Rothbard’s Conceived in Liberty: The New Republic

I’ve been waiting to read the fifth volume of Murray Rothbard’s Conceived in Liberty for over 30 years.  Now my former student Patrick Newman, professor at Florida Southern College, has miraculously undeleted this “lost work.”  Patrick’s quasi-archaeological efforts are nothing short of amazing, but how does the actual book hold up?

In the first four volumes of Conceived in Liberty, Rothbard tells the story of the American colonies’ rise, rebellion, and victory over the British.  In this final volume, he tells the story of America’s brief time under the Articles of the Confederation – abruptly  (and illegally!) ended by the revolution/coup/counterrevolution that we now know as the United States Constitution.  Rothbard, a vociferous detractor of the Constitution, could easily have subtitled this last book in his series “The Revolution Betrayed.”

Under the Articles of the Confederation, government was much more decentralized – and therefore much better:

Overall, it should be evident that the Constitution was a counterrevolutionary reaction to the libertarianism and decentralization embodied in the American Revolution. Th e Antifederalists, supporting states’ rights and critical of a strong national government, were decisively beaten by the Federalists, who wanted such a polity under
the guise of democracy in order to enhance their own interests and institute a British-style mercantilism over the country.

Rothbard’s main focus, however, is not in persuading the reader that the Articles were superior, but simply chronicling the details of their demise.  As a result, the book is disappointing.  I expected to watch Rothbard debunk the standard civics case for the Constitution – to insist that the Articles fostered rapid economic growth, high individual liberty, and peace both between the U.S. states and between the U.S. and the world.  I expected him to enthusiastically defend the repudiation of war debt.  And I expected him to at least consider reconsidering his earlier support for the American Revolution and its many slave-holding philosophers of freedom.  Instead, Rothbard glosses over the Big Questions in favor of detailed multi-stage Constitutional vote analysis.

Admittedly, quantitatively comparing growth, freedom, and peace under the two colonial regimes would be difficult due to data limitations.  But there’s no excuse for ignoring the implications for revolution change.  In his engaging introduction, Newman depicts Rothbard as a dedicated supporter of the American Revolution:

Although the Revolution was enormously costly and resulted in the near destruction of the economy (through hyperinflation, military confiscation of goods, British pillaging of infrastructure and supplies, and the flight of British loyalists), the war was worth it since it led to the achievement of highly libertarian goals of inestimable value. Rothbard explains that the American Revolution was radical and led to the restriction of slavery in many areas, the end of feudalism, the emergence of religious freedom, democratic constitutions with increased suffrage, and revolutions in European nations.

Here’s the rub: How can the war (including the “near destruction of the economy”!) be “worth it” if the libertarian revolution gets cancelled a few short years later?  This is an astronomical price to pay for such a transient gain.  Sure, you could reply, “Well, the war would have been worth it if the Articles had endured.”  But that immediately raises a deeper question: Was the American Revolution even a prudent gamble?  The probability of victory aside, what is the probability of winning the war but losing the peace?  If your answer isn’t, “Very high,” I question your knowledge of the history of violent revolution.

Perhaps Rothbard would insist, “The Constitution was only a partial counterrevolution.  Many of the libertarian gains of the American Revolution endured.”  Then he could point to all the items in the preceding list: “the restriction of slavery in many areas, the end of feudalism, the emergence of religious freedom, democratic constitutions with increased suffrage, and revolutions in European nations.”  Given the hellish history of the French Revolution and the Napoleonic era, I’d say the latter “achievement” outweighs all the others.  In any case, Rothbard barely grapples with the counterfactuals.  How do we know slavery wouldn’t have been restricted anyway?  What’s the probability that the British would have restricted slavery earlier and more peacefully?  Inquiring minds want to know.

Rothbard also fails to grapple with the complex interaction between decentralization and mobility.  As I’ve explained before:

[D]oes decentralization alone really promote liberty or prosperity?  The mechanism is elusive at best. Imagine a world with a thousand sovereign countries of equal size.  This is far more decentralized than the status quo, right?  Suppose further, however, that there is zero mobility between these countries.  Labor can’t move; capital can’t move.  In this scenario, each country seems perfectly able to pursue its policies free of competitive pressure.  Why should we expect such policies to promote liberty, prosperity, or anything else?

The story would change, of course, if you combine decentralization with resource mobility.  In that case, each country’s government has to compete to retain labor and capital at home.  If you don’t make the customer happy, somebody else proverbially will.  But without this “universalist” mobility rule, decentralization leaves everyone under the rule of a preordained local monopolist.

