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Advancing Austrian Economics, Liberty, and Peace

Advancing the scholarship of liberty in the tradition of the Austrian School

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REVIEWS of Man, Economy, and State (Table of Contents):

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Ludwig von Mises: As the result of many years of sagacious and discerning meditation, [Rothbard] joins the ranks of the eminent economists by publishing a voluminous work, a systematic treatise on economics.... An epochal contribution to the general science of human action, praxeology, and its practically most important and up-to-now best elaborated part, economics. Henceforth all essential studies in these branches of knowledge will have to take full account of the theories and criticisms expounded by Dr. Rothbard. [Read Mises's full review]


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Henry Hazlitt: It is in fact the most important general treatise on economic principles since Ludwig von Mises's Human Action in 1949.

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Hans-Hermann Hoppe: Man, Economy, and State is Murray Rothbard's main work in economic theory. It appeared in 1962, when Murray was only 36 years old. In it Murray develops the entire body of economic theory, in a step-by-step fashion, beginning with incontestable axioms and proceeding to the most intricate problems of business cycle theory and fundamental breakthroughs in monopoly theory. And along the way he presents a blistering refutation of all variants of mathematical economics. The book has in the meantime become a modern classic and ranks with Mises's Human Action as one of the two towering achievements of the Austrian School of economics. In Power and Market, Murray analyzes the economic consequences of every conceivable form of government interference in markets. The Scholars Edition brings both books together to form a magnificent whole.

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Joseph T. Salerno: The revival of Austrian economics as a living scientific movement can be dated from the publication of Rothbard’s Man, Economy, and State in 1962, a contribution to Austrian economics and to pure economics in general that ranks as one of the most brilliant performances in the history of economic thought.

The book was a two-volume treatise of nearly 1,000 pages written in scintillating English that logically deduced the entire corpus of economic theory step by step from the undeniable fact of purposeful human action. It integrated the insights and theorems of dozens of previous Austrian economists from Menger to Mises into a systematic and comprehensive organon of economic theory. Perhaps the greatest of Rothbard’s many contributions in his treatise was the elaboration of a unified theory of production, extending over five of the treatise’s 12 chapters and encompassing the capital structure, interest rate determination, factor pricing, and the entrepreneurial role in production.

While many elements of the theory had been developed previously by various Austrian economists, they had never been fully integrated and several elements were still missing. Rothbard’s methodical treatment of production repaired one of the few serious gaps remaining in Austrian economics after Mises. Rothbard’s book also contained critiques of contemporary neoclassical and Keynesian theories and a critical analysis of typical state interventions into the economy.

In 1970, Rothbard published Power and Market (1970), an exhaustive typology and analysis, based on value-free economic theory, of the myriad of government interventions into the economy. One of its many innovations was to identify and analyze taxation and government spending as types of intervention into the free market economy rather than, as in the long-entrenched conventional view of economists, the necessary means for creating and enforcing a legal framework for the market economy. The book also contained the first analysis of free market defense agencies from an Austrian perspective as well as a path-breaking Wertfreipraxeological critique of antimarket ethics. (QJAE, 5.1)

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Justin Raimondo: As is apparent from the opening pages of this monumental work, they don't write 'em like this anymore. In the present day and age, economists, as a rule, rarely bother with writing books. Today, the frontiers of economic knowledge are explored in the pages of specialized academic journals and in brief, highly technical articles and notes. In a field that really ought to be "English only," the language of this priesthood of specialists is abstract mathematics. Inscrutable to outsiders, the literature of modern economics is read only by those fellow specialists who inhabit a particular subfield. Like every other field of human knowledge, economics is fractured into numerous subcategories, none of which appears to have much connection with the other. Thus it is possible, in this Wonderland we live in, for a distinguished scholar in the field to know everything about the wage patterns of 19th-century Appalachian coal miners and nothing about the most basic principles of economics. Incredibly, with the exception of textbooks for undergraduates, very little discussion of economic theory and empirical work is written in English.

