# *Man, Economy, and State* (1962), with *Power and Market* (1970) Back to [[Murray Rothbard]] · [[Bibliography]] · [[Theories and Influence]] **What it is:** Rothbard's general treatise on economic theory, about 1,000 pages in the Scholar's edition. It began as a Volker Fund commission for a textbook version of [[Ludwig von Mises|Mises's]] *Human Action* (1949). It deduces economics step by step from the "action axiom," that humans act purposefully using means to reach ends ([Gordon](https://mises.org/profile/murray-n-rothbard)). **Publication:** D. Van Nostrand, 1962, 2 vols. The copyright page reads "© 1962 by William Volker Fund and D. Van Nostrand." The final part on government intervention was cut down heavily and appeared in full as *Power and Market*. Its copyright page reads "© 1970 by Institute for Humane Studies; © 1977… second edition". Gordon dates it 1972. The Mises Institute Scholar's edition (2004) combines the two. ## What Gordon credits as original - The calculation argument applies not only to socialism but to **a single private firm owning the entire economy**: "It too could not calculate." - Integration of **Frank Fetter's rent theory** with Austrian capital theory. - **No monopoly price can exist on the free market**, distinguishable from a competitive price. - A critique of Keynes, and an anticipation of "rational expectations" (Gordon's claim). - (Source for all: [Gordon](https://mises.org/profile/murray-n-rothbard)) ## Outline: *Man, Economy, and State* 1. **Fundamentals of Human Action.** The action axiom; means and ends; time preference; ordinal value; the law of marginal utility; the Crusoe economy. 2. **Direct Exchange.** Barter; the gains from exchange; price formation. Ends with §12, "Property: The Appropriation of Raw Land," and §13, "Enforcement Against Invasion of Property." These already state his homesteading and defense ideas. 3. **The Pattern of Indirect Exchange.** The emergence of money from barter (Menger and Mises); the money economy. 4. **Prices and Consumption.** Supply and demand schedules; speculation; consumer sovereignty versus individual sovereignty. 5. **Production: The Structure.** Capital goods ordered in stages; the **evenly rotating economy (ERE)**, an analytical device that Cowen & Fink later criticised. 6. **Production: The Rate of Interest and Its Determination.** A pure time-preference theory of interest, following Fetter and against productivity theories. 7. **Production: General Pricing of the Factors.** Discounted marginal value product; imputation. 8. **Production: Entrepreneurship and Change.** Profit and loss under uncertainty; capital accumulation and decumulation. 9. **Production: Particular Factor Prices and Productive Incomes.** Labour, land and rent. §3E sets out the limits of vertical integration. A firm that grows so big that there is no market for its internal inputs loses calculation: "islands of noncalculable chaos swell to the proportions of masses and continents" (p. 614, Scholar's ed.). That leads to his conclusion that one firm owning everything could not calculate. 10. **Monopoly and Competition.** In his own preface he calls this "a completely new theory of monopoly—that monopoly can be meaningfully defined only as a grant of privilege by the State… there can be no monopoly or monopoly price on the free market." The chapter also covers monopolistic competition, and §7 "Patents and Copyrights" (he accepts copyright as contractual and rejects patents). [[Hans-Hermann Hoppe]] and Javier Milei both single out this chapter. Milei told *The Economist* that reading Rothbard on monopoly changed his views (see [[Theories and Influence]]). 11. **Money and Its Purchasing Power.** The regression theorem; demand for money; critique of price-level stabilisation; **100% reserve** gold money. 12. **The Economics of Violent Intervention in the Market.** A typology of interventions. §E, "**Centers of Calculational Chaos**": "each governmental firm introduces its own island of chaos into the economy; there is no need to wait for full socialism… No government enterprise can ever determine prices or costs or allocate factors… in a rational… manner" (Scholar's ed., p. 952–53). This is the textual basis for the "why exempt the state?" line in [[Post Analysis - Handre on Rothbard (2026-10-21)|@Handre's post]]. ## Power and Market *Power and Market: Government and the Economy* is the full form of the intervention section. 1. **Defense Services on the Free Market.** Private protection agencies and courts; how disputes would be settled; why the state is not necessary for defense. 2. **Fundamentals of Intervention.** Autistic, binary and triangular intervention; direct and indirect effects. 3. **Triangular Intervention.** Price controls, product controls and grants of monopolistic privilege (licensing, tariffs, antitrust, "conservation" laws, and others). 4. **Binary Intervention: Taxation.** Incidence; no "neutral" tax; critique of canons of tax justice (ability to pay, benefit principle). 5. **Binary Intervention: Government Expenditures.** Subsidies; transfers; government enterprise. 6. **Antimarket Ethics: A Praxeological Critique.** Answers to objections to the market (inequality, "luck," monopoly, etc.). Gordon says this "refuted in advance" Rawlsian luck arguments. 7. **Conclusion: Economics and Public Policy.** ## Reception - Mises praised it effusively on publication ([Wikipedia](https://en.wikipedia.org/wiki/Murray_Rothbard)). - Hoppe: "a blistering refutation of all variants of mathematical economics." - Outside Austrian circles it got little attention. Mark Skousen judged that Rothbard's work "fell on deaf ears" outside his ideological circles ([Wikipedia](https://en.wikipedia.org/wiki/Murray_Rothbard)). - Tyler Cowen and Richard Fink found "serious inconsistencies in both the nature of the ERE and its suggested uses." They noted that apart from Rothbard, no economist adopted Mises's term ([Wikipedia](https://en.wikipedia.org/wiki/Murray_Rothbard)). ## Sources - Full text (Scholar's ed.): https://cdn.mises.org/man_economy_and_state_with_power_and_market_3.pdf - David Gordon biography: https://mises.org/profile/murray-n-rothbard - Wikipedia, "Man, Economy, and State": https://en.wikipedia.org/wiki/Man,_Economy,_and_State - Wikipedia, "Murray Rothbard": https://en.wikipedia.org/wiki/Murray_Rothbard