Standard civics classes claim that under the Articles of the Confederation, interstate tariffs were a serious problem; they offered decentralized politics without free trade.  Rothbard only response is to downplay the severity of the regulation:

While Connecticut taxed imports from Massachusetts, and New York in 1787 moved to tax foreign goods imported from neighboring states, the specter of disunity and disrupting interstate tariff s was more of a bogey to sell the idea of a powerful national government than a real factor in the economy of the day.

Perhaps Rothbard’s right, but remember: interstate tariffs only had a few years to get online.  What would have happened to interstate tariffs in the long run if the Articles endured?  And doesn’t the question illustrate the critical insight that decentralization without resource mobility is no recipe for liberty?

To be clear, I enjoyed reading the final volume of Conceived in Liberty.  And to be fair, Rothbard probably would have greatly improved it before publication.  As it stands, though, Rothbard’s lost book dodges the fundamental questions that Mr. Libertarian famously relished.  If you want to read one of his posthumous works, you’d be better off with The Progressive Era – also beautifully edited and annotated by Patrick Newman.


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Oksana Boyko Interviews Henderson on RT

The interview went 28 minutes and is here.

I won’t do my usual time-stamping because I’m busy with other things.

What I will point out is that approximately the first half is on my Wall Street Journal article, co-authored with Jonathan Lipow, that analyzed the findings of the major cost/benefit analyses of lockdowns and other measures that were in response to the coronavirus. We get into an interesting discussion of the value of a statistical life. It also gave me a chance to use the main thing I took away from my debate with Justin Wolfers back in April: how the concept of least-cost avoider strengthens the case against lockdowns.

The second half is about my latest article for Hoover’s Defining Ideas, “Black Livelihoods Matter,” Defining Ideas, June 17.  We get into the minimum wage, Senator John F. Kennedy’s racist case for increasing the minimum wage, occupational licensure, how restrictions on housing supply drive up housing prices in San Francisco, Los Angeles, New York City, and other cities, and charter schools. Early in the second half, I dealt briefly with the issue of white privilege.

Also, right at the end, I get in a major criticism of mega-murderers Chairman Mao and Joseph Stalin.

Oksana Boyko did her homework and so the result was an excellent conversation.

P.S. I wanted to do a screenshot at the 1:27 point that shows both Oksana, me, and my Rocky movie poster, but with my new MacBook Pro, I couldn’t figure out how.



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The Data Are In: It’s Time for Major Reopening



Early in the Covid-19 pandemic, an influential economic analysis from the University of Chicago concluded that the likely benefits of moderate social distancing would greatly exceed the resultant costs. The New York Times and the Washington Post recently cited that study as evidence that the use of strict lockdowns to control the virus’s spread has been justified, and that current efforts to “open up” social and economic activity around the U.S. are dangerous and irresponsible. That is seriously misleading; the Chicago study is already out of date. More recent research supports the idea that the lockdowns should end.

This is the lead paragraph in an op/ed published in today’s Wall Street Journal. The op/ed is David R. Henderson and Jonathan Lipow, “The Data Are In: It’s Time for Major Reopening,” WSJ, June 15 (electronic) and June 16 (print).

Three things that delight me about it, in order:

1. It was published and I think it’s pretty important.
2. Although I haven’t seen the print version, a friend in the Eastern time zone tells me that it’s the lead op/ed. I’ve had over 50 op/eds in the Journal and this is only about the 4th or 5th time my piece has been above the fold.
3.The editor understands that the word “data” is plural.

Another paragraph:

That finding [that the benefit of the social distancing and lockdowns is only about $250 billion] casts major doubt on the value of lockdowns and even social distancing as a method of reducing the spread of Covid-19. While we can’t yet estimate a specific figure, the economic cost of social distancing and lockdowns will likely be more than $1 trillion. And that’s an understatement of the costs when you consider increased suicides and other social losses not captured in gross domestic product. For example, parents of young children have widely noted their kids’ gloomy outlook when not allowed to be with friends.

As always, I’m contractually obligated not to post the whole thing until 30 days from now. It’s on my calendar.


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What I’m Doing

1. The U.S. political system is deeply dysfunctional, especially during this crisis.  Power-hunger reigns in the name of Social Desirability Bias.  Fear of punishment aside, I don’t care what authorities say.  They should heed my words, not the other way around.

