Tuesday, August 16, 2011

Sense on Murray Rothbard, But Not on the IH Metaphor

Adrián Ravier, a professor of economics at Francisco Marroquin University in Guatemala and the National University of La Pampa in Argentina, posted in the MSkousen.com Blog (HERE):

A part of the question and answers session by Professor Ravier with Mark Scousen about Adam Smith.

This is most interesting, especially concerning Murray Rothbard’s savage criticism of Adam Smith, both as he was (which some would say were Rothbard’s scurrilous judgements of Adam Smith’s life and work), and as Smith was presented by some of Rothbard's contemporary economists in the 1930s (‘invisible hands’ and all that guff about ‘founder of capitalist economics). I criticized some of Rothbard’s remarks about Smith on Lost Legacy in various posts in 2006-7. This post relates to Mark Scousen’s account of his role in influencing Rothbard’s publications.

“Major Interview with Mark Skousen on “His Life and Works in Economics, Finance and the Freedom Movement” (15 August) by
Adrián Ravier, a professor of economics at Francisco Marroquin University in Guatemala and the National University of La Pampa in Argentina.

“AR: By the way, what do you think of Rothbard´s criticism to Adam Smith?”

“MS: When I first started writing ‘The Making of Modern Economics’ in the late 1990s, I was still quite infatuated with everything Rothbardian, including his surprising critique of Adam Smith. According to Rothbard, Smith was a plagiarist who ‘originated nothing that was true, and whatever he originated was wrong.’ That’s quite an indictment of
 the Scottish philosopher celebrated by almost all free-market economists, including Rothbard’s teacher Ludwig von Mises [who] wrote a glowing introduction to ‘The Wealth of Nations’ edition published by Regnery, calling it a ‘marvelous’ and ‘great’ book that brought together ‘the ideology of freedom, individualism, and prosperity, with
admirable logical clarity and in an impeccable literary form.’
Who was right, Rothbard or Mises? There was only one way to find out. I decided to read the entire 1,000-page ‘Wealth of Nations,’ page by page and cover to cover, and come to my own conclusion. Two months later, I put the book down and said to myself: ‘Murray Rothbard is wrong and Mises is right.’ Adam Smith has written a grand defense of the invisible hand and economic liberalism.

My change of heart completely transformed my history. Suddenly, ‘The Making of Modern Economics’ had a plot, an heroic figure, and a bold storyline. Adam Smith and his system of natural liberty became the focal point from which all economists could be judged, either adding to or distracting from his system of natural liberty. …

Granted, Smith made numerous mistakes in his classic work, such as his crude labor theory of value, his attack on landlords, and his failure to recognize marginal subjective values, but French, British, Austrian and Chicago economists have done a great job improving upon the House that Adam Smith Built without destroying his fundamental system of natural liberty, and his policy prescriptions, which were largely libertarian (the
 classical model of limited government, free trade, balanced budgets, and sound money).’

I am always pleased to see somebody standing up to Murray Rothbard – as a polemicist he did not take prisoners, nor indulge criticism.

I am, however, somewhat perplexed with this sentence: “Adam Smith has written [in Wealth Of Natopms] a grand defense of the invisible hand and economic liberalism.”

It’s not bad for a single instance of the use of a metaphor in nearly 900 pages to be described as a “grand defense”!
What Mark means by his high-blown rhetoric is not clear. How does a single metaphor of “an invisible hand” come to constitue a “grand defence”? Perhaps Mark could enlighten us?

I can see a separate case for “economic liberalism” being worthy of such an accolade, but a metaphor, which discusses an instance in anything but a ‘free market liberal economy’?

Surely not the case, unless Mark wraps the entire case of “economic liberalism” (as per David Friedman, a couple of years back) into the metaphor, which is, on grounds of the English language meaning of a metaphor, an absurdity to call it a "grand defence' of liberalism.

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