Draft – Comments Welcomed 1 Rothbard on Socialism in Theory and Practice Peter Boettke, George Mason University pboettke@ gmu.edu [T]he extent of socialism in the present-day world is at the same time underestimatated in countries such as the United States and overestimated in Soviet Russia. It is underestimated because the expansion of government lending to private enterprise in the United States has been generally neglected, and we have seen that the lender, regardless of his legal status, is also an entrepreneur and part owner. The extent of socialism is overestimated because most writers ignore the fact that Russia, socialist as she is, cannot have full socialism as long as she can still refer to the relatively free markets existing in other parts of the world. In short, a single socialist country or bloc of countries, while inevitably experiencing enormous difficulties and wastes in planning, can still buy and sell and refer to the world market and can therefore at least vaguely approximate some sort of rational pricing of producers’ goods by extrapolating from the market. The well-known wastes and errors of this partial socialist planning are negligible compared to what would be experienced under the total calculational chaos of a world socialist state. Murray Rothbard (1962: 830-31). It has become commonplace for economists to insist that the collapse of the Communist Bloc in 1989 is a defining moment in 20 th century political economy. It is also almost obligatory for these economists to insist that nobody predicted the collapse of communism. But this humility is self-imposed by the intellectual straightjacket that many economists wear. Murray Rothbard refused to be so confined by the methods and methodology of the dominant lines of economic thought during his lifetime. He rejected the formalism of Walrasian price theory, the positivism of econometrics, and the aggregation of Keynesianism. But make no mistake, Rothbard was actually a member of good standing in the mainstream of economic thought historically contemplated, and this orthodox strain in economics would not have to be so humble in the face of the collapse of communism in the late 1980s. These economists have warned of the problems that deviations from a private