Power & Market

[Mr. Grant studied under Mises at NYU in the early 1960s and became a friend of Rothbard’s some years thereafter.]

If you were to ask me, many years after I last spoke with Murray Rothbard, what was the first thing that comes to mind when I think about Murray now—I'm skipping for the moment the extraordinary brainpower, the powerful books and essays, and the infectious personality—then it would be his cackle. It was not the timbre of the cackle, nor its loudness, nor its length; indeed, it was not a particularly unusual cackle at all. What made Murray's cackle noteworthy to me was its frequency. Predicting precisely when Murray would cackle was not necessarily easy; what was easy, though, was predicting that it would surely emerge from him very often.

When I think about Murray's cackle, I am reminded of the title of a long essay he wrote about one of our mutual heroes, the journalist H.L. Mencken. The headline for Murray's piece called Mencken a "joyous libertarian." Anyone who spent time with Murray and had frequent exposure to his cackle realized pretty quickly that the mantle "joyous libertarian" had switched easily from Mencken to Murray. (When I attended the Mises seminar in the early Sixties, by contrast, I found Mises anything but joyous. He appeared extremely dour. Of course, this may have something to do with the fact that I was still a teenager, while Mises was over 80; such an age difference can be quite intimidating!)

But back to Murray. How did I first meet him? I became interested in the conservative movement after, as a high school student, I heard a speech by an unknown Senator named Barry Goldwater (l can even now hear Murray shouting "fascist!" at the mere mention of Goldwater's name) at Hunter College in May of 1960; he was introduced by Bill Buckley, by the way. I was piqued enough by Goldwater's passionate speech to buy Conscience of a Conservative.

This was also the time when I was thinking about college. Just about when I first encountered Goldwater, and I was trying to figure out what to major in, an uncle of mine suggested economics; as a journalist, my instinct was to major in English, but my uncle told me that economics might be more practical for me.

That decision, and my natural curiosity about economics matters, gradually led me to the names of Mises, Hazlitt and Hayek.

My childhood friend Larry Moss and I started to attend the Mises seminar at New York University. At some point around that time, someone mentioned the name Murray Rothbard to me. I don't think I had ever heard of him. I remember well that he was described to me as—I am not joking!—"an anarchist dwarf." And so, of course, I thought that this guy Rothbard must be some kind of wacko, and I hardly gave him another thought. (Once I got to know Murray, of course, I discounted the noun—but not the word preceding it.)

As I delved more and more into Austrian economics, I began to wonder about this fellow Rothbard. At some point someone (l cannot recall who) suggested a meeting with him. And so Larry and I trudged to 215 West 88th Street (sometimes the memory is good; even now, decades later, I still recall the phone number at his apartment: SC-4-1606) for what turned out to be the first of many memorable evenings.

Often those evenings stretched to 3 a.m.; in those days (the early Sixties), New Yorkers did not worry about taking the "A" train back to Queens at such forbidden hours. Larry and I met many memorable people at Murray's and (his wife) Joey's apartment, including Edith Efron and Leonard Liggio.

But, of course, it was the anarchist dwarf himself who was the engine, the soul and the heart of those evenings. He seemed to love being a host and observing the give-and-take of his guests. Nor was he ever shy; if he ever lacked an opinion about anything, I certainly can't recall such a moment!

One of the most (of many) notable things about Murray was his reaction when you asked him a question or raised a topic for discussion. His attitude always seemed open and, charmingly, quizzical—I say ''charmingly" because Murray was of course quite fixed in his opinions, and yet he didn't always seem so.

This was quite unlike Mises, from whom Larry and I learned the word ''apodictic"; Mises not only loved (and used) that word, but he lived that word himself. But not Murray. Let me make up an example, because I can only recall the general phenomenon, rather than a particular instance: I say to Murray something that 99% of Americans would accept, such as "Well, of course, we had to get into World War II." Murray cocks his head, looks puzzled (NOT angry, not upset, not a hint that he might even slightly disagree) and says, good-naturedly, ''Really? Why do you say, that?" It was exactly as if I had said something completely uncontroversial and of little importance that was rarely discussed in one's living room, such as, "Well, of course, Washington is the capital of the United States," or if l said my eyes are brown or Frank Sinatra had recorded "All The Way."

In other words, one could say things in the presence of Murray with which (in retrospect) he furiously (and apodictically!) disagreed, and yet often his reaction would be the kind of mild response your grandmother might give you if you asked her what kind of flowers she liked.

