Murray N. Rothbard The Making of an Austrian Economist

PART V

Applying the Treatise, 1956–1962

THE COMPLETION OF THE FIRST DRAFT of Man, Economy, and State enabled Murray Rothbard to move on to other activities and projects. He earned his doctorate in 1956 and reviewed papers and books for the Volker Fund, evaluating contemporary research using the body of economic theorems he had deduced. Focusing on the Chicago School, Rothbard criticized Israel Kirzner’s attempt to fuse Austrian insights with neo-Marshallian production theory as well as Milton Friedman and others’ neo-Fisherian monetary economics. Rothbard not only criticized new publications; he also continued to edit his treatise, adding new references and making other changes. In 1962, despite professional and institutional obstacles, Man, Economy, and State was finally published. With it, Rothbard greatly advanced the Austrian tradition and firmly positioned himself as Mises’s heir.

Academic Credentials and Job Prospects

As 1956 dawned, Rothbard’s career reached a crossroads. He had finished the rough draft of his treatise, a crucial component of the interdisciplinary science of liberty, but Rothbard had made little progress toward establishing an institute for libertarian scholarship. Moreover, he still lacked a doctoral degree. To make matters worse, his research grant from the Volker Fund—the income that he lived on while writing Man, Economy, and State—was set to expire in June. If Rothbard was going to become a professional economist, he needed Arthur Burns to depart from his dissertation committee and a new source of income. Fortunately, several pieces fell into place.

Most importantly, in 1953 Burns left the Columbia economics department to serve as the chairman of President Dwight D. Eisenhower’s Council of Economic Advisers. The major roadblock that prevented Rothbard from attaining his degree was gone, and he “was able to get through with the degree before [Burns] got back.” Rothbard defended his dissertation on the Panic of 1819 in May 1956. He thought that the timing was “fortuitous” because Burns returned to Columbia “just after” he defended. Rothbard reported to the Volker Fund that Joseph Dorfman and other professors “loved the darn thing,” though he himself had “been hating [it] roundly for years [because] . . . the thing was diluted to the point of neutral pallor.” The only resistance came from the noted economic historian Carter Goodrich, who detected “a strong undercurrent of ‘sound-money doctrine.’” Rothbard heard him “mutter something about ‘Mises’ at one point.” But aside from this minor difficulty, Rothbard “breezed through” the final oral. By June he wrote to Harold Luhnow thanking him for the “kind congratulations” and support. Rothbard had finally received his PhD, no thanks to Burns. Surprisingly, he harbored no ill will toward his former family friend. In a report on policy lectures by Burns the following year, Rothbard wrote that despite former difficulties he maintained “a warm personal regard for him and for the quality of his reasoning power.”

Traditionally, when graduate students earn their PhD they enter the next phase of their career: teaching students and continuing to research. With a PhD from one of the top universities, Rothbard should have had many options at elite institutions available. Instead, his peculiar graduate career (a ten-year gap existed between his master’s degree and dissertation defense), free-market proclivities, and desire to stay in the Northeast constrained him. Previously, Rothbard had surveyed the job options that realistically lay before him. “Usually,” Rothbard wrote, Austrians and libertarians “cannot get teaching posts in universities. This almost always shuts them out from the leisure time necessary to do research and write in their fields,” which severely limits their influence. To make matters worse, the teaching posts that are available are “almost always in a small college, isolated from the main influential centers of academe.” Even in this dismal setting, Austrians are “discriminated against, harassed, etc. by the administration and by the faculty.” Rothbard did not find this alternative worthwhile or fulfilling.

Above all, Rothbard wanted to read and write full-time. In such a job, he could devote all his energy to staying up to date on current publications and publishing in economics and other disciplines in the science of liberty. Pressing tasks in Rothbard’s envisioned political economy included the need “to reestablish the ‘science’ of ethics” and write history, “another crucial area in which almost no libertarian work has been done.” He emphasized to his colleagues the “urgent necessity for research itself,” against the popular misconception among libertarians “that all knowledge has already been accumulated, and that therefore the necessity for further research is negligible.”

With this goal in mind, he contacted the Volker Fund to inquire about potential sources of income after his research grant expired. Since “the present set up is the ideal type of arrangement,” he asked Richard Cornuelle if he could continue “on a full-time grant basis from the Fund.” If this were not possible, his alternatives in order of preference were “a part-time grant plus regular part-time work for the Fund, . . . teach at nyu, . . . work at the fee,” or go into the private sector as a ghostwriter.

To Rothbard’s dismay, the Volker Fund did not continue the full-time research grant. Instead, they hired him part-time to evaluate books and papers to be potentially promoted by the National Book Foundation, a subsidiary that distributed conservative books to libraries. This was most likely the case because the Volker Fund wanted its highly valued asset to find an academic job. Short of that, the Volker Fund thought Rothbard could secure grant assistance from other agencies. Rothbard pursued the latter: several weeks after contacting Cornuelle, the two discussed a project on the 1929 depression that the affiliated Earhart Foundation would fund. With a letter of recommendation from Mises, Rothbard received a one-year grant from June 1956 to June 1957 to “devote full time to complete a study of the causes of the 1929 American depression.” He plunged into the project, building on a Great Depression piece he had written for fee. This caused him to turn down a job offer from Milton Friedman, who had suggested that Rothbard “apply for a Post Doctoral Fellowship at the University of Chicago.” Rothbard’s decision to not work at a university, while understandable, significantly hurt his long-run chances on the academic job market.

Mises’s letter of recommendation displays his enormous confidence in and respect for a man who just turned thirty years old. He described Rothbard as “an extraordinarily talented young man, a keen thinker and an indefatigable worker” and was “fully convinced that he will one day be counted among the foremost economists. . . . I fully endorse what he says about these matters and I want merely to add that in my opinion nobody is better qualified to perform this job than Rothbard.”

The remarks made by the demanding Mises must be placed in proper context. That Mises was not simply writing a routine letter of recommendation can be seen by comparing it with the letters Mises wrote a year later for his own doctoral student Israel M. Kirzner. Kirzner had applied for an Earhart fellowship to turn his doctoral dissertation into a publishable book. Mises believed the dissertation showed that Kirzner “has a perfect familiarity with the fundamental problems of economic theory” and “promises to become a highly competent teacher and author.” While his recommendation of Kirzner was highly favorable, Mises clearly considered Rothbard his brightest and most promising disciple.

As was the case with his treatise, because he had to devote time to other projects Rothbard spent several years longer than anticipated on his 1929 depression book—he finished the rough draft in January 1958 and the final draft three years later. In early 1957, he wrote to Ludwig M. Lachmann that he was “as busy as a beaver lately, juggling what amounts to four jobs.” He thoroughly enjoyed the work, despite finding the constant rotation of part-time jobs stressful. In addition to writing on the Great Depression, he wrote “a pamphlet for [fee] on money.” At the same time, Rothbard edited other manuscripts, particularly his “huge Principles tome, [and] . . . wonder[ed] what to do with [his] PhD thesis.” On top of this, he kept himself busy with “reading and reviewing for the Volker Fund, and . . . some part-time research and consulting for a new organization called the Princeton Panel.” The latter was a new outfit established by the pollster Claude Robinson as an organization “to disseminate economic education among businessmen.” Although the panel collapsed later in the year after Robinson fell ill, Rothbard continued to do research for Robinson’s book project and wrote hundreds of pages of memos on economics, public policy, and history.

The Princeton Panel memos, while demonstrating Rothbard’s prodigious productivity, were geared toward the noneconomist. The part-time Volker Fund job better suited Rothbard’s talents and aspirations. Over the next several years, it enabled him to read voraciously and evaluate the latest research on economics, history, and political philosophy. In terms of economics and related empirical studies, Rothbard scoured books and journals to identify research that employed the praxeological method. Of course, he was thrilled to discover the rare author who explicitly identified with the Austrian tradition, but he was particularly on the lookout for contributions from mainstream economists who applied or advanced the praxeological theoretical system in specific areas. He hailed the authors of these contributions and incorporated references to their works into his treatise. But if the research he was evaluating promoted fallacious theoretical doctrines that he had so deftly exposed in his treatise manuscript, Rothbard trenchantly criticized it, regardless of the free-market orientation of its author. It was excellent experience for someone who aspired to correct the errors of the prevailing neoclassical synthesis.

Against Chicagoan Methodology and Production Theory

Rothbard devoted a significant number of his scholarly evaluations to the rising “new” Chicago School led by George J. Stigler and Milton Friedman. It was an auspicious time to do so: in 1958, after Rothbard started his part-time work for the Volker Fund and turned down the postdoctoral fellowship, Stigler left Columbia to join Milton Friedman in the economics department at the University of Chicago.

Although the Chicago School continued to promote free-market economics and a few of its members appreciated some Austrian insights, it was not enough to garner Rothbard’s approval. For the most part, he remained an unabashed critic. In a review of Prices, Income, and Public Policy, a textbook written by the Chicagoans Clark Lee Allen, James M. Buchanan, and Marshall R. Colberg, Rothbard stated he was increasingly “less . . . impressed” the more he “read the general, all-around works of the ‘Chicago School’ of economics.” Chicago School economics was grounded in far too many methodological and theoretical fallacies to mount an effective attack on the neoclassical synthesis. Rothbard had previously tried to utilize the Marshallian partial-equilibrium apparatus during the writing of Man, Economy, and State and realized it led to multiple errors. Combining Friedmanite positivism and neo-Fisherian macroeconomics with Stigler’s Marshallian price theory would only compound the problems he had encountered.

At the root of Rothbard’s disagreement with the new Chicago School was its methodological perspective, a variant of positivism that enthusiastically promoted the use of unrealistic assumptions so long as they improved the predictive power of the theory. This position was best articulated by Milton Friedman in his 1953 paper “The Methodology of Positive Economics.” It sharply broke with the method of the older Chicago School of Frank Knight, which adhered to a position akin to Robbins’s An Essay on the Nature and Significance of Economic Science. In his essay, Friedman implicitly acknowledged this schism: he did not mention Knight at all but thanked Burns and Stigler for their “helpful comments and criticism.” While Rothbard considered Knight “highly overrated as [an] economist and philosopher,” he thought him “much better, methodologically, than the younger Chicago School who are all positivists.” His paper “‘What is Truth’ in Economics?” articulated criticisms “from what is essentially a praxeological point of view” despite Knight not sufficiently adhering to this method in his own theorizing. But the new Chicago School replaced Knight’s methodological doctrines with those of Friedman, which were “very ‘big’ now among economists.”