The sheer breathtaking scope of Rothbard's vision is enough to spark an idealist's interest in the "dismal" science. Here is economics for living, breathing human beings; not statistics, computer models, and arcane mathematical symbols. First published in 1962, Man, Economy, and State is something very different from the narrow worm's-eye view of the field afforded by modern economics texts: a systematic treatise, a comprehensive synthesis of economic thought, a majestic overview of basic principles and their application. Except for Ludwig von Mises' monumental Human Action (1949), Rothbard's book is the only such treatise published since the early 20th century, when the "principles" book was the standard form in which economists presented their ideas. Designed to be accessible to any interested reader, and presupposing no formal training in economics, mathematics, or statistics, the book covers nearly all of basic economic theory, from barter and indirect exchange to competition and monopoly, public expenditures, money and interest, and inflation and the business cycle.

As the heir and champion of the great Ludwig von Mises, Rothbard is the leading figure in the so-called "Austrian" School of economics. Founded in the 1870's by the Viennese economist Carl Menger and his successors, the Austrians emphasize the human aspect of economic behavior. This reverses the modern trend, which reduces human beings to a series of numbers in some planner's grand design. The economists of the 20th century, always eager to appear "scientific" and up-to-date, adopted the outlook and methods of experimental physics. The Austrians, in contrast, maintain that the social sciences, and economics in particular, require a method closer to logic. Thus, Austrians favor verbal reasoning over mathematics, causal explanations over formal descriptions of "equilibrium," and an emphasis on the subjective nature of economic decisions and knowledge. They also tend to be strong advocates of laissez- faire capitalism, even more so than members of the better-known Chicago School. Deriving the principles of economics from self-evident axioms, the Austrians see the free market not merely as the most efficient allocator of scarce resources, but, more importantly, as part of the natural order of things.

Given the popularity of the pragmatic-empiricist Chicagoites among establishment conservatives, it is easy to see why, even with the political and moral collapse of socialism, the free market is nowhere in sight; who, after all, is willing to go to the barricades for an empirical study? But men have laid, and will lay, down their lives for what they believe to be the natural order, especially if they see it violated by government on a daily basis. Rothbard is a breath of fresh air for all those who are looking not for policy-wonk cost-benefit analyses and arguments for "efficiency," but for a philosophy of the social sciences, of which economics is but one branch.

It is impossible in a review to do justice to the scope and depth of the book's contents. Among the author's original contributions are a treatment of the theory of interest as integrated into the theory of the firm (in Chapter 7) and a discussion of monopoly (in Chapter 10) in which Rothbard demolishes the concept of a free-market monopoly and proves that no one can maintain a stranglehold on the economic life of a nation unless it is enforced at gunpoint, i.e., by the government. This volume is a gold mine of numerous insights and observations on topics ranging from business organization and comparative economic systems to legal philosophy, history, and psychology.

In addition to presenting a general theory of economics itself, the author rebuts numerous fallacies and misinterpretations, including most of the common policy prescriptions of the time. Since this book is a reprint of the earlier edition, his discussion covers only those fallacies that were around as of 1962. The last 30 years have spawned many more, and it would have been nice to have an updated edition, but this is a minor quibble. Out of print since the early 1970's, Man, Economy, and State is the necessary antidote to the nonsense that passes for economics these days, an indispensable weapon in the battle against the redistributionist schemes of the Washington power elite.

The significance of this work is tied up with its history, and so you should know that Man, Economy, and State was originally published as part of a series sponsored by the now-defunct William Volker Fund, which also funded Mises' salary at New York University, as well as part of Hayek's at the Committee on Social Thought at the University of Chicago. The Volker series also included Mises' Epistemological Problems of Economics and Israel Kirzner's first book, The Economic Point of View. Rothbard worked as a full-time analyst for the Volker Fund, tracking down the few free market-libertarian scholars that existed and making it possible for them to continue and expand their work. The fund was the main link in the network of Old Right economists, who were never for a moment reconciled to the welfare-warfare state, and its collapse was due in part to the crisis that occurred in the conservative movement of the 1950's.

