Power and Market, by Murray Rothbard, Kansas City: Sheed Andrews and McMeel, 2nd edition, 1977, 304 pp., $15/$4.95
Not that we need a special reason for doing so—but the reissue of Murray Rothbard's Power and Market: Government and the Economy (originally published in 1970) provides a welcome opportunity to recall the insights and analyses of this very readable book.
Power and Market is a systematic and lucid study of the economic consequences of coercion—especially State coercion of economic activity. At most, it is possible to give a partial list of the many coercive practices with which the State blesses us and with which Rothbard deals.
One major chapter presents a detailed critique of all forms of intervention by which free association or exchange between two parties is forbidden or restricted by a third party—the State. Rothbard dissects price controls, prohibitions on the production or sale of goods or services, and grants of monopoly. Under this last rubric we find criticisms of compulsory cartelization, licensing, tariffs, immigration restrictions, child-labor laws, antitrust laws, and many other restrictive practices.
Two major chapters deal with taxation. The first is a survey of the distribution of the burdens of various tax schemes and of the real economic consequences of these different programs. All sorts of highly touted tax schemes are shown to have counterintuitive characteristics and counterproductive outcomes. Included here is a fine critique of various proposed canons of "justice" in taxation. The second chapter on taxation deals with consequences of State use of the resources acquired through taxation. Here we encounter criticisms of: the subsidization of poverty and unemployment; the possibility of "business-like" State operations, or efficient socialism; and the idea of "public" ownership.
Another major chapter, "Antimarket Ethics: A Praxeological Critique," provides generally excellent challenges to ethical criticisms of market society that turn on alleged psychological or sociological "insights" destructive of capitalism.
This listing of a portion of the myriad topics Rothbard takes up may give the impression that his work is entirely negative and piecemeal. This is not at all true. All the failures of nonmarket and involuntary forms or coordination are presented against a background account of how and why market and voluntary forms work.
We are presented with a recurring contrast between the "market principle" and the "hegemonic principle," between the mutually beneficial and efficient order that follows from voluntary association and freedom of action and the exploitative and inefficient order that follows from coercive interference. This theme is nicely pulled together in the final chapter, "Economics and Public Policy." Rothbard's continual and insightful development of this contrast, his systematic refusal to reify "the market," "the economy," and so forth, and the merciful absence of any bridge building to the left makes this a thoroughly enjoyable book and one of the best for conveying the libertarian world view.
Nevertheless, this work may encounter serious methodological problems in connection with, for example, the status and meaning of Rothbard's praxeological axioms, his insistence that only actions of buying and selling reveal preferences, and the contrast between the praxeologist's inability to make meaningful statements about what someone would prefer and the entrepreneur's ability to do this all the time. But these possible difficulties cannot be examined here.
In Power and Market Rothbard also presents some of his reasons for favoring a system of competing private defense agencies over a monopolistic State. His position appears as a simple extension of the values of free association and trade and the disvalues of forced association and State monopolization and resource allocation: the same reasons that favor free market provision of other goods and services favor the market provision of legitimate defensive and juridical services. But those who prefer that their anti-Statist passions be rational passions may find Rothbard's arguments deficient in rigor.
For one thing, Rothbard's argument in chapter one turns on including taxation among the defining characteristics of the State. Libertarian limited governmentalists will insist that the State they favor does not tax. Rothbard's best reply to this occurs within his discussion of "voluntary taxation"—but here, and in other areas, Rothbard takes stands that ultimately raise many of the methodological questions previously noted.
Lastly, there are Rothbard's surprising references to "the basic legal structure of a free society." This phrase seems to ignore the possibility of diverse pairs of individuals tailoring the law that is to govern their relationships to fit their particular preferences. This is a remarkable omission from someone so attuned to, the diversity of (legitimate) human wants and to the market's sensitivity to these differences.
Eric Mack teaches philosophy at Tulane University and recently joined REASON as a contributing editor.
This article originally appeared in print under the headline "Power and Market".