 This is Mises Weekends with your host Jeff Dice. Ladies and gentlemen, welcome back once again to Mises Weekends. This week we are talking about Murray Rothbard, the Economist as opposed to Murray Rothbard, the Sociologist or Libertarian Theorist. And our show features a talk by Dr. Joe Salerno delivered just this past weekend at our 35th anniversary event in New York City where Joe makes the case that Murray really is the rightful heir not only to the Austrian tradition but to the Misesian tradition within that school. Joe makes the case that man economy and state is one of the four major treatises in Austrian economics and also you're going to be fascinated by his account of Friedrich Hayek's view of Murray's place within Austrian economics. So if you like Murray, stay tuned for a fantastic speech by our own Dr. Joe Salerno. I'm thrilled and I'm honored to be here to honor the Institute that really molded my thought and gave me an outlet for my academic work. Without the Mises Institute I certainly wouldn't be the same scholar that I am today such as I am, which pales in comparison to the person that I'm going to speak about now, Murray Rothbard. So my topic that I chose to address you on was Murray Rothbard, Mises True Heir. I chose this topic because in the past ten years or so there's been a concerted effort in some quarters of the Austrian movement to deny Rothbard his just do as Mises's closest disciple and as the initiator of the revival of Austrian economics. The story according to the Rothbard deniers goes as follows. Yes, yes, they say Rothbard wrote some foundational works in the 1960s. Man economy and state, America's Great Depression, the Panic of 1819, and power and market. But then in the 1970s he became disengaged from economics and from the economics profession. Now what that means, they love that word disengaged. That is he was not engaging in a conversation, they like conversation too, in a conversation with mathematical and positivist economists. In other words he thought it was crap and he was pushing forward economics in the correct direction. But by the 1980s, the fable grows, by the 1980s Rothbard abandoned academic pursuits altogether and became a political activist and propagandist for libertarian ideas. This is what they tell us. Well let's put this tall tale to rest by listing Murray's publication since 1980. He wrote a number of foundational articles and a number of books. So let me just list a few of them. The Myth of Neutral Taxation 1981, Law Property Rights and Air Pollution 1982, Federal Reserve's Cardinalization Device 1984, The Case for Genuine Goal Standard 1985, The End of Socialism and the Calculation Debate Revisited, a great article in 1991. His books included the Ethics of Liberty 1982. This is all why he was only really a political activist who was playing politics in the Libertarian Party. The Mystery of Banking 1983, Lou Gevon Mises, Scholar-Creator-Hero 1988, and finally his great classic which rivals anything that has been written in the history of economic thought. The Austrian perspective on the history of economic thought which unfortunately came out posthumously. And during this time he had the time to found the first Austrian economics journal in North America, the Review of Austrian Economics in 1987. And of course Rothbard's scholarly works have continued to pour forth 22 years after his untimely death, culminating in this grand, maybe it's not the culmination, but culminating for now in this great work that Patrick Newman has edited, The Progressive Era. That in itself is something that his critics could only dream of putting on their resume as a sole work. And when we think of Rothbard's works, I mean it's just they pale in comparison. So contrary to the Rothbard deniers, Murray Rothbard was a creative genius and the greatest economist of the past 50 years. He was also Mises' true heir as both Mises himself and Friedrich Hayek, who was a great historian of thought when it came to Austrian economics, both attest. Let me just read a few things by both Mises and Hayek and what they said about Rothbard. When Rothbard published Man economy and state, Mises reviewed it and enthusiastically endorsed it. Now, by the way, so the Rothbard deniers claim that Austrian economics have culminated in Mises and then went to Hayek and then other people picked up the Hayekian thread, Hayek built on Mises supposedly. And then Rothbard sort of shunted the train onto the wrong track that is on the track down to Auburn, Alabama. And this was only libertarian activism. So this is what Mises says. He called Rothbard's work an apocal contribution to the general science of human action. He then went on to declare, quote, henceforth all essential studies in these branches of knowledge will have to take full account of the theories and criticisms expounded by Dr. Rothbard, unquote. It doesn't sound like he thinks that Rothbard wasn't one of his closest followers, does it? Mises gave high praise to Rothbard's treatise despite the fact that parts of the book were intended to correct, improve upon and fill in gaps in the system of economics that Mises himself had created. In fact, in one particular case, Rothbard explicitly disagreed with Mises and that was the theory of monopoly. Mises had conceded that the formation of a monopoly price above the competitive price was theoretically conceivable in an unhampered market, though very unlikely to occur in practice. He generally attributed the source of a monopoly to government. Rothbard argued to the contrary that the distinction between monopoly and a competitive price was conceptually meaningless in a market economy. Now, Mises was once asked his opinion of Rothbard's disagreement with this theory of monopoly price by Joaquin Reg, the Spanish translator of human action. This occurred at the Mont Pelerin Society in 1965 and we have two accounts of it. Mrs. von Mises said that her husband had replied, quote, whatever Rothbard has written in his work is of the greatest importance, unquote. However, the Spanish economist, Jesus Huerta de Soto, has