Human Action: A Treatise on Economics Prime – Circuitwiringdiagram.co

In the foreword to Human Action A Treatise on Economics, Mises explains complex market phenomena as the outcomes of countless conscious, purposive actions, choices, and preferences of individuals, each of whom was trying as best as he or she could under the circumstances to attain various wants and ends and to avoid undesired consequences It is individual choices in response to personal subjective value judgments that ultimately determine market phenomena supply and demand, prices, the pattern of production, and even profits and losses Although governments may presume to set prices, it is individuals who, by their actions and choices through competitive bidding for money, products, and services, actually determine prices Thus, Mises presents economics not as a study of material goods, services, and products but as a study of human actions He sees the science of human action, praxeology, as a science of reason and logic, which recognizes a regularity in the sequence and interrelationships among market phenomena Mises defends the methodology of praxeology against the criticisms of Marxists, socialists, positivists, and mathematical statisticiansMises attributes the tremendous technological progress and the consequent increase in wealth and general welfare in the last two centuries to the introduction of liberal government policies based on free market economic teachings, creating an economic and political environment which permits individuals to pursue their respective goals in freedom and peace Mises also explains the futility and counter productiveness of government attempts to regulate, control, and equalize all people s circumstances Men are born unequal and it is precisely their inequality that generates social cooperation and civilization Ludwig von Mises was the leading spokesman of the Austrian School of Economics throughout most of the twentieth century He earned his doctorate in law and economics from the University of Vienna inIn , Mises founded the Austrian Institute for Business Cycle Research Fromto , he was an economist for the Vienna Chamber of Commerce Before the Anschluss, inMises left for Geneva, where he was a professor at the Graduate Institute of International Studies until , when he emigrated to New York City Fromto , he was a visiting professor at New York UniversityBettina Bien Greaves is a former resident scholar, trustee, and longtime staff member of the Foundation for Economic Education She has written and lectured extensively on topics of free market economics Her articles have appeared in such journals as Human Events, Reason, and The Freeman Ideas on Liberty A student of Mises, Greaves has become an expert on his work in particular and that of the Austrian School of economics in general She has translated several Mises monographs, compiled an annotated bibliography of his work, and edited collections of papers by Mises and other members of the Austrian School


