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Murray N. Rothbard

Articles by Murray N. Rothbard

The Myth of “Economic Power”

8 days ago

A very common criticism of the libertarian position runs as follows: Of course we do not like violence, and libertarians perform a useful service in stressing its dangers. But you are very simpliste because you ignore the other significant forms of coercion exercised in society—private coercive power, apart from the violence wielded by the State or the criminal. The government should stand ready to employ its coercion to check or offset this private coercion.
In the first place, this seeming difficulty for libertarian doctrine may quickly be removed by limiting the concept of coercion to the use of violence. This narrowing would have the further merit of strictly confining the legalized violence of the police and the judiciary to the sphere of its competence:

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Anatomy of the Bank Run

15 days ago

[This article is featured in chapter 79 of Making Economic Sense by Murray Rothbard and originally appeared in the September, 1985 edition of The Free Market] 
It was a scene familiar to any nostalgia buff: all-night lines waiting for the banks (first in Ohio, then in Maryland) to open; pompous but mendacious assurances by the bankers that all is well and that the people should go home; a stubborn insistence by depositors to get their money out; and the consequent closing of the banks by government, while at the same time the banks were permitted to stay in existence and collect the debts due them by their borrowers.
In other words, instead of government protecting private property and enforcing voluntary contracts, it deliberately violated the property of the

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Gustave de Molinari, First Anarcho-Capitalist

26 days ago

Of all the leading libertarian French economists of the mid- and late nineteenth centuries, the most unusual was the Belgian-born Gustave de Molinari (1819-1912). Born in Liege, the son of a Belgian physician and a baron who had been an officer in the Napoleonic army, Molinari spent most of his life in France, where he became a prolific and indefatigable author and editor in lifelong support of pure laissez-faire, of international peace, and in determined and intrasigent opposition to all forms of statism, governmental control and militarism. In contrast to British soft-core utilitarianism on public policy, Molinari was an unflinching champion of freedom and natural law.
Coming to Paris, the cultural and political centre of the French-speaking world, at the age of

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Altruism vs. Materialism in Market Exchange

29 days ago

[Excerpted from chapter 6 "Antimarket Ethics: A Praxeological Critique" of Power and Market.]
One of the most common charges levelled against the free market (even by many of its friends) is that it reflects and encourages unbridled “selfish materialism.” Even if the free market—unhampered capitalism—best furthers man’s “material” ends, critics argue, it distracts man from higher ideals. It leads man away from spiritual or intellectual values and atrophies any spirit of altruism.
In the first place, there is no such thing as an “economic end.” Economy is simply a process of applying means to whatever ends a person may adopt. An individual can aim at any ends he pleases, “selfish” or “altruistic.” Other psychic factors being equal, it is to everyone’s

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The Impossibility of Equality

March 2, 2023

[Excerpt from chapter 7 of Power and Market in Man, Economy, and State with Power and Market, pp. 1308–12.]
Probably the most common ethical criticism of the market economy is that it fails to achieve the goal of equality. Equality has been championed on various “economic” grounds, such as minimum social sacrifice or the diminishing marginal utility of money (see the chapter on taxation above). But in recent years economists have recognized that they cannot justify egalitarianism by economics, that they ultimately need an ethical basis for equality.
Economics or praxeology cannot establish the validity of ethical ideals, but even ethical goals must be framed meaningfully. They must therefore pass muster before praxeology as being internally consistent and

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Jeremy Bentham: From Laissez-Faire to Statism

February 26, 2023

[An Austrian Perspective on the History of Economic Thought (1995)]
Jeremy Bentham (1748–1832) began as a devoted Smithian but more consistently attached to laissez-faire. During his relatively brief span of interest in economics, he became more and more statist. His intensified statism was merely one aspect of his major — and highly unfortunate — contribution to economics: his consistent philosophical utilitarianism. This contribution, which opens a broad sluice-gate for state despotism, still remains as Bentham’s legacy to contemporary neoclassical economics.
Bentham was born in London the son of a wealthy lawyer, whiled away his youth at Oxford, and was admitted to the bar in 1772. But it soon became clear that Bentham was not interested in a career as an

