Customer Reviews

Man, Economy, and State with Power and Market, Scholar's Edition

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[This is a reposting, very slightly edited, of my review from six years ago of an earlier and now unavailable edition of this book.]

Murray Newton Rothbard's development of economic theory from the axiom of human action is brilliant from start to finish.

Building on Ludwig von Mises's masterwork _Human Action_, Rothbard in effect removes Mises's work from its neo-Kantian setting and places it on a foundation of Aristotelian realism (though this fact will not be obvious without study of Rothbard's later work, notably _The Ethics of Liberty_).

Rothbard systematically and rigorously develops all of economic theory from the axiom that human beings act to achieve ends in a world in which specific and delimitable causes have specific and delimitable effects. In so doing, he has written a work that, over three decades after its publication, still serves as a comprehensive introduction to Austrian School economics.

And no wonder: Rothbard viewed Austrian economics particularly and the 'science of liberty' generally as systematic philosophy, not as the mere collection of statistical facts and 'model-building'. The result is a highly readable volume that reads more like a philosophical treatise than a standard 'economics' textbook.

Anyone who loves liberty and thinks _ideas_ are important will love this volume. Keynesians and econometricians need not apply.

[Later note: _Human Action_, this book (this edition of which includes the portion originally shaved off and published separately as _Power and Market_), and George Reisman's _Capitalism_ are the twentieth century's Three Great Treatises on free-market economics. They don't always agree with each other, so if this subject is of interest to you, be sure to read all three.]

In 1962, Murray Rothbard published his epic MAN, ECONOMY, AND STATE (MES). In 1970, Rothbard's powerful critique of government intervention in the economy, POWER AND MARKET (P&M) was published. However, P&M was originally part of MES. For reasons of length and content (P&M was seen as too radical) MES' original publisher decided not to publish the work as a unified whole.

Over 40 years later, the Ludwig von Mises Institute has remedied this sad situation by publishing these works as a whole. Even if you own MES and P&M, you need to get this "scholar's edition." First, the new version is in hardcover. Second, the endnotes have been converted to footnotes. Third, the new edition contains an excellent introduction by Joseph Stromberg describing in detail the writing of the book, based on documents in Rothbard's papers.

I've reviewed MES and P&M on Amazon, so I won't repeat my comments here. Suffice it to say, this is one of the great works of economic scholarship of the twentieth century. No student of liberty will want to be without it.

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. Because of the Austrian methodology, Rothbard was a system-building rationalist, and so this book has little resemblance to mainstream economics. As a praxeologist, Rothbard builds economics not on models or mathematics, but using primordial logical principles to explore the formal implications of purposeful human behavior. Rothbard not only presented Austrian economics in a systematic, complete way -- he also advanced it considerably. Some examples of his contributions to the hardcore of Austrian economics: he refined the theory of utility, he greatly elaborated and developed theories of production, (although I believe his theory of interest was incorrect), reconstructed the approach to welfare-economics, demolished the illusory free-market monopoly problem, etc. Also crucial to his economic theory was his indepth exploration of violent intervention in the free market. That volume, _Power and Market_, is included here (as it was originally intended). Here, Rothbard drives the final nail in the coffin for virtually any argument that the government do anything positive for the economy. He 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 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. 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.

The individual above who states that time preference is the dirty little secret of Austrian Economics is obviously confused. The example he uses in his review to refute it shows plainly that he misunderstands it. A more carefull reading paying attention to the previous section on means and ends (the definitions) will reveal the problem. This book is excellent! Rothbard was truly a genius. I'm not saying the book is perfect, but I could find no theoretical flaws. If you are interested at all in economics, this is a must read!

Finally Man, Economy, and State is complete as Rothbard originally drafted it, including the chapters later published separately as Power and Market.

The irrefutable case, in pristine logic and analysis, against any form of government intervention in the economy.

One of the most important books of the 20th Century, and now of the 21st.

This monumental follow-up to Ludwig Von Mises's "Human Action" continues the ground-breaking path set by Mises in that work. Rothbard's treatise is written more in the style of an economics textbook. Most of the book is an expansion of the economic principles that Mises's expounded in "Human Action." Rothbard's brilliant defense of a natural monopoly (as opposed to a government-created one) is alone worth the price of the book. But neither work is for the beginner. It is best to read Carl Menger's "Principles of Economics" first, before attempting to tackle either book.