Rothbard expanded his criticism of Friedman’s methodology in a review for the Volker Fund of Essays in Positive Economics. “Few things would be as disastrous for economic theory as the widespread adoption of the Friedman methodology,” Rothbard warned. On top of advocating “all the predictable nonsense of the positivists,” including comparing economics with physics and engineering, Friedman is “actually advocating theories with false assumptions, provided their so-called ‘predictive power’ be empirically useful.” This clearly contrasted with the praxeological method Rothbard had deftly used when writing his treatise and auxiliary papers. Here, the “assumptions and postulates [are] true and derived from reality,” and the praxeologist only uses unrealistic assumptions initially before discarding them in later logical chains of reasoning. Rothbard’s criticism that Friedman committed the “most pernicious (in the light of current trends), methodological fallacy in economic thought today” was shared by F. A. Hayek. Late in his life, Hayek considered “Milton’s Positive Economics . . . in a way . . . as dangerous a book” as John Maynard Keynes’s The General Theory of Employment, Interest, and Money.

Friedman’s methodology influenced the second edition of Stigler’s The Theory of Price, a canonical text of the Chicago School. Rothbard had commented on the first edition in 1953 when he was in the middle of revising his projected textbook. When the Volker Fund asked him to review the second edition in 1960, he possessed the experience of several years of sedulously deducing the theoretical apparatus of his treatise. The mature Rothbard noted that the new edition “is considerably changed to show more of an influence by the ‘young’ Chicago School headed by Milton Friedman.” He criticized Stigler’s decision to replace the first chapter on methodology, “one of the best chapters . . . which was patterned on Knight and Robbins.” Instead, the revised edition “follows the empiricist mode in scorning questions of methodology.” Along these lines, Stigler injected “a great deal of empirical and institutional data into the book in order to ‘test’ the theory; this reflects Friedman’s positivist empiricism as contrasted to Knight’s deductive theoretical view.” This data “weakens the force of the theory,” such as his “stress on the single firm . . . instead of the Austrian insight into the interrelations of firms.” Despite Stigler’s viewing of advertising in a more favorable light and making other marginal improvements, Rothbard considered the new edition “a work of very little value.”

Friedmanite positivism also permeated the textbook written by Buchanan, Allen, and Colberg, which Rothbard considered “at the root of almost all the troubles of the book.” As an example of how the “positivist epistemology pervades the technical economic analysis,” Rothbard singled out how “the authors said that a fixed, vertical demand curve is illustrated by the government’s demand for soldiers.” Rothbard reasoned that even if the economist assumes conscription can be illustrated by a demand curve, the authors’ “analysis is nonsense” because if the government’s vertical demand curve is greater than the amount of men who “can possibly be hired or drafted,” then the two curves “never intersect. On the authors’ own premises, then, no one would be in the army, which is clearly absurd.” When Rothbard wrote to Buchanan asking him to clear up this point, Buchanan conceded that “the solution to which the fixed-demand tends to lead under your assumptions is absurd . . . [because] if the fixed demand is greater than the fixed supply, price should be infinite.” Such unrealism, Buchanan goes on to say, “is really the same in all of those cases in which we make rather extreme assumptions.” Buchanan argued that what ultimately matters is “the models themselves are useful for predictive purposes.” Rothbard immediately recognized the Friedmanite positivism in Buchanan’s response and how it was antithetical to the praxeological method. “No theory of lasting merit,” Rothbard concluded, “can emerge from this sort of cauldron.”

Rothbard’s criticisms extended beyond the Chicago School’s methodology. While reviewing for the Volker Fund, he frequently pointed out the flaws in its recent writings on production theory. For example, he considered Armen A. Alchian and Reuben A. Kessel’s “‘Competition, Monopoly, and the Pursuit of Pecuniary Gain’ . . . highly confused on the important question of defining monopoly.” Alchian and Kessel properly define one case of monopoly “as [a] grant of governmental privilege; but then they spoil this by adding another case where ‘the number of competitors is small.’” “As I will show in my principles book,” Rothbard wrote, this definition “is an entirely unjustified use of the term ‘monopoly.’” He considered Alchian’s article “‘Private Property and the Relative Cost of Tenure’ . . . a great deal better” precisely because “there is not here any discussion of the competition vs. monopoly question.”

However, Rothbard’s most substantive criticism of Chicagoan production theory focused on a work written by an Austrian, Kirzner, who taught at New York University after receiving his PhD in 1957. Rothbard thought extremely highly of Kirzner, praising him in a letter to Lachmann as a “very fine Misesian student.” He considered Kirzner’s dissertation “a fine work and certainly deserving of publication,” notwithstanding his sharp criticism of Kirzner’s analysis of the relationship between Robbins’s means-ends framework and Mises’s praxeology. “By far and away,” Rothbard concluded, of all Mises’s students, Kirzner was the “most competent and scholarly, and, indeed, the only one who shows signs of becoming an important economist in his own right.” The Volker Fund recognized Rothbard’s relationship with Kirzner, considering his evaluation of Kirzner’s dissertation as “a masterful job.” Consequently, the foundation requested Rothbard to review Kirzner’s textbook manuscript, which sought to combine Austrian reasoning with Chicago price theory.

Rothbard reacted very negatively to Kirzner’s textbook and most of his review “was totally out of sympathy with the entire analysis.” In Rothbard’s view, Kirzner committed an error akin to the one he himself had made in the original chapter 5 of his treatise: Kirzner tried to delicately balance Austrian and neoclassical economics, to “carry water on both shoulders” and fuse “excellent expressions of what may be called the ‘Austrian’ position” with the “‘Chicago’ analysis, as typified . . . by Stigler’s Theory of Price.” But Kirzner did not even succeed in giving equal amounts of water to both schools of thought, because aside from the first five chapters on method and utility, he abandoned the Austrian approach “except for a few ritualistic qualifications and sentences.”

Thus, the book suffers from a fundamental flaw: “the artificial and even disastrous isolation of price theory from . . . time (and) capital phenomena.” Time and the production structure formed the bedrock of Rothbard’s production theory. He had constructed this edifice by demonstrating how these concepts followed as the logical implications of human action. Time, capital, and interest are fundamental to market activity and “must be infused into the price analysis.” The abstention from the treatment of capital and interest could not simply “be remedied by an appendix that Kirzner promises us on time,” because it would still leave the basic problems in Marshallian production theory unresolved.

When discussing specific issues with Kirzner’s production theory, Rothbard drew upon what he learned from writing his own treatise. Kirzner lapses into the standard Marshallian “orthodoxy to concentrate on the firm, in his analysis, instead of the interrelations between firms.” This causes him to neglect the significance of capitalist-entrepreneurs’ “readily shift[ing] their capital back and forth to wildly different areas of production.” This narrow focus leads to “all the crucial errors of the cost-curve analysis,” especially the fallacy that a “firm will invest funds in production up to the point where ‘marginal revenue’ equals ‘marginal cost.’” 

Kirzner failed to achieve the same insight that Rothbard did when writing his treatise: an entrepreneur may “invest the same $100 . . . elsewhere” at a higher return than what would be earned by continuing to invest in the firm until marginal revenue is equal to marginal cost. “Once we bring investment interest return, into the picture,” Rothbard stresses, “we see that the whole elaborate cost-curve structure is totally faulty.” Furthermore, focusing on the firm causes Kirzner to consider the manager as the entrepreneur when in fact this uncertainty-bearing function falls upon the men financing the firm, the “capitalist-entrepreneurs.” By supplying “present goods in exchange for future goods,” whether through loans or equity investments, the capitalist-entrepreneurs always “reap an interest return.” In other words, entrepreneurs are always capitalists.

Kirzner falls into other errors that Rothbard once committed. Despite Kirzner’s “welcome repudiation of the ‘pure competition theory,’” he invokes the price-taking assumption, “granting that a competitor will face an infinitely elastic demand curve.” This fallaciously implies that a firm will exert zero influence on the price of its product. In general, Kirzner’s analysis omits any recognition “of imputation from consumer demand down to determining prices.” He falls into the same trap as Stigler, considering prices as “always there, given, when they are supposed to be explained, and determined.” In fact, Kirzner’s analysis is inferior to Stigler’s in some respects, particularly his “really grievous neglect of the pricing of factors of production.” Kirzner omits any discussion of “marginal productivity determination of factor prices; there is no discussion of the consequent demand curves.” This mistake, Rothbard emphasized, is “the biggest single omission of the work” and reflects the overall inadequacy of Kirzner’s production theory. As Rothbard realized when writing his own treatise, the theorist cannot simply assume given output and input prices if he wants to properly analyze economic interrelations.

Ultimately, Rothbard was “highly critical of his forthcoming textbook.” Kirzner’s work did not teach sound economic reasoning to students and perpetuated many of the fallacies Rothbard had refuted. But testament to the lamentable state of the economics profession, “despite its grave defects, this textbook will be the best in the field (admittedly a bad lot).” The book, Market Theory and the Price System, was published in 1963, three years after the publication of Kirzner’s dissertation, The Economic Point of View. One critic labeled Market Theory as a “Bible” teaching students to “hold the market system in high esteem.”  It received little traction from the Chicago School and sank without a trace.

It is worth noting that Kirzner appears to have made few changes to his manuscript after receiving Rothbard’s criticism. However, Rothbard’s strong objection to the complete absence of capital theory in his manuscript may have had an impact on Kirzner. In early 1962, Kirzner submitted a grant application to the Volker Fund proposing “a comprehensive treatise together with a complete bibliography” which would systematically investigate “the development of the theory of capital since Böhm-Bawerk’s Capital and Interest.” The goal was quite ambitious: to “do for the literature on capital theory of the past seventy years, what Böhm-Bawerk’s first volume did for the literature that preceded his own contribution.” In reviewing Kirzner’s proposal, Rothbard praised it as “a massive and monumentally important project, because . . . a volume which promises, as Kirzner does, to carry forward a point of view similar to Bohm-Bawerk [sic] and the Austrians, is of enormous importance to economic thought.” Rothbard left no doubt that he believed the applicant was capable of accomplishing such an undertaking. It is unknown if Kirzner ever received the grant, but the project was never completed. Kirzner did publish a shorter and less ambitious monograph on the topic, An Essay on Capital, which indicated his knowledge of the literature.