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The Origins of the Federal Reserve

December 26, 2022

Where did this thing called the Fed come from? Murray Rothbard has the answer here — in phenomenal detail that will make your head spin. In one extended essay, one that reads like a detective story, he has put together the most comprehensive and fascinating account based on a century’s accumulation of scholarship.
The conclusion is that the Fed did not originate as a policy response to national need. It wasn’t erected for any of its stated purposes. It was founded by two groups of elites: government officials and large financial and banking interests. Rothbard adds a third critical element: economists hired to give the scheme a scientific patina.
This excerpted chapter from Rothbard’s History of Money and Banking is as scholarly as it is hair raising. This is one

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Rothbard Explains The Failure of the “New Economics”

May 11, 2022

[This foreword to Henry Hazlitt’s Failure of the New Economics (available at free in PDF, ebook, and audiobook) was first published in National Review, August 15, 1959.]
For most people, economics has ever been the “dismal science,” to be passed over quickly for more amusing sport. And yet, a glance at the world today will show that we pass over economics at our peril. The influence of economic ideas on human history, especially political history, has been momentous; how different would be the lives of all of us if Karl Marx had never lived and spun his fatal vision!
In the twentieth century, the most influential economist has been John Maynard Keynes, who swept the world of economics like an avalanche in 1936 with his General Theory of Employment,

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The Nationalities Question

April 22, 2022

[This article was published in in The Irrepressible Rothbard, available in the Mises Store.]
Upon the collapse of centralizing totalitarian Communism in Eastern Europe and even the Soviet Union, long suppressed ethnic and nationality questions and conflicts have come rapidly to the fore. The crack-up of central control has revealed the hidden but still vibrant “deep structures” of ethnicity and nationality.
To those of us who glory in ethnic diversity and yearn for national justice, all this is a wondrous development of what has previously lived only in fantasy or longing: it is a chance in Europe at long last, to begin to reverse the monstrous twin injustices of Sarajevo and Versailles. It is like being back in 1914 or 1919 again, with a chance for the map of

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Ludwig von Mises (1881–1973)

March 25, 2022

One of the most notable economists and social philosophers of the twentieth century, Ludwig von Mises, in the course of a long and highly productive life, developed an integrated, deductive science of economics based on the fundamental axiom that individual human beings act purposively to achieve desired goals. Even though his economic analysis itself was “value-free”—in the sense of being irrelevant to values held by economists, Mises concluded that the only viable economic policy for the human race was a policy of unrestricted laissez-faire, of free markets and the unhampered exercise of the right of private property, with government strictly limited to the defense of person and property within its territorial area.
For Mises was able to demonstrate (a) that the

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Trading with the Enemy: An American Tradition

March 19, 2022

During the French and Indian War (1754–1763), Americans continued the great tradition of trading with the enemy, and even more readily than before. As in King George’s War, Newport took the lead; other vital centers were New York and Philadelphia. The individualistic Rhode Islanders angrily turned Governor Stephen Hopkins out of office for embroiling Rhode Island in a “foreign” war between England and France.
Rhode Island blithely disregarded the embargo against trade with the enemy, and redoubled its commerce with France. Rhode Island’s ships also functioned as one of the major sources of supply for French Canada during the war. In the fall of 1757, William Pitt was told that the Rhode Islanders “are a lawless set of smugglers, who continually supply the enemy

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The New Deal and the Emergence of the Old Right

January 15, 2022

During the 1920s, the emerging individualists and libertarians — the Menckens, the Nocks, the Villards, and their followers — were generally considered Men of the Left; like the Left generally, they bitterly opposed the emergence of Big Government in twentieth-century America, a government allied with Big Business in a network of special privilege, a government dictating the personal drinking habits of the citizenry and repressing civil liberties, a government that had enlisted as a junior partner to British imperialism to push around nations across the globe. The individualists were opposed to this burgeoning of State monopoly, opposed to imperialism and militarism and foreign wars, opposed to the Western-imposed Versailles Treaty and League of Nations, and they

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Rothbard: With Interest Rates, “There Are Two, Opposite Causal Chains at Work.”