The fund was, in large part, a casualty of the struggle between the Old Right and the New and the breakup of the conservative-libertarian alliance over the issue of the Cold War. With the Volker Fund's demise, the hard-core free-market analysis of economic thought represented by the Austrian School was largely absent from the ranks of the conservative establishment; the incursions of neoconservative pragmatists and ex-Marxist social scientists who envisioned a "conservative welfare state," as Irving Kristol puts it, thus met with little resistance in the councils of the right. The publication of this new edition of Man, Economy, and State, together with Power and Market, therefore comes at just the right time. As libertarians and conservatives rediscover their common Old Right heritage and cast aside Kempian nostrums of neoconservative welfare statism, this book will do much to instruct a new generation of conservative activists who understand that knowledge is the prerequisite for activism.

The author of 20 books and more than 1,000 articles, Murray N. Rothbard has been a mentor and an inspiration to the partisans of liberty since the early 1950's. If he had written only Man, Economy, and State, it would have been enough to secure him a permanent place among the luminaries of libertarian thought. As it is, the astonishing range of his writings, from economics to ethics to history to political journalism, reveals the mind of a polymath, so unlike the modern intellectual's narrowness of vision that the two seem representative of different species. He is comfortable everywhere, and just as capable of turning out a knock 'em-sock 'em political polemic as of writing the magisterial Man, Economy, and State.

Murray Rothbard, the happy scholar-warrior of liberty, is a national treasure.

[Justin Raimondo is the author of Reclaiming the American Right: The Lost Legacy of the Conservative Movement (Center for Libertarian Studies) and the famed columnist for AntiWar.com. This is adapted from a published review of a previous edition (Chronicles, November 1994)]

*****

The American Economic Review (June 1963, 53.3, pp. 460-461), Victor Heck: This reviewer seriously doubts that "an unhampered market" of the sort envisioned by Rothbard ha ever existed, or that it would work in the manner he describes even if it did exist, or that society would particularly like it if it should come into existence. … The reviewer found the most interesting reading in the two volumes to be in the voluminous footnotes conveniently group at the end of each volume. These footnotes, which often take a petulant tone, convey better than the text itself Rothbard's conviction that intervention by the State is the root of all evil in economic life. Hence, he attacks monopoly grants, government enterprises of all kinds, the granting of privileges to labor unions and above all the welfare state. Anything remotely suggesting state coercion he regards as the Nemesis of both productivity and freedom."

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Southern Economic Journal XXIX, 3, Jan 1963, pp. 252-253, Lewis E. Hill: "This work has all the strengths and weaknesses of the Austrian tradition in which it is written. Rothbard builds much of his argument Böhm-Bawerk's positive theory of capital; therefore, he is subject to many of the same criticisrns which have been directed against Böhm-Bawerk. The author follows the Austrians by contending that marginal utility is the sole determinant of value, and is very critical of the Marshallian tradition for considering costs of production to be a value determinant of equal importance with marginal utility. Rothbard de-emphasizes costs of production, insisting that costs are price-determined, rather than price-determining. To the extent that costs of production are analyzed, they are given the subjective interpretation of psychic costs involved in the disutility of labor and waiting. The Keynesian system of economic analysis is most emphatically rejected in favor of the Austrian stages-of-production theory of the business cycle.

These volumes are refreshing in their originality, and challenging in the boldness of their approach. They constitute a comprehensive and thorough analysis of the principles of Austrian marginal-utility economics, which are carefully explained and clearly illustrated with many examples. This work is probably the most accurate and detailed praxeological analysis of the economy which has yet been written. Nevertheless, in my opinion, it deserves at least four major criticisms.

