Ludwig von Mises Institute, 1974, 58 pgs., index, paperback
This is an excellent expose of the reality of rulers- governments - sovereigns.
Unfortunately the author insists in using the very term rulers use to conceal
their activities - the 'state'. Just substitute the real, living power
(use ruler, sovereign, government as desired) for every place Rothbard writes
'state'. He claims it is this 'state' that is responsible for
what is wrong in political-economy, rather than the rulers- governments. But
the 'state' is an abstract concept developed in western Europe during
the Renaissance to take the place of the medieval concept 'Great Chain of
Being' as the public belief that justifies and legitimizes the power and
actions of the ruler. A study of intellectual history shows that all rulers
claimed legitimacy according to some belief system promoted by intellectuals
that supported them. Rulers were deified, or declared the representative of the
deities, or the strongest warrior, or the legitimate successor according to
dynastic rules, or due to some other belief. Philip Bobbitt in his master work - The Shield of
Achilles - identifies the origin of the abstract concept of 'state' from
which rulers could claim 'reasons of state' to justify their actions. He then
describes the evolution of the content of the doctrine (theory) from 'princely
state' to 'kingly state' to 'territorial state' to 'state nation' to 'nation
state' to welfare state. During each phase leading intellectuals devised
doctrines to show that the current theory justified the contemporary
organizational structure. Prior to its development as a legitimizing concept
during the European Renaissance there was no concept of 'state' separate and
above society. Rather the ruler (or government) was considered an integral
component of society deriving his legitimacy as noted above from within
society, society's beliefs.
This is one of several of Rothbard's books that I am attempting to review. His
theory about government and use of 'state' as a substitute for rulers in
consistent throughout these and his many other publications. I attempt to
indicate the consistgent threads.
Rothbard, Murray - What Has Government Done to Our Money?
Rothbard, Murray - The Mystery of Banking
Rothbard, Murray - A History of Money and Banking in the United States
Rothbard, Murray - Economic Thought Before Adam Smith - Vol 1 of An
Austrian perspective on the History of Economic Thought
Rothbard, Murray - Classical Economics - Vol., II of An Austrian
Perspective on the History of Economic Thought
What the State is Not
Dr. Rothbard begins with description of various concepts he believes are held
by people to explain what the 'state' is in terms of what it does for
Among these, he writes: "With the rise of democracy the identification of
the State with society has been redoubled, until it is common to hear
sentiments expressed which violate virtually every tenet of reason and common
sense such as, "we are the government'". Here he is confusing the
State, with the government in order to claim correctly that government
is not 'we'. He is right that government is NOT 'we' in the sense of society
including all its members. But government is also NOT the State.
He continues: "Briefly, the State is that organization in society
which attempts to maintain a monopoly of the use of force and violence in a
given territorial area, in particular, it is the only organization in society
that obtains its revenue not by voluntary contribution of payment, for services
rendered but by coercion."
This is an excellent description of government itself, but not of the
State. It is government that obtains its revenue by compulsion. Actually
Rothbard's substitution of the abstract concept of 'State' for
government plays right into the hands of govenment that uses this abstract
concept as the source of justification for the very coercive activities
So the State is not what Rothbard says it is not but it is also not what
he thinks it is - see next chapter.
What the State is
In this chapter Rothbard presents an excellent description under the category
he writes: "Man is born naked into the world" et cetera.
His position is that man is the producer of assets (goods and services) by his
own energy and mind. (I stress also his time, which is his personal asset.) The
natural process is voluntary and the exchange of products is mutual. His
elaboration on this process is excellent. He zeros in by quoting Franz
Oppenheimer's distinction in the process for creating wealth between 'economic
means' which are voluntary and 'political means' which are coercive.
I frequently write it thusly: Economics is the allocation by voluntary means of
scarce resources having alternate uses to fulfill human benefits to the maximum
possible. Politics is the allocation by coercive means of scarce resources
having alternate uses to fulfill the desires of the favored individuals and
groups who have the control of those coercive means. Now it is government that
allots to itself the monopoly in the legitimate use of coercive means. And it
uses those coercive means to manipulate and control the allocation process for
its own consumption since it, itself, produces nothing.
