Murray N. Rothbard is one of the all-time greats in Austrian economics and libertarianism. Period. When one studies his work and comprehends the overarching system he built, one immediately recognizes that Rothbard is indeed a giant whose shoulders free market scholars should aspire to stand on.
Most academics hope to produce meaningful research that answers some narrow theoretical or empirical question. Many popular writers yearn to publish one acclaimed article or book sometime in their career. What makes Rothbard so incredible is that he did both and in multiple disciplines. The prolific Rothbard produced pathbreaking and widely read works in economic theory, philosophy, political science, economic history, the history of economic thought, pure history, political strategy, and current events. His systematic and logical reasoning has encouraged countless readers to think about the world in such a profoundly different way that they feel as though they have just discovered the key that unlocks the secrets of the universe.
The unifying principle behind Rothbard’s writings is “libertarianism—the discipline of liberty.” Rothbard believed that he was building a veritable science of liberty that drew from multiple “areas of the study of human action: economics, philosophy, political theory, history, even—and not least—biology. For all of these provide in varying ways the groundwork, the elaboration, and the application of libertarianism.” Rothbard integrated each of these fields into a logically coherent structure, an ironclad demonstration that the essential condition for human flourishing is individual freedom while the eternal impediment to mankind’s progress is government intervention. Rothbard’s science of liberty really is the golden ticket and the open sesame; it really is the key.
The year 2026 will be celebrated by many as the 250th anniversary of the country’s founding. While the signing of the Declaration of Independence is certainly a praiseworthy event, we should not forget that this year is also the 100th anniversary of Rothbard’s birthday. Rothbard, who wrote so much about the American ideas of liberty, freedom, the right of self-determination, and secession deserves to be celebrated too. The ideas of Rothbard are relevant for the 2020s and beyond, just as the founding principles of the United States are. His work provides a lifetime of insights for students, laymen, popular writers, social media influencers, scholars, entrepreneurs, activists, and politicians. That is why the Mises Institute is proud to announce 2026 as the Year of Rothbard.
This article covers a selection of insights from Rothbard’s science of liberty and explains their relevance for the twenty-first century. It will (hopefully!) be an informative and concise survey of the most relevant aspects. We will first discuss Rothbard’s economics, and why his analyses of capitalist-entrepreneurs and grants of monopolistic privilege are crucial for understanding the workings of the modern economy.
The Rothbardian Economic Edifice
Rothbard was, first and foremost, an economist and received his PhD in economics from Columbia University in 1956. Just a few years later he published Man, Economy, and State, a mighty tome that stands next to Ludwig von Mises’s Human Action as one of the two most important books in the Austrian tradition. Rothbard’s economic theory is an integral component of his science of liberty, so it is appropriate to begin with economics.
At the heart of Rothbardian economics is the comprehensive explanation of the workings of the market economy. Starting from the basic building block of human action, Rothbard deduces step by step the immutable economic laws that explain price formation, production decisions, and the allocation and reallocation of scarce resources. Truly, “the explanation of the free economic system constitutes a great architectural edifice.” Equally important is what he follows this with—an exhaustive overview of the economic laws that demonstrates how government and its policies interfere with and distort the market order. His economic laws hold true for all of human society, regardless of time or place, and are thus crucial for understanding how the modern world works.
Rothbard teaches us that we should understand the economy as one large production structure, with all markets interconnected. Rothbard stresses that we must always remember that production is “a structure of stages, a latticework that moves from the most ‘roundabout’ processes of production—the stages of production most remote from the consumers—down to nearer processes, and finally down to the production and sale of goods and services to the ultimate consumers.” This is true whether we are looking at the production process behind the latest artificial intelligence tool, driverless car, or rocket ship. The production of an advanced automobile begins with the mining of various metals and minerals from the earth, followed by their use in making computer chips and other components. It is only after a significant period of time and the assembly of every component of the car throughout several stages that the automobile is finished and ready for purchase by the consumer.
The major movers and shakers in the production structure are the capitalist-entrepreneurs, the individuals who save and invest in firms, such as by plowing their savings into their own proprietorships and partnerships, purchasing the stock of a corporation, or loaning money to businesses. They allocate their savings toward the production of resources that in turn make the consumer goods they estimate people will most urgently desire.
Rothbard brilliantly reveals how, in the face of seemingly impossible odds, the individual decisions of countless capitalist-entrepreneurs result in a harmonious order. How does it all work? Given the multitude of uncoordinated plans formed by imperfect humans, how do capitalist-entrepreneurs allocate their savings appropriately across the production structure so that the consumer goods people want are produced? The reason is that profits and losses and the relentless pressure of rival business owners ensure efficiency. Good forecasts result in a capitalist-entrepreneur reaping profits, and profits beget other hopeful entrepreneurs in that industry. This leads to more savings being used to produce the goods consumers desire, which in turn leads to an increase in supply, an improvement in quality, and a lowering of prices. Bad forecasts result in losses, which spur a reallocation of savings toward producing consumer goods that are more highly desired. If the capitalist-entrepreneurs who suffer losses do not adjust their behavior, they will go out of business.