First, to deduce "the entire corpus of economics" from three axioms is heroic over-simplification, to say the very least. These axioms are not "apodictically true" in the absolute sense, but are relative truths, subject to so many qualifications that they cannot support Rothbard's logical arguments. In the absence of the necessary qualifications, this reviewer would reject the axioms as meaningless nontruths. Second, Rothbard disregards the frictions and imperfections which would plague the economy even in the absence of governmental intervention, and the problems which result from these frictions and imperfections. Involuntary unemployment, the concentration of economic power in the large corporation, and economic growth and development are among the contemporary economic problems which the author fails to recognize, either because he denies the existence of these conditions, or because he denies that such conditions constitute problems to a free market economy. Therefore, even if, for purposes of argument, we accept Rothbard's analysis as logically valid, it would be of limited and doubtful usefulness as an intellectual tool for solving practical economic problems.

Third, the analysis of monopoly is untenable, because grants of privilege by the state are identified as the sole source of monopoly. This analysis denies the existence of monopoly originating in the market power of large corporations and cartels. Rothbard does not recognize that concentrations of market power can be used coercively to establish monopolistic restraints of trade. Consequently, he develops an indefensible double standard of monopoly, according to which governmental monopoly is condemned as very bad, while corporate monopoly is regarded as nonexistent or harmless.

Fourth, there is a complete absence of empirical verification. Rothbard not only fails to verify axioms, postulates, and conclusions, but also insists that empirical verification is not proper analytical procedure, because he regards economic truth as empirically indeterminable. The reader is asked to accept both assumptions and conclusions as economic dogma, and is allowed to question only the internal logical consistency of the system. As has been indicated above, this reviewer does not accept Rothbard's axioms in the absolute and unqualified form in which they are stated. His conclusions may or may not have empirical relevance to the economic problems of the real world. The author does not recognize the legitimacy of the empirical research which might verify his conclusions.

For the reasons which have been indicated, this reviewer cannot recommend Rothbard's work for the "intelligent layman," to whom the book is addressed. The professional economist, who has acquired a critical and discriminating electicism, may find these volumes to be an interesting and informative elaboration of Austrian marginal-utility economics, and an unusually forthright statement of the laissez-faire conclusions to which such analysis leads. The praxeological method may prove to be a useful supplement to other methods of economic analysis, but it is not the only legitimate method. Rothbard may have discovered some part of a larger body of economic truth, but few economists will accept his principles as whole truth in economics.

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New York University Law Review. Manuel S. Klausner. (June 1963. Vol. 38, No. 4, pp. 802-807.) [See the original text in PDF] Since the economic revolution ushered in by the New Deal, the unhampered free market system has been regarded as ill-suited to the needs of the modern, industrialized American society. We live in an age in which the government has assumed a steadily expanding role in the economy. The doctrines of Lord Keynes have become the prevailing orthodoxy, while non-Keynesian economics has become as out of fashion as pre-Newtonian physics. The teaching of economics today is primarily confined to the teaching of the "new economics"; against the free market economy is exhibited a strong intellectual prejudice which manifests and perpetuates itself in the neglect of those writers who support the free market system. The sad fact is that few students have even heard of the leading contemporary free market economists, let alone acquired a familiarity with their works and an understanding of their ideas.

The foremost exponent of the "Austrian libertarian school of economic thought," Dr. Ludwig von Mises, has contributed many important works to economic science, the most significant of which is his treatise, Human Action.[1] Now his former student, Murray Rothbard, has written Man, Economy, and State, a comprehensive and systematic treatise on the principles of economics, which both expands and clarifies the Misesian structure of economic science.[2] Beginning with the application of the implications of human action—that human beings resort to appropriate means toward the attainment of desired ends—to the behavior of an isolated individual ("Crusoe economics"), Dr. Rothbard extends his analysis to the workings of a society based on voluntary contractual agreements and the unhampered or free market. He describes the contractual society of the market as a genuinely cooperative society where "each person specializes in the task for which he is best fitted, and each serves his fellow men in order to serve himself in exchange." (p. 84)

In contrast to the hegemonic form of society, in which one person or one group of persons exploits the others, a contractual society leaves each person free to benefit himself in the market and as a consequence to benefit others as well. . . . It is this almost marvelous process, whereby a man in pursuing his own benefit also benefits others, that caused Adam Smith to exclaim that it almost seemed that an "invisible hand" was directing the proceedings, (pp. 84-85)[3]

