A correspondent points me at an old piece by Murray Rothbard criticizing me for my failure to hate the state, and asks for comment.
Rothbard's basic point is correct. I do not regard support for government as an act of willful evil but as an intellectual mistake; my arguments (and his) could be wrong, and some sort of government might be the least bad alternative among available human institutions. And even if we are correct, it is not unreasonable for other people to think we are not, as lots of intelligent people I know do.
The flip side of that is that I think one consequence of his attitude was to make him willing to be deliberately dishonest in his arguments—all being fair in war. That included being dishonest in the arguments he made to fellow libertarians.
My standard example was an exchange long ago, after a talk of his in which he claimed that Reagan did not really cut government and offered as evidence the increase in the nominal federal budget. I pointed out that, while his conclusion might for all I knew be true, his evidence combined whatever growth had occurred in the real size of the federal government with the effect of inflation over the period.
His response was that that was all right; because Reagan was responsible for the inflation, it was appropriate to use it to make his performance look worse. Think that through and he was saying that it was all right to misrepresent the evidence to his fellow libertarians as long as the result was to make them think badly of someone they should think badly of, to lead them to the correct conclusion for the wrong reason. I don't regard that as a desirable approach to political (or other discussion). Or, for that matter, a libertarian one—we are generally opposed to fraud as well as force.
My standard example was an exchange long ago, after a talk of his in which he claimed that Reagan did not really cut government and offered as evidence the increase in the nominal federal budget. I pointed out that, while his conclusion might for all I knew be true, his evidence combined whatever growth had occurred in the real size of the federal government with the effect of inflation over the period.
His response was that that was all right; because Reagan was responsible for the inflation, it was appropriate to use it to make his performance look worse. Think that through and he was saying that it was all right to misrepresent the evidence to his fellow libertarians as long as the result was to make them think badly of someone they should think badly of, to lead them to the correct conclusion for the wrong reason. I don't regard that as a desirable approach to political (or other discussion). Or, for that matter, a libertarian one—we are generally opposed to fraud as well as force.
I've written at some length online in the past on what I consider Rothbard's dishonesty with regard to economic history, in particular his misrepresentation of Smith (unfavorable) and his French contemporaries (favorable); see this old post for examples and further links. And there have been other examples. Murray was bright, articulate, and could be charming, but I don't think he could be trusted.
37 comments:
Some of these old battles have to just fight on forever; they have a life of their own.
Rothbard's style reminds me of Dworkin's.
Your writings generally set a standard of honesty and good temper in argument that it's genuinely hard for other people to reach.
Jonathan, if the Machinery of Freedom is nothing but good sense, why don't more people share the views explained in it?
Why is there such a chasm between popular viewpoints and the libertarian viewpoints?
Why, if Keynesian economics is nonsense, do I read nothing but Keynesian analysis in newspapers, and do I hear that it's the 'mainstream economic viewpoint'?
I don't mean to make an argumentum ad populum, but if the preponderance of a evidence is a certain way, what are the forces that steer people in another direction?
An the followup question of how that trend may be reversed.
"Jonathan, if the Machinery of Freedom is nothing but good sense, why don't more people share the views explained in it?"
Many times, erroneous and emotional arguments make for more persuasive arguments: which is why Rothbard is more popular among libertarians.
With regard to everyone else, most people don't care to think about politics at all. And I include in that people who go to political clubs as well. Those that do care to think things through, and read widely, may have a genuine difference of opinion, as Friedman already said. We see that in any other science. By the way, the average economist is much more libertarian leaning than the average Joe, as Bryan Caplan shows.
Finally, I don't understand your attack in Keynesianism. It is indeed the "mainstream economic viewpoint" in that every macro theory out there is generally predicated in the idea of sticky prices. We may differ in how much that factor is important in the real economy, but calling it non-sense is non-sense.
“Jonathan, if the Machinery of Freedom is nothing but good sense, why don't more people share the views explained in it?”
Rawls can answer that: the fact of “reasonable pluralism”. People bring in their ordinary lives general views of a religious, metaphysical, epistemological, ethical, etc, that apply to a wide range of subjects. General views may extend to questions of “what is of value in human life, as well as ideals of personal virtue and character, that are to inform much of our nonpolitical conduct (in the limit our life as a whole).” Rawls calls views of this character “comprehensive conceptions” or “comprehensive conceptions of the good”. Virtually all modern societies are divided by competing comprehensive conceptions. The cause of reasonable disagreement? Rawls posits the “burdens of judgment”: the vagueness of concepts, diversity of personal experiences, different people giving different weights to conflicting values, etc.
