Power and Market
|Power and Market|
|Author(s)||Murray N. Rothbard|
|Subject(s)||Political economy, Economics|
|Publisher||Institute for Humane Studies|
Power and Market: Government and the Economy is a book by American economist Murray Rothbard published in 1970. The text analyzes the negative effects of the various kinds of government intervention, and argues that the state is neither necessary nor useful. Originally part of his 1962 book Man, Economy, and State, it was removed before publication for various reasons and later published under the above title. It was reunited with the 4th edition of Man, Economy, and State in 2004 in the volume sub-titled "The Scholar's Edition" from the Ludwig von Mises Institute.
What can government do to enhance social and economic well being? Nothing, says Murray N. Rothbard. Power and Market contains the proof. It will inoculate the reader against the even the slightest temptation to invoke the state as a solution to any social or economic problem. It is ultimate manual for completely de-mystifying the myth of the state.
The Rothbardian claim is perhaps the most radical made in the history of political economy. But how can it be convincing? What must an author do to back up this claim?
Here is what Rothbard did. He systematically classified every form of intervention into three types: autistic, binary, and triangular. Within each category, he discusses their ill effects, and does so with precision and insight. Free market scholars have been using and expanding on his insights for years. But in this book we have the source.
He is like an expert house inspector examining the edifice of the state. Brick by brick, nail by nail, he shows that it is fundamentally unsound. The seeming edifice is really a house of cards.
This book is the ideal answer to the person who says: "I favor free markets but…." and then proceeds to advocate some intervention they believe to be helpful. Rothbard shows that it is not helpful, no matter what it is. And he provides the logic for understanding how all forms of government aggression make society worse off.
Some of the topics covered: price control, compulsory cartels, licenses, quality standards, safety precautions, tariffs, child labor laws, conscription, subsidies to unemployment, subsidies to employment, base-point pricing bans, conservation, antitrust laws, patents, public utilities, eminent domain, wage taxes, corporate taxes, capital gains taxes, property taxes, progressive taxes, the single tax, government ownership of anything, and all forms of government spending.
Within each category he lays out the rationale for why the measure must fail.
Here is a sample of the prose and analytics you can expect:
Many "right-wing" economists have advocated general sales taxation, as opposed to income taxation, on the ground that the former taxes consumption but not savings-investment; many “left-wing” economists have opposed sales taxation for the same reason. Both are mistaken; the sales tax is an income tax, though of more haphazard and uncertain incidence. The major effect of the general sales tax will be that of the income tax: to reduce the consumption and the savings-investment of the taxpayers.
Or what about taxes that are designed to bolster savings and reduce consumption. Here is Rothbard:
Why does consumption possess less merit than saving? Allocation between them on the market is simply a matter of time preference. This means that any coerced deviation from the market ratio of saving to consumption imposes a loss in utility, and this is true whichever direction the deviation takes. A government measure that might induce more saving and less consumption is then no less subject to criticism than one that would lead to more consumption and less saving. To say differently is to criticize free-market choices and implicitly to advocate governmental measures to force more savings upon the public.
Such pithy arguments make up the entire book, as Rothbard's laser hits topic after topic. Nor does he avoid the moral arguments for state intervention, and here his work really shines. He shows that intervention cannot make a society more religious, cultured, or healthy. It can only do precisely what it is capable of doing: taking our lives and property, actions which only reduce wealth.
The statist reading this book can only feel like a cornered rat.
This book was originally written as part of Man, Economy, and State, but it culled out because it was too controversial for the publisher. The Mises Institute included it again in its Scholar's Edition of Man, Economy, and State.
And yet the demand for Power and Market in a single volume remains high. Hence, this edition, designed for classroom use, individual use, or to hand to a politician before he makes his very first campaign stop.
The introduction is by Edward Stringham of San Jose State University.
- Resources page at Mises.org