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Rothbard vs Fisher's Equation of Exchange, MV = PT

The following is abstracted from :

M.N. Rothbard, Man, Economy and State

This is available in both online .pdf form and as a newly released hardcover Scholar's Edition from

It is provided here as a reference for comments that came up in response to an earlier post, Money and the Government. Read more »

Money and the Government

Some Implications Resulting From the Relationship Between the Government and Money

Imagine a very simple Federal Government, consisting of merely two organizations, the Money Supply Control Agency (MSCA) and the Treasury Department. The Treasury Department prints money and the MSCA controls its supply. This is NOT what Austrians and Libertarians mean when they say they want a smaller government, but it serves for the purposes of demonstration.

Further imagine that these organizations are quite inactive, with years or even decades separating their actions, as described below. Read more »

Product X Revealed

In earlier posts, I have claimed that the existence of a Product X represents strong evidence that the high prices of prescription drugs are NOT the result of a monopoly supply of patented drugs, but are rather the perverse result of the market dominance of the buying agents of prescription drug benefit plans.

The following describes Product X -- Read more »

Product X, Last Chance

In an earlier post I described a product that is distributed through the same channels as prescription drugs, and shares the same pricing characteristics as a monopoly prescription drug, but neither requires a prescription nor is supplied by monopolists. Read more »

The High Price of Monopoly Prescription Drugs (?)

Imagine a prescription drug made by a monopoly drug supplier that is both safely and effectively used in the treatment of a major disease.

The dosage typically varies from 4 to 10 pills per day, and the pills cost consumers $0.80 apiece. This works out to $96 to $240 per month, or $1152 to $2880 per year. Read more »

An Example of Price Discrimination and Its Consequences

Imagine a company, ACME CROSS-THREADED WIDGETS (AC-TW), which has two geographical markets for its products, the island of Manhattan in New York City and the region surrounding Jackson, Mississippi. Read more »

Drug Re-importation, Fallacies II

In an earlier post I attempted to show that, under certain conditions detailed there, a monopoly supplier of patented prescription drugs does no injury to US consumers when it sells into isolated foreign markets at lower prices, independent of whether those prices are set by a free market or whether they are controlled by a government. Read more »

Housing and CPI Calculations

From a quick google search for information on rent equivalent housing calculations, I came across this from Greg Nyquist. Read more »

Drug Re-importation, a Fallacy

One of the many fallacies that accompanies the question of drug re-importation is the idea that low drug prices in foreign markets harm American consumers.

I will attempt to briefly demonstrate that this is not the case.

For simplicity, assume a monopoly supplier of a patented prescription drug selling into a free American market with a zero marginal cost of production. Also assume that the supplier sells directly to consumers. These assumptions are not true, especially that of a free American market, but the conclusions should not be fundamentally affected. Read more »

Job Outsourcing and Efficiency Wages

It seems to be generally assumed that whenever someone's job can possibly be performed by someone overseas at a much lower wage, or at a lower cost, it soon will be.

There are many reasons that may make this more or less likely in particular cases, but here I'll just suggest one that seems to me to bring significant doubt on the assumption. Read more »

Even more on stock options and opportunity cost

Don Lloyd responds to Kyle Markley's entry on stock options and opportunity cost.

I think that opportunity costs can, in some cases, be accounted for, but in the case of stock and options, there is no opportunity cost. Read more »

Money supply inflation vs. price inflation

Reader Don Lloyd writes on the differences the between money supply inflation and price inflation, and why the former may not always reflect in the latter as measured by arbitrary indices such as the CPI.

In spite of all of the Austrian school's best efforts, most economists and other people refuse to believe in the reality of 'inflation' unless it shows up in the CPI or other similar indicators, no matter how much of an increase in the supply of money is admitted to. Read more »