Demise of the Circle Bastiat

The only work that matched Human Action as a literary monument to the libertarian renaissance of the early postwar period was Ayn Rand's novel Atlas Shrugged. Mises was a great admirer of this work and said so in a letter to its author:

“Atlas Shrugged” is not merely a novel. It is also—or may I say: first of all—a cogent analysis of the evils that plague our society, a substantiated rejection of the ideology of our self-styled “intellectuals” and a pitiless unmasking of the insincerity of the policies adopted by governments and political parties. It is a devastating exposure of the “moral cannibals,” the “gigolos of science” and of the “academic prattle” of the makers of the “anti-industrial revolution.” You have the courage to tell the masses what no politician told them: you are inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you.

If this is arrogance, as some of your critics observed, it still is the truth that had to be said in this age of the Welfare State.¹³

In the original Rand circle in Manhattan, and in many of the later Randian groups throughout the United States, many members cultivated a religious reverence for the writings and opinions of Ayn Rand. Their attitude to Rand's writings did not differ essentially from the attitude that Christians hold toward the Bible, and consequently they were in more than one respect the acolytes of a Randian church. Rothbard, who had personally attended the meetings of Rand's group for several months, stated that “the fanaticism with which they worship Rand and Branden has to be seen to be believed, the whole atmosphere being a kind of combination of a religious cult and a Trotskyite cell.”¹⁴ They demanded unconditional allegiance to their creed and harassed and ousted anyone who would not go along with the party line.

One position of the creed particularly dear to these Randians was atheism—the religious belief in the non-existence of God. For Ayn Rand and her disciples it has always been a matter of course to contest any evidence purporting to prove the existence of God, and to emphasize any argument or piece of evidence that was deemed to prove His non-existence. But this argumentative approach was chosen only when they confronted neophytes. With more senior members of the group, they felt they could expect a more “mature” stance on the God-question: the unconditional adoption of atheism. And they did not forgive deviance; in particular, they would not tolerate an avowed Christian in their midst and even went so far as to harass members who, although atheists or agnostics themselves, were married to unrepentant Christians. This was the case with Murray Rothbard, whose wife JoAnn was unapologetically Protestant.¹⁵

One might argue that the Randian insistence on action in conformity with its atheistic ideal was a healthy attitude to preserve and cultivate purism; and indeed from this point of view, Randianism might be as legitimate as any other religion. It was however not the attitude that Murray Rothbard brought to his encounters with fellow human beings. He had a firm opinion on various questions, but he was mainly interested in argument and debate as the best method to test positions and opinions. When it became obvious that he preferred being married to JoAnn to being numbered among the Randians, things turned ugly. In early summer 1958, Rothbard was asked to abandon his theistic wife. He refused to comply.

This incident had direct repercussions on the Austro-libertarian movement in that it led to the disintegration of the Circle Bastiat—the Misesian study group that met at Murray Rothbard's apartment and had included Hessen, Liggio, Raico, and Reisman. Hessen and Reisman remained in the Randian orbit and had no further contact with their former friends—who had in their view betrayed Reason.

Rothbard in turn pulled no punches about what he came to call the Ayn Rand Cult. He later had telephone shouting matches with Nathaniel Branden, a man who took pride in outdoing everyone else in worshipping his mistress (in both connotations).¹⁶ Branden charged Rothbard with plagiarism and threatened him with a lawsuit, alleging that Rothbard in a recent paper had adopted ideas from Ayn Rand and Branden's wife Barbara without duly acknowledging this intellectual debt. The charge was baseless. It cost Rothbard's friend Leonard Liggio only a couple of hours of work in the public library to document that the “stolen ideas” had been part of the western intellectual heritage for several centuries, and had originated in many cases with Catholic scholastic thinkers.

