Category Archives: Murray Rothbard

Playing with Fire: Money, Banking, and the Federal Reserve

Video by the Mises Institute.

The Fed has been the source of booms, busts, and the ongoing impoverishment of Americans since the Fed’s founding.

This is why a new, critical look at the Federal Reserve is needed, and why the Mises Institute is now happy to bring you this new documentary on the Fed.

Playing with Fire provides a look at how the Fed uses its expanding power to damage our economy, increase inequality, and to impoverish ordinary Americans. The film also looks at how much the Fed has expanded its own power since the Financial Crisis of 2008.

Featuring interviews with Ron Paul, Tom DiLorenzo, Joseph Salerno, Mark Thornton, Jim Grant, Alex Pollock, and Jonathan Newman, Playing with Fire explains what the Fed is, where it came from, and why it is so dangerous. Perhaps most importantly of all, Playing with Fire shows why we need to end the Fed altogether.

The Ruling Elites Create an Orwellian Reinterpretation of Human Rights

Article by Wanjiru Njoya:

Ludwig von Mises depicts the aim of revolutionary socialism as: “to clear the ground for building up a new civilization by liquidating the old one.” One of the main strategies in liquidating a civilization involves dismantling its legal and philosophical foundations. This role is fulfilled by activists who embark upon “sabotage and revolution” by subverting the meaning of words: “The socialists have engineered a semantic revolution in converting the meaning of terms into their opposite.”

George Orwell famously called this subversive language “Newspeak.” Peter Foster describes Newspeak as “a sort of totalitarian Esperanto that sought gradually to diminish the range of what was thinkable by eliminating, contracting, and manufacturing words.”

Mises explains that dictators express their ideas in Newspeak precisely because, if they did not, nobody would support their schemes:1984 (Signet Classics)George OrwellBest Price: $1.49Buy New $3.58(as of 10:53 UTC – Details)

This reversal of the traditional connotation of all words of the political terminology is not merely a peculiarity of the language of the Russian Communists and their Fascist and Nazi disciples. The social order that in abolishing private property deprives the consumers of their autonomy and independence, and thereby subjects every man to the arbitrary discretion of the central planning board, could not win the support of the masses if they were not to camouflage its main character. The socialists would have never duped the voters if they had openly told them that their ultimate end is to cast them into bondage. (emphasis added)

In the proliferation of Newspeak, the reinterpretation of “human rights” has proved to be one of the most powerful weapons of sabotage and revolution. Activists have seized control of a vast empire of international law, NGOs, and human rights charities with a global network of staff who monitor respect for “human rights.” They wield their significant influence in the human rights industry to undermine human liberty by redefining the meaning of “human rights” to denote the antidiscrimination principle. Under the banner of equality and nondiscrimination, they restrict free speech and other human liberties. In other words, the doctrine of “human rights” now denotes the precise opposite: the destruction of human liberty.

The “human right” to non-discrimination

Human rights no longer mean what many might suppose: the right to life, liberty, and property. The vast corpus of human rights in international law has been categorized by Karel Vašák into three: civil-political, socio-economic, and collective-developmental. These categories are said to encompass negative rights (things the state must not do, such interfering with life, liberty, or property), positive rights (things the state must do, for example, provide citizens with food, shelter, education, healthcare, etc.), and rights of solidarity between citizens such as wealth redistribution through social welfare schemes and equal participation in economic progress through measures such as the minimum wage or equal pay.

Human rights organizations monitor progress against these categories and ensure that the legal system works in favor of socialist goals and against liberty. For example, the United Nations human rights program educates the public on the need to eradicate “hate speech” and interprets “equal protection” of the law, as a fundamental human right, to mean protection from hate speech. The UN says:

Addressing hate speech does not mean limiting or prohibiting freedom of speech. It means keeping hate speech from escalating into more something more dangerous, particularly incitement to discrimination, hostility and violence, which is prohibited under international law.

From that description, it can be seen that the UN takes a concept which is well-established in the criminal law, namely, prohibiting incitement to violence, and links it to notions of incitement to discrimination and incitement to hostility, which have never before been recognized as crimes. They annex discrimination and hostility to the charge of inciting violence because, if they did not, it would be immediately clear to everyone that criminalizing “discrimination” or “hostility” amounts to nothing less than Newspeakian crimethink.

The meaning of human rights

In his article, “There’s no such thing as Human Rights,” the British journalist Peter Hitchens argues that,

Human rights do not exist. They are an invention, made out of pure wind. If you are seriously interested in staying free, you should not rely on these flatulent, vague phrases to help you.

