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Murray Rothbard's Randian Austrianism
In a 1971 article in Modern Age, Murray Rothbard declared that Mises' work provides us with an economic paradigm grounded in the nature of man and in individual choice. Rothbard explains that Mises' paradigm furnishes economics in a systematic, integrated form that can serve as a correct alternative to the crisis situation that modern economics has engendered. According to Rothbard, it is time for us to adopt this paradigm in all of its facets.1
Like Mises, Rothbard begins with the axiom that human beings act and believes that all of economic theory can be logically deduced from this starting point. Committed to the praxeological method, Rothbard's writings are characterized by value-free deductive reasoning, abstract universal principles, and methodological individualism. He agrees with Mises that the basic test of economic theory is the truth of the premise and the logical chain of reasoning involved. By setting out from the undeniable fact that a person acts, Rothbard establishes economics as a logic of action.
Rothbard defends Mises' methodology but goes on to construct his own edifice of Austrian economic theory. Although he embraced nearly all of Mises' economics, Rothbard could not accept Mises' Kantian extreme aprioristic position in epistemology. Mises held that the axiom of human action was true a priori to human experience and was, in fact, a synthetic a priori category. Mises considered the action axiom to be a law of thought and thus a categorical truth prior to all human experience.
Murray Rothbard agreed that the action axiom is universally true and self-evident but argued that a person becomes aware of that axiom and its subsidiary axioms through experience in the world. A person begins with concrete human experience and then moves toward reflection. Once a person forms the basic axioms and concepts from his experiences with the world and from his reflections upon those experiences, he does not need to resort to external experience to validate an economic hypothesis. Instead, deductive reasoning from sound basics will validate it.
Rothbard, working within an Aristotelian, Thomistic, or Mengerian tradition, justified the praxeological action axiom as a law of reality that is empirical rather than a priori. Of course, this is not the empiricism embraced by positivists. This kind of empirical knowledge rests on universal inner or reflective experience in addition to external physical experience. This type of empirical knowledge consists of a general knowledge of human action that would be considered to be antecedent to the complex historical events that mainstream economists to try to explain. The action axiom is empirical in the sense that it is self-evidently true once stated. It is not empirically falsifiable in the positivist sense. It is empirical but it is not based on empiricism as practiced by today's economics profession. Praxeological statements cannot be subjected to any empirical assessment whether it is falsificationist or verificationist.
In a 1957 article in the Southern Economic Journal, Rothbard states that it is a waste of time to argue or try to determine how the truth of the action axiom is obtained. He explains that the all important fact is that the axiom is self-evidently true for all people, at all places, at all times, and that it could not even conceivably be violated. Rothbard was not concerned with the controversy over the empirical status of the praxeological axiom. Whether it was a law of thought as Mises maintained or a law of reality as Rothbard himself contended, the axiom would be no less certain because the axiom need only to be stated to become at once self-evident. In Rothbard's words:
Whether we consider the Axiom "a priori" or "empirical" depends on our ultimate philosophical position. Professor Mises, in the neo-Kantian tradition, considers this axiom a law of thought and therefore a categorical truth a priori to all experience. My own epistemological position rests on Aristotle and St. Thomas rather than Kant, and hence I would interpret the proposition differently. I would consider the axiom a law of reality rather than a law of thought, and hence "empirical" rather than "a priori." But it should be obvious that this type of "empiricism" is so out of step with modern empiricism that I may just as well continue to call it a priori for present purposes. For (1) it is a law of reality that is not conceivably falsifiable, and yet is empirically meaningful and true; (2) it rests on universal inner experience, and not simply on external experience, that is, its evidence is reflective rather than physical; and (3) it is clearly a priori to complex historical events.2The Aristotelian, neo-Thomistic and natural-law-oriented Rothbard refers to laws of reality that the mind apprehends by examining and adducing the facts of the real world. Conception is a way of comprehending real things. It follows that perception and experience are not the products of a synthetic a priori process but rather are apprehensions whose structured unity is due to the nature of reality itself. In opposition to Mises, Rothbard contends that the action axiom and its subsidiary axioms are derived from the experience of reality and are therefore radically empirical. These axioms are based on both external experience and universal inner experience. By 1978, Rothbard was stronger in voicing his opposition to Mises' Kantian epistemology:
Without delving too deeply into the murky waters of epistemology, I would deny, as an Aristotelian and neo-Thomist, any such alleged 'laws of logical structure' that the human mind necessarily imposes on the chaotic structure of reality. Instead, I would call all such laws "laws of reality," which the mind apprehends from investigating and collating the facts of the real world. My view is that the fundamental axiom and subsidiary axioms are derived from the experience of reality and are therefore in the broadest sense empirical. I would agree with the Aristotelian realist view that its doctrine is radically empirical, far more so than the post-Humean empiricism which is dominant in modern philosophy.3Rothbard nevertheless continued to endorse Mises' monumental, integrated, and systematic treatise, Human Action, as a complete and true paradigm based on the nature of man and individual choice. Although he disagrees with Mises' epistemology, he does agree that Mises' praxeological economics appropriately begins with, and verbally deduces logical implications from, the fact that individuals act. Rothbard contends that it's time for Mises' paradigm to be embraced if we are to find our way out of the methodological and political problems of the modern world.