The competitive profit and loss mechanism results in one of the most important economic laws of the marketplace: “The market tendency is toward a high level of fit between anticipation and reality, and for a minimum of erroneous investment.” Markets will tend to produce what people want, and consumers will tend to be satisfied. This economic law is always at work. When we observe an increase in the quality of life, such as through new smartphones, quicker delivery service for online orders, and lower TV and electronics prices, Rothbard’s reasoning provides the ultimate explanation.
Many people roll their eyes when they hear such an explication of the free market. They think this reasoning doesn’t apply to goods X, Y, and Z because their prices remain high and their quality stays poor while the businesses that sell the goods continue to reap large profits. For instance, we have all endured interminable flight delays and the extra burden of airlines’ questionable customer service. Are we not subject to a market cartel and all its deleterious effects? Don’t we need the government to step in and ensure order?
What makes Rothbardian economics so relevant in situations like this is its demonstration that the situation is precisely the reverse: Government intervention is hobbling the competitive profit and loss mechanism! Look close enough at an example and you will inevitably find what Rothbard calls a “grant of monopolistic privilege.” Whether through licenses, quality and safety standards, or some other regulatory edict, grants of monopolistic privilege raise the cost of competition and discourage (or outright prohibit) new capitalist-entrepreneurs from entering certain lines of production. The result is that profits do not reflect consumer satisfaction because entry and efficiency are forcibly discouraged. Quantity and quality are lower and prices are higher than what would be the case on the free market. That monopolistic grants have restrictionist consequences is one of the most crucial economic laws of government intervention.
Despite the harmful outcomes they cause, monopolistic grants proliferate throughout our economy because “in the present day [they are] far more likely to be hidden or indirect, cloaked as a type of penalty on competitors, and represented as favorable to the ‘general welfare.’” That makes them very difficult for the public to detect. In the case of the airline industry, competition from foreign airlines is restricted. Under the guise of national security and safety, airlines with more than 25% foreign ownership are barred from offering flights between US airports. This has led to a government-sponsored cartel of domestic airline companies. In contrast, in the European Union, the restriction is less severe and companies that want to offer flights between European countries are allowed up to 49% foreign ownership. Is it any surprise that EU airlines often have lower prices and better service than their American competitors?
The implications of Rothbardian economics are clear. The fruits of the economy that we often take for granted—improvements in quantity, quality, variety, and affordability—are due to the ceaseless efforts of capitalist-entrepreneurs operating throughout the structure of production under the disciplinary framework of profit and loss and competition. In contrast, long-lasting inefficiencies and the resultant frustrations that many of us experience when we purchase ordinary goods and services are due to government grants of special privilege. May those who strive to build a better future recognize these economic truths!
Rothbardian Political Philosophy
Alongside his work on economic theory Rothbard wrote extensively on political philosophy. This was very appropriate because a robust analysis of exchange requires a theory of contracts and what counts as violations of said contracts. Rothbard penned many influential works on political theory that are still read to this day—For a New Liberty made the definitive case for anarcho-capitalism and the private provision of law and order, and The Anatomy of the State exposed governments for what they truly are. In fact, a mises.org link to the latter was tweeted by the CEO of Twitter, Jack Dorsey, in 2021!
Just like Rothbardian economics, Rothbardian political philosophy is eye opening. No one—and I mean no one—explains the essence and nature of the government quite like Rothbard. From ancient empires to modern-day constitutional democracies, Rothbard’s all-encompassing theory of the origin and functioning of government is the essential analytical lens.
When studying social interactions between individuals and the exchanges of goods that they make, Rothbard stresses that one can never lose sight of the fact that “what is actually being exchanged is the title of ownership to each of these goods.” A core component of Rothbard’s science of liberty is the elaboration of the concept of property titles and what is a voluntary exchange as opposed to a coerced transfer.
Most people think of the government as indispensable in outlining and enforcing property titles. They may grumble about government interference in their life and grouse at having to pay taxes. But from their earliest days in grade school to this morning’s news articles they have been taught that government is the necessary price for the maintenance of civilization. If they don’t like how things are done, then the best they can do is to vote for someone else in the next election. There is no other way.
