Prepared for delivery in Hamburg, Germany, upon my
receiving the Roland Baader Prize.
Thank you very much for the great honor you have
conferred on me. The Roland Baader Prize is named for an outstanding champion
of the free market and disciple of Ludwig von Mises. As I am the founder of
the Ludwig von Mises Institute, you will not be surprised to learn that I too
am a disciple of Mises. I am sure that the members of this audience revere
Mises as well, and I’d like to point out another thing we have in common. The
Mises Institute is headquartered in Alabama, a state in the American South,
and I am speaking to an in audience in Germany. My friend Judge John Denson,
whom many of you will know from his books on revisionist history, has said
that both Germany and the South were conquered and then occupied by the
American army.
I’d like to begin by telling you something about how I
founded the Mises Institute in 1982 and what we are trying to accomplish.
Thirty-five years ago, when I was contemplating the creation of a Ludwig von
Mises Institute, the Austrian School of economics, and its Misesian branch in
particular, were very much in decline. The number of Misesian economists was
so small that all of them knew each other personally, and could probably have
fit in Mises’s small living room. This is a world that young people today, who
find Austrian economics all over the place, can hardly imagine.
I wanted to do what I could to promote the Austrian
School in general and the life and work of Mises in particular. Mises was a
hero both as a scholar and as a man, and it was a shame that neither aspect
of his life was being properly acknowledged.
Principles of Economics , Carl Menger.
I first approached Mises’s widow, Margit, who was what
Murray Rothbard called a “one-woman Mises industry.” After her husband’s
death, she made sure his works stayed in print and continued to be translated
into other languages. She agreed to be involved and to share her counsel as
long as I pledged to dedicate the rest of my life to the Institute. I have
kept that pledge. Margit von Mises became our first chairman. How lucky we
were to have as her successor, the great libertarian businessman Burt
Blumert, who was also a wise advisor from the beginning.
When I told Murray Rothbard about the proposed institute,
he clapped his hands with glee. He said he would do whatever was necessary to
support it. He became our academic vice-president and inspiration.
Ron Paul agreed to become our distinguished counsellor,
and was also a huge help in assembling our early funding, as well as an
inspiration.
Murray would later say, “Without the founding of the
Mises Institute, I am convinced the whole Misesian program would have
collapsed.” Of course, we can’t know how things would have turned out had we
made different choices. I simply wanted to do what I could, with the help of
dear friends like Murray and Burt, to support the Austrian School during some
very dark times, and I was prepared to let the chips fall where they may.
When I look back on all we’ve accomplished over the past
35 years, I can hardly believe it. Naturally we’ve promoted and kept in print
works of Mises, the Nobel Prize-winning works of F.A. Hayek, and the
indispensable catalogue of Murray Rothbard. Beyond that, we’ve made available
to the world, free of charge, an enormous library of the most brilliant and
important works ever written on Austrian economics and libertarian theory.
On our campus, the library and archives – based on the
massive collections of Rothbard and Bob LeFevre’s Freedom School – are
incomparable. We have lecture halls, classrooms, student and faculty offices,
student housing, a bookstore, and much more, all thanks to our magnificent
donors.
Then there’s the entire run of the Quarterly Journal of
Austrian Economics (which the Institute publishes), its predecessor, the
Review of Austrian Economics, Murray Rothbard’s Journal of Libertarian
Studies, and the publications that he edited during the especially dark days
of the 1960s and 1970s. Add to that many thousands of articles on every
subject under the sun and thousands of hours of free audio and video from our
seminars and other events, and you have a program of self-education that at
one time would have required access to university libraries and a huge
investment of time and money.
At the Mises Institute, we aim to introduce students to
the thought of Mises and his great student Murray Rothbard, and I would like
to tell you something about each of these great heroes of liberty.
How blessed are we that we have not a criminal like Marx
nor a monster, like Keynes to follow, but Ludwig von Mises, a hero as well as
a genius.
Mises was not only a dazzling economist and champion of
liberty, but no Communist, nor Nazi, nor central banker could pressure him
into doing the wrong thing.
Born in 1871 in the city of Lemberg, then part of the
Austro-Hungarian empire, he moved with his family to Vienna as a young man.
Mises’s father was a high executive in the Austro-Hungarian railways.