In his review of the price theory manuscript, Rothbard had briefly criticized Kirzner’s isolation of “price theory from monetary” phenomena, for Kirzner, in Chicagoan fashion, neglected to discuss demand curves for goods in terms of money. The “abstention from money,” though a serious error, was “unfortunate but not fatal” in contrast to the abstraction from time and the structure of production. But it was still an enormous area of disagreement between Rothbard and the Chicago School because the latter separated price theory from money, unlike Rothbard, who successfully integrated the marginal utility of money into his construction of demand curves. After criticizing Chicagoan production theory, Rothbard soon turned to its monetary analysis, particularly as exemplified in the work of Friedman.

Criticizing Chicagoan Monetary Theory

The Chicago School gained prominence in the late 1950s for its increased emphasis on the importance of money and monetary policy. Milton Friedman led the charge, working on numerous theoretical and empirical studies that dealt with how changes in the money supply affect prices and output. Among others, Friedman edited Studies in the Quantity Theory of Money, authored A Theory of the Consumption Function, and wrote A Program for Monetary Stability, all the while immersed in a massive project on the monetary history of the United States with Anna Schwartz. Rothbard, concurrently editing his treatise and writing a monetary history of his own, did not believe that Friedman’s neo-Fisherian quantity theory effectively attacked the reigning neoclassical synthesis. To Rothbard, the Chicago School simply did not understand how money and credit expansion worked. Mises shared Rothbard’s perspective: according to New York University seminar participant Bettina Bien Greaves, Mises considered Friedman one of the two most dangerous men in America (the other was Paul Samuelson). Mises insisted that Friedman’s aggregative analysis ignored relative prices and was simply a recrudescence of Fisher’s work that he had refuted in the 1910s and 1920s.

When asked to review Friedman’s research, Rothbard informed the Volker Fund that he considered Friedman a man with a “brilliant, clear, and logical mind . . . even though fundamentally and basically mistaken” on money. At the core, Friedman’s “positivist-empiricist methodology” failed to vindicate the quantity theory of money. Friedman inappropriately utilized the method of the natural sciences and tried to “measure the unmeasurable, to present large arrays of highly refined (and therefore arbitrary) statistics, bolstered by mathematical formulae, [and] to try to ‘test’ hypotheses.” Not only did this approach fail to depict the nonneutral operation of the monetary transmission mechanism; more profoundly, it was inappropriate for “the sciences of human action” due to human volition and changing economic data. Friedman’s A Theory of the Consumption Function fared no better. It exemplified the errors of the “positivist methodology,” and Friedman’s search for “statistical constants” led him “down a fruitless path.” Rothbard considered the work disappointing because for “fallacious Keynesian attempts at finding quantitative constants in the economic world, Friedman substitutes his own fallacious set.”

Other Chicago School works suffered from the same methodological deficiencies. Karl Brunner’s proposed research project “Monetary Analysis and Monetary Policy” was “a most commendable one” for bringing “the money supply back into the economics of inflation” but was extremely flawed. Brunner’s “positivist and behaviorist” approach seeks “quantitative equations [to] . . . explain Federal Reserve policy.” Modeling decisions by central bank officials as a function of a “change in [the] demand for money, or a change in reserve requirements,” completely neglects “the ideas motivating Fed[eral] Reserve officials.” Humans are not robotic; they use their free will to make decisions. The historian must read private correspondence and other documents to understand why government officials acted in a certain way. In contrast to Brunner, Rothbard utilized this approach when studying the monetary policy of the 1920s.

Alchian and Kessel’s “Real Wages in the North During the Civil War: Mitchell’s Data Reinterpreted” served as “a striking example of the epistemological deficiencies of the Chicago School.” Alchian and Kessel continued the “holistic Chicago tradition in the field of money” by focusing on a “vague, general ‘index of real wages’” instead of tracing “what happened to different kinds of workers in different industries.” In contrast, the “Austrian-Misesian cycle theory and monetary theory stresses the crucial importance of the differences between various groups . . . in how they fare during an inflation,” such as early and late receivers of new money or workers in higher- and lower-order stages of production. Furthermore, Alchian and Kessel assume “that the extent of depreciation of the greenback exchange rate equaled precisely the depreciation of purchasing power.” But this simply assumes the equilibrium end point: exchange rates “cannot be assumed as being already there, especially when violent short-run changes are occurring, as in the Civil War.” Thus, Rothbard concluded, “the supposedly ‘empirical’ Chicago School” produces work “much more poorly than [what] a Misesian—supposedly purely abstract and deductive—would have done.”

Rothbard did not consider flawed methodology the only factor weakening the Chicago School’s monetary research: Friedman and others committed grave errors in their theoretical analyses. Notably, Friedman argued “that the key effect of inflation” is a “‘tax on holding money’” because rising prices reduce the real value of non-interest-earning assets. While this statement is true as far as it goes, it completely ignores the nonneutrality of money and the uneven changes in real income it causes. For “those who receive money before their buying prices rise,” their income increases more than the rise in prices. Consequently, the early receivers’ real income goes up and they pay “no ‘tax’” for holding money. Once again, the Chicago School’s focus on aggregates obscures the underlying adjustment mechanisms. Furthermore, Friedman misunderstands the opportunity cost of money and “in fallacious Keynesian fashion” identifies it “with an interest rate.” But, as Rothbard explains, individuals do not only decide between maintaining a cash balance and investing in interest-earning assets; “consumption foregone is also an important ‘cost’ of holding money.”

Rothbard sharply criticized the Chicago School’s analysis of monetary policy and the business cycle. Adverting to Austrian business cycle theory, Rothbard pointed out that Friedman and others failed to understand how “monetary inflation creates maladjustments in the economy” by artificially lowering interest rates. These malinvestments cannot be maintained and “require a subsequent recession” to remove. In contrast to the Austrians, whose counsel was “to keep its hands off and to avoid any further inflation,” the Chicago School advocated “pumping money in and out of the economy” to eliminate business cycles. Friedman preferred “automaticity over Fed[eral] Res[erve] management of the economy,” particularly a “rule for [a] 4% annual increase of the money supply.” Rothbard did not think this solution was that much better than discretionary central bank policy. Instead of a free-market gold standard, a Friedmanite rule would result in “guaranteed, fixed, [and] automatic inflation.” One could not even trust the monetary authorities with such a rule and the policy would “lead inexorably to a runaway inflation.”

These disagreements naturally resulted in diametrically opposed interpretations of the Great Depression. Rothbard argued that the Federal Reserve practiced expansionary monetary policy in the 1920s, thereby creating an unsustainable boom. Moreover, the Fed failed to utilize contractionary monetary policy in the early 1930s and continued its easy money policy. Friedman, according to Rothbard, argued the opposite and blamed the “1929 depression on the tight money policy of the late 1920s, and the deflation of the early 1930s, and not at all on the real genesis: the easy money policy of the Fed in the earlier 1920s.” Thus did Rothbard expose the yawning chasm between Austrian and Chicagoan monetary analysis.

Rothbard soon voiced his criticisms directly to members and fellow travelers of the Chicago School. In the fall of 1960, along with Clark Warburton, James M. Buchanan, Milton Friedman, and Jacob Viner, Rothbard participated in a lecture series at the Thomas Jefferson Center at the University of Virginia, a center for which the Volker Fund had provided foundational grant money. Unlike the other participants, who advocated various government controlled monetary standards, Rothbard’s “The Case for a 100 Per Cent Gold Dollar” championed a return to free-market money and a suspension of fractional-reserve banking. While some members of the Chicago School did advocate 100 percent reserves, they only viewed it “as a useful, efficient tool for government manipulation of the money supply,” unhindered by the money multiplier or excess reserves. Instead, Rothbard wanted to establish 100 percent reserves on the grounds of “the free market and property rights,” for in his view any credit expansion was tantamount to fraud. In sharp contrast to the Chicago School, Rothbard wanted to “completely expunge government intervention from the monetary system,” desiring to change the law so bank notes and deposits were treated “as what they are in economic and social fact”: always redeemable on demand at a fixed rate.

After the conference, Leland B. Yeager, a recent Chicago PhD graduate (1952) whom Rothbard had immense respect for as a quasi-Austrian methodologist, wrote to Rothbard congratulating him on the paper. Yeager believed it “will prove more stimulating and thought-provoking, at least for us members and fellow-travelers of the Chicago School, than any other paper in the entire series.”  The Volker Fund also “spoke in glowing terms” about Rothbard’s work. All indications were that he was a rising star who would only advance further with the publication of his treatise.

Finalizing the Treatise

Rothbard’s extensive criticism of the Chicago School does not mean that he disapproved of all their work. On the contrary, while reviewing for the Volker Fund, he was editing Man, Economy, and State and adding favorable references to new research produced by the Chicago School and others. Indeed, Rothbard welcomed and eagerly incorporated any new research that strengthened the praxeological tradition.

In early 1957, Rothbard wrote to Ludwig M. Lachmann on the status of his treatise. He had a high opinion of Lachmann, describing him to Herbert C. Cornuelle as “looking better . . . all the time.” He particularly praised Lachmann’s “amplification” of “the Austrian theory of the business cycle” for showing that “if businessmen became sound Austrian economists, they will not yield to the temptations to expand and malinvest.”  “The temptation” regarding his treatise, Rothbard confided to Lachmann, was “to keep adding footnotes, etc. as more good articles come out.” 

Rothbard did not exaggerate; he added a flurry of references to new research articles and books. Unsurprisingly, one notable book Rothbard singled out was Lachmann’s Capital and Its Structure, considering it “an excellent work” and agreeing “with practically all of it.” A major contribution was its “linking up of asset structure on the capital market with the real-goods capital structure” and demonstrating how financial markets facilitated investment in the network of heterogeneous producer goods. This contrasted with mainstream economists who “shove the stock market into the background as a mere gambling casino.” Rothbard edited his manuscript to mention Lachmann’s book and his recent paper on capital as a sign “of a revival of ‘Austrian’ production theory.” In the same reference, he also happily noted “a groping attempt by a leading mathematical economist to return to the Austrian road,” Robert Dorfman, as well as “an incisive critique” of Dorfman’s attempt. Later in the treatise Rothbard acknowledged that he was “deeply indebted” to Lachmann and his “Honours Seminar in Economics at the University of Witwatersrand, South Africa” for stimulating questions regarding his utility and welfare theory.

