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1. Money, Monopoly &
Market Intervention
Robert P. Murphy
Mises Academy
November 7, 2011
Lecture 6: 1st
Third of Chapter 12 of
Man, Economy, and State

2. 1st
Third of
Chapter 12 of MES1. State vs. Private Intervention
2. Typology of Intervention
3. Utility
4. Price Controls
5. Gresham’s Law
VI. Resurrecting “Monopoly Price”
VII. Taxing and Spending Both
Burdens
VIII. Thoughts on Taxes
IX. Income vs. Consumption
Taxes

3. I. State vs. Private
Intervention

4. II. Typology of Intervention
Autistic
Binary
Triangular

5. III. Utility
Rothbard argues that (in a sense)
free market “maximizes” utility of
everyone.
By definition, an intervention raises
the utility of the intervener but
lowers that of the recipient.

6. IV. Price Controls
For more, see Lessons for the Young
Economist.

7. V. Gresham’s Law
Traditional version:
“Bad money drives out good.”
Bimetallism: Government enforces a fixed
exchange ratio between gold and silver.

8. VI. Resurrecting “Monopoly
Price”

9. VII. Taxing and Spending
Both Burdens

10. VIII. Thoughts on Taxation
●No such thing as a “neutral tax.”
●Head Tax vs. Flat Tax
●Tax “Shifting”: What’s right and
what’s wrong

11. IX. Income vs. Consumption
Taxes
●Income tax does penalize saving
(though be careful about
reasoning).
●Consumption tax ends up “taxing”
income too!
●Right-wingers tend to denigrate
consumption.