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Murray Rothbard

Mar 06, 202510 min read

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Man, Economy, and State

Chapter 1: Fundamentals of Human Action

1. The Concept of Action

  • Human action is defined simply as purposeful behavior. (p. 1)
  • The purpose of a man’s act is his end; the desire to achieve this end is the man’s motive for instituting the action. (pp. 1-2)
    • As Deutsch would likely argue, it is memes—and in the case of rational memes, knowledge—that drive men.
  • The fact that men act by virtue of their being human is indisputable and incontrovertible. To assume the contrary would be an absurdity. (p. 2)

2. First Implications of the Concept

  • The first truth to be discovered about human action is that it can be undertaken only by individual “actors.” (p. 2)
  • In order to institute action, it is not sufficient that the individual man have unachieved ends that he would like to fulfill. He must also expect that certain modes of behavior will enable him to attain his ends. Action requires an image of a desired end and “technological ideas” or plans. (p. 3)
  • To act, he must have technological ideas about how to use some of the elements of the environment as means, as pathways, to arrive at his ends. (p. 4)
  • All human life must take place in time. If the desired ends could all be attained instantaneously in the present, then man’s ends would all be attained and there would be no reason for him to act; and we have seen that action is necessary to the nature of man. Therefore, an actor chooses means from his environment, in accordance with his ideas, to arrive at an expected end, completely attainable only at some point in the future. (p. 4)
  • A man’s time is always scarce. Time is a means that man must use to arrive at his ends. Time is scarce for man only because whichever ends he chooses to satisfy, there are others that must remain unsatisfied. (p. 5)
  • The action axiom and its implications:
    • All means are scarce—if the means are in unlimited abundance, then they need not serve as the object of attention of any human action. (p. 5)
      • Time is scarce means time is a means—because the multiverse is a general condition.
      • Air is abundant means air is a general condition.
    • These scarce means must be allocated—this act of choice may be called economizing the means to serve the most desired ends. The larger the supply of means available, the more ends can be satisfied and the lower the rank of the ends that must remain unsatisfied. (pp. 5-6)
    • The uncertainty of the future must be true because the contrary would completely negate the possibility of action. This uncertainty stems from two basic sources: the unpredictability of human acts of choice, and insufficient knowledge about natural phenomena. (p. 7)
      • And I argue that both originate from the following general condition—humans are fallible because knowledge is unpredictable.develop
        • All his actions are of necessity speculations based on his judgment of the course of future events. The omnipresence of uncertainty introduces the ever-present possibility of error in human action. (p. 7)

10. Action as an Exchange

  • All action involves an exchange—a giving up of a state of affairs for what the actor expects will be a more satisfactory state. Every aspect of action has involved a choice among alternatives. In each case, the actor adopted the course that he believed would afford him the highest utility on his value scale; and in each case, the actor gave up what he believed would turn out to be a lesser utility. (pp. 70-71)
  • Since man is always acting, he must always be engaged in trying to attain the greatest height on his value scale. There must always be room for improvement in his value scale; otherwise action would disappear. This means that there is always open to each actor the prospect of improving his lot, of attaining a value higher than he is giving up, i.e., of making a psychic profit. (p. 71)
    • Deutsch (or extension of his theory) would likely argue that there is objective reality out there, and with regards to the understanding of that reality there is objective improvement. But in The Evolution of Culture, he also emphasized how we cannot do away with anti-rational memes.
    • Everett (or extension of his theory) would likely agree with Deutsch, if not fully—he would likely argue that although science deals with the objective reality, scientific theory is fallible and cannot comprehend all of human knowledge (i.e., the dark matter theory of mind).
    • The subjective value theory, another axiom of praxeology, is retained even with the existence of objective reality and associated scientific theories, precisely because we are fallible.develop

