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''Human Action: A Treatise on Economics'' is a work by the
Austrian Austrian may refer to: * Austrians, someone from Austria or of Austrian descent ** Someone who is considered an Austrian citizen, see Austrian nationality law * Something associated with the country Austria, for example: ** Austria-Hungary ** Austr ...
economist An economist is a professional and practitioner in the social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the s ...

economist
and
philosopher A philosopher is someone who practices philosophy Philosophy (from , ) is the study of general and fundamental questions, such as those about Metaphysics, existence, reason, Epistemology, knowledge, Ethics, values, Philosophy of mind, mi ...

philosopher
Ludwig von Mises Ludwig Heinrich Edler von Mises (; 29 September 1881 – 10 October 1973) was an Austrian School economist, historian, logician, and Sociology, sociologist. Mises wrote and lectured extensively on the societal contributions of classical liberal ...

Ludwig von Mises
. Widely considered Mises' ''
magnum opus 's ''The Creation of Adam ''The Creation of Adam'' () is a fresco Fresco (plural ''frescos'' or ''frescoes'') is a technique of Mural, mural painting executed upon freshly laid ("wet") lime plaster. Water is used as the vehicle for the dry-po ...

magnum opus
'', it presents the case for
laissez-faire ''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system An economic system, or economic order, is a system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects hav ...
capitalism Capitalism is an economic system An economic system, or economic order, is a system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects have an effect upon one another. The idea o ...

capitalism
based on
praxeology In philosophy Philosophy (from , ) is the study of general and fundamental questions, such as those about Metaphysics, existence, reason, Epistemology, knowledge, Ethics, values, Philosophy of mind, mind, and Philosophy of language, language ...
, his method to understand the structure of human decision-making. It rejects
positivism Positivism is a philosophical theory A philosophical theory or philosophical position''Dictionary of Theories'', Jennifer Bothamley is a view that attempts to explain or account for a particular problem in philosophy Philosophy (from ...
within
economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interact ...

economics
. It defends an ''
a priori ''A priori'' and ''a posteriori'' ('from the earlier' and 'from the later', respectively) are Latin phrases used in philosophy Philosophy (from , ) is the study of general and fundamental questions, such as those about reason, Metaph ...
''
epistemology Epistemology (; ) is the Outline of philosophy, branch of philosophy concerned with knowledge. Epistemologists study the nature, origin, and scope of knowledge, epistemic Justification (epistemology), justification, the Reason, rationality o ...

epistemology
and underpins
praxeology In philosophy Philosophy (from , ) is the study of general and fundamental questions, such as those about Metaphysics, existence, reason, Epistemology, knowledge, Ethics, values, Philosophy of mind, mind, and Philosophy of language, language ...
with a foundation of
methodological individualism In the social sciences, methodological individualism is the principle that subjective individual motivation explains social phenomena, rather than class or group dynamics which are (according to proponents of individualistic principles) illusory ...
and laws of
apodictic "Apodictic", also spelled "apodeictic" ( grc, ἀποδεικτικός, "capable of demonstration"), is an adjectival expression from Aristotelean logic that refers to proposition In linguistics and logic, a proposition is the meaning of a de ...
certainty. Mises argues that the free-market economy not only outdistances any government-planned system, but ultimately serves as the foundation of civilization itself. ''Nationalökonomie: Theorie des Handelns und Wirtschaftens'' is the 1940 German-language predecessor to ''Human Action''.


Synopsis

Mises sees economic calculation as the most fundamental problem in economics. The economic problem to Mises is that of
action ACTION is a bus operator in , Australia owned by the . History On 19 July 1926, the commenced operating public bus services between Eastlake (now ) in the south and in the north. The service was first known as Canberra City Omnibus Se ...
. Man acts to dispel feelings of uneasiness, but can only succeed in acting if he comprehends causal connections between the ends that he wants to satisfy, and available means. The fact that man resides in a world of
causality Causality (also referred to as causation, or cause and effect) is influence by which one Event (relativity), event, process, state or object (a ''cause'') contributes to the production of another event, process, state or object (an ''effect'') ...
means that he faces definite choices as to how he satisfies his ends. Human action is an application of
human reason Reason is the capacity of consciously making sense of things, applying logic Logic (from Ancient Greek, Greek: grc, wikt:λογική, λογική, label=none, lit=possessed of reason, intellectual, dialectical, argumentative, translit=lo ...
to select the best means of satisfying ends. The reasoning mind evaluates and grades different options. This is economic calculation. Economic calculation is common to all people. Mises insisted that the logical structure of human minds is the same for everybody. Of course, this is not to say that all minds are the same. Individuals make different value judgments and possess different data, but logic is the same for all. Human reason and economic calculation have limitations, but Mises sees no alternative to economic calculation as a means of using scarce resources to improve our well being. Human action concerns dynamics. The opposite to action is not inaction. Rather, the opposite to action is
contentment Contentment is an emotional state Emotions are biological Biology is the natural science Natural science is a branch of science Science (from the Latin word ''scientia'', meaning "knowledge") is a systematic enterprise tha ...