They are in fact a weapon in the hands of those who wish to remove your liberty and transform society, though this is probably an accident. It is only in the past 50 years or so that radical judges have realised these baseless declarations can be used (for example) to abolish national frontiers or give criminals the right to vote.

In that context, Hitchens is referring not to the ancient liberties protected by Magna Carta, but to the Newspeakian rights now enshrined in human rights instruments, such as the UN Declaration of Human Rights and the European Convention on Human Rights. Human rights have been transformed into wooly concepts which merely reflect political and partisan demands.

Murray Rothbard avoids the ambiguity surrounding the meaning of human rights by defining them as property rights. In the Ethics of Liberty, he explains:

…the concept of “rights” only makes sense as property rights. For not only are there no human rights which are not also property rights, but the former rights lose their absoluteness and clarity and become fuzzy and vulnerable when property rights are not used as the standard.

In the first place, there are two senses in which property rights are identical with human rights: one, that property can only accrue to humans, so that their rights to property are rights that belong to human beings; and two, that the person’s right to his own body, his personal liberty, is a property right in his own person as well as a “human right.” But more importantly for our discussion, human rights, when not put in terms of property rights, turn out to be vague and contradictory, causing liberals to weaken those rights on behalf of “public policy” or the “public good.”

Thus, the Rothbardian interpretation of human rights denotes the universal right to self-ownership and private property that vests in all human beings.

Bureaucratic reinterpretation

In practice, the meaning of human rights is subject to interpretation by courts or other law enforcement officials. Therefore, human rights ultimately mean only what they are interpreted to mean by law enforcement, not what they may theoretically, politically, or philosophically. Lowell B. Mason, an attorney and former chair of the Federal Trade Commission explains the significance of bureaucratic interpretation by observing wryly that:

When in private practice I never told clients what the law was; I always told them what the bureaucrats thought the law was… The legality or illegality of what you do often depends not on the words of a statute enacted by your elected representatives, but on the state of the collective liver of a dozen anonymous bureaucrats.

Being well aware of this, the goal of activists is to ensure that “human rights” are interpreted so as to advance their goals. This explains the concerted efforts to depict “hate speech” as a human rights violation. In this way the commitment of states to protecting “human rights” is transformed, through the prism of the antidiscrimination principle, into an edict to prohibit hate speech. The word “hate” is interpreted to mean having the temerity to disagree with socialists, and similarly, the word “equality” is interpreted to mean wealth redistribution to achieve equality of material conditions.

Mason explains how it is possible for bureaucrats, charged with law enforcement, to reinterpret the Constitution to suit whatever they think the law ought to achieve. No matter how carefully a law is drafted, it will always require interpretation, and this is where the bureaucrats strike as they purport to be applying the “evolving” meaning of the Constitution. Mason explains:

“Of course,” he will reassure you, “the Constitution still stands as a bulwark to liberty but it is a growing instrument that adapts itself to the times, and while it has not been repealed or amended, it has necessarily been reinterpreted so that due process (as it was known in the past) no longer unduly encumbers the administration of the law.”

Through Newspeak, the Constitution itself has been reinterpreted, enabling socialists to claim that they support free speech and also support the prohibition of “hate speech.” Mises explains that this subverts the concept of freedom into its very opposite: “Freedom implies the right to choose between assent and dissent. But in Newspeak it means the duty to assent unconditionally and strict interdiction of dissent.” In that sense, the concept of “hate speech” is not compatible with free speech. In denoting any dissent as “hate,” it is the very negation of free speech and freedom of thought. Through Orwellian Newspeak, ordinary words like “liberty,” “justice,” and “equality”—values that most people would support—have been subverted and harnessed to promote socialism.

The Role of Intellectuals in Society

The concluding words in Murray N. Rothbard‘s book “The Case For a One Hundred Percent Gold Dollar” (pp. 71f):

There is no gainsaying the fact that this suggested program will strike most people as impossibly “radical” and “unrealistic”; any suggestion for changing the status quo, no matter how slight, can always be considered by someone as too radical, so that the only thoroughgoing escape from the charge of impracticality is never to advocate any change whatever in existing conditions.
But to take this approach is to abandon human reason, and to drift in animal- or plant-like manner with the tide of events. As Professor Philbrook pointed out in a brilliant article some years ago, we must frame our policy convictions on what we believe the best course to be and then try to convince others of this goal, and not include within our policy conclusions estimates of what other people may find acceptable. For someone must propagate the truth in society, as opposed to what is politically expedient. If scholars and intellectuals fail to do so, if they fail to expound their convictions of what they believe the correct course to be, they are abandoning truth, and therefore abandoning their very raison d’etre. All hope of social progress would then be gone, for no new ideas would ever be advanced nor effort expended to
convince others of their validity.

