Monday, February 25, 2013

Murray Rothbard versus Milton Firedman and the Enduring Legacy

The National Bureau of Economic Research has published a new paper by Michael D. Bordo, Hugh Rockoff, Not Just the Great Contraction: Friedman and Schwartz's A Monetary History of the United States 1867 to 1960. They write (My highlight)
A Monetary History of the United States 1867 to 1960 published in 1963 was written as part of an extensive NBER research project on Money and Business Cycles started in the 1950s. The project resulted in three more books and many important articles. A Monetary History was designed to provide historical evidence for the modern quantity theory of money. The principal lessons of the modern quantity theory of the long-run neutrality of money, the transitory effects of monetary policy on real economic activity, and the importance of stable money and of monetary rules have all been absorbed in modern macro models. A Monetary History , unlike the other books, has endured the test of time and has become a classic whose reputation has grown with age. It succeeded because it was based on narrative and not an explicit model. The narrative methodology pioneered by Friedman and Schwartz and the beautifully written story still captures the imaginations of new generations of economists.
What's fascinating about this commentary is that the most highlighted observation in the Friedman-Schwartz text has been their view on the Great Depression. Ivan Pongracic, Jr writes:
 As a result of examining more closely the key years between 1929 and 1933, Friedman and Schwartz first concluded that the Great Depression was not the necessary and direct result of the stock-market crash of October 1929, which they attribute to a speculative investment bubble.[...]  In fact, they believed that the economy could have recovered rather rapidly if only the Fed—the central bank of the United States —had not engaged in a series of disastrous policies in the aftermath of the crash.
In contrast, the economist Murray Rothbard tied together the stock-market crash and Great Depression, in his book, America's Great Depression, to Federal Reserve money printing of the 1920s. The end to this printing, in Rothbard's view, caused the crash and the Great Depression. The GD itself being prolonged by government interference, which prevented markets (especially with regard to wages) from clearing.

Thus, while it is interesting to observe the mainstream propaganda machine hailing the Friedman-Schwartz book as having "endured the test of time." It may prove instructive to look as the numbers to determine endurance.

According to Amazon, the paperback edition of A Monetary History of the United States, 1867-1960  is ranked #40,235 in Books.

The paperback edition of Murray Rothbard's America's Great Depression is  #37,511 in Books

Even drilling down to the much narrower category, Books > Business & Investing > Economics > Money & Monetary Policy

Rothbard out ranks Friedman-Schwartz. Rothbard is ranked # 18 and Friedman-Scwartz is ranked #19.

This is quite remarkable given that the Mises Institute sells Rothbard's book, which is a perennial best seller for them and likely draws away a significant number of sales that would otherwise go to Amazon and boost Rothbard's sales rank even higher.  There is no comparable institute selling the Friedman-Schwartz book.

I look forward to Bordo and Rockoff discussing why Rothbard out ranks Friedman-Schwartz, when it comes to Money & Monetary Policy, and Rothbard's enduring legacy.


  1. You can download "AGD" for free from and it still outsells Friedman.

  2. You write correctly The economist Murray Rothbard tied together the stock-market crash and Great Depression, in his book, America’s Great Depression, to Federal Reserve money printing of the 1920s. The end to this printing, in Rothbard’s view, caused the crash and the Great Depression.

    Inflationism is pivoting to Destructionism. Currency traders are unwinding currency carry trades, and initiating competitive currency devaluation, devaluing money; and bond vigilantes are calling interest rates higher; causing investors to derisk out of stocks and delverage out of commodities.

    The week ending February 22, 2013, Major World Currencies, DBV, and Emerging Market Currencies, CEW, joined World Stocks, ACWI Commodities, DBC, and Bonds, BND, in turning lower on the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, to monetize debt, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad. Major World Currencies, DBV, crested February 11, 2013, at 26.95; and Emerging Market Currencies, CEW, crested February 11, 2013, at 21.29.

    The chart of the S&P 500 Weekly, $SPX, SPY, crested February 11, 2013, at 152.11, in an Elliott Wave 5 High. And World Stocks Weekly, ACWI, crested January 28, 2013, at 50.34, in an Elliott Wave 2 High.

    I relate that trust in the debt of the sovereigns, that is in the US, VTI, Germany, EWG, Spain, EWP, Italy, EWI, Greece, GREK, Germany, EWG, China, YAO, Australia, EWA, Japan, EWJ, Norway, NORW, Finland, EFNL, Sweden, EWD, and others produced Peak Commodities, DBC, on September 14, 2012, Peak Credit, on December, 6, 2012, Peak Wealth, on January 28, 2013, and Peak Currencies, on February 11, 2013. Liberalism’s great Banking Schemes produced Peak Sovereignty and Peak Seigniorage, that is Peak Moneyness, to arrive at Peak Prosperity. The Age of Credit and the Age of Prosperity is over.

    Jesus Christ is now introducing the epoch, that is the era, of Authoritarianism, which is characterized by fiat asset deflation (read stock market decline), headline inflation, fascism, totalitarian collectivism, debt servitude and austerity.

    The Age of Fiat Asset Deflation and the Age of Austerity is commencing as Jesus Christ has released the Four Horsemen of the Apocalypse, to ride with intensifying vigor over mankind. The Second Great Depression is on the way as the Great Debt Bubble, AGG, and associated Great Major World Currency Market, DBV, and Emerging Market Credit Bubble, CEW, has burst.

    The very linchpin of ECB debt support has burst as Greece, GREK Greek shares that fell the sharpest this week of all European shares as is seen in this Yahoo Finance chart. The nation that defines Clientelism, Barriers To Competition, and Corruption, is leading Europe, and the World into Economic and Political Failure.

    The sovereigns of Authoritarianism, nannycrats, acting through regional governance provide the seigniorage of diktat, via the Diktat Money System, where diktat serves as both money and currency for regional security, stability, and security, establishing fascism with public private partnerships
    being the chariots of debt servitude and austerity, as well as the agents of diktat that manage regional resources, oversee the factors of production, and direct economic activity for the region’s security, stability and stability.