Rothbard A to Z
WAGE RATES
WAGE RATES
… wages are determined by the supply and demand for labor …
Classical Economics, p. 133
Action implies that the individual’s behavior is purposive, in short, that it is directed toward goals. Furthermore, the fact of his action implies that he has consciously chosen certain means to reach his goals. Since he wishes to attain these goals, they must be valuable to him; accordingly he must have values that govern his choices.
Economic Controversies, p. 60
… each man will tend to earn an income equal to his “marginal productivity,” to his particular productivity in satisfying consumer demands. …
… In the free society, those who are capable of providing goods and services that the consumers value and are willing to purchase, will receive precisely what the consumers are willing to spend.
Economic Controversies, pp. 627–28
Since consumer utility and demand determines value, people will tend to receive income from production to whatever extent they satisfy consumers in the production process.
Economic Thought Before Adam Smith, p. 410
… the demand curve for any sort of labor (as for any other factor of production) is set by the perceived marginal productivity of that labor …
Making Economic Sense, p. 134
… the wage or rent of the service of an original factor of production will equal its DMVP, the discounted marginal value product.
Man, Economy, and State with Power and Market, p. 525
… in a progressing economy, i.e., in an economy with increases in gross savings and investment, money wages and ground rents may well fall, but real wages and rents will rise.
Man, Economy, and State with Power and Market, p. 526
A wage is the term describing the payment for the unit services of a labor factor. A wage, therefore, is a special case of rent; it is labor’s “hire.” On a free market this rent cannot, of course, be capitalized, since the whole labor factor—the man—cannot be bought and sold for a price, his income to accrue to his owner. This is precisely what occurs, however, under a regime of slavery. The wage, in fact, is the only source of rent that cannot be capitalized on the free market, since every man is necessarily a self-owner with an inalienable will.
Man, Economy, and State with Power and Market, p. 559
… the general supply curve of a factor will be “forward-sloping,” i.e., rightward-sloping.… general supply curves for a labor factor will also be forward-sloping.
Man, Economy, and State with Power and Market, p. 573
That each man receives his marginal value product means that each man is paid what he is worth in producing for consumers.
Man, Economy, and State with Power and Market, p. 579
… while wage rates are not equalized, psychic wage rates will all tend, in the long run, to move together and maintain a given skill-differential between each occupation. Therefore, when a certain branch of industry expands its capital and production, an increase in DMVP, and therefore in wage rates, is not confined to that particular branch.
Man, Economy, and State with Power and Market, p. 579
To the employer, in other words, it makes no difference in what form workers cost him money, whether in “take-home pay” or in welfare benefits. But he cannot pay more than the worker’s DMVP; i.e., the worker’s total wage income is set by this amount. The worker, in effect, chooses in what form he would like his pay and in what proportion of net wage rates to “welfare” benefits. Part of these benefits is money that the employer might spend to provide particularly pleasant or plush working conditions for all or some of his employees. This cost is part of the total and is deducted from the overt wage rates of the employee.
Man, Economy, and State with Power and Market, p. 581
Wage rates will tend toward uniformity for the same labor in different geographical areas in precisely the same way as from industry to industry or firm to firm. Any temporary differential will induce laborers to move from the low- to the high-wage area and businesses to move from the latter to the former, until equilibrium is reached.
Man, Economy, and State with Power and Market, p. 617
… real wage rates will increase in the progressing economy.
Man, Economy, and State with Power and Market, p. 627
… the free market does not distribute incomes; income there arises naturally and smoothly out of the market processes of production and exchange.
Man, Economy, and State with Power and Market, p. 912
The laborer, faced with a tax on his wages, has less incentive to work hard …
Man, Economy, and State with Power and Market, p. 915
Workers always want higher wages … A worker can get only the value of the discounted marginal productivity of his labor.
Man, Economy, and State with Power and Market, p. 928
In the free market the inexorable trend is to equalize wage rates for the same value-productive work all over the earth.
Man, Economy, and State with Power and Market, p. 1107
On the free market, everyone earns according to his productive value in satisfying consumer desires.
Man, Economy, and State with Power and Market, p. 1363
WALRAS, LÉON
The Walrasian scheme is unrealistic, consisting solely of a mathematical analysis of an unrealizable (though important) equilibrium system.