October 23, 2021

Editor’s Note: Interest rates and inflation are certainly connected to efforts on the parts of central banks to loosen and tighten the money supply. These relationships, however, are much more complex than many people suppose. As we’ve seen in recent weeks, with constant talk about what the Fed will do next, expectations are an important factor in how markets respond to central bank actions. In his article “Ten Great Economic Myths,” Murray Rothbard addresses some of these issues.
Myth 4: Every time the Fed tightens the money supply, interest rates rise (or fall); every time the Fed expands the money supply, interest rates rise (or fall).
The financial press now knows enough economics to watch weekly money supply figures like hawks; but they inevitably interpret

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Monetary Competition: The Best Alternative to Razing Central Banks to the Ground

October 1, 2021

[Editor’s note: Two interviews from August 1992, given by Murray Rothbard to the Swedish student publication Svensk Linje (continuously published since 1942) were recently discovered in the Rothbard Archives and translated by Sven Thommesen for the first time. In this interview, Anton Wahlman, an economist from Georgetown University School of Foreign Service, interviewed Rothbard about Sweden and European integration with the rise of the ECU (euro). The interview took place in August 1992.
For readers: EMS = the European Monetary System and ECU = the European Currency Unit = the euro]
An alternative to the EMS and the ECU
Anton Wahlman: You are known all over the world as one of the most forceful defenders of free markets. Should Sweden wish to throw off the

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The 1787 Constitution Was a Radical Assault on the Spirit of the Revolution

September 30, 2021

It was a bloodless coup d’état against an unresisting Confederation Congress. The original structure of the new Constitution was now complete. The Federalists, by use of propaganda, chicanery, fraud, malapportionment of delegates, blackmail threats of secession, and even coercive laws, had managed to sustain enough delegates to defy the wishes of the majority of the American people and create a new Constitution. The drive was managed by a corps of brilliant members and representatives of the financial and landed oligarchy. These wealthy merchants and large landowners were joined by the urban artisans of the large cities in their drive to create a strong overriding central government—a supreme government with its own absolute power to tax, regulate commerce, and

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Why the Federalists Hated the Bill of Rights

September 21, 2021

The Constitution had been ratified and was going into effect, and the next great question before the country was the spate of amendments which the Federalists had reluctantly agreed to recommend at the state conventions. Would they, as Madison and the other Federalists wanted, be quietly forgotten? The Antifederalists, particularly in Virginia and New York, would not permit that to happen and the second convention movement, led by Patrick Henry and George Mason in Virginia and proposed by the New York convention circular letter, was the Antifederal goal. Already the circular letter had won approval from Virginia, North Carolina, and Rhode Island. A second convention would reopen the whole question of the Constitution and allow restrictive amendments and

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Why the Federalists Hated the Bill of Rights

September 21, 2021

The Constitution had been ratified and was going into effect, and the next great question before the country was the spate of amendments which the Federalists had reluctantly agreed to recommend at the state conventions. Would they, as Madison and the other Federalists wanted, be quietly forgotten? The Antifederalists, particularly in Virginia and New York, would not permit that to happen and the second convention movement, led by Patrick Henry and George Mason in Virginia and proposed by the New York convention circular letter, was the Antifederal goal. Already the circular letter had won approval from Virginia, North Carolina, and Rhode Island. A second convention would reopen the whole question of the Constitution and allow restrictive amendments and

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The Old Right on War and Peace

August 10, 2021

As the force of the New Deal reached its heights, both foreign and domestic, during World War II, a beleaguered and tiny libertarian opposition began to emerge and to formulate its total critique of prevailing trends in America. Unfortunately, the Left, almost totally committed to the cause of World War II as well as to extensions of the domestic New Deal, saw in the opposition not a principled and reasoned stand for liberty, but a mere blind "isolationism" at best, and, at worst, a conscious or unconscious "parroting of the Goebbels line."
It should not be forgotten that the Left, not so long ago, was not above engaging in its own form of plot hunting and guilt by association. If the Right had its McCarthys and Dillings, the Left had its John Roy Carlsons.
Now it

