[cboyack]

I listened to the lecture from Dr. Woods from the Mises University 2012 series this morning where he talks about the cult of anti-Rothbard. I encounter people who dislike Murray Rothbard, and now that he brought it to my attention, even within Austrian Economics, there does appear to be a Hayek camp, and a Rothbard camp. I’m curious why this is? Besides the Mises Institute, there is another organization that I like that also promotes Austrian Economics, but come to think of it, I remember wondering why Rothbard wasn’t mentioned much when I listened to several of their seminar series. Is there some sort of animosity between the two “camps” that I’m not aware of? Is it due to differences in economic theory, or political beliefs?

What are some of the major differences between Hayek and Rothbard? I know Rothbard was Anarcho-Capitalist, and Hayek wasn’t, but neither was Mises.

Thanks,

Andrew

[cboyack]

I used to wonder this myself (and I’m sure there are some here who can provide even greater information).

This article, though, shed a great deal of light on the matter for me, and hopefully will do the same for others.

Edit: The first article was more focused on differences between Mises and Hayek. This excerpt from The Ethics of Liberty by Rothbard throws more light on some differences between Rothbard and Hayek.

[lrcammarosano]

Rothbard follows more in the line of Alfred Jay Nock and Frank Chodorov (no state) than Mises, Hayek and Ron Paul (limited state)

[jmherbener]

After Carl Menger, the Austrian school broke into two lines. The main line followed his causal-realist approach of Menger in the work of Boehm-Bawerk, Mises, and Rothbard. The branch line was inspired by Wieser and continued by Hayek.

Joe Salerno has a seminal article on the difference between the two branches as illustrated by the relationship between Mises and Hayek on the issue of economic calculation in a system of central planning.

http://mises.org/journals/rae/pdf/rae6_2_5.pdf

[mpelkowski]

In line with what RealMises posted above, see this article by Rothbard himself…http://www.mises.org/daily/5342/Do-You-Hate-the-State

[cboyack]

It looks like I have my reading assignments for the next couple evenings.

Thank you Dr. Herbener, and everyone else who recommended various reading material.

[lrcammarosano]

Another easy and rewarding read is For a New Liberty – The Libertarian Manifesto by Murray Rothbard

This book gives you the essence of Rothbard not in a theoretical way like his Man Economy and State or The Anatomy of the State but against an historic and current events backdrop.

[cboyack]

I just finished reading For a New Liberty:The Libertarian Manifesto this afternoon. Fantastic read, and really expands on some of the ideas in the Power and Market portion of Man, Economy, and State.

[lrcammarosano]

The anti capitalist mentality and Liberalism by Mises are also worthwhile as they
covers some of the same ground as Rothbard.

I also really like -One is a crowd and Income Tax -The Root of all evil by chodorov
Chodorov focuses less on economics than Mises and Rothbard

[cboyack]

I haven’t read the Anti Capitalist Mentality yet, but I have read Liberalism by Mises.

I’ve never heard of One is a crowd, but Income tax: root of all evil by Chodorov is on my reading list.

[lrcammarosano]

Here is a link to the audio reading of Rothbard’s For a New Liberty
http://www.youtube.com/watch?v=Xuaej3rnLYI

[cboyack]

Dr. Herbener,

I read the articles you and the others suggested. Very interesting.

As I try to study and learn Austrian Economics here at home, should I dismiss Hayek and focus on the Mises and Rothbard tradition, or are there any aspects of Hayek’s contributions to the Austrian school that you recommend studying?

