This file is a single-authored conference paper: Rothbard’s polemical assessment of Austrian economics after the 1970s revival. Its range is broad—methodology, subjectivism, knowledge, entrepreneurship, equilibrium, socialist calculation, reason, monetary theory, and movement history—but its governing claim is narrow: Austrian economics must be re-centered on Misesian praxeology rather than dispersed among Hayekian knowledge theory, Lachmannian radical uncertainty, or ecumenical “Austrian” pluralism.
It is the contention of this paper, indeed, that several different and clashing paradigms have been allowed to develop and fester, all in the name of “Austrian economics”; that a great deal of confusion and incoherence have resulted; and that this coexistence of contradictory doctrine and proliferation of clutter should be brought to an end.
Rothbard begins by denying the Whig assumption that later doctrine is necessarily better. Kuhn’s language of paradigms lets him argue that economics can lose knowledge as well as gain it, and that some alleged Austrian “developments” may be degenerations. He also attacks the “New Methodology” as an anti-prescriptive prescription, an “anything goes” posture unable to distinguish truth from error. The opening move is therefore disciplinary boundary-setting: Austrian economics cannot be merely a loose style of subjectivism, process analysis, anti-formalism, and interest in unintended consequences. It needs a logical center.
The word praxeology means precisely what its etymology says: the logic of (human) action.
From this premise Rothbard reorders Austrian themes. Subjective valuation is indispensable, but it does not abolish objective reality, causal law, or deductive reasoning. Uncertainty is real, but Lachmann’s radical unknowability, in Rothbard’s view, dissolves economics into institutional history by denying stable causal propositions about action. Hayek and Kirzner are less destructive, yet Rothbard thinks their entrepreneur is too passive: someone “alert” to signals rather than an owner-appraiser who risks resources under uncertainty. The Misesian entrepreneur calculates, forecasts, owns, gains, and loses.
He is a knowledgeable, active, risking, forecasting, man using the price system as an indispensable guide to enable him to calculate his costs, and to estimate his future revenues and profits.
The same standard shapes Rothbard’s discussion of market process. He defends equilibrium and imaginary constructions as necessary tools of causal explanation; without ceteris paribus reasoning, “process” becomes a slogan rather than a theory. Against Hayekian “coordination of plans,” he emphasizes Hutt-Salerno price coordination: free prices clear markets while entrepreneurial errors and longer-run reallocations persist. In the socialist calculation debate this distinction is decisive. Hayek made socialism primarily a knowledge problem; Rothbard, following Salerno’s recovery of Mises, insists that even perfect technical knowledge would not provide market prices for capital goods or the appraisement needed for rational allocation.
The purpose of human action is not to “know” but to employ means to achieve goals.
The essay’s deepest opposition is between Misesian reason and Hayekian deference to evolved rules. Rothbard presents Mises as an Aristotelian rationalist: action presupposes consciousness, choice, purpose, and intelligible causality. Hayek’s “spontaneous order” and emphasis on unintended consequences are treated as evasions when they obscure deliberate action and rational defense of markets. Rothbard does not deny remote or unintended effects; he argues that economic theory should make them visible, as in Bastiat and Hazlitt, so that people can understand and defend liberty.
The monetary sections show why Rothbard thinks Misesian Austrianism also has a macroeconomics. Mises integrated money with marginal utility and explained the business cycle through inflationary credit. Against Hayek’s competing private currencies and free-banking sympathies, Rothbard invokes the regression theorem and property rights: money must emerge from commodity exchange, and fractional-reserve banking is not market freedom but legalized counterfeiting. The cure is not better banking management but abolition of the counterfeit privilege.
The epilogue turns interpretation into movement history. Rothbard rejects Karen Vaughn’s account of Austrianism as progress from Mises through Hayek and Lachmann to Lavoie. He substitutes a three-phase story: the 1974 revival around South Royalton and Hayek’s Nobel; a late-1970s drift into non-Misesian deviations; and a Mises Institute renaissance restoring praxeology. The paper is therefore not a neutral survey but a manifesto. For Rothbard, “Austrian economics” is to be judged by action, reason, calculation, entrepreneurship, and property-rights money, not by novelty or breadth of affiliation.
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