America’s Great Depression, p. 66n12
It is surely no accident that the rise to dominance of Walrasian economics has coincided with the virtual mathematization of the social sciences.
Economic Controversies, p. 261
Modern orthodox economics has abandoned the quest for causal explanation in behalf of a Walrasian world of “mutual determination” suitable for the current fashion of mathematical economics.
Economic Controversies, pp. 695–96
The very notion of a Walrasian general equilibrium is not simply totally unrealistic, it is conceptually impossible, since money and monetary exchange cannot be sustained in that kind of system.
Economic Controversies, pp. 697–98
The Walrasian world is also one of “perfect” competition, where prices are given to all managers.
Economic Controversies, p. 832
WAR AND PEACE
… any inflationary boom, especially that of a lengthy and major war, will collapse at the war’s end into depression and deflation.
Classical Economics, p. 205
… a guerrilla war would be the libertarian way to fight a war …
Conceived in Liberty v. 4, p. 24; p. 1138
In war, State power is pushed to its ultimate, and, under the slogans of “defense” and “emergency,” it can impose a tyranny upon the public such as might be openly resisted in time of peace. War thus provides many benefits to a State, and indeed every modern war has brought to the warring peoples a permanent legacy of increased State burdens upon society.
Egalitarianism as a Revolt Against Nature, pp. 80–81
War, while risky, will be an ever-present tendency of States …
Egalitarianism as a Revolt Against Nature, p. 82
In the modern era of total war, combined with the technology of total destruction, the very idea of keeping war limited to the State apparati seems even more quaint and obsolete than the original Constitution of the United States.
Egalitarianism as a Revolt Against Nature, p. 85
… while war in the narrower sense is a conflict between States, in the broader sense we may define it as the outbreak of open violence between people or groups of people.
Egalitarianism as a Revolt Against Nature, p. 117
The Libertarian’s basic attitude toward war must … be: it is legitimate to use violence against criminals in defense of one’s rights of person and property; it is completely impermissible to violate the rights of other innocent people. War, then, is only proper when the exercise of violence is rigorously limited to the individual criminals.
Egalitarianism as a Revolt Against Nature, p. 119
… each State lives by taxation over its subjects. Any war against another State, therefore, involves the increase and extension of taxation-aggression over its own people.… state wars can only be waged through aggression against the taxpayer.
Egalitarianism as a Revolt Against Nature, p. 124
… the overriding consideration for the Libertarian is the condemnation of any State participation in war.
Egalitarianism as a Revolt Against Nature, p. 128
… the use of nuclear or similar weapons, or the threat thereof, is a crime against humanity for which there can be no justification.
… it is precisely the characteristic of modern weapons that they cannot be used selectively, cannot be used in a libertarian manner. Therefore, their very existence must be condemned, and nuclear disarmament becomes a good to be pursued for its own sake. Indeed, of all the aspects of liberty, such disarmament becomes the highest political good that can be pursued in the modern world. For just as murder is a more heinous crime against another man than larceny so mass murder—indeed murder so widespread as to threaten human civilization and human survival itself—is the worst crime that any man could possibly commit. …
… nuclear warfare is totally illegitimate …
Ethics of Liberty, p. 191
… each State lives by taxation over its subjects. Any war against another State, therefore, involves the increase and extension of taxation-aggression against its own people. Conflicts between private individuals can be, and usually are, voluntarily waged and financed by the parties concerned.… State wars can only be waged through aggression against the taxpayer.
All State wars, therefore, involve increased aggression against the State’s own taxpayers …
Ethics of Liberty, pp. 192–93
… the libertarian is interested in reducing as much as possible the area of State aggression against all private individuals, “foreign” and “domestic.” The only way to do this, in international affairs, is for the people of each country to pressure their own State to confine its activities to the area which it monopolizes, and not to aggress against other State-monopolists—particularly the people ruled by other States. In short, the objective of the libertarian is to confine any existing State to as small a degree of invasion of person and property as possible. And this means the total avoidance of war. The people under each State should pressure “their” respective States not to attack one another, and, if a conflict should break out, to negotiate a peace or declare a cease-fire as quickly as physically possible.