The grammar schools and gymnasiums he attended—super high
schools in our terms—still have his records. He was recognized as
extraordinary from the first.
The Theory of Money an... Ludwig von Mises.
Mises excelled as a student at the University of Vienna,
earning a doctorate in economics and law. He wrote a book on housing policy
before encountering Menger’s Principles and becoming an
Austrian economist.
Mises clerked for judges and practiced law before getting
a job as an economist at the professional housing association. While there,
he demonstrated that high real estate taxes were hindering new construction,
a serious problem in housing-short Vienna. Through his papers and lectures,
that is, the pure power of his mind, he brought about a cut in taxes, leading
to more investment in housing, exactly as he had predicted.
Mises was denied a paid position at the university,
despite publishing his astounding Theory of Money and Credit.
Before the founding of the Fed, he demonstrated that such a central bank
would harm business and people to aid the government and its cronies, as well
as bring on the business cycle of artificial booms followed by busts.
Mises was an army officer during the war, and we are
privileged to have his medals at the Institute. At first, Mises was an
economic advisor to the general staff. Then he was sent to the most dangerous
duty in the war and almost killed. Guido Hülsmann, author of the great Mises
biography, discovered that the power of Mises’s free-market analysis led to
his corrupt and statist opponents hoping to kill him. There was a lot of
money at stake. Still, the wounded Mises was decorated for bravery under
fire, and as a great leader of men under brutal attack.
After the war, Mises secured a position as an economic
advisor to the government for the Vienna Chamber of Commerce. He had been
blocked from a position at the university by powerful socialists, and instead
worked as a privatdozent and later a prestigious associate
professor at the university, both unpaid positions. Unpaid or not, he used it
to teach students and host his famous private seminar, which attracted top
intellectuals from all over Europe. They remembered it as the most intense,
rigorous, and fun experience of their academic lives.
Though working in effect two full-time jobs, Mises threw
himself into his work as an economic advisor to call for a fully redeemable
gold standard. The central bank was furious. It turned out that the
then-current system allowed officials to have a secret slush fund for
themselves and friendly economic journalists. The vice president of the
central bank even hinted at a bribe for Mises if only he would be more
accommodating to compromise. Of course, then and throughout his life, he
never would.
The power of Mises’s influence as an economic advisor was
shown in two more important ways. Austria threatened to follow Germany into
hyperinflation. Almost singlehandedly his persuasion prevented a repeat in
his country, if not of all inflation, of the speed and depth of the German
catastrophe.
After the war, a coalition government, in part Marxist,
came to power in Austria. Otto Bauer, a leader of the Austrian Social
Democratic party and foreign minister, intended to introduce Bolshevism in
Austria, but he listened to his old school chum Mises, something Bauer
resented bitterly in later years.
Evening after evening, Mises persuaded Bauer and his
equally Marxist wife that Bolshevism would mean mass starvation. Bauer was
convinced.
All this time, Mises was also trying to do his scholarly
work. And he did, while also paying full attention to his day job. In what
would normally be his leisure time, for example, he wrote first his world
historic article and then his book on Socialism. Just after the
establishment of Bolshevism in Russia, he proved that with no private
property in the means of production, socialism would be a chaotic and
poverty-producing disaster. No planning board could substitute for property
and market. Tragically for the world, it took decades before socialists would
admit, after his death, “Mises was right.”
But the evil of statism also grew from another direction,
and Mises was the first to see what was in store for Austria with the
National Socialists. Many colleagues credited him with saving their lives,
because they left in time. In 1934, Mises secured the first and only paid
professorship of his life, at the International Graduate School in Geneva. It
was a happy time for Mises, who lectured in accentless French and wrote in
German. But by 1940, it was getting very uncomfortable in Switzerland.
Already in 1938, the invading Nazis had ransacked his
Vienna apartment, and stolen his library and papers. Mises and his wife
Margit—later first chairman of the Mises Institute—decided to go to America.
They crossed France barely in front of advancing German
troops, just making it into neutral Portugal and a ship to New York. Once
here, in an academic community offering professorships to all the European
Marxists and Keynesians, there was nothing for the “Neanderthal,”
“reactionary,” and “caveman” Mises. The intellectual climate of the New Deal
was bitterly hostile. Even when the libertarian Volker Fund offered to pay
his entire university salary, Mises was shunned for defending freedom and
capitalism.
