My complaint about Rothbard, here and elsewhere, isn’t primarily that his conclusions were wrong—after all, we agreed about a lot of things. It is that he was willing to make dishonest arguments for conclusions he believed, at least sometimes correctly, to be true.

Rothbard’s treatment of Smith did not, at least with respect to Rothbard’s main points, involve any intentional distortion by omission. I believe David is failing to take into account how Rothbard qualified his arguments in light of what Smith wrote (some examples of which Dr. Gordon noted in his article), and how Rothbard was judging Smith’s ideas (rather harshly to be sure) from an Austrian and a hard-core state-hating perspective rather than from David’s own perspective.

Regarding Smith, David wrote:

Finally, Vincent argues that I was wrong to claim that Smith’s maximand was the welfare of the people, on the grounds that Smith described political economy as having two objectives—first benefitting the people and second supplying the state “with a revenue sufficient for the public services.” I don’t see the error. Smith obviously believed that some level of public services was necessary for the welfare of the people, and hence that the second objective was needed for the first.

A more interesting point is raised by the final sentence Vincent quotes: “It proposes to enrich both the people and the sovereign.” That points at what I suspect may have been an element of dishonesty in Smith’s writing, although I’m not sure how deliberate. I think it is clear that one of his objectives was to persuade those with political power that the policies he thought were good for the population as a whole were also good for them, in order to get them to support those policies.

I think we have to take Smith at his word that he wanted to enrich both the people and the Sovereign. Smith didn’t offer anything more specific as a moral principle for judging public policies, and one can find a number of counter-examples to Smith’s proto-Benthamite tendencies. All in all, The Wealth of Nations represents an intellectual muddle very much like what conservatives spout today.

Unless income equality is itself consistent with the conditions of the ERE, it does not follow from (1) A neutral tax is consistent with the ERE + income equality that (2) A neutral tax is consistent with the ERE. For a rigorous proof, Mises needs to demonstrate the consistency of income equality with the ERE: he can’t simply assume it. (I’m of course ignoring as irrelevant problems about what “follows” from a contradictory premise.)

It still seems to me that you are resting an awfully strong accusation on a single case that could as easily be attributed to error. All scholars make mistakes, even mistakes from haste. Time is scarce after all. What exactly did Rothbard have to gain from characterizing Mises as you say he did? It seems to me that he, the Austrian School, and libertarianism would all benefit from Mises arguing in print that neutral taxation is a myth. With all due respect, it seems to me that you had a pre-existing bias against Rothbard before reading the Myth of Neutral Taxation and seized upon a passage where he deviates from the gospel of Mises as evidence of his unscrupulousness and duplicity.

Looking at the footnote in question, it doesn’t seem to support such an extreme interpretation:

“Thus Ludwig von Mises, by far the most thoughtful and systematic of free-market economists, devotes only a few unsatisfactory paragraphs to the subject of a neutral tax, or indeed to taxation in general While conceding the impossibility of a neutral tax in the real world, he maintains without demonstration that it would be possible in a world of general equilibrium. And, despite its conceded impossibility, he seems to advocate pursuing the neutral tax as an ideal. (He also does not explain why everyone’s income would be equal in general equilibrium.) Apart from this, Mises maintains that taxes, despite “directly curtail[ing] the taxpayer’s satisfaction,” are “the price he pays for the services which government renders to…each of its members.” He warns that taxes should remain “low,” but the only criterion offered for this lowness is that they “do not exceed the amount required for securing the smooth operation of the government apparatus”; in that case, “they are necessary costs and repay themselves.” We may here reiterate all the questions we’ve discussed above, emphasizing such problems as: How much service? To which members? How about pacifists? Who pays the necessary costs and who gets repaid and then some? And what exactly is the “smooth operation of the government apparatus,” and [why] should that be the overriding desideratium? Mises, Human Action. Pp. 730-31, 733-34, 738.”

