A Comparison of the Utility Theory of Rothbard and Kirzner

IN THIS ARTICLE we analyze the theories of utility put forth by Rothbard (2004) and Kirzner (1963). While both authors are strongly influenced by Mises’ (1998) conception of the utility of a good being the end that must be foregone in the absence of that good (or attained in the presence of that good), we observe a tension in Kirzner’s rendition. In particular, he embraces the neoclassicist framework of the consumer budget problem, in which the utility of a good is the amount of another good that an actor is indifferent towards (for a given level of satisfaction). Such a framework is completely absent from Rothbard’s work, and we note the way in which this tension is reflected in Kirzner’s view of the market process.