Truth to Powerby
David Gordon
Speaking of Liberty • By Llewellyn H. Rockwell, Jr. • Ludwig von Mises Institute, 2003 • 471 pages A great many people have learned from Mises and Rothbard, but Lew Rockwell belongs to a much more select class: he has developed their thought in an original way. His essay, "The Economics of Discrimination," included in the present collection of Rockwell's speeches and articles, stands as an especially impressive contribution. Through a well-known argument, Mises showed that interventions in the free market could quickly lead to full-scale socialism. Suppose, to take a familiar example, that the state institutes price controls on milk, in an effort to help the impoverished. The result will be a shortage, precisely the opposite of the program's aim. What then is to be done? The interventionists can come to their senses and abandon their misguided interference. If they do not, they must proceed to further interventions. To attempt to remedy the shortage, they may impose further controls. If the costs of production to milk retailers are lowered, will not the shortage disappear? Such efforts are of course futile, and planners must again confront the same choice as before: back to the free market or forward to more controls. All readers of Mises will recognize the argument that I have just paraphrased from "Middle-of-the-Road Policy Leads to Socialism," but Rockwell has found an illuminating parallel to it. Mises's contention, he shows, applies also to laws that forbid discrimination. The 1964 Civil Rights Act, its proponents claimed, did not tell employers whom they could hire. It merely forbade them from refusing to hire someone on grounds of race and a few other categories. But so taken, the law would inevitably have failed to achieve its purpose. What employer in his right mind would tell an applicant, "I'm rejecting you because I don't like people of your race"? The employer has only to invent a plausible excuse for rejecting those whom he dislikes, and he may discriminate as much as he wishes. To block him, must not the state impose further restrictions? It will require employers to hire specific numbers of the groups it holds to be disadvantaged.
Rockwell's development of Mises's argument reflects his careful study of that great economist. Rockwell often calls attention to details not usually stressed. Everyone knows that Mises showed that economic calculation under socialism is impossible; but how many are aware that Mises was also a pioneering critic of socialized medicine? Mises called attention to a crucial feature of systems that separate the benefits of medical programs from their costs. Rockwell summarizes his key insight in this way:
Rockwell uses a detail in the work of Friedrich Hayek to make another point of vital importance in the struggle for the free market. Opponents of the free market sometimes disguise their plans. Claiming to be defenders of economic freedom, they promote schemes inimical to the free market. For instance, in Orwellian fashion, plans for control of trade by international bureaucracies come packaged as "free trade." Rockwell notes that Hayek warned against this threat:
To use Hayek against NAFTA is indeed a stroke that would have occurred to few. September 30, 2009 David Gordon [send him mail] is a senior fellow at the Ludwig von Mises Institute and editor of its Mises Review. He is also the author of The Essential Rothbard. See also his Books on Liberty.
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