Appendix A: Praxeology and Economics

  • Once it is demonstrated that human action is a necessary attribute of the existence of human beings, the rest of praxeology (and its subdivision, economic theory) consists of the elaboration of the logical implications of the concept of action. (p. 72)
  • Economics is not concerned with their content, and its laws apply regardless of the nature of these ends. Psychology and ethics deal with the content of human ends; they ask, why does the man choose such and such ends, or what ends should men value? (pp. 72-73)
  • The law of marginal utility depends on no physiological or psychological assumptions but is based on the praxeological truth that the first unit of a good will be used to satisfy the most urgent want, the second unit the next most urgent want, etc. (p. 73)
  • Praxeology includes economics, and the latter includes the analysis of the action of an isolated individual (Crusoe economics) and that of interpersonal exchange (catallactics). (p. 74)
  • It is the great quality of verbal propositions that each one is meaningful. Algebraic and logical symbols, as used in logistics, are not in themselves meaningful. (p. 75)
  • Logistics, therefore, is far more suited to the physical sciences, where, in contrast to the science of human action, the conclusions rather than the axioms are known. In the physical sciences, the premises are only hypothetical, and logical deductions are made from them. In these cases, there is no purpose in having meaningful propositions at each step of the way, and therefore symbolic and mathematical language is more useful. (p. 75)
    • Physical sciences, as with most of human thinking, start in the middle—it consists both theorization and experimental refutation of such theories. The representation of the latter (i.e., experimental results) can be done with mathematical symbols.
    • Praxeology consists of axioms and its implications—i.e., theorization.
      • Viz., explanations.
    • If the laws of physics imply the existence of the multiverse, and if the multiverse implies the existence of explanatory knowledge (i.e., humans), then praxeology per se does not necessarily have to be refutable. In other words, refuting the existence of the multiverse will refute praxeology.develop
  • Contrary to what might be believed, the use of verbal logic is not inferior to logistics. On the contrary, the latter is merely an auxiliary device based on the former. (p. 76)
    • “If you can’t explain it simply, you don’t understand it well enough” – Einstein

Chapter 2: Direct Exchange

Chapter 3: The Pattern of Indirect Exchange

1. The Limitations of Direct Exchange

Chapter 8: Production: Entrepreneurship and Change

1. Entrepreneurial Profit and Loss

  • Having developed in the previous chapters our basic analysis of the market economy, we now proceed to discuss more dynamic and specific applications, as well as the consequences of intervention in the market. (p. 509)

Power and Market

Anatomy of the State

What the State Is Not

What the State Is

How The State Preserves Itself

How The State Transcends Its Limits

What The State Fears

  • The death of a State can come about in two major ways: (a) through conquest by another State, or (b) through revolutionary overthrow by its own subjects—in short, by war or revolution. (p. 31)
  • As stated above, any way must always be used to mobilize the people to come to the State’s defense in the belief that they are defending themselves. (p. 31)
  • The fallacy of the idea becomes evident when conscription is wielded against those who refuse to “defend” themselves and are, therefore, forced into joining the State’s military band: needless to add, no “defense” is permitted them against this act of “their own” State. (p. 31)
  • War provides many benefits to a State. (p. 31)
  • The gravest crimes in the State’s lexicon are almost invariably not invasions of private person or property, but dangers to its own contentment, for example, treason, desertion of a soldier to the enemy, failure to register for the draft, subversion and subversive conspiracy, assassination of rulers and such economic crimes against the State as counterfeiting its money or evasion of its income tax. (p. 32)

How States Relate to One Another

History as a Race Between State and Social Power

  • “Social power” and “State power”:
    • Social power is man’s power over nature, his cooperative transformation of nature’s resources and insight into nature’s laws, for the benefit of all participating individuals. Social power is the power over nature, the living standards achieved by men in mutual exchange. (p. 38)
    • State power, as we have seen, is the coercive and parasitic seizure of this production—a draining of the fruits of society for the benefit of nonproductive (actually antiproductive) rulers. While social power is over nature, State power is power over man. (p. 38)
  • In this century, the human race faces, once again, the virulent reign of the State—of the State now armed with the fruits of man’s creative powers, confiscated and perverted to its own aims. (p. 39)

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