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Human Action

A Treatise On Economics

By Ludwig von Mises

Originally published in 1940.
Fourth edition, published by the Bettina Bien Greaves, FEE, and Fox & Wilkes, 1996.

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"For a long time men failed to realize that the transition from the classical theory of value to the subjective theory of value was much more than the substitution of a more satisfactory theory of market exchange for a less satisfactory one. The general theory of choice and preference goes far beyond the horizon which encompassed the scope of economic problems as circumscribed by the economists from Cantillon, Hume, and Adam Smith down to John Stuart Mill. It is much more than merely a theory of the "economic side" of human endeavors and of man's striving for commodities and an improvement in his material well-being. It is the science of every kind of human action. Choosing determines all human decisions. In making his choice man chooses not only between various material things and services. All human values are offered for option. All ends and all means, both material and ideal issues, the sublime and the base, the noble and the ignoble, are ranged in a single row and subjected to a decision which picks out one thing and sets aside another. Nothing that men aim at or want to avoid remains outside of this arrangement into a unique scale of gradation and preference. The modern theory of value widens the scientific horizon and enlarges the field of economic studies. Out of the political economy of the classical school emerges the general theory of human action, praxeology[1]. The economic or catallactic problems [2] are embedded in a more general science, and can no longer be severed from this connection. No treatment of economic problems proper can avoid starting from acts of choice; economics becomes a part, although the hitherto best elaborated part, of a more universal science, praxeology."

Table of Contents

Foreword to the 4th edition by Bettina B. Greaves (p. v)


* Economics and Praxeology (p. 1)
* The Epistemological Problem of a General Theory of Human Action (p. 4)
* Economic Theory and the Practice of Human Action (p. 7)
* Resume (p. 10)


Chapter I. Acting Man

* Purposeful Action and Animal Reaction (p. 11)
* The Prerequisites of Human Action (p. 13)
* Human Action as an Ultimate Given (p. 17)
* Rationality and Irrationality; Subjectivism and Objectivity of Praxeological Research (p. 19)
* Causality as a Requirement of Action (p. 22)
* The Alter Ego (p. 23)

Chapter II. The Epistemological Problems of the Sciences of Human Action

* Praxeology and History (p. 30)
* The Formal and Aprioristic Character of Praxeology (p. 32)
* The A Priori and Reality (p. 38)
* The Principle of Methodological Individualism (p. 41)
* The Principle of Methodological Singularism (p. 44)
* The Individual and Changing Features of Human Action (p. 46)
* The Scope and the Specific Method of History (p. 47)
* Conception and Understanding (p. 51)
* On Ideal Types (p. 59)
* The Procedure of Economics (p. 64)
* The Limitations on Praxeological Concepts (p. 69)

Chapter III. Economics and the Revolt Against Reason

* The Revolt Against Reason (p. 72)
* The Logical Aspect of Polylogism (p. 75)
* The Praxeological Aspect of Polylogism (p. 76)
* Racial Polylogism (p. 84)
* Polylogism and Understanding (p. 86)
* The Case for Reason (p. 89)

Chapter IV. A First Analysis of the Category of Action

* Ends and Means (p. 92)
* The Scale of Value (p. 94)
* The Scale of Needs (p. 96)
* Action as an Exchange (p. 97)

Chapter V. Time

* Time as a Praxeological Factor (p. 99)
* Past, Present, and Future (p. 100)
* The Economization of Time (p. 101)
* The Temporal Relation Between Actions (p. 102)

Chapter VI. Uncertainty

* Uncertainty and Acting (p. 105)
* The Meaning of Probability (p. 106)
* Class Probability (p. 107)
* Case Probability (p. 110)
* Numerical Evaluation of Case Probability (p. 113)
* Betting, Gambling, and Playing Games (p. 115)
* Praxeological Prediction (p. 117)

Chapter VII. Action Within the World

* The Law of Marginal Utility (p. 119)
* The Law of Returns (p. 127)
* Human Labor as a Means (p. 131)
* Production (p. 140)