Rothbard was totally committed to the praxeological method. In fact, he thought that Mises was not sufficiently thoroughgoing or revolutionary enough with respect to his praxeological deductions. By consistently taking the praxeological path in economics, Rothbard arrives at the desirability of a pure anarcho-capitalist society. He convincingly argues that a stateless society is the only society totally consonant with natural rights to person and property. For Rothbard, freedom means private property, consent, and contract. It follows that the institutions and projects of a legitimate society stem from consensual agreements between property owners. Rothbard endorsed private property anarchism because he could not reconcile a coercive monopoly government with men's natural rights to liberty and legitimately acquired property.
For Rothbard, the state cannot be defended on praxeological or moral grounds. He systematizes a fully consistent argument against government intervention in human pursuits in any form or circumstances. Rothbard demonstrates that there exists no proper role for the State by explaining how market enterprises or associations can supply any good or service desired by individuals. Private companies and voluntary associations can do whatever needs to be accomplished. The market can produce all goods and services including defense, security, and arbitration activities.
Rothbard produced a system of political and social philosophy based on economics and ethics as its foundations. First, he presented an exhaustive case for a pure market economy resting on the observation that "men act" in Man, Economy, and State and then in The Ethics of Liberty he explained the relationship between economics and ethics that is grounded in the concept of property. Rothbard teaches that economics can provide data and knowledge for a libertarian position, but that it cannot morally validate that political philosophy. Insisting that economics, as a science, is value-free, he contends that an ethical foundation must be established in order to make the case for individual freedom. According to Rothbard, economics and ethics are separate disciplines, complement one another, and are based on the nature of man and the world. He recognizes the need for an ethic to underpin, accompany, and enhance a value-free economics in order to solidify the argument for a free-market society. To make a case for laissez-faire, Rothbard goes beyond economics by formulating a metanormative objective ethics that affirms the essential value of liberty.
Separating praxeological economics from the science of ethics, Rothbard bases his ethical system upon the principles of self-ownership and first use–first own. Beginning with axiomatic principles about the nature of man and the world, Rothbard devises a radical dualistic dissociation between political ethics and personal morality. In essence, he is distinguishing between the metanormative sphere of politics and law and the normative domain which concerns moral or ethical principles for one's self-fulfillment and flourishing. Rothbard is differentiating between natural rights and the morality or immorality of the exercise of those rights. There is a critical distinction between the right to take a particular action and the morality of that action.
Rothbard's The Ethics of Liberty is not a prescription for personal morality. Instead, in it he concentrates on the political dimension of social relations by constructing a framework of political philosophy that only expresses what ought to be permitted and not what is desirable or proper. Rothbard's goal was to develop the branch of natural law that involves natural rights and that pertains to the political realm. He was concerned with building a system of rules consistent with social cooperation, interpersonal conduct, and the maintenance and facilitation of human life.
Rothbard's libertarian ethic considers nonaggression to be an absolute principle prior to any foundation for personal morality. In other words, he separates the form of human liberty from any specific noncoercive context in which a person's liberty is used. Rothbard is morally neutral with respect to the particular values and goals at which a person aims as long as the individual does not initiate the use of force or fraud against other people. Although Rothbard realized the importance of an individual's personal moral values, he viewed them as separate from, but dependent upon, the institution of a libertarian social order.
Rothbard deduces the entire body of a libertarian law code including the laws of appropriation, contract, and punishment. This nonstatist code of nonaggression establishes the framework for a competitive method regarding the furnishing of legal, defense, and judicial services.
Comparing the Ideas of Rothbard and Rand
Both Murray Rothbard and Ayn Rand were concerned with the nature of man and the world, natural law, natural rights, and a rational ethics based on man's nature and discovered through reason. They also agreed that the purpose of political philosophy and ethics is the promotion of productive human life on earth. In addition, both adopted, to a great extent, Lockean natural rights perspectives and arguments that legitimize private property. Additionally, they both disagreed with Mises' epistemological foundations and on very similar grounds.
Both Rothbard and Rand endeavored to determine the proper rules for a rational society by using reason to examine the nature of human life and the world and by employing logical deductions to ascertain what these natures suggest. They agreed with respect to the volitional nature of rational human consciousness, a man's innate right of self-ownership, and the metanormative necessity of noncoercive mutual consent. Both thus subscribed to the nonaggression principle and to the right of self-defense.
Rothbard and Rand did not agree, however, on the nature of (or need for) government. They disagreed with respect to the practical applications of their similar philosophies. Rejecting Rand's idea of a constitutionally-limited representative government, Rothbard believed that their shared doctrines entailed a zero-government or anarcho-capitalist framework based on voluntarism, free exchange, and peace.
Rothbard and Rand subscribed to different forms of metanormative libertarian politics – Rothbard to anarcho-capitalism and Rand to a minimal state. Unlike Rand, Rothbard ended his ethics at the metanormative level. Rand, on the other hand, advocated a minimal state form of libertarian politics based on the fuller foundation of Objectivism through which she attempted to supply an objective basis for values and virtues in human existence. Of course, Rothbard did discuss the separate importance of a rational personal morality, stated that he agreed essentially with most of Rand's philosophy, and suggested his inclination toward a Randian ethical framework. The writings of Murray Rothbard, much like those of Carl Menger, the founder of Austrian economics, have done a great deal toward building a bridge between Austrian economics and Objectivism.
1 Murray N. Rothbard, "Ludwig von Mises and the Paradigm for Our Age," Modern Age, Fall, 1971, pp. 370-379.
2 Rothbard, "In Defense of 'Extreme Apriorism," Southern Economic Journal, January, 1957, pp. 314-320.
3 Rothbard, "Praxeology: The Methodology of Austrian Economics," in Edwin Dolan (ed.), The Foundations of Modern Austrian Economics, Kansas City: Sheed and Ward, 1976.
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