Ethics of Liberty, p. 193
The libertarian objective, then, should be, regardless of the specific causes of any conflict, to pressure States not to launch wars against other States and, should a war break out, to pressure them to sue for peace and negotiate a cease–fire and a peace treaty as quickly as physically possible.
Ethics of Liberty, p. 194
It is in war that the State really comes into its own: swelling in power, in number, in pride, in absolute dominion over the economy and the society. The root myth that enables the State to wax fat off war is the canard that war is a defense by the State of its subjects. The facts are precisely the reverse. For if war is the health of the State, it is also its greatest danger.
Ethics of Liberty, pp. 196–197
… a permanent army is a standing temptation to the State to enlarge its power, to push around other people as well as other countries, and to dominate the internal life of the nation.
For a New Liberty, p. 101
Any standing army, then, poses a standing threat to liberty. Its monopoly of coercive weapons, its modern tendency toward creating and supporting a “military-industrial complex” to supply that army, and last, but not least … the taxing power to finance that army, pose a continuing threat of the army’s perpetual expansion in size and power. Any tax-supported institution, of course, is opposed by the libertarian as coercive, but an army is uniquely menacing for its amassing and collecting into one set of hands the massive power of modern weaponry.
For a New Liberty, p. 102
… the idea of inter-State war against a libertarian country or geographical area would most likely disappear.
For a New Liberty, p. 296
The main reason a conquering country can rule a defeated country is that the latter has an existing State apparatus to transmit and enforce the victor’s orders onto a subject population.… in those cases in history where the conquered had no government, the conquerors found rule over the conquered extremely difficult.
For a New Liberty, p. 298
… no occupying force can long keep down a native population determined to resist.… Guerrilla warfare has proved to be an irresistible force precisely because it stems, not from a dictatorial central government, but from the people themselves, fighting for their liberty and independence against a foreign State.
For a New Liberty, pp. 298–99
… the objective of the libertarian is to confine any existing State to as small a degree of invasion of person and property as possible. And this means the total avoidance of war. The people under each State should pressure “their” respective States not to attack one another, or, if a conflict should break out, to withdraw from it as quickly as physically possible.
For a New Liberty, pp. 331–32
War, then, is mass murder, and this massive invasion of the right to life, of self-ownership, of numbers of people is not only a crime but, for the libertarian, the ultimate crime.… Since all governments obtain their revenue from the thievery of coercive taxation, any mobilization and launching of troops inevitably involve an increase in tax-coercion … because inter-State wars inevitably involve both mass murder and an increase in tax-coercion, the libertarian opposes war. Period.
For a New Liberty, p. 332
… the libertarian position should be that, so long as the war continues, the scope of assault upon innocent civilians must be diminished as much as possible.… the libertarian tries to induce neutral States to remain neutral in any inter-State conflict, and to induce the warring States to observe fully the rights of neutral citizens.
For a New Liberty, p. 333
The libertarian foreign policy, then, is not a pacifist policy. We do not hold, as do the pacifists, that no individual has the right to use violence in defending himself against violent attack. What we do hold is that no one has the right to conscript, tax, or murder others, or to use violence against others in order to defend himself. Since all States exist and have their being in aggression against their subjects and in the acquiring of their present territory, and since inter-State wars slaughter innocent civilians, such wars are always unjust—although some may be more unjust than others.
For a New Liberty, p. 337
War has always been the occasion of a great—and usually permanent—acceleration and intensification of State power over society. War is the great excuse for mobilizing all the energies and resources of the nation, in the name of patriotic rhetoric, under the aegis and dictation of the State apparatus. It is in war that the State really comes into its own: swelling in power, in number, in pride, in absolute dominion over the economy and the society. Society becomes a herd, seeking to kill its alleged enemies, rooting out and suppressing all dissent from the official war effort, happily betraying truth for the supposed public interest.
For a New Liberty, pp. 347–48
… war and a phony “external threat” have long been the chief means by which the State wins back the loyalty of its subjects.
For a New Liberty, p. 364
Only if governments are deprived of weapons of offensive warfare will they be forced to pursue a policy of isolation and peace.
For a New Liberty, p. 367
Unconditional surrender maximizes the war and mass murder. In short, no one in war surrenders unconditionally, so proclaiming such an aim means that peace cannot be achieved on any terms short of eradication of the enemy.
