Human Action, by Ludwig von Mises, Part II

On critics of Ricardo’s law of comparative cost (or the law of association)

They prefer to resort to those methods of utility analysis which they consider a means for making value calculations in terms of utility. It will be shown in the further progress of our investigation that these attempts to eliminate monetary terms from economics calculation are delusive. Their fundamental assumptions are untenable and contradictory and all formulas derived from them are vicious. No method of economic calculation is possible other than one based on money prices as determined by the market. – Page 162

For libertarian idealists and anarcho-anythings

It is illusory to maintain that individuals in renouncing the alleged blessings of a fabulous state of nature and entering into society have foregone some advantages and have a fair claim to be indemnified for what they have lost. The idea that anybody would have fared better under an asocial state of mankind and is wronged by the very existence of society is absurd. – Page 165

For agrarians

The natural condition of man is extreme poverty and insecurity. It is romantic nonsense to lament the passing of the happy days of primitive barbarism. In a state of savagery the complainants would either not have reached the age of manhood, or if they had, they would have lacked the opportunities and amenities provided by civilization. Jean Jacques Rousseau and Frederick Engels, if they had lived in the primitive state which they describe with nostalgic yearning, would not have enjoyed the leisure required for their studies and for the writing of their books. – Page 165

I’d just like to note that in part I disagree with the above statement. The difference between making a living with one’s hands (I’m not talking about typing) and one’s mind must have some material implication.

Economics In The Movies

Popular films, such as Batman Begins, demonstrate misunderstanding about how the field of economics is defined. In that film, the lead member of the League of Shadows (a group responsible for toppling entire societies at their decadent pinnacles) claims to have invented economics to destroy Gotham. As Henri Ducard explains to Bruce Wayne,

“Over the ages our weapons have grown more sophisticated, with Gotham we tried a new one, economics.”

These continuing apprehensions have not changed much over more than half a century. To progress beyond equivocation, reading more of Human Action is critical. In the first two chapters, Mises attempts to broaden the field’s scope, calling the resulting discipline ‘praxeology’. (A term credited to Alfred Espinas.) It was not successfully socialized, and ambiguity surrounding whether economics as more than just the study of market prices remains.

The textbook definition of economics I learned was ‘the study of human choices made given unlimited wants and limited resources (scarcity)’. When asked to define economics in the Count of Monte Cristo (2002), Edmond responds, “Economics is a science that deals with the production, distribution, and consumption of commodities.” Mises wants to expand this definition, suggesting that,

“It is much more than merely a theory…of man’s striving for commodities and an improvement in his material well-being. It is the science of every kind of human action. Choosing determines all human decisions…No treatment of economic problems proper can avoid starting from acts of choice; economics becomes a part, although the hitherto best elaborated part, of a more universal science, praxeology.” (3)

Grab a dictionary

Mises uses many words that were initially foreign to me, to list a few:

catallactic
categorial
homunculus
pleonastic
polylogism
praxeology
ratiocination

Human Action by Ludwig von Mises

One of my goals for this blog is to digest and present some of the ideas from Ludwig von Mises‘ seminal work, Human Action. And if you think about it, human action is seminal work. Pun intended.

“The ultimate goal of human action is always the satisfaction of the acting man’s desire. There is no standard of greater or lesser satisfaction other than individual judgments of value, different for various people and for the same people at various times…Nobody is in a position to decree what should make a fellow man happier.” – p.14