David R. Henderson  

The Sarajevo of the Cato Institute?

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David Gordon makes a category error.

The other factor was more fundamental; we have discussed it already but now Rothbard elaborated on it in more detail. Crane and Koch, in a quest for political power, wished to compromise with libertarian principle. This process did not begin with the Childs-Mueller view of nuclear policy. Rather, the first deviation came about when David Henderson, a supporter of the Chicago School rather than Austrian economics, received an appointment to Cato, over Rothbard's strong opposition. "The Sarajevo of the Cato Institute was a seemingly simple act: the hiring of Dr. David Henderson as his policy analyst and economist."

This is from David Gordon, "Murray Rothbard on the Kochtopus." David is normally a careful writer who reads books and articles with a jeweler's eye. Nevertheless, in the above quote (not the Sarajevo quote from Rothbard but the whole paragraph), he makes a simple category mistake. Take as given that I am "a supporter of the Chicago School," which is an oversimplification. Can you spot the mistake?


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CATEGORIES: Economic Philosophy



COMMENTS (30 to date)
Philo writes:

I don't know if this is a "category mistake," but the Gordon/Rothbard view is evidently that *hiring someone who (in part) disagrees with you* a *violation of libertarian principle* (that's surely some sort of mistake).

David R. Henderson writes:

@Philo,
No. Not hiring someone who disagrees with you is not necessarily a mistake, by libertarian principles or almost any other.

Hermogenes writes:

Gordon assumes that support for the Chicago school is incompatible with support for Austrianism.

Ryan writes:

Hiring somebody from the "Chicago School" hardly seems like a compromise from a libertarian perspective.

Blackadder writes:

The Koch brothers are not the Cato Institute. You can't just attribute deviations from libertarian principles by the latter to the former.

darjen writes:

Sure, maybe it's not necessarily a mistake. But at the same time, I can't say I really blame someone for wanting to hire people they agree with.

David R. Henderson writes:

Ryan got it. Although I would amend his "hardly seems" to "is not necessarily."

Philo writes:

As I understand it, the libertarian principle not only does not forbid hiring a non-libertarian, it does not even forbid advocating anti-libertarian views oneself. The latter would be _mere_talk_, not _aggression_.

mdb writes:

You have written papers and articles for Cato, were you ever an employee of Cato (not a contractor)?

David R. Henderson writes:

@mdb,
Yes. From August 1979 to April 1980.

Philo writes:

@ David Henderson
I think you misunderstood my first comment. I was saying that the Gordon/Rothbard view was a mistake.

david writes:

I am no Austrian, but Rothbard realized - correctly - that a consistent application of some of the assumptions inbuilt in Chicago-school modeling imply the harmlessness of many types of state action. Rationality conflicts with the canonical Austrian presumption that investors can be systematically fooled by excessively low nominal rates, for example.

As an anarchist, Rothbard aggressively disputed anything that may have legitimized minarchist positions, which the Chicago position does. This is someone who attacked Milton Friedman as a statist court jester, after all. One might think that we could hardly call Friedman illibertarian, but Rothbard did and said so.

david writes:

David Gordon attacked Tyler Cowen for being insufficiently enthusiastic about von Mises, too, so you're in good company, Prof Henderson.

darjen writes:

Hmm, reading through that again, it seems like the Chicago School is indeed inconsistent with at least some libertarian principles. Therefore, if you hire someone from the Chicago School, who didn't deviate from those compromises, how is that paragraph inaccurate?

David, in your opinion, how accurate is Rothbard's essay that I linked?

David R. Henderson writes:

@darjen,
You write:
Therefore, if you hire someone from the Chicago School, who didn't deviate from those compromises, how is that paragraph inaccurate?
David, in your opinion, how accurate is Rothbard's essay that I linked?

Of course, if you hire someone who didn't deviate from those compromises, the paragraph would not be inaccurate. But it is inaccurate. Cato hired me, not Milton.
I think there is much that is accurate in Rothbard's essay.

Ted writes:

What's more revealing about this quote is that it seemingly suggests that libertarian economic theory has nothing to do with truth. Who cares if Austrian economics is even correct - you just have to believe it to be a libertarian! If suddenly some 100% irrefutable piece of evidence was discovered that discredited Austrian economics (in the vein of the famous "Precambrian rabbit" for evolutionary theory), would this discredit the libertarian project? To suggest any deviation from some economic theory is unacceptable makes libertarianism look more like a cult than a respectable movement.

Also, the difference in policy prescriptions between the Austrian and Chicago schools are going to be extremely small (perhaps with the exception of monetary policy).

Anyway, I'm a proud libertarian and I proudly subscribe to New Keynesian economics for macro (though realistic versions with sensible business cycle impulses like "news shocks" rather than mysterious "demand shocks" - so maybe I'm actually just an RBC guy who believes in short-run nominal and real wage and price rigidities) and Coasian-style micro. But given that I'm not an Austrian, I guess I just better join the Communist party and be done with it.

