"Wall Street, Banks, and American Foreign Policy" by Murray N. Rothbard

Mises Institute
Oct. 12, 2010

Murray Rothbard's 1984 analysis of modern American history as a great power struggle between economic elites, between the House of Morgan and the Rockefeller interests, culminates in the following conclusion: "the financial power elite can sleep well at night regardless of who wins in 1984." By the time you get there, the conclusion seems understated indeed, for what we have here is a sweeping and compressed history of 20th century politics from a power elite point of view. It represents a small and highly specialized sample of Rothbard's vast historical knowledge coming together with a lifetime devoted to methodological individualism in the social sciences. It appeared first in 1984, in the thick of the Reagan years, in a small financial publication called World Market Perspective. It was printed for a larger audience by the Center for Libertarian Studies in 1995, and appears in 2005 online for the first time.

Theoreticians Left and Right are constantly referring to abstract "forces" when they examine and attempt to explain historical patterns. Applying the principle of methodological individualism – which attributes all human action to individual actors – and the economic principles of the Austrian School, Rothbard formulated a trenchant overview of the American elite and the history of the modern era.

Rothbard's analysis flows, first, from the basic principles of Austrian economics, particularly the Misesian analysis of banking and the origin of the business cycle. This issue is also discussed and elaborated on in one of his last books, The Case Against the Fed (Mises Institute, 1995). Here, the author relates the history of how the Federal Reserve System came to be foisted on the unsuspecting American people by a high-powered alliance of banking interests. Rothbard's economic analysis is clear, concise, and wide-ranging, covering the nature of money, the genesis of government paper money, the inherent instability (and essential fraudulence) of fractional reserve banking, and the true causes of the business cycle.

As Rothbard explains in his economic writings, the key is in understanding that money is a commodity, like any other, and thus subject to the laws of the market. A government-granted monopoly in this, the very lifeblood of the economic system, is a recipe for inflation, a debased currency – and the creation of a permanent plutocracy whose power is virtually unlimited.

Read the full text here (.pdf)