The Essential Rothbard - Ludwig von Mises Institute

The Essential Rothbard 81
Fogel failed to distinguish between genuine investment on the
market and “investment” subsidized by the government. To equate
the two showed a lack a conceptual clarity.
Fogel’s mistake reflected a preference for government control
of the economy:
Fogel concludes that the Union Pacific construction was a
fine, noble work for the general welfare; he would have preferred,
however that the railroad were built totally as a government
enterprise, so the costs would have been at a minimum,
and government could have reaped the profit for
“entrepreneurial risk,” at which point government could have
sold the railroad, at a capitalized value, to private enterprise.
224
Rothbard, with characteristic depth, here reverts to a familiar
theme. Just as in welfare economics, lack of conceptual clarity—in
the case the equation of private with government risk—leads to
antimarket views.
Rothbard saw Fogel’s pattern of reasoning as part of a larger
trend among American historians.
This book, in its whitewashing of the Crédit Mobilier scandals,
is indicative of a perhaps broader movement in American
historiography: with the shift of left-wing American historians
from Marxism or straight socialism to belief in a
“mixed economy,” the value placed by these historians in
“muckraking” has dwindled very sharply. 225
Corruption almost always involves cooperation between government
and business interests; thus, those who support a mixed economy,
which favors such cooperation, will tend to ignore corruption.
“Muckraking, on the other hand, is suitable either for 100%
socialist historians or for libertarians.” Rothbard not only explains
Fogel’s lapse but identifies a key area of his own historical practice:
224 Ibid.; emphasis in the original.
225 Ibid.