This isn't the typical economics textbook. However, for sure you'll learn better economics than any of them.
For those knowing Mises's Human Action, this isn't a mere copy-paste of it. It developes it (although you don't need to read Human Action for understanding Man, Economy, and State) but adds Rothbard's own contribution.
For those knowing the Austrian School, I think Rothbard's book is surprisingly more neoclassic in its analysis than, for example, Human Action. An example is the use of supply-demand graphics.
In sum, the book has a lot of pages (1,441) but I think you'll find the basics of a sound economics science in any of them. It's worth the effort is worth.

Published in 1962, "Man, Economy, and State" is a massive treatise on the fundamental principles of economics. The author, Murray Rothbard, was a disciple of Ludwig von Mises, so it's no surprise that his book begins with an a priori analysis of human action and subjective valuation. With this groundwork in place, Rothbard guides the reader through "Robinson Crusoe" economics and the economics of barter, and then lays out the inner dynamics of an "evenly rotating economy," where knowledge is perfect and tastes never change. Only then, equipped with insights from the operation of ideal, unchanging free markets, does Rothbard relax his unrealistic assumptions and analyze real free markets, including markets hampered by government regulation. For the most part, "Man, Economy, and State" restates and clarifies canonical Misean teachings on time and interest, capital structure, business cycles, monetary theory, entrepreneurship, methodology, and so forth. It also makes original contributions to Austrian thought, in particular, to competition theory. Every university library should have "Man, Economy and State."

That said, "Man, Economy and State" is a lousy read and an imperfect introduction to economics. Apart from being more than 1,000 pages long, the book is abstract, repetitive, and tedious. It dismisses economic history and empirical data with sneers and pseudo-logic worthy of a hack lawyer. Thousands of words are wasted explaining concepts that could be illustrated with a single graph; hundreds of pages could be cut without diminishing the book's pedagogical value. Even worse, the book fails to engage with rival schools of thought such as neo-classical or Marxist economics. Austrianism has a rich intellectual tradition, but, like all schools of thought, it has axes to grind, and a beginner would get a skewed view of economics if he relied on "Man, Economy and State" for his education. He would learn next to nothing about national income accounting, market failure, growth and development, or the behavioral psychology of markets. Austrians shy way from these subjects for various reasons (mostly dogmatic), but they are essential parts of any well-rounded economic education.

The book is also undermined by Rothbard's bizarre riffs on law and politics. He believed that legal systems should not protect intellectual property or enforce promises to perform services in the future. (The modern technological economy could not exist in Rothbard's legal universe.) He would have criminalized the non-payment of debt, thus re-establishing debtors' prisons. (The impact on modern credit markets would have been interesting). Rothbard also had an absolutist, super-Lockean view of property rights. He claimed, for example, that the first fisherman to dip his net into the ocean would be entitled not just to own any fish he caught, but to own the ocean itself!

Coming across these dicta is like finding astrology in a physics textbook. At first, I laughed, but as the weirdness piled up, I began to wonder about the book and its author. The sheer monomaniacal bulk of "Man, Economy and State" makes it easy to caricature Rothbard as a genius/crank, who scribbled away over the 1950s to write a mammoth book -- an Austrian Summa -- that would be the last word on economics. He submitted his masterwork to mainstream publishers and university presses, but none would publish it, for reasons that become obvious by, oh, page 750. In the end, the book was published by an obscure right-wing publisher who did not edit the text (beyond tossing out a 300-page postscript that was published as a separate book by a different right-wing publisher). After giving birth to "Man, Economy and State," Rothbard was ignored by the economics profession. He taught at minor colleges, preached anarchism to the lunatic fringe of the libertarian movement, and published articles in journals edited by himself. He died in 1995. It's unfair to depict him as the Kilgore Trout of 20th century economics -- but since he believed that defamation laws violated free market metaphysics, he really couldn't complain.

Bottomline: The Mises Institute would do Austrian economics (and Rothbard's reputation) a favor by publishing an abridged version of "Man, Economy and State." Readers coming to economics for the first time should read an introductory mainstream text (Samuelson is still pretty good) and then sample modern Austrian authors like Israel Kirzner or Roger Garrison to see what the Austrian alternative is all about. After that, they can tackle old, quasi-philosophical Austrian texts like "Man, Economy and State" or works by Carl Menger or Ludwig von Mises.