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

170 Study Guide to Man, Economy, and State with Power and Market
after the tax this may no longer be true; all producers
in the affected industry can raise prices because no
one can operate profitably at the old price. (See question
9 below.)
5. In footnote 12 (p. 1003), Rothbard clarifies that his
“natural rate” is the rate of return earned by businesses
on the market, and is different from the loan
rate of interest. (It is thus what Böhm-Bawerk means
by the originary rate of interest.) In contrast, Knut
Wicksell (as well as other Austrian expositions) uses
the term “natural rate” to mean simply the free market
rate, i.e., the rate that would prevail were it not
for distortionary credit expansion.