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P - Ludwig von Mises, Human Action: A Treatise on Economics, vol. 4 (LF ed.) 
Human Action: A Treatise on Economics, in 4 vols., ed. Bettina Bien Greaves (Indianapolis: Liberty Fund, 2007). Vol. 4.
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Panphysicalism. The theory that holds that all human ideas and acts are determined by physical laws; “that the procedures of physics are the only scientific method of all branches of science. It denies that any essential differences exist between the natural sciences and the sciences of human action.”
Panslavism. A nineteenth-century nationalist movement of various Slavonic groups who resented their political rule by, and economic subservience to, the German and Magyar nobility. The movement envisioned the creation of a federal government of all Slavonic nations, under which the land would be divided equally among the peasants who would elect their local governments. It reached its height in the Revolutions of 1848, after which it subsided into a literary movement to which Russian autocrats appealed in their attempts to extend Russian influence and absolutism into Eastern Europe and the Balkans. One of the main obstacles in the realization of the Panslav program was the Russian oppression of the Poles. Another difficulty was the religious conflict between those who acknowledged the supremacy of the Pope and those who belonged to the Greek Orthodox Church.
Par, Parity. In reference to a monetary unit, par or parity is the amount of precious metal, gold or silver, which has been officially designated as the legal equivalence of the monetary unit.
In reference to foreign exchange, par or parity is the official or established ratio between the amount of a precious metal, usually gold, which is the legal equivalent of the monetary unit of one country and the amount of the same precious metal which is the legal equivalent of the monetary unit of another country. For example, the British pound sterling in 1949 was legally defined as the equivalent of 2.8 times the amount of gold that was the then legal equivalent of the American dollar. So the par or parity for the pound sterling was then stated as $2.80.
Paradisiac. Pertaining to or resembling paradise.
Paralogism. Faulty reasoning. In formal logic, a fallacy in which the conclusion does not follow from the premises.
Parameter. In equations, an arbitrary constant quantity which can have different values in otherwise similar equations. An example would be the “time parameter,” an arbitrarily selected time period which must remain constant for any one set of simultaneous equations; but which may be varied for other sets of similar equations. In uses other than in equations, parameter has different meanings which have no reference to “mathematical economics.”
Paramour. Lover, wooer, mistress; esp. one loved illicitly without the rights of husband or wife.
Pariahs, class of. Members of a very low caste, in the former caste systems of Burma and India, usually relegated to the least desirable occupations such as domestic servants and hired farmhands. The term has become a synonym for outcasts who are excluded from normal social activities.
Parvenus, (French). Upstarts; those newly risen in position, prominence or wealth, frequently by chance or good luck.
Pasha, (Turkish). High rank Turkish official who represented the Sultan’s temporal power in a specified area. Formerly, a prince of the blood but later applied as a title after the names of all higher civil and military officials.
Pathological. Due to, or related to, disease.
Pathology. The science of diseases and their medical treatment; the totality of knowledge concerning diseases including their origins, progress, consequences and cures.
Patrie, (French). Native land; fatherland.
Patronus, (Latin). The former master of a freed slave who was still entitled to receive some services from his former slave, for whom he continued to serve as a sort of paternal advisor, protector and defender.
Peculium, (Latin). Originally the savings or property held by a Roman slave by permission of his master. Later, it often included a share of his production and was protected by law. Slaves often used their peculium to buy their freedom from their master.
Pecunia pecuniam parere non potest, (Latin). Money cannot beget money.
Peddling. Selling from place to place; small business retailing of goods or trifles.
Peel’s Act of 1844. The British Bank Charter Act, named after its sponsor and political leader of the Currency School (q.v.), the first lord of the treasury and prime minister, Sir Robert Peel (1788–1850). The Act regulated the operation of the then privately owned Bank of England until World War I. The Bank was divided into two separate departments, one for note issue and the other for deposit banking operations. Further increases in the note issue were limited to those issued against gold deposits. This provision, which prevented the further issue of fiduciary media in the form of banknotes, was suspended three times (1847, 1857 and 1866) before World War I (1914–18). The gold requirements did not apply to the Banking Department which greatly expanded its deposits against bank loans and thus thwarted the efforts of the Currency School to prevent further credit expansion (q.v.).
