The Rothbardian Turn of Mind
THE LOGIC OF ACTION
Murray N. Rothbard
Edward Elgar, 1997, Vol. I, xviii + 452 pgs.; Vol. II, ix + 416 pgs.
It is both essential and impossible to review these two volumes. Essential, because they
bulk of the scientific papers written by a great Austrian theorist. But also impossible, because of
the incredible variety of topics covered, ranging from the nature of human action to the influence
gnostic thought on Marxism.
As one reads these disparate essays, however, a common quality comes to the fore. Murray
again and again challenges an assumption that everyone else takes to be obviously true. Once
poses his question, our view of the relevant topic is at once turned upside down.
Everyone knows that the free market is the most efficient economic system; Milton
Friedman et hoc
genus omne build their defense of the market largely on this consideration. One might
Rothbard, second to none as a champion of the market, would join in lauding its efficiency.
he asks a fundamental question: does the concept of efficiency mean anything?
"Let us take a given individual...in order for him to act efficiently, he would have to possess
perfect knowledge of the future. But since no one can ever have perfect knowledge of the future,
one's action can be called 'efficient.' ...[I]f ends change in the course of an action, the concept of
efficiency--which can only be defined as the best combination of means in pursuit of given
becomes meaningless" (I, pp. 266-67). And if efficiency can be given no clear characterization
individual, it fares even worse when the ends of more than one person are considered.
Murray Rothbard viewed the logical positivists with alarm; but as the example just discussed
used with great skill a favorite tactic of theirs. He asks: what is the operational definition of a
concept under discussion? If none can be provided, the concept must be eliminated from
Another instance of this technique occurs in the essay, "Toward a Reconstruction of Utility
Welfare Economics." Our author will have no truck with James Buchanan's attempt "to
State as a voluntary institution. Buchanan's thesis is based on the curious dialectic that majority
rule in a democracy is really unanimity because majorities can and do always shift. The resulting
pulling and hauling of the political process, because obviously not irreversible, are therefore
supposed to yield a social unanimity. The doctrine...must be set down as a lapse into a type of
Hegelian mysticism" (I, p. 252).
Rothbard's procedure is a simple one. He asks: what does the voluntary state amount to? And
Buchanan's characterization of it, Rothbard goes on to ask: is this what we ordinarily mean by
"voluntary"? As it obviously is not, this conception of the voluntary state cannot stand. (Another
instance of the same technique may be found in the search for an operational definition of
price in Man, Economy, and State.)
As the same essay illustrates, Rothbard took nothing for granted in ethics. Much of
welfare economics rests on the detection of positive externalities. Our author, with his
characteristic jump to the essence, inquires, why are positive externalities a social problem?
"A and B decide to pay for the building of a dam for their uses; C benefits though he did not
This is the problem of the Free Rider. Yet it is difficult to understand what the hullabaloo is all
about. Am I to be specially taxed because I enjoy the sight of my neighbor's garden without
it? A's and B's purchase of a good reveals that they are willing to pay for it; if it
benefits C as well, no one is the loser" (I, p. 25).
Let us once more pause to grasp the revolution involved in Rothbard's query. Before him
assumed without much thought that beneficiaries of positive externalities ought to pay for them.
Rothbard has raised the question, you cannot help but wonder, why should this controversial
assumed without argument?
When Robert Nozick made a similar point in Anarchy, State, and Utopia
(1974), philosophers were quick
to take notice. But Rothbard was there long before. (Incidentally, the response that it maximizes
efficiency for beneficiaries to pay is blocked by the earlier Rothbardian analysis discussed
In the second volume of this monumental collection, where issues of the application of
feature prominently, Murray Rothbard continues his pursuit of the revolutionary question. People
usually looked at an issue in a certain way; but why should we do so?
Thus, an influential approach to welfare economics endeavors to minimize transaction costs.
Myth of Neutral Taxation," Rothbard is ready with an iconoclastic query: "What is so terrible
transaction costs? On what basis are they considered the ultimate evil, so that their minimization
must override all other considerations of choice, freedom, or justice?" (p. 88). If one responds
reducing these costs has some, though not overriding, importance, Rothbard's question compels
specify exactly how much, and why, they are to count.
Fortunately for our society, support among economists for the free market is widespread. For
any government activity, you can find an economist to argue that the market will provide the
in a better fashion. Yet who but Rothbard would think to ask, why should the government be
He makes a simple and devastating point: absent statistical data, the government could not
with the economy. "[S]tatistics are, in a crucial sense, critical to all interventionist and
socialistic activities of government.... Statistics are the eyes and ears of the bureaucrat, the
politician, the socialistic reformer. Only by statistics can they know, or at least have any idea
about, what is going on in the economy.... Cut off those eyes and ears, destroy those crucial
guidelines to knowledge, and the whole threat of government intervention is almost completely
eliminated" (II, pp. 182-83).
As you might expect, my favorite section of the volumes is "Criticism," in which Rothbard
adversaries in unique fashion. Again, he always grasps the essential.
As an example, deconstructionists claim that texts lack a fixed meaning. The apparent
meaning of a
text is always accompanied by countervailing patterns. A reader must then "deconstruct" a text
than take it to have coherent sense. Rothbard raises the key point: why bother? "If we cannot
understand the meaning of any texts, why are we bothering with trying to understand or to take
seriously the works or doctrines of authors who aggressively proclaim their own
(II, p. 277).
Rothbard, in philosophy as elsewhere, insisted on clear definitions: without this, nonsense
ensues. He found a prime instance of philosophical nonsense in what he termed "reabsorption
He maintained that this bizarre view lies at the heart of both Hegelianism and Marxism.
I cannot do better than to end with Rothbard's hilarious account of the reabsorption doctrine.
One is the original state of the pre-creation cosmic blob, with man and God in happy and
unity, but each rather undeveloped. Then, the magic dialectic does its work, Stage Two occurs,
creates man and the universe. But then, finally, when the development of man and God is
Stage Two creates its own aufhebung, its transcendence into its opposite or
negation: in short, Stage
Three, the reunion of God and man in a 'ecstasy of union' and the end of history" (II, p.
After you read about the "cosmic blob" it is difficult to take Hegel and Marx entirely
this, I suspect, is exactly the effect Rothbard wished to achieve.