Irrepressible Rothbard, p. 158
… a land without a settled government, whether criminally anarchic or anarcho-capitalist, is almost impossible for an external power to occupy and govern. For there is no political infrastructure, no settled government to whom the occupying imperial power can transmit orders.
Irrepressible Rothbard, p. 192
Well, I don’t want to disillusion any tender souls, but almost all victorious troops through history commit systemic rapin’ and lootin’ of the vanquished. It’s called the “spoils of war,” and will continue to exist, despite received opinion, so long as war exists.
Irrepressible Rothbard, p. 210
Sanctions, the step-by-step escalation of intervention, is a favorite policy of the warmongers. …
… Sanctions are simply the coward’s and the babbler’s halfway house to war.
Irrepressible Rothbard, p. 219
Justifications, rationalizations, for butchery and mass murder have been served up by every State and cheerfully adopted by the overwhelming majority of their citizens.
Left and Right, p. 449
… the root cause of war is the nation-State system; given the existence of this system, wars will always occur, and all States will share in that guilt … all States, without exception, aggress against their citizens … in all wars each State aggresses against innocent civilians “belonging” to the other State.
Left and Right, pp. 504–05
Nothing brings about a revolutionary crisis situation—and no revolutions can occur without such crises—so completely as a “no-win” war; nothing so starkly reveals the inadequacy of the existing State to its citizenry. A losing war is more powerful than decades of patient education in the vital task of demystifying and desanctifying the State apparatus in the eyes of its subject population.
Libertarian Forum v. 1, p. 69
… to call State Y an “aggressor” per se must mean that the present territorial boundaries of State X are somehow morally and rightfully its own … But since national territories have invariably been acquired by previous aggression rather than by voluntary social contract, to leap automatically to the defense of the invaded State is an absurdity. …
… since all States are aggressors anyway against their own population, even the most aggrieved State can never, for libertarians, aspire to the simple status of innocent victim … No State, in fact, is worth the extra State aggression upon their subjects that will be involved in every State’s ganging up on the “aggressor” in the collective-security mystique.
Libertarian Forum v. 1, p. 253
… in every war in history, there is one and only one way to secure return of POW’s: by ending the war.
Libertarian Forum v. 1, p. 294
The biggest single enemy of liberty, the biggest threat to the life, liberty and property of Americans and of the entire human race is modern nuclear warfare.
Libertarian Forum v. 1, p. 621
War has been the great killer of human liberty as well as human lives.
Libertarian Forum v. 1, p. 621
… war has been the major method by which the State has fastened its rule upon a deluded public.… War and foreign intervention are crucial methods by which a State expands its power and exploitation … war provides a golden opportunity for the State to bamboozle its citizens into gathering together to defend it and to advance its interests and its power.
Libertarian Forum v. 2, pp. 639–40
… war and militarism … are in fact the major menace to liberty …
Libertarian Forum v. 2, p. 711
… war has always been the occasion for a huge, catastrophic leap into statism, a leap that occurs during the war and lasts as a permanent legacy afterward.
Libertarian Forum v. 2, p. 925
… war is a grim and evil business …
Libertarian Forum v. 2, p. 1019
When it provides postal service, or roads, or steel plants, the State can only loot and miscalculate. It is monumentally inefficient and monumentally thieving. But, at least, in those functions it does not kill. It is precisely in war, in its active use of force outside its borders, that the State Murders.
Libertarian Forum v. 2, p. 1178
Every war in American history has been the occasion for a Great Leap Forward in the power of the State, a leap which, at best, could only be partly rolled back after the war.
Making Economic Sense, p. 428
… war may be defined as violent action used by two or more opponents …
Man, Economy, and State with Power and Market, p. 80
It is the peaceful, cooperative society that creates favorable conditions for feelings of friendship among men.
Man, Economy, and State with Power and Market, p. 101
War, then, even a just defensive war, is only proper when the exercise of violence is rigorously limited to the individual criminals themselves.
Man, Economy, and State with Power and Market, p. 190
The market is an interpersonal relation of peace and harmony; statism is a relation of war and caste conflict.
Man, Economy, and State with Power and Market, p. 1363
Justifications, rationalizations, for butchery and murder have been served up by every State and adopted by the overwhelming majority of their citizens.