10 thoughts on “Human Action: A Treatise on Economics

  1. Paul Paul says:

    One of the most important books of the 20th century, not yet as influential as it deserves to be.I was brought to this book in 2009 after a growing feeling of dissatisfaction with expert explanations being offered for the various financial and economic calamities that seemed to be happening worldwide Economic commentary by journalists and pundits struck me as being opaque, partisan, and contradictory Gradually I had become interested in the ideas of the so called Austrian school of free mark One of the most important books of the 20th century, not yet as influential as it deserves to be.I was brought to this book in 2009 after a growing feeling of dissatisfaction with expert explanations being offered for the various financial and economic calamities that seemed to be happening worldwide Economic commentary by journalists and pundits struck me as being opaque, partisan, and contradictory Gradually I had become interested in the ideas of the so called Austrian school of free market economics, and eventually I decided to take the plunge and read its principal text, Human Action.I was bowled over In the first place, the title, Human Action, intrigued me As a category this seemed to extend far beyond the bounds of what I thought of as economics, and indeed I was right Von Mises founds his argument on a little known 19th century discipline called praxeology, or the science of human behavior While psychology is the study of human thoughts and feelings, praxeology is the study of human actions To be alive is to be continually in action, doing things Why do we do what we do What guides our actions What motivates us At the bottom of all our actions lies a specific feeling a felt unease that prompts us to seek its lessening, its amelioration It was easy for me to assent to this idea, since it accords well with my Buddhist training Indeed, human action is a passable translation of the Sanskrit term karma, which according to Buddhists is the mechanism of action and reaction in which we all engage due to duhkha, usually translated as suffering , although felt unease is probably a better translation It is usually subtle and underlying rather than something that is consciously felt, and I think von Mises put his finger on this quality of experience, and it was a mark of his genius to do so and to build his analysis from it.Part 1 of the book, the first 140 or so pages, deals only with the theory of human action and the categories intimately associated with it, such as time and uncertainty Our lives are short, and therefore time presses and we have to choose some things and forgo others the future is uncertain, so we have to use our experience and our smarts, whatever those might be, to make the best choices we can Each one of us is in this situation, even as we are also unique individuals in unique circumstances This uniqueness of constitution and circumstance means that we value things differently differently from each other, and differently ourselves from day to day or moment to moment Nothing whatsoever has any intrinsic, fixed value all is subjective and situational.Building out from these ideas, von Mises goes on to explain, logically and systematically, how the free actions of subjective individuals necessarily develop into the phenomena we call markets, and how, if allowed to follow their own course, material and social benefits necessarily flow from them.I don t doubt that some people regard von Mises as dogmatic, and he does write in a forceful, declarative style, but it is not dogma anythan Euclid s Elements is dogma and for the same reason For von Mises insists that the fields of praxeology and catallactics its extension into the realm of production and consumption are purely logical their laws, based on irreducible constants of experience such as time and uncertainty, are inexorable and not falsifiable by experiment Praxeology and catallactics are built up by theorems, exactly like geometry.Again and again while reading this book I found myself confronted with new, provocative ideas In this respect von Mises has few peers In my own reading I can think of only maybe Northrop Frye or Eric Hoffer or Erich Neumann as offering such a density of surprising ideas per page.Is von Mises a capitalist Absolutely Capitalism, in its pure state, is the condition of free individuals engaging with each other without coercion Von Mises deplores violence, and for him socialism is intrinsically violent and should be shunned because it leads inexorably to poverty and slavery things that no human being seeks At the same time, he s well aware that there is plenty of coercion and fraud in supposedly capitalist societies, and to the extent that this is the case, those societies are materially poorer and less free than they might be.I do not feel competent to argue with anything that von Mises is saying, since the depth and range of his thought in these areas is so vastly greater than my own But I did have a couple of questions or proto critiques One was in von Mises assertion that military conscription is a justifiable intrusion on the liberty of individuals Since this to me is a form of slavery, I find it hard to square with his dedication to individual liberty Another issue was in his assertion that all values are subjective he takes it as an axiom that no absolute value can be found My intuition is that this point of view is one that ignores the spiritual dimension of human life In Buddhism, for example, duhkha or felt unease is not the last word in a sense it s only the first word For like von Mises, the Buddha started there but he took that notion in a much different, and a much deeper, direction The Buddha taught liberation from that unease von Mises is only teaching us how to get along with it.But in all, my considered opinion is that Human Action is one of the greatest works of literature of all time And as such it is, I believe, worthy of your time and attention


