BOOK REVIEW: Murray Rothbard – Man, Economy, and State (with Power and Market)

Murray Rothbard’s contribution to economic science cannot be overstated. Following the footsteps of Mises’ Human Action, Rothbard’s own treatise leaves no economic question untouched.

Man, Economy and State presents the entire corpus of economic law, deduced logically from the undeniable fact of human choice. Truly embodying the Austrian methodology, Rothbard was a system-building rationalist, and so this book has little resemblance to mainstream economics. Following Mises’ “praxeologic” approach, Rothbard builds economics not on models or mathematics, but using primordial logical principles to explore the formal implications of purposeful human behavior. (It is interesting that Rothbard was a mathematician before coming to the economics field, so this choice is especially notable.) His treatment gives economic law a vividly real actuality not commonly present in writings on the subject. Unlike most economists, Rothbard never forgets he’s talking about real people.

Rothbard not only presented Austrian economics in a systematic, complete way — he also advanced it considerably. Some examples of his contributions to the hard-“core” of Austrian economics: (1) he refined and improved the theory of marginal utility significantly, (2) he greatly elaborated and developed theories of production (although I believe his theory of interest is not strictly correct), (3) reconstructed the approach to welfare-economics, (4) demolished the illusory free-market monopoly problem.

Also crucial to his economic theory was his in-depth analysis of violent intervention in the market. This was originally relegated to a separate volume because the publisher thought it was too radical to print as part of the main treatise. The Scholar’s Edition of Man, Economy, and State includes Power and Market, as it was meant to be. Here, Rothbard drives the final nail in the coffin for virtually any argument that the government do anything positive for the economy. He exposes all forms of intervention as leading to impoverishment. Power and Market concludes with a critique of anti-market ethics. This section is effective because Rothbard himself relies on no ethical argument, but the simple exposure of logical flaws and erroneous reasoning in traditional complaints about the market.

Rothbard also recognized that economic and ethical problems have the same, fundamental root: scarcity, without which neither discipline would be at all meaningful. This connection was critical for Rothbard as he later developed his political philosophy, which was systematically presented later in The Ethics of Liberty (1982).

Considering Rothbard completed this treatise when he was only 36, his level of scholarship is nothing short of incredible. He tackles the questions of contemporary economic journals along with the classic problems. His footnotes are full of treasures.

This is truly one of the most important works of economic theory ever written. Indeed, it covers everything, and Rothbard’s clear, tempered prose is unrivaled in either philosophy or economics. Anyone who is alive should read this book. If you’re dead and you can read, well… that’s amazing, but still the book won’t be much used to you.

(This review was originally published in 2005.)

— Purchase Man, Economy, and State from Amazon for cheap here, or read it for free online here. —