This course will cover chapters 10, 11, and 12 of Murray Rothbard’s systematic treatise on economics, Man, Economy, and State. In this course, you will have the ideal instructor: Robert Murphy, the author of the study guide to Man, Economy, and State.

Chapter 10 contains one of Rothbard’s foremost original contributions to economic science: his discussion of monopoly and competition. Rothbard went beyond even Mises in exculpating the pure market economy from the arguments of antitrust-advocating market critics. Rothbard argued that on the free market there can be no such thing as a monopoly price which is different in any significant way from a competitive price.

In chapter 11, Rothbard presents a thorough and completely Misesian exposition of monetary theory. Among other highlights, this chapter includes the most devastating and succinct critique of Keynesianism ever penned, as well as a thorough refutation of Irving Fisher’s “equation of exchange” doctrine, thereby discrediting much of monetarism, and undercutting (before the fact) many of the arguments of the modern, quasi-Austrian, “Free Banking” school.

And chapter 12 is a methodical deconstruction of the folly of all state intervention into the market economy. After having spent 11 chapters describing the essence and functioning of the market system, chapter 12 elucidates what happens when government throws a wrench in the gears.

This course is a perfect follow-up to Murphy’s previous courses based on Man, Economy, and State. However, having taken those courses is NOT required, and this course stands alone as an excellent study of 3 crucial areas in Austrian theory. This course is well-suited for anyone conversant with the Austrian understanding of the market process.

Lectures

The video lectures are online, and use Webex, the industry-standard web conferencing service.  Lectures will be Wednesday evenings, 6:00-7:30 pm Eastern time. They will be recorded and made available for enrolled students to download.

Reading

The primary text of the course is Man, Economy, and State by Murray N. Rothbard, specifically chapters 10-12.  This and any other assigned readings are available for free online.

Topics

Below are the readings and topics that will be covered in this 8-week course.

CHAPTER 10-MONOPOLY AND COMPETITION
(study guide in PDF)

1. The Concept of Consumers’ Sovereignty (p. 629)
A. Consumers’ Sovereignty versus Individual Sovereignty (p. 629)
B. Professor Hutt and Consumers’ Sovereignty (p. 631)
2. Cartels and Their Consequences (p. 636)
A. Cartels and “Monopoly Price” (p. 636)
B. Cartels, Mergers, and Corporations (p. 643)
C. Economics, Technology, and the Size of the Firm (p. 645)
D. The Instability of the Cartel (p. 651)
E. Free Competition and Cartels (p. 653)
F. The Problem of One Big Cartel (p. 659)
3. The Illusion of Monopoly Price (p. 661)
A. Definitions of Monopoly (p. 661)
B. The Neoclassical Theory of Monopoly Price (p. 672)
C. Consequences of Monopoly-Price Theory (p. 675)
(1) The Competitive Environment (p. 675)
(2) Monopoly Profit versus Monopoly Gain to a Factor (p. 677)
(3) A World of Monopoly Prices? (p. 680)
(4) ”Cutthroat” Competition (p. 681)
D. The Illusion of Monopoly Price on the Unhampered Market (p. 687)
E. Some Problems in the Theory of the Illusion
of Monopoly Price (p. 698)
(1) Location Monopoly (p. 698)
(2) Natural Monopoly (p. 702)
4. Labor Unions (p. 704)
A. Restrictionist Pricing of Labor (p. 704)
B. Some Arguments for Unions: A Critique (p. 716)
(1) Indeterminacy (p. 716)
(2) Monopsony and Oligopsony (p. 717)
(3) Greater Efficiency and the “Ricardo Effect” (p. 718)
5. The Theory of Monopolistic or Imperfect Competition (p. 720)
A. Monopolistic Competitive Price (p. 720)
B. The Paradox of Excess Capacity (p. 726)
C. Chamberlin and Selling Cost (p. 736)
6. Multiform Prices and Monopoly (p. 739)
7. Patents and Copyrights (p. 745)

CHAPTER 11-MONEY AND ITS PURCHASING POWER
(study guide in PDF)

