Customer Reviews

An Austrian Perspective on the History of Economic Thought (2 Vol. Set)

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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.

A mild warning - although the book is an exhilarating history of ideas, some of the finer points may be difficult or perhaps too technical for a layman. Rothbard has particular detailed points on theoretical economic issues. (Which makes me question the familiar charge about Rothbard retreating from Economics during the 1970's - as this book was written in the 1980's) He spends some space analyzing the differences in the theory of price (between Mill, Ricardo, Smith and the French School), interest and other lengthy sections (roughly 3 chapters of the second book) on monetary theory.

In light of the 20th century textbook analysis dominated by the neo-classical tradition in the micro sphere and Keynesianism in the macro sphere, Rothbard seeks to carve out and correct misunderstanding and misrepresentation of the classics and its development into the strains of these modern ideas - evaluating them by his own Austrian standard (see Rothbard's Man, Economy and State and Human Action by L. von Mises). Yet, Rothbard is not intentionally setting up historical economists as straw men, but to show that they were pioneers - some with clearer insight than others. In effect, he shows that some economics has gotten better while other have gotten worse.

Although this book is aimed at understanding economics, these two volumes also show the depth of Rothbard as an intellectual, religious and political historian as well. Again, this work ought to be disquieting to those scholars who continually discounted Rothbard. It is this painstaking argumentation which feeds directly into his thesis and makes the work sparkle; providing relevance to the questions which still persist today and will be here tomorrow.

The product of a lifetime of dedicated scholarship, this is Rothbard's magnum opus.

Volume one is a breathtaking journey through time, analyzing how culture, religion, and politics have impacted upon economic thought.

Volume two contains the most devastating refutation and trenchant analysis of Karl Marx and his destructive, apocalyptic theory of Communism."

I borrowed this work from my local university library and read it through TWICE! I am now about to order this new affordable set published by the Mises Institute so that I can not only read it through again but have as a constant source of reference. A brilliant work!

When an economist writes history, you are going to get something much different than when a historian writes history. For regular historians, economics is a poorly understood sideshow at best. Unlike Rothbard, they'll skip consideration of the economists themselves and their ideas.

In other words, you will never have heard of 95% of the historical figures in this book, important as they were to the birthing of the modern world, nor will you have heard of the wars of ideas they fought. Certain major factors moving big events of history will not be there because the historians simiply haven't noticed.

For example...

We all know about the Black Death. But a free market economist studying the era quickly makes a connection missed (so far as I know) by standard historians. Standard historians tell us about how the bubonic plague affected the economy but generally miss how the economy affected the plague. Rothbard doesn't miss it. 13th and 14th century kings, challenging the power of Rome and in need of money to finance their new structures of centralized state power, taxed and regulated the burgeoning commerce that had been bringing Europe out of the Dark Ages. In so doing, they sent the economy spiraling back into a new dark age of poverty, poor sanitation, and ill health that made the plague just that much more virulent when it hit.

Rothbard is not a proponent of the "Great Men" school of economic thought that has a few giants like Smith, Marx, Keynes etc. doing all the heavy lifting. He sees the conscious study of economics as somewhat unusual in history and the advancement of economic understanding as slow and incremental. Actually, advancement is not always the right word. Rothbard makes the point that there have been and still are many wrong turnings that have set progress back.

In this astounding book, you will get a look at: the laissez faire philosophy of Chinese Taoists, Plato vs. Aristotle, the laissez faire underpinnings of Roman Law, Thomas Aquinas, the exceptional and important free market discoveries of the Catholic Scholastics during the Middle Ages, their struggle to come to grips with and finally dismantle the notion that usury is a sin, the struggle between liberal-minded Scholastics (especially Jesuits) and authoritarian Protestants (which presages and develops into the modern intellectual debate between freedom and authority in politics and economics), mercantilism vs. freedom during the English Civil War, Cantillon and Turgot, and finally the Scottish Enlightenment and Adam Smith, one of the Great Men who doesn't fare as well under Rothbard's analysis as one might expect.

(Note, this review was for Volume One: Economic Thought Before Adam Smith, before the two volumes were combined.)

This set is outstanding in its accuracy, information and applicability to the understanding of historic and present problems. It is a more detailed and complete set of works which is the basis of the book "Case Against the Fed" by the same author. Actually that smaller work might be best read first as it will, in its summary, make the larger two volume set easier to handle.