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How the Federalists Bullied Rhode Island into Joining the United States

August 4, 2021

Doughty, courageous little Rhode Island was the last state left. It is generally assumed that—even by the most staunchly Antifederalist historians—Rhode Island could not conceivably have gone it alone as a separate nation. But such views are the consequence of a mystique of political frontiers, in which it is assumed that a mere change in political frontiers and boundaries necessarily has a profound effect in the lives of the people or the validity of a territory or region. But, in reality, political frontiers are mere excrescences, the daily lives of the people, their economic and social relations, can go on unperturbed and unchanged whether politically defined counties are large, tiny, or even non-existent. That Switzerland or Holland are small has no more

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The Corrupt Bargain and the Preservation of Slavery

May 11, 2021

[Chapter 19 of Rothbard’s newly edited and released Conceived in Liberty, vol. 5, The New Republic: 1784–1791.]
The most important battle of the August days of the Constitutional Convention was waged, as had been the battle over the three-fifths clause, between the North and South and had at its heart the institution of slavery. One of the small number of restrictions on Congress in the draft Constitution was a prohibition of any tax on exports, or of any tax or prohibition on the “migration or importation of such persons as the several States shall think proper to admit”; in short, there was to be no restrictions on the slave trade. Furthermore, no navigation act could be passed except by a two-thirds vote in each house of Congress: a hallmark of the southern

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America’s “Great Men” and the Constitutional Convention

April 15, 2021

[Chapter 13 of Rothbard’s newly edited and released Conceived in Liberty, vol. 5, The New Republic: 1784–1791.]
From the very beginning of the great emerging struggle over the Constitution the Antifederalist forces suffered from a grave and debilitating problem of leadership. The problem was that the liberal leadership was so conservatized that most of them agreed that centralizing revisions of the Articles were necessary—as can be seen from the impost and congressional regulation of commerce debates during the 1780s. By agreeing in principle with the nationalists’ call for central power, but only opposing the change going too far, the Antifederalist leadership threw away its main weapon and found itself ready to be antagonized by the forces of the

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The Annapolis Convention: The Beginning of the Counterrevolution

April 7, 2021

[Chapter 12 of Rothbard’s newly edited and released Conceived in Liberty, vol. 5, The New Republic: 1784–1791.]
By 1787, the nationalist forces were in a far stronger position than during the Revolutionary War to make their dreams of central power come true. Now, in addition to the reactionary ideologues and financial oligarchs, public creditors, and disgruntled ex-army officers, other groups, some recruited by the depression of the mid-1780s, were ready to be mobilized into an ultra-conservative constituency. Inefficient urban artisans who wanted a central protective tariff to secure a nationwide market from more efficient British competition; merchants who wanted central navigation acts and other subsidies; western land speculators who wanted to prevent

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Murray Rothbard on War and “Isolationism”

March 1, 2021

[These edited extracts, from an interview in the February 1973 issue of Reason magazine, first ran in the June 1999 issue of the Rothbard-Rockwell Report.]
Q: Why, in your view, is isolationism an essential tenet of libertarian foreign policy?
A: The libertarian position, generally, is to minimize state power as much as possible, down to zero, and isolationism is the full expression in foreign affairs of the domestic objective of whittling down state power. In other words, interventionism is the opposite of isolationism, and of course it goes on up to war, as the aggrandizement of state power crosses national boundaries into other states, pushing other people around etc. So this is the foreign counterpart of the domestic aggression against the internal population.

