The archive.

Government debt, Sennholz insists, is not stimulus but consumed capital—a distinction that anchors this April 1995 essay written as the U.S. debt neared five trillion dollars. Private borrowing can finance production and raise output per worker; public borrowing merely absorbs savings that would otherwise become productive investment, redirecting scarce resources toward political uses that voters see as costless benefits and never as the goods forgone. Behind the marble temples of politics he reads hidden deprivation, and behind the debt a moral outrage: one generation has no right to mortgage the labor of the next. Legal restraints alone, he concludes, cannot break the spending habit; only a change in economic ideas can, beginning with visible sacrifice—salary cuts for the president and legislators—before citizens are asked to accept restraint.

The federal debt is a pyramid of IOUs for income and wealth consumed in the past.

Economic thought did not climb steadily from Smith to Ricardo to Mill; it discovered truths and then lost them. That wager governs this second volume of Rothbard's Misesian history, which demotes Adam Smith from founder to interrupter — the man who shunted a nearly complete proto-Austrian tradition of subjective value onto the dead end of labor and cost. Ricardo deepens the error with class-conflict distribution and abstract model-building, while Nassau Senior and a neglected Irish school of utility theorists mark the road not taken. Long chapters follow the bullionist controversy, Peel's Act, and the currency-versus-banking debate over fractional reserves, then reconstruct Marxism as heir to millenarian communism from Babeuf onward. Throughout, the reversal is the same: cost never creates value, and entrepreneurs spend only because they anticipate what consumers will pay.

‘Value does not spring from the labour of the producer, but from the desire of the consumer’.

Americans measure their institutions against wisdom, righteousness, justice, and liberty, and so feel the painful distance between the Founders' principles and modern interventionism - yet measured against the world's actual alternatives, Sennholz argues, they remain unusually fortunate. Moving from lament to comparison, he surveys Canada's stagnating welfare state, Mexico's one-party corruption and currency collapse, Britain's diminished pound, Germany's "double-barreled" post-reunification transfers, and Japan's ordered but statistically distorted prosperity, reading each outcome as a consequence of taxation, regulation, monetary instability, and ideology rather than accident. The American advantage is not perfection but relative room for enterprise and correction. Writing in the mid-1990s, he detects signs that the interventionist habit is weakening as anti-business politics and organized labor lose their grip, and closes on conditional rather than triumphant hope.

The sixty-year-old death grip of government is loosening.

Valuable chiefly as a peaceful procedure for changing rulers, democracy degenerates—on Sennholz's account—the moment majority power slips its constitutional limits and turns toward economic leveling. He strips government of mystique (officials are ordinary people, not a higher caste), grants the state only a protective task, and then draws his central distinction: between mere majoritarianism, which can violate individual rights and destroy the very conditions of its own existence, and constitutional democracy, which shields minorities from the majority's whims. Enforced economic equality, he argues, denies human difference and the division of labor, requiring coercion and exploiting resentment. The essay's moral psychology rests on envy, which it names the engine of demagoguery—turning politics into an art of promises and evasions, and the body politic into a source of strife.

Envy is more irreconcilable than hate. It is the most corroding of all political vices and also a great power in our land. The friends of freedom are content to be envied, but envy not.

Against the reigning story in which Adam Smith fathered economics, this first volume of Rothbard's Austrian history insists that economic thought can move backward as well as forward, and that Smith diverted a rich pre-classical tradition toward labor-value theory and equilibrium. Writing as an avowed Misesian, Rothbard reconstructs two millennia of neglected analysis: Aristotle on exchange as reverse inequality of valuations, the Spanish scholastics of Salamanca groping toward marginal utility, the medieval usury debates, Buridan's commodity theory of money, and the hard-money critique of royal debasement from Oresme to Mariana. He ties competing doctrines to Catholic-Thomist versus Calvinist culture and treats politics as inseparable from economic theory. The result recovers a proto-Austrian lineage buried by the Whig-progressive narrative.

Adam Smith (1723–90) is a mystery in a puzzle wrapped in an enigma.

Who acquires power when equality becomes an administrative task? In this 1995 article, Murray N. Rothbard connects the practical difficulties of equalizing incomes with the authority required to decide which differences count. Equal money incomes leave unequal wealth, local amenities, family circumstances, and personal preferences untouched; attempts to compensate for these differences, he argues, continually enlarge the administrator’s remit. His distinctive move is to connect this measurement problem to a theory of elite interests, distinguishing voluntary leadership based on competence from coercive hierarchy justified in egalitarian terms. Readers can examine how his defense of individual diversity becomes a polemical account of intellectuals and welfare professionals as beneficiaries of equalization—and assess the distance between identifying institutional incentives and establishing the motives of those who advocate equality.

