Ludwig von Mises: As the result of many years of sagacious and discerning meditation, [Rothbard] joins the ranks of the eminent economists by publishing a voluminous work, a systematic treatise on economics…. An epochal contribution to the general science of human action, praxeology, and its practically most important and up-to-now best elaborated part, economics. Henceforth all essential studies in in these branches of knowlege will have to take full account of the theories and criticisms expounded by Dr. Rothbard.
Henry Hazlitt: It is in fact the most important general treatise on economic principles since Ludwig von Mises’s Human Action in 1949.
Hans-Hermann Hoppe: Man, Economy, and State is Murray Rothbard’s main work in economic theory. It appeared in 1962, when Murray was only 36 years old. In it Murray develops the entire body of economic theory, in a step-by-step fashion, beginning with incontestable axioms and proceeding to the most intricate problems of business cycle theory and fundamental breakthroughs in monopoly theory. And along the way he presents a blistering refutation of all variants of mathematical economics. The book has in the meantime become a modern classic and ranks with Mises’s Human Action as one of the two towering achievements of the Austrian School of economics. In Power and Market, Murray analyzes the economic consequences of every conceivable form of government interference in markets. The Scholars Edition brings both books together to form a magnificent whole.
Joseph T. Salerno: The revival of Austrian economics as a living scientific movement can be dated from the publication of Rothbard’s Man, Economy, and State in 1962, a contribution to Austrian economics and to pure economics in general that ranks as one of the most brilliant performances in the history of economic thought.
The book was a two-volume treatise of nearly 1,000 pages written in scintillating English that logically deduced the entire corpus of economic theory step by step from the undeniable fact of purposeful human action. It integrated the insights and theorems of dozens of previous Austrian economists from Menger to Mises into a systematic and comprehensive organon of economic theory. Perhaps the greatest of Rothbard’s many contributions in his treatise was the elaboration of a unified theory of production, extending over five of the treatise’s 12 chapters and encompassing the capital structure, interest rate determination, factor pricing, and the entrepreneurial role in production.
While many elements of the theory had been developed previously by various Austrian economists, they had never been fully integrated and several elements were still missing. Rothbard’s methodical treatment of production repaired one of the few serious gaps remaining in Austrian economics after Mises. Rothbard’s book also contained critiques of contemporary neoclassical and Keynesian theories and a critical analysis of typical state interventions into the economy.
In 1970, Rothbard published Power and Market (1970), an exhaustive typology and analysis, based on value-free economic theory, of the myriad of government interventions into the economy. One of its many innovations was to identify and analyze taxation and government spending as types of intervention into the free market economy rather than, as in the long-entrenched conventional view of economists, the necessary means for creating and enforcing a legal framework for the market economy. The book also contained the first analysis of free market defense agencies from an Austrian perspective as well as a path-breaking Wertfreipraxeological critique of antimarket ethics. (QJAE, 5.1)
Justin Raimondo: As is apparent from the opening pages of this monumental work, they don’t write ‘em like this anymore. In the present day and age, economists, as a rule, rarely bother with writing books. Today, the frontiers of economic knowledge are explored in the pages of specialized academic journals and in brief, highly technical articles and notes. In a field that really ought to be “English only,” the language of this priesthood of specialists is abstract mathematics. Inscrutable to outsiders, the literature of modern economics is read only by those fellow specialists who inhabit a particular subfield. Like every other field of human knowledge, economics is fractured into numerous subcategories, none of which appears to have much connection with the other. Thus it is possible, in this Wonderland we live in, for a distinguished scholar in the field to know everything about the wage patterns of 19th-century Appalachian coal miners and nothing about the most basic principles of economics. Incredibly, with the exception of textbooks for undergraduates, very little discussion of economic theory and empirical work is written in English.
The sheer breathtaking scope of Rothbard’s vision is enough to spark an idealist’s interest in the “dismal” science. Here is economics for living, breathing human beings; not statistics, computer models, and arcane mathematical symbols. First published in 1962, Man, Economy, and State is something very different from the narrow worm’s-eye view of the field afforded by modern economics texts: a systematic treatise, a comprehensive synthesis of economic thought, a majestic overview of basic principles and their application. Except for Ludwig von Mises’ monumental Human Action (1949), Rothbard’s book is the only such treatise published since the early 20th century, when the “principles” book was the standard form in which economists presented their ideas. Designed to be accessible to any interested reader, and presupposing no formal training in economics, mathematics, or statistics, the book covers nearly all of basic economic theory, from barter and indirect exchange to competition and monopoly, public expenditures, money and interest, and inflation and the business cycle.
