Man, Economy, and State with Power and Market

Another objection holds that the free market does not really increase the utility of all individuals, because some may be so smitten with envy at the success of others that they really lose in utility as a result. We cannot, however, deal with hypothetical utilities divorced from concrete action. We may, as praxeologists, deal only with utilities that we can deduce from the concrete behavior of human beings.12 A person’s “envy,” unembodied in action, becomes pure moonshine from the praxeological point of view. All that we know is that he has participated in the free market and to that extent benefits by it. How he feels about the exchanges made by others cannot be demonstrated to us unless he commits an invasive act. Even if he publishes a pamphlet denouncing these exchanges, we have no ironclad proof that this is not a joke or a deliberate lie.

• 12Elsewhere, we have named this concept “demonstrated preference,” have traced its history, and have directed a critique against competing concepts. See Murray N. Rothbard, “Toward a Reconstruction of Utility and Welfare Economics” in Mary Sennholz, ed., On Freedom and Free Enterprise (Princeton, N.J.: D. Van Nostrand, 1956), pp. 224 ff.