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Money, Method, and Merchants of Death

Mises Daily: Monday, April 18, 2005 by

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In the Journal of Libertarian Studies' inaugural issue, Murray Rothbard described the field of libertarian studies as an "interdisciplinary discipline . . . enriched by contributions in each of the particular and seemingly isolated fields that study human action." The journal's newest issue, 19.1, illustrates this interdisciplinary character of which Rothbard spoke, featuring articles ranging from intellectual history and political strategy to power-elite analysis and the philosophy of economics.

  • The question of strategic alliances is an enduring one in the libertarian movement. In "Rothbard's Time on the Left," John Payne documents the rise, progression, and waning of Murray Rothbard's Vietnam-era attempt to build an alliance with the New Left. Rothbard broke with the mainstream conservatism of National Review in the early 1960s, primarily over issues of foreign policy and U.S. military expansionism. Rothbard also challenged conventional conservative views of the role of business interests in American history, agreeing rather with New Left historians like Gabriel Kolko and William Appleman Williams that the corporate class, far from being the hapless victims of government intervention in the economy, were in large parts its architects and beneficiaries. Rothbard became convinced that the Left was, at least for the time being, a more fruitful ally than the Right in the struggle against the militarist and corporatist state. As Payne notes, "while his cooperation with the New Left never altered or caused him to hide any of his foundational beliefs, Rothbard's rhetoric shifted distinctly leftward during this period" as he spent about a decade exploring alliances with such groups as the Students for a Democratic Society. Payne documents Rothbard's early enthusiasm and later increasing frustration with the New Left, culminating in an eventual rejection of the movement as hopelessly mired in what Rothbard viewed as a culture of irrationality. Nevertheless, Payne suggests that the alliance was a partial success, as "a great many libertarians were culled and/or created" from the Left during this period. At a time like the present, when rising militarism offers new opportunities for making common cause with the left, the study of Rothbard's experiences can serve as a useful guide both to the benefits and to the pitfalls of such alliances.
  • The issue's second article also focuses on the intellectual career of a major figure in Austrian economics. Most recent research on the intellectual history of the Austrian School has focused on, well, Austria. That is of course reasonable enough; but Jude Blanchette usefully broadens the scope in his article "Anderson, Hazlitt, and the Quantity Theory of Money." While Henry Hazlitt's intellectual debt to Böhm-Bawerk, Mises, and Hayek is well-known, Blanchette's article traces the influence on Hazlitt of the American economist Benjamin Anderson, and argues that the roots of Hazlitt's later criticisms of Keynesianism and monetarism are to be found in Anderson's critique of Irving Fisher's monetary theory. Indeed, Blanchette maintains that Hazlitt's hostility toward fiat money, inflation, and excessively mathematized approaches to economics received their initial impetus from Anderson rather than from the Austrians.
  • In 1934, H.C. Engelbrecht and F.C. Hanighen published their book Merchants of Death, arguing that the armaments industry played a significant role in promoting a militarist foreign policy in general, and the chain of events leading to World War I in particular. In "Merchants of Death Revisited: Armaments, Bankers, and the First World War," T. Hunt Tooley draws on recent historical research to defend and extend the Engelbrecht-Hanighen thesis, painstakingly documenting the role not only of the armaments industry but also of the banking industry, including the House of Morgan, in promoting militarism. Tooley's essay makes a valuable companion piece to two articles from the journal's previous issue: Joseph Stromberg's analysis of Anglo-American foreign policy and Scott Trask's study of the relation between plutocracy and imperialism in Sumner's thought; it also illustrates some of the common ground between libertarians' and leftists' analysis of corporate elites that Payne highlighted in his article on Rothbard.
  • Austrian economists in the Misesian-Rothbardian tradition typically hold that the basic principles of economics express a priori conceptual insights into the nature of purposeful action as such, and consequently are both independent of empirical support and immune to empirical refutation. But Bryan Caplan, an anarcho-libertarian economist of neoclassical leanings, has recently argued that since it is possible to be uncertain as to whether a given a priori economic principle is true, a given conceptual claim may sometimes have a lower probability than a given empirical claim, in which case a conceptual claim might well rest on or be undermined by empirical evidence after all. Caplan's reasoning would imply that economic theory depends more heavily on empirical data than Austrians generally admit. In "Rejoinder to Caplan on Bayesian Economics," the latest entry in a series of exchanges with Caplan on the subject of economic methodology, Walter Block replies to Caplan's argument, charging Caplan with confusing two different senses of certainty: the psychological and the logical. (One may view Block here as continuing in the tradition not only of Mises, but also of philosophers like Immanuel Kant and Gottlob Frege who insist on combating the "corrupting intrusion of psychology into logic.")
  • Finally, Gary Galles reviews a recent translation of Benjamin Constant's 1815 Principles of Politics Applicable to All Governments. Along with such thinkers as Say, Dunoyer, Thierry, Bastiat, and Molinari, Benjamin Constant was a major figure in the proto-Austrian French radical liberal movement. Galles lets Constant speak for himself, offering a wealth of quotations on the merits of peace, free trade, and limited government.

This issue, my first as editor, also inaugurates a new design format; thanks to Judy Thommesen, Chad Parish and Kathy White for their work on this. And see Jeff Tucker's argument for why you should subscribe now.

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Roderick T. Long (email) is senior fellow of the Mises Institute, professor of philosophy at Auburn University, and the new editor of the Journal of Libertarian Studies. Subscribe to the Journal today. Post your comments on the blog.