Chapter VIII. Human Society

* Human Cooperation (p. 143)
* A Critique of the Holistic and Metaphysical View of Society (p. 145)
* The Division of Labor (p. 157)
* The Ricardian Law of Association (p. 159)
* The Effects of the Division of Labor (p. 164)
* The Individual Within Society (p. 165)
* The Great Society (p. 169)
* The Instinct of Aggression and Destruction (p. 170)

Chapter IX. The Role of Ideas

* Human Reason (p. 177)
* World View and Ideology (p. 178)
* Might (p. 187)
* Meliorism and the Idea of Progress (p. 191)

Chapter X. Exchange Within Society

* Autistic Exchange and Interpersonal Exchange (p. 194)
* Contractual Bonds and Hegemonic Bonds (p. 195)
* Calculative Action (p. 198)


Chapter XI. Valuation Without Calculation

* The Gradation of the Means (p. 200)
* The Barter-Fiction of the Elementary Theory of Value and Prices (p. 201)
* The Problem of Economic Calculation (p. 206)
* Economic Calculation and the Market (p. 209)

Chapter XII. The Sphere of Economic Calculation

* The Character of Monetary Entries (p. 212)
* The Limits of Economic Calculation (p. 214)
* The Changeability of Prices (p. 217)
* Stabilization (p. 219)
* The Root of the Stabilization Idea (p. 223)

Chapter XIII. Monetary Calculation as a Tool of Action

* Monetary Calculation as a Method of Thinking (p. 229)
* Economic Calculation and the Science of Human Action (p. 231)


Chapter XIV. The Scope and Method of Catallactics

* The Delimitation of Catallactic Problems (p. 232)
* The Method of Imaginary Constructions (p. 236)
* The Pure Market Economy (p. 237)
* The Autistic Economy (p. 243)
* The State of Rest and the Evenly Rotating Economy (p. 244)
* The Stationary Economy (p. 250)
* The Integration of Catallactic Functions (p. 251)

Chapter XV. The Market

* The Characteristics of the Market Economy (p. 257)
* Capital Goods and Capital (p. 259)
* Capitalism (p. 264)
* The Sovereignty of the Consumers (p. 269)
* Competition (p. 273)
* Freedom (p. 279)
* Inequality of Wealth and Income (p. 287)
* Entrepreneurial Profit and Loss (p. 289)
* Entrepreneurial Profits and Losses in a Progressing (p. 294)
* Promoters, Managers, Technicians, and Bureaucrats (p. 303)
* The Selective Process (p. 311)
* The Individual and the Market (p. 315)
* Business Propaganda (p. 320)
* The "Volkswirtschaft" (p. 323)

Chapter XVI. Prices

* The Pricing Process (p. 327)
* Valuation and Appraisement (p. 331)
* The Prices of the Goods of Higher Orders (p. 333)
* Cost Accounting (p. 339)
* Logical Catallactics Versus Mathematical Catallactics (p. 350)
* Monopoly Prices (p. 357)
* Good Will (p. 379)
* Monopoly of Demand (p. 383)
* Consumption as Affected by Monopoly Prices (p. 384)
* Price Discrimination on the Part of the Seller (p. 388)
* Price Discrimination on the Part of the Buyer (p. 391)
* The Connexity of Prices (p. 391)
* Prices and Income (p. 393)
* Prices and Production (p. 394)
* The Chimera of Nonmarket Prices (p. 395)

Chapter XVII. Indirect Exchange

* Media of Exchange and Money (p. 398)
* Observations on Some Widespread Errors (p. 398)
* Demand for Money and Supply of Money (p. 401)
* The Determination of the Purchasing Power of Money (p. 408)
* The Problem of Hume and Mill and the Driving Force of Money (p. 416)
* Cash-Induced and Goods-Induced Changes in Purchasing Power (p. 419)
* Monetary Calculation and Changes in Purchasing Power (p. 424)
* The Anticipation of Expected Changes in Purchasing Power (p. 426)
* The Specific Value of Money (p. 428)
* The Import of the Money Relation (p. 430)
* The Money-Substitutes (p. 432)
* The Limitation on the Issuance of Fiduciary Media (p. 434)
* The Size and Composition of Cash Holdings (p. 448)
* Balances of Payments (p. 450)
* Interlocal Exchange Rates (p. 452)
* Interest Rates and the Money Relation (p. 458)
* Secondary Media of Exchange (p. 462)
* The Inflationist View of History (p. 466)
* The Gold Standard (p. 471)

