Ever since I became a libertarian, I’ve always been enamored by the writings of Murray Rothbard. For those who are unfamiliar with him, he is often referred to as “Mr. Libertarian.” This is no surprise as he did more than any other person in the liberty movement to bring about a revival in radical liberal ideas. He was the ultimate polymath, writing over 20 books on economics, political theory, history, and philosophy. Jeff Deist, the current President of the Mises Institute, states that his bibliography is currently 63 pages long! He made major contributions in Austrian Economics, anarchism, and historical revisionism. He was the originator of the term anarcho-capitalism, and was a co-founder of both the Cato Institute and the Ludwig von Mises Institute. While there are areas of his thought I personally disagree with him on (which will probably end up being a post in it of itself), there is no denying that he is one of my intellectual heroes and is always a resource in my education.
The current work I will be reviewing is the brand new book The Progressive Era, which was edited by Mises Institute fellow and Professor of economics at George Mason University Patrick Newman. Despite passing away in 1995, Rothbard was so prolific that he had an unfinished manuscript lying around in his papers. This book takes that manuscript, along with his previously scattered articles on World War One, the FED, and Herbert Hoover, and combines it into a single 500 page volume with a lovely forward by Judge Andrew Napolitano. I personally acquired this when I went to the Mises NYC Gala event on the weekend of October 6-7th. Because this work is so massive and packed with juicy history, I’m going to take it chapter by chapter, and take it from there.
The first chapter talks about the economic situation facing the country following the Civil War. Specifically, he goes into a discussion about the railroads in this country. As per all of his historical works, he likes to introduce a bunch of characters as integral to the story. He especially emphasizes the people whom most historians would gloss over, like Schuyler Colfax and Collis P. Huntington. He also states at the outset of this chapter that from the beginning the building of the transcontinental railroads was illegitimate due to the theft of Native American land, something that would probably not even get a mention from most economic historians, who would instead emphasize efficiency and growth. Instead this is a people-centered approach that we would expect from all historians after the rise of the revisionists in the 1960s and 70s.
Throughout this chapter, Rothbard discusses the large amount of cronyism that existed among the Republican Party members who towed the Hamilton-Clay line. But if you think this work is just about the rise of neo-mercantilism after the Civil War, think again! Because after the Panic of 1873, which destroyed the Jay Cooke & Co. monopoly, there was a strong anti-monopoly movement that led to the states slowly ending their monopolistic practices (it also leads to the rise of J.P. Morgan, but he isn’t a major player as of right now). Rothbard also briefly alludes to the origins of the Populist movement among the farmers, emphasizing that the Granger Movement was wrong in its assertions that they were getting the raw end of the deal, however he’ll return to this subject once he talks about the 1892/6 Elections.
Finally, he goes into lengthy detail about the economics of the merger movement of the 1870s. The railroads, wanting to monopolize the market, sought to form a cartel that would engage in predatory pricing, rate wars, and end the unfettered competition that was preventing them from making the large profits they had enjoyed under government subsidy. However, each time they tried to form a voluntary cartel, someone would leak the information out and the cartel would collapse as the businesses returned to free market competition.
This chapter is quite reminiscent of a series of lectures that Hans Hermann-Hoppe recorded in 1986 while Rothbard was teaching at Brooklyn Polytechnic. However, while in the lectures he goes more into the mindset of the American people with regards to both the railroads and politicians who subsidized them, here it is a much more serious economic take on the attempted mergers and cartels. Through the historical example of the railroads, Rothbard demolishes the standard Progressive argument that monopolies naturally form on the free market. Ultimately, this chapter serves as the opening shot for the beginning of the end of a mostly laissez-faire economy in the United States, and the rise of the modern corporate system, supported, in large part, by the rising Progressive Movement. But that will all be fleshed out in future chapters, as I continue to plow through this massive and dense volume.