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Tuesday, May 29, 2007

Rothbard credits many lesser individuals which prefigured Smith

In Economic Thought Before Adam Smith, Murray Rothbard traces economic ideas from ancient sources to show that laissez-faire liberalism and economic thought itself began with the scholastics and early Roman, Greek, and canon law. He celebrates Aristotle and Democritus, for example, but loathes Plato and Diogenes. He is kind toward Taoism and Stoicism. He is no fan of Tertullian but very much likes St. Jerome, who defended the merchant class. Now, that takes us only to page 33, just the beginning of a wild ride through the middle ages and renaissance and modern times through 1870.
Rothbard read deeply in thinkers dating back hundreds and thousands of years, and spotted every promising line of thought  and every unfortunate one. He knew when an idea would lead to prosperity, and when it would lead to calamity. He could spot a proto-Keynesian or proto-Marxist idea in the middle ages, just as he could find free-market lines of thought in ancient manuscripts...
His demolition of Karl Marx is more complete and in depth than any other ever published. His reconstruction of 19th-century banking debates has provided enough new ideas for a dozen dissertations, and contemporary real-money reform. His surprising evisceration of John Stuart Mill is cause to rethink the whole history of classical liberalism.
Most famously, Rothbard demonstrated that Adam Smith's economic theories were, in many ways, a comedown from his predecessors in France and Spain. For example, Smith puzzled over the source of value and finally tagged labor as the source (a mistake Marx built on). But for centuries prior, the earliest economists knew that value came from within the human mind. It was a human estimation, not an objective construct.
Rothbard was a pioneer in incorporating the sociology of religion into the history of economic ideas. He saw that the advent of Christianity had a huge impact on the theory of the state. He observed the rise of absolutism and theory of nationalism that came with the reformation. He traced the changes in the Western view toward lending and interest payments over the course of a thousand years. Amazon Editorial Reviews
Pre-Austrian Economic History from an Austrian Perspective, February 2, 2007 By Hans Haneberg - See all my reviews This review is from: An Austrian Perspective on the History of Economic Thought (2 Vol. Set) (Hardcover)
This work is a tour de force of economic thought, spanning a thousand pages and nearly two millennia. The books thesis rests on Thomas Kuhn's theory of paradigm shifts of scientific intellectuals in "The Structure of Scientific Revolutions." In these two volumes, Rothbard grinds his axe against what he would refer to as the "Whig theory of history" or the idea that history of ideas is always a progression forward.
In light of this thesis, Rothbard carefully works in progression from ancient Greek thought of Plato, Aristotle, and Xenophobe to the late 19th century works of J.S. Mill, Marx, Bastiat and Pareto. What is truly amazing is amount of time in Volume I he devotes to smaller unknown scholastics (who revived much of the work of Aristotle after finding preserved by the Arabs) overlooked by works like Lionel Robbins lectures on Economic thought and much of Hayek's contributions, which were dominated by the Scottish Enlightenment. Insomuch, Rothbard credits - like Schumpeter did - many lesser individuals which prefigured Smith, like Turgot, Cantillon and the French tradition; or the School of Salamanca and the Scholastic's who debunked the idea of a just price - based in a theoretical corpus of Natural Law (like Rothbard himself).
There are some who have taken the whole book out of context by reading only his treatment of Adam Smith - mostly because this is the most controversial section. Without context, Rothbard chapter on Smith seems to be harsh for those who consider him a great defender of liberty and lassie faire. Yet, to me, he sufficiently backs his libertarian case against Smith - as those who have actually looked into the Wealth of Nations can attest (the contradiction in Book 1 and 5 is most apparent in his description of the division of labor on one hand and alienation on the other).
In fact, he continues Joseph Schumpeter's famous assessment of `das AdamSmith' problem (Schumpeter argues that Smith, in the Wealth of Nations is just carrying on a physiocrat position in `Economic Doctrine and Method'); which has plagued economic thought by misplacing an emphasis on one man as the intellectual godfather while belittling outstanding prefigures like Turgot and Cantillon, the Scholastics and post-figures such as Senior, Bastiat and Say.
It is not that Rothbard means to tear Smith's whole doctrine asunder. Rothbard admits freely that Smith was important up to a point, yet was bereft in his defense of liberty. Hence Smith doesn't measure up to his `hardcore' liberal French counterparts - for instance Turgot or Say. Rothbard illustrates this in the American tradition by quoting Thomas Jefferson as having admiration and preference for De Tracy and J.S. Say instead of Adam Smith.

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