Bryan Caplan  

Two Rothbardian Reductios

PRINT
Shiller is bold?... Is This a Swindle?...

Despite his army of detractors, Murray Rothbard was a master of the reductio ad absurdum. In Power and Market, he out-did even Bastiat:

Suppose that Jones has a farm, “Jones’ Acres,” and Smith works for him. Having become steeped in protariff ideas, Jones exhorts Smith to “buy Jones’ Acres.” “Keep the money in Jones’ Acres,” “don’t be exploited by the flood of products from the cheap labor of foreigners outside Jones’ Acres,” and similar maxims become the watchword of the two men. To make sure that their aim is accomplished, Jones levies a 1,000-percent tariff on the imports of all goods and services from “abroad,” i.e., from outside the farm. As a result, Jones and Smith see their leisure, or “problems of unemployment,” disappear as they work from dawn to dusk trying to eke out the production of all the goods they desire. Many they cannot raise at all; others they can, given centuries of effort. It is true that they reap the promise of the protectionists: “self-sufficiency,” although the “sufficiency” is bare subsistence instead of a comfortable standard of living. Money is “kept at home,” and they can pay each other very high nominal wages and prices, but the men find that the real value of their wages, in terms of goods, plummets drastically.
Properly interpreted, the point of this reductio is not that a 1% tariff put us on the slippery slope to destitution. What this extreme example highlights, rather, is that protectionism has a major downside: It prevents you from taking full advantage of the division of labor.

Yesterday I came across another Rothbardian gem: A reduction to absurdity of the view that "getting tough" with other countries is a free lunch. Let us consider, he says...

[T]he toughest possible policy: an immediate American ultimatum to Khruschev and Co. to resign and disband the whole Communist regime; otherwise we drop the H-bomb on the Kremlin. What about this policy of maximum toughness, which would certainly accomplish one thing: it would bring about a quick showdown between East and West? What is wrong with this policy? Simply that it would quickly precipitate an H-bomb, bacteriological, chemical, global war which would destroy the United States as well as Russia. Now, it is true that perhaps this would not happen. Indeed, if we accept the favorite Right-wing credo that the Soviet leaders will always back down before any of our ultimatums, and will never fight if we are only tough enough, then maybe it is true that the Communist leaders will quickly surrender, perhaps on promise of asylum on some remote Elba. But are you, Mr. Right Winger, willing to take this risk?
Properly interpreted, the point of this reductio is not that aggressive policies put us on the slippery slope to armageddon. What this extreme example highlights, rather, is that aggressive policies have a major downside: The risk of provoking an enemy would otherwise would have left you alone, or even eventually fallen apart under internal pressures. You can call Rothbard's point obvious, but I've talked to plenty of people - including more than a few economists - who deny the trade-off - or at least act as if it doesn't exist.

Do you need a reductio to see this point? Hardly. Introspection should suffice: When someone "gets tough" with you, how often do they succeed? Still, when an issue gets emotional enough, sometimes a good reductio is the only way to cut through the fog.


Comments and Sharing





COMMENTS (7 to date)
Scott Scheule writes:

Rothbard's latter point is obvious. You should find some more sensible people to talk to.

Selfreferencing writes:

Even after all these years, thinking that I've 'matured' past the Rothbardian days of my youth, I have to say that Rothbard still puts a twinkle in my eye and a fire in my belly.

"If we look at the black record of mass murder, exploitation, and tyranny levied on society by governments over the ages, we need not be loath to abandon the Leviathan State and . . . try freedom."

Ah ... still so powerful.

Bill Stepp writes:

Rothbard's Power and Market is the best book on the economics of government I've read, despite some problems, like his acceptance of copyright.
His writings on money and banking were the weakest things he produced. He criticized Milton Friedman's writings on money, saying they illustrated the point that scholars sometimes devote the most ink to their weakest stuff. This might have been true for Rothbard too.
Rothbard's three foundational essays on society and the state--"Justice and Property Rights," The Anatomy of the State," and "War, Peace, and the State"--are the three best libertarian essays on these subjects.
I still remember the exact moment, when reading the first paragraph of "The Anatomy of the State," that I instantly became an anarcho-capitalist. I thought about the possibility of suing my social studies teachers for malpractice going back to sixth or seventh grade.

Rothbard also had a great line when he called the State "the biggest mass murderer, armed robber, enslaver, and parasite in all of human history." Which it is.
One of his weakest postions is his idea that Jackson and his movement were libertarian. Billy Leggett aside, they weren't, as a dip into Jackson's state papers in the Richardson collection reveals. Remini says in his bio of Jackson that Old Hickory was a precursor of Lincoln, which would make him a monster indeed.

8 writes:

There is a wide chasm between "getting tough" and threatening to nuke a country, just as there is a difference between having stiff penalties for crime and having the LAPD execute gang members.

John Thacker writes:

What this extreme example highlights, rather, is that aggressive policies have a major downside: The risk of provoking an enemy would otherwise would have left you alone, or even eventually fallen apart under internal pressures.

Sure. And passive policies have the corresponding downside as well: the risk of provoking an enemy that otherwise would have left you alone (but who takes advantage of your weakness and willing to cooperate regardless of their actions), or even eventually fallen apart under internal pressures. You can call this point obvious, but I've talked to plenty of people who deny the trade-off- or at least act as though it doesn't exist.

Neither always being aggressive nor always being passive is helpful in any game theoretic model.

aaron writes:

With the "getting tough" absurdity, I see an additional problem of allowing your opponent the first punch (not a good fighting strategy). A credible ultimatum leaves the opponent with two options, concede or launch a pre-emptive strike.

Cyrus writes:

The problem with regarding getting tough as a free lunch is that the analysis ends once you've eaten your lunch, and life doesn't. Those with whom you've gotten tough, though they have capitulated for now, are holding a brainstorming meeting to think of ways to get you back.

Comments for this entry have been closed
Return to top