"It's the economy, stupid" gets the politics exactly backward, Rothbard contends. The Clintonian slogan reduces voting to macroeconomic mood and then reduces the economy to the business cycle, crude economic determinism he calls "vulgar Marxism." Public revolt, he argues, springs also from crime, immigration, broken promises, and distaste for the Clintons themselves, and its economic core is not cyclical recovery but secular decline: rising taxation, persistent inflation, falling real family income, and the need for married women to work simply to hold a household's standard of living in place. He trusts ordinary budgeting over official statistics and futurist cheer about computers and media, reading the public's anger as a rational response to the slow erosion of the postwar promise that each generation would surpass the last.

Instead, to capture the Clintonian meaning, the sentiment should be rephrased as “it’s the business cycle, stupid.”

Envy, once it enters politics, becomes for Sennholz the emotional engine of coercive redistribution, demagoguery, and social conflict. This 1995 “Notes” essay distinguishes natural human inequality—of ability, industry, and productivity—from the equal legal standing that lets unequal persons cooperate in peace. The demand for equal results, he argues, is not justice but force, requiring endless taxation and confiscation because the inequalities it targets keep reappearing; it opens the door to demagogues who convert resentment into electoral power. Against this he sets the market order as an envy-free arrangement in which income tracks service rendered. The deeper danger is capital consumption: confiscatory taxation, welfare transfers, and deficit spending divert savings from future production, pitting present beneficiaries against taxpayers and against generations not yet born.

All kinds of problems are solvable except those which spring from envy.

No wage mandate, Sennholz argues, can manufacture the productivity that sustains high wages; it can only forbid employment below a statutory cost and so bar the least skilled from the first rungs of the ladder. Treating the minimum wage as a prohibition rather than a gift, he insists the posted hourly rate understates the real barrier: employers must also carry payroll taxes, Social Security, unemployment insurance, workmen's compensation, and paid holidays, so the relevant floor is the total cost of employment. When that cost exceeds a worker's output, hiring becomes a loss and the worker goes unhired—teenagers, the untrained, and minority youth first. Unions and Northern industry back the floor, he claims, to blunt lower-cost Southern and nonunion competition. If decrees could create prosperity, poor nations could abolish poverty by statute.

Few economic laws, if any, are more malicious and malignant than minimum wage laws.

Rename the welfare state an 'exploitation state,' and its politics look different: not a set of correctable errors but a structure that lives off its productive members and rewards its own expansion. Sennholz's diagnosis is that electoral rollback fails because the transfer system has already manufactured its own constituencies—students, retirees, public employees, welfare recipients, regulated interests—who experience spending as right and livelihood, while reform's gains stay diffuse and delayed. Once interest on accumulated debt competes with transfer payments, he warns, the state reaches its terminal crisis, resolved only through inflation or capital levies. Yet the essay's decisive turn is outward: modern communications, transportation, and global commerce give capital and enterprise the mobility to escape predatory jurisdictions, so that national governments must now compete for the productive property they once simply seized. Hope drives lengthy campaigns, he concludes, but increasingly cannot deliver reform.

Markets have sprung up virtually everywhere, internationalizing commerce and capital and depriving governments of their restrictive powers. They have given productive capital unprecedented mobility, allowing it to escape exploitation and confiscation with the speed of E-mail.

Strip the language of national defense from protectionism and what remains, Sennholz argues, is raw political force: the power to tax one man to subsidize another's business. This 1995 essay treats tariffs, import restrictions, and export promotion as a recurring alliance of fear, interest-group pressure, and economic fallacy shared by old mercantilism and new labor-nationalism alike. The claim that barriers preserve jobs he answers by showing they lower productivity and purchasing power, destroying more employment than they create. The “cheap foreign labor” argument collapses, he notes, once the fiercest agitation targets high-wage Japan and Germany. And the trade deficit with Japan reflects not foreign unfairness but American policy—low saving, capital taxation, and federal deficits—since Japanese dollar earnings flowed back into U.S. Treasury bonds.

Every form of protectionism builds on raw political force.

Even a genuine insurance crisis, Rothbard argues, would give insurers no claim on legislative rescue—and he doubts the crisis is genuine, reading its alarming anecdotes, unsupported by transparent industry data, as a device to deny injured parties fair recompense. Insurers are entrepreneurial firms whose losses reflect failed forecasting like anyone else's. Against the tort-reform campaign of insurers, manufacturers, and organized medicine, he defends contingency fees as the instrument that gives poorer plaintiffs their day in court, and the jury as an inherited safeguard against arbitrary caps on justice. His own reform is qualitative, not quantitative: liability should fall in full, but only on those who actually caused the harm—never on retailers or shareholders singled out for their deep pockets.

So there may well be no insurance crisis at all, and the entire hysteria may be trumped-up to gain benefits for the insurance industry at the expense of victims of injury to person or property who are entitled to just compensation.