Not sure I understand mr friedman's arguments here. Perhaps mr friedman feels it his prerogative to defend his father (himself a statist), since he worked under Reagan. Rothbard has been quite accurate and many of mr friedman's arguments seem like non sequiturs. Don't get me wrong, david friedman is a good economist, but rothbard was far better. Indeed rothbard pointed out reagan's disastrous inflation because he "was" responsible for it. The fed created money like crazy, and volcker was fidgeting with the interest rates. Not sure mr friedman understands the ABCT, but there is good reason Rothbard pointed that out. One must remember that david friedman uses many statist models to make his points. Rothbard on the other hand took them straight on and showed that the Austrian Mechanics were far superior. There is good reason why Austrians have been correct, and why people like Milton Friedman were wrong and statist. Of course David Friedman is nothing like his father, since David himself (at least I hope) desires the government gone.
What adringuti said, is that parody? 'Cause if it is, it's very good. I honestly can't tell.
Either way, it makes my point better than I did.
One thing, though: it should be "Dr. Friedman," even if he himself wouldn't be pretentious enough to insist on the title.
@ Dr Friedman,
I would like to know if there are topics/books/essays in which Rothbard can be trusted or even made very good points in your opinion?
Respectively are there other issues (except Smith and this one), where one should be very careful as well in your opinion?
Interesting how Rand's people mistrusted Murray too.
What's interesting is that he's saying he's ruled by his emotions, whereas David is not. . .
I would rather see an academic response to "because Reagan was responsible for the inflation, it was appropriate to use it to make his performance look worse." I read that as, "Reagan was responsible for the inflation, so it was appropriate to count it in the analysis." That makes sense at a glance, but not under closer scrutiny. You mean that counting it this way is not the most meaningful way to count, because it would count an increase in government but not balanced against an increase in individual incomes. Is that right?
Roger, inflation means a generalized increase of prices. Nominal taxes may increase, but so have incomes. ie. The government collects more money, but pays more for things as well. The resources it commands do not change, and you should discount inflation when calculating the "burden" of government.
And yes, government prints some money to pay its bills, which will cause inflation down the road. But so what? If you look at government _spending_ that's already factored in. Again, if you want to calculate how many resources the government is spending, look at how much government is spending over time versus how much government is paying for the things it buys.
Hope that clears it out.
SO what is the reality of Reagan-era government spending? The way I recall it (I was there; I'm only a few years younger than Dr. Friedman), Reagan may have slowed the growth of government relative to those who came before and after him, but few if any programs or budgets were actually cut on his watch, even after adjusting for inflation. Is my memory correct, or the jaundiced view of a frustrated libertarian?
Kid: What I said above is that our host here sets a high standard of honesty and good temper in argument. I didn't actually claim that his arguments are sensible or correct, though as it happens I do believe that they usually are. (I say 'usually' because no-one can be right all the time.)
It's a fact of history that the majority of people tend to have wrong opinions on many subjects. Humans, all of us, are fallible and of limited intelligence. Perhaps all of us are still wrong about just about everything, and some future generation will look back on our foolish misconceptions with amazement.
I was exposed to Rothbard through the Von Mises institute. (Hence my screen name).
But after reading them both, I'd say David's arguments are generally more convincing. Its just too bad there isn't a David Friedman Institute. Anyone want to start it?
A problem I have with Reagan and Thatcher is that I find it almost impossible to decide whether I like them (their actions, not rhetoric) or not, as anyone arguing for or against them seem to betray some sort of emotion towards them, attachment or hatred.
What strikes me about Rothbard's writings is that he thinks very much in in-group/out-group terms. There's Rothbard and his fellow group of true libertarians, who are good; there's their current set of allies, who are acceptable; and there's everyone else, who is evil and must be opposed. I see the same thing from a number of other, more mainstream political groups.
And in this style of thinking, there are two key points:
* There's a tendency to think that all the people who are opposed to you are a unified Evil Party of Evil, all working together
* The worst evil of all is often seen as people who claim to be on your side but who try to form cooperative arrangements with the Evil people, because such people are traitors who can't be trusted
This probably all goes back to stone age tribes trying to keep strangers off their foraging grounds or something. But it's not the style of behavior of someone interested in voluntary trade and cooperation.
Whereas I think you're wrong about a number of things, but I also don't expect you to decide that my disagreement make me Evil, still less part of a unified Evil Party of Evil.
Dr. Friemdan, I'm a long fan of yours and the Austrian school but on this point you are the one mischaracterizing the situation.
Inflation in prices caused by the government, should be included when weighing the influence of government. Your argument for why not was "think about it". How exactly does that trump Rothbard's reasoned explanation for its inclusion?
are you arguing that inflation has no real effects?
you must simply have a disagreement on the neutrality of money, which Austrians, correctly in my opinion, have shown is unrealistic. Inflation is unevenly distributed in time and space, and both are advantages the government takes hold of as they are the earliest recipients of the increases in spending power initiated by the central bank. The government is the benefactors of the Cantillon effect, so clearly should be included.