  2. Clif Clif says:

    Ludwig von Mises is a major contributor to what is called the Austrian School of economics Human Reason is his magnum opus, a thorough going look at the way that the innate human desire to decrease uneasiness is the pursuit for which capitalism is the mechanism.The thesis is simple Human beings take action to make things better for themselves If we were satisfied, there would be no economy But most of us will be cautious in what we do, avoiding as much risk as possible in our attempt to get Ludwig von Mises is a major contributor to what is called the Austrian School of economics Human Reason is his magnum opus, a thorough going look at the way that the innate human desire to decrease uneasiness is the pursuit for which capitalism is the mechanism.The thesis is simple Human beings take action to make things better for themselves If we were satisfied, there would be no economy But most of us will be cautious in what we do, avoiding as much risk as possible in our attempt to get what we want.Certain individuals, the entrepreneurs, however, seek out risk when they see an opportunity to obtain capital the materials needed to produce something at a total cost less than the price that can be obtained by selling the final product what we call profit Of course we all seek individual profit when we do anything even something as simple as moving an object in the living room closer to a chair so we can reach it But the entrepreneur seeks profit in a way that he she hopes will benefit others, why else would people buy what the entrepreneur puts up for sale If the entrepreneur is successful he or she is rewarded If the product does not sell, he or she loses money and the business fails Risk results in reward or failure.Rather than decrying the wealth of those who are successful in taking a risk in the hope of a reward, we should be grateful that such risk takers exist because they are the ones who bring forth the products we desire, who take the time and money and effort to come up with the products and services that have created the huge increase in wealth obtained since capitalism took root in the 17th century.Consumers are not victims of capitalism, but kings of the market that exists only to provide things for which we, those consumers, are willing to pay We end up paying for what we want and not having to pay for what we don t want.Socialism is, according to von Mises, an idealistic fiction that cannot but end in chaos because it has no method of determining prices and is driven by the few who make policy in the name of the many who must accept what they are told is best for society as a whole The man or woman on the street ends up faced with great quantities of products that few want and too few of the products that many want Only by having a capitalist system to determine prices is there any chance for a socialist system to even limp along as the USSR did for several decades Under socialism there is no opportunity to vote with one s money.Not a single chart or graph will be found in this lengthy work and that is in keeping with von Mises insistence that human action cannot be quantified with formulas that provide any guide to future events Human beings decide what is best for them as individuals who evaluate conditions in non quantitative ways.A validation of von Mises concept is presented by modern advertising that has largely thrown out plain speech advocating a product in favor of atmospherics and emotional settings that tug on the non rational side of human thought to sway purchasing decisions.This book is a perfect read at this time 2008 9 of huge interventions by government in financial affairs We hear economists making a case for this or that government action based on what has been learned in the past, particularly in the Great Depression But von Mises argues that history can never repeat itself because the factors that make up any economic situation are too complex forthan a very broad and hence of little use comparison between the past and the present Government actions are broad and blunt and slow acting while the economy changes from minute to minute Like the bull in the china shop, interventions arelikely to create future problems than to solve current ones.In the careful arguments that he makes Human Reason is nothing if not a collection of solid logic von Mises provides the reader with a real education in the meaning of savings, investments, unions, welfare, prices and so muchHe makes short work of Marxism by showing the faulty premises on which it is based.Never one to rant, the author maintains that though there is a certain amount of pain in capitalism to those who lose jobs or investments it isthan offset by the vast increase in wealth for humanity as a whole that it has provided We may not like what the market economy does to us as individuals at certain times in our lives, but we can hardly deny the fabulous abundance of consumer goods that we can have for very little money something that even the kings and queens of old were denied.This book is for the person who wants to know why things are the way they are It is not for casual reading or entertainment but it is intellectually satisfying, highly educational and best of all it makes sense