Strictly Confidential, p. 338
… war is uneconomic for the various peoples if there is free trade and free markets (and, hopefully, freedom of migration); but if there is not, then war can confer national economic benefits in the sense of seizing raw material that would not otherwise be available due to tariff, quota, etc., barriers of national autarky.
Strictly Confidential, p. 378
WATER
If private property rights existed in the ocean, there would be a fantastic flowering of aquaculture, a flowering which would not only use the enormous untapped resources of the ocean, but also would enormously increase the resources through such techniques as fertilizing, “fencing” off parts of the ocean, etc.
Egalitarianism as a Revolt Against Nature, p. 185
Water shortages are chronic in some areas of the country, and intermittent in others … Yet the government, (1) via its ownership of the public domain, owns the rivers from which much of the water comes, and (2) as virtually the only commercial supplier of water, the government owns the reservoirs and water conduits.
For a New Liberty, p. 91
The oceans are in the international public domain, i.e., no person, company, or even national government is allowed property rights in parts of the ocean. …
With respect to the ocean, however, we are still in the primitive, unproductive hunting and gathering stage.
For a New Liberty, p. 314
If private property in parts of the ocean were permitted, a vast flowering of aquaculture would create and multiply ocean resources in numerous ways we cannot now even foresee.
For a New Liberty, p. 315
… “freedom of the seas” really means “ocean communism,” i.e., a state of no-property in the ocean.… the ocean … has been substantially kept out of productive use because “ocean communism” has been able to prevent private property in parts of the ocean. As a result, the ocean is under-utilized in the same way that land was in the centuries before private property was allowed in land. Only hunting and gathering (of fish, minerals) is allowed in the oceans now, just as only hunting and gathering was feasible in the days before private landed property. It was only private property in land that made agriculture (the transformation of the land by human energy) possible, thereby enormously increasing land productivity; and only private property in parts of the ocean will eventually make “aquaculture” feasible, and lead to a vast and mighty boom of resources and production in the vast ocean storehouse.
Libertarian Forum v. 1, p. 566
If the water industry were free and competitive, the response to a drought would be very simple: water would rise in price. There would be griping about the increase in water prices, no doubt, but there would be no “shortage,” and no need or call for the usual baggage of patriotic hoopla, calls for conservation, altruistic pleas for sacrifice to the common good, and all the rest. But, of course, the water industry is scarcely free; on the contrary, water is almost everywhere in the U.S. the product and service of a governmental monopoly.
Libertarian Forum v. 2, p. 765
It is high time to expand the dominion of man to one of the last frontiers on earth: aquaculture.… What aquaculture needs above all is the expansion of private property rights and ownership to all useful parts of the oceans and other water resources.
Making Economic Sense, pp. 88–89
A longer-run solution, of course, is to privatize the entire system of water and water rights …
… The entire water system is a mess, and only privatization and free markets can cure it.
Making Economic Sense, pp. 91–92
Water, as usual with government, is priced in an economically and irrational manner.
Making Economic Sense, p. 97
If the government wants to conserve water and lessen its use, all it need do is raise the price. It doesn’t have to order an end to this or that use, set priorities, or decide who should be allowed to drink more than three glasses a day. All it has to do is clear the market, and let people conserve each in his own way and at his own pace.
In the longer run, what the government should do is privatize the water supply, and let water be supplied, like oil or Pepsi-Cola, by private firms trying to make a profit and to satisfy and court consumers, and not to gain power by making them suffer.
Making Economic Sense, p. 99
Fish are definitely not available in unlimited quantities relatively to human wants. Therefore, they are appropriable—their stock and source just as the captured fish themselves. Indeed, nations are always quarreling about “fishing rights.” In a free society, fishing rights to the appropriate areas of oceans would be owned by the first users of those areas and then usable or salable to other individuals. Ownership of areas of water that contain fish is directly analogous to private ownership of areas of land or forests that contain animals to be hunted. Some people raise the difficulty that water flows and has no fixed position, as land does. This is a completely invalid objection, however. Land “moves” too, as when soil is uprooted in dust storms. Most important, water can definitely be marked off in terms of latitudes and longitudes. These boundaries, then, would circumscribe the area owned by individuals, in the full knowledge that fish and water can move from one person’s property to another.