In contrast, Murray could excoriate like few others. One of his favorite nouns was surely "fascist" and he used it very liberally indeed. Forget about Hitler; Murray lambasted as ''fascist" people from Barry Goldwater to a dear friend of mine—a libertarian who is active in Cato, mind you!—who had had the temerity to disagree with Murray on some minor doctrinal point.

Typically the evenings at Murray's and Joey's apartment were long (l don't recall his ever asking me and Larry to leave, and the conversations were lively). The talk was almost always fascinating, with much back-and-forth debating and a great deal of humor and, of course, many cackles.

Joey, Murray's wife, was a charming hostess. She seemed so sweet that I found it difficult to believe it when a mutual acquaintance told me after Joey died in the late 90s that she was in fact much tougher and meaner than Murray. I don't recall that side of her.

My chief recollection of the apartment itself was the seemingly never-ending array of bookcases—row upon row upon row of bookcases that seemed 40 feet high and topped off mere inches from the ceiling.

In addition to those enjoyable evenings with Murray and Joey, I have of course spent countless hours immersed in his books and articles. The first one I read was probably Man, Economy, and State; I have read it 2 1/2 times altogether.

While often provocative, Murray's opinions were indeed apodictic. This is most obvious, of course, in his theoretical tomes. In some cases, such as The Ethics of Liberty, I find him frequently unpersuasive. Even in such cases, however, he rarely fails to provoke; consider, for example, his distinction between copyright and patent (with which Mises disagreed) and his thoughts on what he called "Kid Lib." And of course he could be delightfully un–politically correct, such as when speaking of certain feminists.

Clearly, a lot of research went into his non-theoretical works, such as America's Great Depression and his delightful two-volume history of economic thought. Someone wrote somewhere that Murray seemed to have read EVERYTHING ever published about EVERYTHING; as one picks through his extensive footnotes, one can believe it.

Generally speaking, I find Murray's rebuttal of Keynesian and other fallacies much more thorough and convincing than Mises's. Firstly, Mises rarely addressed Keynes's arguments directly (in class at NYU, he pronounced the adjective Kuh-NAY-zee-un). Secondly, Mises's references to Keynes and others with whom he disagreed were all too often mere castigations. (By the way, I named my public relations firm after Mises; the firm is called "LVM Group," and our clients—3M, Channel 13, the Empire State Building, and others—have no idea what the name stands for.)

As a former journalist myself, I do not agree with many of the kind words others have said about Murray's writing. While there is no denying that he was an extraordinarily passionate and knowledgeable writer, I thought his writing too often pedestrian, cliché-ridden and uninspired. Someone once compared Murray's writing to our hero Mencken's, but Mencken was a WRITER; Murray was a writer, and not a great one. By contrast, while many have lambasted Mises for what they considered his dry writing, I have always found it well thought out, lucid, un-cliché-ish [I grant you that's not a word] and [I confess] often dry. But Murray did exhibit at least one good trait lacking in Mises; Murray's writing is lively.

Both in person and in his writings, Murray was one of the most exciting and inspiring people I ever met in my life. I'm glad I had the chance to know him.

The US Senate will soon vote on Federal Reserve Chairman Jerome Powell’s nomination to a second term. One of the senators opposing Powell is Elizabeth Warren. I don’t often agree with Senator Warren, but I do agree with her assessment that Powell is “dangerous.” However, Warren actually doesn’t understand what makes Powell, or any Fed chairman, intrinsically dangerous to liberty and prosperity.

Warren thinks Powell is dangerous because she thinks he will not be supportive enough of imposing her desired new regulations on banks and other financial institutions. Senator Warren, like most progressives, clings to a fantastical notion that regulations benefit workers, consumers, and small businesses. The truth is most regulations benefit large corporations by imposing costs that big businesses can easily absorb, but that their smaller competitors cannot.

Powell is a threat to the American people. Under his tenure, the Fed has kept interest rates at or near zero. The Fed’s balance sheet has grown to over eight trillion dollars. This has caused prices to climb at a rate America has not seen in several decades.

At his nomination hearing before the Senate Banking Committee, Powell reiterated the Fed’s intention to fight inflation by reducing its monthly 120-billion-dollar purchase of Treasury and mortgage-backed securities. Powell also stated that the Fed is planning to increase interest rates this year. However, even if the Fed follows through on this, interest rates will remain at historically low levels.

