I'd like to start off by saying that the Austrian Scholars Conference has been a very fruitful
outlet for me over the past ten years. I gave a paper here in 2002 that later turned into
my book, The Church and the Market, in 2005. That actually ended up winning me a fairly
substantial book prize which, as a matter of justice, I shared some of the proceeds
from with the Mises Institute. I gave a paper on the military-industrial complex that turned
I've turned into a chapter in my book Rollback. I answered a critic here once and that turned
into an article in the Catholic Social Science Review. So it really makes me, my natural
inclination is to be a lazy bum and then this conference comes along and it makes the lights
of fire under me. So it's good to do that. Well, today my ambitions are at once less,
I don't know, perhaps elevated and yet at the same time maybe in the long run even more
are significant than otherwise because I want to sort of inspire other people to do things
this time. And I want to talk in particular about something that Rothbard wrote years
ago and my inspiration here comes from this collection that's edited by David Gordon called
Strictly Confidential. It's the Volcker Fund memos that Rothbard wrote. Now the Volcker
The Volcker Fund, of course a lot of you know, the William Volcker Fund, paid Mises' salary.
It made possible the writing of Man Economy and State.
It was a group of businessmen with some money, and they helped to fund what little libertarian
scholarship was taking place at that time.
Rothbard wrote a number of memos for them that are absolutely fantastic.
I sort of thought, I'll be honest with you, when this book came out, I kind of thought,
all right, now maybe they're just scraping the bottom of the barrel of the Rothbard papers.
We all have this Rothbard fix that needs to be satisfied. We need a Rothbard book every
two years. But I finally flipped through one day. I got a Kindle for the first time. I
wanted to put stuff on it, so I figured I'd put this on.
So I get to Rothbard's book review of a two-volume history of the American Republic by George
de Houssard and Thomas Holbert Stevenson. And he lays into this book like you would not
Believe, page after page and on a Kindle of course you don't know ahead of time how long
a given chapter is and I finally said, how long does this go on? It goes on for over
a hundred pages. So I want to start off just, really what I want you to do is if nothing
else, just read this memo and you can get Strictly Confidential here in the bookstore,
You can get it online for free in various formats. Look at this memo. It's unbelievable
that Rothbard had this in his files for years and never thought maybe it might be worth
publishing as a monograph because it is indirectly a recommendation of what you should do if
you want to really tell the American story. So I want to just start off by, I want to
read you just a passage almost at random to give you a hint of the flavor and verve of
So, he says,
Monroe was not handpicked by Madison. Contrary to de Houssard, there was a great deal of enmity there.
Furthermore, de Houssard omits the crucial struggle between Monroe and William H. Crawford
for the presidential succession in 1816. Monroe, a former deep-dyed Republican,
now a bipartisan Federalist type, defeated Crawford, the candidate of the old Republican forces.
Crawford was supposed then to succeed Monroe. This was the general agreement.
In the Monroe administration such men as Adams and Clay had prominent roles and in 1824 Monroe
took the crucial anti-Crawford step of refusing to name his successor and refusing even to
uphold the old caucus system, where Crawford would have won renomination easily. Thus Monroe
completed his final betrayal of the old cause. None of this penetrates to de Hussard, who
hardly knows of Crawford's existence, much less of the principles and the cause that
he represented.
Now Rothbard was an economist by training. I hasten to remind you. He's recommending
sources constantly to the objects of his scorn. So talking about colonial times, simply being
told that many people could vote is too fuzzy and imprecise. There should be more use of
recent voting studies, of which Rothbard recommends two. He says the ordinance of 1785 was a dictatorial
Controversial intrusion into the western region, which set too high a minimum land sale and
price thus restricting settlement, and also enforced rectangular surveying, thus forcing
the purchase of sub-marginal land within an otherwise good rectangle, instead of conforming
as in the southern methods of surveying to the natural topography of the land in question."
I bet you overlooked that about the Ordinance of 1785.