  3. Patrick Peterson Patrick Peterson says:

    This book is one of the greatest of the 20th century and will endure as a bright beacon of wisdom for centuries to come.I began this book in a curious, but still recommended fashion, in college Because of its size over 800 pages and at times, especially in the beginning, difficulty, I chose to use it as a reference book In going to classes or doing my other reading, if I came across an idea critique of free market capitalism that bothered me, or one which I thought, there is no way the free This book is one of the greatest of the 20th century and will endure as a bright beacon of wisdom for centuries to come.I began this book in a curious, but still recommended fashion, in college Because of its size over 800 pages and at times, especially in the beginning, difficulty, I chose to use it as a reference book In going to classes or doing my other reading, if I came across an idea critique of free market capitalism that bothered me, or one which I thought, there is no way the free market can solve X problem then I simply looked up X in the Table of Contents or Index, then read the passage s by Mises Time and time again, not even having read all the context surrounding each passage, I found a whole new and usually much clearer than anything I had ever read approach to the problem idea In almost every instance I saw new ways of thinking about how the free, voluntary marketplace really could solve X problem s better than passing a law for the government to do something about it, as is the common trait today Often the passage from Mises would show very clearly why the government may have caused the very problem in the first place.But you probably don t believe me.So I just challenge you to try it Human Action will not answer every problem in the world that you come across, but I bet you will come away enriched, intrigued, and amazed, at how logical and consistent, how in touch with reality, and how persuasive Mises is.Go ahead, try it, see what you think The book is on line, for free at several websites There are many editions in paperback and hardcover if you prefer a physical copy The book even has at least two different audio versions with two very competent professional readers, and probablyBut watch out, checking on five or ten social economic political problems Seeing how Mises deals with them might get you to actually read the whole book from cover to cover If you are like me, that ain t such a bad thing.I admit am proud actually to having read it at least four times over 40 years and wanting to do it again What is really a gas is to read in stages 50 150 pages and talk about it in a group that has committed to discussing each part as they go Even better is if you can find a mentor to lead the group, someone who knows the book well enough to help those who have difficulties and point out various key parts I ve been pretty lucky to have participated in three different such groups Each group met about 10 times over the course of almost a year Each group was wonderful and helped me see so many new insights, besides the side benefit of making new friendships.Oh, onething get a copy of the book Mises Made Easier by Percy Greaves to have handy while you read Human Action It is a glossary of the tough or obscure or foreign terms in Human Action and most of the other books by Mises It does not have absolutely all such terms in Human Action defined, but it has a great many, and is quite a bit better and much smaller, than using a big dictionary Dictionaries can have extraneous definitions, and also miss completely some of the key terms.Love to hear back from you on your experience with my suggestions 1 introductory method of getting acquainted with Human Action or2 theserious and thorough discussion group method too I may even know of someone in your area who might like to join you in such a project I have a pretty good worldwide network of friends interested in Mises 3 check out www.facebook.com MisesCelebrationsSo, if you have difficulty finding someone, just send me a message.Enjoy You could be getting into something truly transformational


  4. Brian Michels Brian Michels says:

    There cannot be a serious conversation about economics without Mise s Human Action is the definition of Free Market and delivers the goods for a just economy while cutting down to size any alternative economic system.This is a must read in your lifetime book The sooner the better


  5. Kevin Cole Kevin Cole says:

    I used to hate economics because I thought it related to nothing in my life Certain others then began showing me, in flashes, that I was wrong But it was Mises who not only showed, but to my mind proved economics has everything to do with my life because economics doesn t exist without people behaving as people.Whimsical example If you re in the habit of buying a pound of Brazilian coffee for 1 every week, then you hear on the news that an unexpected freeze has hit Brazil, with analysts ex I used to hate economics because I thought it related to nothing in my life Certain others then began showing me, in flashes, that I was wrong But it was Mises who not only showed, but to my mind proved economics has everything to do with my life because economics doesn t exist without people behaving as people.Whimsical example If you re in the habit of buying a pound of Brazilian coffee for 1 every week, then you hear on the news that an unexpected freeze has hit Brazil, with analysts expecting Brazilian coffee exports to drop, and subsequently Brazilian coffee prices worldwide to rise what do you do Do you wait until next week to buy as much coffee for twice the price No, you buy twice as much coffee now What Mises explains, in elegant layering, is why.Why would I buycoffee now Easy answer To save money if not now, then later But there sto it than that Why would I want to savemoney Because having less money means having less money to buy other things that I want.Common sense Then why do people hate economics Why do people insert morality into a phenomenon human action that is morally neutral We live in a world of scarcity, in which our wants exceed the means to satisfy those wants Because of this, people are ill at ease Yet they can imagine a state where they are less ill at ease and act to achieve it ends by way of means, whereby all things have subjective utility and are chosen on a scale of value..Noranting A good book


  6. Monica Perez Monica Perez says:

    The best work on economics ever written If Mises had been an anarchist he d have been perfect.


