Murray Rothbard on Me and Vice Versa

“Rothbard is the most entertaining of major libertarian thinkers; sharp, witty, mean, funny, and colloquial” (Brian Doherty in “A Tale of Two Libertarianisms, Reason, 12/18/2009)

An essay published by Murray Rothbard back in 1977 criticized me for my failure to hate the state. He was correct. I regard support for government not as an act of willful evil but an intellectual mistake. My arguments and his could be wrong; some sort of government might be the least bad alternative among workable human institutions. And even if we are correct other people may reasonably think we are not, as lots of intelligent people I know do.

One unfortunate consequence of Rothbard’s point of view was that, since he viewed disagreement as war, he was more interested in whether an argument supported his position than whether it was correct. My standard example is an exchange long ago after a talk 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 do not regard that as a desirable approach to argument. Or a libertarian one — libertarians oppose fraud as well as force.

Looking through old issues of Rothbard’s Libertarian Forum, which the Mises Institute has conveniently webbed,^¹ I discovered an article by Rothbard written after our exchange in which he made the same argument, and went on to write:

David Friedman, David Henderson, and other "libertarian" apologists for Reaganism have protested that such an attack is unfair since inflation can reduce the "real" level of government spending, as corrected for inflation. But while it is perfectly valid to correct yours and my incomes for inflation to see how well off we really are, it is impermissible to do this for the federal government, which, by its printing of counterfeit money, is itself responsible for the inflation. It is truly bizarre to try to excuse the growth of Reagan spending by pointing to inflation's reducing the "real" level of spending, for in that case, we should hope for an enormous amount of inflation and hail Reagan's spending "reductions" if such hyperinflation came about.²

The words “unfair” in the first sentence and “excuse” farther down say something about how Rothbard viewed the controversy. The issue was not whether he was being fair to Reagan but whether he was being honest with his audience. Readers may decide for themselves whether his argument comes down to anything more than “Reagan is bad, so facts that make him look less bad don’t count.”

My other examples of Rothbard’s willingness to offer bad arguments to support his conclusions are in his attack on Adam Smith, to be covered in my next post. 

My Real Disagreement with Murray Rothbard

Whether Murray Rothbard could be trusted is relevant to anyone who might rely on him for facts or arguments but irrelevant to the arguments themselves; one can and should judge them on their own merits. My important disagreement with him on the nature of anarchocapitalism had to do with our differing views of how the law of an anarcho-capitalist society would be produced and why it would be libertarian. His view, as best I could understand it, was that the law would be the product of libertarian philosophy. Since there was one correct answer to what the law should be, all lawyers and legal scholars would agree and so all courts would accept the same law.

 [I]t would not be very difficult for Libertarian lawyers and jurists to arrive at a rational and objective code of libertarian legal principles and procedures based on the axiom of defense of person and property, and consequently of no coercion to be used against anyone who is not a proven and convicted invader of such person and property. This code would then be followed and applied to specific cases by privately competitive and freemarket courts and judges. (Rothbard [1965], 208³)

There are two problems with this. The first is that libertarian thinkers disagree on many features of a just legal code. To take two of the most obvious ones, some libertarians, such as Ayn Rand, support laws protecting intellectual property, others oppose them. Some libertarians, probably most, believe that abortion should be legal, since a woman is the owner of her body. Others argue that it should be illegal, since the fetus has rights that should be protected.

One might attribute these disagreements to intellectual error on one side or another and that is probably how most of those involved in such controversies see them. But it should be obvious to anyone who has made a serious study of the law that there are many legal questions to which philosophy gives no clear answer. 

Consider, for example, the question of what the penalty ought to be for theft. If the convicted thief is merely required to give back what he stole theft becomes a profitable activity, since not all theft is detected: Heads you win, tails you break even. So the penalty must be something more than that.

How much more? Rothbard’s answer was that the thief must give back twice the value he stole but he never offered any convincing reason why it should be two rather than three or ten.⁴ The rule is supposed to apply to all societies, but in a society where theft is hard to detect it will still leave the thief with a profit, hence will not deter theft. Any thoughtful legal scholar or law student could offer more examples of such problems.  

The second difficulty with the idea of deriving law from philosophy is that it ignores the problem of making it in the interest of courts to follow that law. In market anarchy, courts and rights enforcement agencies are private businesses. They can be expected, like private businesses in our society today, to try to maximize their profits. Rothbard seems to be assuming that, once the philosophers have determined what the law should be, everyone else will choose to accept it. That might make sense if one believes both that philosophers can convincingly show what is right and that moral arguments are so powerful that, once what is right is shown, practically everyone will choose to act accordingly. Neither belief fits my observations.