What Has Government Done to Our Money?

Book by Murray Rothbard, preface by Guido Hülsmann

I can name maybe half a dozen books (including the Bible) which have been pivotal to my intellectual development. What Has Government Done to Our Money, by Murray N. Rothbard, is one of them. Here‘s the Wikipedia page on the book.

I cite in the following excerpts from the preface by Professor Jörg Guido Hülsmann.

What Has Government Done to Our Money? is an outstanding example of Rothbard’s creative mind at work. Since it was first published in 1964 .[sic! Wikipedia and other sources say 1963], it has appeared in four editions in English, and has been translated into many foreign languages. It has served as a primer on monetary theory for all its readers. In fact, it is probably the most brilliant introduction to monetary theory ever written, presenting both the foundation of monetary theory and exploring the role of the state in the degeneration of monetary systems. The book is suitable not only for economists, but also for non-academics and all people interested in the subject. It is, like all of Rothbard’s works, a timeless and powerful statement. It leaves the reader with a completely new way to think about the relationship between money and state.

Here the elements and the functions of a free monetary system are presented with brevity and clarity. Rothbard shows how and why gold and silver are used as money on the unhampered market. Money originates neither from social compact nor government edict, but as a market solution of the problems and costs associated with barter. All other tasks usually considered monetary duties of the state — from minting to the definition of the monetary units to the precise form money will take — are left to private entrepreneurs on the unhampered market.

Where is the place of the state in this picture? Doesn’t the state have to guard our money? Doesn’t it have to adjust the money supply and supervise the banks? Rothbard’s answer to these questions is a clear no. Government intervention does not protect money at all but rather threatens its integrity. Government interference leads to more abuse and more instability than the free market would otherwise have tolerated. Instead of solving problems, intervention creates them. Instead of order they bring chaos and economic upheaval.

For Rothbard, the central issue is not whether monetary policy should stabilize the price level or the money supply; it is whether there is a role for the state in the monetary system at all. On this question, Rothbard answers decisively in the negative. Entrusting the money to the state is a grave error. It opens door and gate for totalitarian control of the society by interest groups closely connected to the state apparatus. The consequences are economic and monetary crises, and a relentless decline in the purchasing power of money. Rothbard illustrates this impressively with a short history of the monetary collapse of the West.

Rothbard’s chronicle of decline ends with the breakdown of Bretton Woods and a prediction that the future portends continued exchange-rate volatility, debt accumulation, inflation, crises, bailouts, and a political drive to further centralize control of money and credit. This prediction turned out to be a good summary of the monetary events of the last quarter century. The world economy adopted a de facto dollar standard, a managed monetary integration came to Europe, and crisis has followed crisis in Asia, Russia, Mexico, and Central and South America, along with exploding deficits and debts in the United States. Undoubtedly many more will come our way.

This new edition includes a detailed reform proposal for a 100% gold dollar [see online here], an essay first published in 1962, the same year that Man, Economy, and State appeared and two years before What Has Government Done to Our Money. That it was written a decade before the last vestiges of the gold standard were abolished does not diminish its power as a proposal for reform.

Would Rothbard’s plan work? Certainly. The limits are due not to its economic viability but rather to the same forces that keep all radical proposals for freedom at bay: political barriers and ideological opposition. Should the conditions ever become ripe for pure liberty again — and Rothbard was ever the optimist — this essay will serve as an outstanding blueprint.

Today all nations face a choice between sound money and continuing monetary depreciation and/or monetary crisis. Sound money, Rothbard shows, means the enforcement of strict separation between the state and money. Rothbard has shown that the world’s party of liberty can embrace what is usually said to be an impossible ideal: an international money protected against the arbitrariness of the state. His analysis and prescriptions deserve even more attention today than when they were first written.

Jörg Guido Hülsmann

Angers, France

April 2005

Legal Foundations of a Free Society

Excerpt from Hans-Hermann Hoppe’s foreword to Stephan Kinsella’s new book, “Legal Foundations of a Free Society”.

The objective for a human ethic or a theory of justice, then, is the discovery of such rules of human conduct that make it possible for a—indeed, any—bodily person to act—indeed, to live his entire active life—in a world made up of different people, a “given” external, material environment, and various scarce—rivalrous, contestable or conflict-able—material objects useable as means toward a person’s ends, without ever running into physical clashes with anybody else.

