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Power and Market: Government and the Economy

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Power and Market is Murray Rothbard's seminal critique of government intervention in the economy. Originally meant to be part of his magisterial Man, Economy, and State, it was published separately some years later. (For a discussion of this, see Justin Raimondo's An Enemy of the State: The Life of Murray N. Rothbard at 189-194.)

Unlike most Austrian school economists, Rothbard was an anarchist. In fact, he was the twentieth century's seminal figure in anarcho-capitalist thought. This means that Rothbard thought that not only roads and the like, but also national defense and courts could be provided without a state. (See his Society Without a State in the Libertarian Reader, ed. Machan, for a succinct presentation of his views.)

Rothbard starts out this work with a discussion of various types of government intervention in the economy. He divides them into three types: autistic (violent crime), triangular (tariffs, wage and price controls, licensing, etc.)and binary intervention (taxation and government spending). Following this is a discussion of antimarket ethics. There isn't an aspect of government intervention in the economy that escapes Rothbard's scalpel. As a whole, this is certainly an outstanding book. Take Rothbard's discussion of taxation. Many "right wing" economists support the sales tax on the ground that it doesn't discourage savings and investment. But it reduces people's income and thereby reduces savings and investment. It is a tax on income. [pp. 92-93.]

My main problem with this work is the sometimes simplistic discussion of complex problems and the leaps in logic. (I've discussed this is my review of The Ethics of Liberty.) Take for example the issue of immigration laws. "The advocate of immigration laws . . . really fears, therefore, is not so much immigration as any population growth. To be consistent, therefore, he would have to advocate compulsory birth control, to slow down the rate of population growth desired by individual parents." [p. 55.] Even in light of the entire 2 page discussion of immigration laws, I don't see how this follows. In this (and some other areas) the discussion is narrowly economic. Aren't there good reasons to restrict the type of immigrants? For example, if you have a society that is devoted to individual freedom and responsibility, isn't it wise to prevent immigration from those countries that don't support freedom?

If you want to know the essence of Rothbard, purchase this work; Man, Economy, and State; The Ethics of Liberty; and the Logic of Action.

This volume is one of the most important economic works of the 20th century. For the most part, the bulk of this work is really nothing more than an extension of the chapter on "violent intervention" in "Man, Economy, and State." Unfortunately the initial publishers of that work balked at the radical views set forth, and therefore forced Rothbard to truncate his analysis. Nevertheless, we are fortunate enough to have this work, in he elaborates on his work in order to offer a complete praxeological critique of *all* governmental action. He classifies government intervention into 3 basic categories; autistic, binary, and triangular, and proceeds to refute arguments for all of them. Dealt with are the more commonplace statist policies such as licensing, antitrust, etc., as well as many generally off-limit areas. Indeed, probably the most startling and important aspect of this work is the lengthy refutation of virtually every significant justification of taxation, from the income tax to the Georgist single tax. Even common "conservative" myths are given no standing, as Rothbard demonstrates that there is really no such thing as a "neutral tax," and that all taxation, however applied, has sharply negative effects on the market economy. In addition to this, Rothbard develops a very stimulating refutation of common ethical arguments against capitalism, showing them to be incompatible with reality and economics. Although by and large the work is solid, I must say that I still disagree on several points with Rothbard's particular vision for a totally free, voluntary society. Nonetheless, we are not very far apart. Altogether, I have to say that this work is a landmark in economic theory, and should be on the bookshelf of every serious radical libertarian.

if you feel a serious need to understand what is being done to you, and your business, by those in charge of the government, look no further! when you are done reading power and market, not only will you be able to criticize, you will understand the situation. by the way, this book reads fresh and new. it could have been written yesterday; and it is that relevance that makes it so special!

This book is an important addendum to Man, Economy, and State. It explains the incompatibility of the free market and a statist government; they cannot exist together. You can have a free market and a government dedicated to protecting property rights or you can have a statist government that controls the economy to a greater or lesser degree.

Many people say the US has a free-market economy; anyone who says so is either a fool or a knave. If you don't already fully understand what I'm telling you, read this book.

Among all of Rothbard's works, Power and Market is my personal favorite. I first read it several years ago and have found myself going back to it ever since. The most important section of the book is his analysis of taxation, about 100 pages long. Every form of taxation is discussed and thoroughly refuted on both practical and moral grounds. Highly recommended!