Power And Market: Government And The Economy

Power & Market Murray N. Rothbard Power and Market Cosponsored by the Institute for Humane Studies, Inc., Menlo Park, California, and Cato Institute, San Francisco. Government and the Economy Power and Market copyright © 1970 by the Institute for Humane Studies, Inc. Second edition, copyright © 1977 by the Institute for Humane Studies, Inc. All rights reserved. Printed in the United States of America. No part of this book may be used or reproduced in any manner whatsoever without written permission except in the case of reprints within the context of reviews. For information write Sheed Andrews and McMeel, Inc., 6700 Squibb Road, Mission, Kansas 66202. by Murray N. Rothbard Sheed Andrews and Mcmeel, Inc. Subsidiary of Universal Press Syndicate Kansas City ISBN: 0-8362-0750-5 cloth 0-8362-0751-3 paper Library of Congress Catalog Card Number: 70-111536 [p. v] Books by Murray N. Rothbard The Panic of 1819 Man, Economy, and State America’s Great Depression For a New Liberty Conceived in Liberty 1 Power & Market Murray N. Rothbard discussed this concept have not bothered to justify the existence of taxation itself. The search for a tax “neutral” to the market is also seen to be a hopeless chimera. Preface This book emerges out of a comprehensive treatise on economics that I wrote several years ago, Man, Economy, and State (2 vols., Van Nostrand, 1962). That book was designed to offer an economic analysis of Crusoe economics, the free market, and of violent intervention—empirically, by government almost ex clusively. For various reasons, the economic analysis of government intervention could only be presented in condensed and truncated form in the final, published volume. The present book serves to fill a long-standing gap by presenting an extensive, revised and updated analysis of violent intervention in the economy. In addition, this book sets forth a typology of government intervention, classifying different forms as autistic, binary, or triangular. In the analysis of triangular intervention in Chapter 3, particular attention is paid to the government as an indirect dispenser of grants of monopoly or monopolistic privilege, and numerous kinds of intervention, almost never considered as forms of monopoly, are examined from this point of view. More space than is usual nowadays is devoted to a critique of Henry George’s proposal for a “single tax” on ground rent. Although this doctrine is, in my view, totally fallacious, the Georgists are correct in noting that their important claims and arguments are never mentioned, much less refuted, in current works, while at the same time many texts silently incorporate Georgist concepts. A detailed critique of Georgist tax theory has been long overdue. Furthermore, this book discusses a problem that the published version of Man, Economy, and State necessarily had to leave in the dark: the role of protection agencies in a purely free-market economy. The problem of how the purely free- market economy would enforce the rights of person and property against violent aggression was not faced there, and the book simply assumed, as a theoretical model, that no one in the free market would act to aggress against the person or property of his fellowmen. Clearly it is unsatisfactory to leave the problem in such a state, for how would a purely free society deal with the problem of defending person and property from violent attacks? In recent years, economists such as Anthony Downs, James Buchanan, and Gordon Tullock (many of them members of the “Chicago School” of economics) have brought economic analysis to bear on the actions of government and of democracy. But they have, in my view, taken a totally wrong turn in regarding government as simply another instrument of social action, very much