The archive.

Was Adam Smith’s achievement a new beginning for economics—or a diversion from more promising explanations of exchange? In this polemical essay, Murray N. Rothbard argues that Smith’s authority obscured a Continental tradition connecting prices to utility and scarcity. The contrast turns on concrete problems: why water costs less than diamonds, how markets adjust to changes in money, and whether production costs can explain value independently of consumer choice. Judging Smith by Austrian commitments to subjective value and market process, Rothbard also tests his laissez-faire reputation against his support for interest-rate ceilings and navigation laws. Readers encounter a sharply contested genealogy of economics in which scholastic thinkers, Cantillon, and Turgot become alternatives to—not merely precursors of—Smith.

Philosophy gives economics its intellectual setting—but can economics, in turn, supply the foundations of ethics? In this review of Wolfgang Grassl and Barry Smith’s edited volume, Murray N. Rothbard welcomes studies linking Carl Menger’s economics to Franz Brentano’s Aristotelian philosophy, while resisting attempts to extend marginal analysis into morality. His judgments distinguish the collection’s historical achievement from arguments he finds theoretically confused or politically objectionable. The sharpest boundary concerns Grassl’s proposed “moral market”: balancing virtues, Rothbard argues, cannot justify incremental doses of theft or violence. This short review offers a pointed encounter with Rothbard as both historian and libertarian critic, defending philosophy’s role in explaining economic thought while insisting that ethical limits govern economic choice.

When the Group of Seven moved in 1987 to prop up a falling dollar and revive coordinated fixed exchange rates, Rothbard saw one more attempt to preserve inflationary discretion under a gold-colored disguise. Tracing the line from the classical gold-coin standard through the interwar sterling system, Bretton Woods, and the short-lived Smithsonian Agreement, he argues that fixed rates without genuine gold money become arbitrary political prices, doomed to collapse under redemption pressure and Gresham's Law. He dissects James Baker's proposed scheme, a secret commodity-price index granting gold only a token, formulaic role, and the odd alliance of conservative Keynesians and supply-siders such as Robert Mundell and Jack Kemp who back it. Floating fiat rates are bad, he concludes; fixed fiat rates, which add international price-fixing to paper money, are worse.

Once again, the market proves wiser than economists.

Can a theory that begins with an economy already in equilibrium explain how economies change? Murray N. Rothbard presses this question against Schumpeter’s account of innovation and, more briefly, Hansen’s secular-stagnation thesis. He argues that Schumpeter’s innovative entrepreneur and reliance on newly created bank credit follow from premises that exclude saving, time preference, and ordinary entrepreneurial adjustment. Hansen’s dwindling investment opportunities receive a parallel diagnosis: apparent historical conclusions reflect the limits of a static model. Rothbard’s Austrian perspective makes the distinction between interest and entrepreneurial profit central to his critique. The article offers a pointed way to examine whether an economic theory explains change—or merely admits the kinds of change its starting assumptions allow.

Can a science of exchange explain the economic choices of someone with nobody to trade with? In this dictionary article, republished in the 2008 New Palgrave, Rothbard traces the possibilities and limits of defining economics through exchange rather than material wealth. Subjective valuation explains how both trading partners can gain and why services belong alongside tangible goods in economic analysis. Yet the isolated individual poses a problem for an exclusively interpersonal account. Rothbard favours Mises’s resolution: place market exchange within a broader science of purposeful human action. This compact intellectual history shows how a seemingly terminological dispute changes what economists can explain—from mutual gains in trade to the solitary allocation of scarce resources.

Why does a productive asset yield rent, and what determines its price today? In this brief entry from the 2008 second edition of The New Palgrave Dictionary of Economics, Murray N. Rothbard presents Frank Albert Fetter’s answer: productivity determines rental returns, while time preference determines the rate at which future returns are discounted. Rothbard’s distinctly Austrian appraisal credits Fetter with extending subjective valuation into a unified account of rent, capital, and interest—without making productivity explain interest itself. Readers can grasp this consequential distinction through an account that extends beyond lending to entrepreneurs’ purchases of productive factors. Rothbard’s admiration is selective: he sharply questions Fetter’s later opposition to basing-point pricing.