Chapter XVIII. Action in the Passing of Time

* Perspective in the Valuation of Time Periods (p. 479)
* Time Preference as an Essential Requisite of Action (p. 483)
* Capital Goods (p. 490)
* Period of Production, Waiting Time, and Period of Provision (p. 493)
* The Convertibility of Capital Goods (p. 503)
* The Influence of the Past Upon Action (p. 505)
* Accumulation, Maintenance and Consumption of Capital (p. 514)
* The Mobility of the Investor (p. 517)
* Money and Capital; Saving and Investment (p. 520)

Chapter XIX. Interest

* The Phenomenon of Interest (p. 524)
* Originary Interest (p. 526)
* The Height of Interest Rates (p. 532)
* Originary Interest in the Changing Economy (p. 534)
* The Computation of Interest(p. 536)

Chapter XX. Interest, Credit Expansion, and the Trade Cycle

* The Problems (p. 538)
* The Entrepreneurial Component in the Gross Market Rate of Interest (p. 539)
* The Price Premium as a Component of the Gross Market Rate of Interest (p. 541)
* The Loan Market (p. 545)
* The Effects of Changes in the Money Relation Upon Originary Interest (p. 548)
* The Gross Market Rate of Interest as Affected by Inflation and Credit Expansion (p. 550)
* The Gross Market Rate of Interest as Affected by Deflation and Credit Contraction (p. 566)
* The Monetary or Circulation Credit Theory of the Trade Cycle (p. 571)
* The Market Economy as Affected by the Recurrence of the Trade Cycle (p.575)

Chapter XXI. Work and Wages

* Introversive Labor and Extroversive Labor (p. 587)
* Joy and Tedium of Labor (p. 588)
* Wages (p. 592)
* Catallactic Unemployment (p. 598)
* Gross Wage Rates and Net Wage Rates (p. 600)
* Wages and Subsistence (p. 602)
* The Supply of Labor as Affected by the Disutility of Labor (p. 611)
* Wage Rates as Affected by the Vicissitudes of the Market (p. 624)
* The Labor Market (p. 625)

Chapter XXII. The Nonhuman Original Factors of Production

* General Observations Concerning the Theory of Rent (p. 635)
* The Time Factor in Land Utilization (p. 637)
* The Submarginal Land (p. 640)
* The Land as Standing Room (p. 642)
* The Prices of Land (p. 643)

Chapter XXIII. The Data of the Market

* The Theory and the Data (p. 646)
* The Role of Power (p. 647)
* The Historical Role of War and Conquest (p. 649)
* Real Man as a Datum (p. 651)
* The Period of Adjustment (p. 652)
* The Limits of Property Rights and the Problems of External Costs and External Economies (p. 654)

Chapter XXIV. Harmony and Conflict of Interests

* The Ultimate Source of Profit and Loss on the Market (p. 664)
* The Limitation of Offspring (p. 667)
* The Harmony of the "Rightly Understood" Interests (p. 673)
* Private Property (p. 682)
* The Conflicts of Our Age (p. 684)


Chapter XXV. The Imaginary Construction of a Socialist Society

* The Historical Origin of the Socialist Idea (p. 689)
* The Socialist Doctrine (p. 693)
* The Praxeological Character of Socialism (p. 695)

Chapter XXVI. The Impossibility of Economic Calculation Under Socialism

* The Problem (p. 698)
* Past Failures to Conceive the Problem (p.701)
* Recent Suggestions for Socialist Economic Calculation (p. 703)
* Trial and Error (p. 704)
* The Quasi-market (p. 705)
* The Differential Equations of Mathematical Economics (p. 710)