Pendant. Counterpart or parallel; something attached to or connected with.
Pense bassement, (French). Mean, base, ignoble, despicable thought.
Penury. Extreme poverty or economic hardship.
Per analogiam, (Latin). By analogy.
Peremptory. Determined, positive, authoritative, fixed in opinion, decisive, dogmatic, arrogant.
Periphrastic. Using a phrase with more words than necessary for a simple direct expression; tending to expression in a drawn out roundabout manner.
Perorate. To harangue or expound at length; to conclude or sum up a long discourse.
Phalanstère, Fourier’s, (French). Phalanstery. In the complicated visionary socialist system of François-Marie-Charles Fourier (1772–1837), the phalansteries are the common organizations of essentially self-sufficient cooperative communities. He would permit some inter-phalanstery exchanges between those in different parts of the world. In such communities, all participants would seek their happiness in the abandonment of the restraints normally imposed by the previously existing societies. Minimum subsistence would be a first lien on total production. After that, the balance would be allocated 5 / 12 for labor, 4 / 12 for capital and 3 / 12 for talent. It was assumed that all tasks, even the most menial, could be made sufficiently attractive so that enough workers would always volunteer to perform all necessary communal work.
Pharisaic. Pertaining to the Pharisees, a school of ancient Jews noted for their strict and formal observance of both written law and traditional rites. Hence, tending to observe external forms without regard for the essence of inner spiritual feeling. Thus, a connotation of overly formal, hypocritical self-righteousness.
Phlogiston theory. A chemical theory of fire that was generally accepted for about a century, until disproved in 1775 by Antoine Laurent Lavoisier (1743–94).
Physiocracy. An early (eighteenth century) economic theory prevalent in France which considered agriculture the prime source of wealth and both manufacturing and trade as sterile. It held that the function of government was to give effect to “natural law.” Their maxim, laissez faire, laissez passer, gave impetus to free enterprise ideas.
Physiology. That section of the science of biology which deals solely with the operation of the functional processes of the many coordinated physical units of the healthy body. It is not specifically concerned with the mental content of the mind or with mental processes in so far as they are separate from the purely physical processes.
Pied piper. One who uses his ability to attract others in order to lure them to their destruction. The term comes from the Legend of the Pied Piper of Hamelin (Germany) made famous by a poem of Robert Browning (1812–89). According to the myth, a colorful piper agreed to rid the town of rats for a fee. He played a tune which lured the rats into the river where they drowned. When his fee went unpaid, he played a tune which lured the town’s children into a cave from which they never returned.
Plain state of rest. The condition where there is a cessation of all market transactions because, for the time being, no potential buyers or sellers believe they could improve their conditions by further transactions at quoted prices. This is a temporary period that disappears as soon as such conditions disappear.
Planning. Economic planning “leaves to the individual merely the right to obey.” The economic planning authority directs all economic matters, controls all aspects of a man’s life and activities. The planning authority is the only employer. “All labor becomes compulsory labor because the employee must accept what the chief deigns to offer him. The economic tsar determines what and how much of each the consumer may consume....As soon as the economic freedom which the market economy grants to his members is removed, all political liberties and bills of rights become humbug.” (Human Action, p. 287) Planning means “Let the government alone choose and enforce its rulings by the apparatus of coercion and compulsion.” (Human Action, p. 731)
Pleonasm. An expression which, if omitted, would not change the meaning. Its use is usually considered a fault, but is sometimes acceptable for emphasis.
Pluralis gloriosus, (Latin). Literally, glorious plural. Hence, the use of plural “we” in a manner whereby the user implies a false personal identity of himself with famous or distinguished persons. Example: an Italian boor says, “We are the world’s greatest painters.”
