What I Learned From Rothbard

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by Paul Gottfried

In the latest issue of the Mises Review, David Gordon has published an informative as well as flattering study of my new book on multiculturalism, in which he undertakes to investigate the pedigree of my historical analysis. David is correct about my drawing upon the political theories of Carl Schmitt and the German-Jewish historian of gnosticism Jacob Taubes; and in his critical remarks on After Liberalism, he also picked up on a tendency that I share with Hans-Hermann Hoppe, adapting from the right the Critical Theory otherwise identified with the radical left Frankfurt School in interwar Germany.

What Hans and I do is expose the enslaving function of the managerial state that destroys community and poisons culture. Rather than putting the monkey on the back of corporate capitalists, as the Critical Theorists do, both Hans and I locate the hegemonic manipulation of society in "democratic" public administration. Note we never deny that unprincipled or brainwashed capitalists run in to participate in this process; nor do I suggest that academics and clergy would not be raving multiculturalists without government support. But what makes the system work is the force that the managerial state brings to the accomplishment of a coercively applied PC.

Putting aside another acknowledged debt, to Nietzsche’s attacks on "slave morality," there is an influence that, like Hans, I would happily own up to, namely, the brilliant work of Murray N. Rothbard. For some reason, most of my friends assume that my connection to Murray was exclusively social; and that while I deeply mourned his unexpected passing, and that of his wife, earlier associations formed my thinking. But such was not the case. Until my friendship with Murray, which flourished in the early and mid-nineties, when I also read his books and articles, I was a Europeanist who wrote occasionally on ancient historiography. Despite my short monograph on the American Right and despite my discussion of related themes in my book on Hegel and his American disciples, by training and inclination I preferred the Old World to the New. What changed this focus was to a large extent my exposure to Murray’s historical and social work. He convinced me of the world-historical centrality of the United States, as a model for a free society and, more recently, for a successful servile imperialist state.

His examinations of the dynamics of the American corporate regime, e.g., in his posthumously published anthology of essays, A History of Money and Banking in the United States, minutely plots the process by which the original American regime was warped into what it eventually became. In contrast to the left-liberal "mainstream" historiography of the 1950s, which the neocons have now revived and vulgarized, Rothbard stresses the derailment of a constitutionally limited federal regime over a period of more or less a century. Rothbard brings up many reasons that the warping worked; and it is incorrect to view his critical studies of the House of Morgan or of the career of Morgan’s mouthpiece Charles Conant as expressive of a conspiratorial view of historical causation.

What Rothbard as an economic historian is always highlighting is the importance of certain already powerful figures being in critical positions during periods of transition. Thus Morgan, partly through his showcasing of the economic planner Conant, helped to create the Federal Reserve System and to incite imperialist adventures; Morgan also turned to other willing agents to push the US into World War One on the side of England. Needless to say, Morgan was not operating in a cultural-political vacuum and found others who shared his interests and predilections and who agitated to achieve the same ends. But none of them was as rich or influential as Morgan or had the same direct access to American presidents. Similarly, Murray’s study of John Dewey and his role in planning a social democratic regime for the US, by getting the country into World War One and then by influencing wartime social policy, is not an arbitrary look at an isolated nobody. Dewey and those around him, as I emphasize in After Liberalism, play a formative role in American public education and in popularizing the moral assumptions of American public administration.

Another aspect of Murray’s work that has affected my view of American government is his cogency in demonstrating that counterfactual histories may have carried us at least as far economically as where we have come. His examination of the Depression, which is the first book of his I read, makes clear that historians, journalists, and politicians, have all misrepresented the federal government’s destructive role in this crisis, e.g., engaging in heavy deficit spending and monetary expansion from the Hoover years onward and by doing all it could to keep the economy from progressing from a slowdown to prudential investment. His critiques of the FRS have also caused me to think that Murray had a point when he argued that a real gold standard would have sufficed to keep inflation under control. Moreover, banks that made bad loans would have suffered immediate consequences, without the feds helping them to overextend. Most significantly, the availability of government-generated credit forged a close alliance between corporate capitalists and big government, which had dangerous political consequences that are still being seen.

Note I do not believe this alliance has resulted in enormous material suffering for our society. Though it did limit economic growth in some respects and caused the Depression to last longer than it might, the US has remained a fabulously prosperous society, while enduring a self-enriching government. Equally important, in the US, the welfare state has not brought about ninety-proof socialism. The political class has understood the value of keeping a market system, however diminished, in operation, both to avoid the responsibility of running the economy outright and to produce capitalist wealth. In this in-between situation, as Mises observed, the government can redistribute earnings and corporate profits and take credit for what others have achieved in terms of added wealth. Describing such arrangements as "the end of socialism" is, among other things, a self-serving lie. But it also reveals the conceptual poverty of those trying to make sense of what is going on politically.

Murray documents the emergence of public administration as an economic savior for the masses. This image is one that corporate capitalists, the academic Left, and the media have both nurtured and propagated. Without this image, as my last two books note, welfare state democracies would not have established their looming presence so firmly in the US or in Europe. Their exaggerated or totally invented role as material providers and tamers of the free market have allowed them to engulf societies, while certifying their control by pointing to a paid-for popular will.

And what this control has meant is giving public administrators powers beyond regulating currency, extending credit, and redistributing income. Imposing the ideology of multiculturalism has been one recent power-grab, which may not be the last phase of the state’s evolution into a coercive therapist. But the precondition for this evolution was the consolidation of a corporate welfare state; and how this came about in the New World is a long historical lesson that Murray painstakingly offers in his books.

Despite my debates with him over Locke and natural right theory, Murray as an historian lives on in my critical thinking. He is there even more than the ghosts of Schmitt, Hegel, and Weber, who were evoking a nation state that by now is almost defunct. What Murray focused on is not the old state, which came into existence in the early modern age, but its terrifying successor. This new luxury-size one, which supposedly never makes war unless driven by global democratic indignation, works toward the happy ending of the Wall Street Journal’s agitprop picture of history. Murray, my friend and teacher, knew better and explained the world honestly.

December 28, 2002

Paul Gottfried [send him mail] is professor of history at Elizabethtown College and author of, most recently, the highly recommended Multiculturalism and the Politics of Guilt.

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