  In recognizing that "the regime that tends to maximize consumers' satisfaction . . . is one of simple economic liberty," (p. 582) Rothbard, while criticizing the use of the term "consumers' sovereignty," (pp. 560-66) in effect adopts what may be termed the "consumer perspective of the market."[4] "It is the consumers . . . [through their buying and abstention from buying] who make the decisions for the economic system," and "to the extent that producers wish to make money, they drive toward ever more efficient servicing of the desires of the consumers." (pp. 467, 557)

  Perhaps the major single usefulness of Man, Economy, and State is found in Rothbard's lucid presentation of the business-cycle analysis of the "Austrian" school, with his terse conclusion that "there can be no business cycle in the purely free market." (p. 764) The dread problem of the business cycle, with its pattern of prosperity or "boom" followed by crisis and depression, has never been answered by the "overwhelming bulk of current business cycle theory [which] is not economics at all, but meaningless manipulation of mathematical equations and geometric diagrams." (p. 764)

  Rothbard presents the following theory of the business cycle as a complete answer to the cause of extreme fluctuations in business conditions: The essential point is that credit expansion always generates the boom-depression cycle by reducing the market rate of interest, thus creating distortion and malinvestment. (p. 862) The drop in interest rates induces businessmen to embark upon projects which would not be profitable at a higher interest rate.[5] The ensuing intensified activities of business continue so long as there are further doses of bank credit expansion, for the boom that is created is kept going only by continuing to increase the supply of money. Once the banks begin to restrict the expansion of credit, the breakdown appears. As prices and consumption increase, businesses realize that investments during the boom have been wasteful and unprofitable. Readjustment comes about with the liquidation of bad investments in the depression stage. "[T]he crisis-depression phase is the curative period, after people have been forced to recognize the malinvestments that have occurred." (p. 860) The larger the scope of malinvestment and error during the boom, the longer the task of readjustment in the depression. Until recovery to normal conditions ultimately is achieved, there must be the painful period of liquidation and bankruptcy, accompanied by heavy unemployment.                                                 

Is there any way to prevent a depression? Yes, states Rothbard, the answer is simple: "[A] void starting a boom. And to avoid starting a boom all that is necessary is to pursue a truly free-market policy in money, i.e., [rejecting fractional-reserve banking in favor of] a policy of 100% specie reserves for banks and governments." (p. 862) The practice of fractional-reserve banking is what permits the banks to expand credit. To Rothbard, this basic banking procedure, whereby banks are not required to retain in their vaults the full amount of the liabilities that must be paid to their depositors on demand, is tantamount to fraud. (pp. 702-03) The outlawing of this practice is what underlies Rothbard's thesis that the unhampered free market would not be in danger of suffering depression.[6]

Of special interest to lawyers is Rothbard's thorough analysis of the theories of monopoly, monopoly price, and monopolistic competition. He points out that "despite the reams of literature on monopolies, very few economists have bothered to define monopoly." (p. 907 n. 29) After a fresh critique Rothbard dismisses other definitions of monopoly as "confused" or "inexpedient,"[7] and he adopts the original common law definition of monopoly as the only proper and meaningful one: "Monopoly is a grant of special privilege by the State, reserving a certain area of production to one particular individual or group." (p. 591) By this definition, no monopoly can arise in a free market, unhampered by governmental interference. The author proceeds to investigate the theory of monopoly price and concludes that "the entire concept is meaningless" because, in the free market, there is no way to define and distinguish a "monopoly price" from a "competitive price." "There is only the 'free-market price.'" (pp. 614-15) In short, there can be no monopoly or monopoly price on the free market.