Pluralis imperialis, (Latin). Literally, imperial plural. Hence, the use of the plural “we” in a manner whereby the user implies a false personal identity of himself with the ruling powers of his government. Example: a Britisher, between 1790 and 1945, said, “We are ruling India.”
Pluralis logicus, (Latin). Literally, logical plural. Hence, the use of the plural “we” for a combination of persons who have a logical identity.
Pluralis majestaticus, (Latin). Literally, majestic plural. Hence, the use of the plural “we” by a monarch speaking in his official capacity in much the same manner as an editor uses the editorial “we.”
Plutodemocracy. A term of disparagement which advocates of a socialist dictatorship apply to the democratic regimes of civilized nations. It implies that such nations are ruled by a clique of rich exploiters.
Polylogism. In short, many logics. The theory that the logical structure of the human mind differs according to certain divisions of mankind and that as a result the ideas and logic of men also differ in accordance with the specified classification of men. Marxian polylogism asserts there are differences according to social classes. Others claim there are differences according to race, religion, nationality, etc.
Portent. Forewarning of something to be feared; hint or indication of a future undesired event or consequence.
Positive laws. Man-made laws; laws enacted or recognized (common law) by an established government, including both statutory and judicial law. The term is often used in contrast to natural law (q.v., sense 2) or concepts of imagined ideal or perfect laws.
Positive price premium. See “Price premium.”
Positivism. A doctrine taught by Auguste Comte (1798–1857). It holds that man’s knowledge of all subjects passes through three stages (theological, metaphysical and positive). Contemporary positivism seeks to apply the experimental methods of the natural sciences (q.v.) to the study of the problems of human action (q.v.). The maxim of positivists is that science is measurement.
Postulate. An underlying assumption accepted as true, a priori, but acknowledged as indemonstrable because of the limitations of human knowledge or the human mind.
Pound sterling, (£ for libra, Latin for “pound”). The monetary unit of the United Kingdom, composed of 20 shillings (s.) of 12 pence (d. for denarii, Latin for “pence”) each. At one time, the British monetary unit was a troy pound of silver, which became known as a pound sterling. The term sterling stems from “Easterlings,” the name given to North German merchants who established a Hansa, or trade guild, in England in the thirteenth century. Their coins were noted for their uniform reliability as to weight and fineness.
During most of the eighteenth century, England was legally on a bimetallic standard which overvalued silver. As the result of Gresham’s Law (q.v.), it was in fact on the gold standard. The one pound coin then became the gold sovereign, so called because the King’s bust appeared on its face. During the Napoleonic Wars the British government resorted to credit expansion (q.v.) with the result that the Bank of England suspended the gold redemption of its Notes from 1797 to 1821. The gold standard was legally adopted in 1816 and went into effect in 1821.
From 1821 until the outbreak of World War I in 1914, the Bank’s Notes and gold sovereigns were interchangeable except for short suspensions in 1847, 1857 and 1866. The gold standard was again resumed in 1925 at the pre-war parity rate of $4.86, or .2568 troy ounces of gold, for one paper pound. In 1931 the gold standard was dropped and the value of the pound fell to $3.27 by the end of 1932. The American devaluation of 1933–34 raised its dollar value to $5.15, but its value continued to fall until 1940 when it was officially declared to be worth $4.03. In 1949, it was further devalued to $2.80, or .08 troy ounces of gold, for one pound sterling. The pound has since been further devalued and is no longer officially tied to gold.
In 1971, the decimal system was adopted and the pound was then subdivided into 100 new pence.
Pragmatism. The theory that ideas or principles are true so far as they work. In general, pragmatists rely on empirical or experimental methods and reject apriorism as a source of human knowledge. Because pragmatists differ among themselves in their use of the term, it is difficult to give a short precise definition.
