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murray rothbard

Left-liberal intellectuals are often a wondrous group to behold. In the last three or four decades, not a very long time in human history, they have, like whirling dervishes, let loose a series of angry complaints against freemarket capitalism. The curious thing is that each of these complaints has been contradictory to one or more of their predecessors. But contradictory complaints by liberal intellectuals do not seem to faze them or serve to abate their petulance—even though it is often the very same intellectuals who are reversing themselves so rapidly. And these reversals seem to make no dent whatever in their self-righteousness or in the self-confidence of their position.


In the late 1930s and early 1940s, the liberal intellectuals came to the conclusion that capitalism was suffering from inevitable “secular stagnation,” a stagnation imposed by the slowing down of population growth, the end of the old Western frontier, and by the supposed fact that no further inventions were possible. All this spelled eternal stagnation, permanent mass unemployment, and therefore the need for socialism, or thorough going State planning, to replace free-market capitalism. This on the threshold of the greatest boom in American history!


During the 1950s, despite the great boom in postwar America, the liberal intellectuals kept raising their sights; the cult of “economic growth” now entered the scene. To be sure, capitalism was growing, but it was not growing fast enough. Therefore free-market capitalism must be abandoned, and socialism or government intervention must step in and force-feed the economy, must build investments and compel greater saving in order to maximize the rate of growth, even if we don’t want to grow that fast. Conservative economists such as Colin Clark attacked this liberal program as “growthmanship.”


Suddenly, John Kenneth Galbraith entered the liberal scene with his best-selling The Affluent Society in 1958. And just as suddenly, the liberal intellectuals reversed their indictments. The trouble with capitalism, it now appeared, was that it had grown too much; we were no longer stagnant, but too well off, and man had lost his spirituality amidst supermarkets and automobile tail fins. What was necessary, then, was for government to step in, either in massive intervention or as socialism, and tax the consumers heavily in order to reduce their bloated affluence.


The cult of excess affluence had its day, to be superseded by a contradictory worry about poverty, stimulated by Michael Harrington’s The Other America in 1962. Suddenly, the problem with America was not excessive affluence, but increasing and grinding poverty—and, once again, the solution was for the government to step in, plan mightily, and tax the wealthy in order to lift up the poor. And so we had the War on Poverty for several years.


Stagnation; deficient growth; over-affluence; over-poverty; the intellectual fashions changed like ladies’ hemlines. Then, in 1964, the happily short-lived Ad Hoc Committee on the Triple Revolution issued its then-famous manifesto, which brought us and the liberal intellectuals full circle. For two or three frenetic years we were regaled with the idea that America’s problem was not stagnation but the exact reverse: in a few short years all of America’s production facilities would be automated and cybernated, incomes and production would be enormous and superabundant, but everyone would be automated out of a job. Once again, free-market capitalism would lead to permanent mass unemployment, which could only be remedied—you guessed it!—by massive State intervention or by outright socialism. For several years, in the mid1960s, we thus suffered from what was justly named the “Automation Hysteria.”


By the late 1960s it was clear to everyone that the automation hysterics had been dead wrong, that automation was proceeding at no faster a pace than old-fashioned “mechanization” and indeed that the 1969 recession was causing a falling off in the rate of increase of productivity. One hears no more about automation dangers nowadays; we are now in the seventh phase of liberal economic flip-flops.


Affluence is again excessive, and, in the name of conservation, ecology, and the increasing scarcity of resources, free-market capitalism is growing much too fast. State planning, or socialism, must, of course, step in to abolish all growth and bring about a zero-growth society and economy—in order to avoid negative growth, or retrogression, sometime in the future! We are now back to a super-Galbraithian position, to which has been added scientific jargon about effluents, ecology, and “spaceship earth,” as well as a bitter assault on technology itself as being an evil polluter. Capitalism has brought about technology, growth—including population growth, industry, and pollution—and government is supposed to step in and eradicate these evils. It is not at all unusual, in fact, to find the same people now holding a contradictory blend of positions 5 and 7 and maintaining at one and the same time that (a) we are living in a “post-scarcity” age where we no longer need private property, capitalism, or material incentives to production; and (b) that capitalist greed is depleting our resources and bringing about imminent worldwide scarcity. The liberal answer to both, or indeed to all, of these problems turns out, of course, to be the same: socialism or state planning to replace free-market capitalism.

The great economist Joseph Schumpeter put the whole shoddy performance of liberal intellectuals into a nutshell a generation ago:

Capitalism stands its trial before judges who have the sentence of death in their pockets.

They are going to pass it, whatever the defense they may hear; the only success victorious defense can possibly produce is a change in the indictment.

And so, the charges, the indictments, may change and contradict previous charges—but the answer is always and wearily the same.