contentment
. In a fully contented state there would be no action, no effort to change the existing order of things (which might be changed by merely ceasing to do some things). Man acts because he is never fully satisfied, and will never stop because he can never be fully satisfied. This might seem like a simple point, but modern economics is built upon ideas of contentment-equilibrium analysis and indifference conditions. It is true that some economists construct models of dynamic equilibrium, but the idea of a dynamic equilibrium is oxymoronic to Mises. An actual equilibrium may involve a recurring cycle, but not true dynamics. True dynamics involve non-repeating evolutionary change. Mises explains dynamic change in terms of "the plain state of rest." A final state of rest involves perfect plans to fully satisfy human desires. A plain state of rest is a temporary and imperfect equilibrium deriving from past human plans. Though any set of plans is imperfect, to act means attempting to improve each successive set of plans. Movement from one plain state of rest to another represents the process of change, either evolutionary or devolutionary. Mises links progress and
profit Profit may refer to: Business and law * Profit (accounting) Profit, in accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic en ...
s. Profits earned from voluntary trades are the indicator of economic success. It is monetary calculation of profits that indicates whether an enterprise has generated a net increase in consumer well being over true economic costs. Loss, in Mises' own words, is failure, and is simply consumers projecting to the theoretical entrepreneur that he has failed. The close association that Mises draws between economic calculation and monetary calculation leads him to conclude that market prices (upon which monetary profits are calculated) are indispensable to progress in bettering the human condition. Without
markets Market may refer to: *Market (economics) *Market economy *Marketplace, a physical marketplace or public market Geography *Märket, an island shared by Finland and Sweden Art, entertainment, and media Films *Market (1965 film), ''Market'' (1965 ...
there are no prices, and without prices there is no economic calculation. Monetary calculation is vitally important. Mises writes:
"We have assumed that the director has already made up his mind in regard to the construction of a definite plant or building. However, in order to make such a desision he already needs economic calculation. If a hydroelectric power station is to be built, one must know whether or not this is the most economical way to produce the energy needed. How can he know this if he cannot calculate costs and output?"
Mises establishes that the allocation of resources requires economic calculation. In his view, without economic calculation, there is no economy, as one cannot allocate resources in a rational manner. Mises stresses the importance of
entrepreneur Entrepreneurship is the creation or extraction of value. With this definition, entrepreneurship is viewed as change, generally entailing risk beyond what is normally encountered in starting a business, which may include other values than simply ...

entrepreneur
ship because only entrepreneurs actually do monetary calculation. This fact puts entrepreneurs at the center of all progress (and failure). Entrepreneurs who estimate costs more correctly than their rivals earn high profits while also serving consumers. Such people rise to top positions in industry. Entrepreneurs who err seriously in their calculations experience financial losses and cease to direct production. Mises described this market test of entrepreneurial skills as the only process of trial and error that really matters. The concepts of monetary calculation,
financial speculation Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers and investors have money available which could ...
, and entrepreneurship form the basis for the von Mises critique of
socialism Socialism is a political Politics (from , ) is the set of activities that are associated with Decision-making, making decisions in Social group, groups, or other forms of Power (social and political), power relations between individuals, ...
.