Notice that his complaint is that Mises only devotes a few unsatisfactory paragraphs to the subject and that he recognizes that Mises conceded the impossibility of the neutral tax in the real world. It is also not unimportant that Rothbard’s purpose in this paper is to completely discredit the neutral tax, including as a possible feature of general equilibrium. Considering his mainstream economist opponents, who would use the possibility of a neutral tax in general equilibrium as an ideal to be strived for, this is perfecetly reasonable. I also don’t see anything in the footnote above to indicate that Rothbard thought that Mises thought that income inequality was an essential or core feature of the ERE. Rothbard’s statement about it above merely questions why the assumption should even be made at all, even for the limited purposes to which Mises puts it. Why assume income equality in the ERE just to prove that neutral taxation would be possible in it with it? It serves no useful purpose and unnecessarily concedes a point to those in favor of taxation. In the final analysis, I see nothing untoward in the footnote in question. Rothbard’s critique of Mises seems here to be apropos and not the least bit unscholarly, vindictive, or duplicitous.

The footnote is #72.

Some “history” may be instructive as well.

As mentioned, when the piece appeared a couple years ago , I read it, having a general intent to rectify my ignorance of Rothbard’s thought.

But, immediately, the piece seemed to me to impute specifi8c thought to Mises which, to my knowledge and understanding, was simply at odds with the facts (though I hadn’t seen the relevant passages in years, I was as morally certain of Mises’ thoughts on the matter as I’d be of my own kids’ names). Without “checking up” (or even finishing the Rothbard piece), I dashed off an e-mail of protest to Lew. Shortly, I received Lew’s reply, directing me to the explanatory footnote #72 that I’ve indicated to you.`

Indeed, I was somewhat chastened–embarrassed at my neglect of “thoroughness.” So, I read the footnote. Initially, my reaction was that I’d been unfair to Rothbard; the footnote seemed so considered, so thoughtful, so analytical.

But that’s when I went back and read the passage in HUMAN ACTION which was the subject of criticism. And, it’s quite true that Mises wrote: “A neutral mode of taxation is conceivable…” That’s the focus of the argument Rothbard has raised..the nail on which his hat is hung, so to speak.

What Rothbard does not relate (because it would knock his soapbox out from under him) is that, after a couple paragraphs explicatory of the
characteristics of such a “neutral tax” under constructed, unrealizable conditions, Mises concludes: (In a market economy) “In the frame of such a system, no tax can be neutral. The very idea of a neutral tax is as unrealizable as that of neutral money.” That case (contra Rothbard) is closed and moreover, airtight.

The second, the matter of the ERE, is less conclusively (to my thinking) settled and admits of two distinct (but not mutually exclusive) explanations. But neither is favorable to an opinion of Rothbard’s scholarship.

Rothbard questions (in footnote #72) why income equality is a requisite feature of general equilibrium, more or less as though he’s questioning a potentially superfluous characteristic of one of Mises’ mental tools. If Rothbard wrote those words honestly, it shows him actually ignorant of ERE characteristics because INCOME EQUALITY IS NOT A CHARACTERISTIC OF THE EVENLY-ROTATING ECONOMY (and if Rothbard ACTUALLY had honest doubt, he could’ve simply refreshed his memory by flipping back from the pages drawing his critcism to those defining the ERE).

So where does the “income equality” question come from? The answer is that it comes from the very set of unreralizable conditions Mises proposes (in the same set of passages) as necessary to a “conceivable” neutral tax. The only question remaining is whether Rothbard was ignorant (and sloppy) in an egregious misinterpretation of what Mises had written (and remember–he had personal access to question directly) or whether the entire purpose of footnote #72 and its “thoughfulness” is to forestall readers’ potential examination of the Mises text in question and direct comparison to Rothbard’s criticism.

The world of thought is rife wth the opportunity for the intrusion (whether deliberate or inadvertant) error; we may safely assume that none are immune to the inadvertant variety. Once I’ve detected the deliberate variety, though, my practice has been simple avoidance; I’ll leave the polemics and counterarguments to my betters in that field. I’d rather think about other things–or go fishing, maybe.

In my response to him, I thought that this distinction was needed to make the passage consistent with Smith’s proposal for government establishment, in certain circumstances, of local schools. But it isn’t necessary to make the distinction to preserve Smith’s consistency. Under Smith’s proposal, the government mandates that local schools be established. How these schools are to be financed is a separate issue. Voluntary contributions, even if they suffice for all expenses, do not transform a government program into a private one.

