Thursday, June 15, 2006

Old News: Friedman Contra Rothbard

Many years ago, I got into an exchange on Usenet in which I argued that the part of Murray Rothbard's book on the history of economic thought that dealt with Adam Smith was a hatchet job, using selection and deliberate omission to attack Smith. David Gordon recently posted a long rebuttal and I have just posted a comment responding to the rebuttal. I don't know of any way of linking to my comment on someone else's blog, so am including it below. Interested readers may want to read my summary post from eight years ago, then Gordon's piece, then what follows. The controversy may be of interest to those interested in the history of modern libertarianism, in controversies, or both.

(My comment at

I'm not inclined to engage in a detailed rebuttal; interested readers can check the original thread against the account here. I did want to make a few points, however.

1. I wasn't arguing the question of how important Smith was or wasn't in the history of economic thought, however interesting that might have been, or of how pure a libertarian he was. Indeed, I explicitly conceded that Rothbard was correct in pointing out that many of Smith’s ideas appear in earlier works.

I was focusing on a simple question: was Rothbard's account of Smith and his French contemporaries an honest and accurate one or, as I argued, a hatchet job, deliberately distorting by omission and selection.

2. I suggest that readers consider one simple case, where David Gordon and I do not disagree on the facts, merely the interpretation: Smith's views on the wool trade. Rothbard said that Smith advocated taxing wool exports and offered that as evidence of his non-libertarian views. Rothbard did not mention that Smith was proposing the tax as a replacement for the existing situation—an absolute ban, enforced by extensive regulations and ferocious penalties, described in detail by Smith. 

Gordon argues that Smith's position was not all that libertarian, since the proposal can be read as imposing a tax high enough to collect most of the gains from the repeal of the ban. Whether that is true or not, he does not deny that Rothbard accused Smith of wanting to impose taxes on the export of wool without mentioning that he was proposing the tax as an alternative to a much less free existing system--a fact that the average reader would not have known.

Perhaps David Gordon believes that an honest writer could have done that. I do not.

3. Gordon thinks I am mistaken in reading Smith as undecided between public and private support for schooling, despite Smith's plain statement that "The expense of the institutions for education and religious instruction ... might perhaps with equal propriety, and even with some advantage, be defrayed altogether by those who receive the immediate benefit of such education and instruction, or by the voluntary contribution of those who think they have occasion for either the one or the other."

Gordon wants us to read that as making a distinction between the cost of setting up schools and of maintaining them. He may not have noticed that the previous paragraph, on roads, specifically refers to "maintainance." This one does not. There is no basis in the text I have just quoted for separating out the capital cost of establishing a school from the operating cost; both are expenses.

Gordon's response is to quote an earlier passage, where Smith suggests, as one possibility, having the state establish schools, with much of the fee paid by parents. But of course, Smith in his discussion of education considers lots of alternatives. Indeed, Gordon quotes a bit from my lecture notes—where I describe the proposal in question as "Possible public role in the education of the common people." There is nothing in that passage implying that the cost of setting up a school is not part of "the expense of the institutions of ... ." 

4. Vincent Cook writes:

"Moreover, Friedman and Rothbard had clashed in other contexts (especially in arguing the foundations of anarcho-capitalism)."

I'm not sure we ever did clash on that, although it's probably the most important and interesting substantive disagreement between us—assuming that what Vincent means is the disagreement on how the legal code of an anarcho-capitalist society gets produced.

But I think the real conflict was something quite different. Rothbard has a piece, webbed somewhere, in which he criticizes me for not hating the state. In his terms, he was correct. In my view, the fundamental conflict is not between bad men and good men but between mistaken beliefs and correct beliefs.

The flip side of that is that, in my view, Rothbard was consistently more interested in whether an argument was on the right side than whether it was correct. I think I have demonstrated that in the context of his attack on Smith—that he was willing to deliberately mislead his readers about the facts in order to get them to what Rothbard considered the correct conclusion. I can think of other examples.


Matt McIntosh said...

The Rothbard piece you mentioned in passing is here.

Gabriel M said...

Great topic! We need more of this kind of posts!

sierra said...

The link to your comment is here: A good blog template would feature explicit permalinks to comments. As it is, the HTML source features a DIV tag with an ID attribute that appears in the above URL after the # character.

Anonymous said...

Friedman: "In my view, the fundamental conflict is not between bad men and good men but between mistaken beliefs and correct beliefs."

Rothbard: "Granted that life is more pleasant following this tack, but alas, it misses the crucial point. Also, it is unpleasantly reminiscent of the tactic of all ruling classes in history: criticize inflation, but never the inflators; price controls, but never the people doing the controlling, etc. The point is that sins, errors, evils, etc. are not just floating abstractions; they are committed by real persons in the real world, and therefore they cannot be combatted unless people know what is going on in the concrete and who is doing it. Who is inflating and regulating, and for what purpose? It is at that point that we realize that not just abstract error but conscious evil is being perpetrated for the sake of ill-gotten money and power." (From the Jan '81 edition of the Libertarian Forum)

Anonymous said...

I should probably apologize for partly causing this. I noticed a link you posted in a comment of yours at the econlog blog and then posted that on a comment at the mises blog. I did not think it would inspire David Gordon to create a response on the site, as there are usually much fresher (and less obscure) debates to add ones two cents to.