Praxeology, (from the Greek, Praxis, action, habit or practice; logia, doctrine, theory or science). The science or general theory of (conscious or purposeful) human action. Mises defines action as “the manifestation of a man’s will.” Accordingly, he considers the use of the adjectives “conscious or purposeful” to be redundant. Praxeology is a manifestation of the human mind and deals with the actions open to men for the attainment of their chosen ends. Praxeology starts from the a priori category of action and then develops the full implications of such action. Praxeology aims at knowledge valid for all instances in which the conditions exactly correspond to those implied in its assumptions and inferences. Its statements and propositions are not derived from experience, but are antecedent to any comprehension of historical facts.
Prerogative. A right or privilege which belongs to a person or legal entity by virtue of his rank, office, position or special characteristic which entitles him to precedence or the exercise of some power or advantage not granted to others.
Price level. A confused concept which implies that all prices rise and fall uniformly with changes in the quantity of money or the total of goods and services offered for sale, somewhat as the level of a liquid rises and falls with changes in its quantity or the size of its container. Actually, the term “price level” usually refers to an average of selected prices which individually move quite differently from each other and their average. Acting men are more interested in the interrelationship of different prices than in the movement of all or average prices. When all, or almost all, prices move in the same direction, it is usually a sign of inflation (q.v.) or deflation (q.v.). Continued use of the term “price level” frequently leads to the notion of the neutrality of money (q.v.).
Price of gold. “Under the gold standard gold is money and money is gold.” (Human Action, p. 428) In Mises’ terminology, a “price” is a ratio of a good or service to money. A “price” reflects—in money terms—the respective subjective values of a would-be buyer and a potential seller of a specific good or service at a particular place and time. If gold is the money, its “price” in money terms would be expressed in terms of itself, i.e. of gold. In other words, the “price” of an ounce of gold would be an ounce of gold. To Mises, therefore, it was nonsensical to speak of the “price” of gold. “Under the gold standard the dollar and the pound sterling were merely names for a definite weight of gold, within very narrow margins precisely determined by the laws.” (Human Action, pp. 428–29) When governments abandon the gold standard, the relation of gold to the various paper currencies will fluctuate depending on their quantity and the value placed on them by market participants. But this is a ratio in terms of the paper money, not a “price” in money terms. See Human Action, p. 478, where Mises refers to the then (1949) “price of 35 dollars for an ounce of gold.”
Price premium. The reflection of anticipated future price changes contained in market interest rates. The component in gross market interest rates which attempts to allow for the anticipated changes in the purchasing power of money, i.e., prices. Because changes in the quantity of money usually precede their effects, the price premium tends to lag behind changes in purchasing power. The price premium is added to, or subtracted from, the originary rate of interest and is one reason for the spread between the originary and market interest rates.
The price premium is negative (a minus component) when it reflects an anticipated rise in the purchasing power of money, i.e., a drop in prices, and positive (a plus component) when it reflects an anticipated drop in the purchasing power of money, i.e., a rise in prices, as is frequently the case when inflation is anticipated.
Primordial. Primary; fundamental; rudimentary; elemental; original; existing from the beginning.
Principle of Fullarton. See “Banking School.”
Pro anno, (Latin). For a year; annually; per annum.
Procrustean. Imposing stern and inflexible conformity to a preconceived theory or system. It originated from the mythical legend of Procrustes who was reputed to tie his victims to an iron bed and then stretch them or cut off their legs to make them fit the bed.
Productivity theory of interest. The theory, disproved by Eugen von Böhm-Bawerk (1851–1914) that interest is the income attributed to, or derived from, the use of capital goods in the production process. For the correct theory of interest, time preference, see “Originary interest.”
Profit. The goal of every contemplated action (anticipated profit) or the gain or satisfaction derived from every successfully completed action (achieved profit). Since all men prefer success over failure and a greater success over a lesser success, every human action is aimed at obtaining as high a gain or satisfaction (profit) as possible. The opposite of profits is losses, the result of unsuccessful actions, which all human actions seek to avoid or minimize. Both anticipated and achieved profits are of two types, psychic (mental) profit (q.v.) and entrepreneurial (business) profit (q.v.).
Progenitive. Able to reproduce.
