great mentor, Ludwig von Mises, thatrneconomics is but a branch of praxeologyrn(the study of human action), which alsornincludes psychology, history, ethics,rnpolitical economy, and all the socialrn(or “soft”) sciences. Whatever editorrnthought such a project could be shoehornedrninto a few hundred pages had nornunderstanding of Austrian economics—rnor of Rothbard. However frustrating itrnmight have been for Rothbard, this woefulrnignorance, far from deterring or discouragingrnhim, merely made him all thernmore determined to educate such people,rnraising them up, as it were, to his levelrnof understanding. The impulse to correctrnerror—and not only to correct it butrnto offer a complex and closely reasonedrnalternate paradigm —is what made him arngreat educator, as well as a world-classrnpolemicist.rnAgainst the Great Man theor)’ of economicrnhistory, in which “AdamrnSmith created economics, much asrnAthena sprang full-grown and fullyrnarmed from the brow of Zeus,” Rothbardrncounterposes a new and very differentrnparadigm. The conventional wisdom isrnthat, since Smith, the progress of “economicrnscience” has been ever in the ascendant.rnThis complements the contemporaryrnview of economics as arn”science,” which, like physics, steadilyrnincreases its knowledge and accuracyrnand perfects its analysis toward completernunderstanding. This ever-onward-andupwardrnview of economic history, saysrnRothbard, is demonstrably false. Therernis such a thing as “lost knowledge”; historyrncan (and all too often does) take arnwrong turn. Citing Thomas Kuhn’srnStructure of Scientific Revolutions, Rothbardrnpoints out that not even the “hard”rnphysical sciences follow this “romantic,rnPanglossian” course. Debunking whatrnRothbard calls “the WTiig theory of history”rnin the sciences, Kuhn showed thatrnscience did not develop in this way. Arnparadigm, once selected, is rarely eitherrntested or challenged: only when thernnumber of anomalies and contradictionsrnproliferate to the point of “crisis” is thernparadigm successfully challenged andrnreplaced. Kuhn’s insight “rings true,” asrnRothbard puts it, “both as histon,- and asrnsociology.”rnIf the modernist prejudice that “laterrnis better” is inapplicable to the “hard” sciences,rnit is even less relevant to the studyrnof the “soft” sciences, including economics.rnLooking past the dominantrnparadigm, Rothbard saw that “economicsrncan and has proceeded in contentious,rneven zig-zag fashion, with laterrnsystemic fallacy sometimes elbowingrnaside earlier but sounder paradigms,rnthereby redirecting economic thoughtrndown a totally erroneous or even tragicrnpath.”rnThe “Few Great Men theory of economicrnhistory” starts with Adam Smith,rnFlounder-not only of free-market theo-rnT)’, but of economics/)erse. Yet Rothbardrnreveals a rich and extensive pre-Smithianrntradition running from the ancientsrn(Greece, Rome, China) to the medievalrnscholastics. In his first volume, Rothbardrnshows that economic thought did not beginrn—or even reach its apogee—with therncareer of an 18th-century ScottishrnCalvinist. “It all began, as usual, with thernGreeks,” he writes, the first discoverers ofrnthe concept and principles of naturalrnlaw.rnRothbard’s view of economic thoughtrnamong the ancients begins with Plato asrnthe archetypal totalitarian-mystic, thernoriginal oligarch and precursor of all thernvanguard parties to come. To the Platonists,rnthe “limitations” imposed by naturalrnlaw are intolerable, therefore therngoal is to “transcend” them. Alienatedrnfrom his true self—which is eternal, transcendingrntime and space-man tries tornregain his godlike state. Overcomingrn”alienation,” as Rothbard vividly demonstratesrnin the next thousand or so pages,rnhas been the motive and overriding purposernof scores of religious and ideologicalrnmovements, from the ProtestantrnReformation to the secularized millennialismrnof Marx and communism to thernpost-millennial pietist prophets of “progressive”rneconomic and social reform inrnAmerica.rnThis history of economic thought,rnthen, is simultaneously a history not onlyrnof philosophy and politics but of religion.rnHere we encounter the controversial thesisrnof Emil Kauder, the German-bornrnAustrian historian, so central to thisrnwork. Kauder maintained that AdamrnSmith, far from being the founder of economics,rnwas the author of a major errorrnthat diverted the field away from a proto-rnAustrian subjective utility theory of value,rnwith its emphasis on relative scarcity,rnand substituted for it the labor theor)’ ofrnvalue. The Spanish and Italian scholasticsrnof the Middle Ages and the earlyrnRenaissance, as well as the Frenchrneconomists of the 18th century, had a farrnmore sophisticated conception of thernmarket than did Smith: their emphasisrnhad been on subjective valuation, entrepreneurship,rnand prices fluctuatingrnwith demand. Smith changed all that.rnBy shifting the focus of economics fromrnsubjective valuation to labor, Kauderrncontended that Smith ought to be grantedrn”the dubious honor of being ‘a necessaryrnprecursor of Karl Marx.”‘rnKauder’s thesis, however, goes far beyondrndebunking Adam Smith. As Rothbardrnrelates in his introduction, Kauder’srntheory answers the question: “Why is it,rnfor example, that the subjective utilityrntradition flourished on the Continent,rnespecially in France and Italy, and thenrnrevived particularly in Austria, whereasrnthe labor and cost of production theoriesrndeveloped especially in Great Britain?”rnIn Kauder’s view, the difference was duernto the decisive role of religion in the lifernof a people. The culture of SouthernrnEurope, of the scholastics and thernFrench and Italian laissez (aire theorists,rnwas permeated with a Catholic sensibility.rnCatholicism, with its Thomistic-Aristotelianrntradition, translated into the idearnthat the goal of production is consumption,rnthat moderate consumption is notrnsinful, and that life is to be enjoyed. Thisrnview implies that economic values arernsubjective since different things are enjoyedrnby different people.rnIn the case of the Protestant ethos,rnhowever, doctrinal and emotional assumptionsrnare very different, as is the resultingrneconomic theory. In rebellionrnagainst the supposed slackening of originalrnChristian doctrine, the Protestantsrnbarkened back to what they imaginedrnwas the original asceticism of Christianity.rnParticularly galling to the rebels wasrnthe sophisticated economic analysis ofrnthe Spanish scholastics, who by the midto-rnlate Middle Ages had swept away thernmedieval ban on charging interest for arnloan (“usury”) in everything but the mostrnformal sense. The Calvinist emphasisrnon labor (“toil to the g]or’ of God”) as arngood in and of itself was conducive to thernlabor theory of value, which imputedrnsome inherent measure of worth to thernproducts of man’s labor. And if man, asrnthe original Calvinists asserted, is predestinedrnto walk a certain path, if the electrnare chosen not bv their acts but by thernunknowable will of Cod, then surelyrnthe economic choices of such creaturesrnare similarly predestined. Unlike thernCatholic theorists of the natural law tradition,rnthe Calvinist and Lutheran ideologuesrnrejected reason as the frameworkrnlUNE 1998/33rnrnrn