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Socialism: An Economic... Ludwig von Mises
Finally, businessman Lawrence Fertig, later a benefactor
of the Mises Institute, was able to persuade NYU, where he was on the board,
to allow Mises to be an unpaid, permanent “visiting professor.” Even so,
Keynesian deans gave him the worst offices and class hours, and tried to
persuade students not to take his courses.
Yet, though in a new country at almost sixty, of whose
language he had only a reading and writing knowledge to begin with, Mises was
undefeated. He restarted his weekly seminar, attracting such participants as
Henry Hazlitt, Ayn Rand, and Murray Rothbard. Important business leaders,
journalists, and financiers audited his classes. This drove other professors,
said Robert Nozick, wild with envy.
But Mises, never compromising his principles, just moved
ahead, uncomplaining, undismayed, and unhindered. And it was in the 1940s
that Mises completed his monumental treatise Human Action, in which he
reconstructed all of economic analysis on a sound individualistic foundation.
Any of the books I’ve mentioned—and he wrote many
more—would be a significant lone achievement for a lifetime. It was one of
the great moments of my life to have dinner with Mises and his wife while
serving as his editorial assistant. He was eighty-six, and magnificent. I can
testify that Rothbard was right: he was trailing clouds of glory from a lost
and better civilization: pre-WWI Vienna. In looks, speech, dress, bearing,
and manners, he was a great European gentleman.
Because Mises was intransigent on matters of principle, some
of his critics have denounced him as “obnoxious”! He might have had reason,
but as Rothbard, Hazlitt, Hayek, Fertig, Leonard Read, and so many others
confirmed to me, he was kind, funny, and generous, no matter what he was put
through. He was especially good with students. Or to a twenty-three-year-old
kid helping bring some of his books back into print, as well as to publish a
new paper.
One of Roland Baader’s strongest principles was the
importance of sound money, and
this he learned from Mises. In his great essay “Monetary
Reconstruction,” Mises defied the pseudo-economists of his time and called
for a return to a full gold standard. We do not need to expand the
money supply as the economy grows. To the contrary, doing so promotes
inflation and economic instability.
In these days of political correctness, it’s important to
realize that Mises opposed the lunatic left that seeks to root out the
institutions on which our civilization rests.
In his classic Socialism, he attacked the radical
feminist movement: “3So far as Feminism seeks to adjust the legal position of
woman to that of man, so far as it seeks to offer her legal and economic
freedom to develop and act in accordance with her inclinations, desires, and
economic circumstances—so far it is nothing more than a branch of the great
liberal movement, which advocates peaceful and free evolution. When, going
beyond this, it attacks the institutions of social life under the impression
that it will thus be able to remove the natural barriers, it is a spiritual
child of Socialism. For it is a characteristic of Socialism to discover in
social institutions the origin of unalterable facts of nature, and to
endeavour, by reforming these institutions, to reform nature.”
For Mises, the feminist drive to abolish the family
rested on a total misconception of the place of women in society: “The
misconception to which the principle of equality before the law is exposed in
the field of general social relationships is to be found in the special field
of the relations between those sexes. Just as the pseudo-democratic movement
endeavours by decrees to efface natural and socially conditioned
inequalities, just as it wants to make the strong equal to the weak, the
talented to the untalented, and the healthy to the sick, so the radical wing
of the women’s movement seeks to make women the equal of men. Though they
cannot go so far as to shift half the burden of motherhood on to men, still
they would like to abolish marriage and family life so that women may have at
least all that liberty which seems compatible with childbearing. Unencumbered
by husband and children, woman is to move freely, act freely, and live for
herself and the development of her personality.”
