I wrote an article on Austrian School economist Murray Rothbard. I argued that one of the reasons why tenured Austrian School economists want to distance themselves from him, is his writings on conspiracies in American history.
Rothbard was quite clear about his commitment to apply Austrian economics’ theories of human action to the topic of conspiracies. He wrote this defense of the conspiracy view of history in 1977. He began with a description of the knee-jerk reaction of Establishment intellectuals.
Anytime that a hard-nosed analysis is put forth of who our rulers are, of how their political and economic interests interlock, it is invariably denounced by Establishment liberals and conservatives (and even by many libertarians) as a “conspiracy theory of history,” “paranoid,” “economic determinist,” and even “Marxist.” These smear labels are applied across the board, even though such realistic analyses can be, and have been, made from any and all parts of the economic spectrum, from the John Birch Society to the Communist Party. The most common label is “conspiracy theorist,” almost always leveled as a hostile epithet rather than adopted by the “conspiracy theorist” himself.
THE HISTORICAL GUILD
This brings up the issue of the academic guild. Every guild has rules and regulations. It has above all a system of screening. The guild screens out people who do not hold to the standards enforced by the guild. The guild attempts to define its own practices as the only true practices that are acceptable to the guild, and which should be acceptable by society. Any practitioner who deviates from the standards announced by the guild, and above all, systematically enforced by the guild is automatically defined as some sort of deviant. The representatives of the guild warn the public not to accept the conclusions, practices, or presuppositions of anyone, and especially any rival group, that dares to call into question the conclusions, practices, and presuppositions of the guild.
The guild dismisses all suggestions that it is operating in terms of self-interest. It assures the public that it only has the interests of the public at heart. It is pursuing its goals in order to defend the public from unscrupulous operators who seek to defraud the public. For this reason, and only for this reason, the guild insists that it is necessary for the government to intervene and prevent those who offer opposing opinions, practices, and above all, lower prices. The public needs protection from charlatans, the guild insists, and in order to help the public, the guild calls upon politicians and bureaucrats to establish rules, which means rules written by the guild, to restrict entry into the field of study or operations presently dominated by the guild.
The guild seeks to define legitimate practices, presuppositions, and concepts in terms of the prevailing standards of the guild. It is this definition of legitimacy which is central to the promotion of the guild’s interests. The guild must deflect all criticism of the guild that is based on a careful study of cause-and-effect with respect to the economic results of the guild’s recommended political measures. Anyone who follows the money, from the effects of the regulations back to the bank accounts of the members of the guild, is dismissed as a conspiracy theorist. He is dismissed as a Marxist, or someone who was opposed to the protection of the general public. The guild insists that its adherence to its own standards of operation has nothing to do with the increased income generated by the guild, and by the decreased income generated by the guild’s competitors.
Virtually all modern political legislation, as well as virtually all standards adopted by government bureaucracies to enforce the laws, are the result of special-interest pressures brought to bear on politicians and bureaucracies by members of guilds. Almost all of modern economic life is based on guilds, as surely as urban economic life in the year 1200 was based on guilds. They are not called guilds today. They are called special interests. Special interests are groups of producers whose special interest is specifically their own personal self-interest.
One of the strange aspects of modern historiography and academic social science is this. The phrase “special interest group” is widely accepted, but the phrase “conspiracy history” is one of contempt. From an economic standpoint, a special-interest group lobbies politicians to get laws passed that restrict new entrants into the field which is presently dominated by the particular special-interest group. This is widely recognized as being basic to modern political life, and academicians have no doubts about following the money back to a capitalistic special-interest group: a corporation, a trade association, or a cartel. In other words, they follow the money when the money leads back to a specific group of capitalists. This tradition goes back to Adam Smith in the wealth of nations. It is a long-established tradition.
When the trail of money leads to well-known Establishment organizations, such as the Council on Foreign Relations or the Trilateral Commission, or worse, to the Federal Reserve System, the academic historian draws the line. “Thus far, and no farther.” He ceases to follow the money. It is legitimate, he says, to follow the money back to organizations whose sole purpose is making money. These are the bad guys. But it is illegitimate to continue following the money when it leads to nonprofit government advisory organizations made up of the prominent people in business, academia, the media, and the highest levels of national government.
(To read the rest of my article, click the link.)