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The Drive for State and Federal Protective Tariffs in Early America

February 23, 2021

[Chapter 3 of Rothbard’s newly edited and released Conceived in Liberty, vol. 5, The New Republic: 1784–1791.]
Every depression generates a clamor among many groups for special privileges at the expense of the rest of society—and the American depression that struck in 1784–1785 was no exception. If excess imports were the culprit, then voluntary economizing could help matters, and the press was filled with silly fulminations against ladies wearing imported finery. Less foolish and more pernicious was a drive by the beleaguered and often sub-marginal artisans and manufacturers for the special privilege of protective tariffs.
As early as July 1783, a group of manufacturers from Philadelphia met to petition the Assembly for protection against foreign imports. The

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The Depression of the 1780s and the Banking Struggle

February 14, 2021

[Chapter 2 of Rothbard’s newly edited and released Conceived in Liberty, vol. 5, The New Republic: 1784–1791.]
It has been alleged—from that day to this—that the depression which hit the United States, especially the commercial cities, was caused by “excessive” imports by Americans beginning in 1783. But this kind of pseudo-explanation merely betrays ignorance of economics: a boom in imports reflects voluntary choices and economic improvement by consumers, and this expression of choice can scarcely be the cause of general depression. In short, an improved standard of living for the bulk of consumers reflects improvement and not depression. It is impossible for consumers to buy “too many” imports, for they must pay for them with something, and this payment is

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How the State Preserves Itself—and What the State Fears

January 14, 2021

Once a State has been established, the problem of the ruling group or “caste” is how to maintain their rule.1 While force is their modus operandi, their basic and long-run problem is ideological. For in order to continue in office, any government (not simply a “democratic” government) must have the support of the majority of its subjects. This support, it must be noted, need not be active enthusiasm; it may well be passive resignation as if to an inevitable law of nature. But support in the sense of acceptance of some sort it must be; else the minority of State rulers would eventually be outweighed by the active resistance of the majority of the public. Since predation must be supported out of the surplus of production, it is necessarily true that the class

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James Mill: Laissez-Faire’s Lenin

November 16, 2020

[An Austrian Perspective on the History of Economic Thought (1995)]
James Mill (1771–1836) was surely one of the most fascinating figures in the history of economic thought. And yet he is among the most neglected. Mill was perhaps one of the first persons in modern times who might be considered a true “cadre man,” someone who in the Leninist movement of the next century would have been hailed as a “real Bolshevik.” Indeed, he was the Lenin of the radicals, creating and forging philosophical radical theory and the entire philosophical radical movement.
A brilliant and creative but an insistently Number 2 man, Mill began as a Lenin seeking his Marx. In fact, he simultaneously found two “Marxes,” Jeremy Bentham and David Ricardo. He met both at about the same time,

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Compulsory vs. Free Education

September 26, 2020

[unable to retrieve full-text content][A selection from Education: Free and Compulsory.] The Reverend George Harris described the effects of compulsory education in imposing uniformity and enforced equality (soon after the establishment of compulsion).

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The Great Society: A Libertarian Critique

July 12, 2020

The Great Society is the lineal descendant and the intensification of those other pretentiously named policies of twentieth-century America: the Square Deal, the New Freedom, the New Era, the New Deal, the Fair Deal, and the New Frontier. All of these assorted Deals constituted a basic and fundamental shift in American life—a shift from a relatively laissez-faire economy and minimal state to a society in which the state is unquestionably king.1
In the previous century, the government could safely have been ignored by almost everyone; now we have become a country in which the government is the great and unending source of power and privilege. Once a country in which each man could by and large make the decisions for his own life, we have become a land where the

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What Is Entrepreneurship?

April 14, 2020

[From Chapter 8 of Rothbard’s Man, Economy, and State.]
We shall concentrate on the capitalist-entrepreneurs, economically the more important type of entrepreneur. These are the men who invest in “capital” (land and/or capital goods) used in the productive process….
The capitalist-entrepreneur buys factors or factor services in the present; his product must be sold in the future. He is always on the alert, then, for discrepancies, for areas where he can earn more than the going rate of interest. Suppose the interest rate is 5 percent; Jones can buy a certain combination of factors for 100 ounces; he believes that he can use this agglomeration to sell a product after two years for 120 ounces. His expected future return is 10 percent per annum. If his expectations

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