Man, Economy, and State with Power and Market, p. 174
WEALTH
… wealth is accumulated by means of unconsumed and saved annual produce.
Economic Thought Before Adam Smith, p. 395
A man then, can acquire “wealth”—a stock of useful capital or consumer goods—either by “producing” it himself, or by selling to its producer some other product in exchange. The exchange process reduces logically back to original production.
Ethics of Liberty, p. 37
… there are only two paths for man to acquire property and wealth: production or coercive expropriation.
Ethics of Liberty, p. 49
… there are two and only two ways of attaining wealth in society: (a) by production and voluntary exchange with others—the method of the free market; and (b) by violent expropriation of the wealth produced by others. The latter is the method of violence and theft. The former benefits all parties involved; the latter parasitically benefits the looting group or class at the expense of the looted.
Ethics of Liberty, pp. 166–67
On the free market, it is a happy fact that the maximization of the wealth of one person or group redounds to the benefit of all; but in the political realm, the realm of the State, a maximization of income and wealth can only accrue parasitically to the State and its rulers at the expense of the rest of society.
Ethics of Liberty, p. 176
WELFARE
Being-on-welfare, like all other human economic acts, has a “supply function”: in other words, if you make welfare pay enough, you can produce as many welfare clients as you wish to have. …
… the supply function of welfare clients is inversely proportional to the difference between the prevailing wage rate in the area and the level of welfare payments. This difference is the “opportunity cost” of going on welfare—the amount that one loses by loafing instead of working.
Economic Controversies, p. 900
The Libertarian approach to the welfare problem, then, is to abolish all coercive, public welfare, and to substitute for it private charity based on the principle of encouraging self-help, bolstered also by inculcating the virtues of self-reliance and independence throughout society.
Economic Controversies, pp. 902–03
… the number of welfare recipients has what is called in economics a “positive supply function”; in other words, that when the incentives to go on welfare rise, the welfare rolls will lengthen, and that a similar result will occur if the disincentives to go on welfare become weaker.
For a New Liberty, p. 177
Another powerful factor in swelling the welfare rolls is the increasing disappearance of the various sturdy disincentives for going on welfare. The leading disincentive has always been the stigma that every person on the welfare dole used to feel, the stigma of being parasitic and living off production instead of contributing to production. This stigma has been socially removed … with the old stigma increasingly removed, people now tend more and more to move rapidly toward welfare instead of shrinking from it.
For a New Liberty, pp. 179–180
… the libertarian position calls for the complete abolition of governmental welfare and reliance on private charitable aid, based as it necessarily will be on helping the “deserving poor” on the road to independence as rapidly as possible.
For a New Liberty, pp. 182–83
The easy availability of the welfare check obviously promotes present-mindedness, unwillingness to work, and irresponsibility among the recipients—thus perpetuating the vicious cycle of poverty-welfare.
For a New Liberty, pp. 191–92
Perhaps one of the grimmest consequences of welfare is that it actively discourages self-help by crippling the financial incentive for rehabilitation.
For a New Liberty, p. 194
Since welfare families are paid proportionately to the number of their children, the system provides an important subsidy for the production of more children. Furthermore, the people being induced to have more children are precisely those who can afford it least; the result can only be to perpetuate their dependence on welfare, and, in fact, to develop generations who are permanently dependent on the welfare dole.
For a New Liberty, p. 194
The one element that saves the present welfare system from being an utter disaster is precisely the red tape and the stigma involved in going on welfare. The welfare recipient still bears a psychic stigma, even though weakened in recent years, and he still has to face a typically inefficient, impersonal, and tangled bureaucracy. But the guaranteed annual income, precisely by making the dole efficient, easy, and automatic, will remove the major obstacles, the major disincentives, to the “supply function” for welfare, and will lead to a massive flocking to the guaranteed dole.
For a New Liberty, p. 210
… the logical conclusion of the guaranteed annual income will be a vicious spiral into disaster, heading toward the logical and impossible goal of virtually no one working, and everyone on the dole.
For a New Liberty, p. 211
The only workable solution is the libertarian one: the abolition of the welfare dole in favor of freedom and voluntary action for all persons, rich and poor alike.
For a New Liberty, p. 212
… the welfare state injures, rather than benefits, its alleged beneficiaries, and only aggravates the problem.
