David Friedman <d...@best.com>

Vincent has, I gather, withdrawn from the argument on the grounds that my
attack on Rothbard's attack on Smith is obviously due to malice and bias
on my part; how he can know that is true without first finding out whether
what I am saying is true I have not yet figured out.

I thought that before ending my side of the argument, it would be worth
summing up my reasons for believing that the relevant part of Rothbard's
book (the discussion of Smith, with associated references to Cantillon and
Turgot) is biased, containing a mixture of error and deliberate
misrepresentation--my reasons, in other words, for regarding it as a
hatchet job.

For any who missed the earlier posts, I believe the sequence (some steps
contained more than one post) was:

Victor Cook posts some assertions about Smith, Cantillon and Turgot.

I responded, arguing that Victor's comments on Cantillon and Smith were
mistaken (I had not yet looked at Turgot)

Victor, in his response, mentioned Rothbard's book in a fashion that led
me to suspect (correctly, as it turned out) that Victor's opinions were
based entirely on Rothbard, not on Smith, Cantillon and Turgot, whom
Victor does not seem to have read.

In my response I referred to Rothbard's discussion of Smith as a "hatchet
job," on the basis of Victor's summary of it (and my previous knowledge of
Rothbard); at that point I had not yet located a copy of Rothbard's book.
I also took Victor to task for making confident statements about authors
he had not read, based solely on a biased account by someone else.

Victor, in his response, accused me of being unreasonable in condemning
Rothbard's book without reading it; I responded that Victor had condemned
Smith without reading him, and on the basis of a hostile, not a friendly,
summary. I also provided a lengthy quote from Turgot, demonstrating that
Turgot's views on public schooling, which neither Victor nor Rothbard
mentioned, were very much worse than Smith's views, which Victor (and his
source, Rothbard) condemned. I also provided more examples of misleading
statements in Rothbard about Smith. By that point I had located copies of
Rothbard's book and two books containing translations of Turgot.

Victor decided that arguing with me was a mistake, and announced his
decision not to do any more of it. Whether he has taken any steps to
determine whether his previous assertions about Smith et. al. were true I
do not know.

Herewith a final summary of my conclusions:

1. Cantillon

At one point in the chapter, Rothbard says that Cantillon "was not a
consistent free trader internally just as he was not in the foreign trade
area." Later, however, he writes that "While he inconsistently suggested,
in accordance with the state-building notions of the age, that the king
should amass treasure from a favorable balance of trade, the entire thrust
of Cantillon's work was in a free trade, laissez-faire direction." He does
not mention Cantillon's discussion of how some trade injures one of the
trading partners for the benefit of the other, or his endorsement of trade
regulations designed to maximize the inflow of money to the country. Nor
does Rothbard mention anywhere I could find Cantillon's belief
that an inflow of treasure would benefit the economy as well as the King.

In general, I think Rothbard's discussion of Cantillon is mildly
misleading but not to the point of dishonesty or clear error--I was misled
in that by Vincent's summary of Rothbard, which is what I was originally
responding to.

2. Smith, Turgot, and public education

Rothbard refers to Smith's "call for government-run education." He claims
that it was Smith's desire to see government foster a martial spirit, and
inculcate obedience to government among the populace, that motivated that call.

This is in part false and in part misleading. To begin with, Smith did not
call for government-run education. He offered arguments both for and
against government education, and his conclusion, which Rothbard does not
mention, was that subsidizing the education of the masses would be a
legitimate government activity, but that it would be equally legitimate,
and might be better, to leave education entirely private.

Furthermore, Rothbard's reference to "martial spirit" is highly

"But the security of every society must always depend, more or less, upon
the marital spirit of the great body of the people. In the present times,
indeed, that martial spirit alone, and unsupported by a well disciplined
standing army, would not, perhaps, be sufficient for the defence and
security of any society. But where every citizen had the spirit of a
soldier, a smaller standing army would surely be requisite. That spirit,
besides, would necessarily diminish very much the dangers to liberty,
whether real or imaginary, which are commonly apprehended from a standing
army. As it would very much facilitate the operations of that army against
a foreign invader, so it would obstruct them as much if unfortunately they
should ever be directed against the constitution of the state."

Or in other words, Smith's argument on the virtues of a martial spirit is
the same as the argument often offered for the right to bear arms. It
makes a standing army less necessary, and it means that if a standing army
ever tries to take over, the people will be able to stop it. That is very
nearly the opposite of what Rothbard implies.