As the heir and champion of the great Ludwig von Mises, Rothbard is the leading figure in the so-called “Austrian” School of economics. Founded in the 1870′s by the Viennese economist Carl Menger and his successors, the Austrians emphasize the human aspect of economic behavior. This reverses the modern trend, which reduces human beings to a series of numbers in some planner’s grand design. The economists of the 20th century, always eager to appear “scientific” and up-to-date, adopted the outlook and methods of experimental physics. The Austrians, in contrast, maintain that the social sciences, and economics in particular, require a method closer to logic. Thus, Austrians favor verbal reasoning over mathematics, causal explanations over formal descriptions of “equilibrium,” and an emphasis on the subjective nature of economic decisions and knowledge. They also tend to be strong advocates of laissez- faire capitalism, even more so than members of the better-known Chicago School. Deriving the principles of economics from self-evident axioms, the Austrians see the free market not merely as the most efficient allocator of scarce resources, but, more importantly, as part of the natural order of things.
Given the popularity of the pragmatic-empiricist Chicagoites among establishment conservatives, it is easy to see why, even with the political and moral collapse of socialism, the free market is nowhere in sight; who, after all, is willing to go to the barricades for an empirical study? But men have laid, and will lay, down their lives for what they believe to be the natural order, especially if they see it violated by government on a daily basis. Rothbard is a breath of fresh air for all those who are looking not for policy-wonk cost-benefit analyses and arguments for “efficiency,” but for a philosophy of the social sciences, of which economics is but one branch.
It is impossible in a review to do justice to the scope and depth of the book’s contents. Among the author’s original contributions are a treatment of the theory of interest as integrated into the theory of the firm (in Chapter 7) and a discussion of monopoly (in Chapter 10) in which Rothbard demolishes the concept of a free-market monopoly and proves that no one can maintain a stranglehold on the economic life of a nation unless it is enforced at gunpoint, i.e., by the government. This volume is a gold mine of numerous insights and observations on topics ranging from business organization and comparative economic systems to legal philosophy, history, and psychology.
In addition to presenting a general theory of economics itself, the author rebuts numerous fallacies and misinterpretations, including most of the common policy prescriptions of the time. Since this book is a reprint of the earlier edition, his discussion covers only those fallacies that were around as of 1962. The last 30 years have spawned many more, and it would have been nice to have an updated edition, but this is a minor quibble. Out of print since the early 1970′s, Man, Economy, and State is the necessary antidote to the nonsense that passes for economics these days, an indispensable weapon in the battle against the redistributionist schemes of the Washington power elite.
The significance of this work is tied up with its history, and so you should know that Man, Economy, and State was originally published as part of a series sponsored by the now-defunct William Volker Fund, which also funded Mises’ salary at New York University, as well as part of Hayek’s at the Committee on Social Thought at the University of Chicago. The Volker series also included Mises’ Epistemological Problems of Economics and Israel Kirzner’s first book, The Economic Point of View. Rothbard worked as a full-time analyst for the Volker Fund, tracking down the few free market-libertarian scholars that existed and making it possible for them to continue and expand their work. The fund was the main link in the network of Old Right economists, who were never for a moment reconciled to the welfare-warfare state, and its collapse was due in part to the crisis that occurred in the conservative movement of the 1950′s.
The fund was, in large part, a casualty of the struggle between the Old Right and the New and the breakup of the conservative-libertarian alliance over the issue of the Cold War. With the Volker Fund’s demise, the hard-core free-market analysis of economic thought represented by the Austrian School was largely absent from the ranks of the conservative establishment; the incursions of neoconservative pragmatists and ex-Marxist social scientists who envisioned a “conservative welfare state,” as Irving Kristol puts it, thus met with little resistance in the councils of the right. The publication of this new edition of Man, Economy, and State, together with Power and Market, therefore comes at just the right time. As libertarians and conservatives rediscover their common Old Right heritage and cast aside Kempian nostrums of neoconservative welfare statism, this book will do much to instruct a new generation of conservative activists who understand that knowledge is the prerequisite for activism.
The author of 20 books and more than 1,000 articles, Murray N. Rothbard has been a mentor and an inspiration to the partisans of liberty since the early 1950′s. If he had written only Man, Economy, and State, it would have been enough to secure him a permanent place among the luminaries of libertarian thought. As it is, the astonishing range of his writings, from economics to ethics to history to political journalism, reveals the mind of a polymath, so unlike the modern intellectual’s narrowness of vision that the two seem representative of different species. He is comfortable everywhere, and just as capable of turning out a knock ‘em-sock ‘em political polemic as of writing the magisterial Man, Economy, and State.
Murray Rothbard, the happy scholar-warrior of liberty, is a national treasure.
[Justin Raimondo is the author of Reclaiming the American Right: The Lost Legacy of the Conservative Movement (Center for Libertarian Studies) and the famed columnist for AntiWar.com. This is adapted from a published review of a previous edition (Chronicles, November 1994)]