The Essential Rothbard - Ludwig von Mises Institute

The Essential Rothbard 85
Industrial development becomes an unexamined end-in-itself; but
why is growth in this sector always desirable?
Once again, the important desideratum is freedom of the
market; a country or region will often best develop, depending
on conditions of resources or the market, by concentrating
on one or two items, and then exchanging them for other
items produced elsewhere. If this comes in a free market, it is
far more productive than forcing a hothouse steel or textile
mill in the name of “economic growth.” 233
North in this instance does not himself take the fatal step into
false policy—most economists do manage to avoid recommending
tariffs, regardless of what their argument requires. In another area,
though, North allows an unexamined ethical assumption to skew his
analysis. He notes, accurately enough, that some plantation
economies are underdeveloped, and that such economies are also
highly inegalitarian. Probably because of his own commitment to
equality, he wrongly concludes inequality is bad for development:
Unequal distribution of income he associates with a “plantation”
economy, where the planners have the ill grace to spend
their money on imported luxuries; this is contrasted to the
noble, more egalitarian economy where more people develop
home industry and home activities. Once again, North’s position
is compounded of both historical and economic errors;
the fact that, historically, some plantation systems had
unequal incomes does not mean that either the plantation system
or the inequality [always] inhibited economic development.
Certainly neither did. 234
Rothbard’s reports on economic works were by no means
always negative. He declared that Lawrence Abbott’s Quality and
Competition 235 was a masterpiece. Most mainstream economists, in
233
Ibid.
234
Ibid.; emphasis in the original.
235
Lawrence Abbott, Quality and Competition (New York: Columbia
University Press, 1955).