In his usual lucid and insightful manner Rothbard exposes the error in this line of thinking. Using both theory and empirical evidence Rothbard demonstrates that the state is not just another business people choose to patronize. It is not an ice cream shop, Amazon, or a private security firm. It is, in fact, a legalized crime syndicate. The state is “that organization in society which attempts to maintain a monopoly of the use of force and violence in a given territorial area; in particular, it is the only organization in society that obtains its revenue not by voluntary contribution or payment for services rendered but by coercion.” States emerge through conquest and subjection of the populace. Individuals are unable to patronize different providers of law and order like they can with other goods and services—they must pay taxes to the government ruling over the land they live on or be sent to jail.
The government, moreover, does not operate like businesses in the marketplace, where skilled capitalist-entrepreneurs who satisfy consumer desires earn profits while the less efficient ones suffer losses. Instead, there is only the ruling caste of the exploiters, “the kings, politicians, and bureaucrats who man and operate the State [and] the groups who have maneuvered to gain privileges, subsidies, and benefices from the State.” These individuals earn money according to how effectively they wield power and how well they lobby (or help those who lobby) for grants of monopolistic privilege and other favors. The ruling caste makes its money through the “powerful and terrible alliance of warrior chief and medicine man, of Throne and Altar.” In return for their slice of the pie, the court intellectuals convince the public that they should accept the rulers’ authority and not question their decisions.
Some would respond by stating that although the Rothbardian concept of the state accurately describes the governments of antiquity or modern authoritarian regimes like Russia, China, Iran, and North Korea, it does not shed light on the operation of Western democracies like the United States. Our armed forces exist to defend the public and fight the bad guys abroad. Our government is run by democratically elected politicians who operate under the rule of law. Our government is defended by enlightened experts who have the public’s best interest in mind.
They are mistaken. The essence of democracies and autocracies is the same. In fact, our own government was born in conquest. “It was a bloodless coup d’état.” The government enshrined in the US Constitution only came into existence because “the Federalists, by use of propaganda, chicanery, fraud, malapportionment of delegates, blackmail threats of secession, and even coercive laws, had managed to sustain enough delegates to defy the wishes of the majority of the American people and create a new Constitution.”
While better than many alternatives, the US government still runs on coercion. Disagree with the police and you will be thrown in jail, or worse. Disagree with the military and your country will be bombed, sanctioned, or invaded. The only set of international rules the US follows is that whatever it does is right and that other countries must do only what the US government deems acceptable.
Every election in the US is a choice between two political parties who advocate awarding different privileges to different special interests. Forty-nine percent of the population is forced into accepting whomever the other 51% voted for. Moreover, the 51% who choose the winner do so in the mistaken belief that the politician will enact policies that benefit them and not the special interests who donated large sums to their campaigns. The public is stuck with the choice and forced to suffer the consequences. It is true that individuals have the option of moving to a different state or country, but even this choice is made under coercion because individuals have to sell the land that they own. They can’t break territory away from one government to join another state or start a new country. The United States projects to its citizens the illusion of choice while violating one of the country’s most important founding principles—the right to self-determination.
The court intellectuals know how the game works and defend it. The economists, historians, foreign policy experts, and other credentialed officials at government bureaus, state universities, and think tanks are the modern-day medicine men. In return for taxpayer subsidies they justify government interventions X, Y, and Z on the grounds of national security and a higher GDP.
Politicians come and go, but Washington, DC, operates much like the imperial cities of years past. Coercion is wielded, bureaucratic sinecures are awarded, and special privileges are sold. The result is that out of the ten wealthiest counties in the United States according to median household income, no less than five are in the DC area. They and their rankings are as follows: Loudoun County (first), Falls Church (second), Fairfax County (fifth), Howard County (sixth), and Arlington County (seventh). Can anyone honestly suggest that this is the result of the consensual choices of the people?
Rothbard’s political philosophy provides penetrating insights into how to view the United States. Our rulers want to be seen as leaders who run a friendly neighborhood club that is looking out for everyone’s best interests. In reality, they just want to keep the public occupied while they rob Peter to pay Paul. When people are listening to a news announcement by a politician, watching the president’s State of the Union address, reading an article by a national security expert, or standing in the voting booth, they should remember the true anatomy of their government.
Rothbardian Empirical Analysis
Murray Rothbard was not an armchair theorist who avoided empirical research. On the contrary, Rothbard studied real-world, flesh-and-blood individuals and wrote about economics, ideas, politics, and culture. His writings on historical episodes and current events actually constitute a larger portion of his output than his theoretical work. He produced eye-opening studies of these phenomena by synthesizing immense amounts of facts and interpreting them with the relevant theories. Take, for example, his popular writings on politics and economic policy in The Libertarian Forum and his historical treatises Conceived in Liberty and An Austrian Perspective on the History of Economic Thought. In each of these Rothbard provided penetrating insights into people, their ideas, and the consequences of their decisions.
