The Essential Rothbard - Ludwig von Mises Institute

The Essential Rothbard 115
Neither are John Pocock and his followers convincing in trying
to posit an artificial distinction and clash between the libertarian
concerns of Locke or his later followers on the one
hand, and devotion to “classical virtue” on the other . . . why
can’t libertarians and opposers of government intervention
also oppose government “corruption” and extravagance?
Indeed, the two generally go together. 303
Rothbard firmly opposes the Whig view of the history of economics,
in which “later” is inevitably “better,” thus rendering the
study of the past unnecessary. In his view, much of the history of
economics consists of wrong turnings; and volume I ends with a
tale of decline. Yet, paradoxically, Rothbard’s own method is in
another way Whiggish itself. He has his own firmly held positions
on correct economic theory, based on his adherence to the tenets
of the Austrian School. He accordingly is anxious to see how various
figures anticipate key Austrian views or, on the contrary, pursue
blind alleys.
The dominant theme in Rothbard’s appraisal of economics is
the nature of value. Economic actors, endeavoring to better their
own positions, guide themselves by their subjective appraisals of
goods and services. The pursuit of an “objective” measure of value
is futile; what influence can such an alleged criterion have, unless
it is reflected in the minds of economic agents?
Rothbard especially emphasizes, in this connection, the socalled
paradox of value. How can it be that water costs little or
nothing while diamonds are extraordinarily expensive? Life cannot
exist without the former, while the latter are the merest luxuries.
Does not this paradox show that goods do not exchange according
to their subjective values? The answer, fully developed by the Austrian
School, depends on the fact that subjective appraisals of particular
units of a good, not the supposed value of the whole stock
of the good, determine price. Since water is abundant and diamonds
are scarce, there is no anomaly at all in the greater price of
the latter.
303 Ibid., p. 314.