Essentially, these rules have been known and recognized since eternity. They consist of three principal components. First, personhood and self-ownership: Each person owns—exclusively controls—his physical body that only he and no one else can control directly (any control over another person’s body, by contrast, is invariably an in-direct control, presupposing the prior direct control of one’s own body). Otherwise, if body-ownership were assigned to some indirect body-controller, conflict would become unavoidable as the direct body-controller cannot give up the direct control over his body as long as he is alive. Accordingly, any physical interference with another person’s body must be consensual, invited and agreed to by such a person, and any non-consensual interference with his body constitutes an unjust and prohibited invasion.

Second, private property and original appropriation: Logically, what is required to avoid all conflict regarding external material objects used or usable as means of action, i.e. as goods, is clear: every good must always and at all times be owned privately, i.e. controlled exclusively by some specified person. The purposes of different actors then may be as different as can be, and yet no conflict will arise so long as their respective actions involve exclusively the use of their own private property. And how can external objects become private property in the first place without leading to conflict? To avoid conflict from the very start, it is necessary that private property be founded through acts of original appropriation, because only through actions, taking place in time and space, can an objective—intersubjectively ascertainable—link be established between a particular person and a particular object. And only the first appropriator of a previously unappropriated thing can acquire this thing as his property without conflict. For, by definition, as the first appropriator he cannot have run into conflict with anyone else in appropriating the good in question, as everyone else appeared on the scene only later. Otherwise, if exclusive control is assigned instead to some late-comers, conflict is not avoided but contrary to the very purpose of reason made unavoidable and permanent.

Third, exchange and contract: Other than per original appropriation, property can only be acquired by means of a voluntary—mutually agreed upon—exchange of property from some previous owner to some later owner. This transfer of property from a prior to a later owner can either take the form of a direct or “spot” exchange, which may be bi- or multi-lateral as when someone’s apples are exchanged for another’s oranges, or it may be unilateral as when a person makes a gift to someone else or when someone pays another person with his property now, on the spot, in the expectation of some future services on the part of the recipient. Or else the transfer of property can take the form of contracts concerning not just present but in particular also prospective, future-dated transfers of property titles. These contractual transfers of property titles can be unconditional or conditional transfers, and they too can involve bi- or multi-lateral as well as unilateral property transfers. Any acquisition of property other than through original appropriation or voluntary or contractual exchange and transfer from a previous to a later owner is unjust and prohibited by reason. (Of course, in addition to these normal property acquisition rules, property can also be transferred from an aggressor to his victim as rectification for a previous trespass committed.)

Drawing on the long, but in today’s world largely forgotten or neglected intellectual tradition of natural law and natural rights theory with its three just briefly sketched principal components, then, the most elaborate, systematic, rigorous and lucid presentation of a theory of justice up until then had been developed in the course of the second half of the 20th century by economist-philosopher Murray N. Rothbard, culminating in his Ethics of Liberty, originally published in 1982. Unfortunately, but not entirely surprisingly, however, his work was typically either completely ignored or else dismissed out of hand by the gatekeepers and high priests of academia. The anarchist conclusions ultimately arrived at by Rothbard in his works appeared simply outlandish in an ideological environment molded overwhelmingly by tax-funded intellectuals and steeped to the hip in statism or étatisme. Among academic big-shots, only Harvard philosopher Robert Nozick in his Anarchy, State and Utopia acknowledged his intellectual debt to Rothbard and seriously tried to refute his anarchist conclusions—but miserably failed.

While Rothbard’s work largely fell on deaf ears within academia, then, it exerted considerable influence outside of it, in the public at large. Indeed, through his work Rothbard became the founder of the modern libertarian movement, attracting a sizable popular following far exceeding that of any mainstream academic in numbers. As for the further development of a natural-law and -rights based theory of justice, however, this very success turned out to be a rather mixed blessing. On the one hand, the movement inspired by Rothbard likely helped dampen and slow down the popularity and growth of statism, but it manifestly failed in halting or even reversing the long-run historical trend toward ever increasing state-power. On the other hand (and that may well be one of the reasons for this failure), the larger the movement grew in numbers, the greater also the confusion and the number of intellectual errors spread and committed by its followers. The pure theory of justice as presented by Rothbard was increasingly watered down, misunderstood, misinterpreted or downright falsified, whether for short-run tactical gains, out of ignorance or plain cowardice. As well, all too often sight was lost of the fundamentally important distinction between the core, the foundational principles of a theory on the one hand and its application to various peripheral—often far-fetched or merely fictional—practical problems on the other; and far too much effort and time, then, has been spent on debating peripheral issues the solution of which may well be arguable, but which is of minor importance in the larger scheme of things and helps distract public attention and concentration away from those questions and issues that truly matter and count.

