Wednesday, June 14, 2006

Rothbard's Hyperbole Challenged - again

From the Mises.org on Rothbard’s critique of Smith: my response to a comment supporting Rothbard:

From Paul Marks:


“That Adam Smith contributed nothing that was both true and original. When he said something that was true it had already said by others (for example even the account of the pin factory was lifted from a French reference book - as one can tell because he gives the number of stages in a French factory not a British one) such things as the division of labour had already been gone into by others.

And when Adam Smith does produce something fairly new (such as the Labour Theory of Value - which he falls into having in his early years understood that there was no "paradox of value" on such things as gold and water [see his lectures versus the Wealth of Nations]), it is not true.

So Rothbard is correct and David Friedman mistaken."

My Response:

"Paul
You are compounding the same errors Rothbard made on the ‘pin-maker’ trade.

1 Diderot’s Enclyopedie was itself copied from a British text, Cyclopaedia (4th ed.1741) and Smith states at the head of the paragraph ‘the division of labour has been very often taken notice of’. He made no claims to his precedence at all – people who read his text carelessly (as I believe did Rothbard) credited precedence to him long after he was dead. Plato wrote on the division of labour, so did Sir William Petty, and others; none were credited by Diderot. The division of labour was a phenomenon well known by the 18th century.
2 The 18 operations were all performed by ‘distinct hands, though in others the same man will perform two or three of them’ (Wealth of Nations) and Smith gives an example: ‘I have seen a small manufactury of this kind where ten men only were employed’ and ‘where some of them consequently performed two or three distinct operations’ (next sentence, Wealth of Nations) but he does not state how many distinct operations there were in the manufactury he visited (Rothbard states Smith never visited one!).

3 You forget it seems that Smith lived in Kirkcaldy, a small village across the Firth of Forth in Fife where there were several little ‘manufacturies’, some he visited, including the nail maker.

4 I hardly think there was a ‘British’ norm, and as the Cyclopaedia was published in London, not Scotland, its information came from nearby. It is Edwin Caanan who pointed out (vo.ii, 2nd and 4th editions) the ‘number of separate operations [at] twenty-five’. Smith reported what he saw, not what Rothbard misread in a footnote to a book published in 1937.
5 Briefly, Smith’s reference to the ‘labour theory of value’ is no different than Cantillon’s (valeur intrinseque = labour price; valeur de marche = market price) and Smith (Natural price = labour price; Market Price).

I do not understand why in the one case this is a sign of great economic foresight and in the other a sign of causing a relapse in economic theory for 100 years!

I think Murray Rothbard had a tendency to hyperbole."

Posted by
Gavin Kennedy

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