reported that when Reg himself used to recount the incident, he would quote Mises' response as, I agree with every word Professor Rothbard has written on the subject. And let me just say a few words about Hayek and how he viewed Rothbard. He wrote, although I owe, this is Hayek writing, although I owe, I do owe Mises a decisive stimulus at a crucial point of my intellectual development and continuous inspiration through a decade, I perhaps most profited from his teaching because I was not initially his student at the university. I was not an innocent young man who took his word for gospel, but I already came to him as a trained economist. Trained in a parallel branch of Austrian economics. So he was not trained in the same branch as Mises, which Bombavirk, the great Austrian economist Bombavirk had started. Continuing, Hayek wrote on Rothbard 1977 or wrote on Mises' followers. He said, in today's world, Mises and his students are regarded as the representatives of the Austrian school. And justifiably so, although he represents only one of the branches into which Menger's theories had been divided by his students, the close personal friends, Bombavirk and Wieser. I only admit this with some hesitation because I had expected much of the Wieser tradition and he was in the Wieser tradition. And he says these expectations were not fulfilled. But he goes on and says, today's active Austrian school almost exclusively in the United States, and that's Murray Rothbard, and this is 1977, is really the followers of Mises based on the tradition of Bombavirk, Mises' teacher, while the man in whom Wieser had such great hope never fulfilled his promise. So it was Mises and Rothbard, Mises' branch as carried on by Rothbard. That was the living and thriving branch of Austrian economics. Finally, Hayek recently found that Hayek wrote an introduction to a work by Rothbard, short work, Two Essays on Methodology. And he wrote, among the thinkers who have made outstanding contributions to the peculiar problems raised by the science of human action, Ludwig von Mises has probably been the most acute and most original thinker of modern times. Professor Murray and Rothbard has been profoundly influenced by his work in this field. Both of us, meaning Rothbard and Hayek himself, has been trying to develop it further. And if this has sometimes led us to modify Mises' conclusions, perhaps even in different directions. I am sure this is what Mises would have expected and even desired. He then goes on to say that the present state of this tradition established by the large treatises written by Mises should be made accessible to readers of the ninth decade in a condensed form by one of his best authorized disciples. It is certainly to be much welcomed, his best authorized disciple being Murray and Rothbard. Now we have that out of the way. Rothbard for all his scientific brilliance and genius and scholarly achievements was also my friend. And a real person, as he used to like to use the term, real person had a real job who was rooted in his or her community, who loved American culture or the culture that they were born into. So permit me to recount some anecdotes which reveal his great personal charm and genuine humility. And I can go on for quite a while because Guido has gracefully seated me his 20 minutes. No, no. Let me first say a few words about my own conversion to Austrian economics. I was converted in my junior year of college. I was already a libertarian to some extent, but I'd never heard of Austrian economics despite the fact that I had already taken two macroeconomics courses. And I was well into my junior year. And then a student was a conservative said I was talking about free market economics. And he says, well, you know, it sounds to me like you need to read a little booklet. And he handed me this booklet. It's 30 pages long. It's called a mini book. This is the original one used to be a series of these. And it was straightforwardly called Economic Depressions Causing Cure. It was written by Murray Rothbard. That was really the first time I heard the name. Actually the second I heard it in a magazine article or read it in a magazine article. And I learned more in 45 minutes reading that pamphlet than from listening to lectures in my macroeconomics courses and from reading very ponderous and boring textbooks. One of the textbooks I was assigned, and I have a prop here. You can match this was Paul Samuelson's seventh edition. This is 821 pages long and weighs five pounds. I waited before I came here. And it says dumb as it is dense. So I certainly owe to Murray Rothbard my conversion to Austrian economics. I mean, that's really cool. I just sat there and I read it in my car before I went to my macro course for 45 minutes and I said, I didn't go to the course. I didn't go to that particular class. Let me tell you about my meeting with Murray Rothbard, my first meeting. I met him while I was attending graduate school the following year. Well, actually two years later. There was a libertarian conference in New York City whose featured speakers included Rothbard, Robert LeFave, Carl Hess. It was the first time I had met any of these giants of the early libertarian movement in person. And I was especially excited at the prospect of hearing Rothbard speak. Rothbard followed LeFave on the program. And if you know anything about Robert LeFave, he was an anarchist, but he called his philosophy otarchism, which meant self-government. And he was an extreme pacifist. He didn't believe that you could use violence even in self-defense. So when Murray spoke, I was really impressed with his joyfulness, but his wit and his humor, especially on display in the question and answer period, when someone asked him his view of the extreme pacifism of LeFave, which prohibited any form of violence, as I said, Rothbard replied, well, if someone was threatening me with an ax and I had a gun, I'd plug him. I subsequently invited Rothbard to give the keynote address at the New Jersey Libertarian Convention. I was one of the founding members of the Libertarian Party, unfortunately. Prior