The Rothbard Reader Th e Mises Institute dedicates this volume to all of its generous donors and wishes to thank these Patrons, in particular: Dr. Gülçin Imre Hoppe and Prof. Dr. Hans-Hermann Hoppe, One Horizon Foundation Anonymous, Conant Family Foundation, Wayne Chapeskie, T.J. and Ida Goss, In Memory of Virginia Harley, Hunter Lewis and Elizabeth Sidamon-Eristoff , Brian E. Millsap, Gary and Nina Turpanjian, Dr. Th omas L. Wenck Mr. and Mrs. David P. Abernathy, Patricia and Christopher Auff enberg, Jeff rey A. Barnes, John Bartel, Richard Beverly Bleiberg, Bob and Rita Bost, Laurie Buckland, Andrew S. Cofrin, Scott Colburn, Donald K. Cowles, Jim and Cherie Cox, Carl S. Creager, D. Allen and Sandra Dalton, Karen DeCoster, Paul J. Dietrich, Justin Edwards, David J. Emery, Jeff rey E. Fernley, D.O., M.S., Michael C. Fox, Steven C. Frazer, Gary T. Gorski, William and Mary Elizabeth Grant, In Honor of Jamie Haenggi, Jeff rey Harding , Hunter and Juliana Hastings, In Honor of Woody Russell, In Memory of Charles A. and Julia Culp, In Memory of Wade and Sophronia James, Yisok Kim, Richard J. Kossman, M.D., Dr. Antonio A. Llorens Rivera, Arthur L. Loeb, Roland R. Manarin, Richard and Donna Mancini, Jim McElroy, M.A. Mellott, Steve Milunovich, Ronald E. Morrell, Jr., Ken and Jan Morris, Darren Mullen, Mr. and Mrs. R. Nelson Nash, Ernest Ortiz, Paul F. Peppard, William Andrew Rariden, Rajashekar Reddy, Mr. and Mrs. Donald M. Rembert, Sr., Jorge Roca Arteta, Greg Roe, Th omas S. Ross, Charles D. Sears, Joshua Shelly, In Honor of Henri Etel Skinner, Robert Stewart, Dr. Michael Th ibodeaux, Joe Vierra, William Vinck, J.C. Warren, Alice and Wayne Whitmore, Mr. and Mrs. Walter Woodul, III, Nabeel Zafar The Rothbard Reader J OSEPH T. SALERNO M ATTHEW MC C AFFREY E DITORS M ISESI NSTITUTE AUBURN, ALABAMA Published 2016 by the Mises Institute. Th is work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 International License. http://creativecommons.org/licenses/by-nc-nd/4.0/ Mises Institute 518 West Magnolia Ave. Auburn, Ala. 36832 mises.org paperback edition: 978-1-61016-661-4 large print edition: 978-1-61016-662-1 epub: 978-1-61016-663-8 Contents Introduction. 7 Section I: Rothbard: Man, Economist, Anti-Statist . 11 1. Murray Rothbard (Penthouse). 13 2. A Conversation with Murray Rothbard (Austrian Economics Newsletter) . 29 3. Murray Rothbard in the New Banner . 38 Section II: Foundations of Social Science and the Free Society . 53 4. Th e Discipline of Liberty . 55 5. Value Implications of Economic Th eory . 57 6. Statistics: Achilles’ Heel of Government . 67 7. Ludwig von Mises and the Paradigm for Our Age . 72 Section III: Principles of Economics and Government Intervention . 87 8. Fundamentals of Value and Price . 89 9. Exchange and the Division of Labor. 97 10. Th e Division of Labor Clarifi ed. 107 11. Monopoly and Competition . 111 12. Are Diamonds Really Forever? . 127 13. Th e Infant-Industry Argument . 130 14. Airport Congestion: A Case of Market Failure? . 134 15. Th e Union Problem. 137 16. Outlawing Jobs: Th e Minimum Wage, Once More. 141 17. Th e Myth of Tax “Reform” . 144 5 6 The Rothbard Reader Section IV: Money, Banking, and the Business Cycle . 155 18. Essentials of Money and Infl ation. 157 19. On the Defi nition of the Money Supply. 163 20. Defl ation Reconsidered . 173 21. Anatomy of a Bank Run . 181 22. Lessons of the Recession. 184 Section V: History of Economic Th ought. 189 23. Mercantilism . 191 24. Frédéric Bastiat: Champion of Laissez-faire . 194 25. Keynes’s Political Economy . 199 26. Th e Chicago School. 205 27. Israel Kirzner and the Economic Man . 210 Section VI: Economic History. 213 28. Economic Determinism, Ideology, and the American Revolution . 215 29. Th e Progressive Movement . 226 30. Unhappiness with the National Banking System . 229 Section VII: Political Philosophy and the Libertarian Movement . 233 31. Property and Exchange. 235 32. War, Peace, and the State . 248 33. Notes on the Nintendo War . 261 34. Society Without A State . 268 35. Why Be Libertarian?. 284 36. In Praise of Demagogues . 290 Section VIII: Movie Reviews . 293 37. Th e Godfather. 295 38. Th e Godfather, Part II . 297 39. Blaxploitation. 299 40. Th e Tough Cop . 300 41. Death Wish . 303 42. Cinema Paradiso . 304 Index . 