Irrepressible Rothbard, p. 386
… the federal anti-poverty program is a sham and a fraud …
Left and Right, p. 134
The essence of the “welfare state” [is] privileged monopolists find their privileged income being reduced by free competition, and they call upon the friendly government authorities to use their coercive powers to outlaw the competition. The “welfare state” is the monopoly state.
Libertarian Forum v. 1, p. 546
… the more any product, service, or condition is subsidized, the more of it we are going to get.
Making Economic Sense, p. 55
The welfare system has become an open scandal …
Making Economic Sense, p. 56
… throwing taxpayer money and privileges at the inner cities is starkly counterproductive.
Making Economic Sense, p. 66
A massive and expensive attempt to stamp out poverty, inner-city problems, racism, and disease, has only resulted in all of these problems being far worse, along with a far-greater machinery for federal control, spending, and bureaucracy.
Making Economic Sense, p. 79
Here is the essence of the “welfare state” in action: The government cartelizing and restricting competition, cutting production, raising prices, and particularly injuring low-income consumers, all with the aid of mendacious disinformation provided by technocrats hired by the government to administer the welfare state, all meanwhile bleating hypocritically about how the policy is all done for the sake of the consumers.
Making Economic Sense, p. 84
Transfer spending or subsidies distort the market by coercively penalizing the efficient for the benefit of the inefficient. (And it does so even if the firm or individual is efficient without a subsidy, for its activities are then being encouraged beyond their most economic point.) Subsidies prolong the life of inefficient firms and prevent the flexibility of the market from fully satisfying consumer wants. The greater the extent of government subsidy, the more the market is prevented from working, the more resources are frozen in inefficient ways, and the lower will be the standard of living of everyone.… The more widespread the tax-and-subsidy process, the more people will be induced to abandon production and join the army of those who live coercively off production. Production and living standards will be progressively lowered as energy is diverted from production to politics and as government saddles a dwindling base of production with a growing and more top-heavy burden of the State-privileged.
Man, Economy, and State with Power and Market, p. 942
Standard theory views government as functional: a social need arises, and government, semi-automatically, springs up to fill that need. The analogy rests on the market economy: demand gives rise to supply (e.g., a demand for cream cheese will result in a supply of cream cheese on the market). But surely it is strained to say that, in the same way, a demand for postal services will spontaneously give rise to a government monopoly Post Office, outlawing its competition and giving us ever-poorer service for ever-higher prices.
Indeed, if the analogy fails when even a genuine service (e.g., mail delivery or road construction) is being provided, imagine how much worse the analogy is when government is not supplying a good or service at all, but is coercively redistributing income and wealth.
Progressive Era, p. 321
… we must realize that the two most powerful motivations in human history have always been ideology (including religious doctrine), and economic interest, and that a joining of these two motivations can be downright irresistible. It was these two forces that joined powerfully together to bring about the welfare state.
Progressive Era, p. 327
WELFARE ECONOMICS
… utilities and costs are purely subjective to each individual and therefore cannot be compared or weighed between persons.
Classical Economics, p. 61
… no act whatever of the State can increase social utility. …
… the free market maximizes social utility.
Economic Controversies, p. 92
Indifference can never be demonstrated by action. Quite the contrary. Every action necessarily signifies a choice, and every choice signifies a definite preference. Action specifically implies the contrary of indifference. …
If a person is really indifferent between two alternatives, then he cannot and will not choose between them. Indifference is therefore never relevant for action and cannot be demonstrated in action.
Economic Controversies, pp. 304–05
… the concept of the individual indifference curve is completely fallacious …
Economic Controversies, p. 306
… We can only say that “social welfare” (or better, “social utility”) has increased due to a change, if no individual is worse off because of the change (and at least one is better off). If one individual is worse off, the fact that interpersonal utilities cannot be added or subtracted prevents economics from saying anything about social utility.
Economic Controversies, p. 314
… we cannot scientifically compare utilities or satisfactions between individuals.
Economic Controversies, p. 315
… the very fact that an exchange takes place demonstrates that both parties benefit (or more strictly, expect to benefit) from the exchange. The fact that both parties chose the exchange demonstrates that they both benefit. The free market is the name for the array of all the voluntary exchanges that take place in the world. Since every exchange demonstrates a unanimity of benefit for both parties concerned, we must conclude that the free market benefits all its participants. In other words, welfare economics can make the statement that the free market increases social utility …
… the processes of the free market always lead to a gain in social utility. And we can say this with absolute validity as economists, without engaging in ethical judgments.