Perhaps you could provide me with the footnote number(s) that you referred to in Rothbard’s Myth of Neutral Taxation? I’m having trouble finding the remarks about the ERE you mentioned.

Instead of name calling, would not a more constructive approach be to examine any existing evidence and offer reasonable explanations as to why Mises apparently changed his lifetime opposition to conscription in the 1963 edition of Human Action?

In my humble opinion, maybe Mises came to believe that monetary problems, especially inflation and the distortion (and possible destruction) of economic calculation caused by socialism, interventionism, and inflation, are greater enemies of civilization than conscription, and that in order to gain a wider audience for his views on monetary issues, Mises apparently modified his opinion regarding conscription.

Well, Mises’ passage on conscription is totally out of line with his entire body of work; he didn’t advocate conscription during WWII when he was surrounded by Nazi’s — certainly a most critical moment. Hoppe’s comments on this are insightful:

AEN: The strongest evidence against Mises as a radical anti-statist is the passage in
Human Action that endorses conscription.

HOPPE: This passage is very peculiar. It, and the several paragraphs that precede it
and the one that follows it, is not in the first edition. It makes its first appearance in
the 1963 edition. It comes out of the blue, and has no foundation in his overall
thinking. To me, this addition appears completely ad hoc.
You just have to remind yourself about his general position on government. Every
group and, if it can be technically done, every individual, can secede from the
government. Accordingly, conscription, in this sense, is completely illegitimate. If you
read the 1949 edition of Human Action, there is nothing at all that would seem to lead
to these particular funny conclusions.

AEN: Perhaps the Cold War explains it.

:HOPPE: But the likelihood that he would make a statement like this is the greatest in
prior editions. In 1940, he was in Switzerland, surrounded by Nazi forces. In 1949, he
had just seen the old Europe smashed by war and imperialism; what better time to
endorse the draft so it could be used to stop this type of thing in the future? But he did
not. Why, then, does he do this in 1963? There is no major war going on. Vietnam was
in its early stages. The Cold War is not at a peak, and the Soviet Union was in its
post-Stalinist period. These passages cry out for explanation.

As explained earlier in the Interview with Hoppe, Mises expressed very strong views in support of secession. You can look through some of his works, but here’s a starter: Quotable Mises: Secession.

Perhaps instead of arguing that one side is a liar, it would be more charitable to argue there’s a difference of opinion. I think it’s a little bit biased and unfair when people refer to Mises’ passages on conscription, without noting his huge body of work in support of the opposite, including secession. If anything, his passage on conscription is an aberration.

I don’t know you and don’t know whether or not I agree with much of whatever you think or write. But, if you read my posts to Mr. Plauche, particularly the penultimate, you’ll gather that we share an aversion (perhaps even more extreme in my own case) to liars (and particularly to “scholarly” liars).

One of the best examples to my recent memory was the proceeding in Leon County (FL) Court, Judge Sauls presiding, pitting Bush’s legal team against Gore’s team (Boises) in an election matter. Gore’s people were so outrageously manipulative of both testimony and evidence that I was surprised Sauls didn’t jail ‘em all. The “expert” statistician (a Yale prof) was so expertly crossed that he literally fell apart and slunk off the stand (probably expecting to be arrested for perjury, evidence-tampering, or obstruction). Also, there used to be an on-line magazine called “Upstream” which had some brilliant commentary (by a Dr. Finnis of Oxford, to my recollection) on the “scholarly” expert witnesses presented by Roe in the original case v. Wade.

Your comment regarding the ERE sound very much like something I would’ve said back when I had first encountered Mise’ HUMAN ACTION and had, on first reading, more or less “skimmed” that part without much reflection or analysis. But, though it is imaginary and depicts conditions never encountered in reality nor even ever attainable
in reality, it is simply indispensable to a real understanding of economic phenomena and relationships. To the degree that Rothbard (citing his own questions from the above-referenced material) did not understand the ERE
(or disagreed with Mises as to its characteristics), it is incredible to me that these were not expressed and resolved long before–during the years in which persoanl access was possible and, apparently, frequent. Not having read Rothbard any further, I’m in no position to declare that the matter isn’t raised anywhere else–but I think scholars of the Austrian school would be more aware (and expressed) on such a potentially schismatic question.