In this situation, then, more than 40 years after the first publication of Rothbard’s Ethics of Liberty and characterized by much practical disappointment and increasing theoretical confusion, the publication of Stephan Kinsella’s present work must be considered a most welcome sign of renewed hope and new, refreshing intellectual inspiration. Indeed, with this work, that has been in the making for more than two decades, Kinsella has produced no less than an intellectual landmark, establishing himself as the leading legal theorist and the foremost libertarian thinker of his generation. While following in Rothbard’s footsteps, Kinsella’s work does not merely rehash what has been said or written before. Rather, having absorbed as well all of the relevant literature that has appeared during the last few decades since Rothbard’s passing, Kinsella in the following offers some fresh perspectives and an innovative approach to the age-old quest for justice, and he adds several highly significant refinements and improvements and some centrally important new insights to the theories of personhood, property and contract, most famously some radical criticism and rejection of the idea of “intellectual property” and “intellectual property rights.”

Henceforth, then, all essential studies in the philosophy of law and the field of legal theory will have to take full account of the theories and criticisms expounded by Kinsella.

What Adam Smith had to say about conspiracies

They are quite common, especially if they are given protection by government regulation

We often hear people being dismissive about “conspiracy theories”. Yet one of the most eminent thinkers of the 18th century, who is often called the founder of economics (although there were others, see here), Adam Smith, knew that they were commonplace. Here is what he wrote in his famous book with the (abridged) title “The Wealth of Nations”:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. 

– The Wealth of Nations, Book I, Chapter X. 

Most people who remember reading this however don’t know that the really interesting part comes after that. Smith goes on to say:

It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary. A regulation which obliges all those of the same trade in a particular town to enter their names and places of abode in a public register, facilitates such assemblies. . . . A regulation which enables those of the same trade to tax themselves in order to provide for their poor, their sick, their widows, and orphans, by giving them a common interest to manage, renders such assemblies necessary. An incorporation not only renders them necessary, but makes the act of the majority binding upon the whole.

– The Wealth of Nations, Book I, Chapter X.

Regarding this, Sam Bowman of the Adam Smith Institute writes:

As Eamonn Butler has written, Smith’s point is that the only way businessmen can succeed in a ‘conspiracy against the public’ is if they are given protection by government regulation. If not, the pressures of competition will ensure that conspiring businesses are quickly undermined by their competitors.

Birthday of a great economist

Murray Rothbard

Today would have been the 97th birthday of Murray Rothbard, considered by those who know of him and his writings as the greatest economist of the second half of the 20th century. (The greatest economist of the first half was Ludwig von Mises. There is a great organisation dedicated to the work of both of them and other economists of their “Austrian” school of thought.)

On this occasion, Allan Stevo writes in a newsletter:

Never heard of him?

There’s a reason for that.

Sometimes the establishment wants you to hear about the losers, the court jesters, and court economists who will doubtless serve the interest of the establishment.

To hear from someone who gives you recipes for success and freedom alongside basic principles for using economics to enfeeble government — well, the establishment doesn’t want that. They do not want you strong.

If you’ve never heard of Rothbard and have a favorite economist, I can almost guarantee you that your favorite economist is a buster, a court jester, a court economist, someone who will only take the argument so far.

That is not Rothbard.

​Confined to a no-name school in an outer borough of New York for part of his career and then sent out to the deserts of Las Vegas to teach economics at UNLV for another portion of his career (the best American school that would accept this incredibly intelligent and prolific economist), the man was blackballed by academia for not having off limit topics.

​

The Libertarian Christian Institute

Just discovered this

From their “About” page:

If you have never heard of libertarianism before now, it is a very simple philosophy based on the non-aggression principle, which states that the initiation of physical force and the threat thereof is inherently illegitimate. In other words, everyone has the right to engage freely in whatever activity they choose so long as they do not infringe upon the rights of others.

For those familiar with libertarianism already, you might be asking can a Christian also be a libertarian? At LCI, we boldly answer YES! Christian libertarians believe that libertarianism is the only political philosophy that is truly consistent, that makes any rational or moral sense at all, and that agrees with what we understand in the Bible and Christian history. Read more about what it means to be a Christian libertarian by clicking here.