Progenitor. Parent; founder of a family; ancestor.
Progeny. Children; offspring; descendants.
Progressing economy. An economy in which the per capita quota of invested capital is increasing. This increase in capital goods results in an increase in per capita income. In a progressing economy total entrepreneurial profits thus exceed total entrepreneurial losses. Since incomes and capital accumulation are incapable of measurement, the existence of a progressing economy can only be grasped by resorting to historical understanding.
Progressive taxation. A method of taxation under which the tax rate increases as the amount to be taxed increases. It represents an attempt to make wealthy persons pay more than a proportional share of taxes levied on incomes and inheritances. The Communist Manifesto (q.v.) endorses progressive taxation as one of ten measures that may be used for effecting “despotic inroads on the rights of property, and . . . as a means of entirely revolutionizing” the social order.
Proletarian. A wage earner, manual worker or peasant, whom socialists view as one without property and thus, under capitalism, at the mercy of employers. Proletarians are to be distinguished from (1) the bourgeois or merchants, employers and white-collar workers, and (2) the nobility and landed gentry.
Proliferation. Rapid reproduction, multiplication or growth in numbers.
Prophylactics. That part of medical science related to the prevention of, or defense against, disease.
Propitious. Favorable or conducive to success; offering advantageous conditions or circumstances.
Protectionism. The policy of imposing legal burdens or restrictions on imports with the intention of hampering or preventing their competition with domestic products. It includes the use of embargoes, tariffs, import quotas, burdensome import regulations, foreign exchange controls, etc. A protective tariff, unlike a tariff for revenue, is designed to keep out imports rather than raise revenue.
Provenance. Source, origin or derivation, particularly as related to place or persons responsible for the discovery or original production.
Psychic profit and loss. An increase (profit) or decrease (loss) in the acting man’s satisfaction or happiness. Psychic profits and losses are sensible, subjective, mental and purely personal. They can be neither measured nor weighed. They can only be felt or sensed. The psychic profit or loss derived from any action can be compared with that of another solely in terms of more or less.
Psychology. Psychology is concerned with the minds of men. It has two major meanings. The sciences of human action are not primarily concerned with the physiological meaning, sometimes known as natural or experimental psychology. Whenever Mises refers to psychology in economic studies, he has in mind what some call “literary psychology” and which he has called “Thymology” in Theory and History and The Ultimate Foundation of Economic Science. In this sense, psychology “is on the one hand an offshoot of introspection and on the other a precipitate of historical experience. It is what everybody learns from intercourse with his fellows. It is what a man knows about the way in which people value different conditions, about their wishes and desires and their plans to realize these wishes and desires. It is the knowledge of the social environment in which a man lives and acts.”
It signifies the cognition of human ideas, emotions, volitions, motivations and value judgments which are an indispensable faculty of everyone. It is the specific understanding of the past which gives men an insight into the minds of other men. Psychology, like economics, starts with the individual. It concerns the internal invisible and intangible events of the mind which determine man’s value scales which result or can result in action. Economics begins at the point psychology leaves off.
Psychopath. A person with a mental disease, usually characterized by a mental or emotional instability, due to a defect in character or personality, that approaches but falls short of insanity.
Psychopathology. The branch of psychological knowledge that is concerned with mental diseases and disorders.
Psychophysics. The division of psychology that studies the physiological aspects of mental phenomena and in particular the quantitative relations between stimuli and the resultant sensations.
“Pump-priming.” Deficit spending by a government on public works and “welfare” projects in an attempt to raise the purchasing power of the recipients and thus stimulate and revive economic activity to the point that deficit spending will no longer be considered necessary to maintain the desired economic activity. “Pump-priming” sometimes fails to catch on, as in the case of the American New Deal of the 1930s. At other times, it starts a boom which inevitably leads to a recession, depression or “flight into real values” (q.v.). See also “Trade cycle” and “Monetary theory of the trade cycle.”
Punctilious. Attentive to detail, scrupulous.
Purveyor. One who provides or procures food, necessary supplies.