I should also point out that one other matter (of which I am aware) characterizes divergence between various views of Mises and those of Rothbard/Rockwell. That is the view of conscription expressed eloquently (by Mises) in several editions (of HUMAN ACTION) but conspicuously absent in one edition on this site.
Lew explained to me that the wording had been inserted at the insistence of a publisher over Mises’ objections (unenforceable because of immediate financial need) but Mises’ transcriptionist (Mrs. Bien-Graves) has denied this utterly (in personal conversation with me).
In this case, we are left to guess at who the liar is. (And you know what my guess is.)

Just about 60 years ago, I decided to “up and quit” reading fiction. It was a drastic but practical decision: I was a kid with an enormous appetite for reading but didn’t want to be a “bookworm” and just chose to draw that particular line. I have not been perfect in my practice; I made a partial exception for short stuff–magazine pieces, some sci-fi short stories, even a detective novel (I, THE JURY), and, about 30 years ago, Ayn Rand’s ATLAS SHRUGGED. Again, I stress there was no rhyme or reason other than a simple (some might say simplistic), expedient cutoff.

But, along about 40 or so years ago, I began to focus on the extent to which popular media and their contents, ostensibly non-fiction (books, magazines, TV news and analysis, etc.) are so thoroughly infested, not only with misinformaton arising from ignorance but frequently with deliberate attempts to falsify and mislead, most usually for the purpose of “improving” an account but (not rarely) with the intent to influence the reader’s opinion in one fashion or another. And so, since 1980, I haven’t read a newspaper or news magazine, haven’t watched network TV news, etc. And haven’t missed ‘em, either.

The stuff (Friedman/Rothbard/Smith etc.) being discussed is relatively complex. Without some of the relevant background reading, I’m unqualified to comment on that very specific matter. However, because of that very complexity, its discussion tends also toward complexity and nuanced interpretations.

But, because of my extremely limited experience (of reading Rothbard: no experience and no opinion)) and the dramatically simple exposition of his method that I had encountered in my very first, I thought it useful and starkly illustrative to throw it into this particular forum. And, though it is true that I’d expressed my own conclusion in the matter I’d suggested (to you and others), that is a particularly moot point in that, had my conclusion been any other than negatively charged, there’d have been no reason for any comment whatever (the fact that someone, in places A, B and C or at times X, Y, and Z said things that were true or made arguments that were logically unassailable CANNOT, in any fashion, counter evidence that that person is either ignorant or a deliberate liar in Case X, whether or not Case X does or does not involve A, B, C, etc.)

It’s really a simple matter. Reading what I suggested is far easier and less time-consuming than wading through all the matters raised in the basic discussion article. And, if, after doing so, the conclusion you reach is significantly different than mine, I’d be very surprised.

1. I wasn’t arguing the question of how important Smith was or wasn’t in the history of economic thought, however interesting that might have been, or [of] how pure a libertarian he was. Indeed, I explicitly conceded that Rothbard was correct in pointing out that many of Smith’s ideas appear in earlier works.

To which Vincent responds:

“But these aren’t separate issues. If Rothbard’s main theses about Smith are true, then he is not guilty of distorting Smith’s role in the history of economic thought, let alone doing so deliberately.”

On the contrary. It’s perfectly possible to make dishonest arguments for a correct conclusion. If you choose to do so, people who notice will conclude that you cannot be trusted as a source of information—which is one reason not to do it.
Among the reasons I haven’t bothered to read the rest of Rothbard’s book on the history of thought is that I would have no idea which of the things he said were true unless I checked them all myself, which would be a lot of work.

