“No nation ever made its bread either by its great arts, or its great wisdoms. By its minor arts or manufactures, by its practical knowledges, yes; but its noble scholarship, its noble philosophy, and its noble art are always to be bought as a treasure, not sold for a livelihood.”
—John Ruskin

Is it a law of physics, or of human nature, that frequently dooms genius to obscurity during its lifetime? While every nonentity has his 15 minutes of fame, anything more enduring seems governed by a simple principle: death precedes recognition. In the case of Murray Rothbard, the axiom applies in spades. The dean of the Austrian or pure free market school of economics, Rothbard was the author of 28 books, wrote thousands of articles and reviews, and founded the libertarian movement literally in his living room. Not until the last years of his life did this productive and innovative scholar receive at least some measure of the honor that was his due: in 1994, The Rockford Institute awarded him The Ingersoll Foundation’s Richard M. Weaver Award for Scholarly Letters. Wider acclaim, however, eluded him. This was due, first of all, to the undying enmity of precisely those people whose business it is to hand out awards, fellowships, academic appointments, and other emoluments. The Establishment which Rothbard lambasted was hardly likely to honor him — living or dead.

Even his libertarian adherents, outside the immediate circle of his friends and colleagues, failed to see what they had in Rothbard. This under-appreciation may be attributed, in part, to Rothbard’s own struggle to find a literary form equal to the scope of his erudition. While a quick glance at the footnotes of the 26 books he published before his death would indicate the breadth and depth of his knowledge, no single work gave him the scope to bring it all into play. It was, instead, the accumulated weight of his achievements in various fields—economics, philosophy, history, political theory—that won him what acclaim he garnered during his lifetime. With the publication of the History of Economic Thought, however, Rothbard’s stature cannot be denied. The richness of anecdote and analysis, the scope of the research, the transparency of the language, and the lightning flashes of wit that illuminate these two volumes are impossible to summarize, except in a single word: masterpiece.

In the course of researching a biography of Rothbard, I came across a 1983 letter in which he complains of “a crisis in my History of Economic Thought book.” The original publisher wanted the manuscript in short order, and his editor insisted that Rothbard “stress the post-[Adam] Smith era.” The only way to do that, and also bow to the publisher’s edict to keep it short, was to scrap everything he had written to that point “and to write what he wants—what Joey [JoAnn Rothbard, his wife] calls for short the Ten Great Modern Economists, and then hope that there will be enough time to link the two books up into one. If not, I may wind up with [one short book] and a larger, much broader book on the whole shebang.” Luckily for future generations, he did not scrap the first volume; instead, as he writes in his acknowledgments, “after pondering the problem . . . I told [the editor] that I would have to begin with Aristotle, since Smith was a sharp decline from many of his predecessors.”

“The whole shebang” is the only phrase that does justice to Rothbard’s theme. Rejecting the narrowly “economic” in favor of presenting the philosophical, religious, and political context in which economic theories are formulated, Rothbard created a vivid panorama of the history of thought: not just economic thought, but all thought. The method follows the injunction of his great mentor, Ludwig von Mises, that economics is but a branch of praxeology (the study of human action), which also includes psychology, history, ethics, political economy, and all the social (or “soft”) sciences. Whatever editor thought such a project could be shoehorned into a few hundred pages had no understanding of Austrian economics— or of Rothbard. However frustrating it might have been for Rothbard, this woeful ignorance, far from deterring or discouraging him, merely made him all the more determined to educate such people, raising them up, as it were, to his level of understanding. The impulse to correct error—and not only to correct it but to offer a complex and closely reasoned alternate paradigm —is what made him a great educator, as well as a world-class polemicist.

Against the Great Man theory of economic history, in which “Adam Smith created economics, much as Athena sprang full-grown and fully armed from the brow of Zeus,” Rothbard counterposes a new and very different paradigm. The conventional wisdom is that, since Smith, the progress of “economic science” has been ever in the ascendant. This complements the contemporary view of economics as a “science,” which, like physics, steadily increases its knowledge and accuracy and perfects its analysis toward complete understanding. This ever-onward-and-upward view of economic history, says Rothbard, is demonstrably false. There is such a thing as “lost knowledge”; history can (and all too often does) take a wrong turn. Citing Thomas Kuhn’s Structure of Scientific Revolutions, Rothbard points out that not even the “hard” physical sciences follow this “romantic, Panglossian” course. Debunking what Rothbard calls “the Whig theory of history” in the sciences, Kuhn showed that science did not develop in this way. A paradigm, once selected, is rarely either tested or challenged: only when the number of anomalies and contradictions proliferate to the point of “crisis” is the paradigm successfully challenged and replaced. Kuhn’s insight “rings true,” as Rothbard puts it, “both as history and as sociology.”