[miljacic]

Jeff Herbener wrote:
“Joe Salerno has a seminal article on the difference between the two branches as illustrated by the relationship between Mises and Hayek on the issue of economic calculation in a system of central planning.
http://mises.org/journals/rae/pdf/rae6_2_5.pdf ”

Mr. Herbener (or anyone else interested), could I ask for a tiny help here… I tried to read this article, since I’m interested in understanding differences between the trio Mises-Rothb-Hayek, but somehow I couldn’t get much from this text… maybe it’s the written style or something else, but I found it mostly non-readable/understandable and kinda watered down relative to the writing styles of any of the three masters (who I have less trouble reading)… lot of words and assumptions and comparisons but little condensed essence. So… can anyone condense at least some of the points of this article (so that I can lean on that and try to read once again)? Please restate in a simple way one big difference between these two branches (among, I guess, several differences)? Can description of these various differences be simplified by stating their basic, deep, mental attitudes or points of view? Thank you very much.

[jmherbener]

One difference between the Mises-Rothbard branch and the Wieser-Hayek branch of Austrian economics can be seen in their different arguments against central planning.

The M-R branch argues that entrepreneurs in a market economy can make economizing decisions for society at large by appealing to economic calculation of net income and net worth. Entrepreneurs can appraise the effect their production decisions will have in the future on their enterprises’ net income and net worth. In socialism, the central planners cannot appeal to economic calculation because the state owns all factors of production, therefore, there can be no prices of factors of production, therefore, there can be no calculation of net income and net worth and, therefore, no appraisement of the effect of their decisions in the future.

The W-H branch argues that entrepreneurs can make economizing decisions in a market economy because prices contain all the relevant information condensed into a useable form. The central planners cannot make economizing decisions because they lack the necessary information.

These two different views of the problem of central planning imply different views of the working of a market economy.

Take a look at Hans Hoppe’s article on this point.

http://mises.org/journals/rae/pdf/RAE9_1_13.pdf

[miljacic]

Mr. Herbener, thank you for the help, this article was much more clear and direct.

However, I must add that the article was also very surprising to me. Either am I profoundly misreading Hayek, or the author.

Allow me to comment on a point or two. I’m putting the “…..” around quoted parts, and then add my own reading of Hayek.

1. “Hayek’s solution is not private property, but the decentralization of the use of knowledge.”

Yes, but he didn’t mean to actually avoid private property in the real world… quite contrary, private property is THE essential spontaneously emerged mechanism to enforce coordinated use of dispersed information. Remove private property and the wide social order would break down since there isn’t anything else known that could replace it. So (I think) Hayek is saying that private property is so far the only functional instrumentation of wide social order, but also that it does not need to be the most fundamental theoretical concept… underneath this concept, the coordination of dispersed information is even more fundamental. Private property is one possible instrumentation, maybe the only one possible, maybe not – nothing else has historically emerged.

2. “First, if the centralized use of knowledge is the problem, then it is difficult to explain why there are families, clubs, and firms, or why they do not face the very same problems as socialism.”

This is, for me, a very strange misunderstanding. Hayek was, seemingly, emphasizing that there are two separate orders of coordinating information. One is happening in the visible, perceptible world around each individual, the world of more-or-less directly interacting people, so yes, families, clubs, insides of individual firms. I’d add clans, tribes, groups of friends etc. These do not critically require private property to coordinate information, because more-or-less direct human interaction is enough. Then there is another order of coordinating information that is happening in the vast social order where direct informational exchange is not enough by large… so entities like private property become a must. This clear separation of the two orders of coordinating information is what Hayek is emphasizing all along. Has Mr. Hoppe missed this very important point? For analogy, individual atoms and molecules have completely different properties when assembled into solids and liquids – the famous “more is different”.

I could go on and on further down this article, as criticisable interpretations and conclusions seem to abound, but this seems enough for now. Either I am completely lost with this article, or the author, Mr. Hoppe is very, very wrong.

So, at the moment, I don’t understand if Hayek branch is differing from Mises branch on some very concrete point.. apart from simply “digging deeper” to find some deeper theoretical goodies and a wider vista. It seems to me that these are two self-consistent historical lines of reasoning that move on separately, each in its own groove, but not really disagreeing whenever they overlap.

Anyway, thank you, now it’s back to Mr. Salerno’s paper from above, second trial.

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