to my talk, I introduced myself to him. We made some small talk, and then I told him that I was a graduate student in economics and that I was currently following up some of the citations in his work, Man, Economy and State. I was reading articles by Frank Federer and his others, he had mentioned. His eyes immediately lit up, and he seemed like he could barely contain himself. I'm looking for a pen and a pad I handed him. He took down my phone number and my address, and he said, well, there are people in New Jersey that professors and students who currently have an Austrian reading group, I'll give them your information. I didn't think he would remember, but the following Monday, someone showed up at my door and didn't even call, showed up at my door and said, Murray said that you would like to join the reading group, so I did do that. And the reading group was run by one of my other libertarian heroes, Walter Block. So I was soon invited to the inner sanctum of Murray's apartment in Manhattan, and you saw the apartment building if you were on the tour yesterday. On the way over, I was extremely nervous. I thought that he would grill me and expose my staggering ignorance of libertarianism in Austrian economics. But my apprehension instantly dissipated when Murray excitedly greeted me at the door and said, Joe, my boy, it's great to see you again. That was the only second time I met him. He made me feel like I was one of the few people in the world that was his friend. It was a memorable evening. My fellow student and I, the guy who drove me over, we sat on the living room rug while Murray regaled us from his couch with jokes, anecdotes, opinions on very politically incorrect opinions on current affairs. But his lighter conversation was interspersed by questions to me on economic and political matters. At one point, the question of what methods were justified in recovering one's property from looters came up. This was shortly after the riots that we had in our cities. Murray was of the opinion that a store owner was justified in using defensive violence, including deadly forts, if absolutely necessary, in defending his property from looters. But he believed that if the looter had already seized the property and was running away, the owner could not plug him. He could not employ deadly force retrievers' property. So I timidly suggested that the store owner would be justified in using deadly force, if necessary, to recover as well as to defend his property. I didn't see the difference. So Murray thought for a minute and he says, ah, now that's a conversation I'm willing to have. And also during that evening, another topic came up about how he would return government property, state property back to the private sector after the libertarian revolution. Murray was always very, very forward looking. So he was very lukewarm on my suggestion that it should be auctioned off and the proceeds divided up among taxpayers. He was also not keen on giving ownership of the property to the employers, public schools to the teachers, railroad to the engineers and conductors. I mean, really, these options were two-time consuming, would require a state to sort of carry it out, continuing the state to return the tax money, or would give the property to the wrong people. So the overall writing goal was to return the state property to productive use in the private sector as soon as possible. So he said the best solution, and he said this with a twinkle in his eye, is to give ownership of these assets to the heroes of the libertarian revolution. So in the years that followed, I might have time for one more anecdote. In the years that followed, I enjoyed increasing personal contact with Murray. I saw him many times at conferences and seminars and we regularly met for lunch at Wolf's Deli in Manhattan. What struck me most about him was not just the creative genius as an economist, social theorist, political philosopher, but the fact that he himself was a real person. Now he used that term endearingly of other libertarians that he liked, that he thought were grounded real people who really loved, not just liberty, as sort of an arid, empty construct, but the real system of political and economic liberty that gives rise to the institutions and the culture that allow human beings to thrive and to live. And this explains why Murray cherished and celebrated American culture and society and was proud to call it his own. He was very much a cultural American, cultural New Yorker. Murray was an unapologetic admirer of American culture because he viewed it as the specific historical product of the relatively libertarian and individualist pre-New Deal American society. Thus, he loved Godfather movies, not the third one, he hated the third one, as we all should, and James Bond movies. He loved visiting visits to late night visits to Denny's restaurants when he was out of New York. And he loved drinking martinis with his friends at the Algonquin Club. One last very quick anecdote. I once was at a conference with Murray and it was the usual long conversation until well into the early hours of the morning. He was hungry and so were the graduate students, we were all graduate students. So he piled into my car and we drove around looking for some place to eat. Of course, every place was closed and Murray was getting more and more agitated and he said, what's wrong with these people? Don't they understand that the Industrial Revolution took place 200 years ago? We have electric light. He says, why aren't they serving their hungry customers? So just as we were turning around, I spied a pizza place and so we pulled in and Murray said, heroic, you're a hero of revolution. Because I found an open place to eat. There are many other things about Murray. I loved Murray. Lou Rockwell, unfortunately cannot be here, loved Murray. Just last week we were speaking about something and we both at the same time said I wonder what Murray would think about that. Thank you. Subscribe to Mises Weekends via iTunes U, Stitcher and SoundCloud or listen on Mises.org and YouTube.