In order to grasp Mises’s line of argument, we need to
keep in mind a key point. Ignoring this point is the major failing of all
leftists. Legal equality doesn’t abolish biological differences. Thus, it
doesn’t follow from the fact that women don’t earn as much as men, or don’t
hold as many powerful positions, that they are victims of discrimination
“4.4But the difference between sexual character and sexual destiny can no
more be decreed away than other inequalities of mankind. It is not marriage
which keeps woman inwardly unfree, but the fact that her sexual character demands
surrender to a man and that her love for husband and children consumes her
best energies. There is no human law to prevent the woman who looks for
happiness in a career from renouncing love and marriage. But those who do not
renounce them are not left with sufficient strength to master life as a man
may master it. It is the fact that sex possesses her whole personality, and
not the facts of marriage and family, which enchains woman. By “abolishing”
marriage one would not make woman any freer and happier; one would merely
take from her the essential content of her life, and one could offer nothing
to replace it.
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Human Action: A Treati... Ludwig von Mises
Tributes to Murray N. Rothbard are often taken up with a
listing of his accomplishments. This is because he was so astonishingly prolific
that there seems to be many scholars with that name.
As soon as you describe him as an economist, you recall
that he wrote some ten large volumes on history. But describe him as a
historian and you suddenly recall that he made large contributions to political
philosophy. But as soon as you begin talking about his libertarianism, you
recall again that he wrote vast amounts of technical economic theory.
It is the same with the venues in which he chose to
write. If you look at his scholarly publications list, which is vast and
expansive, you can easily forget that he wrote constantly and for 50 years in
popular periodicals of every sort, commenting on politics, movies, culture,
sports, and anything else in the popular scene.
The problem grows worse when you consider the major parts
of his legacy. Let me list just a few:
- He was the economist who provided a
bridge from Mises to the modern Austrian school, through his personal
influence, articles, and especially through Man, Economy, and State,
which appeared in 1963;
- He developed the Misesian system in the
areas of welfare economics, production theory, banking, monopoly theory,
and tied it all together with a theory of natural rights that drew on
medieval and enlightenment thought;
- He was the pioneer of libertarian
theory who finally tied the principle of property rights to a consistent
non-aggression principle of politics;
- He was the anti-war theorist who
insisted that the cause of peace is inseparable from the dream of
prosperity;
- He rescued the 19th-century American
hard money school from obscurity and wove its contributions into modern
banking theory;
- He demonstrated the libertarian origins
of the American Revolution with the most extensive account ever of the
tax strikes and prominence of libertarian theory during the Colonial
Period;
- He explained the ideological upheaval
that afflicted the American Right following World War II, showing the
clear difference between the Old Right and the New based on the attitude
toward war.
This of course only scratches the surface, but if I went
on like this, I would use too many words and take up too much time, when what
I would really like to discuss is Rothbard’s methods as a researcher, writer,
and scholar. I would also like to draw attention to his heroism.
A friend tells the story of a time when he was hanging
around Rothbard’s apartment one summer. The conference that was coming up
that weekend was mentioned, and Rothbard had forgotten about it. Rothbard
rushed to the typewriter and started writing. The words flowed from him as if
the entire paper had already been written in his head.
The result was a 60-page paper on monetary history and
theory, complete with bibliography and footnotes. The scene was recalled to
me the way miracles are described in the Gospels. His jaw was on the floor in
amazement.
The anecdote is inspiring but also intimidating for those
who labor so hard to accomplish a tiny fraction of this level of
productivity. We might look at what he did and become discouraged that we
could never equal his productivity in even one small sector, much less take
on all of his interests in so many areas of life.
Rothbard’s first step toward writing was to learn as much
as possible. He never stopped taking this step for his entire life. There was
never a point when he woke up feeling as if he knew all that he needed to
know. No matter how much he wrote, he was always careful to read even more.
If you follow his model, you will not regard this as an
arduous task, but rather a thrilling journey. A trip through the world of
ideas is more exciting and exhilarating than the grandest excursion to the
seven wonders of the world, more daring and adventurous than wild game
hunting, and far more momentous than any moon shot.
There is another respect in which we can all emulate
Murray. He was fearless in speaking the truth. He never let fear of
colleagues, fear of the profession, fear of editors or political cultures,
stand in the way of his desire to say what was true. This is why he turned to
the Austrian tradition even though most economists at the time considered it
a dead paradigm. This is why he embraced liberty, and worked to shore up its
theoretical and practice rationale, at a time when the rest of the academic
world was going the other way.
