Murray Rothbard on Big Business

via John Kersey

“For some time I have come to the conclusion that the grave deficiency in the current output and thinking of our libertarians and “classical liberals” is an enormous blind spot when it comes to big business. There is a tendency to worship Big Business per se … and a corollary tendency to fail to realize that while big business would indeed merit praise if they won that bigness on the purely free market, that in the contemporary world of total neo-mercantilism and what is essentially a neofascist “corporate state,” bigness is a priori highly suspect, because Big Business most likely got that way through an intricate and decisive network of subsidies, privileges, and direct and indirect grants of monopoly protection.”

 Murray Rothbard, writing in a private letter in 1966, quoted in the June edition of “The Individual”, the journal of the Society of Individual Freedom –

7 responses to “Murray Rothbard on Big Business

  1. Murray Rothbard was many things (some of them good, some of them bad – one of the bad things was his habit of throwing around words like “Fascist” without remembering that Mussolini idea of a “Corporate State” was very different from the Hollywood definition – under real Fascism it is THE STATE that is in charge), but he never attacked a business enterprise just for being big.

    Rothbard opposed government subsidy for business – whether than business was big or small. And, as Rothbard understood economics (unlike some people who appear on this blog from time to time), he knew that Frank Fetter (amongst others) refuted Ricardian “rent” theory (and with it the “Ricaradian Socialist” ideas of property being a state granted privilege) more than a century ago.

    Short version.

    Murray Rothbard would not have been an enemy of Charles and David Koch (alhough he would not have held them to be perfect either) – nor would he have been a friend of those who are their enemies.

  2. As for “mercantalist” ideas they are wrong indeed – and go back a long way.

    One can (for example) find them (although not with the use of the actual word “mercantalist”) in the 15th century work of Sir John Fortescue – promote exports, discourage imports, encourage production….. (the normal errors).

    That does not make Fortescue a Fascist or NeoFascist.

  3. Rothbard is the hero and intellectual guiding light of those associated with the Mises Institute (e.g Lew Rockwell, Hoppe, Walter Block, Thomas E.Woods Jr etc). And here he is attacking the corporate state in much the same vein as Kevin Carson does today. YET, Carson continuously attacks the Mises Institute scholars for being somehow soft on state-capitalism, as if they were all secretly shilling for WalMart or something. I have never been able to figure that one out. It just goes to show that in-fighting (within a family, or an ideological movement) is usually more intense than out-fighting. John Cleese said it best in The Life of Brian: “SPLITTERS!”

    It will take another generation or two for people to automatically identify and attack state-capitalism as a discreet system. For now, people splinter off too easily into obsolete “right” and “left’ variations. On any given day, in any given article, the world will be depicted as either:

    1) A greed extravaganza in which the evil rich compete savagely for a chance to grind the faces of the poor in the dirt.


    2) A predatory, neo (neo) crypto-Marxist socialist bureaucracy, in which nationalised individuals live increasingly meaningless lives administered by humanitarian parasites.

    Look, here’s an excerpt from an article in Esquire magazine:

    “For thirty years, the Republican party has been trying to “starve the government beast” by rejecting the taxation needed to finance the public sector. The Democratic party has timorously followed along. Despite Barack Obama’s recent paeans to liberalism in his Inaugural and State of the Union addresses, the Republican agenda is very far advanced: The Age of Sequestration is at hand.”

    You got that? The Republican party are the party of private enterprise and low taxation, see? And they’re getting their way! The U.S is being ravaged by the free market run amok!

    But look here, an excerpt from an article in the Wall Street Journal:

    “But it is our record-high government spending, not the failure to raise taxes on the rich, that is the typical American’s largest long-term problem….The biggest threat to long-term economic growth is government growth of the magnitude that characterized the past two years and that is forecast for our future.”

    You got that? The Democrats are spending the U.S into oblivion! The grossly enlarged state must be curtailed, it is heedlessly eating its way through all the wealth!

    It will take some time before these perspectives can be reconciled into a unified attack on state-capitalism which does not have any left-wing/right-wing sub-clause built into it.

  4. YET, Carson continuously attacks the Mises Institute scholars for being somehow soft on state-capitalism, as if they were all secretly shilling for WalMart or something.

    Basically, it’s a classic straw man from the Carsonites. Hence the regular deployment of nonsense like everyone else “worships” big business.

    The point is that they are opposed to all “big” businesses simply because they are big and they are businesses; indeed Carson is opposed to business on the capitalist model entirely, and seeks a future where there is no employment, everyone is part of a localist co-operative, etc.

  5. Carl – the tax trick is not complex. The left (including academia and the “mainstream media”) exclude certain taxes (either Federal ones such as the Social Security tax – or State and local taxes in total) and then they say “taxes are lower than they were in the 1950s – evil Republicans!”

    If taxes actually were lower than in the 1950s it should be “wonderful Republicans!” but they are not. One might as well exclude ALL taxes from the calculations and then “the Republicans have created anarchocapitalism!” – it really is that silly, but the media (and academia) carry on with the absurd “taxes are very low” mantra.

    Many Federal schemes, such as Medicare and Medicaid, actually have shared costs between the Federal government and the State governments – which is one reason why “low tax Texas” has a State Sales Tax of 8% (plus local stuff) – in 1960 there was no Sales Tax in Texas.

    For the record the Republicans just accepted a Federal tax increase on the wealthy a couple of months ago – which the media have already “forgotten”.

    And there was a tax increase on the poor as well (the Social Security tax increase) and the media has already “forgotten” that also.

    We are back to “taxes are incredibly low – they must be increased…….”

  6. As for “state capitalism” – that is a Marxist term that should be rejected (even some Marxists reject the term).

    It is as false as calling modern Western countries “Fascist” or “Neo Fascist” – Rothbard knew Ludwig Von Mises, but he refused to benefit ffrom the experience of Mises (Mises knew what “Fascism” actually meant).

    For people who insist on books – both “Omnipotent Government” by Mises and “The Road to Serfdom” by Hayek are good at explaining what Fascism is actually like. What the modern West has is not “Fascism” (let alone the Marxist term “State Capitalism”), it is INTERVENTIONISM.

    “But at what point does Interventionism so utterly undermine Civil Society that it no longer makes sense to talk about a market economy at all?”

    A good question – and I think that point is fast approaching.

    But that does not mean that out-of-control intenventionism (such as the demented Central Bank policy of created money from nothing in the desperate effort to get “low interest rates – cheap money”) or the out of control WELFARE STATE creates “State Capitalism” or “Neo Fascism”.

    It actually creates A MESS.

    It is as simple (and as brutal) as that – it does not create a “new system”, it just creates A MESS – a total and (in the end) self destructive mess.

  7. Ian – Kevin Carson sometimes formally denies what you say here. Sometimes he admits that even if there was no state intervention at all there would still be big business enterprises (just as there would still be landowners, includinging “absantee” ones, and so on).

    But then Kevin “forgets” what he has admitted – and we get stupid “Vulgar Marxist” bits of crap such as the post of his that was published here on American Tax Day – a post much of which could have come from the mouth of a “Socialist Worker” newspaper seller.