Rothbard recognized other advances in economic theory. On method, he cited numerous new articles that pointed out the limitations of econometrics and mathematical economics. In terms of production theory, Rothbard lauded “a brilliant but neglected article” that examined the “difference between” the theories of the firm “in ‘Austrian’ vs. ‘neo-classical’ thought,” recognizing the article mirrored his own critique of the marginal revenue–marginal cost condition. Regarding the cost-curve literature, Rothbard praised an article by Alchian for criticizing “orthodox ‘cost-curve’ analysis, its neglect of time, [and] its artificial separation between short and long runs.” He also welcomed Reuben A. Kessel’s article on multiform pricing in medicine as “truly excellent.” Lawrence Abbott’s Quality and Competition Rothbard deemed one of “the best economics works [he had] read in many a year.” This “masterpiece . . . follows [F. A.] Hayek and J.M. Clark in stressing competition as a dynamic process” instead of an equilibrium condition. Abbott’s “quality competition” and description of “quality variations within the same want . . . is consonant with the Austrian tradition and is an innovation within it.”

Advances in monetary and business cycle theory also received Rothbard’s approval. He singled out Friedman’s A Program for Monetary Stability for recognizing “the feasibility of private coinage under a commodity standard.” Rothbard “endorsed enthusiastically” F. A. Hayek’s “Unions, Inflation, and Profits” because it explained how “the Keynesian ‘money illusion’ is now leading to disastrous monetary inflation.” The Failure of the “New Economics,” Henry Hazlitt’s exhaustive criticism of Keynes’s General Theory, was “the best and most thorough exercise in economic demolition since [Eugen von] Böhm-Bawerk . . . exploded Marx’s labor theory of value.” Accordingly, in his treatise manuscript, Rothbard included references to it and a later volume of essays edited by Hazlitt, The Critics of Keynesian Economics.

At the same time, Rothbard incorporated recent advances made by others into his Great Depression manuscript. In private correspondence, the attorney Rae C. Heiple III, who was affiliated with fee, suggested to Rothbard in 1956 that if “government expenditures were eliminated,” then “the time preference ratio” would fall. Rothbard thanked Heiple for his “excellent” suggestion which “no one has pointed . . . out before.” Rothbard added that he was “really indebted” to him “for making this point” and intended “to make considerable use of it in my book on the 1929 depression,” where he would indeed argue that cutting government expenditures, by decreasing consumption, lowers time preferences and hastens recovery in a recession.

Rothbard also investigated the question of “the proper definition of money,” formulating it as either the general medium of exchange or something which is exchangeable at any time at par with the general medium, such as a demand deposit. Savings deposits must also be included because they are “redeemable at par” for demand deposits or currency. Rothbard realized that if savings deposits belong in the money supply, then so do “any assets . . . redeemable at par.” He considered Gordon W. McKinley’s articles excellent for arguing “persuasively for the inclusion of savings deposits and savings-and-loan shares” but went even further by provocatively adding “the cash-surrender values of life insurance.” McKinley’s and Burns’s writings inspired him to include this in the money supply. He submitted a paper on this topic to the Journal of Finance in 1959. Like his other recent journal submissions, it was rejected. Nevertheless, Rothbard subsequently felt vindicated because “in his latest exposition of the subject, McKinley approaches recognition” that cash surrender values of life insurance policies belong in the money supply.

Ironically, Rothbard’s most substantial change in Man, Economy, and State was to occur after he thought he had finished the book in the spring of 1959. His “mammoth book” totaled 1,900 pages. He searched for an academic publisher, such as the University of Chicago Press, but could not find any institution willing to publish his book. Fortunately, it found a home in the William Volker Fund Series in the Humane Studies, a newly established collection of free-market and Austrian books published by the Van Nostrand Company that included volumes by Kirzner and Mises. Due to its length, the Volker Fund wanted someone who possessed the “editorial knowhow to maybe cut it.” The institution chose one of its consultants, the conservative-libertarian writer Frank Meyer.

“Unequivocally,” Meyer stated in his review, Rothbard’s “book is one of the two or three most important discussions of economics to be written this century. It is in the direct line of [Carl] Menger, Böhm-Bawerk, and Mises.” Meyer exclaimed that Rothbard’s treatise had “certain positive qualities beyond . . . anything that Mises has written.” Specifically, “it is an exhaustive treatise on economics, considering all aspects of the subject and simultaneously . . . refuting the most powerful contemporary economists (e.g., . . . the Keynesians).” “No economist since [Frank] Taussig and [Frank] Fetter has produced anything in the nature of a true treatise on economics as a whole,” including Joseph Schumpeter, John Maynard Keynes, and F. A. Hayek. Human Action is Mises’s “closest approach to a general treatise, though it is . . . at some points too generalized to enter effectively the contemporary scene of battle.”

Meyer then stated his major editorial suggestion: “Chapters 12 through 19 should be removed and replaced by a single chapter summarizing the economic theories.” Meyer thought that on top of the book’s length, the later chapters expressed “an uncompromising anarchism” that denied the legitimacy of any government activities whatsoever. This extreme stance “could very well prevent a hearing for his profound and exhaustive economics,” especially among conservative audiences. Due to the Volker Fund’s “great deal of respect for Frank’s editorial sense,” the institution informed Rothbard in January 1960 that he needed to cut his treatise in accord with Meyer’s recommendations so it could come “out in such a form as to be the greatest possible credit to [his] remarkable talents.” Van Nostrand would publish his treatise in “two volumes” with consideration given to a “potential ‘third volume.’”

Rothbard, who had learned of Meyer’s review the prior November, believed it “obvious that the whole plot is to knife [the third volume] by shelving it, and thus derricking the anarchism.” In his response to the Volker Fund, though, he was “highly encouraged that Frank thought as well of the book as he did” and agreed that if “the book must be cut, it is best to proceed as he suggests . . . rather than try to cut each chapter internally.” He did, however, strongly protest Meyer’s characterization of the chapters on government intervention as “‘dogmatic’ and ‘political.’”

Nonetheless, Rothbard wrote a new chapter 12 summarizing his economic analysis of government intervention. He severely cut down his welfare theory, typology of intervention, and analysis of various government policies. He added nothing new except for a section based on a suggestion of Meyer’s, where he discussed new research on the economics of developing countries as well as recent critics of capitalism. Emphasizing the importance of savings and private property, Rothbard cited Lachmann’s book on capital, P. T. Bauer’s recent research on the subject, and Mises’s new book on the appropriate method in history.

While writing the revised chapter 12 in 1960, Rothbard split up Man, Economy, and State into two volumes to prepare it for publication by Van Nostrand. Volume 1 contained chapters 1 to 7 and analyzed “the economics of the isolated individual, barter, and indirect exchange.” He put chapters 8 to 12 in volume 2, which focused on the “‘dynamic’ problems of a changing economy, particular types of factors, money and its value, and monopoly and competition” along with “in necessarily more summary fashion, the consequences of violent intervention in the free market.” By January 1961, Rothbard had completed revising his manuscript, which now totaled “about 1470 pages of pica type (with footnotes single-spaced).” At long last, Rothbard had finished his project, the result of years of painstaking effort and dedication. He eagerly looked forward to the work’s publication.

The Publication of the Treatise

In 1960 and 1961, several momentous events occurred that greatly impacted Rothbard’s future as a professional economist. In February 1960, Rothbard sent a flurry of letters inquiring about prospective employment opportunities to several prestigious universities, including Princeton, Columbia, and Yale, and promptly received in return letters indicating that there were no job openings at present. These responses most likely put the final nail in the coffin of Rothbard’s goal to communicate his findings to the economics profession. Despite earlier optimism, he realized the academic community would not pay attention to his treatise. At this point, Rothbard began to seriously promote his proposed research institution and exulted when he learned that the Volker Fund was also interested in such an organization.

By the late 1950s, F. A. Harper, a former economist at Cornell University who had worked at fee before settling down at the Volker Fund, started to seriously inquire about developing a libertarian research center. When the idea picked up steam in 1961, Rothbard wrote a flurry of letters to Harper and provided a range of advice and ideas. With respect to advancing the various branches of knowledge in the “science of liberty” that the institute would promote, he argued that “economics is in least need of further development,” an understandable statement given the completion of Man, Economy, and State. In fact, Rothbard later wrote to another Volker Fund colleague that “with the books published especially with Man, Economy, and State, I believe I have said whatever I had to say about economics, and am now eager to move on.”

Rothbard believed the institute’s most important task was not to directly communicate with academia but to advance “the ‘hard core’ of libertarian thought and libertarian thinkers.” In particular, Rothbard proposed that the institute publish a “scholarly, interdisciplinary journal” that focused on “economics, history, government, philosophy [and] even science if need be.” This would prevent “libertarian scholars” at various colleges from being “completely isolated amidst largely hostile, or, at best, indifferent colleagues and publics.” Instead, they could “meet, exchange ideas, cross-fertilize, publish their views, and, in general, exercise a ‘multiplier’ or leverage effect, on the advancement of libertarian ideas.” The institute would focus on research and not the “too grandiose, too impractical” goal of becoming a “graduate school granting degrees.” His institute “would be simpler, cheaper, and far more suitable and effective.” “So enthusiastic” was Rothbard about this undertaking that he offered to work “full time” to bring it to fruition. Clearly, Rothbard pinned his hopes for future employment on the proposed institute, which would promote his treatise and provide him with the time and resources to engage in further research.