This fearlessness, courage, and heroism applied even in
his political analysis. He was an outspoken opponent of the U.S. nuclear
buildup and militarization during the Cold War. His opinion in that regard
cost him many publication outlets. It cost him friends. It cost him financial
supporters. It hurt his prospects for professional advancement. A surprising
number of his articles were written for very small publications, simply
because the larger ones were captives of special interests.
But time would eventually reveal that he took the right
path. Forty years of pro-Cold War writing on the Right were made irrelevant
by events. Rothbard’s work during these years has stood the test of time. He
is seen as one of the lone prophets of the collapse of socialism in Russia
and Eastern Europe.
The choices he made in life were not designed to advance
his career. They were made to advance liberty and truth. For many years,
publications were closed to him. He did not teach in a prestigious
institution. His income was small. Only very late in life did he begin to get
his due as a thinker and teacher. But he never complained. He was grateful
for any and every opportunity that came along to write and teach. His legacy
is now a living part of the world of ideas. The people who tried to exclude
him and write him out of history are mostly forgotten.
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Man, Economy, and Stat... Murray N. Rothbard
Like Mises, and also Roland Baader, Rothbard supported
sound money. He opposed fractional reserve banking and favored the gold
standard. His work with Ron Paul and the Gold Commission in 1982 was a high
point in the struggle for liberty. Murray was the main author of the
Commission’s Minority Report, “The Case for Gold.” I can still
hear his voice, as he used to say to me “The dollar is a unit of weight,
dammit!”
Like Mises, Rothbard had no use for the lunatic left. He
challenged so-called “left libertarians” on an issue that will be of special
interest to a German audience, immigration. Shortly before his death, Murray
Rothbard published an article called “Nations by Consent: Decomposing
the Nation State.” He had begun rethinking the assumption that libertarianism
committed us to open borders.
He noted, for instance, the large number of ethnic
Russians whom Stalin settled in Estonia. This was not done so that Baltic
people could enjoy the fruits of diversity. It never is. It was done in an
attempt to destroy an existing culture, and in the process to make a people
more docile and less likely to cause problems for the Soviet empire.
Murray wondered: does libertarianism require me to
support this, much less to celebrate it? Or might there be more to the
immigration question after all?
And here Murray posed the problem just as I have: in a
fully private-property society, people would have to be invited onto whatever
property they traveled through or settled on.
If every piece of land in a country were owned by some
person, group, or corporation, this would mean that no person could enter
unless invited to enter and allowed to rent or purchase property. A totally
privatized country would be as closed as the particular property owners
desire. It seems clear, then, that the regime of open borders that exists de
facto in the U.S. and Western Europe really amounts to a compulsory opening
by the central state, the state in charge of all streets and public land
areas, and does not genuinely reflect the wishes of the proprietors.
In the current situation, on the other hand, immigrants
have access to public roads, public transportation, public buildings, and so
on. Combine this with the state’s other curtailments of private property
rights, and the result is artificial demographic shifts that would not occur
in a free market. Property owners are forced to associate and do business
with individuals they might otherwise avoid.
Roland Baader, like Mises and Rothbard, emphasized the
importance of the moral foundations of society. He described the Ten
Commandments as the “constitution of society.” You can be sure he would have
wanted nothing to do with the libertines and degenerates who today masquerade
as “left libertarians.”
I’d like to conclude with some thoughts on the dangers to
libertarianism we need to confront. We have been told by some libertarians in
recent months that yes, yes, libertarianism is about nonaggression and
private property and all that, but that it is really part of a larger project
opposed to all forms of oppression, whether state-imposed or not. This has
two implications for the thick libertarian. First, opposing the state is not
enough; a real libertarian must oppose various other forms of oppression,
even though none of them involve physical aggression. Second, libertarianism
should be supported because the reduction or abolition of the state will
yield the other kinds of outcomes many thick libertarians support: smaller firms,
more worker cooperatives, more economic equality, etc.
Let’s evaluate these implications one at a time.
To claim that it is not enough for the libertarian to
oppose aggression is to fall into the trap that destroyed classical
liberalism the first time, and transformed it into modern liberalism. How,
after all, did the classical liberalism of the eighteenth and nineteenth
centuries become the state-obsessed liberalism of the twentieth and
twenty-first centuries? How did the once-venerable word liberalism
become perverted in the first place? Precisely because of thickism. Sure,
twentieth-century liberals said, we favor liberty, but since mere negative
liberty – that is, restrictions on the state – doesn’t appear to yield a
sufficiently egalitarian result, we need more than that. In addition to
restrictions on some state activity, we need the expansion of other
forms of state activity.
