— From Rothbard at 100: A Tribute and Assessment, Stephan Kinsella and Hans-Hermann Hoppe, eds. (Houston: Papinian Press and Property and Freedom Society, 2026) —
Murray N. Rothbard and the Demystification of Economics
Rahim Taghizadegan1
Economics is sometimes treated, on the one hand, as an occult science—supposedly beyond ordinary common sense because it can “prove,” with historical, statistical, and mathematical solemnity, that when the state piles up debts beyond all measure this will not end in ruin, but in universal prosperity for private and public budgets alike. On the other hand, economics—when its high priests condescend to propose that political appetites for spending should be restrained—is denounced as a devil’s instrument, something to be ignored so that one may do what one considers morally right and politically unavoidable.
Murray N. Rothbard (1926–1995), in the three volumes associated with Man, Economy, and State, refutes both attitudes. He shows, first, that economics is something anyone can understand. That does not mean the foundations of economics are easy. Rothbard does not dilute or simplify in order to become “accessible.” But whoever makes the effort can grasp how an economy functions in any society—whatever its particular form. Starting from the first facts of exchange, Rothbard proceeds step by step up to those processes that are supposedly incomprehensible to outsiders: monetary policy and the state budget. The reader comes to see that the aura of mystery surrounding economics serves a purpose—namely, that he should not understand what those are doing whom he has elected to their positions.
In doing so, Rothbard also demonstrates a second point: it is not possible to disregard the regularities of human interaction and bend them at will to one’s desires and interests. Whoever, by decree and through the power of the state, makes a good cheaper than it would be on the market—even if it is an absolutely vital good for everyone—will inevitably help to ensure that less of this good is available to those most in need. Rothbard sets this out so clearly and unmistakably that it does not need repeating here. But the mere reminder that such laws of interaction exist helps unmask politicians who claim they can declare some good a “human right” that must be available to all at an “affordable” price.
The insight into these laws does not tell us which policy is morally correct—economics, in this sense, is “value-free.” But it does tell us which political promises are built on sand.
Explaining how a market works is one thing; it sounds harmless enough. Analyzing what happens when the market’s laws of interaction are ignored is quite another—and it is highly explosive. For once one analyzes markets into which state power intervenes, or markets it promises to abolish (without ever truly being able to), one arrives at a sobering recognition: those who actually benefit from the activity of the state are not the people politicians claim they want to help. The beneficiaries are the powerful themselves. And the powerful do not like to hear words that enlighten.
From Economic Theory to a Principled Opponent of State Power
Rothbard’s further path therefore led him beyond purely academic economics. He became an engaged opponent of state power—of its wars abroad and of its policy of colonizing its own people at home. With the help of economic insight into the laws of interaction, he analyzed historical events such as the framing of the U.S. Constitution, the war policies of the First and Second World Wars, the rise and expansion of the welfare state, the so‑called “Great Depression” of the 1930s, and the “Cold War” from the 1950s into the 1970s. From the early 1960s onward he commented continuously on political events.
His standpoint was always on the side of those who opposed war and state power. Every step toward peace and toward an enlargement of individual liberty was welcome to him—no matter in coalition with whom. Every step toward more violence and more war he rejected, regardless of the flag under which an expansion of the state was being pursued. Within the framework of conventional politics it could look as though he were constantly changing sides; in reality, he remained faithful to his principles.
Man, Economy, and State: An Unmatched Systematic Construction
Man, Economy, and State was first published in 1962, written during the 1950s and early 1960s. Rothbard builds closely on the economics of his academic teacher Ludwig von Mises, yet one does not need (though it can at times be helpful) to know Mises’s writings in order to understand Rothbard. For Rothbard constructs his exposition of the market in a systematic manner that remains unrivaled to this day—and that also explains the work’s size.
Although one can sometimes feel the work’s historical character, above all in some examples and turns of phrase, it remains comprehensible without added commentary and its core claims remain current. In the age of the internet, the occasional foreign word or technical term is hardly an obstacle to understanding.
In 1970 Rothbard continued the systematization—begun in the final chapter of Man, Economy, and State—of the interventions of state power into the economy and their catastrophic effects, in Power and Market: Government and the Economy. Compared to 1962, Rothbard in 1970 was no longer a scholar in an ivory tower, but an activist against state injustice. Yet he retained the “value-free” mode of analysis: he limited himself to showing what the unavoidable consequences of interventions will be. Rothbard did not exclude ethical and political evaluations; he simply treated them in his other works.
The Thin Thread of the Austrian School’s Survival
The Viennese, or Austrian, School of economics survived—almost miraculously—the deranged twentieth century whose errors Rothbard tried to undo and demanded be undone (“repeal the twentieth century!”). The continuity of this tradition hung by an especially thin and frayed thread.