Rothbard was thrilled to learn that Harper’s proposal greatly interested Harold Luhnow and the Volker Fund. In fact, by late 1961 the Volker Fund decided to transfer $17 million to endow Harper’s new organization, the Institute for Humane Studies (ihs), and Luhnow organized an inaugural meeting in February 1962. The good news kept coming in. First, the Volker Fund approved a two-year research grant for Rothbard to write about the political philosophy of liberty and initiated the process for him to receive a similar grant for an American history project. Second, the Volker Fund paid for the printing costs necessary for Columbia University to publish Rothbard’s long-dormant dissertation on the Panic of 1819. Third, the Volker Fund agreed to publish Rothbard’s book on the Great Depression, which it considered “an enormously important one.” This rounded out Rothbard’s publications, save for his pamphlet on money, which, thanks to a small libertarian publishing house, would also see the light of day. Fourth, and most important, the Volker Fund prepared to engage in “rather extensive promotional plans” for Man, Economy, and State. It anticipated that “a good many thoughtful people are going to get to know Murray Rothbard’s ideas rapidly and fully in the near future.”

Therefore, by February 1962, Rothbard—who was only thirty-six years old—must have felt an enormous sense of accomplishment. Man, Economy, and State would arrive on the shelves later in the year. In addition, the Volker Fund clearly valued his research and encouraged Rothbard to develop his systematic science of liberty. On top of that, the Volker Fund planned to provide millions to establish the Institute for Humane Studies. This organization would promote and disseminate Man, Economy, and State, and there was a very strong chance that it would employ Rothbard as a full-time researcher. In a little over ten years, Rothbard had come a long way from the Columbia graduate student whom Mises had requested to write a textbook-style version of Human Action. Now, Rothbard’s treatise was nearing release, and the creation of an institute designed to advance his own writings and those of other free-market authors seemed imminent. The future of Austrian economics and libertarianism looked very bright indeed.

But then it all came crashing down. At the end of 1961, the Volker Fund sent Rothbard a book to review by the Christian fundamentalist R. J. Rushdoony, whom Luhnow “was a follower of.” After Rothbard “blasted” the work in a scathing review, Luhnow quickly became convinced “he was surrounded by an atheist, anarchist, pacifist conspiracy to destroy Christianity.” He started to vacillate in his support of ihs, arguing that all necessary knowledge had been accumulated and more emphasis needed to be placed on influencing college campuses and political elections. In March, less than two months after the inaugural meeting of ihs, Luhnow suddenly terminated the Volker Fund. The consequences were seismic: ihs would get no seed money and the William Volker Fund book series would soon be discontinued, which severely curtailed the impact of Rothbard’s publications. Not even Mises was safe—the Volker Fund stopped covering his salary at nyu in 1964. Luhnow’s abrupt decision devastated Rothbard, who considered it “an outburst of nihilism and irrationality,” which was “symbolic of” the growing split between libertarianism and conservatism on foreign policy matters. He now only had his research grants and his job reviewing books for the Volker Fund to live on. His long-cherished goal to work full time developing the science of liberty had suffered an enormous setback.

Given the sudden change of events and the lack of extensive Volker Fund promotion, Man, Economy, and State languished upon its release. Van Nostrand reportedly “fouled everything up royally” when it sent the book to reviewers, “sending Volume I out in advance, and then forgetting to send Volume II.” The limited reviews in professional journals were negative and failed to seriously grapple with Rothbard’s theoretical arguments. They considered the praxeological method and its welfare conclusions concerning the free-market dogmatic. For example, while Lewis E. Hill in the Southern Economic Journal thought the volumes were “refreshing in their originality, . . . challenging in the boldness of their approach, [and] . . . probably the most accurate and detailed praxeological analysis of the economy which has yet been written,” he could not recommend it because Rothbard did not empirically test his assumptions and failed to consider the power of corporate monopoly. D. N. Winch, reviewing for the Economic Journal, called the work “nostalgic and tendentious” and closer to “systematic theology than economics.” Looking back on the publication, Rothbard lamented how only a few individuals “were even interested, except the Mises-seminar people and fee people. . . . Most were non-economists or friends and admirers of Mises.” It was a dismal reception for such an important work.

While it is true that Man, Economy, and State only interested Austrians and fellow travelers, their opinion of it was highly enthusiastic. Fritz Machlup wrote to Rothbard that he was “delighted to have” the book. Despite disagreeing with Rothbard’s legal and political analysis, Henry Hazlitt recognized Man, Economy, and State as “the most important general treatise on economic principles since Ludwig von Mises’ Human Action in 1949.” A memo from the fledgling Institute for Humane Studies, most likely written by Harper in the mid-1960s, considered it “a monumental work that seems to be assured of becoming a classic in the literature of human liberty, economics, and political science.” The ihs memo continued its lavish praise of the treatise: “many of the best minds have asserted that it surpasses the ‘masters’ like the works of Ludwig von Mises, F.A. von Hayek, Wilhelm Roepke, and others of fame.” Harper and ihs clearly thought very highly of Rothbard’s talents.

Indeed, these free-market commentators, not the mainstream economists writing in professional journals, were right on the mark: Man, Economy, and State is a classic that follows in the footsteps of Human Action. Rothbard refined many of Mises’s insights and made his own important contributions to the praxeological tradition. This is best seen in Mises’s own review of the treatise, which recognized Rothbard’s enormous achievement.

The Mises–Rothbard Paradigm

Despite the unforeseen setbacks during the publication of Man, Economy, and State, Rothbard still scored a victory when Ludwig von Mises reviewed his treatise. He had kept Mises informed during the final phase of his treatise’s completion. When Rothbard thought he had finished the book before learning of Frank Meyer’s editorial remarks, he wrote to Mises in May 1959: “At last, after more than several years, I have finally finished the General Principles book.” Mises’s disciple stressed that he could “never adequately thank [him] for the inspiration, both scientific and personal,” that he received from him. In a fitting tribute, Rothbard dedicated the book to his mentor.

Now, in the early 1960s, Rothbard must have felt great trepidation after he learned that Mises had received his book and was writing a review for the New Individualist Review, a conservative-libertarian periodical published by students at the University of Chicago. After all, Mises was dismissive of most economists’ contributions, writing in Human Action that “there never lived at the same time more than a score of men whose work contributed anything essential to economics.” Mises could have viewed Man, Economy, and State as one of the many works that failed to add anything important to the discipline. Rothbard need not have worried: Mises extravagantly praised the work and considered it a major leap forward in economic theory.

Mises started his review with a scathing indictment of the economics profession he considered beyond redemption. “In the writings and teaching of those who nowadays call themselves economists,” there is “no longer any comprehension of the operation of the economic system as such,” because these writers fail to understand “the interdependence and mutuality of the various individuals’ and groups’ activities.” Instead, the current orthodoxy analyzes “the different economic spheres” as “isolated domains,” thereby fragmenting the science into separate fields, “such as [the] economics of labor, of agriculture, of insurance, of foreign trade, of domestic trade, and so on.” Moreover, many of these so-called economists seek refuge in the compilation of “a vast array of statistical and other historical data” without any theoretical understanding of the underlying causal relationships. Overall, recent economics writings provide “a pitiful story of progressing deterioration and degradation,” and the good contributions that are published get “smeared as old-fashioned and reactionary by the government economists, boycotted by the universities, the academic magazines, and the newspapers.”

This was the intellectual environment Rothbard was immersed in when he started his graduate studies at Columbia. Rothbard showed enormous promise at one of the top universities in the country, but his studies failed to furnish him with a systematic understanding of all economic activity. He recognized weaknesses in the prevailing institutionalist and Keynesian approaches but had not yet grasped the deficiencies in the positivist and Marshallian framework he had absorbed. This, of course, rapidly changed when he met Mises and experienced a veritable epiphany by reading Human Action, the inspiration for his own decade-long journey in advancing the praxeological tradition. At first, Rothbard thought he could directly and persuasively communicate his new insights and breakthroughs to the economics profession before realizing, much like his mentor, that he could not change the prevailing disposition of economists.

While the result of Rothbard’s sedulous efforts—Man, Economy, and State—did not impact the profession, it definitely impressed his mentor. “Dr. Rothbard,” Mises wrote, “already well known as the author of several excellent monographs . . . joins the ranks of the eminent economists by publishing . . . a voluminous work, a systematic treatise on economics.” Mises recognized that his protégé’s original contributions grew out of his deep engagement with the history of economic thought, writing that “in every chapter of his treatise,” Rothbard, “adopting the best of the teachings of his predecessors, and adding to them highly important observations . . . develops the correct theory.” For example, Mises praised Rothbard’s Böhm-Bawerkian general interdependence approach to production theory, particularly the careful use of “equilibrium and the evenly rotating economy” and applications involving the “discounted marginal value product” of factors. Mises also approved Rothbard’s demolition of the core of mathematical economics “in a few brilliant lines” and his identification of Keynesian economics’ “missing link . . . the wage rate.”

Despite disagreeing with Rothbard on “the philosophy of law and some problems of the penal code,” Mises recognized Rothbard’s prodigious talents and the enormous contribution he had made to economic science. He considered Man, Economy, and State “an epochal contribution to the general science of human action” and insisted that all future economists would “have to take full account of the theories and criticisms expounded by Dr. Rothbard.” Clearly, Mises’s review demonstrates his enormous admiration for Rothbard as an economist and that Man, Economy, and State represented an important elaboration of the economic theory expounded in Human Action. Indeed, after all these years, Rothbard had finally written the “great book” Mises had encouraged him to write in 1950. Upon receiving the latest copy of the New Individualist Review, Rothbard thanked his mentor for his “very fine review” and hoped it would “spread the knowledge and influence of the book in intellectual circles.”

That he considered Rothbard’s work in economic theory as an updating and advancement of his own work, Mises left no doubt in private correspondence to learned laypeople and academics as well as in classroom comments. In a letter late in 1962 to the noted philosopher Louis Rougier, Mises referred him to “the systematic exposition of the whole doctrine of praxeology in my book Human Action and nowadays in the brilliant book of a younger man, Murray N. Rothbard, Man, State and Economy [sic].” After recommending to Rougier a new edition of his book on the methodology of economics, Epistemological Problems of Economics, Mises closed the letter with an entreaty to Rougier: “But, please, first of all read the book of Rothbard. It is very interesting also from the epistemological point of view.” Two months later, in 1963, a businessman wrote to Mises asking if he knew of “a college economics textbook on the market today that could be regarded as advancing your ideas on the subject?” Mises responded: While he was unable to “name an American textbook that could be considered as fully satisfactory,” Rothbard’s Man, Economy, and State “is a systematic analysis of the whole economic process. I think you will be interested in reading this excellent treatise.”

