Murray Rothbard on Adam Smith

28 December, 2016 at 16:03 | Posted in Economics | 4 Comments

Adam Smith (1723-90) is a mystery in a puzzle wrapped in an enigma. The mystery is the enormous and unprecedented gap between Smith’s exalted reputation and the reality of his dubious contribution to economic thought …

The problem is not simply that Smith was not the founder of economics.

81979The problem is that he originated nothing that was true, and that whatever he originated was wrong; that, even in an age that had fewer citations or footnotes than our own, Adam Smith was a shameless plagiarist, acknowledging little or nothing and stealing large chunks …

Even though an inveterate plagiarist, Smith had a Columbus complex, accusing close friends incorrectly of plagiarizing him. And even though a plagiarist, he plagiarized badly, adding new fallacies to the truths he lifted … Smith not only contributed nothing of value to economic thought; his economics was a grave deterioration from his predecessors …

The historical problem is this: how could this phenomenon have taken place with a book so derivative, so deeply flawed, so much less worthy than its predecessors?

The answer is surely not any lucidity or clarity of style or thought. For the much revered Wealth of Nations is a huge, sprawling, inchoate, confused tome, rife with vagueness, ambiguity and deep inner contradictions.

Not exactly the standard textbook presentation of the founding father of economics …



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  1. Q: “The historical problem is this: how could this phenomenon have taken place with a book so derivative, so deeply flawed, so much less worthy than its predecessors?”
    A: “Because it came along at the right time to serve as a useful political implement for ascendent economic interests.”
    See, e.g., “Debt: The First 5000 Years”, and “The Great Transformation”.
    Consider “the standard textbook presentation” of the origins of money:
    “In all countries, however, men seem at last to have been determined by irresistible reasons to give the preference, for this employment, to metals above every other commodity. Metals can not only be kept with as little loss as any other commodity, scarce any thing being less perishable than they are, but they can likewise, without any loss, be divided into any number of parts, as by fusion those parts can easily be reunited again; a quality which no other equally durable commodities possess, and which more than any other quality renders them fit to be the instruments of commerce and circulation. ”
    — Wealth of Nations, I.4.4
    Then consider, a mere six paragraphs later:
    “For in every country of the world, I believe, the avarice and injustice of princes and sovereign states, abusing the confidence of their subjects, have by degrees diminished the real quantity of metal, which had been originally contained in their coins….By means of those operations the princes and sovereign states which performed them were enabled, in appearance, to pay their debts and to fulfil their engagements with a smaller quantity of silver than would otherwise have been requisite. It was indeed in appearance only; for their creditors were really defrauded of a part of what was due to them.”
    — Ibid. I.4.10
    The first passage presents a metalist theory of money. The second passage presents a chartalist theory of money. The argument in each passage contradicts the argument in the other.
    The only point in common is that each passage independently implies an argument against the role of the state in the creation and management of the money supply.
    If you are looking for a consistent economic theory, clearly it isn’t here. If, on the other hand, you are looking for arguments to bolster industrialist-friendly public policy, bingo.

  2. “Not exactly the standard textbook presentation of the founding father of economics …”

    … and not one specific example in the excerpt, that might support any of Rothbard’s claims about Smith’s behavior.

    Any specific examples elsewhere in the book?

  3. On the other hand, Murray Rothbard was a terrible economist.

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