Chapter XXVII. The Government and the Market

* The Idea of a Third System (p. 716)
* The Intervention (p. 717)
* The Delimitation of Governmental Functions (p. 719)
* Righteousness as the Ultimate Standard of the Individual's Actions (p. 724)
* The Meaning of Laissez Faire (p. 730)
* Direct Government Interference with Consumption (p. 732)

Chapter XXVIII. Interference by Taxation

* The Neutral Tax (p. 737)
* The Total Tax (p. 738)
* Fiscal and Nonfiscal Objectives of Taxation (p. 740)
* The Three Classes of Tax Interventionism (p. 741)

Chapter XXIX. Restriction of Production

* The Nature of Restriction (p. 743)
* The Price of Restriction (p. 744)
* Restriction as a Privilege (p. 748)
* Restriction as an Economic System (p. 755)

Chapter XXX. Interference with the Structure of Prices

* The Government and the Autonomy of the Market (p. 758)
* The Market's Reaction to Government Interference (p. 762)
* Minimum Wage Rates (p. 769)

CHAPTER XXXI. Currency and Credit Manipulation

* The Government and the Currency (p. 780)
* The Interventionist Aspect of Legal Tender Legislation (p. 783)
* The Evolution of Modern Methods of Currency Manipulation (p. 786)
* The Objectives of Currency Devaluation (p. 789)
* Credit Expansion (p. 793)
* Foreign Exchange Control and Bilateral Exchange Agreements (p. 800)

Chapter XXXII. Confiscation and Redistribution

* The Philosophy of Confiscation (p. 804)
* Land Reform (p. 805)
* Confiscatory Taxation (p. 806)

Chapter XXXIII. Syndicalism and Corporativism

* The Syndicalist Idea (p. 812)
* The Fallacies of Syndicalism (p. 813)
* Syndicalist Elements in Popular Policies (p. 815)
* Guild Socialism and Corporativism (p. 816)

Chapter XXXIV. The Economics of War

* Total War (p. 821)
* War and the Market Economy (p. 825)
* War and Autarky (p. 828)
* The Futility of War (p. 831)

Chapter XXXV. The Welfare Principle Versus the Market Principle

* The Case Against the Market Economy (p. 833)
* Poverty (p. 835)
* Inequality (p. 840)
* Insecurity (p. 851)
* Social Justice (p. 853)

Chapter XXXVI. The Crisis of Interventionism

* The Harvest of Interventionism (p. 855)
* The Exhaustion of the Reserve Fund (p. 855)
* The End of Interventionism (p. 858)

Chapter XXXVII. The Nondescript Character of Economics

* The Singularity of Economics (p. 862)
* Economics and Public Opinion (p. 863)
* The Illusion of the Old Liberals (p. 864)


Chapter XXXVIII. The Place of Economics in Learning

* The Study of Economics (p. 867)
* Economics as a Profession (p. 869)
* Forecasting as a Profession (p. 870)
* Economics and the Universities (p. 872)
* General Education and Economics (p. 876)
* Economics and the Citizen (p. 878)
* Economics and Freedom (p. 879)

Chapter XXXIX. Economics and the Essential Problems of Human Existence

* Science and Life (p. 881)
* Economics and Judgments of Value (p. 882)
* Economic Cognition and Human Action (p. 885)


Criticism & Responses to Human Action

Reflections on Human Action after 50 Years
Vernon L. Smith, Cato Journal, Vol. 19, No. 2, Fall 1999

The Methodology of Human Action
Lawrence H. White, Cato Journal, Vol. 19, No. 2, Fall 1999

Related Books

Austrian Economics: An Anthology
Bettina Bien Greaves, FEE, 1996

Essays on Liberty: Volume 1
Foundation for Economic Education, 1952

Essentials of Economics: A Brief Survey of Principles and Policies
Faustino Ballvé, FEE, 1994

Man, Economy, and the State, with Power and Market
Murray Rothbard, Ludwig von Mises Institute, 2004

Education for Freedom

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