Champagne land commands high rents because consumers value champagne—not the other way round. This reversal anchors Rothbard’s dictionary article, presented here in its 2008 republication, on how productive resources acquire value. His Austrian perspective separates two questions easily conflated: why means derive their value from desired ends, and how actual prices for those means emerge. Against attempts to calculate factor values directly from subjective preferences, Rothbard stresses market exchange and entrepreneurial trial and error. The distinction gives this compact entry its bite: explaining the logical dependence of production on consumption does not, he argues, supply the knowledge needed for economic calculation. Readers can discover both the force of that distinction and a limiting case in which market participants must bargain over relative factor prices.

Keynesians, on Rothbard's account, have the whole causal story backward. They treat idle labor and unused capacity as brute aggregate facts, then insist inflation cannot revive while slack persists, yet stagflation and the renewed inflation of later years refuted them. The missing piece, he argues, is the price system. Unemployment is a surplus like any other: resources go unused because their owners hold out for wages or prices above what buyers will pay, which makes idleness, in an analytical sense, voluntary. Drawing on William H. Hutt, he traces persistent mass unemployment to interventions, compulsory unionism, minimum-wage laws, welfare, and unemployment insurance, that keep wages above market-clearing levels. Monetary expansion can mobilize idle resources only by raising the returns paid for them, which is to say only through inflation. Idle capacity and rising prices, then, are no paradox at all.

The Keynesians themselves create the problem by leaving out the price system.

How can individual valuations explain money, economic crises, and the limits of central planning? In this New Palgrave dictionary entry, republished in 2008, Murray N. Rothbard presents Ludwig von Mises’s economics as a connected response to that question. Money poses a particularly revealing puzzle: people value it for its purchasing power, yet purchasing power itself depends on their demand. Rothbard’s account of Mises’s solution opens onto a broader contrast between causal explanations grounded in human action and mathematical descriptions of equilibrium. Writing sympathetically from within the Austrian tradition, Rothbard treats Mises’s defence of laissez-faire as a consequence of his economic reasoning. The result is a compact intellectual portrait that shows how monetary theory, economic calculation, and deductive method fit together in Rothbard’s interpretation of Mises.

A crime without a victim is how Rothbard characterizes insider trading, and from that provocation he builds a full libertarian defense of profiting from superior knowledge. The 1980s prosecutions of Wall Street financiers, he argues, are not justice but a punitive political campaign that treats speculators as worse than robbers while harming no one who was not already willing to sell. Trading on early information, in his account, is entrepreneurship: it moves capital toward the farsighted and improves the whole economic system. He reads the charge of unfairness as egalitarian resentment of any human superiority, warns that such enforcement chills speech and privacy, and contends that federal attacks on takeover financiers like Drexel Burnham Lambert shield old-line managerial elites against stockholders and market competition.

There is a veritable Reign of Terror rampant in the United States—and everyone’s cheering.

That an administration responsible for the largest deficits in American history should offer a constitutional balanced-budget amendment as the cure strikes Rothbard as image triumphing over substance. The amendment, he argues, would balance only projected budgets, never actual year-end spending, and would fall to accounting tricks, off-budget expenditures, and revenue limits pegged to national income, which he dismisses as a statistical artifact, not a real entity fit for fundamental law. Proposals to exempt government capital spending would simply relabel boondoggles as investment. Since the federal courts that would enforce it are themselves organs of the government being restrained, enforcement is a fiction. He likens the whole scheme to the supply-siders' phony gold standard: the rhetoric of discipline masking undiminished cheap money and deficit politics.

Second, balancing the budget by increasing taxes is like curing influenza by shooting the patient; the cure is worse than the disease.

"The consequences of human action, not human design"—the Ferguson-via-Hayek slogan that casts Austrian economics as the study of unintended outcomes—gets a pointed rebuttal here. Rothbard grants that the market coordinates beyond any single benevolent intention, as with Smith's butcher and baker, but insists the formula collapses once intention is taken seriously: if businessmen learn sound theory and consciously aim at serving consumers, the once-unintended becomes intended. Grounding his case in Misesian praxeology, he treats human action as purposive choice rather than blind response to stimuli. The stakes are political as well as methodological: to describe the growth of the state as nobody's design, he warns, is to disguise the special interests that consciously pursue privilege behind the rhetoric of the public good.

For if actions are largely always unintended, this means that government just grew like Topsy, and that no person or group ever willed the pernicious consequences of that growth.