After all, the new liberals said, state oppression isn’t
the only form of oppression in the world. There’s poverty, which limits
people’s ability to make life choices. There’s private property, whose
restrictions limit people’s ability to express themselves. There’s
discrimination, which limits people’s opportunities. There’s name-calling,
which makes people feel bad. To focus entirely on the state is to miss these
very real forms of harm, the new liberals said.
Sound familiar? Is this not precisely what many thick
libertarians are now saying? Attacking the state is not enough, we hear. We
must attack “patriarchy,” hierarchy, inequality, and so on. Thick
libertarians may disagree among themselves as to what additional commitments
libertarianism entails, but they are all agreed that libertarianism cannot
simply be dedicated to eradicating the initiation of physical force.
If some libertarians wish to hope for or work toward a
society that conforms to their ideological preferences, they are of course
free to do so. But it is wrong for them – especially given their insistence
on a big tent within libertarianism – to impose on other libertarians
whatever idiosyncratic spin they happen to have placed on our venerable
tradition, to imply that people who do not share these other ideologies can’t
be real libertarians, or to suggest that it would be “highly unlikely” that
anyone who fails to hold them could really be a libertarian. That these are
the same people who complain about “intolerance” is only the most glaring of
the ironies.
Thus the danger of thick libertarianism is not simply
that vast chunks of the American population will fail to pass its entrance
requirements, not keeping up every ten minutes with what MSNBC informs us is
acceptable to believe and say. The danger is that thick libertarianism will
import its other concerns, which by their own admission do not involve the
initiation of physical force, into libertarianism itself, thereby
transforming it into something quite different from the straightforward and
elegant moral and social system we have been defending for generations.
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Against the State: An ... Llewellyn H. Rockwell Jr.
Now for the second implication, that opposition to the
state should be favored because it will yield egalitarian outcomes. (Of
course, the abolition of the state will necessarily increase the level of
egalitarianism from the point of view of status; the inequality of
status between state officials on the one hand, who today may carry out all
kinds of moral outrages with the legitimacy of the state to support them, and
ordinary people, who are constrained by the traditional moral rules against
theft and aggression, on the other, will no longer exist when the state
disappears.) But what if it doesn’t? The claim that firms will tend to be
smaller on the free market, and that government policy encourages bigness in
business, is far too sweeping a statement about far too complex a phenomenon.
What if the absence of the state leads to no change in firm size, or in the
employer-employee relationship, or in wealth inequality?
At that point, the question would become: to which
principle are thick libertarians more committed, nonaggression or
egalitarianism? What if they had to choose?
Likewise, the hatred of some classical liberals for the
Church motivated them to confiscate Church property and impose restrictions
of various kinds on Church activity. When it came down to a choice between
their belief in liberty and their personal hatred for the Church, their
personal hatred won the day, and their supposedly principled opposition to
violence was temporarily suspended.
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How people arrive at libertarianism is also immaterial.
There are various schools of thought that culminate in the principle of
nonaggression. Once there, we may of course debate what precisely constitutes
aggression in particular cases, and other foundational questions within the
general framework of the impermissibility of aggression. But if the school of
thought you belong to takes you only partly toward nonaggression, it is not
the case that you have discovered a new or better form of libertarianism.
Such a case would mean only that you are partly a libertarian, not a
different kind of libertarian.
Whether it’s the claim that self-defense laws are
“racist,” that Bitcoin is “racist,” or that libertarians ought to throw off
“white privilege” – all of which have been advanced by libertarians claiming
to have moved beyond our alleged fixation with the nonaggression principle –
the various forms of thick libertarianism are confusing the core teaching of
what we believe. None of these concerns have the slightest bit to do with
libertarianism.
All of these additional claims are a distraction from the
central principle: if you oppose the initiation of physical force, you are a
libertarian. I have no doubt that Roland Baader would have agreed. Let us
move forward to advance the principles that he learned from Mises, against
their detractors, whether “libertarian” or otherwise.
The Best of Llewellyn H. Rockwell, Jr.