Nobody I know of argues that Smith was an anarchist, or that he wanted to eliminate all taxes. Everyone familiar with his work knows that he advocated some additional violations of strict laissez-faire. Some people probably overestimate how much of what is in The Wealth of Nations was original, but people knowledgable in the field know that not all of it was—I had heard of Cantillon before our exchange, although I don’t think I had read him.

My complaint about Rothbard, here and elsewhere, isn’t primarily that his conclusions were wrong—after all, we agreed about a lot of things. It is that he was willing to make dishonest arguments for conclusions he believed, at least sometimes correctly, to be true.

What would you think of someone who, speaking to an audience completely ignorant of American institutions, attacked the Drug Policy Foundation for suggesting taxing marijuana–without mentioning that they favored legalizing it? That’s Rothbard on export taxes on wool.

What would you think of someone who argued that Nozick was much less libertarian than Rawls, and did it by giving examples of non-libertarian views Nozick held and carefully not mentioning the much more non-libertarian views Rawls held? That’s Rothbard’s comparison of Smith to Turgot.

Finally, Vincent argues that I was wrong to claim that Smith’s maximand was the welfare of the people, on the grounds that Smith described political economy as having two objectives—first benefitting the people and second supplying the state “with a revenue sufficient for the public services.” I don’t see the error. Smith obviously believed that some level of public services was necessary for the welfare of the people, and hence that the second objective was needed for the first.

A more interesting point is raised by the final sentence Vincent quotes: “It proposes to enrich both the people and the sovereign.” That points at what I suspect may have been an element of dishonesty in Smith’s writing, although I’m not sure how deliberate. I think it is clear that one of his objectives was to persuade those with political power that the policies he thought were good for the population as a whole were also good for them, in order to get them to support those policies.

The clearest case is not that quote but Smith’s argument that repealing trade barriers on the import of agricultural products would benefit land owners. I find it distinctly strained—which makes me suspect that he was making it because the landowners had most of the political power and it would therefore be much more difficult to repeal the corn laws if the landowners were against it. What I’m not sure of is whether Smith was doing that deliberately or whether he had convinced himself that his argument was correct.

1. I wasn’t arguing the question of how important Smith was or wasn’t in the history of economic thought, however interesting that might have been, or have how pure a libertarian he was. Indeed, I explicitly conceded that Rothbard was correct in pointing out that many of Smith’s ideas appear in earlier works.

I was focussing on a simple question: was Rothbard’s account of Smith and his French contemporaries an honest and accurate one or, as I argued, a hatchet job, deliberately distorting by omission and selection.

But these aren’t separate issues. If Rothbard’s main theses about Smith are true, then he is not guilty of distorting Smith’s role in the history of economic thought, let alone doing so deliberately.

For example, Friedman’s concession that Smith had significant predecessors seems to endorse Rothbard’s honesty and accuracy in describing Cantillon, and not Smith, as the founder of modern economics.

An issue like this is highly significant for judging Rothbard’s honesty, as it flatly contradicts the “hatchet job” thesis. Given that Rothbard’s overt purpose was to debunk the customary hagiographic treatment of Smith and customary slighting of Smith’s French predecessors, a concession on this point implies that Rothbard was truthful in boldly challenging the mainstream consensus and giving the French their place in the sun.

I think much the same applies to the other main points of Rothbard’s book. What I have discovered upon reading the original Cantillon and Smith sources and then rereading Rothbard’s analysis of them is that Rothbard made precisely the same qualifications to his main arguments that I would have. Rothbard didn’t omit anything of interest to those who evaluate the merits of economists from an Austrian perspective.

On the contrary, I discovered that Dr. Friedman committed an error of omission himself 8 years ago, though I trust that it wasn’t deliberate. In the now infamous Usenet thread, I was informed that Smith’s maximand was the welfare of the people. However, this is incorrect. Smith wrote in his introduction to book IV of The Wealth of Nations:

“Political Å“conomy, considered as a branch of the science of a statesman or legislator, proposes two distinct objects: first, to provide a plentiful revenue or subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services. It proposes to enrich both the people and the sovereign.”

I would say that including the plunder of the sovereign in the desired aggregate casts Smith’s policy goals in a somewhat different light.