  7. Ross Ross says:

    Human Action is considered by many to be the definitive theoretical work for what is known as the Austrian school of economics Reading it was 10 weeks of brain stretching concentration, peppered liberally with moments of personal paradigm shaking, and demystification of how our actions affect each other It enhanced my appreciation of the beautiful way in which life orders itself.In the first section of this masterwork, Mises gets right down to laying a solid epistemological and methodological Human Action is considered by many to be the definitive theoretical work for what is known as the Austrian school of economics Reading it was 10 weeks of brain stretching concentration, peppered liberally with moments of personal paradigm shaking, and demystification of how our actions affect each other It enhanced my appreciation of the beautiful way in which life orders itself.In the first section of this masterwork, Mises gets right down to laying a solid epistemological and methodological foundation for the study of the social sciences The ideas in this section could be Mises most powerful contribution to mankind s body of ideas, and I consider it one of the most fascinating discoveries of my adult life Mises shows the inherent difference between the nature of the subject matter of natural sciences and the social sciences For example, it is not possible to carry out controlled social laboratory experiments in reliably revealing ways This does not in any way de legitimatize the study of the social sciences, but it indicates that sound understanding of them requires asuitable methodological approach than that of the natural sciences In order to make some sense of the virtually infinite white noise of historical data, one must have a theoretical base with which to recognize the relevant data, and use it to draw causal links between events and phenomena This is the context of his introduction of the basic ideas of praxeology, the study of human action The fundamental concepts of praxeology are that actions are performed by individuals, individual action arises from a motive or purpose, and that purpose is the attempt to satisfy some perceived need or want To develop economics using praxeology, we don t have to understand where purposes come from, the complex neurological mechanisms going on, whether they are purely determined by physical law, or if there is some sort of extra physical aspect to desires intentions No matter what sort of truths are discovered or beliefs held along these lines, we still know that there is action, and action is purposeful Mises uses this principle to build his economic theory from the ground up.Mises illustrates that the economic models used bymathematically oriented economic schools of thought are based on an assumption of static resource levels and consumer demands, as well as unchanging technological knowledge It is meaningless to take these models and derive impressive looking mathematical formulae that attempt to describe reality, as reality is always unpredictable, and in flux However, Mises doesn t dispense with these static economic models altogether, but uses them brilliantly as theoretical tools By changing one variable at a time, Mises shows how a given static model relates to the dynamic unpredictability of reality, in which every action of an individual actor aggravates the static state illustrated by the model With this technique, Mises shows the respective ways in which the various types of individual and institutional actions shift the end equilibrium state within these models, which the economy is approaching but never reaching at any given instant of time.As Mises would put it, economics is a value free science It does not aim to tell us what we should strive for, but rather, what is the most effective way to achieve whatever it is that we do strive for I don t agree with every philosophic idea that Mises presents But as Mises elegantly shows, it is not necessary to be lock step with his cosmological or social philosophy in order to understand the great practical applicability of his economic ideas to understanding the ongoing drama of human action and exchange Having said that, in my mind Human Action handily rebuts the major criticisms I have seen of his economic theories and methodological approach In the face of the praxeological base of Mises theoretical work, the criticisms leveled against them usually seem pretty shallow and lacking in any real attempt to understand the fundamental concepts of praxeology.Five years ago if you told me I would be as fascinated by an economics book as I was by Human Action, I would have had a good hearty laugh All through my formal schooling, I found economics a bore at best, and a racket at worst However, I discovered Austrian economics at a time when I was ripe with desire for understanding, and I find the methodologically sound and logically rigorous approach of its major writers consistently elucidating After reading a half dozen or so other books from within this school of thought, a book club that I was participating in took on this treatise, much to my good fortune.Don t make this your first step into the world of theoretical economics, but if you have an understanding of some basic philosophical concepts, have a moderate level of economic literacy, and understand the commitment of time and energy involved in absorbing this masterwork, then I highly recommend Human Action