But Rothbard does recognize this. Instead he continues by writing: "The
State, in the words of Oppenheimer is the 'organization of the political
means'; it is the systematization of the predatory process over a given
territory." (Skip the role of 'territory' for the moment). It is not the
abstract concept of State that does this but flesh and blood government
(meaning rulers - sovereigns) He summarizes; "The State is an organization
of the political means". NO, the State is the modern western European
abstract concept developed circa 1500 to provide justification in the eyes of
the populations for the claims to legitimate exercise of coercion by rulers
(governments). The creation of this new concept was necessary as the critical
replacement in European thought for the defunct concept "The Great Chain
of Being", which had justified medieval social and political life.
Rothbard continues in confusing things by writing. "The State provides a
legal, orderly, systematic channel for the predation of private property; it
renders certain, secure, and relatively 'peaceful' the lifeline of the
parasitic caste in society." Yes, it does, but it does this in a
conceptual, intellectual, way by being one of many concepts that seek to
legitimize the predation conducted by flesh and blood rulers (governments). And
it is but one of these concepts and didn't exist prior to or outside
How the State Preserves itself
In this chapter Rothbard focuses on the preservation of government (rulers). He
begins with: "Once a State has been established, the problem of the ruling
group or 'caste' is how to maintain their rule". Exactly, the problem is
that of the 'ruling group' and it has existed since the first 'ruling group'
became a part of human societies, long before and without the necessity of
relying on the concept of 'State'.
He hits the bulls eye with this: "For in order to continue in office, any
government (not simply a 'democratic' government must have the support of the
majority of its subjects" and more elaboration on that. This requirement
pertains to ALL human organizations from smallest to largest. His elaboration
on this is excellent (baring references to State). As he points out, the
coercive organs of the ruler that accomplish the predation must be funded by
the very production of the private sector from which they are confiscated. Then
he switches nomenclature by writing correctly: "Therefore, the chief task
of the rulers (note not State) is always to secure the active or resigned
acceptance of the majority of the citizens". Yes, indeed. But the rulers
secure this acceptance by promulgating this abstract concept of 'state' by
foisting off the responsibility for their predation using such terms as
'reasons of state' to justify their actions. He continues correctly to note
that one typical measure employed by rulers is to create 'vested interests' in
the economic favors the ruler can provide by manipulating economic activity.
Then he writes: "For this essential acceptance, the majority must be
persuaded by ideology that their government is good, wise and at least
inevitable, and certainly better than other conceivable alternatives."
WOW, this is exactly what I have been pointing out. The concept of 'State' is
that ideology and it replaced other ideologies. He then discusses
the role of intellectuals in providing the appropriate ideology but
apparently limits this to the idea of 'state' while there have been and are
other ideologies - for instance Communism and Islam. Communism
recognizes the 'state' as the concept that justifies rulers' (ruling class)
coercion and claims the 'state' will wither away under communism. Islam does
not recognize any intermediate political agency between the believers in
society and Allah). He notes correctly that while the rulers need intellectuals
to justify their rule, intellectuals also need rulers to provide them with
livelihood not requiring actual productive work.
In the defining study of the creation and evolution of the concept of 'state,
Philip Bobbitt in his "Shield of Achilles' provides and discusses the
specific roles of specific intellectuals in justifying the form of the 'state'
current to their times. He skips Bobbitt's list but jumps to the professors at
the University of Berlin without naming their important organization - the
Historical School - which was the intellectual support of Bismarck's
unification of Germany under the King of Prussia - aka- Emperor of Germany.
Then Rothbard turns to Karl Wittfogel's critical study in "Oriental
Despotism'. But he does mention and recognize that the despotic ancient
Egyptian and Mesopotamia rulers and political system rested conceptually not on
the modern concept of 'state' but rather deification - the rulers were either
gods themselves, agents of gods, or priests essential to inform the public of
the demands of the gods. Or like Chinese emperors, rulers adhering for their
legitimacy to the "Mandate of Heaven". But he does not recognize that
all these did without any intermediate concept of the 'State'. He does
recognize the existence of the class of intellectuals whose function is to
legitimize the rulers. He descries many of the typical 'ideological devices'
but believes that somehow they were servants of this 'State' ideal.
