Murray Rothbard in the Financial Times

I won’t confess everything but I will admit that I was once a great fan of Murray Rothbard (1926-1995), the economist who was nicknamed “Mr. Libertarian.” I was reminded of that when I saw him mentioned in a Financial Times column a few days ago: Jonathan Derbyshire, “Libertarianism Is Having a Moment With Argentina’s Milei,” August 31, 2023.

The column focuses on Javier Milei, who is the favorite to win the upcoming presidential election in Argentina (see also “Argentina Could Get Its First Libertarian President,” The Economist, January 14, 2023). Milei, who defines himself as an anarcho-capitalist à la Rothbard, is a fan of the latter and named one of his dogs after him. The fact that Milei is apparently also a fan of Donald Trump does not bode well for the future. The Financial Times columnist does get Trump’s anti-libertarianism right, albeit not to all its extent. But he is wrong in suggesting that Republican primaries candidate Vivek Ramaswamy could (or, at any rate, should) be embraced by the libertarian movement. Anti-libertarians have been elected before Trump, but this is not an excuse for libertarians to compete down to the bottom of the barrel.  If we are to believe The Economist, many of Mr. Milei’s political allies are not exactly paragons of libertarianism either. I do think that libertarianism and classical liberalism should be a big tent, but there is a limit somewhere.

Rothbard’s system had an apparent advantage, which was also its big defect: it had an obvious, definitive, nearly religious answer to any and all questions. I was bothered by some of his claims, like the right of a child to run away from home whenever he wants to because he is thereby asserting his natural right of self-ownership (The Ethics of Liberty, p. 102). I also had doubts about his economics, although it took me some time to recognize their significance. He had a deep distaste for, or fear of, anything that looked like mathematics. He did not realize that, as J. Williard Gibbs said, mathematics is a language. He did not see the relationship between mathematics and logic. For instance, he could not understand that his supposedly ordinal “marginal utility” is mathematically impossible if utility is ordinal (that is, just a ranking as opposed to a cardinal measure). It makes no sense to chop an ordinal value into identifiable (uniquely defined) marginal pieces. So he was unknowingly using a concept of cardinal utility.

What Rothbard was missing had been explained by John Hicks (a future Nobel economics laureate) and Roy Allen in two famous 1934 Economica articles, “A Reconsideration of the Theory of Value.” Hicks and Allen formalized an ordinal theory of utility, which Irving Fisher, Vilfredo Pareto, and perhaps other economists had already postulated but not exactly specified. As Hicks and Allen put it, “if total utility is not quantitatively definable, neither is marginal utility.” Lionel Robbins, who represented a mix of the Austrian and neoclassical schools of economics, mentioned Hicks and Allen’s advance in the 1935 edition of his Essay on the Nature of Significance of Economic Science.

Changing one’s opinion for good reasons is not a cardinal sin.

Sometime around the turn of the millennium, I asked Anthony de Jasay, who described himself as a liberal and an anarchist, why he did not use the anarcho-capitalist label. He answered, “I do not wish to be counted as one of that company,” or perhaps simply “I don’t like the company.” (Although I quoted the first sentence elsewhere, the latter also hangs in my memory. I should have written it down at the time.) I think Tony’s statement was meant as a criticism of the Rothbardian sort of anarcho-capitalism.

Let’s hope Mr. Milei wins the election in October and does not oblige libertarians all over the world to walk back their support or, worse, lead them to Trumpianize the libertarian movement.