Mises Daily – January 6, 2011

January 6, 2011

Mises Daily

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by Murray N. Rothbard

Christopher Beam Takes On Libertarianism
by Robert P. Murphy on January 6, 2011

They say there’s no such thing as bad publicity. Indeed, a recent New York magazine article — with the dubious title “The Trouble With Liberty” — includes pithy quotes from Mises Institute president Doug French, which should appeal to open-minded readers.

But even though the New York author, Christopher Beam, tries to be fair to libertarians, in the end he thinks their worldview is wacko. In the present piece I’ll explain how Beam goes wrong in his critique of libertarianism.

Beam Did His Homework

Although Beam ultimately disagrees with their version of libertarianism, followers of Murray Rothbard should be grateful anytime a popular magazine article carries passages like this:

Ayn Rand has been called the “gateway drug” to libertarianism, but many converts keep toking well into adulthood. Her novels, including 1943’s The Fountainhead and 1957’s Atlas Shrugged, sell more than 800,000 copies a year. Other libertarians credit their conversion to Hayek, fellow Austrian economist Ludwig von Mises (Ron Paul’s personal fave), American free-marketer Milton Friedman, or Austrian-influenced American anarcho-capitalist and father of modern libertarianism Murray Rothbard. Ever since its publication in 1944, Hayek’s The Road to Serfdom has been the anti-regulatory Ur-text.

In addition to including quotes from Doug French, Beam’s research of the various strands of libertarian thought shows that in his mind he wasn’t setting out to write a hatchet job. In fact, Beam didn’t start to annoy me until the fifth page of a six-page article, which is quite an accomplishment.

In Defense of Theft and Murder?

After quoting libertarian comedian Penn Jillette — who before 9/11/01 had written about the overblown threat of airline terrorism in a manner that now seems naïve in retrospect — Beam writes,

Jillette might choose his words differently today. Everyone knows going through airport security sucks, even without “porno-scanners.” But few dispute the need for some line of defense. More-efficient, less-intrusive security would be great. But none at all? Jillette’s tract is a good example of how libertarianism ventures down some fascinating paths but usually ends up deep in the wilderness.

Now, I haven’t read the Penn & Teller book How to Play in Traffic from which Beam quotes, so we don’t know if Jillette is really for “none at all” when it comes to airline security, or if he really had been objecting to government-imposed security measures. (Jillette is a comedian who frequently uses curse words, so it’s possible he didn’t have such fine nuances in mind.)

In any event, the problem with Beam’s critique is that he reduces it to a popularity contest. In other words, Beam isn’t arguing here that Jillette is wrong; rather, he’s saying that few people would agree with him. More generally, Beam’s critique of libertarianism is that it “ends up deep in the wilderness,” i.e., far away from the conclusions reached by most other thinkers. That may well be true, but nobody denies that libertarians are currently in the minority.

The next paragraph is where the trouble really begins:

Same story on issue after issue. Taxation isn’t just a poor allocation of resources; it’s an act of violence. “At least the highwayman would take your money and leave you alone,” says Douglas French, president of the Mises Institute. “The government takes your money, then stands around and tells you what to do with it.” The Federal Reserve doesn’t just restrict the markets; it’s an arrogant monstrosity that should be abolished and replaced by the gold standard — a policy that most economists agree would lead to economic meltdown. War isn’t just bad; it’s a bankrupt excuse to suppress personal freedoms and wield state control that’s never justified by the inciting incident. The North should have let the South exercise its “right to secede,” argues libertarian commentator Lew Rockwell. Conservative Pat Buchanan penned a book in 2008 calling World War II “unnecessary.”

Beam presents no real arguments here; he merely states the libertarian (or, in his view, the extreme libertarian) position on various issues, as if that were a sufficient refutation. Yet, ironically, Beam has already given away the game, as I’ll now explain.

The libertarian (in the tradition of Rothbard) says, “It is a crime if I take someone else’s money, regardless of what ‘good’ I do with it. So that’s why taxation is theft.” There are all sorts of responses nonlibertarians could give, but just about all of them involve some claim that taxation is necessary. So, if the libertarians happen to be right that taxation involves a “poor allocation of resources,” then the statists fail to overcome the libertarians’ principled, moral objection. In other words, it would be a bit weird to say, “Sure, if any private individual ‘taxed’ his neighbors, we would call it robbery. But when the IRS does it, it misallocates resources, and so I have no problem with the practice.”

Or take the issue of war. Beam seems to be OK with people who say that war is “bad,” but apparently you must don a tinfoil hat if you go further and say, “it’s a bankrupt excuse to suppress personal freedoms and wield state control that’s never justified.” Does this seem plausible? Are we supposed to think that bad wars are started by political rulers who don’t have any interest in suppressing personal freedoms or wielding more state control?

Let me make sure my point is clear: There is a strong moral presumption against the practices we call “taxation” and “war,” because they involve systematic acts that would be obvious crimes — i.e., theft and murder — if we analyzed them from an everyday perspective. Now there are various political philosophies that try to neuter this conclusion, yet most of them rely on the crucial plank in their reasoning that taxation and war are necessary evils.