All this description is excellent and would be more effective it was ascribed
directly to the rulers themselves rather to their own conceptual surrogate -
How the State Transcends its Limits
Again Rothbard provides a passionate but factual description of the excesses of
rulers and of efforts throughout history to limit their power. Just substitute
Ruler for State where ever he employes that term to recognize the reality.
Remarkably, in this chapter he writes the following: "Originally, in
Western Europe, the concept of divine sovereignty held that the kings may rule
only according to divine law, the kings turned the concept into a rubber stamp
of divine approval for any of the kings' actions." Not exactly true. He is
writing about the concept "the Great Chain of Being', which I have
mentioned. But, as he notes, it held rulers to adhere to divine law. The kings
did not turn THAT concept into a rubber stamp, rather, when their actions
(especially in raising funds for war) were severely limited, they overthrew it
and substituted the concept he assumes is a living thing, the State.
It is not the 'state' that is transcending its Limits, rather it is rulers who
have thrown off their previous limits by creating this abstract concept to
justify their expanded power and absence of any limits.
He continues, correctly but with confusing nomenclature: "Certainly, the
most ambitions attempt to impose limits on the State has been the Bill of
Rights and other restrictive parts of the American Constitution, in which
written limits on government became the fundamental law to be interpreted by a
judiciary supposedly independent of the other branches of govenment."
Right in this single sentence he reveals his confusion. First he writes 'state'
being limited, but then he writes that it is government that is being limited
in its specific actions. So which is it. The remainder of his analysis
correctly pertains to what had happened to any limitations on government action
due to adverse interpretations by judicial review. Again he stresses the
necessity for rulers to have 'legitimacy'. He ascribes anthropomorphic
attribuets to his idea of 'state' acting itself, rather than recognizing that
it is rulers (government) that is using the concept of 'state' as an
ideological source of justification. He fingers the judicial system up to the
Supreme Court as a major supporter of expanded government power and gives some
kind words to John Calhoun for his strong objections.
What the State Fears
Again, simply substitute ruler (government) for State in this sentence.
Rothbard claims otherwise correctly, "What the State fears above all of
course, is any fundamental threat to its own power and its own existence."
President Trump is finding out the power of this fear and the lengths to which
the ruling class of government bureaucracies will go to defeat him. And too
many conservatives don't recognize the existential struggle going on now.
How the States Relate to One Another
There are several related misconceptions in this chapter. He opens with this:
"Since the territorial area of the earth is divided among different
States, inter-State relations must occupy much of a State's time and
First, that the earth it now divided among different political entities is a
very new phenomena in human history. Rather, until very modern times vast
territories lay outside any political control, for instance steppe lands in
Eastern Europe and Asia; mountainous areas, frozen areas and of course seas and
Second, again the regions that were controlled by specific human groups were so
held by a wide variety of political entities each doing so with very different
conceptions of their legitimacy to do so and for none of them prior to circa
1500 was the concept a 'state'.
Third, the 'state' is an abstract concept and does not have either 'time or
energy'. His notion is anthropomorphism. In so far as his description about
'rules of law' for 'states', it relates to the period after the Peace of
Westphalia. For instance the Romans had concepts about 'rules of law' with
respect to warfare between non-states or even organized political entities.
Philip Bobbitt devotes much attention to the development of inter-state
relations and defines the activity as 'strategy;.
History as a Race Between State Power and Social Power
In this chapter Rothbard describes history as a struggle between 'social power'
and 'state power'.
My view is that it has been a struggle between rulers and ruled. Or as
Machievelli stated, between those who seek to dominate and those who refuse to
be dominated. Rothbarde defines 'social power' as limited to mankind's efforts
to control nature and 'state power' is 'the coercieve and parasitic seizure of
this production - a draining of the fruits of society for the benefit of
nonproductive (actually antiproductive - rulers." ..
"While social power is over nature, State power is power over man."
First, all societies exercise some, more or less, power over their members,
their power is not limited to control of nature, it includes power over man.
Second, he, himself, notes 'power over man'. Substitute 'rulers' for 'state'
and he is exactly correct.
Again, I believe that by atributing to this 'state' the source of social-
political- economic evil rather than to the rulers themselves, he is
misdirecting attention and abetting their purposes.