Ludwig von Mises had to establish himself anew in old age in the United States, a refugee whose homeland lay first in spiritual and then in material ruins. But American universities had largely learned from Prussian models and followed Europe’s statist turn. The academic mainstream denied Mises recognition and a professorship.
His student and seemingly predestined successor, Friedrich A. von Hayek, felt so isolated after the triumph of Keynesianism that he first found rare fellow travelers in the monetarism of the Chicago School and in the ordoliberal tradition, then turned away from economics toward the history of ideas and legal philosophy, and finally returned to Europe—where he was, as it were, put away in a small Salzburg room. His later “Nobel Prize” (the Nobel Memorial Prize in Economic Sciences) again brought some attention and made the Viennese School, as an academic niche program, a bit more socially acceptable—though in a diluted variant, trimmed of its critical scrutiny of monetary policy, the financial system, and interventionism.
To those academics who would like to gather a few crumbs of budgets and prestige by distributing certificates from central banks and states, Rothbard appears unworthy: “unscientific,” “too radical.”
Rothbard as the “Lost Generation” of the Tradition
In fact, Rothbard represents the “lost generation” of the Viennese School. In Europe there was only one Hayek student, the entrepreneur Roland Baader, who as a solitary publicist continued the Austrian tradition in its full sharpness and contemporary relevance. Baader wrote off the academic realm and addressed a broader public of critical citizens directly. Rothbard had reached a similar conclusion in the United States even earlier.
As an American student of Mises, Rothbard recognized the intellectual explosive hidden in the sober realism of the Austrian School—if one does not misinterpret it as a “neoliberal economic theory,” but understands it as a heterodox school of social science that stands clearly apart from the neoclassical mainstream through its interdisciplinary, empathetic understanding of real human beings (instead of modeling a fictitious homo oeconomicus).
In deciding to carry the Austrian tradition forward, Rothbard stood as alone in the United States as Baader did in German-speaking Europe. Yet Baader, as an entrepreneur, did not depend on an income from employment as an economist or academic. Economists—even those sympathetic to the Austrian School—must, in the end, live from something, and theory nourishes only when it serves interests. Nearly all theoretical economists who are not academics work for central banks, government agencies, or interest groups—and for such positions the Austrian School is not exactly a recommendation.
The United States, however, has a diverse philanthropic tradition—once found in Europe as well, before it largely dried up in the twentieth century. In America it lived on in foundations endowed by successful entrepreneurs. One such foundation was the Volker Fund, and by chance its board took a liking to the Austrian School as the only economic tradition that understands and honors the role and function of the entrepreneur.
In 1952 the young Rothbard received a stipend to work on Man, Economy, and State. That was unusual: a brilliant economist in his best years was thus freed from the pressure to fight for precarious survival in academic life by producing “papers” nobody reads or by tutoring uninterested students—students to be coached, as it were, in cram‑and‑purge learning.
The work was intended as a textbook for college students, meant to make Mises’s then largely ignored masterwork Human Action—and thus the Austrian tradition—didactically accessible. Rothbard wrote a sample chapter on monetary theory and presented it to Mises. Mises approved, and Rothbard set to work on a task that both he and the foundation had vastly underestimated. For Rothbard was not simply one young academic among many, packaging conventional knowledge into textbook form. In his time, he was the only one prepared to devote his life to the task of continuing the Austrian School as a distinct tradition.
A Lineage Maintained by Very Few
This thread had always been thin. Even two of Carl Menger’s favorite students, Felix Somary and Richard Schüller, did not continue the scientific work. Largely unknown to this day, they worked behind the scenes of practice—and probably had far greater impact than all the theorists after them. Somary helped found Swiss private banking; Schüller, as a diplomat, played a significant role in the peace of Brest-Litovsk and in the continued existence of an independent Austria. Almost all the countless other students of Menger made careers in politics and bureaucracy.
Only one, Eugen von Böhm‑Bawerk, carried the Austrian tradition forward as an economist—though in a way that left Menger dissatisfied. And among Böhm‑Bawerk’s students, only one continued Menger’s tradition in a way that enabled its independent survival through new students: Ludwig von Mises.
Still maligned as “dogmatic,” even though in his Mises Circle he practiced a critical openness and tolerance toward other approaches and conclusions that is unique in intellectual history, Mises alone emphasized the epistemological independence of the Austrian School, while other representatives of the time made their peace with the dominant academic currents. Only a Mises could produce a Rothbard—just as Rothbard eventually found, in Hans‑Hermann Hoppe, a student and successor who likewise stressed and further worked out the epistemological independence of the tradition.
A good student, in this sense, never merely copies the teacher; he is a dwarf standing on the shoulders of giants and can therefore see farther. In critically appropriating and engaging with Mises’s work, Rothbard recognized that a mere restatement would be insufficient. He did the intended didactic work through countless examples more familiar to the American audience of the time, and through illustrations. But in doing so he had to fill gaps—to make explicit those arguments that in Mises had remained implicit. Finally, Rothbard also encountered major areas where he reached conclusions different from Mises’s, or found a different approach more realistic.