I think a better interpretation than Gordon’s and Friedman’s, but closer to Gordon’s can be found in the mercantilist rationale that Smith gives for the wool tax. Correct me if I am wrong, but Smith doesn’t make a free trade argument here but rather a mercantilist one: repealing the ban on wool exports and imposing a tax will reap more revenue for the state. This isn’t the only time we see Smith concerned with state revenue where he could have made a free trade, i.e., laissez-faire argument.

That’s the hallmark of moral relativism.
Mass murder is not a crime. It’s an intelectual mistake…

This ‘theory’ about human actions is the cherished credo of elitist intelectuals who like to think that people act based on ideas. Their ideas, of course. If that’s the case, then intelectuals can control people as if they were robots, putting the ‘right’ or ‘wrong’ ideas in their minds.
Idealism and free will do not get along.

“If Rothbard wasn’t a great economist, then there has never been a great economist.”

What exactly did he discover?

1. I wasn’t arguing the question of how important Smith was or wasn’t in the history of economic thought, however interesting that might have been, or have how pure a libertarian he was. Indeed, I explicitly conceded that Rothbard was correct in pointing out that many of Smith’s ideas appear in earlier works.

I was focussing on a simple question: was Rothbard’s account of Smith and his French contemporaries an honest and accurate one or, as I argued, a hatchet job, deliberately distorting by omission and selection.

2. I suggest that readers consider one simple case, where David Gordon and I do not disagree on the facts, merely the interpretation: Smith’s views on the wool trade. Rothbard said that Smith advocated taxing wool exports and offered that as evidence of his non-libertarian views. Rothbard did not mention that Smith was proposing the tax as a replacement for the existing situation—an absolute ban, enforced by extensive regulations and ferocious penalties, described in detail by Smith.

Gordon argues that Smith’s position was not all that libertarian, since the proposal can be read as imposing a tax high enough to collect most of the gains from the repeal of the ban. Whether that is true or not, he does not deny that Rothbard accused Smith of wanting to impose taxes on the export of wool without mentioning that he was proposing the tax as an alternative to a much less free existing system–a fact that the average reader would not have known.

Perhaps David Gordon believes that an honest writer could have done that. I do not.

3. Gordon thinks I am mistaken in reading Smith as undecided between public and private support for schooling, despite Smith’s plain statement that “The expense of the institutions for education and religious instruction … might perhaps with equal propriety, and even with some advantage, be
defrayed altogether by those who receive the immediate benefit of such education and instruction, or by the voluntary contribution of those who think they have occasion for either the one or the other.”

Gordon wants us to read that as making a distinction between the cost of setting up schools and of maintaining them. He may not have noticed that the previous paragraph, on roads, specifically refers to “maintainance.” This one does not. There is no basis in the text I have just quoted for separating out the capital cost of establishing a school from the operating cost; both are expenses.

Gordon’s response is to quote an earlier passage, where Smith suggests, as one possibility, having the state establish schools, with much of the fee paid by parents. But of course, Smith in his discussion of education considers lots of alternatives. Indeed, Gordon quotes a bit from my lecture notes–where I describe the proposal in question as “Possible public role in the education of the common people.” There is nothing in that passage implying that the cost of setting up a school is not part of “the expense of the institutions of … .”

4. Vincent Cook writes:

“Moreover, Friedman and Rothbard had clashed in other contexts (especially in arguing the foundations of anarcho-capitalism).”

I’m not sure we ever did clash on that, although it’s probably the most important and interesting substantive disagreement between us–assuming that what Vincent means is the disagreement on how the legal code of an anarcho-capitalist society gets produced.

But I think the real conflict was something quite different. Rothbard has a piece, webbed somewhere, in which he criticizes me for not hating the state. In his terms, he was correct. In my view, the fundamental conflict is not between bad men and good men but between mistaken beliefs and correct beliefs.

The flip side of that is that, in my view, Rothbard was consistently more interested in whether an argument was on the right side than whether it was correct. I think I have demonstrated that in the context of his attack on Smith–that he was willing to deliberately mislead his readers about the facts in order to get them to what Rothbard considered the correct conclusion. I can think of other examples.