In his own New York University seminar from November 1962 to May 1963, Mises periodically commented on Rothbard’s work. Notes from Bettina Bien Greaves reveal that though Mises quibbled with Rothbard’s “terminology,” he thought that Alfred Marshall’s long run was “very well criticized” by Rothbard. Marshall was “well criticized by Murray re[garding] long run and short run, the equilibrium. For Marshall, short run of no significance. A good chapter of Murray Rothbard.” Mises did disagree with Rothbard’s discussion of monopolies and monopoly pricing: “Rothbard says it is always the government that makes monopoly price. I say there could be some monopoly prices and monopoly gain without the government—although it is a very small part of the market.”

In private remarks, Mises praised Rothbard’s analysis of monopoly price and insisted that there was little difference between their views. Thus, as reported by his wife, Margit, Mises responded to a question about his differences with Rothbard on monopoly theory by stating, “I would subscribe to every word Rothbard has written in his study.” In a second account of the incident, Margit reported Mises as having replied, “Whatever Rothbard has written in this work is of the greatest importance.” In response to a letter written by David Gordon, Mises wrote, “the difference between mine and Mr. Rothbard’s treatment of the monopoly price problem is of minor importance” because in practice all present-day monopoly prices “owe their existence to the absence of market-freedom,” though Mises still believed that theoretically it was possible for a monopoly price to arise on the free market. These remarks show that Mises valued Rothbard’s analysis, though he still did not completely accept Rothbard’s point that there was no way to conceptually distinguish between competitive and monopoly prices on the free market.

Furthermore, in an article titled “On the International Monetary Problem” Mises referred to Man, Economy, and State for “a brilliant critique of the balance of payments theory of foreign exchange.” Most importantly, Mises updated Human Action in 1963 to highlight Rothbard’s contributions, the highest praise one could earn from a fellow economist. According to seminar participant Hans Sennholz, “everyone knew that this addition [sic] aimed at Murray Rothbard,” particularly his “anarchism.” Greaves agreed, writing that “the principal changes in the second (1963) and later editions of Human Action—those respecting monopoly and corruption in government—were introduced primarily because of differences Mises had with Murray.” But Mises did not confine his revisions to merely defending his views on the necessity of government. As stated earlier, he incorporated Rothbard’s analysis on indifference into his value theory, and, while not directly citing Man, Economy, and State, he did include a reference to America’s Great Depression in a footnote in his chapter on business cycles. Fittingly, when Rothbard asked Mises to sign his copy of the third edition of Human Action, Mises inscribed it, “To Murray N. Rothbard, pioneer of praxeological analysis.”

Man, Economy, and State is a groundbreaking work, standing alongside Human Action as one of the two most significant books in the Austrian tradition. At every step of the way, Rothbard clarified, refined, and improved his mentor’s edifice. Using the work of Böhm-Bawerk, Hayek, and others, Rothbard filled in various gaps in Mises’s theories and expounded new economic truths that strengthened the Austrian paradigm. In this sense, he is the most important successor to Mises.

Man, Economy, and State’s advances in economic theory beyond Human Action are numerous and significant. First, Rothbard used the praxeological method to flesh out Mises’s utility and price theory, explaining each step-by-step deduction. He elaborated on Mises’s ordinalist conception of marginal and total utility, explaining how individuals’ marginal utility rankings on their value scales lead to downward-sloping demand curves. Furthermore, he described how prices form in real world markets of uncertainty and speculative adjustment by entrepreneurs. Rothbard then constructed a new production theory that synthesized the disparate strands of interest and capital theory in Böhm-Bawerk and his followers’ analysis. Rothbard’s Austrian general equilibrium approach showed the economic interrelations in the production structure and the overriding importance of the capitalist-entrepreneur for allocating scarce resources and pricing consumer and producer goods. He also made crucial innovations in the areas of monopoly and competition by revising Mises’s theory and building upon Hayek and other thinkers.

Finally, Rothbard deduced a systematic theory of intervention that explained the full consequences of government policies on pricing and production. Notably, he outlined the workings of a purely free-market economy with private defense agencies and no government whatsoever. In addition to innovative welfare theories and analyses of the effects of taxation and government spending on the structure of production, Rothbard refined the Mises–Hayek theory of the business cycle. In each chapter, Rothbard referenced contemporary works, highlighting contributions to economic science or showing how it contributed to the retrogression of the discipline. Rothbard’s “systematic exposition of the whole doctrine of praxeology,” to use Mises’s words, is a magnificent accomplishment that stands in stark contrast with the neoclassical synthesis.

Rothbard went on to write many other books on subjects concerning economics and other aspects of political economy. But Man, Economy, and State is undoubtedly the pinnacle of his career. This magnum opus cements Rothbard’s legacy as an indispensable contributor to Austrian economics and the most important heir of Mises.

____________________

Murray N. Rothbard, Man, Economy, and State: A Treatise on Economic Principles, 2 vols. (D. Van Nostrand, 1962).

Walter Block and Walter Grinder, “Rothbard Tells All: Interview with Murray Rothbard,” December 1972, p. 13, Rothbard Papers. Justin Raimondo, An Enemy of the State: The Life of Murray N. Rothbard (Prometheus Books, 2000), p. 44.

Murray N. Rothbard to Richard C. Cornuelle, May 30, 1956, p. 1, Rothbard Papers.

Murray N. Rothbard to Harold W. Luhnow, June 17, 1956, p. 1, Rothbard Papers.

Murray N. Rothbard, “Memorandum to the Earhart Foundation: Report on the A. F. Burns lectures,” November 1957, p. 1, Rothbard Papers.

Murray N. Rothbard to Richard C. Cornuelle, “Suggestions for a General Research Program for the Volker Fund,” April 3, 1954, p. 6, Rothbard Papers.

Murray N. Rothbard to F. A. Harper, January 3, 1961, pp. 1, 2, 5, Rothbard Papers.

Murray N. Rothbard to Richard C. Cornuelle, January 8, 1956, p. 1, Rothbard Papers.

Michael McVicar, “Aggressive Philanthropy: Progressivism, Conservatism, and the William Volker Charities Fund,” Missouri Historical Review 105, no. 4 (2011): 198–99.

James A. Kennedy to Murray N. Rothbard, April 20, 1956, p. 1, Rothbard Papers. Murray N. Rothbard to Richard C. Cornuelle, January 31, 1956, p. 4, Rothbard Papers; Murray N. Rothbard, “Application to the Earhart Foundation,” early 1956, pp. 1–10, Rothbard Papers; Murray N. Rothbard to Leonard E. Read, February 4, 1956, p. 1, Rothbard Papers.

Murray N. Rothbard to Milton Friedman, February 18, 1956, p. 1, Rothbard Papers.

Ludwig von Mises to James A. Kennedy, April 5, 1956, p. 1, Ludwig von Mises Collection, Grove City College. Murray N. Rothbard to Ludwig von Mises, April 2, 1956, p. 1, Rothbard Papers.

Ludwig von Mises to Richard A. Ware, January 28, 1957, p. 1, Rothbard Papers; Ludwig von Mises to Richard A. Ware, February 7, 1957, p. 1, Ludwig von Mises Collection, Grove City College.

Murray N. Rothbard to Henry Hazlitt, January 20, 1958, p. 1, Rothbard Papers; Murray N. Rothbard to Richard A. Ware, January 30, 1961, p. 1, Rothbard Papers.

Murray N. Rothbard to Ludwig M. Lachmann, February 14, 1957, pp. 1–3, Rothbard Papers. Murray N. Rothbard, “Money, Free and Unfree,” June 1957, pp. 1–85, Rothbard Papers.

Murray N. Rothbard to Lawrence W. Fertig, October 9, 1957, p. 1, Rothbard Papers.

Claude Robinson, Understanding Profits (D. Van Nostrand, 1961); Rothbard to Fertig, October 9, 1957, p. 1. For an example of a memo, see Murray N. Rothbard, “Competition and the Economists,” May 1961, in Strictly Confidential: The Private Volker Fund Memos of Murray N. Rothbard, ed. David Gordon (Mises Institute, 2010), pp. 307–20.

George J. Stigler, Memoirs of an Unregulated Economist (Basic Books, 1988), pp. 148–57.

Murray N. Rothbard, “Untitled Letter Critical of Chicago School Economics,” February 3, 1960, in Strictly Confidential, ed. David Gordon, p. 295. James M. Buchanan et al., Prices, Income, and Public Policy, 2nd ed. (McGraw-Hill, 1959).

Milton Friedman, “The Methodology of Positive Economics,” in Essays in Positive Economics (University of Chicago Press, 1953), pp. 3–43.

Frank H. Knight, “‘What is Truth’ in Economics?,” Journal of Political Economy 48, no. 1 (1940): 1–32; Lionel Robbins, An Essay on the Nature and Significance of Economic Science, 2nd ed. (Macmillan, 1935).

Friedman, “The Methodology of Positive Economics,” p. 3.

Murray N. Rothbard to William F. Campbell, April 2, 1961, p. 3, Rothbard Papers.

Milton Friedman, Essays in Positive Economics (University of Chicago Press, 1953).

Murray N. Rothbard to George Resch, October 4, 1961, pp. 1–2, Rothbard Papers.

F. A. Hayek, Hayek on Hayek: An Autobiographical Dialogue, ed. Stephen Kresge and Leif Wenar (University of Chicago Press, 1994), p. 145. John Maynard Keynes, The General Theory of Employment, Interest, and Money (Cambridge University Press, 1936).

George J. Stigler, The Theory of Price, 2nd ed. (Macmillan, 1952).

Murray N. Rothbard to Richard C. Cornuelle, December 25, 1953, pp. 1–2, Rothbard Papers; George J. Stigler, The Theory of Price (Macmillan, 1946).

Murray N. Rothbard to Ivan R. Bierly, November 4, 1960, pp. 1–2, Rothbard Papers.

Rothbard, “Untitled Letter Critical of Chicago School Economics,” pp. 298–300.

James M. Buchanan to Murray N. Rothbard, January 28, 1960, p. 1, Rothbard Papers. Murray N. Rothbard to James M. Buchanan, January 25, 1960, p. 1, Rothbard Papers.