  8. Robert Taylor Robert Taylor says:

    After having read the first 500 pages 3 times over the course of 2 years, I finally completed my reading of Human Action Without being overly poetic, it is by far the seminal intellectual book of the 20th century, and probably the most important contribution to human knowledge so far.It may seem audacious for me to say something like that, but given that ANY other book dealing with one of the physical sciences like a book on Advanced Quantum Mechanics or any other science for that matter ca After having read the first 500 pages 3 times over the course of 2 years, I finally completed my reading of Human Action Without being overly poetic, it is by far the seminal intellectual book of the 20th century, and probably the most important contribution to human knowledge so far.It may seem audacious for me to say something like that, but given that ANY other book dealing with one of the physical sciences like a book on Advanced Quantum Mechanics or any other science for that matter can only be an expansion of the disciplines that were laid out millenia ago by the Greeks, it becomes easier to understand where I am coming from with my assertion, given that as far as I can see in the literature today, Mises treatise is the first and most encompassing book that deals with the YOUNGEST of all sciences, Economics in a pure absolutist manner.It not only covers an all encompassing defense of Economics as a science, but openly displays the epistemological problems with the science and then features a total deductive formal system of knowledge in which to understand the entire concatenation of human phenomena starting at the beginning and most fundamental aspect of human life In other words, Human Action as a book serves as the first book to attempt and successfully in my opinion explain the Theory of Everything


  9. David David says:

    There are so many problems with this work The fundamental is a rejection of empirical observations He dismisses all attempts to understand Economics by looking at historical data or using mathematics as WRONG He sees all human actions as irreducible and too complex to be understood He then builds an entire argument ostensibly on rationality If you look from a probabilistic world view, you see that each step he takes away from an empirical fact introduces uncertainty Since each claim that i There are so many problems with this work The fundamental is a rejection of empirical observations He dismisses all attempts to understand Economics by looking at historical data or using mathematics as WRONG He sees all human actions as irreducible and too complex to be understood He then builds an entire argument ostensibly on rationality If you look from a probabilistic world view, you see that each step he takes away from an empirical fact introduces uncertainty Since each claim that is pilled on top, now multiples the uncertainty Given the length of this book, you can make a mathematical argument that the certainty of the authors conclusions are wrong, would approach 100% given the methodology The author argues against taking on beliefs based on authority, but what else is this book He makes all kinds of assertions about the basic nature of man, and human prehistory, which I don t believe line up with either contemporary or modern understandings of either subject Clearly this is written by a man who sees a totalitarian communist everywhere he looks What troubles me, is that I see so much of modern thought based on these assumptions about the nature of man I think the value of this book is getting to see the rotten foundations of this mode of thought


  10. Jacob Aitken Jacob Aitken says:

    All deductive systems are dangerous if formulated incorrectly Their appeal lies in their power, and Mises s system is powerful indeed Mises advances Praxeology, an economic doctrine emerging from the Classical School when it was realized that human action and not the inherent value of an object is what drove economics Mises 3 Since our knowledge is limited, our choices will always have an element of uncertainty.Thus, Mises can advance his main theorem Human action is purposeful action And All deductive systems are dangerous if formulated incorrectly Their appeal lies in their power, and Mises s system is powerful indeed Mises advances Praxeology, an economic doctrine emerging from the Classical School when it was realized that human action and not the inherent value of an object is what drove economics Mises 3 Since our knowledge is limited, our choices will always have an element of uncertainty.Thus, Mises can advance his main theorem Human action is purposeful action And the second is like unto it, All action aims at a removing or lessening a present uneasiness Action does not measure utility or value it chooses between alternatives When I choose between unit a and unit b, I am not choosing between the total stock of either, but simply between the marginal values of both a and b And this leads to the key gain of the Austrian school the doctrine of marginal utility The marginal utility of a good decreases as its supply increases Whenever I get a good, I devote it to the most important end As I getgoods, I devote them to lesser ends Obviously, this applies to subjective use value and not a thing s perceived objective value This allows the Austrian School to avoid the hang ups which plagued all of the Classical Economists from Smith to Ricardo to even Marx.Not directly, but indirectly related to the above is another axiom Because man is an acting man, situations change Prices will change There cannot be a universal set price Past prices are a guide to future prices.Another axiomMises has several challenging chapters on interest and the Industrial Revolution He argues that interestCriticisms Mises s Utilitarianism is subject to some devastating defeaters, mainly Betrand Russell s the only way to justify an action is in light of its consequences, but the only way to justify whether those consequences are good are in light of the consequences consequences, and so on to infinity.Fortunately, most of his system is salvageable from that