Powell, like Elizabeth Warren and other progressives, dangerously believes that the Fed should go “woke.” However, Powell is still not “woke” enough for progressives who lobbied President Joe Biden to replace Powell with Fed board member Lael Brainard, the biggest supporter of Elizabeth Warren–style regulations on the Fed board. Brainard is more committed than Powell to using monetary and regulatory policies to advance the “woke” agenda. President Biden did end up nominating Brainard to become vice chairman at the Fed.

A Powell-Brainard Fed would likely use “social and climate justice” as a justification for expanding the Fed’s easy money policies. President Biden has recently nominated Sarah Bloom Raskin to the Fed board, who also has advocated for the Fed to use its power to fight climate change.

A central bank committed to the social justice and climate change agendas will inevitably increase the Fed’s “inflation tax.” Contrary to the claims of some progressives, lower-income Americans are primary victims of this hidden and regressive tax.

Powell prefers to push his rather zealous and extremist philosophies behind the scenes. Thus, not surprisingly, he is a leading opponent of Audit the Fed. Powell claims that bringing transparency to the Fed’s conduct of monetary policy would somehow jeopardize the Fed’s independence. Powell’s claim is truly fake news. There is nothing in the Audit the Fed bill giving Congress or the executive branch any new power over monetary policy.

Any group of individuals given the power to manipulate the money supply, and manipulate the interest rates that are the price of money, poses a threat to our liberty and prosperity. The solution is not to replace Powell with a “better” Fed chairman, or to force the Fed to follow a “rule” that still allows it to erode the dollar’s value. The only way to protect the people from dangerous individuals like Jerome Powell, Lael Brainard, and the rest of the Fed board is to audit and then end the Fed.

Fedcoin is inevitable. Yet many issues surround it while the Federal Reserve continues engaging the public and experts on this matter. The Board of Governors recently issued a report: Money and Payments: The U.S. Dollar in the Age of Digital Information detailing various ideas without definite conclusions.

It starts with the Executive Summary:

This paper is the first step in a public discussion between the Federal Reserve and stakeholders about central bank digital currencies (CBDCs). For the purpose of this paper, a CBDC is defined as a digital liability of a central bank that is widely available to the general public.

They don’t use the word Fedcoin; perhaps CBDC sounds more official. But they’re discussing a Federal Reserve cryptocurrency, created by the Fed functioning exactly like the dollar bills in your wallet.

One hurdle is the transmission process required to get the new coins into circulation. CBDC’s could simply be exchanged for existing dollars, or can used to expand the money supply through new loan arrangements directly to the public.

The potential expansion of the money supply, and the Fed gaining new powers by stepping into the commercial banking/government transferor/collection agency role, is most concerning if not completely terrifying. In the Fed’s own words:

A widely available CBDC would serve as a close—or, in the case of an interest-bearing CBDC, near-perfect—substitute for commercial bank money.

Consider the implications of an interest bearing CBDC. The Fed could grant Fedcoin loans at favorable rates to the entire country or only to those deemed most in need of funds. Consider if someone were to default on a CBDC loan. Would the Fed not be obligated to seize that person’s assets? This is hardly a conspiracy theory as default risk would be an eventuality of issuing Fedcoin loans if repayment of principal and interest is required.

Alternatively, forgivable Fedcoin loans could be granted; much like the Paycheck Protection Program, where, as of January 9, 2022, $680 billion in loans were forgiven across America.

In what could become the ultimate error in monetary policy, next time a financial crisis hits, Fedcoins could be deployed to stimulate demand, meaning citizens could receive an instantaneous stimulus check deposited into their bank account, courtesy of their neighborhood central bank.

A faint hope of averting disaster remains. Earlier this month, legislation was introduced by Congressman Tom Emmer (MN-R), who anticipated the trajectory of Fedcoin. He issued a bill prohibiting CBDC from being issued directly to individuals, saying:

It is important to note that the Fed does not, and should not, have the authority to offer retail bank accounts.

He also had concerns over the Fed having the ability to:

…collect personally identifiable information on users, and track their transactions indefinitely…

History provides many examples showing what the Fed can do as the lender of last resort. The continual boom and bust cycle, a dollar that can only decline in purchasing power, a country never more divided economically while facing a booming stock market are just some of the implications of central banking. A significant amount of economic destruction will be avoided if the Fed is not afforded the opportunity to become the lender of first resort.

For one of the most powerful institutions on the planet, Fedcoin is an idea that Marx himself could only dream of when he asked for:

Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.