Mises had taken part in the Symposium on Relativism at which Rothbard had presented the original version of the paper under dispute.¹⁷ He was speechless at the Randians’ charge of plagiarism against Rothbard, but he avoided any direct involvement in the controversy, which he was sure would resolve itself in Rothbard's favor. Mises had good reason not to create even more bad blood between his disciples and the Randians. At the beginning of the 1960s, Branden's organization was very successful in selling Mises's writings, in particular, Planning for Freedom. At the end of 1961, the book was almost sold out and Nymeyer planned an extended second edition, including an additional essay.¹⁸ Ayn Rand and Nathaniel Branden also tried to establish closer ties with Mises, inviting him to attend their lecture evenings and social gatherings.¹⁹

Mises reciprocated to a certain extent. He appreciated intellectual affinities with the Randians, but he was not fond of their fanatical zeal. He liked to persuade other people through detached speech and writing, whereas the Randians strove to make converts to the cause of Objectivism by applying the same techniques used by religious cults: group sessions, psychoanalysis, and group pressure. Mises could perfectly well respect and even befriend people with whom he disagreed, even when these disagreements concerned questions of fundamental importance. This was the case for example with Louis Rougier (a positivist), Gottfried von Haberler (an interventionist), Louise Sommer (a protectionist), and Murray Rothbard (an anarchist).²⁰ Leland Yeager (a monetarist) once wrote to Mises:

I hope you agree that among people who are united in favor of economic liberalism, there can be healthy controversy on such details as the admissibility of the price-level concept and whether the gold standard or price-level stabilization is the better rule for monetary policy.²¹

And this hope was entirely justified, despite the fact that Yeager's disagreements with Mises concerned more than mere details. Mises would not hold anyone in low esteem just because the person in question held opinions that Mises believed were entirely wrong. Steeped in the humanism of the Christian Occident, he held the individual above anything else. He was not concerned about individual souls, of course, but he did care supremely about individual liberty. He was happy for each new convert to the cause of liberty, but he would have been unable to rejoice over conversions obtained through group pressure and other forms of harassment.

For Mises, only one sin was unforgivable: lack of integrity. Speaking and behaving against one's better knowledge could not be excused. This is why Mises maintained a lifelong friendship with Gottfried Haberler, whom he believed to be an honest interventionist, but broke with Fritz Machlup when he started qualifying the case for the gold standard. At the same time Mises recommended Leland Yeager for Mont Pèlerin Society stipends even though Yeager was no less skeptical of gold money than Machlup.

But the Randian mind was not overly concerned with the trifling virtue of integrity. There was only Reason (always capitalized), and whoever did not come to endorse Reason as defined by the Ayn Rand church had to be stupid, evil, or hard of hearing. Being friends with such a person was out of the question. The Randian way of dealing with disagreements was to confront the dissenter with a stark choice: either undergo an endless series of discussions with the foregone conclusion that the dissenter had fallen prey to the heresy of irrationalism, or be expelled from the group and shunned by all its members.

In the fall of 1961, Nathaniel Branden showed once again that bullying his opponents was his forte. The New Individualist Review, a journal edited by Ralph Raico, who was by then a doctoral student in Chicago under Hayek, had published a critical piece on Ayn Rand. This prompted Branden to ask Hayek, who was on the editorial board of the Review, publicly to dissociate himself from the author of the article, and to “insist an apology to Miss Rand be printed in The New Individualist Review on your behalf and in your name.”²² He also sent a copy of the letter to Mises, who was certainly happy to have kept the Randians at arm's length. Of course Hayek never complied.

Mises abhorred such bullying. He had a different way of dealing with smears. In the fall of 1961, Mises and Rand met at a party in Henry Hazlitt's house.²³ After dinner, a discussion between them turned into an argument on philosophical principle and drew the attention of the bystanders. It is not clear what was said, even though there were a number of topics on which they heartily disagreed.²⁴ In any case, Russell Kirk, a notorious critic of Randianism who had witnessed the discussion, was later reported to have said in his lectures before student audiences that Mises had called Ayn Rand “a silly little Jew girl.” When the report was brought to Mises's attention, he immediately wrote to Kirk: “I never called Mrs. Ayn Rand—or for that matter, anyone else—‘a silly little Jew girl.’ I should be obliged if you would not repeat this false story in the future.”²⁵

Kirk denied it all:

Your informant, with the eccentricity and fanaticism characteristic of the Randian cult, seems to have combined details from several accounts of the meeting between yourself and Miss Rand which she had heard, and to have attributed the composite story to me. Any anti-Jewish prejudice, or suggestion thereof, was not contained in my second-hand account, nor in the account which I heard. But I am glad to have from Mr. Hazlitt a more accurate report of the encounter, before receiving your letter.²⁶