Study Guide to Man, Economy, and State with Power and Market

Chapter 12: The Economics of Violent Intervention in the Market 169
Technical Matters
1. In footnote 1 (p. 875), Rothbard is a bit loose and
seems to imply that praxeology and economics are synonymous
terms. Strictly speaking, economics is a
subset of praxeology, which is the science of human
action (p. 74). Even so, Rothbard’s position vis-à-vis
Edwin Cannan is still correct, for “violent interrelations”—particularly
those created by the State—are
certainly forms of action with catallactic effects.
2. In his discussion of monopoly grants (a form of product
control) Rothbard apparently uses the same
analysis that he earlier (chapter 10) took pains to
destroy. However, as he points out (p. 903), the crucial
distinction is that there really is a free market
price and output to use as a benchmark against the
outcome after the government privilege is granted.
In contrast, on the free market there really is no such
alternative “competitive” price and output with
which to compare the “monopoly” outcome.
3. The discussion on pp. 905–06 highlights the fact that
monopoly returns are capitalized into the value of
assets such that the rate of return is the same as in any
other line; that is, there are no lasting monopoly profits,
even in this case where “monopoly price” is
meaningful.
4. A mainstream economist might defend the orthodox
treatment of tax incidence (pp. 927–34) by arguing
that Rothbard is overlooking the changed incentives
after the imposition of a tax. For example, it is true
that producers could not raise prices before the tax,
because if any did so, others would undercut him. But