Publishing history

The German-language predecessor to ''Human Action'', titled ''Nationalökonomie: Theorie des Handelns und Wirtschaftens'', first appeared in 1940. ''Human Action'' was not a direct translation of the earlier work, but used its general framework and expanded on it.
Yale University Press Yale University Press is a university press A university press is an academic publishing Publishing is the activity of making information, literature, music, software and other content available to the public for sale or for free. Traditional ...
published the first edition of ''Human Action'' in 1949. When production delays pushed back the planned released date of a revised and expanded second edition, Lyle Munson, publisher of Bookmailer, Inc., suggested that Mises could take the book to another publisher, and offered to publish it himself. Mises used this offer as leverage to get Yale University Press to accelerate its release. The resulting 1963 edition was full of typographical errors, and another one had to be printed quickly afterwards by another editor.
Henry Regnery Henry Regnery (January 5, 1912 – June 18, 1996) was an Americans, American publisher.Robert McG. Thomas Jr, 'Henry Regnery, 84, Ground-Breaking Conservative Publisher', in ''The New York Times'', June 23, 199/ref>Jeffrey O. Nelson, 'Henry Regnery ...
published the revised third edition in 1966. A posthumous fourth edition was published in 1996, with revisions by Bettina B. Greaves. It is available in hardback single (
Liberty Fund Liberty Fund, Inc. is an American private educational foundation headquartered in Indianapolis Indianapolis (), colloquially known as Indy, is the state capital and List of U.S. states' largest cities by population, most-populous city of the ...
, ) and four-volume paperback editions (Liberty Fund, ), as well as single-volume paperback (Fox & Wilkes, ). In 1998, the
Ludwig von Mises Institute The Ludwig von Mises Institute for Austrian Economics, or Mises Institute, is a libertarian nonprofit think-tank located in Auburn, Alabama, Auburn, Alabama, United States. It is named after Austrian School economist Ludwig von Mises (1881–1973 ...
brought back the first edition as the "Scholar's Edition" (). In 2010, the Institute reissued the first edition as a portable "Pocket Edition" ().


Translations

* In Italian (1959) as ''L'azione umana : trattato di economia'', Torino: UTET * In Chinese (1976) as 人的行為 : 經濟學硏論 / ''Ren de xing wei : jing ji xue yan lun'' by 台湾銀行經濟硏究室, Taiwan yin hang jin ji yan jiu shi, (Bank of Taiwan) * In French (1985) as ''L’action humaine: Traité d’économie''. Libre échange. Paris : PUF, 1985. * In Portuguese (1990) as ''Ação humana: Um tratado de economia''. Rio de Janeiro: Instituto Liberal. ISRN 0-8092-9743-4. * In Spanish (1995) as ''La acción humana: tratado de economía''. Madrid: Unión Editorial D.L., * In Czech (2006) as ''Lidské jednání: Pojednání o ekonomii''. Prague: Liberální institut. . * In Polish (2007) as ''Ludzkie działanie: traktat o ekonomii'' * In Turkish (2008) as ''İnsan eylemi: iktisat üzerine bir inceleme'', Ankara: Liberte Yayınları. * In Japanese (2008) as ヒューマン・アクション: 人間行為の経済学 / ''Hyūman akushon: Ningen kōi no keizaigaku'', 春秋社, Tōkyō: Shunjūsha. . * In Dutch (2016) as ''Het menselijk handelen: een economische verhandeling'', Amsterdam: Stichting Pierson & Templeton. . * In Romanian (2002), as „Acțiunea umană. Un tratat de economie” available on-line at http://mises.ro/43/actiunea-umana. * In Swedish (2021), as ''Mänskligt handlande'', Stockholm: Timbro förlag. .


See also

* Action theory * Demonstrated preference * ''
Man, Economy, and State ''Man, Economy, and State: A Treatise on Economic Principles'' is a 1962 book of Austrian School The Austrian School is a Heterodox economics, heterodox Schools of economic thought, school of economic thought that is based on methodological ind ...
'' *
Methodenstreit ''Methodenstreit'' (German for "method dispute"), in intellectual history beyond German-language discourse, was an economics controversy commenced in the 1880s and persisting for more than a decade, between that field's Austrian School and the (Germ ...
* Socialism (book)


References


External links

* 1949 edition (reissued 1998)
Full text in PDFHTML
* ''Nationalökonomie'', 1940 edition
Full text in PDF
* Audio files for Forewords, Introduction, and all chapters
Media File
{{Ludwig von Mises 1949 non-fiction books Books by Ludwig von Mises Books about capitalism Classical liberalism Yale University Press books
Treatises:''This article is about the literary form of treatise, tractate or tractatus. See also Tract (literature) tract of 1820 A tract is a literature, literary work and, in current usage, usually religious in nature. The notion of what constitutes a t ...