Going Beyond Mises: Monopoly and the Logic of State Action
There are essentially two major areas of theory in which Rothbard went beyond Mises: monopoly theory and a theory of state action.
In the former, Rothbard departs even further from the economic mainstream and exposes the lack of realism in academic confusions of market dominance with privilege. After Rothbard’s critical analysis, little remains of neoclassical monopoly and cartel theory. But this does not amount to an uncritical legitimation of an unjust status quo. The gap is immediately closed by the theory of state action, within which the core of a realistic monopoly theory is rediscovered.
This part of economics—praxeology, to use Mises’s far better and clearer term—does not, unlike catallactics, devote itself to the voluntary cooperation of independently acting people. It devotes itself to violence as a means of achieving ends. Rothbard thus becomes the founder of a new branch of praxeology, one that could, by analogy, be called “kratics”: the logic of power.
The companion volume Power and Market is devoted to this theme of violent interventions. To the sponsor, the Volker Fund, this part was too radical, and publication was refused. Later the foundation’s leadership grew estranged from the Austrian School and finally dissolved the entire foundation in 1972—a severe setback for the tradition. Yet it remains greatly to the foundation’s credit, and nearly a miracle, that despite other expectations it showed ten years of patience and published the main body of Man, Economy, and State in 1962.
Rothbard’s Central Scientific Contribution
Rothbard’s most important scientific contribution lies in the systematic application of praxeology to all essential areas of economic theory. For the first time he sets out a complete theory of production that fits harmoniously into the theories of interest, prices, and capital—because it is part of a comprehensive deductive chain of argument. This chain begins from the basic fact of human action and avoids additional assumptions, reductive abstractions, and implicit value judgments.
Only with Rothbard does the basic structure of economizing—constant weighing and deciding by real human beings—become fully visible. Hence the great importance of rankings of preference, in contrast to the mathematical fictions of quantifiable utility values, functions, or aggregates.
Man, Economy, and State and Power and Market form a conceptually closed unity (even if there are some overlaps), and Rothbard himself saw them this way. Many editions therefore present them together, though Power and Market can also be read and understood independently. Rothbard intended it as a concluding chapter—an “economics of violent interventions.”
Flaws of Editing, and a Work that Still Endures
Even for Rothbard—whose extraordinary productivity remains an unmatched example—the task was immense: to make the Austrian tradition intelligible as a living body of thought while simultaneously developing it further. Periods of overload and the estrangement from the funding foundation perhaps help explain why the editorial work on the book remained imperfect. Minor errors, unclear formulations, repetitions, and stylistic pitfalls have complicated later editions and translations, costing years of labor.
Rothbard himself later discarded an entire chapter when he realized that the textbook model, with its pseudoscientific curve discussions, led too far astray and away from reality. In hindsight he also sensed that the necessary connection to Böhm‑Bawerk—one of the few links in the Austrian chain—had introduced, unnoticed, a certain artificiality that pointed more toward classical economics, and thus toward the very reservations Menger had expressed.
Despite such shortcomings, Man, Economy, and State remains one of the most important works of the Austrian tradition—now carried forward as an American “Austrian School”—directly after its model, Mises’s Human Action. Rothbard’s genius carried the tradition’s interdisciplinarity into unexpected areas. The work already reveals the intellectual-historical, ethical, political-scientific, and legal-philosophical approaches Rothbard would later develop—approaches that still challenge admirers and critics alike by their rigor and radicalism.
Taken together, these works are intellectual dynamite. If they reach enough hands, they can shake the foundations of the state. Against the prevailing trend, it may be that more people will again recognize the value of freedom as a power directed against state coercion—the value of freedom for securing prosperity and peace, and even for safeguarding natural resources that state power plunders (even while claiming to protect them).
A renaissance of the Austrian School’s realistic economics—in the tradition of Menger, Mises, and Rothbard; value-free in analysis, yet marked by strong personal commitments among its best representatives—is more urgent today than ever. The task is not to fall back in the twenty-first century behind the twentieth, but to overcome the bitter inheritance of planned chaos and arrive at a more natural order: an order that, in Rothbard’s sense, corresponds more closely to human nature and to the human capacity for freedom.
- Originally published in German as the introduction, by the author, to Murray N. Rothbard, Mensch, Wirtschaft und Staat, Rahim Taghizadegan and Stefan Blankertz, trans. (mises.at, 2021), the German translation of Rothbard’s Man, Economy, and State. Translated by the author. Rahim Taghizadegan is the last Austrian economist in the direct tradition of the Austrian School. He has written more than fifteen books and translated some of the most important works by Rothbard, Mises, and Hoppe. He has taught at numerous universities across Europe and founded scholarium (scholarium.at) in Vienna—later relocated to Zug, Switzerland—where the Austrian School is studied in its original interdisciplinary form. [↩]
