The Online Library of Liberty

A project of Liberty Fund, Inc.

• Editor’s Note
• Foreword to the Fourth Edition
• Foreword to the Third Edition
• Introduction
• 1: Economics and Praxeology
• 2: The Epistemological Problem of a General Theory of Human Action
• 3: Economic Theory and the Practice of Human Action
• 4: Résumé
• Part 1. Human Action
• Chapter 1: Acting Man
• 1: Purposeful Action and Animal Reaction
• 2: The Prerequisites of Human Action
• On Happiness
• On Instincts and Impulses
• 3: Human Action As an Ultimate Given
• 4: Rationality and Irrationality; Subjectivism and Objectivity of Praxeological Research
• 5: Causality As a Requirement of Action
• 6: The Alter Ego
• On the Serviceableness of Instincts
• The Absolute End
• Vegetative Man
• Chapter 2: The Epistemological Problems of the Sciences of Human Action
• 1: Praxeology and History
• 2: The Formal and Aprioristic Character of Praxeology
• The Alleged Logical Heterogeneity of Primitive Man
• 3: The a Priori and Reality
• 4: The Principle of Methodological Individualism
• I and We
• 5: The Principle of Methodological Singularism
• 6: The Individual and Changing Features of Human Action
• 7: The Scope and the Specific Method of History
• 8: Conception and Understanding
• Natural History and Human History
• 9: On Ideal Types
• 10: The Procedure of Economics
• 11: The Limitations On Praxeological Concepts
• Chapter 3: Economics and the Revolt Against Reason
• 1: The Revolt Against Reason
• 2: The Logical Aspect of Polylogism
• 3: The Praxeological Aspect of Polylogism
• 4: Racial Polylogism
• 5: Polylogism and Understanding
• 6: The Case For Reason
• Chapter 4: A First Analysis of the Category of Action
• 1: Ends and Means
• 2: The Scale of Value
• 3: The Scale of Needs
• 4: Action As an Exchange
• Chapter 5: Time
• 1: Time As a Praxeological Factor
• 2: Past, Present, and Future
• 3: The Economization of Time
• 4: The Temporal Relation Between Actions
• Chapter 6: Uncertainty
• 1: Uncertainty and Acting
• 2: The Meaning of Probability
• 3: Class Probability
• 4: Case Probability
• 5: Numerical Evaluation of Case Probability
• 6: Betting, Gambling, and Playing Games
• 7: Praxeological Prediction
• Chapter 7: Action Within the World
• 1: The Law of Marginal Utility
• 2: The Law of Returns
• 3: Human Labor As a Means
• Immediately Gratifying Labor and Mediately Gratifying Labor
• The Creative Genius
• 4: Production
• Part 2: Action Within the Framework of Society
• Chapter 8: Human Society
• 1: Human Cooperation
• 2: A Critique of the Holistic and Metaphysical View of Society
• Praxeology and Liberalism
• Liberalism and Religion
• 3: The Division of Labor
• 4: The Ricardian Law of Association
• Current Errors Concerning the Law of Association
• 5: The Effects of the Division of Labor
• 6: The Individual Within Society
• The Fable of the Mystic Communion
• 7: The Great Society
• 8: The Instinct of Aggression and Destruction
• Current Misinterpretations of Modern Natural Science, Especially of Darwinism
• Chapter 9: The Role of Ideas
• 1: Human Reason
• 2: World View and Ideology
• The Fight Against Error
• 3: Might
• Traditionalism As an Ideology
• 4: Meliorism and the Idea of Progress
• Chapter 10: Exchange Within Society
• 1: Autistic Exchange and Interpersonal Exchange
• 2: Contractual Bonds and Hegemonic Bonds
• 3: Calculative Action
• Part 3: Economic Calculation
• Chapter 11: Valuation Without Calculation
• 1: The Gradation of the Means
• 2: The Barter-fiction of the Elementary Theory of Value and Prices
• The Theory of Value and Socialism
• 3: The Problem of Economic Calculation
• 4: Economic Calculation and the Market
• Chapter 12: The Sphere of Economic Calculation
• 1: The Character of Monetary Entries
• 2: The Limits of Economic Calculation
• 3: The Changeability of Prices
• 4: Stabilization
• 5: The Root of the Stabilization Idea
• Chapter 13: Monetary Calculation As a Tool of Action
• 1: Monetary Calculation As a Method of Thinking
• 2: Economic Calculation and the Science of Human Action

2

The Scale of Value

Acting man chooses between various opportunities offered for choice. He prefers one alternative to others.

It is customary to say that acting man has a scale of wants or values in his mind when he arranges his actions. On the basis of such a scale he satisfies what is of higher value, i.e., his more urgent wants, and leaves unsatisfied what is of lower value, i.e., what is a less urgent want. There is no objection to such a presentation of the state of affairs. However, one must not forget that the scale of values or wants manifests itself only in the reality of action. These scales have no independent existence apart from the actual behavior of individuals. The only source from which our knowledge concerning these scales is derived is the observation of a man’s actions. Every action is always in perfect agreement with the scale of values or wants because these scales are nothing but an instrument for the interpretation of a man’s acting.

Ethical doctrines are intent upon establishing scales of value according to which man should act but does not necessarily always act. They claim for themselves the vocation of telling right from wrong and of advising man concerning what he should aim at as the supreme good. They are normative disciplines aiming at the cognition of what ought to be. They are not neutral with regard to facts; they judge them from the point of view of freely adopted standards.

This is not the attitude of praxeology and economics. They are fully aware of the fact that the ultimate ends of human action are not open to examination from any absolute standard. Ultimate ends are ultimately given, they are purely subjective, they differ with various people and with the same people at various moments in their lives. Praxeology and economics deal with the means for the attainment of ends chosen by the acting individuals. They do not express any opinion with regard to such problems as whether or not sybaritism is better than asceticism. They apply to the means only one yardstick, viz., whether or not they are suitable to attain the ends at which the acting individuals aim.

The notions of abnormality and perversity therefore have no place in economics. It does not say that a man is perverse because he prefers the disagreeable, the detrimental, and the painful to the agreeable, the beneficial, and the pleasant. It says only that he is different from other people; that he likes what others detest; that he considers useful what others want to avoid; that he takes pleasure in enduring pain which others avoid because it hurts them. The polar notions normal and perverse can be used anthropologically for the distinction between those who behave as most people do and outsiders and atypical exceptions; they can be applied biologically for the distinction between those whose behavior preserves the vital forces and those whose behavior is self-destructive; they can be applied in an ethical sense for the distinction between those who behave correctly and those who act otherwise than they should. However, in the frame of a theoretical science of human action, there is no room for such a distinction. Any examination of ultimate ends turns out to be purely subjective and therefore arbitrary.

Value is the importance that acting man attaches to ultimate ends. Only to ultimate ends is primary and original value assigned. Means are valued derivatively according to their serviceableness in contributing to the attainment of ultimate ends. Their valuation is derived from the valuation of the respective ends. They are important for man only as far as they make it possible for him to attain some ends.

Value is not intrinsic, it is not in things. It is within us; it is the way in which man reacts to the conditions of his environment.

Neither is value in words and doctrines. It is reflected in human conduct. It is not what a man or groups of men say about value that counts, but how they act. The oratory of moralists and the pompousness of party programs are significant as such. But they influence the course of human events only as far as they really determine the actions of men.