Smith goes on, concerning the virtues of a martial spirit, to write:

"But a coward, a man incapable either of defending or of revenging
himself, evidently wants one of the most essential parts of the character
of a man. ...   Even though the martial spirit of the people were of no
use towards the defence of the society, yet to prevent that sort of mental
mutilation, ....  would still deserve the most serious attention of
government ...   ." (Bk V Ch1 part III art III)

This may or may not be correct, but it is at the opposite pole from the
position Rothbard is attributing to Smith--in favor of individuals
standing up for themselves, not being obedient.

So far, Rothbard's account is consistent with either of two
explanations--that he was deliberately dishonest or that he had never
really read the book he was criticizing, merely skimmed it for quotes
suited to his purposes.

What makes Rothbard's bias particularly striking is the contrast of Smith
with Turgot. I have already posted Turgot's argument, directed to the King
of France (when Turgot was finance minister of France), in favor of
establishing centralized government control over the whole educational
system. Rothbard discusses Turgot at length, and favorably--but somehow
fails to mention that particular argument.

3. Smith's value theory:

This is a complicated subject. Rothbard misrepresents, probably through
lack of understanding, Smith's position, but establishing that would
require more than I intend to write for this post. Anyone interested
may want to look at my lecture notes on _The Wealth of Nations_,
webbed at

http://www.best.com/~ddfr/Academic/Course_Pages/History_of_Thought_98...

and

http://www.best.com/~ddfr/Academic/Course_Pages/History_of_Thought_98...

and contrast them (and the original) to Rothbard's description.

4.  Smith, free trade, and wool:

Rothbard objects that Smith was not really a free trader, and offers as
one example his support for export taxes on wool. There are two things
wrong with this:

A. Smith--like Cantillon and Turgot--was not an anarchist; all of them
believed in a government providing (at least) national defense and paying
for it with taxes. That leaves them with the problem of picking the least
bad form of taxation. Smith offers a rather sophisticated argument
(involving the theory of joint production) for why an export tax on wool
would have relatively little effect on quantity or quality of wool
produced, and hence why it is a relatively innocuous tax.

What makes Smith a free trader is that he regards the effect on the
economy of import and export taxes--including that one--as bad, a cost of
raising needed money, not a policy objective. The difference between him
and Turgot was not that one believed more in the virtues of free trade
than the other, but that Turgot (along with other physiocrats) thought the
ideal system of taxation would collect all of its revenue from one tax, on
the net produce of land, while Smith discusses the advantages and
disadvantages of a wide range of alternative taxes--including revenue
tariffs.

B. Rothbard does not mention that at the time Smith was writing the export
of wool was a criminal offense, which the government tried to prevent by
extensive regulations over the wool trade. What Smith is actually
advocating is thus a sharp reduction in government interference with
trade, although not a total elimination of it. Rothbard has to have known
that, and I do not see any way of interpreting his failure to mention it
as due to anything but deliberate dishonesty--the attempt to mislead his
reader by omission.

5. Other claims about Smith:

Rothbard makes a variety of other assertions about Smith's views for which
he provides no support, and which I suspect are false, since I cannot find
anything in _The Wealth of Nations_ to support them. I have invited
Vincent to provide support for them, but he does not seem interested in
the project.

6. The general tone of Rothbard's comments on Smith.

I think anyone reading the chapter has to conclude that Rothbard's purpose
is to attack both Smith's importance as an economist--in part by correctly
pointing out that many of his ideas appear in earlier works, in part by
correctly, in part by incorrectly, criticizing his ideas--and his claim to
be a libertarian. Having such a purpose is not necessarily a bad
thing--although I think the tone is strong enough to make a prudent reader
suspect that the author may be letting the conclusions he wants to reach
bias his arguments. But the combination of that purpose with extensive
misrepresentation of Smith, at least some of it clearly deliberate, seems
to me to justify my description of that part of Rothbard's book as a
hatchet job.

I should add that I have no opinion of the bulk of the book, since I have
not read it and it deals with people I know much less about than Smith.
The sections I have read say some things that are interesting and true and
some things that are interesting and might be true. But from looking at
Rothbard's discussion of Smith, which is the one part I am most competent
to judge, I conclude that Rothbard's discussion is in general not to be
trusted, and that I would therefore have to go through the primary sources
in some detail to determine which parts of his account are true and which
are not. I may end up doing so for Cantillon and Turgot, who are
interesting, but probably not for the earlier writers.
--
David Friedman
D...@Best.com
http://www.best.com/~ddfr/
"No man is secure in his life, liberty or property
while the legislature is in session"