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• Foreword
• Introduction to the Second Edition
• Author’s Preface
• Acknowledgments
• 1: On Defining the Economic Point of View
• The Economic Point of View and the Scope of Economics
• The Multitude of Economic Points of View
• The Controversy Over the Utility of Definition
• An Interpretation of the Controversy
• The Economists and Their Definitions: the Classical Economists
• The Economic Point of View: the Background of the “methodenstreit”
• Twentieth–century Economic Points of View
• 2: The Science of Wealth and Welfare
• The Emergence of Political Economy As the Science of Wealth
• The Science of Material Wealth
• The Science of Subsistence
• The Science of Wealth Retained
• Man Against Nature
• From Wealth to Welfare
• The Science of the Lower Side of Human Nature
• 3: The Science of Avarice; Getting the Most For the Least
• The Science of Avarice
• The Economic Principle
• The “economic Impulse”
• Selfishness and “non-tuism”
• Economics and Mechanics
• 4: Economics, the Market, and Society
• Economics and Catallactics
• Exchange and the Propensity to Truck
• Exchange and the Division of Labor
• The “purely Formal” Concept of Exchange
• Exchange and the Economic System
• Economics, the Economy, and the “volkswirtschaft”
• Economy and Society
• 5: Economic Affairs, Money, and Measurement
• Money, Wealth, and Exchanges
• Money As the Measuring Rod
• Money As a Universal Measuring Rod
• Measurement and Economics
• Money and Price-economics
• Money As an Economic Institution
• 6: Economics and Economizing
• The Economics of Professor Robbins
• Scarcity and Economics
• Economizing and Maximization
• The Character of Robbins' Definition
• A. the “breadth” of Robbins' Definition
• B. the “formalism” of Robbins' Definition
• The Nature of Ends and Means
• “given” Ends and Means
• Single End and Multiple Ends
• Economics and Ethics: the Positive and the Normative
• The Nature of Economic Science and the Significance of Macroeconomics
• 7: Economics As a Science of Human Action
• I
• The Sciences of Human Action
• The Emergence of the Praxeological View of Economics
• Max Weber and Human Action
• Acting Man and Economizing Man: Mises and Robbins
• Ii
• Praxeology and Purpose
• Praxeology and Rationality
• The Assumption of Constant Wants—the Praxeological Context
• Praxeology, Apriorism, and Operationalism
• The Economic Point of View and Praxeology

Acting Man and Economizing Man: Mises and Robbins

In the decades following the age of Weber, praxeological ideas developed in two directions, yielding two related, but significantly distinct, conceptions of economic science. On the one hand, there developed, partly under the influence of Max Weber, the conception of economics that has been treated in the previous chapter. Here the ends-means dichotomy came to serve as the framework for the construction of an economic science that took as its foundation the idea of economizing. The previous chapter has described the culmination of this stream of thought in the work of Professor Robbins. This must now be clearly related to another direction of praxeological thought, to the influence of which, indeed, the development of the first must in some degree be ascribed.

This second line of praxeological thought has been led by the work of Professor Mises. It is in this direction that we find the most complete and consistent development of the praxeological concept, and it is this development that the present chapter set out to describe. Mises' explicit enunciation of the character of economics as a science of human action, the most highly developed of the potential praxeological disciplines, represents one of his most seminal and original ideas. It may be reasonably asserted that most, perhaps all, of Mises' characteristic contributions to the various branches of economic theory are, in his eyes, simply the consistently worked out corollaries of this fundamental thesis concerning the nature of economics.13 If economic theory, as the science of human action, has become a system at the hands of Mises, it is so because his grasp of its praxeological character imposes on its propositions an epistemological rationale that in itself creates this systematic unity. It is unfortunate, but not difficult to understand, that disagreement with some of Professor Mises' economic theories on the part of his critics has induced in them a tendency to ignore, if not to disparage, the epistemological basis from which Mises' conclusions seem to follow so rigorously. The truth is that the comprehension of economics as a science of human action provides a basis broad enough to support widely diverging conclusions. The validity of the praxeological approach must be tested on its own merits and by its internal epistemological adequacy.

