‘Intelligence’ is often surreptitiously derived from Voices that allegedly must – for reasons of national security – be protected from scrutiny.¹ ‘Intelligence’ is often acquired (or fabricated) and sold by double and triple agents – and by journalists, fraudsters and agenda-driven politicians. When ex post the privileged status of this ex ante ‘Intelligence’ is stripped away, a different picture can emerge: the USS Maine was probably not blown up by the Spanish (1898); the North Vietnamese probably didn’t attack American ships in the Gulf of Tonkin (1964); the yellow-cake-fuelled smoking-gun mushroom cloud justification of the US invasion of Iraq was not a ‘slam dunk’ (2003) etc.²

The truth content of ‘Intelligence’ assertions are, of course, unrelated to the confidence with which they are uttered. US Secretary of Defence Donald Rumsfeld, for example, stated in 2001 that ‘the great principles of the University of Chicago economics’ would produce the capture of Osama Bin Laden (Leeson 2003, 92); but it was special forces of the United States government – not market forces – which accomplished that task.

When governments send citizens to war, those with the capacity to critically evaluate alleged ‘Intelligence’ – public servants, journalists and academics – are often overwhelmed and partially silenced by patriotic momentum. Indeed, the incentives faced by journalists – at least prior to war-weariness – can become aligned with those who promote war: the Fourth Estate as a ‘traitor’-exposing, domestic fifth column. In The Political Economy of War, A. C. Pigou (1921, 111–112) described the market failure relating to ‘the private interests of makers of armaments’ who ‘promote war scares’ and who were ‘not without influence in the press and through the press on public opinion’.

In the 20th century, three world wars facilitated a Communist revolution, a Fascist backlash and the subsequent collapse of both. The weakness of bureaucratic information flows (relative to market-based competitors) undermined Communist economies – a point emphasized by Frederick Hayek, the co-leader (with Murray Rothbard) of the fourth generation Austrian School of Economics. Flows of information and disinformation played pivotal roles in the First, Second and Third (that is, Cold) World Wars.

The First World War was a religion-endorsed clash of empires with little ideological content; the Second initially pitted Fascists and Communists against democracies (until the Communists were obliged to change sides); the rhetoric of the Cold War was unambiguously ideological.

The two ideological fraternities that rally behind the slogans of liberty and equality have tended to embrace either markets or governments, and to demonize the other fraternity and its preferred social organizer. The advance of democracy and its legitimizing underpinning, tax-subsidized human capital formation, has, however, tended to embrace governments and markets as collaborating social organizers (with a case-by-case comparative evaluation of each). But the market-failure paradigm is not anti-market; market-based solutions (tax- and subsidy-adjusted prices) are available to correct for sub-optimal outcomes.

Nuanced scholarship differs from agitprop. In What Is to Be Done? Burning Questions of Our Movement, Lenin (1961 [1902]) argued that the Equality revolution could not wait; the Marxist ‘vanguard’ must hasten history. In What Is To Be Done?, Rothbard’s (2009 [1961]) confidential memorandum to the tax-exempt William Volker Charities Fund, a similar strategy was outlined for Austrian liberty.³

Mises’ political activity was consistent with his ideology: on 1 March 1934, he joined the Austro-Fascist Patriotic Front and their Werk Neues Leben social club (Hülsmann 2007, 677, n149). Mises may also have been a victim of propaganda: his justification for this tactical embrace was that fascists would protect property – the protection of which he saw as the very essence of liberty. Meanwhile, tax-evading fascist kleptocrats were eying Jewish property; in the Anschluss of March 1938, Austria was reunited with Austrian-led Germany, and the Austrian Adolf Eichmann opened the Central Office for Jewish Emigration. The decree on the Declaration of Jewish Assets revealed fascism to be a conveyor belt along which Jews had their property confiscated before being exterminated or driven abroad. As The Last Knight of Liberalism bemoaned: ‘Mises family property had become free booty’ (Hülsmann 2007, 728, 677, n149). The Jewish-born Mises was lucky to escape with his life; he devoted much of the rest of it to describing his opponents as ‘Fascists’.

John Maynard Keynes (1919) had resigned from the British government over the peace treaties that had created the resentful environment in which fascism could emerge and thrive. In the early 1970s, the Austrian School, then in its fourth generation, appeared to be nearing an inglorious personal and community end; after a second bout of prolonged depression (1969–1974), Hayek always carried a razor blade with which to slash his wrist (Cubitt 2006, 89).⁴ However, Mises’ death in 1973 facilitated his School’s resurrection; alive Mises had been a liability, whereas dead he could be marketed as a saint. Benjamin Rogge (1974) reported that at a Philadelphia Society meeting, David Friedman ‘first made clear to us the true fascist nature of [his father] Milton Friedman’s thinking.’ When Rothbard, Richard Ebeling, Gary North, Sudha Shenoy et al. initiated an Austrian revivalist conference in June 1974, one of the highlights was the baiting of Friedman – in person – with the accusation that his son detected ‘latent fascist tendencies’ in him (Ebeling 1974). Shenoy (2003) recalled that ‘Murray Rothbard made the whole affair fun.’

For a quarter of a century after World War II, the social democratic ‘middle way’ appeared to prosper. But in the 1970s, the ideological balance shifted. The regulatory wave had successfully tackled various aspects of market failure,⁵ but had actually exacerbated underlying problems when applied to the control of prices and wages. From the mid-1970s, the deregulation wave began to successfully tackle some of the welf...