Rothbard’s Econ Contributions
What are Rothbard’s unique major intellectual contributions? Economists will differ. To some of them I return year after year, without which I would be substantially impoverished. Others are curiosities, but delightfully outrageous socialist balloon-poppers. Each one is worth a professional journal article[...]
The impossibility of applying the calculus (infinitely small steps) to human action.
The impossibility of total utility
The relevance of choice and the irrelevance of indifference curves.
The impossibility of a universal vertical monopoly (not economic calculation).
Neighborhood and even household tariffs (”Buy Jones!”).
The distinction between entrepreneurship (overcoming uncertainty) and gambling (deliberately created risk).
Who bears the tax burden of sales taxes (not just consumers).
Tax exemptions are not implicit subsidies.
The nonsense of “the ability to pay” arguments.
The non-neutrality of any known tax.
Bureaucrats pay no taxes.
The refutation of the single tax.
Bribery as a market tool.
Consider his critique of economic reasoning based on the indifference curves. This is the selected approach of Sir John Hicks and his followers. Hicks, it should be recalled, was the co-winner of the Nobel Prize in 1972. Rothbard wrote in 1956:
“Indifference can never be demonstrated by action. Quite the contrary. Every action necessarily signifies a choice, and every choice signifies a definite preference. Action specifically implies the contrary of indifference.… If a person is really indifferent between two alternatives, then he cannot and will not choose between them. Indifference is therefore never relevant for action and cannot be demonstrated in action.” (Notice this early use of italics. He was afflicted at age 30.)
But it is not simply his general statement of the problem of indifference cures which sticks in the mind. It is his classic examples.
The indifference theorists have two basic defenses of the role of indifference in real action. One is to cite the famous fable of Buridan’s Ass. This is the “perfectly rational” ass who demonstrates indifference by standing, hungry, equidistant from two equally attractive bales of hay. Since the two bales are equally attractive in every way, the ass can choose neither one, and starves therefore. This example is supposed to indicate how indifference can be revealed in action. It is, of course, difficult to conceive of an ass, or a person, who could be less rational. Actually, he is not confronted with two choices but with three, the third being to starve where he is. Even on the theorists’ own grounds, this third choice will be ranked lower than the other two on the individual’s value-scale. He will not choose starvation.
Buridan’s Ass has been in the economic literature since the late-medieval scholastic era. If nothing else, Murray Rothbard ought to go down in history as the economist who at last, after 600 years, kicked Buridan’s Ass into action.
— Gary North. Man, Economy and Liberty: Essays in Honor of Murray N. Rothbard (1989) by Walter Block and Llewellyn H. Rockwell, Jr., pp. 89-109
