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

Economic Calculation and the Science of Human Action

The evolution of capitalist economic calculation was the necessary condition for the establishment of a systematic and logically coherent science of human action. Praxeology and economics have a definite place in the evolution of human history and in the process of scientific research. They could only emerge when acting man had succeeded in creating methods of thinking that made it possible to calculate his actions. The science of human action was at the beginning merely a discipline dealing with those actions which can be tested by monetary calculation. It dealt exclusively with what we may call the orbit of economics in the narrower sense, that is, with those actions which within a market society are transacted by the intermediary of money. The first steps on the way to its elaboration were odd investigations concerning currency, moneylending, and the prices of various goods. The knowledge conveyed by Gresham’s Law, the first crude formulations of the quantity theory of money—such as those of Bodin and Davanzati—and the Law of Gregory King mark the first dawn of the cognition that regularity of phenomena and inevitable necessity prevail in the field of action. The first comprehensive system of economic theory, that brilliant achievement of the classical economists, was essentially a theory of calculated action. It drew implicitly the borderline between what is to be considered economic and what extra-economic along the line which separates action calculated in monetary terms from other action. Starting from this basis, the economists were bound to widen step by step the field of their studies until they finally developed a system dealing with all human choices, a general theory of action.