Duhuzar should consult, he apparently had some aside about the Magna Carta and it only
applied to the Barons, wasn't very significant. He says, no, no, no, Duhuzar is too revisionist
on the Magna Carta. He should consult the recent swing back to the high importance of
the Magna Carta in such works as Faith Thompson and R.L. Perry. And then he goes on and says,
now, okay, so it's bad enough we get insufficient mention of U.S. imperialism over Hawaii, but
But there is no mention at all of the U.S. Samoan Treaty for a naval base in Samoa and
its vicissitudes in the Senate in the 1870s, the U.S. joining the Madrid Convention in
1880, the Berlin Game Treaty with China on immigration or its revision in 1880. There's
nothing at all on the Freling-Heisen-Zavala Treaty of 1884. And it just goes on in this
way and I mean there's just so much. So then he's talking about the 1920s and that period
He says there is no mention whatsoever of the institution of the AMA quasi-monopoly
over medical monopoly following the Flexner Report.
There's nothing on Sacco and Vanzetti, there's no Scopes trial, there's no Holmes-Brandeis
dissents and their legal philosophy, nothing on the Railway Labor Act, then he mentions
Supreme Court cases, the Shepherd-Towner Act, the founding of the FBI, nothing.
So it's just awesome to read this even if you don't want to pursue anything that he
implicitly recommends you pursue.
I just wanted to give you a flavor of this, of just how knowledgeable this guy is.
I wrote to Lew Rockwell after I read this and I said, I feel like I know no US history at all
after reading this memo.
But my favorite thing is, he does somewhat criticize the ideological bias of the authors,
but his real criticism is that they have no overall big picture understanding at all.
at all. It's just a dry chronicling of events that seems to conform to the typical textbook
retelling of the story. But he does pinpoint some, at least implicit, ideological commitments
of the authors that he's unhappy with. But my favorite is he says, the authors appear
to approve of the public library movement. He's zeroed in on how unsound they are. What's
But also great though about this memo is not only that it's implicitly recommending all
kinds of research projects. There are dissertation topics in here. I don't want to hear any more
caterwalling about, I don't know what to write about. All right, then read this thing. You'll
have plenty to keep you busy. But also he's implicitly recommending how history ought
to be done. So for example, like Rothbard's overall view, the way he approaches history
as he explains to us in the introduction to his four volume series Conceived in Liberty
is liberty versus power. That's his overarching theme and that's how he sifts through the
material. Now he doesn't say everybody has to do it this way, but this is a particularly
fruitful path and has been for him because it means that he always expects the state
to be getting away with something. So even the most apparently benign state actions,
he's looking for what's really going on here. So for example, it's because of that
Rothbard looks at the civil service reform movement of the late 19th century, later 19th
century that you would think is not really of that much interest. But Rothbard immediately
realized this is a rotten movement because instead of the, he loved the wonderful old
system that they smeared as the spoil system where the victor would come in and fire everybody
and replace them with his cronies. Okay, that's great because we get rid of all the, we don't
let these people get entrenched, we clear them out, we replace them with other dead
Beats, and that's the best we're going to do in this situation, where civil service
reform freezes these people in place.
You can't just fire them.
So Rothbard says, so notice what the consequences of the Pendleton Act of 1883 are going to
be.
The consequences are it's not like all of a sudden now nobody's going to have cronies
anymore, just that now you can't get rid of the old cronies, so if you're going to reward
your cronies, you have to come up with new jobs for them.
So now there's going to be a ratchet effect upward in government employment.
You can't clear out the other ones and replace them, you've got to add new ones.
So if you weren't constantly looking for what are these people doing, how are they encouraging
the growth of government?
You might have missed that.
But what he recommends, first of all, is don't just thoughtlessly accept the officially given
rationale for something.
Ask the question, who lobbied for this thing?
So he's not saying, by the way, that any environmental regulation or consumer product regulation
is necessarily always and exclusively a cartilaging device by existing competitors to keep other
people down, although it may well be that to some people.
It's also the case, people do, there are consumer advocates who do advocate these things
for what they consider to be pure motives.
There are environmentalists who do purely recommend environmental regulation, but it's
the old Bruce Yandel bootleggers and Baptists thesis that the bootleggers and the Baptists
were both in favor of prohibition, but not for the same reasons.
