What Rothbard Missed: Error or Demagoguery?

I gave up trying to fully understand Rothbard. I like him. He's like a funny crazy uncle who makes you nervous when you have guests over.

I think his total and utter hatred for government and his final position that nothing good could come of it got him to believe in the good for anything that could work toward that end.

But yes, his brilliance is undeniable.

I sometimes wonder if hundreds of years of hindsight will prove him mostly 100% right in his goals.

Will he be the fire cracker who had it right?

Rothbard although a libertarian was a conservative during parts of his political life. As a young man he was part of the Republican party. (He broke with conservatism when William Buckley entered the scene.) This might explain why an anti-statist on the issue of central bank independence has adopted the view of the right wing Buckley conservatism: Some things are better not left alone.

Of course whether what he said about central banks is true or not is irrelevant?

It's ironic that central bankers seem to forget their own research papers and public statements on money supply and inflation as soon as they get to their positions.

Error or Demagoguery?

False dichotomy!

There are other options, including the possibility that he saw further than you and realized that yes, CB independance would reduce inflation for a while, but eventually the Fed would suffer (as so many antitrust agencies) an insider takeover erasing that differential and also, because of reduced transparency, it would then be harder to denounce.

He might have been right about a whole lot of things, but it appears that he didn't know better about demagoguery. See Who Wrote Ron Paul's Newsletters? by Julian Sanchez and David Weigel on January 16, 2008.

Professor Caplan says that government doesn't print money like Professor Rothbard suggested they would. Instead, Professor Caplan explains that government has found less unpopular ways of inflating the currency.

Fair enough, but I always assumed that Rothbard used the phrase "printing money" rather broadly. You can see that the money supply has been growing rapidly. Who cares what form this growth takes?

Rothbard always seemed to cut to the heart of actions. So, for him, the complicated legal procedures surrounding taxation, for example, didn't change the fundamental nature of the act: theft. I always thought that the same was true for "printing money". Sure, the Fed has found complicated, "acceptable" ways of creating "new" money without printing currency, but the fundamental nature of these new actions is still: printing money.

cvd writes:

Professor Caplan says that government doesn't print money like Professor Rothbard suggested they would. Instead, Professor Caplan explains that government has found less unpopular ways of inflating the currency.

Fair enough, but I always assumed that Rothbard used the phrase "printing money" rather broadly. You can see that the money supply has been growing rapidly. Who cares what form this growth takes?

John Snow provides some food for thought.

What if Rothbard saw an independent Fed who inflated, but at a lesser rate than politicians simply a prolonging of the inevitable.

Politicians inflate faster, collapse the money faster, and learn from their mistake faster, which is essentially what Rothbard was hoping for.

Bryan,

With your history of being fair to Rothbard and other Austrians, while still holding them to high standards, I'd be interested in your opinion of Rothbard's work in general. Which book or article of his would be most beneficial for an academic economist to read? For a layperson? On the other hand, which work should have never been written?