“The standard moral objections to theft and killing don’t magically disappear just because a group of professional liars reclassifies them as ‘taxation’ and ‘national defense.'”

But this is precisely what the Rothbardian libertarian rejects. Knowledge of free-market economic theory, and the study of history, shows the Rothbardian that the politicians’ excuses never justify mass outbursts of theft and killing. Society would prosper in the absence of taxation and war, not collapse. If the libertarian is right in this view, then it easily follows that the standard moral objections to theft and killing don’t magically disappear just because a group of professional liars reclassifies them as “taxation” and “national defense.”

An analogy will make things clearer. Suppose someone in the 1830s wrote an article called, “The Trouble With Liberty,” and discussed the “extremist” views of the abolitionists. Such a writer might argue, “For these radicals, it’s not merely that slavery is an unproductive use of labor. No, these firebrands go further and compare it to kidnapping. Most Americans agree that whipping a slave to death is going too far, but to totally abolish slavery? That’s a bit much.”

A Weak Imagination When It Comes to Money and Banking

Things go downhill for Beam as he then writes,

Libertarian minarchy is an elegant idea in the abstract. But the moment you get specific, the foundation starts to crumble. Say we started from scratch and created a society in which government covered only the bare essentials of an army, police, and a courts system. I’m a farmer, and I want to sell my crops. In Libertopia, I can sell them in exchange for money. Where does the money come from? Easy, a private bank. Who prints the money? Well, for that we’d need a central bank — otherwise you’d have a thousand banks with a thousand different types of currency. (Some libertarians advocate this.) Okay, fine, we’ll create a central bank.

In the first place, Beam has chosen an odd way to attack “radical” libertarianism, by starting from the premise of minarchy. Rothbardians would agree with Beam that it is foolish to expect a “night-watchman state” to stay within its appointed limits. Yet that is hardly a critique of anarchocapitalism; rather it is an argument for it. If a person recognizes that the free market can handle computers and healthcare better than the government, why not let freedom handle law enforcement as well?

Even though it’s not fair to the Rothbardian vision, we can forgive Beam for starting from a premise of minarchy, because that’s what so many self-described libertarians do as well. But then, is it not amazing that Beam thinks he has proven the case for central banking in a mere six sentences?

Suffice it to say, Beam’s leap is unwarranted. In a free-market world — “Libertopia,” if you like — the market would probably once again return to gold or silver (or both) as the actual money. Private-sector mints would take the metal(s) and stamp convenient and hard-to-counterfeit coins, in convenient denominations. So the average shopkeeper wouldn’t need to keep scales on hand to weigh chunks of gold and silver every time a customer bought something.

Furthermore, banks would accept deposits of the commodity money (or monies) and give redemption certificates (i.e., banknotes) or checking-account deposits in return. With this innovation, customers wouldn’t need to lug around pounds of gold when making a large purchase, and they wouldn’t need to buy expensive vaults for their homes.

It’s true, today’s Austrian libertarians are divided on the issue of fractional-reserve banking. Yet there is virtually unanimous agreement that there is no need for a central bank to regulate money and banking. Using Beam’s logic, we could just as well “prove” that there should be a Federal English Board, where a team of experts appointed by the president of the United States (perhaps in conjunction with the British Prime Minister) regulates the content of English-language dictionaries.

After all — continuing with Beam’s logic — you couldn’t have anarchy in the dictionary industry, otherwise some publishers would define up as down and left as right. Nobody would know what any words meant without a government-sponsored cartel of dictionary publishers.

In Beam’s case for a central bank, he is ignoring the fact that government did not invent money. Free individuals in the market settled on gold and silver as common media of exchange, in a process eloquently described by Carl Menger, the founder of the Austrian School.

Beam is correct that some libertarian thinkers have advocated systems of market-based fiat money. Whether or not such systems would work is beside the point. There wouldn’t be “a thousand different types of currency,” any more than our present system — where thousands of institutions can issue their own money orders or certified checks — is one with a thousand different types of currency. There are strong market forces limiting the number of different kinds of underlying money, because the whole purpose of money is to provide a common good against which all other items can be traded.


Beam’s argument for central banking is the model for his similar arguments for government-sponsored poverty relief and schooling. That is, Beam observes that “Libertopia” would not in fact be a utopia, and then immediately deduces that government can help.

Yet this is the crux of the debate. Libertarians deny that government intervention actually makes poor children more educated than they would be in a totally free society. Beam doesn’t grapple with any of their particular arguments; he simply assumes his conclusion and, voila, thinks he has made the case for government schools.

Although it is refreshing to see how much research Christopher Beam obviously put into his article, I hope he goes further and actually reads some of the Rothbardian literature. If Beam still disagrees, then he should explain why.

Robert Murphy is an adjunct scholar of the Mises Institute, where he will be teaching Anatomy of the Fed at the Mises Academy this winter. He runs the blog Free Advice and is the author of The Politically Incorrect Guide to Capitalism, the Study Guide to Man, Economy, and State with Power and Market, the Human Action Study Guide, The Politically Incorrect Guide to the Great Depression and the New Deal, and his newest book, Lessons for the Young Economist. Send him mail. See Robert P. Murphy’s article archives.

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