Wednesday, September 4, 2013

Rothbard, Coase and Warnings About Government Thought Control

By David Gordon

Murray Rothbard was an early admirer of Ronald Coase, who died Monday at age 102. In a memo in two parts for the Volker Fund, dated July 16, 1957, Rothbard reported on two series of lectures delivered by Coase. He praised Coase’s insight that “under planning, government, if it cannot force labor directly, must. . .condemn any public criticism as subversive.” A free press requires free enterprise. Coase was a pioneer in calling for privatization of air frequencies, and Rothbard enthusiastically agrees with this proposal. Coase was of course a keen observer of the British scene, and the BBC came in for withering scorn from him. In the lectures, “the personality of the guiding genius of the BBC is deftly pointed up as the prototype of the arrogant bureaucrat.’”(This is apparently a reference to Lord Reith, called by Churchill “that human Alp.”)

Rothbard reports on a second series of lectures in which Coase “shows that the post office originated in government thought control attempts and that the government still continues to censor and suppress communications it does not like.” Although Rothbard thinks that Coase erred by conceding that advertising can be “wasteful”, he applauds Coase for a “caustic statement that political propaganda is far worse, and consistently so, than any business propaganda in advertising.”

Rothbard’s enthusiasm for Coase is not unalloyed. He finds “grave collectivist deviations” in Coase’s thinking. Coase wrongly allows a large role for the State to counter private efforts that make the economic system less competitive. Rothbard will have none of this.”But since the State can and has defined almost any act as reducing competition, this opens the gates for tyranny, or, as Coase admits, ‘a very considerable regulation of business by the State.’”

Rothbard’s memo on Coase is available in the collection Strictly Confidential (Mises Institute, 2010), pp.253-256.

(From the Bastiat Circle)

1 comment:

  1. The post office originated in Art I Sec 8 of the Constitution. Tin foil hats can make it through their metal detectors.