Rothbard, “Untitled Letter Critical of Chicago School Economics,” p. 300. Joseph T. Salerno, “The Problem with James Buchanan’s Positivist Economics,” Mises Wire, May 2, 2014, https://mises.org/mises-wire/problem-james-buchanans-positivist-economics.

Murray N. Rothbard to Kenneth S. Templeton, January 25, 1959, p. 6, Rothbard Papers. Armen A. Alchian and Reuben A. Kessel, “Competition, Monopoly, and the Pursuit of Pecuniary Gain,” in Aspects of Labor Economics, ed. National Bureau of Economic Research (Princeton University Press, 1962), pp. 157–83.

Murray N. Rothbard to Ivan R. Bierly, July 13, 1959, p. 12, Rothbard Papers. Armen A. Alchian, “Private Property and the Relative Cost of Tenure,” in The Public Stake in Union Power, ed. Philip Bradley (University of Virginia Press, 1959), pp. 350–71.

Rothbard to Lachmann, February 14, 1957, p. 8.

Murray N. Rothbard, “Report on Israel Kirzner, ‘The Economic Point of View,’” August 1959, p. 1, Rothbard Papers. Murray N. Rothbard to Ervin K. Zingler, April 19, 1961, p. 1, Rothbard Papers.

Murray N. Rothbard to Kenneth S. Templeton, March 17, 1962, p. 1, Rothbard Papers.

Ivan R. Bierly to Murray N. Rothbard, August 5, 1959, p. 1, Rothbard Papers.

Murray N. Rothbard, “Comments on Israel Kirzner’s MS,” December 1961, p. 1, Rothbard Papers. Joseph T. Salerno, “Varieties of Austrian Price Theory: Rothbard Reviews Kirzner,” Libertarian Papers 3 (2011): e25.

Rothbard, “Comments on Israel Kirzner’s MS,” p. 1.

Rothbard, “Comments on Israel Kirzner’s MS,” pp. 1, 10–11.

Rothbard, “Comments on Israel Kirzner’s MS,” pp. 1–3.

Rothbard, “Comments on Israel Kirzner’s MS,” pp. 2, 7–8.

Rothbard to Templeton, March 17, 1962, p. 1.

Israel M. Kirzner, The Economic Point of View (D. Van Nostrand, 1960); Israel M. Kirzner, Market Theory and the Price System (D. Van Nostrand, 1963).

C. E. Ayres, review of Market Theory and the Price System, by Israel M. Kirzner, American Economic Review 53, no. 4 (1963): 756.

Israel Kirzner, “Entire Project,” n.d., p. 1, Rothbard Papers. Eugen von Böhm-Bawerk, Capital and Interest: A Critical History of Economical Theory (London, 1890).

Rothbard to Templeton, March 17, 1962, p. 1.

Israel M. Kirzner, An Essay on Capital (Augustus M. Kelley, 1966).

Rothbard, “Comments on Israel Kirzner’s MS,” p. 1.

Milton Friedman, A Program for Monetary Stability (Fordham University Press, 1959); Milton Friedman, A Theory of the Consumption Function (Princeton University Press, 1957); Milton Friedman and Anna Schwartz, A Monetary History of the United States, 1867–1960 (Princeton University Press, 1963); Milton Friedman, ed., Studies in the Quantity Theory of Money (University of Chicago Press, 1956).

Brian Doherty, Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement (PublicAffairs, 2007), p. 467.

Murray N. Rothbard to Ivan R. Bierly, October 31, 1960, pp. 1–2, Rothbard Papers.

Murray N. Rothbard to George C. Resch, January 31, 1962, p. 1, Rothbard Papers.

Murray N. Rothbard to Kenneth S. Templeton, November 3, 1957, p. 1, Rothbard Papers.

Murray N. Rothbard to Richard C. Cornuelle, August 21, 1956, p. 2, Rothbard Papers.

Murray N. Rothbard, America’s Great Depression, 5th ed. (Mises Institute, 2008), pp. 85–181.

Murray N. Rothbard to Ivan R. Bierly, March 23, 1960, pp. 3–4, Rothbard Papers. Armen A. Alchian and Reuben A. Kessel, “Real Wages in the North During the Civil War: Mitchell’s Data Reinterpreted,” Journal of Law and Economics 2, no. 1 (1959): 95–113.

Rothbard to Resch, January 31, 1962, p. 1.

Murray N. Rothbard, review of Business Cycles and Their Causes, by Wesley Clair Mitchell, and American Business Cycles, 1865–1897, by Rendigs Fels, Freeman 9, no. 12 (1959): 54.

Rothbard to Bierly, October 31, 1960, p. 2.

Rothbard to Bierly, October 31, 1960, p. 2. Murray N. Rothbard to Clark Warburton, April 23, 1961, p. 1, Rothbard Papers; Clark Warburton to Murray N. Rothbard, June 9, 1961, p. 1, Rothbard Papers.

David M. Levy and Sandra J. Peart, Toward an Economics of Natural Equals: A Documentary History of the Early Virginia School (Cambridge University Press, 2020), pp. 195, 201.

Murray N. Rothbard, “The Case for a 100 Per Cent Gold Dollar,” in In Search of a Monetary Constitution, ed. Leland B. Yeager (Harvard University Press, 1962), pp. 94, 113–14, 116.

Murray N. Rothbard to Richard C. Cornuelle, April 25, 1954, p. 1, Rothbard Papers; Murray N. Rothbard to Richard C. Cornuelle, May 1, 1954, p. 1, Rothbard Papers; Murray N. Rothbard to Leland B. Yeager, October 11, 1960, p. 1, Rothbard Papers; Leland B. Yeager, The Fluttering Veil: Essays on Monetary Disequilibrium, ed. George Selgin (Liberty Fund, 1997), p. xxi; Leland B. Yeager, “The Methodology of Henry George and Carl Menger,” American Journal of Economics and Sociology 13, no. 3 (1954): 233–38; Leland B. Yeager, “Some Questions About Growth Economics,” American Economic Review 44, no. 1 (1954): 53–63.

Leland B. Yeager to Murray N. Rothbard, September 29, 1960, p. 1, Rothbard Papers.

Richard A. Ware to Murray N. Rothbard, January 6, 1961, p. 1, Rothbard Papers.

Murray N. Rothbard to Herbert C. Cornuelle, August 19, 1953, p. 1, Rothbard Papers. Ludwig M. Lachmann, “The Role of Expectations in Economics as a Social Science,” Economica 10, no. 37 (1943): 12–23.

Rothbard to Lachmann, February 14, 1957, p. 3.

Rothbard to Lachmann, February 14, 1957, p. 6. Ludwig M. Lachmann, Capital and Its Structure (London School of Economics, 1956).

Rothbard, Man, Economy, and State, p. 627. Ludwig M. Lachmann, “Mrs. Robinson on the Accumulation of Capital,” South African Journal of Economics 26, no. 2 (1958): 87–100.

Rothbard, Man, Economy, and State, p. 627. Robert Dorfman, “Waiting and the Period of Production,” Quarterly Journal of Economics 73, no. 3 (1959): 351–72; Robert Dorfman, “A Graphical Exposition of Böhm-Bawerk’s Interest Theory,” Review of Economic Studies 26, no. 2 (1959): 153–58; Egon Neuberger, “Waiting and the Period of Production: Comment,” Quarterly Journal of Economics 74, no. 1 (1960): 150–53.

Rothbard, Man, Economy, and State, p. 884. L. D. Goldblatt to Murray N. Rothbard, December 17, 1957, pp. 1–4, Rothbard Papers.

Rothbard, Man, Economy, and State, pp. 75, 326. Boris Ischbolden, “A Critique of Econometrics,” Review of Social Economy 18, no. 2 (1960): 110–27; Vladimir Niksa, “The Role of Quantitative Thinking in Modern Economic Theory,” Review of Social Economy 17, no. 2 (1959): 151–73; Paul Painleve, “The Place of Mathematical Reasoning in Economics,” in Essays in European Economic Thought, ed. Louise Sommer (D. Van Nostrand, 1960), pp. 120–32.

Rothbard, Man, Economy, and State, pp. 354, 736, 1124. André Gabor and I. F. Pearce, “The Place of Money Capital in the Theory of Production,” Quarterly Journal of Economics 72, no. 4 (1958): 537–57.

Murray N. Rothbard to Kenneth S. Templeton, October 20, 1959, p. 1, Rothbard Papers. Rothbard, Man, Economy, and State, p. 592; Armen A. Alchian “Costs and Outputs,” in The Allocation of Economic Resources: Essays in Honor of Bernard Francis Haley, by Moses Abramovitz et al. (Stanford University Press, 1959), pp. 23–40.

Murray N. Rothbard to Ivan R. Bierly, March 16, 1959, p. 1, Rothbard Papers. Reuben A. Kessel, “Price Discrimination in Medicine,” Journal of Law and Economics 1, no. 1 (1958): 20–53; Rothbard, Man, Economy, and State, p. 744.

Murray N. Rothbard, review of Quality and Competition: An Essay in Economic Theory, by Lawrence Abbott, and Natural Resources: The Economics of Conservation, by Anthony Scott, July 21, 1958, in Strictly Confidential, ed. David Gordon, pp. 257–58. Lawrence Abbott, Quality and Competition: An Essay in Economic Theory (Columbia University Press, 1955).

Rothbard, Man, Economy, and State, p. 800.

Rothbard to Bierly, July 13, 1959, p. 3. F. A. Hayek, “Unions, Inflation, and Profits,” in The Public Stake in Union Power, ed. Philip Bradley, pp. 46–62; Rothbard, Man, Economy, and State, p. 592.

Murray N. Rothbard, review of The Failure of the “New Economics”, National Review, August 15, 1959, p. 279. Henry Hazlitt, The Failure of the “New Economics” (Princeton University Press, 1959). Rothbard, Man, Economy and State, p. 784.

Henry Hazlitt, ed., The Critics of Keynesian Economics (D. Van Nostrand, 1960); Rothbard, Man, Economy, and State, pp. 776, 780, 784, 788, 868.

Rae C. Heiple III to Murray N. Rothbard, August 10, 1956, p. 1, Rothbard Papers.