Economic Controversies, p. 320
… no government interference with exchanges can ever increase social utility.… Given the fact that coercion is used for taxes, therefore, and since all government actions rest on its taxing power, we deduce that: no act of government whatever can increase social utility.
Economic Controversies, p. 323
Exchanges between persons can take place either voluntarily or under the coercion of violence. There is no third way. If, therefore, free market exchanges always increase social utility, while no coerced exchange or interference can increase social utility, we may conclude that the maintenance of a free and voluntary market “maximizes” social utility …
Economic Controversies, p. 323
… the free market at any time will maximize social utility.
Economic Controversies, p. 326
… utility cannot be measured, and therefore cannot be compared between one person and another.
Economic Controversies, p. 562
… utilities and costs are indeed subjective: individual utilities are purely subjective and ordinal, and therefore it is totally illegitimate to add or weight them to arrive at any estimate for “social” utility or cost.
Ethics of Liberty, p. 203
… the criterion of “Pareto optimality” [holds] that a political policy is “good” if one or more people are “better off” (in terms of satisfying utilities) from that policy while no one is “worse off.”
Ethics of Liberty, p. 203
… no measurement of psychic gain can be made either for one individual or between different individuals …
Man, Economy, and State with Power and Market, p. 117
… it is conceptually impossible to measure utility …
Man, Economy, and State with Power and Market, p. 130n27
Utility theory is not concerned with psychology or the internal operations of the mind, but is part of a separate science based on the logical consequences of the simple existence of action.
Man, Economy, and State with Power and Market, p. 308
… there is no such relation, and there is no such thing as “total utility,” only the marginal utility of a larger-sized unit.
Man, Economy, and State with Power and Market, p. 306
… “indifference” cannot be a basis for action. If a man were really indifferent between two alternatives, he could not make any choice between them, and therefore the choice could not be revealed in action. We are interested in analyzing human action. Any action demonstrates choice based on preference: preference for one alternative over others. There is therefore no role for the concept of indifference in economics or in any other praxeological science.
Man, Economy, and State with Power and Market, p. 307
… any approach toward the free-market equilibrium price and output point for any product benefits the consumers and thereby benefits the producers as well. Any movement away from the free-market price and output injures the consumers.
Man, Economy, and State with Power and Market, pp. 904–05
… the free market “maximizes” social utility, since everyone gains in utility …
Coercive intervention, on the other hand, signifies per se that the individual or individuals coerced would not have done what they are now doing were it not for the intervention. The individual who is coerced into saying or not saying something or into making or not making an exchange with the intervener or with someone else is having his actions changed by a threat of violence. The coerced individual loses in utility as a result of the intervention, for his action has been changed by its impact.
Man, Economy, and State with Power and Market, p. 1061
… utility is maximized for all on the free market; whereas to the extent that there is invasive interference in society, it is infected with conflict and exploitation of man by man.
Man, Economy, and State with Power and Market, p. 1068
… the benefit from exchange can never be measured or compared interpersonally. The “consumers’ surplus” derived from exchange is purely subjective, nonmeasurable, and noncomparable scientifically.
Man, Economy, and State with Power and Market, p. 1239
WICKSELL, KNUT
Wicksell … dismissed the approach of the “French harmony economists” …
Economic Controversies, p. 325
… Wicksell … engages in a brilliant discussion of capital and the production structure and the role of time in production. Wicksell demonstrates correctly that labor and land are the only ultimate factors, and that therefore the marginal productivity of capital goods is reducible to the marginal productivity of labor and land factors, so that money capital earns the interest (or discount) differential.
Wicksell’s discussion of these and related issues is of basic importance. He recognized, for example, that capital goods are fully and basically coordinate with land and labor factors only from the point of view of the individual firm, but not when we consider the total market in all of its interrelations.
Man, Economy, and State with Power and Market, p. 506n36;
Economic Controversies, p. 279n2
… is one of the fathers of [the Austrian] business-cycle approach …
Man, Economy, and State with Power and Market, p. 1003n112