307 Introduction ew economists manage to produce a body of work that boasts a seri- ous following twenty years aft er their deaths. Murray N. Rothbard is Fa rare exception. More than two decades since his passing, his infl u- ence lives on, both in the work of a new generation of social scientists, and among a growing number of the general public. One reason for Rothbard’s continuing popularity is his ability to reach across disciplines, and to connect them: unlike many contemporary econ- omists, who specialize in increasingly narrow fi elds within the science, Rothbard’s research agenda was expansive and interdisciplinary, covering most of the social sciences and humanities. Some readers of this book will already be familiar with Rothbard’s major works, such as his path-breaking treatise on economics, Man, Econ- omy, and State. Yet Rothbard also produced hundreds of shorter works for both academic and popular audiences. Unfortunately, many lack the time to explore his writings; what’s more, his oeuvre is so enormous it is oft en diffi cult to know where to begin. Th is book aims to solve these problems by providing a window into Rothbard’s achievements in the social sciences, humanities, and beyond. It includes introductory, intermediate, and advanced material, to ensure the book can be enjoyed by readers of all levels of understanding and familiar- ity with Rothbard’s work. Th erefore although it is intended primarily for 7 8 The Rothbard Reader newcomers, veteran readers will also fi nd much to discover or re-discover in these pages. Th e individual articles in this collection can be read in any order; with that in mind, we propose two ways to explore them. Th ose new to Roth- bard’s writing may want to begin with the shorter, more accessible chap- ters that interest them most, before continuing on to more diffi cult topics. However, we have intentionally arranged the articles and sections so that readers who prefer a systematic discussion, or who are already acquainted with Rothbard’s ideas, can read the book cover to cover. Th e volume begins with a personal look at Rothbard’s life and work, as told in his own words. Th e opening section, “Rothbard: Man, Economist, and Anti-Statist,” brings together three rare interviews, each highlighting diff erent aspects of his unique personality and worldview. Readers will soon recognize an overarching theme running through Rothbard’s life and work: a passion for liberty, a unifying principle in his thought, no matter the discipline. Th is commitment can be seen further in the next section, “Founda- tions of Social Science and the Free Society.” In the fi rst essay, Rothbard stresses “Th e Discipline of Liberty” as the foundation for the study of humanity. Th is central interest serves as inspiration and foundation for the project that follows, namely, an outline of the human sciences and their primary method of investigation: praxeology. Although Rothbard wrote on many subjects, his training—and heart —were in economics, and so too are the majority of the writings in this collection. Th e next two sections provide a concise exposition of economic theory, beginning with individual value and choice. Th ey explore in turn Rothbard’s insights into the “Principles of Economics and Government Intervention” and “Money, Banking, and the Business Cycle.” Together, these chapters provide a brief overview of Rothbard’s more comprehensive account of economic theory in Man, Economy, and State. Austrian economists have always been fascinated by the history of their science, and Rothbard was no exception. In fact, his writings on the subject are among his most original and controversial. Th e section devoted to the “History of Economic Th ought” surveys the contributions of many infl uential economists, outlining the development of economics from mercantilism to the modern Austrian school. However, Rothbard’s historical interests extended far beyond the his- tory of economic doctrines. Th e section on “Economic History” illustrates how he consistently applied economic theory to historical experience in Introduction 9 order to explain events like the American Revolution, the Progressive Era, and the rise of central banking in the United States. Of course, no collection of Rothbard’s major ideas could be complete without a section devoted to his political philosophy. Based fi rmly on the idea of property rights, Rothbard develops an account of the free soci- ety and its enemies, especially war and the state. Th ese discussions are followed by Rothbard’s assessment of the libertarian movement and its pitfalls, along with some of his views on eff ective strategies for creating a free society. Th e collection ends on another personal note. Many of Rothbard’s friends attest that when meeting him for the fi rst time, they were stunned by the personality of the man they had previously known only through his academic work. Rothbard embodied a rare vigor and humor, and his love of liberty encompassed more than academic interests: he enjoyed the fruits of liberty as well. Th ese included listening to jazz music and going to the movies, both of which he loved, although perhaps not as much as he delighted in writing about them. Th e fi nal section, “Movie Reviews,” collects some of Rothbard’s most entertaining criticism through the years.