I have read more Mises than Rothbard, but I have noticed two major differences.
Rothbard believes in natural rights, Mises does not.
Rothbard believes that there should be no fractional-reserve banking. Mises believes in free banking, but that in that event credit expansion would be limited adequately by market forces.
Are there any other major differences?
Well, there’s the major difference that Mises believed a limited state was necessary. Rothbard on the other hand believed that the state was not necessary and inherently evil. Mises came close to this point in a few of his writings but couldn’t bring himself to make the final step to anarchism.
As for strictly economic differences, Mises believed that monopolies could arise on the free market under certain circumstances. Rothbard refined the theory to show that true monopolies (ones that are able to charge “monopoly prices”) can only arise as the result of state intervention.
I vaguely remember Mises making more utilitarian-based arguments. Rothbard rejects those. But this is really just another facet of Rothbard’s emphasis on natural rights.
I know there are people who like to argue about it, but free banking really implies no fractional-reserve banking. As long as a bank must contractually distinguish between demand deposits on the one hand, and ‘shares’ issued against bank assets (loans) on the other, and as long as there is competition among banks for the trust of their depositors, the ‘shares’ will not serve as ‘money’ upon which to issue further credit. Fractional-reserve banking is only possible on a sustained basis if the government does something that forces people to accept bank credit as money—grant a politically-favored bank a territorial monopoly on bank-note issue, pass legal-tender laws requiring people to accept notes in payment of debt, collect taxes in the notes of the politically-favored bank, that kind of thing.
I think the fundamental differences have been summed up pretty well already (minarchism vs. anarchism, utilitarianism vs. natural law, natural monopoly vs. monopoly as exclusive result of state intervention, and minor quibbles over banking).
Mises was also a proud veteran of the First World War, which he thought defended Austria from Russian Barbarism
His works lack the populist, anti-state perspective of Rothbard’s.
Thank you for all your observations.
I had not realized Mises was a war veteran - but then I am sure that Rothbard too would have fought willingly if Russia had invaded America (though that’s not quite what happened to Austria).
hjmaiere says:
“free banking really implies no fractional-reserve banking… as long as there is competition among banks for the trust of their depositors”
Yes, I think I’d agree with that. Fractional reserve banks will steadily lose reserves to 100% banks and will have to back-pedal or face a bank run. Sustained credit expansion is feasible only if the banks form a cartel (like the present system), and even then they would lose reserves to overseas if they were on a gold standard.
Mises in H.A. supports conscription. I didn’t check Rothbard but I doubt that an anarchist would approve conscription.
Rothbard doesn’t approve of conscription. He points out that guerrilla warfare is the only moral form of combat because it can only defend and does not rely on taxation to exist.
What you say is true, but Mises’s actual view on conscription is a bit more complicated than that. Here’s a great article that explains the details: http://mises.org/daily/1139
An excerpt: “What is most striking, however, about the passage [in HA where Mises states that “He who in our age opposes armaments and conscription is, perhaps unbeknown to himself, an abettor of those aiming at the enslavement of all”] is that its tone and import departs substantially from what Mises had written throughout the height of his scholarly career.”