Power and Market

Chapter 1, "Defense Services on the Free Market", argues that economists often overlook the importance of property rights and assume that the free market relies on government-provided defense.[3] However, a truly free market society would have voluntary exchange of justly derived property titles, including defense services.[3] The state derives funds through coercive taxation and arrogates a geographical monopoly.[3] Legal scholars could discover the objective properties of a free legal order, including self-ownership and the homesteading principle.[3] In a free society, protection agencies would sell subscriptions and provide services on call, with judges applying a law code that enshrines the non-aggression axiom.[3] The difference between a libertarian society and one under the state is that the former would not have a systematic legalized method of plunder.[3] The notion of limited government is a contradiction, as it is arbitrary to set limits on government once unbridled property rights are abandoned.[3]

Chapter 2, "Fundamentals of Intervention", discusses types of intervention, including autistic, binary, and triangular intervention.[4] The author also explains the direct effects of intervention on utility,[5] including how any intervention necessarily reduces the utility of the affected subjects,[6] and how democracy is not truly voluntary.[7] Additionally, the author argues that private defense agencies can still maximize utility in a free market,[8] and that the market does not necessarily fail to maximize utility due to envy.[9] The chapter concludes with a discussion on utility ex post, in which the author explains how voluntary exchanges in the market usually benefit individuals, while government policies often fail to achieve their intended objectives.[10]

Chapter 3, "Triangular Intervention", discusses various forms of price control, including maximum and minimum price controls, prohibition, and monopoly grants.[11] Rothbard argues that all of the negative effects associated with free market monopolies also apply to government monopolies and cartels.[12] Examples of government intervention in the market include compulsory cartels, licensing, tariffs, immigration restrictions, child labor laws, conscription, government unemployment benefits, antitrust laws, and conservation laws.[13] The author contends that these interventions harm consumers, distort production, and reduce overall output.[13]

Chapter 4, "Binary Intervention: Taxation", argues that society is made up of taxpayers and tax consumers,[14] and all taxation distorts resource allocation. Tax incidence refers to the actual long-term burden of taxation, and no tax can be shifted forward.[15] Income taxes reduce the utility of taxpayers and provide a disincentive to earn income.[15] Direct taxes on consumption merely translate to an income tax,[15] and a tax on accumulated capital is far more destructive than a tax on income.[16] The only objectively just price is the market price,[17] and it is impossible to tax everyone uniformly.[18]

Chapter 5, "Binary Intervention: Government Expenditures", examines government expenditures and distinguishes between pure transfers and resource-using activities.[19] The first category includes government subsidies, which transfer income from the efficient to the inefficient and distort resource allocation.[20] The second category covers government ownership of resources and socialist policies, which have negative economic consequences.[21] The text argues that government ownership of resources distorts incentives, causes shortages, and limits competition, and that socialism results in the misallocation of resources.[21] Additionally, the text highlights the myth of "public" ownership and the inherent inefficiencies of democracy.[21]

Chapter 6, "Antimarket Ethics: a Praxeological Critique", discusses how praxeology, a value-free science, can demonstrate that certain ethical values are either based on false propositions or conceptually impossible to fulfill.[22] The advocate of laissez-faire does not assume that all people always act in their interest but asserts that everyone should have the right to pursue their interests freely.[23] The market economy is a positive sum game where there is a harmony of interests, and the rise of one person's power over another person is a net loss.[24] It is pointless to argue that human rights should trump property rights because all rights are ultimately property rights.[25]

Chapter 7, "Conclusion: Economics and Public Policy", discusses economics and its uses,[26] as well as the failures of welfare economics,[27] the relationship between economics and social ethics,[28] and the market principle versus the hegemonic principle.[29] Economics provides true laws of cause and effect, but its conditional laws are more useful in public policy debates than for businesspeople.[26] Mainstream economists often make value judgments and design policies to achieve ethical goals, even though they claim to be neutral advisors.[27] Economists can play a role in public policy by ruling out meaningless ethical goals, refuting false objections to the market, and explaining the consequences of government intervention and socialism.[28] The market principle and the hegemonic principle are the only two methods of social relations, and their diffent consequences are discussed.[29]

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