If the modernist prejudice that “later is better” is inapplicable to the “hard” sciences, it is even less relevant to the study of the “soft” sciences, including economics. Looking past the dominant paradigm, Rothbard saw that “economics can and has proceeded in contentious, even zig-zag fashion, with later systemic fallacy sometimes elbowing aside earlier but sounder paradigms, thereby redirecting economic thought down a totally erroneous or even tragic path.”

The “Few Great Men theory of economic history” starts with Adam Smith, Flounder-not only of free-market theory, but of economics per se. Yet Rothbard reveals a rich and extensive pre-Smithian tradition running from the ancients (Greece, Rome, China) to the medieval scholastics. In his first volume, Rothbard shows that economic thought did not begin —or even reach its apogee—with the career of an 18th-century Scottish Calvinist. “It all began, as usual, with the Greeks,” he writes, the first discoverers of the concept and principles of natural law.

Rothbard’s view of economic thought among the ancients begins with Plato as the archetypal totalitarian-mystic, the original oligarch and precursor of all the vanguard parties to come. To the Platonists, the “limitations” imposed by natural law are intolerable, therefore the goal is to “transcend” them. Alienated from his true self—which is eternal, transcending time and space-man tries to regain his godlike state. Overcoming “alienation,” as Rothbard vividly demonstrates in the next thousand or so pages, has been the motive and overriding purpose of scores of religious and ideological movements, from the Protestant Reformation to the secularized millennialism of Marx and communism to the post-millennial pietist prophets of “progressive” economic and social reform in America.

This history of economic thought, then, is simultaneously a history not only of philosophy and politics but of religion. Here we encounter the controversial thesis of Emil Kauder, the German-born Austrian historian, so central to this work. Kauder maintained that Adam Smith, far from being the founder of economics, was the author of a major error that diverted the field away from a proto-Austrian subjective utility theory of value, with its emphasis on relative scarcity, and substituted for it the labor theory of value. The Spanish and Italian scholastics of the Middle Ages and the early Renaissance, as well as the French economists of the 18th century, had a far more sophisticated conception of the market than did Smith: their emphasis had been on subjective valuation, entrepreneurship, and prices fluctuating with demand. Smith changed all that. By shifting the focus of economics from subjective valuation to labor, Kauder contended that Smith ought to be granted “the dubious honor of being ‘a necessary precursor of Karl Marx.”‘

Kauder’s thesis, however, goes far beyond debunking Adam Smith. As Rothbard relates in his introduction, Kauder’s theory answers the question: “Why is it, for example, that the subjective utility tradition flourished on the Continent, especially in France and Italy, and then revived particularly in Austria, whereas the labor and cost of production theories developed especially in Great Britain?” In Kauder’s view, the difference was due to the decisive role of religion in the life of a people. The culture of Southern Europe, of the scholastics and the French and Italian laissez faire theorists, was permeated with a Catholic sensibility. Catholicism, with its Thomistic-Aristotelian tradition, translated into the idea that the goal of production is consumption, that moderate consumption is not sinful, and that life is to be enjoyed. This view implies that economic values are subjective since different things are enjoyed by different people.

In the case of the Protestant ethos, however, doctrinal and emotional assumptions are very different, as is the resulting economic theory. In rebellion against the supposed slackening of original Christian doctrine, the Protestants harkened back to what they imagined was the original asceticism of Christianity. Particularly galling to the rebels was the sophisticated economic analysis of the Spanish scholastics, who by the mid-to-late Middle Ages had swept away the medieval ban on charging interest for a loan (“usury”) in everything but the most formal sense. The Calvinist emphasis on labor (“toil to the glory of God”) as a good in and of itself was conducive to the labor theory of value, which imputed some inherent measure of worth to the products of man’s labor. And if man, as the original Calvinists asserted, is predestined to walk a certain path, if the elect are chosen not by their acts but by the unknowable will of Cod, then surely the economic choices of such creatures are similarly predestined. Unlike the Catholic theorists of the natural law tradition, the Calvinist and Lutheran ideologues rejected reason as the framework of ethics, insisting instead on divine revelation as the only path to truth. “If reason cannot be used to frame an ethic,” writes Rothbard, “this means that Luther and Calvin had to, in essence, throw out natural law, and in doing so, they jettisoned the basic criteria developed over the centuries by which to criticize the despotic actions of the state.” Anyone else would have left it at that: a simple statement of his argument, with no further evidence offered. But in a typical flourish, Rothbard illuminates his subject with a lightning flash of insight: “One of the expressions of this conflict came over religious holidays, which Catholic countries enjoyed in abundance. To the Puritans, this was idolatry; even Christmas was not supposed to be an occasion for sensate enjoyment.”

Here is the clincher that makes the case, a vivid example that brings home the centrality of culture and religion to the evolution of economic thought. Under the accumulated weight of considerable evidence, Rothbard shows that militant asceticism—from Plato’s dictatorship of the philosopher-kings to the postmillennial pietism that energized the Progressive era—is inevitably a rationale for tyranny and invariably an occasion for blood-letting on a massive scale. This is a major theme of these volumes, one which runs through all of Rothbard’s writings: the importance of human enjoyment, of pleasure in life, and, therefore, in economics.