Murray N. Rothbard to Rae C. Heiple III, September 1956, p. 1, Rothbard Papers. Rothbard, America’s Great Depression, p. 22.

Murray N. Rothbard, “On the Definition of Money,” April 1959, in Strictly Confidential, ed. David Gordon, pp. 259–60, 262. Arthur F. Burns, Prosperity Without Inflation (Fordham University Press, 1957), p. 50; Gordon W. McKinley, “Effects of Federal Reserve Policy on Nonmonetary Financial Institutions,” in The Federal Reserve System, ed. Herbert V. Prochnow (Harper and Brothers, 1960), pp. 204–25; Gordon W. McKinley, “The Federal Home Loan Bank System and the Control of Credit,” Journal of Finance 12, no. 3 (1957): 319–32.

Not found in Rothbard Papers. Joel Segall to Murray N. Rothbard, April 16, 1959, p. 1, Rothbard Papers.

Rothbard, America’s Great Depression, p. 91.

Murray N. Rothbard to George B. DeHuszar, November 14, 1959, p. 1, Rothbard Papers.

Kirzner, The Economic Point of View; Kirzner, Market Theory and the Price System; McVicar, “Aggressive Philanthropy,” p. 199; Ludwig von Mises, Epistemological Problems of Economics (D. Van Nostrand, 1960); Ludwig von Mises, The Ultimate Foundations of Economic Science (D. Van Nostrand, 1962); Rothbard to DeHuszar, November 14, 1959, p. 1; Murray N. Rothbard to George B. DeHuszar, February 7, 1960, p. 1, Rothbard Papers. Joseph Stromberg, introduction to Man, Economy, and State with Power and Market, scholar’s ed., by Murray N. Rothbard (Mises Institute, 2004), pp. lxiii–lxv.

Murray N. Rothbard to Ralph Raico, November 25, 1959, p. 3, Rothbard Papers.

Frank Meyer, “On Murray Rothbard’s Manuscript,” n.d., p. 1, Rothbard Papers. Frank A. Fetter, Economic Principles (Century, 1915); Frank W. Taussig, Principles of Economics (Macmillan, 1911).

Meyer, “On Murray Rothbard’s Manuscript,” pp. 1–2.

Ivan R. Bierly to Murray N. Rothbard, January 7, 1960, p. 1, Rothbard Papers.

Rothbard to Raico, November 25, 1959, p. 3.

Murray N. Rothbard to Ivan R. Bierly, January 17, 1960, p. 1, Rothbard Papers.

Rothbard, Man, Economy, and State, pp. 962–88. P. T. Bauer, Economic Analysis and Policy in Underdeveloped Countries (Duke University Press, 1957); P. T. Bauer, “The Political Economy of Non-Development,” in Foreign Aid Reexamined: A Critical Appraisal, ed. James W. Wiggins and Helmut Schoeck (Public Affairs Press, 1958), pp. 129–38; P. T. Bauer, United States Aid and Indian Economic Development (American Enterprise Association, 1959); Lachmann, Capital and Its Structure; Ludwig von Mises, Theory and History (Yale University Press, 1957).

Rothbard, Man, Economy, and State, p. 500.

Arthur Goddard to Norman Hood, January 13, 1961, p. 1, Rothbard Papers. Ivan R. Bierly to Norman Hood, January 24, 1961, p. 1, Rothbard Papers.

Harold Barger to Murray N. Rothbard, February 24, 1960, p. 1, Rothbard Papers; Lester V. Chandler to Murray N. Rothbard, February 16, 1960, p. 1, Rothbard Papers; Richard Ruggles to Murray N. Rothbard, February 25, 1960, p. 1, Rothbard Papers.

Rothbard to Harper, January 3, 1961, pp. 1, 5.

Murray N. Rothbard to Kenneth S. Templeton, November 19, 1962, p. 1, Rothbard Papers. Doherty, Radicals for Capitalism, pp. 168–69, 287.

Murray N. Rothbard to F. A. Harper and George Resch, “What Is to Be Done?,” July 1961, p. 2, Rothbard Papers.

Murray N. Rothbard to F. A. Harper, July 16, 1961, pp. 1–4; F. A. Harper Papers, Hoover Institution.

Doherty, Radicals for Capitalism, pp. 291–92, 671; Murray N. Rothbard, “A Conversation with Murray N. Rothbard,” in The Rothbard Reader, ed. Joseph T. Salerno and Matthew McCaffrey (Mises Institute, 2016), p. 33.

Murray N. Rothbard to Ivan R. Bierly, August 21, 1961, pp. 1–2, Rothbard Papers; Ivan R. Bierly to Murray N. Rothbard, August 31, 1961, p. 1, Rothbard Papers; Murray N. Rothbard to Kenneth S. Templeton, August 13, 1961, p. 1, Rothbard Papers.

Murray N. Rothbard to Ivan R. Bierly, November 14, 1959, p. 1, Rothbard Papers; Rothbard to Raico, November 25, 1959, p. 4; Murray N. Rothbard, The Panic of 1819: Reactions and Policies (Columbia University Press, 1962).

Ivan R. Bierly to Murray N. Rothbard, October 31, 1961, p. 1, Rothbard Papers. Murray N. Rothbard, America’s Great Depression (D. Van Nostrand, 1963).

Murray N. Rothbard, What Has Government Done to Our Money? (Pine Tree Press, 1963). F. A. Harper to James L. Doenges, October 21, 1963, p. 1, F. A. Harper Papers, Hoover Institution; Patrick Newman, foreword to What Has Government Done to Our Money?, 6th ed., by Murray N. Rothbard (Mises Institute, 2024), pp. 9–13.

Bierly to Rothbard, October 31, 1961, p. 1. Murray N. Rothbard, Man, Economy, and State: A Treatise on Economic Principles, 2 vols. (D. Van Nostrand, 1962).

Rothbard, “A Conversation with Murray N. Rothbard,” pp. 32–33.

Murray N. Rothbard to F. A. Harper, March 22, 1962, p. 1, Rothbard Papers; Doherty, Radicals for Capitalism, pp. 293–94, 671; Murray N. Rothbard, Betrayal of the American Right, pp. 178–79; Murray N. Rothbard to George Resch, November 16, 1961, pp. 1–5, Rothbard Papers.

Murray N. Rothbard to Frank S. Meyer, June 13, 1962, p. 1, Frank S. Meyer Papers; private collection in the possession of Daniel J. Flynn.

Lewis E. Hill, review of Man, Economy, and State: A Treatise on Economic Principles, by Murray N. Rothbard, Southern Economic Journal 29, no. 3 (1963): 253.

D. N. Winch, review of Man, Economy, and State: A Treatise on Economic Principles, by Murray N. Rothbard, Economic Journal 74, no. 294 (1964): 480–82.

Rothbard, “A Conversation with Murray N. Rothbard,” p. 30.

Fritz Machlup to Murray N. Rothbard, June 24, 1962, p. 1, Rothbard Papers.

Henry Hazlitt, “The Economics of Freedom,” National Review, September 25, 1962, p. 232.

Institute for Humane Studies, “Nomination: Man, Economy, and State,” n.d., p. 1, Rothbard Papers.

Murray N. Rothbard to Ludwig von Mises, May 5, 1959, p. 1, Rothbard Papers.

Rothbard, Man, Economy, and State, p. iii.

Rothbard, Betrayal of the American Right, pp. 176–78.

Ludwig von Mises, Human Action: A Treatise on Economics, scholar’s ed. (Mises Institute, 2008), p. 869.

Ludwig von Mises, “A New Treatise on Economics,” New Individualist Review 2, no. 3 (1962): 39–40.

Mises, “A New Treatise on Economics,” pp. 40–41.

Mises, “A New Treatise on Economics,” p. 41.

Ludwig von Mises to Murray N. Rothbard, May 29, 1950, p. 1, Rothbard Papers.

Murray N. Rothbard to Ludwig von Mises, December 12, 1962, p. 1, Rothbard Papers.

Ludwig von Mises to Louis Rougier, December 6, 1962, p. 3, Rothbard Papers. Mises, Epistemological Problems of Economics.

Warren B. Jones to Ludwig von Mises, February 24, 1963, p. 1, Ludwig von Mises Collection, Grove City College.

Ludwig von Mises to Warren B. Jones, March 7, 1963, p. 1, Ludwig von Mises Collection, Grove City College.

Bettina Bien Greaves, “Notes,” November 29, 1962, p. 6, Bettina Bien Greaves Papers, Mises Institute.

Greaves, “Notes,” November 29, 1962, p. 2.

Bettina Bien Greaves, “Notes,” May 9, 1963, p. 1, Bettina Bien Greaves Papers, Mises Institute.

Margit von Mises, My Years with Ludwig von Mises (Arlington House Publishers, 1976), p. 158.

Margit von Mises, “Testimonial,” in Man, Economy, and Liberty: Essays in Honor of Murray N. Rothbard, ed. Walter Block and Llewellyn H. Rockwell Jr. (Mises Institute, 1988), p. 401. Jesús Huerta de Soto, “The Spanish Roots of the Austrian School: An Interview with Jesús Huerta de Soto,” Austrian Economics Newsletter, Summer 1997, p. 1.

Ludwig von Mises to David Gordon, June 22, 1966, p. 1, Ludwig von Mises Collection, Grove City College.

Ludwig von Mises, “On the International Monetary Problem,” American Opinion 10, no. 2 (1967): 23.

Hans F. Sennholz to Lew Rockwell, February 2, 1998, p. 1, Sennholz Papers, Mises Institute.

Bettina Bien Greaves to Llewellyn H. Rockwell, April 23, 1998, p. 2, Bettina Bien Greaves Papers, Mises Institute. Bettina Bien Greaves to Llewellyn H. Rockwell, August 28, 2000, p. 1, Bettina Bien Greaves Papers, Mises Institute.

Ludwig von Mises, Human Action: A Treatise on Economics, 2nd ed. (Yale University Press, 1963), pp. 279–89, 354, 561.

Joseph T. Salerno, “Murray Rothbard: Pioneer of Praxeological Analysis,” LewRockwell.com, July 12, 2019, https://www.lewrockwell.com/2019/07/joseph-salerno/murray-rothbard-pioneer-of-praxeological-analysis/.

Mises to Rougier, December 6, 1962, p. 3.