Although praxeological ideas already appear in germinal form in Mises' first book, The Theory of Money and Credit (1912), it was not until the twenties that they became explicitly formulated. By the early thirties Mises' ideas on the nature and scope of economics had reached their full development,14 and some of these ideas attracted the attention of writers on the methodology of economics in a number of countries.15 The works in which Professor Mises has most fully presented the case for praxeology are his Grundprobleme der Nationalökonomie. (1933), Nationalökonomie (1940), and its English counterpart Human Action (1949). A vigorous restatement of the position of the sciences of human action and a spirited defense of their epistemological assumptions are to be found in Mises' recently published Theory and History (1957).

In comparing the two views of economics represented by the works of Mises and Robbins, it is necessary to notice carefully their points of similarity and to observe even more carefully the degree to which they differ from one another. Writers have tended to group Mises and Robbins together as continuators of Weber in their stress on the ends-means dichotomy and its importance for economic activity.16 But the two views place economic science in two quite distinct positions.

Economizing consists in the allocation of scarce resources among competing ends. Acting, in the praxeological sense, consists in selecting a pattern of behavior designed to further the actor's purposes. Of course, the particular allocation that, in any given situation, will be made of scarce means in respect of different ends will constitute a course of action, a pattern of conduct designed to further the achievement of as many of those goals (in their preferred order) as possible. But the concept of action is wider and at the same time more fundamental than that of economizing. Although action may be described in terms of ends and means, such a description is quite different from that of an operation of economizing. In the concept of economy, ends and means constitute a scheme more or less artificially imposed on action so that the relative valuations of ends can be reflected in the specific pattern in which resources are allocated. The essential idea becomes, not the intent pursuit of a set purpose, but the almost mechanical translation of the scale of “ultimate” ends into appropriately apportioned shares at the level of means. “Means” are required for the notion of economy because they are the entities that must be “allocated”; it is in the comparison of different ways of utilizing resources that economizing finds its place.

With the broader notion of action, on the other hand, we are not primarily interested in the particular pattern in which resources will be apportioned among ends. Such an allocation, if carried out, will be of interest as one of the possible implications of action and will, of course, as such, find a place somewhere in the science of human action. But on the basis of Robbins' conception of the nature of economic science, economics can achieve homogeneity and individuality only by virtue of its concern with the existence of such operations of comparison and allocation of means. The praxeological approach, on the other hand, finds a basis for the homogeneity and individuality of economics at a deeper level, which does not necessarily require a clearly recognizable pattern of allocation. This basis is found in the fundamental characteristic of action, viz., that it is conduct directed at the achievement of a purpose.

In this characteristic, praxeology finds a sufficient source of explanation for the specific patterns of action, among which the judicious disposal of scarce means appears as a frequent example. But a really unique criterion for the definition of economics is not to be found in the idea of allocating scarce resources, nor can this concept serve as an adequate foundation on which that science can be constructed. The key point is not that acting man ponders the comparative efficacy in different uses of certain given “means,” but that he behaves under a constraint that he himself has imposed, i.e., the necessity of acting in order to achieve what he wants to achieve, so that his behavior tends to conform to the pattern implied by his scale of ends. “Means” exist as such for acting man only after he has turned them to his purpose; acting is not apportioning, but doing—doing what seems likely to further one's purposes.

The remainder of this chapter, which attempts to set forth several details of the praxeological view and to consider various criticisms levelled against it, will serve at the same time as a commentary on the similarities and distinctions between an economics built around homo agens and one centered around economizing man.

II

[[13]]Cf. F. A. Hayek, The Counter-Revolution of Science, p. 209, n. 24.

[[14]]See also L. Mises, Socialism (English ed.; London, 1936), pp. 111 ff.; L. Mises, “Vom Weg der subjektivistichen Wertlehre,” Schriften des Vereins fur Sozialpolitik, 183/1, pp. 76–93; L. Mises, “Begreifen und Verstehen,” Schmollers Jahrbuch, 1930.

[[15]]See, e.g., L. Robbins, Nature and Significance (1930); also his “Live and Dead Issues in the Methodology of Economics,” Economica, August, 1938; F. Kaufmann, Methodology of the Social Sciences (English ed.; New York, 1944), ch. XVI; M. Bowley, Nassau Senior and Classical Political Economy (1937), p. 64; T. W. Hutchison, The Significance and Basic Postulates of Economic Theory (1938); O. Morgenstern, The Limits of Economics (English ed.; 1937), p. 154.

[[16]]See, e.g., L. M. Lachmann, “The Science of Human Action,” Economica, November, 1951, p. 413.