  However, to examine the other side of the coin, the theory of monopoly price "applies fully" in the case of monopoly and quasi-monopoly grants from the government, based on the identifiable distinction between the "free-market price" and the "monopoly price." (p. 787) Thus, rather than leading to any complacency about the monopoly problem, Rothbard's theory mainly focuses attention on the state as the true source of monopoly:[8]

Monopolistic grants can be either direct and evident, such as compulsory cartels or licenses; less direct, such as tariffs; or highly indirect, but nevertheless powerful. Ordinances closing businesses at specific hours, for example, or outlawing pushcart peddlers or door-to-door salesmen, are illustrations of laws that forcibly exclude competition and thereby grant monopolistic privileges. Similarly, anti-trust laws and prosecutions, while seemingly designed to "combat monopoly" and "promote competition," actually do the reverse, for they coercively penalize and repress efficient forms of market structure and activity, (p. 790)

Rejected too are the theories of monopolistic or imperfect competition, which "uphold as their 'ideal' the state of 'pure competition' rather than 'competition' or 'free competition'" and set up a perfectly elastic demand curve for pure competition. (pp. 632-33) The pure-competition theory itself, Rothbard reasons, is fallacious, since it is based on the idea that no one firm through its actions can have any influence on the price of its product. "[T]here can be no such thing as a firm without influence on its price" because "the individual firm, no matter how small, always has a perceptible influence on the total supply." (p. 633) Thus, while the demand curve for each small firm may be "very highly, almost perfectly, elastic . . . the fact that it is not 'perfect' destroys the entire concept of pure competition." (p. 634) Once the "perfect-elasticity myth" has been discarded, there is no problem of imperfect competition stemming from "differentiated products" and "oligopoly" or fewness of firms. (pp. 635-38)

  Of further interest is Rothbard's analysis of property and the role of contract in a free society. "[T]he origin of all property is ultimately traceable to the appropriation of an unused nature-given factor by a man and his 'mixing' his labor with this natural factor to produce a capital good or a consumers' good." (p. 147) If this rule of first ownership by the first user is followed, individuals may acquire property rights in wave lengths available for radio and television purposes, in fishing rights in oceans, and in any other scarce goods which are "not available in unlimited quantities relatively to human wants."[9] (p. 150)

  After completing his examination of the free market, Rothbard critically studies the effects of government intervention in the market ("the substitution of coercion for voluntary actions") and socialism (the "violent abolition of the market"). (p. 765) Following in the path of Professor Mises,[10] Rothbard in effect maintains that no "middle way" or "third system" is possible as a pattern of a permanent social order. Thus he states, "There are two and only two ways that any economy can be organized. One is by freedom and voluntary choice—the way of the market. The other is by force and dictation— the way of the State." (p. 830) He goes on to demonstrate that while superficially "it may seem that the way of the market is only anarchic confusion and chaos . . . [and that] the way of the State constitutes genuine organization and 'central planning,'" in fact "the truth is quite the reverse." (pp. 830, 879-80)

State operation or intervention is . . . far less efficient and creates many disruptive and cumulative problems of its own. Moreover, a socialist State, deprived of the real market and its determination of prices for producers' goods, cannot calculate and can therefore run a productive system only in chaotic fashion. . . . Mises' demonstration of the impossibility of economic calculation under socialism has never been successfully refuted." (p. 830)[11]

One need not agree with all of Dr. Rothbard's views and conclusions to recognize that Man, Economy, and State represents a major contribution to the science of economics. None who seeks to attain a maximum of security and material well-being without sacrificing personal freedom can afford to ignore this challenging and stimulating treatise.                                      

There are some special reasons why Rothbard's treatise is of particular interest and value to lawyers. Because economic issues underlie and permeate much of law and politics today, it is imperative that lawyers study and comprehend economics.[12] This is not only true for lawyers who wish to take an active part in civic and political affairs; for all lawyers have some influence on the values and conduct of their fellow-citizens, as well as in the shaping of our legal and political processes. That the content of many of the courses in the legal curriculum deals with government control and regulation of business illustrates the need for a closer association between law and economics. A study of the legal aspects of the antitrust laws, for example, is incomplete without a grasp of the underlying economic principles which are involved. Despite this manifest necessity for economic education as a part of the preparation for the practice of law, such training has been neglected in the curriculum of most American law schools. Serious study of volumes such as Man, Economy, and State could alleviate this problem. Lawyers, and noneconomists in general, can find no more readable treatise and no more forthright case for freedom and free enterprise.

