The Review of Austrian Economics: Volume 2 by Murray N. Rothbard

Author:Murray N. Rothbard [Murray N. Rothbard]
Language: eng
Format: epub
ISBN: 978-1-61016-538-9
Publisher: Lexington Books
Published: 1988-11-06T16:00:00+00:00

While the one element of wants or desires is secured in the constitution of man’s being, the other element—viz., the relation of labor or effort to them—is fixed in the constancy of nature, and the permanence we attribute to the created world. . . . But, as man’s being and nature’s laws are found in experience, political economy is to be regarded as a positive science. Nothing in its fundamental principles is hypothetical or problematic.

As O’Connor ([1944] 1974, 264) has noted, “Walker extends the tendency to restrict economics to a science of values.” According to Walker (1875, 22), political economy is the science of wealth where “the term ‘wealth’ includes all objects of value, and no other.” In strict accuracy, political economy is the “science of values,” but the term wealth is retained “as being more popular, and as nearer to the customary use of the words.” Value, in turn, is defined catallactically as “the exchange power which one commodity has in relation to another” (Walker 1875, 23).

The notions of wealth and value employed by Walker come directly from Bastiat’s Harmonies, and, indeed, Walker (1875, 24) declares that, “of all the writers on the subject, no one seems to have been more full and clear in the definition and illustration of value than M. Bastiat.” Walker (1875, 24–27) follows this declaration with almost three pages of quotations and examples drawn from Harmonies, which are intended to establish the dual proposition that the value of a thing depends on “the will of the purchaser, as determined by his judgment” and “is the service or labor which [the thing] will command in exchange.”

Without examining Walker’s theoretical system in any great detail, suffice it to say that, in the departments of production and distribution, his doctrines show a much greater affinity with Say, Bastiat, and the liberal school than with the classical school.37

For example, Walker (1875, 27–31), like Bastiat, holds that Nature provides her “utilities” gratuitously, “adds value to nothing,” and, therefore, land as a purely natural agent generates no income return for its owner. Rent, as conceived by Walker (1875, xiv, 325–26), is the “reward of fixed capital,” i.e., the interest return to capital invested in land.

Following Say, Walker views the distributive shares accruing to the various factors of production as determined catallactically, i.e., by the laws governing exchange. Thus, according to Walker (1875, 276, 316–17, 320, 332):

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