Scrutineer writes:

"Music tastes itchy" is a category mistake. "Henderson is a Chicago School supporter, and therefore not a libertarian" is just a mistake.

darjen writes:

@David R. Henderson:

Of course, if you hire someone who didn't deviate from those compromises, the paragraph would not be inaccurate. But it is inaccurate. Cato hired me, not Milton.
I think there is much that is accurate in Rothbard's essay.

Thanks for clarifying. A lot of that essay talked about Chicago School positions in general, not just Milton alone. I would agree that as long as you didn't advocate those positions, then David Gordon's paragraph is indeed inaccurate.

David writes:

If to be "libertarian" is to be Rothbardian to the letter, then

even Rothbard's beloved teacher Ludwig von Mises wasn't a libertarian.

He was never an anarchist, as far as I can tell.

I think I may be able to clarify what David Gordon meant, although I in no way really know Gordon's position. Nevertheless, my interpretation of that paragraph is a bit different, although I wholeheartedly agree that Gordon should have more carefully worded his argument there.

I don't think that Gordon considers the hiring of Henderson as a compromise with the Cato Institute's libertarian platform. Rather, I think he's trying to describe it as an event which represents the beginning of the rift between Murray Rothbard and Crane/Koch.

Again, a poorly worded paragraph.

Travis Miller writes:

Is the mistake that you were actually connected with UCLA? Although UCLA used to have a heavy University of Chicago influence (I remember Thomas Sowell once mentioned some referring to it as the University of Chicago West)there is still a difference. I guess it could be thought of as the intellectual version of allopatric speciation.

Travis Miller writes:

Oh, I just realized you said to accept that you are a "supporter of the Chicago school".

David R. Henderson writes:

@Travis Miller,
When I showed up at UCLA in the fall of 1972, I paid a visit to Sam Peltzman, whose work I had read and admired. He had a bumper sticker on his door that said: University of Chicago at Los Angeles.

Bob Roddis writes:

I’m still a Rothbardian, but I used to love reading Roy Childs whom I credit with helping me to understand the libertarian non-intervention position. I still have all my Libertarian Review issues from 1978 to 1981. I was also impressed with Childs’ argument about nuclear power. At the time, no one really understood that nuclear power only existed in its present form due to either subsidies or liability limits. Childs argued that it was so dangerous that no one would ever insure it in a free market. I don’t know if that’s true or not, but it sure gets ones’ mind wrapped around the idea of big business welfare.

Here’s a Rothbard and Childs cartoon as part of CATO ad:

http://www.flickr.com/photos/bob_roddis/3520147250/sizes/l/in/set-72157600951970959/

CATO loves Ron Paul 1979:

http://www.flickr.com/photos/bob_roddis/4161181369/in/set-72157600951970959/

This cartoon accompanied one of Childs’ excellent long articles on the atrocities of the Shah of Iran:

http://www.flickr.com/photos/bob_roddis/3519316727/in/set-72157600951970959/

Here’s a nice Nixon cartoon:

http://www.flickr.com/photos/bob_roddis/3520131008/in/set-72157600951970959/

I suppose you need to read the Gordon article to know what I discussing.

Michael writes:

I don't see how hiring you could be in any way related to a "quest for political power."

Also, weren't you no longer with Cato by the time Rothbard left?

David R. Henderson writes:

@michael,
I got there after Murray had left.

GaryTheWhale writes:

Austrian "economics" is a cult and Austrian "economists" are just BARELY worth listening to. There are plenty of great, serious free market academics. They have names like "Robert Barro", "Robert Lucas", "Edward Prescott" etc. and work at places like Minnesota, Chicago, Booth, the Minneapolis Fed etc.

Any really unique, interesting and perhaps worthy idea the Austrians have is being done better by some mainstream economist. See John Taylor's effectively "austrian" take on the recent crisis.

You can't get anywhere in big-boy economics while being so terrified of math.

Sorry, it's a bit off topic... but that ridiculous quote reminded me why I dislike the vast majority of Austrians and can't stand anyone that considers themselves a "Rothbardian". It reminds me of that exchange between Walter Block and Milton Friedman over the legacy of Friedrich Hayek. Or of the various pieces written by Austrian "economists" on Friedman and his legacy.

David R. Henderson writes:

@GaryThe Whale,
You wrote,
"Any really unique, interesting and perhaps worthy idea the Austrians have is being done better by some mainstream economist."
I disagree. My counterexample is work on Hayek's idea of local knowledge from "The Use of Knowledge in Society."
Also, you wrote, "It reminds me of that exchange between Walter Block and Milton Friedman over the legacy of Friedrich Hayek." It's funny you mention that. If we're thinking of the same debate, I thought Walter got the better of Milton.

David Gordon writes:

Your point is well taken. Rothbard thought that the Cato Institute had been set up to support both libertarianism and Austrian economics. For that reason, he regarded the appointment of someone wasn't an Austrian economist as a deviation. But I ought not to have worded the sentence in a way that suggests a Chicago School supporter cannot be a libertarian.

David R. Henderson writes:

@David Gordon,
Thanks, David.
Best,
David

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