Concerned citizens may want to alert their state representatives to the potential dangers a CBDC poses, including privacy concerns while having the Fed compete against commercial banks. Additionally, you can fill out the Fed’s feedback form on the matter here. Even if they don’t take your feedback seriously, at least your comments will be made available for public viewing!

In 2016, I published a book titled Lines of Liberty, which featured great quotations about liberty from those who had been active and important in promoting it. To this day, one of my favorite quotes in that book is from John Stuart Mill’s On Liberty: “The only freedom which deserves the name is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to obtain it.”

For that reason, when Leonard Read opened his “Several Facets of Freedom,” Chapter 8 in his 1982 The Path of Duty—his last book—with that quote, it drew my attention instantly. And I found Read’s own opening lines an effective teaser to read more:

The quotation from Mill’s famed essay, On Liberty, published in 1859, captures the essence of freedom. But there are many facets or aspects of the subject that merit elaboration.

Since Leonard Read was always broadening our understanding of liberty, its antecedents, its implications, and its power to benefit all of society, directly and indirectly, it is worth giving his reflections some reflection of our own. So I have put together a top 20 list of my favorite passages from the chapter, dealing with liberty’s connections to knowledge, excellence, influence, merit, competition, justice and optimism.

1. The recognition on the part of Socrates that…he knew he knew nothing--the first step toward wisdom--is, from the standpoint of human freedom and prosperity the most important recognition there is.

2. Each of us has an infinitesimal bit of knowledge--limited expertise…When the market is free--no restrictions against production and exchange--the tiny bits of know-how possessed by millions of discrete individuals flow naturally and easily, contributing to the prosperity of each. This knowledge is in the market process itself, not in you or me or anyone else--the claims of the know-it-alls to the contrary notwithstanding.

3. It is in freedom that one’s knowledge is put to best human use.

4. It is not mere quantity of knowledge that counts, for even the most knowledgeable… has a mere glimpse of all that is to be known…excellence includes growth.

5. When…the keynote…is excellence, freedom reigns!

6. There is no action we take--good or bad--that fails to exert an influence on someone. Thus, the question: How influence others better to understand and explain the free society? The answer: Let anyone who would move mankind toward freedom first move himself!

7. Never try to reform another; do not try to forcibly draw others toward your view. Instead, strive for that perfection of understanding and exposition which will cause them to do the reaching.

8. He who wishes to exert a useful influence must…concentrate his energies on the creation of what is good. He must not demolish, but build.

9. Through the better personal practice of freedom may we attract others to share its blessings.

10. Merit, if it be genuine, cannot be concealed…those who are seeking light, the ones who really count—will find true merit. It cannot be hidden for long.

11. History reveals that contemporaries see more the man than his merit…respect their merit.

12. Many among us insist that man is born for cooperation, not competition—as if these were antagonistic to one another. Such people…they fail to realize that cooperation is only a dream in the absence of competition.

13. Genuine competition implies rules, such as the rule of free entry. Free entry in any field of endeavor--the production of goods or the supplying of services or whatever--assures competition, each participant trying to excel.

14. Free competition among suppliers results in cooperation with customers…When there is real competition among the bakers of bread, we customers decide whose bread we eat, that is, with whom we will cooperate.

15. The goal of competition in the free market is to serve customers better, according to consumer choice. The alternative is coercion…And such a coercive society affords no incentive for self-improvement.

16. When there is competition, there are always those out front, setting the pace, leading the way. The effect of this leadership? Others…are inspired to grow. Competition--trying to excel--is the origin of growth; it is the magnet that draws forth each man’s best in the practice of freedom!

17. Government, the political arm or agent of society, can have no higher aim than justice for one and all alike.

18. The Goddess of Justice is blindfolded; her concern is not with who you are but, rather, with how fairly and honestly one deals with one’s fellowmen.

19. Justice conforms to such ideals as The Golden Rule [and] No special privilege for anyone; No violation of the right to the fruits of one’s own labor or the right to act creatively as one chooses.

20. A person may vigorously denounce the bad while failing to see the good. This…fails to advance the good…faith that the right will prevail…advances the good.

Few people in history spent more of their lives thinking about and acting to advance liberty than Leonard Read, as befits the founder and long-time leader of the Granddaddy of libertarian think tanks. He saw liberty as vitally important to both our individual growth and our social advance, so he considered everything he could think of that had a bearing on, or relationship to, it. Those thoughts are worth thinking after Read, so that we too might grow in insight and wisdom into liberty and advance society with that growth.