Human Action: A Treatise on Economics is a work by the Austrian economist and philosopher Ludwig von Mises. Widely considered Mises' magnum opus, it presents the case for laissez-faire capitalism based on praxeology, or rational investigation of human decision-making. It rejects positivism within economics. It defends an a priori epistemology and underpins praxeology with a foundation of methodological individualism and speculative laws of apodictic certainty. Mises argues that the free-market economy not only outdistances any government-planned system, but ultimately serves as the foundation of civilization itself.
Nationalökonomie: Theorie des Handelns und Wirtschaftens is the 1940 German-language predecessor to Human Action.
Synopsis
Mises sees economic calculation as the most fundamental problem in economics. The economic problem to Mises is that of action. Man acts to dispel feelings of uneasiness, but can only succeed in acting if he comprehends causal connections between the ends that he wants to satisfy, and available means. The fact that man resides in a world of causality means that he faces definite choices as to how he satisfies his ends. Human action is an application of human reason to select the best means of satisfying ends. The reasoning mind evaluates and grades different options. This is economic calculation.
Economic calculation is common to all people. Mises insisted that the logical structure of human minds is the same for everybody. Of course, this is not to say that all minds are the same. Man makes different value judgments and possess different data, but logic is the same for all. Human reason and economic calculation have limitations, but Mises sees no alternative to economic calculation as a means of using scarce resources to improve our well being.
Human action concerns dynamics. The opposite to action is not inaction. Rather, the opposite to action is contentment. In a fully contented state there would be no action, no effort to change the existing order of things (which might be changed by merely ceasing to do some things). Man acts because he is never fully satisfied, and will never stop because he can never be fully satisfied. This might seem like a simple point, but modern economics is built upon ideas of contentment-equilibrium analysis and indifference conditions. It is true that some economists construct models of dynamic equilibrium, but the idea of a dynamic equilibrium is oxymoronic to Mises. An actual equilibrium may involve a recurring cycle, but not true dynamics. True dynamics involve non-repeating evolutionary change.
Mises explains dynamic change in terms of "the plain state of rest." A final state of rest involves perfect plans to fully satisfy human desires. A plain state of rest is a temporary and imperfect equilibrium deriving from past human plans. Though any set of plans is imperfect, to act means attempting to improve each successive set of plans. Movement from one plain state of rest to another represents the process of change, either evolutionary or devolutionary.
Mises links progress and profits. Profits earned from voluntary trades are the indicator of economic success. It is monetary calculation of profits that indicates whether an enterprise has generated a net increase in consumer well being over true economic costs. The close association that Mises draws between economic calculation and monetary calculation leads him to conclude that market prices (upon which monetary profits are calculated) are indispensable to progress in bettering the human condition. Without markets there are no prices, and without prices there is no economic calculation. Monetary calculation is vitally important.
Mises stresses the importance of entrepreneurship because only entrepreneurs actually do monetary calculation. This fact puts entrepreneurs at the center of all progress (and failure). Entrepreneurs who estimate costs more correctly than their rivals earn high profits while also serving consumers. Such men rise to top positions in industry. Entrepreneurs who err seriously in their calculations experience financial losses and cease to direct production. Mises described this market test of entrepreneurial skills as the only process of trial and error that really matters. The concepts of monetary calculation, financial speculation, and entrepreneurship form the basis for the von Mises critique of socialism.
Publishing history
The German-language predecessor to Human Action, titled Nationalökonomie: Theorie des Handelns und Wirtschaftens, first appeared in 1940. Human Action was not a direct translation of the earlier work, but used its general framework and expanded on it.
Yale University Press published the first edition of Human Action in 1949. A revised and expanded second edition came out in 1963. This edition, also by the Yale University Press, was full of typographical errors, and another one had to be printed quickly afterwards by another editor. Henry Regnery published the revised third edition in 1966.
A posthumous fourth edition was published in 1996, with revisions by Bettina B. Greaves. It is available in hardback single (Liberty Fund, ISBNÂ 0-86597-630-9) and four-volume paperback editions (Liberty Fund, ISBNÂ 0-86597-631-7), as well as single-volume paperback (Fox & Wilkes, ISBNÂ 0-930073-18-5). In 1998, the Ludwig von Mises Institute brought back the first edition as the "Scholar's Edition" (ISBNÂ 0-945466-24-2). In 2010, the Institute reissued the first edition as a portable "Pocket Edition" (ISBNÂ 978-1-61016-145-9).
Translations
- In Italian (1959) as L'azione umana : trattato di economia, Torino: UTET OCLC 799056504
- In Chinese (1976) as 人的行為 : ç¶"æ¿Ÿå¸ç¡è«– / Ren de xing wei : jing ji xue yan lun by å°æ¹¾éŠ€è¡Œç¶"æ¿Ÿç¡ç©¶å®¤, Taiwan yin hang jin ji yan jiu shi, (Bank of Taiwan) OCLC 33160039
- In French (1985) as L’action humaine: Traité d’économie. Libre échange. Paris : PUF, 1985. ISBN 2-13-038598-2
- In Portuguese (1990) as Ação humana: Um tratado de economia. Rio de Janeiro: Instituto Liberal. ISBN 978-85-62816-05-5 ISRN 0-8092-9743-4.
- In Spanish (1995) as La acción humana: tratado de economÃa. Madrid: Unión Editorial D.L., ISBN 9788472092921 OCLC 433628807
- In Czech (2006) as Lidské jednánÃ: Pojednánà o ekonomii. Prague: Liberálnà institut. ISBN 80-86389-45-6.
- In Polish (2007) as Ludzkie działanie: traktat o ekonomii ISBN 9788392616009 OCLC 749787775
- In Turkish (2008) as İnsan eylemi: iktisat üzerine bir inceleme, Ankara: Liberte Yayınları. ISBN 9789756201411 OCLC 434438770
- In Japanese (2008) as ãƒ'ューマン・アクション: 人é–"行為ã®çµŒæ¸ˆå¦ / HyÅ«man akushon: Ningen kÅi no keizaigaku, 春秋社, TÅkyÅ: ShunjÅ«sha. ISBN 9784393621837 OCLC 675632995.
- In Dutch (2016) as Het menselijk handelen: een economische verhandeling, Amsterdam: Stichting Pierson & Templeton. ISBNÂ 9789082480405.
See also
- Action theory
- Demonstrated preference
- Methodenstreit
- Man, Economy, and State
References
External links
- 1996 edition: Full text in HTML or PDF
- 1949 edition (reissued 1998): Full text in PDF
- Nationalökonomie, 1940 edition: Full text in PDF
- Audio files for Forewords, Introduction, and all chapters: Media File
- Study Guide in PDF
- Human Action at Goodreads