2. Few private individuals are using quantitative risk analysis to guide their personal behavior.  Fear of personally antagonizing such people aside, I don’t care what they say either.

3. I am extremely interested in listening to the rare individuals who do use quantitative risk analysis to guide personal behavior.  Keep up the good work, life-coach quants – with a special shout-out to Rob Wiblin.

4. After listening, though, I shall keep my own counsel.  As long as I maintain my normal intellectual hygiene, my betting record shows that my own counsel is highly reliable.

5. What does my own counsel say?  While I wish better information were available, I now know enough to justify my return to 90%-normal life.  The rest of my immediate family agrees.  What does this entail?  Above all, I am now happy to socialize in-person with friends.  I am happy to let my children play with other kids.  I am also willing to not only eat take-out food, but dine in restaurants.  I am pleased to accommodate nervous friends by socializing outdoors and otherwise putting them at ease.  Yet personally, I am at ease either way.

6. I will still take precautions comparable to wearing a seat belt.  I will wear a mask and gloves to shop in high-traffic places, such as grocery stores.  I will continue to keep my distance from nervous and/or high-risk strangers.  Capla-Con 2020 will be delayed until winter at the earliest.  Alas.

7. Tyler suggests that people like me “are worse at intertemporal substitution than I had thought.”  In particular:

It either will continue at that pace or it won’t.  Let’s say that pace continues (unlikely in my view, but this is simply a scenario, at least until the second wave).  That is an ongoing risk higher than other causes of death, unless you are young.  You don’t have to be 77 for it to be your major risk worry.

Death from coronavirus is plausibly my single-highest risk worry.  But it is still only a tiny share of my total risk, and the cost of strict risk reduction is high for me.  Avoiding everyone except my immediate family makes my every day much worse.  And intertemporal substitution is barely helpful.  Doubling my level of socializing in 2022 to compensate for severe isolation in 2020 won’t make me feel better.

Alternatively, let’s say the pace of those deaths will fall soon, and furthermore let’s say it will fall by a lot.  The near future will be a lot safer!  Which is all the more reason to play it very safe right now, because your per week risk currently is fairly high (in many not all parts of America).  Stay at home and wear a mask when you do go out.  If need be, make up for that behavior in the near future by indulging in excess.

Suppose Tyler found out that an accident-free car were coming in 2022.  Would he “intertemporally substitute” by ceasing driving until then?  I doubt it.  In any case, what I really expect is at least six more months of moderately elevated disease risk.  My risk is far from awful now – my best guess is that I’m choosing a 1-in-12,000 marginal increase in the risk of death from coronavirus.  But this risk won’t fall below 1-in-50,000 during the next six months, and moderate second waves are likely.  Bottom line: The risk is mild enough for me to comfortably face, and too durable for me to comfortably avoid.

8. The risk analysis is radically different for people with underlying health conditions.  Many of them are my friends.  To such friends: I fully support your decision to avoid me, but I am happy to flexibly accommodate you if you too detest the isolation.  I also urge you to take advantage of any opportunities you have to reduce your personal risk.   But I won’t nag you to your face.

9. What about high-risk strangers?  I’m happy to take reasonable measures to reduce their risk.  If you’re wearing a mask, I treat that as a request for extra distance, and I’ll honor it.  But I’m not going to isolate myself out of fear of infecting high-risk people who won’t isolate themselves.

10. Most smart people aren’t doing what I’m doing.  Shouldn’t I be worried?  Only slightly.  Even smart people are prone to herding and hysteria.  I’ve now spent three months listening to smart defenders of the conventional view.  Their herding and hysteria are hard to miss.  Granted, non-smart contrarians sound even worse.  But smart contrarians make the most sense of all.

11. Even if I’m right, wouldn’t it be more prudent me to act on my beliefs without publicizing them?  That’s probably what Dale Carnegie would advise, but if Dale were here, I’d tell him, “Candor on touchy topics is my calling and my business.  It’s worked well for me so far, and I’m going to stay the course.”

12. I’ve long believed a strong version of (a) buy-and-hold is the best investment strategy, and (b) financial market performance is only vaguely related to objective economic conditions.  Conditions in March were so bleak that I set aside both of these beliefs and moved from 100% stocks to 90% bonds.  As a result of my excessive open-mindedness, my family has lost an enormous amount of money.  The situation is so weird that I’m going to wait until January to return to my normal investment strategy.  After that, I will never again deviate from buy-and-hold.  Never!


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