Well likewise here, Rothbard wants to know, how come when talking about the conservation
movement, which he barely covers, we get the author, we get no mention of the economic
interests pushing for it? If you withhold some land, if you give it to the U.S. government,
that increases the land prices of the remaining lands. Obviously there are people who are
going to lobby for this. He doesn't mention Jay Cooke's maneuvering to enact a national
Bank Act, so as to provide a guaranteed bank market for Cook's government bonds.
He says that de Huizar is biased in favor of interventions in Latin America to protect
American investments, but he never points out who these investors were and what kind
of pressure, what forms of pressure they put on the U.S. government.
He also says that the munitions makers need to come under scrutiny.
Don't just give me all people, American citizens favored preparedness.
Well, which citizens, Rothbard says. He says that de Houssard says the National Security
League around the time of World War I consisted mainly of private citizens wanting to strengthen
the armed forces of the United States. Yes, indeed, but which private citizens, Rothbard
says, the munitions makers who reaped contracts from big arms budgets. And then he recommends,
he says, read the speech in Congress by Representative Clyde Taverner in 1915 on the economic interests
is represented in the Navy League. So he's dug that up somehow. Then he reminds us historians
know almost no economics. So they fall prey to whatever the reigning orthodoxies happen
to be. So if the orthodoxy is that the gold standard causes depressions, that's what they
go for. They have no basis for knowing any better. So I wrote an article for the Quarterly
Journal some years ago on what Austrian economics can teach historians and why we've got a certain
Leg Up. So this particular author accepts every welfare state expansion at face value. He
never connects depressions, or hardly ever, with preceding credit expansion. His farm
policy biases are annoying. He says that two of the causes of the Great Depression were
overproduction and the depression among farmers, which reduced their purchasing powers, a typical
He even defends wildcat banking as leading to increased growth and prosperity, and thereby as Rothbard says, unwittingly adopting the most egregious fallacies of the present day Keynesians.
And then finally, war propaganda. Now war propaganda is where the historian has really got to aim that laser beam.
Because it's just always phony, and it's very bad for scholars to fall for. In fact, after World War I, we all know the League of Nations was formed,
of Nations was formed, but lesser known is that the Committee on Intellectual Cooperation of the League of Nations was formed.
That was formed with the idea that intellectuals ought to be above all this nationalistic bickering,
and ought to be above some of the crude propaganda, portraying the Germans as barbarians and all that.
We're intellectuals, we're men of reason, we ought to be above this.
And the idea of that committee was to prevent that sort of nationalistic parochialism from occurring again.
and for the same sort of reason we want to re-evaluate war propaganda and Rothbard is
very skeptical of course of all the given rationales for the various U.S. wars so he goes through
them all.
The Mexican War, he remembers that the 1819 Adams-Onise Treaty had said that the southern
boundary of Texas is the Nueces River and then after the U.S. got Texas then it just
threw that treaty out the window and said no, no, no, from now on we're going to say
that it's the Rio Grande.
And then, well, that was the whole dispute, was precisely over that.
And so he gives a very good overview of all this stuff.
But then talking about the Spanish-American War, like we all know that, you know, the
Maine and a lot of the propaganda there.
And he goes through and eviscerates all this stuff in great detail.
But then he'll just ask questions that you never even thought of before, like the DeLome
letter in which the Spanish minister to the U.S. insulted McKinley and this contributed
to some of the war fever.
Rothbard reminds us, of course, that the New York Journal that published this
stole the DeLomme letter from the post office. Why were they never prosecuted for that?
I mean, just good questions, right? Why do people not ask?
And then finally, because I know I just got the one-minute sign, I think the most urgent task
right now
for Rothbardians who are doing history is to go back and look again at the 19th
century panics
because now that we're really got the Fed right where we want it,
they're coming back with, oh, but the 19th century was terrible, you had booms and
and you certainly don't want to go back to that. Now Rothbard already gave us a great
work on the Panic of 1819 but there's a lot more where that came from and we need to see
more work done on that and at the Mises Institute last year I gave almost an hour talk on this
subject on economic cycles before the Fed and I made up a resource page on my website
with some of the sources we do have in the Austrian tradition right now on these topics
along with my own video and that's at tomwoods.com slash panics
I'm out of time but
look at this thing and don't ever complain you have nothing to do again
alright thank you