I have a different solution to the problem of producing libertarian law in a market anarchist society, one which makes use of the self-interest of the courts and their customers rather than ignoring it. In my version of anarcho-capitalism each individual is the customer of a rights enforcement agency that sells him the service of protecting his rights and arranging for his disputes to be settled. Each pair of rights enforcement agencies whose customers might interact agrees in advance on a private court and agrees to accept its verdicts in conflicts between their customers. The agreement is enforced by the fact that they are repeat players: If my agency refuses to go along with a judgement against its customer today, yours will act similarly tomorrow. Fighting is more expensive than litigating and produces less predictable outcomes, so both agencies will prefer to keep the agreement. 

Private courts are profit-maximizing businesses, so will want to produce the system of legal rules and procedures that rights-enforcement agencies will want to buy. Rights-enforcement agencies are profit maximizing businesses, so will want to use courts with rules and procedures that their customers want to live under. It follows that the private courts will want to produce legal rules that individuals want to live under, just as private firms in our society want to produce products that their customers want to buy. 

In our present political system politicians similarly want to pass laws that voters approve of, but the voter is neither able to observe and compare alternative legal systems nor to choose among them, since his vote has a near zero chance of affecting the outcome of an election. It follows that voters will be, are, rationally ignorant, it being rational not to acquire information that costs more than it is worth.

Under market anarchy, the individual can see how the legal rules of different private courts are working out and can choose among them by his choice of what rights enforcement agency to hire. He cannot, of course, have unlimited choice, since they have to be rules that some agency is willing to offer and others to accept, but he has much more control, hence more reason to make an informed choice, than in our system. Hence we would expect the market for law to produce better law than the government produces just as the market for cars produces better cars.

It follows that the laws produced under market anarchy will tend to be welfare maximizing ones.⁵ If libertarian views are correct, those will tend to be libertarian — liberty works. The cost to me of your being able to violate my rights is almost always greater than the benefit to you. There is no guarantee that the legal system will be perfectly libertarian, there being no way to guarantee the outcome of any set of institutions. But the reasons to expect the laws to be reasonably libertarian depend neither on philosophers solving the problem of deducing what ought to be from what is nor on courts and enforcement agencies acting on philosophy rather than self interest. Only on economics.

For a much more detailed version of this argument, see my The Machinery of Freedom, especially part III and Chapter 54.

So far as I know, Rothbard never commented on the difference between my mechanism for producing libertarian law and his. He did comment briefly, in at least one of his writings, on the fact that in my system different courts might enforce different laws, but not on my argument for why the outcome of such a market for legal rules would be libertarian.

Rothbard writes:

Within the anarchist camp, there has been much dispute on whether the private courts would have to be bound by a basic, common law code. Ingenious attempts have been made to work out a system where the laws or standards of decision-making by the courts would differ completely from one to another. [footnote to my Machinery of Freedom] But in my view all would have to abide by the basic law code, in particular, prohibition of aggression against person and property, in order to fulfill our definition of anarchism as a system which provides no legal sanction for such aggression. 

That is proof by definition, an evasion of the problem of how to get courts to follow libertarian law. If after Rothbard sets up his system courts adopt rules that permit aggression, he gets to announce that it isn't, by his definition, anarchism. That has no effect on what the courts do, since the system is not going to be ruled by Rothbard.

If you find his argument convincing, imagine the same argument by someone on the other side. He explains that what he is in favor of is not statism in general but a particular form of statism —  "Just-Stateism." You ask why he expects the state to act justly. He responds that his state must act justly because if it did not it would not be Just-Stateism.

Rothbard and Rand

Reading Rothbard’s articles, I was struck by how similar his style and approach were to Ayn Rand's. They disagreed on some important issues, most notably anarchism and foreign policy. But they were both arrogantly certain of their positions, argued them with highly emotive language, believed that their natural rights position could be rigorously derived by reason along Aristotelian lines. Both saw political conflict as fundamentally good against evil. Both expected their followers to accept their current line without question. 

Early on, Rothbard was an admirer of Rand, joining her circle and writing effusive praise of Atlas Shrugged. That did not last. He left her circle, ceased writing of her with admiration, eventually wrote a one-act play satirizing her and her followers. There was not enough room for two captains in one boat.

So far as I know, nobody has yet written a book about Rand and Rothbard, their similarities, differences, and interactions. Someone should.

1. Volume 1 and Volume 2.

2. “Are We Being Beastly to the Gipper? Part I,” Libertarian Forum XVI Number 1, February 1982, p.1.  

3. Rothbard, Murray N. [1965]. “The Spooner-Tucker Doctrine: An Economist’s View,” reprinted in Egalitarianism as a Revolt Against Nature and Other Essays , pp. 205-218. Auburn, AL: Ludwig von Mises Institute, 2000.

4. An extended discussion of the issue from Rothbard’s The Ethics of Liberty has been excerpted and webbed on the Mises Institute site. Readers may decide for themselves whether they disagree with my claim that it offers no convincing defense of his position.

5. Technically, economically efficient. An explanation of exactly what that means can be found in several of my books: The Machinery of Freedom, Law’s Order, Hidden Order, and Price Theory.