Rothbard’s empirical studies, such as those scrutinizing a colonial governor in the 1600s, the failure of the merger movement in the early 1900s, or President Richard Nixon in the early 1970s, are important not only for the rich information they furnish about specific individuals, businesses, and government policies. More fundamentally, they have lasting relevance because they are expert demonstrations of the appropriate method one must use to accurately explain the causes of people’s decisions and why they acted in specific ways. Rothbard’s interpretative framework is an indispensable tool for anyone who wishes to understand the real world of 2026 and beyond.
When studying human events—past, present, and future—one must collate and interpret data concerning individuals and their actions. The subjective nature of this process means that any coherent narrative requires certain information to be included and other details left out. In all of Rothbard’s empirical writings he always sought to structure his case studies around the question Cui bono? Who benefits from this measure? More precisely, why did they do something? If an entrepreneur tells an interviewer that he created product X for God and country, is he telling the truth? Might his main motivation actually have been to make lots of money? If a nineteenth-century social reformer advocated prohibiting alcohol consumption, did she do it to help others or to save herself by establishing the kingdom of God on earth? If a military defense contractor advocates for subsidies to his industry on the grounds of national defense, could the real reason actually be that he is interested in making profits courtesy of the taxpayer? Of course, the plausibility of these motivations does not mean that they are necessarily true. These are only hypotheses, and the historian or investigative journalist must dig deeper and look into personal correspondence, speeches, contemporary assessments, business transactions, and so on to determine a historical figure’s motives.
Rothbard’s approach is especially crucial for understanding the actions of government officials. To the extent mainstream writers try to analyze their motivations, they often do it from the assumption that politicians are motivated to improve the public weal. This is because, as Rothbard explained to his students in a lecture, when they “deal with government officials— presidents, secretaries of state, secretaries of the Treasury, whatever—they talk about these guys as if they dropped from outer space. . . . They don’t say, ‘Who were these people? What were they doing before they became president? What were they doing afterward?’ They have a life, before and after. If you examine the lives of these people before and after, you find some interesting things which hook up and explain the motivations of many of the actions that they took in office.” Indeed, a proper understanding of government officials requires trying to figure out their motivations by discovering connections between their actions and their backgrounds, relationships, and aspirations. These linkages can and often do lead to persuasive explanations.
Rothbard frequently did such investigative research, especially on the verboten subject of Federal Reserve officials. He showed that the first governor of the Federal Reserve Bank of New York, Benjamin Strong, was a former president of Bankers Trust Company, a financial institution in the ambit of J. P. Morgan & Co., and that this connection helps explain many of the pro–Wall Street policies he implemented in the 1910s and 1920s. Rothbard also stressed that it was no coincidence that Alan Greenspan, the Federal Reserve chair from 1987 to 2006 who engaged in easy money policies that disproportionately favored Wall Street, was a former director of J. P. Morgan & Co. and Morgan Guaranty Trust.
We can, albeit extremely briefly, apply the Rothbardian lens to the current Fed chair, Jerome Powell, and his likely successor, Kevin Warsh. Powell, a former partner at the private equity firm the Carlyle Group, will leave a legacy of juicing up financial markets. Kevin Warsh was a former executive director at Morgan Stanley. He then became a member of the Fed’s Board of Governors and worked closely with Wall Street during the 2008 financial crisis. Is it any surprise that financial markets have celebrated Warsh’s nomination for Fed chair? More evidence is needed, but it isn’t looking good for those who say our Fed leaders are apolitical and not influenced by special interests.
Rothbard’s “cui bono?” approach and the requisite deep dive into individuals’ backgrounds and connections is very relevant for anyone seeking to understand the world that we live in. People’s stated motivations cannot be taken for granted, and what they do before and after undertaking a specific action does matter in trying to figure out why they acted in the way that they did.
The Science of Liberty
Over the course of Rothbard’s prodigious career he made groundbreaking advancements in not one, not two, but multiple disciplines. In doing so he showed how libertarianism is a mighty architectonic built from logical theories and detailed case studies. The science of liberty shows, among many other things, that (1) the free market is an interconnected structure whose mechanism encourages abundance while government restrictions result in the opposite, (2) government is antithetical to the market and runs on force and deception of the populace, and (3) human events must be understood as the consequences of actors who have their own motives. These insights all point to and strengthen libertarianism’s conclusion: Human freedom leads to prosperity; government coercion leads to retrogression.
Rothbard never lived in the 2020s, let alone the twenty-first century. We will never know his unique assessment of technological advancements, the current political situation, the covid lockdowns, or the new war with Iran. But we can use his science of liberty to explain these events and so much more. That is why Rothbard remains as relevant as ever, and that is why 2026 is the Year of Rothbard.