Hypocritically, you are in fact mischaracterizing Rothbard simply to cause people to dislike him and not trust him.
More importantly, no one should be trusted outright, views should be internally investigated for their correctness, not based off "trust". I learned this from you, so am curious who exactly we should "trust" then?
are you arguing that inflation has no real effects?
you must simply have a disagreement on the neutrality of money, which Austrians, correctly in my opinion, have shown is unrealistic. Inflation is unevenly distributed in time and space, and both are advantages the government takes hold of as they are the earliest recipients of the increases in spending power initiated by the central bank. The government is the benefactors of the Cantillon effect, so clearly should be included.
Hypocritically, you are in fact mischaracterizing Rothbard simply to cause people to dislike him and not trust him.
More importantly, no one should be trusted outright, views should be internally investigated for their correctness, not based off "trust". I learned this from you, so am curious who exactly we should "trust" then?
Ricardo Cruz,
You have made one grave mistake in your analysis. Government's incomes rise faster than their expenses from inflation. Prices rise for everyone else because of their spending. Look up the Cantillon effect.
Ricardo Cruz,
You have made one grave mistake in your analysis. Government's incomes rise faster than their expenses from inflation. Prices rise for everyone else because of their spending. Look up the Cantillon effect.
I am not arguing that inflation has no real effects, nor objecting to someone offering inflation as something bad governments do.
I am pointing out that nominal expenditure figures do not tell us how much the size of government has grown, given the existence of inflation, and Rothbard was pretending that they did, and then giving an excuse for doing so which amounted to "there's nothing wrong with misrepresenting the facts as long as the people you make look bad deserve to look bad."
Suppose someone claimed that the size of the German government had increased a hundred thousand fold during the post WWI hyperinflation. Would he be telling the truth? I expect in nominal terms the increase was at least that large. Should the Weimar regime be counted a great success because (nominal) per capita income skyrocketed under it?
If we want to deal with the real world, it's important to care what is or isn't true, not just what side an argument supports.
Dr. Friedman, during hyperinflation the government has destroyed the entire economy so their influence is near infinite. Im surprised you would argue otherwise.
Everyone knows nominal incomes don't represent real wealth in aggregate. The correlation is closer with the government than anyone else though. What matters is the income to costs ratio. Government amass more real wealth from inflation, and the industries which they demand from. That money may eventually enter the incomes of other economic players that are non government dependent, but the prices around them have already risen by that time. Its no wonder costs in government influenced industries are higher than private equivalents.
Furthermore, nominal incomes didnt rise as much as is often thought in hyperinflation. Most of the price rise is from the supply side, not the demand side, as confidence in the currency is lost. The demand side always trails the fact that people are no longer willing to give up the same goods for the same price. If people expect the money supply to double, prices can adjust without that money being printed, simply by those controlling the supplies. Clearing the market no longer matters if they are going to absorb losses.
how do you suggest we account for the seigniorage tax then?
Adam asks about the seignorage tax--the revenue government collects by printing money.
The simplest way is by measuring total government expenditure, however funded.
The problem is, i think you're still assuming you can discount a general inflation from government spending. There is no general inflation however. Its always a wealth transfer from late receivers to the printers with other real effects.
Lets say I double the money supply in my basement, spend it and prices increase 100% after the fact (clearly prices don't have to mimic growth in the money supply this way buts lets assume they do). If you discount inflation, you'll say my influence was 0, but along the way i accumulated real stuff and created distortionary effects on the economy as apparent money masqueraded as real capital for a period.
Your way of tracking government influence, by discounting inflation, has serious errors and misses the real transfer of resources. Furthermore there is even more to the story when we account for the added consequences of inflation. I'd bet using Rothbard's numbers you're understating the role government if anything.
Another issue i have is that you think Rothbard genuinely didnt believe that inflation should be counted, and was only using this as a way of purposefully misleading people to the depth of government influence. I personally doubt this and i dont think from the story you've told we can imply his lack of genuineness.
I think David is saying that we should look at how much the counterfeiter spent to get an idea of the overall impact, regardless of where it came from (counterfeiting, theft, or what not).
David, correct me if I am wrong?
"And even if we are correct, it is not unreasonable for other people to think we are not, as lots of intelligent people I know do."
The fact that intelligent people hold a view does not make it reasonable. Many intelligent people hold views they cannot reasonably defend against simple and obvious objections.
Those who disagree you can be intelligent and still unreasonable.