1. Introduction (p. 755)
2. The Money Relation: The Demand for and the
Supply of Money (p. 756)
3. Changes in the Money Relation (p. 762)
4. Utility of the Stock of Money (p. 764)
5. The Demand for Money (p. 767)
A. Money in the ERE and in the Market (p. 767)
B. Speculative Demand (p. 768)
C. Secular Influences on the Demand for Money (p. 771)
D. Demand for Money Unlimited? (p. 772)
E. The PPM and the Rate of Interest (p. 773)
F. Hoarding and the Keynesian System (p. 776)
(1) Social Income, Expenditures, and Unemployment (p. 776)
(2) ”Liquidity Preference” (p. 785)
G. The Purchasing-Power and Terms-of-Trade Components in the
Rate of Interest (p. 792)
6. The Supply of Money (p. 798)
A. The Stock of the Money Commodity (p. 798)
B. Claims to Money: The Money Warehouse (p. 800)
C. Money-Substitutes and the Supply of Money (p. 805)
D. A Note on Some Criticisms of 100-Percent Reserve (p. 810)
7. Gains and Losses During a Change in the Money Relation (p. 811)
8. The Determination of Prices: The Goods Side and
the Money Side (p. 815)
9. Interlocal Exchange (p. 818)
A. Uniformity of the Geographic Purchasing Power of Money (p. 818)
B. Clearing in Interlocal Exchange (p. 821)
10. Balances of Payments (p. 822)
11. Monetary Attributes of Goods (p. 826)
A. Quasi Money (p. 826)
B. Bills of Exchange (p. 827)
12. Exchange Rates of Coexisting Moneys (p. 828)
13. The Fallacy of the Equation of Exchange (p. 831)
14. The Fallacy of Measuring and Stabilizing the PPM (p. 843)
A. Measurement (p. 843)
B. Stabilization (p. 847)
15. Business Fluctuations (p. 851)
16. Schumpeter’s Theory of Business Cycles (p. 854)
17. Further Fallacies of the Keynesian System (p. 859
A. Interest and Investment (p. 859)
B. The “Consumption Function” (p. 860)
C. The Multiplier (p. 866)
18. The Fallacy of the Acceleration Principle (p. 868)

CHAPTER 12-THE ECONOMICS OF VIOLENT INTERVENTION IN THE MARKET
(study guide in PDF)

1. Introduction (p. 875)
2. A Typology of Intervention (p. 877)
3. Direct Effects of Intervention on Utility (p. 878)
4. Utility Ex Post: Free Market and Government (p. 885)
5. Triangular Intervention: Price Control (p. 892)
6. Triangular Intervention: Product Control (p. 900)
7. Binary Intervention: The Government Budget (p. 907)
8. Binary Intervention: Taxation (p. 914)
A. Income Taxation (p. 914)
B. Attempts at Neutral Taxation (p. 919)
C. Shifting and Incidence: A Tax on an Industry (p. 927)
D. Shifting and Incidence: A General Sales Tax (p. 930)
E. A Tax on Land Values (p. 934)
F. Taxing “Excess Purchasing Power” (p. 937)
9. Binary Intervention: Government Expenditures (p. 938)
A. The “Productive Contribution” of Government Spending (p. 938)
B. Subsidies and Transfer Payments (p. 942)
C. Resource-Using Activities (p. 944)
D. The Fallacy of Government on a “Business Basis” (p. 946)
E. Centers of Calculational Chaos (p. 952)
F. Conflict and the Command Posts (p. 953)
G. The Fallacies of “Public” Ownership (p. 955)
H. Social Security (p. 957)
I. Socialism and Central Planning (p. 958)
10. Growth, Affluence, and Government (p. 962)
A. The Problem of Growth (p. 962)
B. Professor Galbraith and the Sin of Affluence (p. 973)
11. Binary Intervention: Inflation and Business Cycles (p. 989)
A. Inflation and Credit Expansion (p. 989)
B. Credit Expansion and the Business Cycle (p. 994)
C. Secondary Developments of the Business Cycle (p. 1004)
D. The Limits of Credit Expansion (p. 1008)
E. The Government as Promoter of Credit Expansion (p. 1014)
F. The Ultimate Limit: The Runaway Boom (p. 1018)
G. Inflation and Compensatory Fiscal Policy (p. 1021)
12. Conclusion: The Free Market and Coercion (p. 1024)
Appendix A: Government Borrowing (p. 1025)
Appendix B: ”Collective Goods” and “External Benefits”:
Two Arguments for Government Activity (p. 1029)

Grades and Certificates

The final grade will depend on quizzes and exams.  The Mises Academy is currently not accredited, but this course is worth 3 credits in our own internal system.  Feel free to ask your school to accept Mises Academy credits.  You will receive a digital Certificate of Completion for this course if you take it for a grade, and a Certificate of Participation if you take it on a paid-audit basis.

Refund Policy

If you drop the course during its first week (7 calendar days), you will receive a full refund, minus a $25 processing fee.  If you drop the course during its second week, you will receive a half refund.  No refunds will be granted following the second week.