed. Llewellyn H. Rockwell, Jr. 1995
 * "Murray N. Rothbard: Mr. Libertarian" by Wendy McElroy July 2000
 * Murray N. Rothbard: In Memoriam (PDF) Ed. Llewellyn H. Rockwell, Jr. 1995
 * "Murray N. Rothbard: Mr. Libertarian" by Wendy McElroy July 2000


 * Interviews and debates
 * "Interview with Murray N. Rothbard" The Austrian Economics Newsletter, Summer 1990
 * "Murray Rothbard on Me and Vice Versa" by David Friedman, June 2011
 * "Murray Rothbard on Chomsky, Left Anarchists" (from The Libertarian Forum, June 1971 (PDF)
 * "Murray Rothbard on Chomsky, Left Anarchists" (from The Libertarian Forum, June 1971 (PDF)


 * Other media
 * The Mises Circle: "Rothbard's Intellectual Entrepreneurship" lecture by Doug French, August 2006 (published as Mises Daily here)
 * Rothbard's Audio Economics Course
 * Short Clips