Economic Thought Before Adam Smith : An Austrian Perspective on the History of Economic Thought (Vol. 1) [Hardcover]

Murray N. Rothbard (Author)

Book Description

Publication Date: March 1995

This is a treatment, from a modern Austrian perspective, of the history of economic thought up to Adam Smith, and as such takes into account the profound influence of religious, social and political thought upon economics. The author contends that "laissez-faire" liberalism and economic thought itself began with the Catholic scholastics and early Roman and canon law, rather than with Adam Smith. The scholastics, he argues, established and developed the subjective utility and scarcity theory of value, as well as the theory that prices, or the value of money, depend on its supply and demand. This continental, or "pre-Austrian" tradition, was destroyed, rather than developed, by Adam Smith whose strong Calvinist tendencies towards glorifying labour, toil and thrift is contrasted with the emphasis in Scholastic economic thought towards labour in the service of consumption. Tracing economic thought from the Greeks to the Scottish Enlightenment, this book includes all the important figures in each school of thought, with their theories assessed in historical context.

Product Details

• Hardcover: 576 pages
• Publisher: Edward Elgar Pub (March 1995)
• Language: English
• ISBN-10: 1852789611
• ISBN-13: 978-1852789619
• Product Dimensions: 9 x 6.3 x 1.5 inches
• Shipping Weight: 2.2 pounds
• Average Customer Review: 4.6 out of 5 stars  See all reviews (10 customer reviews)
• Amazon Best Sellers Rank: #3,855,021 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

71 of 73 people found the following review helpful

5.0 out of 5 stars Pre-Austrian Economic History from an Austrian Perspective February 2, 2007

By Hans Haneberg

Format: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 Xenophon 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. Read more ›

15 of 16 people found the following review helpful

5.0 out of 5 stars Rothbard's Triumphant Master Work April 18, 2008

By anarchteacher

Format:Hardcover

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."

10 of 10 people found the following review helpful

5.0 out of 5 stars It Didn't Start With Adam Smith May 7, 2011

By Mark Ledbetter

Format:Kindle Edition

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.) Read more ›

22 of 28 people found the following review helpful

5.0 out of 5 stars Brilliant work May 16, 2006

By Ian Mackechnie

Format:Hardcover

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!

3 of 3 people found the following review helpful

5.0 out of 5 stars True economics not central bank shams February 20, 2009

By Vince

Format:Hardcover

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.

2 of 2 people found the following review helpful

5.0 out of 5 stars blew my mind January 12, 2013

By GDiaz

Format:Kindle Edition|Amazon Verified Purchase

I have been reading economics books for a long time. This is the first time that I get a full picture of the history of thought. Really enjoying that.

1 of 1 people found the following review helpful

5.0 out of 5 stars THE FIRST VOLUME OF ROTHBARD'S "AUSTRIAN" HISTORY OF ECONOMICS October 29, 2012

By Steven H. Propp TOP 500 REVIEWER

Format:Hardcover

Murray Newton Rothbard (1926-1995) was an American economist of the Austrian School of economics, and a prominent figure in the Libertarian movement; the successor volume is Classical Economics: An Austrian Perspective on the History of Economic Thought. He also wrote books such as Man Economy and State One Complete Volume, Power and Market: Government and the Economy, America's Great Depression (Paperback), etc.

He wrote in the Introduction to this 1995 book, "this work is an overall history of economic thought from a frankly 'Austrian' standpoint... This is the only such work by a modern Austrian... Not only that: this perspective is grounded in what is currently the least fashionable though not the least numerous variant of the Austrian School: the 'Misesian' or 'praxeological.'" (Pg. vii) He adds, "leaving out religious outlook, as well as social and political philosophy, would disastrously skew any picture of the history of economic thought... The entire work is longer than most since it insists on bringing in all the 'lesser' figures... I hope that, for the reader, the unwonted length will be offset by the inclusion of far more human drama than is usually offered in histories of economic thought." (Pg. xiii)

He states, "The usury prohibition was the tragic flaw in the economic views of medieval jurists and theologians." (Pg.... 45) He observes, "The decline of Church authority, then, was matched by the rise in the power of the absolute state." (Pg. 69)

He is (perhaps surprisingly) rather disparaging of Adam Smith: "The honour of being called the 'father of modern economics' belongs... [not to] Adam Smith, but to a gallicized Irish merchant, banker and adventurer... [named] Richard Cantillon." (Pg. 345) "after Adam Smith... the entire tradition of subjective utility... gets poured down the Orwellian memory hole by Adam Smith's fateful decision to discard even his own previous concepts... Adam Smith has a lot to answer for at the bar of history." (Pg. 449-450) "Adam Smith contributed nothing of value to economic thought... he introduced numerous fallacies, including the labour theory of value, and thereby caused a significant deterioration of economic thought..." (Pg. 463) "The most unfortunate aspect of the total Smithian takeover in economics was... the blotting out of knowledge of the rich tradition of economic thought that had developed before Smith. As a result, the Austrians ... were in many ways forced to reinvent the wheel, to painfully claw their way back to the knowledge that many pre-Smithians had enjoyed long before." (Pg. 502)

He admits, "Natural rights, laissez-faire libertarians always confront several problems or lacunae in their theory. One is taxation. If every individual is to have inviolable property rights, and those rights are to be guaranteed by the government, taxation, itself an infringement of property rights, presents an immediate problem to laissez-faire theorists. For HOW HIGH should taxes be, and WHO should pay them?" (Pg. 371)

This first volume goes into MUCH more detail on the early economists than many readers will be even marginally interested in; however, Rothbard's incisive comments make this volume essential reading for anyone studying Austrian economics, or the history of economics. Read more ›