I find the rift between the two of you to be quite disheartening. I consider Rothbard to be the father of Anarcho-Capitalism. I see him as the final link in Austrian theory (Actually, I'm still unsure as to where you stand on this whether you subscribe to the Austrian School or Chicago School, I was hoping you could clear this up for me). Whereas Mises and Hayek were offered brilliant starting points, although somewhat incomplete, he cleaned them up into a coherent and consistent Economic theory.
Whereas Rothbard was the father of the Anarcho-Capitalist philosophy you too play a vital role. Whereas he offers it from a natural rights argument, you prove it is preferable still from a pragmatic and utilitarian perspective. I am huge fans of you both, and I find it really quite sad that your relationship ended on poor terms. I really hope I can see a piece of yours in praise of Rothbard, what he has done for Anarcho-Capitalism, and how/if he has influenced you. Maybe on the anniversary of his death, perhaps?
Perhaps he was being dishonest with regard to Reagan, I don't know. I don't know what statistics he was using, nor do I know how great of a role inflation played int his. Perhaps he "performed a hatchet job on Adam Smith", though you may be taking him too seriously or perhaps his actions were not deliberate. I don't know. Either way these seem to be trivial matters in two minor pieces in his vast array of works.
This is my first ever post, I was hoping to write a paper where I painted you and Rothbard as the undoubted leaders of the An-Cap movement and was hoping to read something where you mentioned each other. I was really sad to find that this was the only piece I've found where you mention him. If you have any more pieces that you have written or any Rothbard wrote that were less critical of you I would love to read it. Also, if you have any objections to Rothbard as the founder of the anarcho-capitalist philosophy and any recommendations for alternative authors, I would like to hear that as well. Thank you.
That being said, I think it was unfair of Rothbard to paint you such a negative light. I feel as though he saw your work as something of an affront to his own, when he should have seen it as a way to further the an-cap movement. How much more compelling is the An-Cap philosophy when it can be viewed in both a natural rights and a utilitarian argument? He seems to be just as nitpicky as you were in your critique, its silly to attempt to dismiss you just because "you don't hate the state enough." The fact that he sides with non-anarchists who hate the state over an anarcho-capitalist just proves how short-sided he's being. What, did he expect you to be something of a militant-anarchist? No, you're an author. You are bringing us closer to anarchy through your influence. And I'm sure if he were alive today I'd be sending him a similar comment.
Regardless, I'd like to hear a lengthier commentary on Rothbard from you other than "he was a great writer, hyper-critical of my father, and that he might have been at times intellectually dishonest."
Anyone who chooses not to read Rothbards economic contributions due to this unnecessary squabble is doing themselves a massive disservice.
You may argue that Rothbard was weak on ethics and moral theory but one thing he was not weak on is economics.
Some of the comments in here, "Rothbard is emotionally driven arguments blah blah" are nonesense. Its clear many folk have not read a lick of Rothbard short of a few small articles.
Everyone who knows Rothbard knows his contributions were made in Economics. Do yourself a favor and read MES. While your at it Read Human Action by Mises.
MOF will not teach you praxeological subjects, like consumer sovereignty, the concept of exchange, and so on and so forth like MES and HA will.
@Anon.
Friedman is a chicagoan leaning market anarchist. As I understand it he rejects the Austrian Capital theory. Austrians have already addressed this.
(Its not all about inflation or hyperinflation like the simple minded folk think)
Its about disruptions in the structure of production, capital accumulation, and more sub-secs of general economic calculation. Calculation being something that revolves around money. Again all covered in MES and HA.
Many times, erroneous and emotional arguments make for more persuasive arguments: which is why Rothbard is more popular among libertarians.
Rothbard's argument is more persuasive because it is based on clear principles. David's utilitarianist approach is not clear and logical because utility cannot be measured objectively in a world where value is subjective. That is David's problem and until he rejects the methodology his positions will never be all that persuasive to principled libertarians.
Friedman's father did work under Reagan. What a great blog here. Can't get enough.. Adam Friedman
But Reagan was a colossal failure as he turned back on his principles. He grew the size of government, made the argument that deficits and debt did not matter, and made 'big government conservatism' respectable.
@skylien:
I noticed your comment when rereading the thread, don't think I answered it.
You should be careful in reading anyone, whether Rothbard or me. Nobody can be trusted--we all make mistakes, we all have our biases. One of the nice things about theoretical arguments is that you can work through the logic for yourself and see if it holds.
That's harder for factual claims, such as Rothbard's on the history of economics. It's easier to check such than it used to be, since the web gives easy access to a lot of information. And you can sometimes track down a work by A criticizing a work by B, and see if you find the arguments convincing, as in the case of my disagreement with Rothbard on economic history. But just trusting someone on one subject because you think he is right on another is always risky.
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