Book – Power and Market: Government and the Economy

What can government do to enhance social and economic well being? Nothing, says Murray N. Rothbard. Power and Market contains the proof. It will inoculate the reader against even the slightest temptation to invoke the state as a solution to any social or economic problem. It is the ultimate manual for completely de-mystifying the myth of the state.

Many “right-wing” economists have advocated general sales taxation, as opposed to income taxation, on the ground that the former taxes consumption but not savings-investment; many “left-wing” economists have opposed sales taxation for the same reason. Both are mistaken; the sales tax is an income tax, though of more haphazard and uncertain incidence. The major effect of the general sales tax will be that of the income tax: to reduce the consumption and the savings-investment of the taxpayers.

Or what about taxes that are designed to bolster savings and reduce consumption. Here is Rothbard:

Why does consumption possess less merit than saving? Allocation between them on the market is simply a matter of time preference. This means that any coerced deviation from the market ratio of saving to consumption imposes a loss in utility, and this is true whichever direction the deviation takes. A government measure that might induce more saving and less consumption is then no less subject to criticism than one that would lead to more consumption and less saving. To say differently is to criticize free-market choices and implicitly to advocate governmental measures to force more savings upon the public.

Available for download at Mises.org

http://www.readrothbard.com/book-power-and-market-government-and-the-economy

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