The Essential Rothbard - Ludwig von Mises Institute

The Essential Rothbard 79
absurd. But this is really the same in all of those cases in which we
make rather extreme assumptions.” 215 Rothbard threw up his
hands in horror:
now, it seems to me that this kind of philosophy, this positivistic
approach to economic theory, corrupts it, if I may use
so strong a term, at the very core, and that no theory of lasting
merit can emerge from this sort of cauldron. 216
Unfortunately, Rothbard’s insistence on absolute conceptual rigor
has thus far remained a minority view.
Buchanan was of course a pioneer in “public choice” economics;
and both he and Gordon Tullock greatly admired Anthony
Downs’s classic in this area, An Economic Theory of Democracy. 217
Rothbard did not. He found in Downs’s work the same mistaken
use of false assumptions that he condemned in Buchanan.
Its key fallacy is in adopting the fashionable positivism of our
day, which asserts that a theory resting on false assumptions can
be good and worthwhile, if it can make good “predictions”
based on “testable” propositions. This ignores the fact that in
human action, propositions are not “testable” in this way. 218
As usual, Rothbard is not satisfied with a general condemnation.
He shows in detail how Downs’s error in theory derails his
book. Downs makes arbitrary assumptions about rational action;
he “proceeds throughout the book judging some actions as
‘rational’, others as ‘irrational’ etc., all mind you, under the guise
of not making ethical value judgments.” 219
215 Ibid.
216Ibid. 217
Anthony Downs, An Economic Theory of Democracy (New York:
Harper, 1957).
218
Letter to Ivan Bierly, August 26, 1959; Rothbard Papers; empahsis
in the original.
219
Ibid.