A complete and thorough survey of the material covered in these thousand pages would take up an entire issue of Chronicles. Reviewers of Rothbard’s magnum opus are therefore forced to focus on a few specifics. A high point is Rothbard’s definitive treatment of Marxism as “an atheized variant of a venerable Christian heresy,” which weaves together the various thematic strands that run through both volumes. The Kuhnian theory of the paradigm shift, in Rothbard’s creative hands, maps the regression from Smith to Marx through Ricardo. The Kauder thesis is expanded to explain the rise of communism as a consequence of the Reformation, a theological phenomenon secularized by German Romantics and their British imitators.

Central to the Rothbardian view of Marxism is his incisive analysis of Marx the man. According to the “scientific” view of “objectivity,” only Marx’s ideas are grist for the historical mill, any prying into the individual psychology of the economist himself being somehow unfair and “ad hominem.” But as Rothbard pointed out many times, and not only in this context, social “forces” and other aggregates are nonexistent entities; only individuals act, in the market and in life. Therefore, the vagaries and personal idiosyncrasies of individuals are a factor in the development of religious, political, and economic ideas, and a valid field of investigation for those who seek to understand the real sources of Marxism—indeed, of any “ism.”

As Rothbard points out, there has been an attempt in recent years to distinguish a benign “young Marx” from the elder Stalinist Marx. In a startling and unusual manner, Rothbard shows that “there is only one Marx, whether early or late.” In a perceptive and original analysis of Marx’s early poetry, often dismissed as adolescent musings of no consequence, Rothbard pinpoints the pure hatred of life, of humanity, and of the natural law that produced, in the man of mature years, a monstrous system of almost satanic evil. (“See this sword? /The prince of darkness / Sold it to me.” And what could be more explicit than: “With Satan I have struck my deal / He chalks the signs, beats time for me./ I play the death march fast and free”?)

This death march has been the Leitmotif of the 20th century, an era which Rothbard denounced in his famous inaugural speech as president of the John Randolph Club as the century of mass murder, totalitarianism, socialism, and devastation on a scale unmatched in all of human history. “Repeal the 20th century!” was the slogan he offered to his fellow Randolphians: Roll back not only the Great Society, but the Fair Deal, the New Deal, the statist “reforms” of the Progressive Era—go back, he urged us, retrace your steps to that fateful crossroads where a wrong turn was taken, and, as he puts it in these volumes, regain “paradigms lost.”

Rothbard’s enemies on the right, notably William F. Buckley, Jr., tried to smear him as a leftist for opposing the Cold War, but this profoundly conservative theme should put that old canard to rest. Against the idea of progress as an automatic series of ascending steps toward the truth and the light, Rothbard held up the vision of knowledge lost and then rediscovered, and of history as an uncertain and heroic struggle to maintain and improve the human condition. He was a man of the right, not only ideologically but temperamentally as well. Upholding the natural law tradition of Aristotle, Aquinas, the scholastics, and Catholicism as the fountainhead of human freedom ought to score him some points with National Review. But Rothbard was a man of the Old Right, one of the hated “isolationists,” permanently ostracized therefore by the right-wing social democrats who have commandeered the conservative movement.

At the conclusion of these volumes, Rothbard breaks off a discussion of Carl Menger and the rise of marginalism, explaining, “But that is the stuff of another volume.” Tragically, there was to be no third volume. Rothbard died on January 7, 1995, before he could put to paper a book that was already written “in my head,” as he explained to a colleague shortly before that tragic day. The story of the history of economic thought in the 20th century, the rise of the Austrians, the triumph of Keynes, the crisis of the Keynesian paradigm, and the summation of what was to be, in an important sense, the capstone of the Rothbardian system—all this was lost when a great mind flickered out.

Yet the magnitude of Rothbard’s achievement was such that his legacy is assured; his contribution to the cause of liberty in America will not only endure but continue to grow in stature. As an economist, he succeeded in firmly establishing the Austrian school of economics in America, expanding and refining the legacy of his own mentor, the great Ludwig von Mises. As a system-builder, he completed the intellectual edifice that was the work of a lifetime in its general outlines and established it upon a solid base. Keeping in mind the limited value of scientific analogies in this context, we may conclude that the totality of his writings—culminating in these volumes—presents the equivalent of a unified field theory for the social sciences.


[Economic Thought Before Adam Smith: An Austrian Perspective on the History of Economic Thought, Volume I;

Classical Economics: An Austrian Perspective on the History of Economic Thought, Volume II, by Murray N. Rothbard Aldershot, Hants, (England: Edward Elgar) 556 pp. and 526 pp., respectively; $110 each]