MANUEL S. KLAUSNER[13]



[1] (1949). A revised edition of Human Action will soon be published by Yale University Press.

[2] "It was with the writings of the Austrian school in the 1870's and 1880's that economics was truly established as a science." (p. 304) The "Austrian" school, which includes some Englishmen and Americans, is to be distinguished from the classical and neoclassical schools.

[3] "The fact that each man, in pursuing his own self-interest, furthers the interest of everyone else, is a conclusion of economic analysis, not an assumption on which the analysis is grounded. Many critics have accused economists of being 'biased' in favor of the free market economy. But this or any other conclusion of economics is not a bias or prejudice, but a postjudice . . .—a judgment made after inquiry, and not beforehand." (p. 766)

[4] The adoption, in effect, of the "consumer perspective of the market" is not a bias or prejudice, but is made after inquiry into the workings of the market. Its major value lies in its use as a tool for teaching and evaluating the merits of the free market, which would serve as a means of alleviating the prejudice which many have against the idea of economic freedom. Compare the suggestion of Professor Cahn that "the choice of perspective makes a decisive practical difference" in the assessment of representative officials. Cahn, The Predicament of Democratic Man 30 (1962).

[5]The essential feature of the boom is not overinvestment, but malinvestment, which results from the distortion of the market rate of interest. See Mises, Human Action 556 (1949).

[6]Rothbard excludes "both explicit violence and the implicit violence of fraud from . . . [his] definition of the market—the pattern of voluntary inter-personal exchanges." (p. 158)

[7]For example, the definition of a monopolist as "the only seller of any given good" means that "whenever there is any differentiation at all among individual products, the individual producer and seller is a 'monopolist' . . . , This definition . . . labels all consumer distinctions between individual products as establishing 'monopolies,'" and because it is so "extraordinarily broad" can hardly be used successfully, (pp. S90-91)

[8]While Mises does not go so far as Rothbard in his analysis of cartels and monopoly prices, he nevertheless stresses that "the great monopoly problem mankind has to face today is not an outgrowth of the operation of the market economy. It is a product of purposive action on the part of governments." Human Action 363 (1949). Compare Lippmann's observation that "few effective monopolies have ever been organized and . . . none can long endure except where there is a legal privilege." The Good Society 223 (1943).

[9]In a provocative discussion of copyrights and patents, Rothbard concludes that patents are incompatible with the free market because they are "grants of exclusive monopoly privilege by the State," and challenges the utilitarian argument that they are necessary to encourage research. (pp. 652-60)

  Moreover, some brief observations concerning defamation (p. 157), blackmail (p. 443 n. 49), negotiable instruments (p. 155), and the types of contracts that should be enforced (pp. 152-54), are included, but they are hardly convincing, and will be rather difficult for lawyers to accept.

[10]See, e.g., Mises, Bureacracy 10 (1962); Mises, Planning for Freedom 18-35 (1952).

[11]In referring to Mises' explanation of the problem of economic calculation under socialism, Walter Lippmann wrote: "An acquaintance with this school of socialist criticism is indispensable to all who would now discuss the problem of collectivism." The Good Society 94 (1943). Yet, as Rothbard points out, "It is remarkable that so many antisocialist writers have never become aware of this critical point." (p. 901 n. 60)

[12]Rothbard explains why knowledge of economics is "necessary, though not sufficient" for making a rational economic judgment in the fields of government intervention and trade union activity: "Economics cannot itself decide on ethical judgments. But in order for anyone to make ethical judgments rationally, he must know the consequences of his various alternative courses of action. In questions of government intervention or union action, economics supplies the knowledge of these consequences." (p. 627)

[13]Member of the California and New York Bars; Ford Foundation Fellow in Comparative Law at New York University School of Law.