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Human Action

A Treatise on Economics

Ludwig von Mises

Publication Year: 2012

In the foreword to Human Action: A Treatise on Economics, Mises explains complex market phenomena as "the outcomes of countless conscious, purposive actions, choices, and preferences of individuals, each of whom was trying as best as he or she could under the circumstances to attain various wants and ends and to avoid undesired consequences." It is individual choices in response to personal subjective value judgments that ultimately determine market phenomena—supply and demand, prices, the pattern of production, and even profits and losses. Although governments may presume to set "prices," it is individuals who, by their actions and choices through competitive bidding for money, products, and services, actually determine "prices". Thus, Mises presents economics—not as a study of material goods, services, and products—but as a study of human actions. He sees the science of human action, praxeology, as a science of reason and logic, which recognizes a regularity in the sequence and interrelationships among market phenomena. Mises defends the methodology of praxeology against the criticisms of Marxists, socialists, positivists, and mathematical statisticians.Mises attributes the tremendous technological progress and the consequent increase in wealth and general welfare in the last two centuries to the introduction of liberal government policies based on free-market economic teachings, creating an economic and political environment which permits individuals to pursue their respective goals in freedom and peace. Mises also explains the futility and counter-productiveness of government attempts to regulate, control, and equalize all people's circumstances: "Men are born unequal and ... it is precisely their inequality that generates social cooperation and civilization."Ludwig von Mises (1881–1973) was the leading spokesman of the Austrian School of Economics throughout most of the twentieth century. He earned his doctorate in law and economics from the University of Vienna in 1906. In 1926, Mises founded the Austrian Institute for Business Cycle Research. From 1909 to 1934, he was an economist for the Vienna Chamber of Commerce. Before the Anschluss, in 1934 Mises left for Geneva, where he was a professor at the Graduate Institute of International Studies until 1940, when he emigrated to New York City. From 1948 to 1969, he was a visiting professor at New York University.Bettina Bien Greaves is a former resident scholar, trustee, and longtime staff member of the Foundation for Economic Education. She has written and lectured extensively on topics of free market economics. Her articles have appeared in such journals as Human Events, Reason, and The Freeman: Ideas on Liberty. A student of Mises, Greaves has become an expert on his work in particular and that of the Austrian School of economics in general. She has translated several Mises monographs, compiled an annotated bibliography of his work, and edited collections of papers by Mises and other members of the Austrian School.

Published by: Liberty Fund

Volume I Title Page, Copyright

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pp. i-ii

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Editor's Note

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p. iii-iii

This edition of Mises’s Human Action is reproduced from the Foundation for Economic Education’s 4th edition which was a reprint of the 3rd 1966 Henry Regnery edition. In this book Mises cited many foreign language works in footnotes. Whenever feasible...

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Foreword to the Fourth Edition

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pp. v-vi

Mises’ contribution was very simple, yet at the same time extremely profound. He pointed out that the whole economy is the result of what individuals do. Individuals act, choose, cooperate, compete, and trade with one another. In this way Mises explained how complex market phenomena...

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Foreword to the Third Edition

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pp. vii-viii

It gives me great satisfaction to see this book, handsomely printed by a distinguished publishing house, appear in its third revised edition. Two terminological remarks may be in order. First, I employ the term“liberal” in the sense attached to it everywhere in the nineteenth century and still today...


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pp. ix-xix

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pp. 1-10

Economics is the youngest of all sciences. In the last two hundred years, it is true, many new sciences have emerged from the disciplines familiar to the ancient Greeks. However, what happened here was merely that parts of knowledge which had already found their place in the complex of the old system of ...

Part 1. Human Action

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p. 11-11

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1. Acting Man

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pp. 11-29

Human action is purposeful behavior. Or we may say: Action is will put into operation and transformed into an agency, is aiming at ends and goals, is the ego’s meaningful response to stimuli and to the conditions of its environment, is a person’s conscious adjustment to the state of the universe that determines ...

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2. The Epistemological Problems of the Sciences of Human Action

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pp. 30-71

There are two main branches of the sciences of human action: praxeology and history. History is the collection and systematic arrangement of all the data of experience concerning human action. It deals with the concrete content of human action. It studies all human endeavors ...

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3. Economics and the Revolt Against Reason

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pp. 72-91

It is true that some philosophers were ready to overrate the power of human reason. They believed that man can discover by ratiocination the final causes of cosmic events, the inherent ends the prime mover aims at in creating the universe and determining the course of its evolution. They expatiated on the ...

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4. A First Analysis of the Category of Action

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pp. 92-98

The result sought by an action is called its end, goal, or aim. One uses these terms in ordinary speech also to signify intermediate ends, goals, or aims; these are points which acting man wants to attain only because he believes that he will reach his ultimate end, goal, or aim in passing beyond ...

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5. Time

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pp. 99-104

The notion of change implies the notion of temporal sequence. A rigid, eternally immutable universe would be out of time, but it would be dead. The concepts of change and of time are inseparably linked together. Action aims at change and is therefore in the temporal order. Human reason is even ...

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6. Uncertainty

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pp. 105-118

The uncertainty of the future is already implied in the very notion of action. That man acts and that the future is uncertain are by no means two independent matters. They are only two different modes of establishing one thing. We may assume that the outcome of all events and changes is uniquely ...

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7. Action Within the World

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pp. 119-142

Action sorts and grades; originally it knows only ordinal numbers, not cardinal numbers. But the external world to which acting man must adjust his conduct is a world of quantitative determinateness. In this world there exist quantitative relations between cause and effect. If it were otherwise, if definite things ...

Part 2. Action Within the Framework of Society

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p. 143-143

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8. Human Society

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pp. 143-176

Society is concerted action, cooperation. Society is the outcome of conscious and purposeful behavior. This does not mean that individuals have concluded contracts by virtue of which they have founded human society. The actions which have brought about social cooperation and daily ...

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9. The Role of Ideas

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pp. 177-193

Reason is man’s particular and characteristic feature. There is no need for praxeology to raise the question whether reason is a suitable tool for the cognition of ultimate and absolute truth. It deals with reason only as far as it enables man to act. All those objects which are the ...

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10. Exchange Within Society

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pp. 194-199

Action always is essentially the exchange of one state of affairs for another state of affairs. If the action is performed by an individual without any reference to cooperation with other individuals, we may call it autistic exchange. An instance: the isolated hunter who kills an animal for his own consumption; he ...

Part 3. Economic Calculation

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p. 200-200

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11. Valuation Without Calculation

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pp. 200-211

Acting man transfers the valuation of ends he aims at to the means. Other things being equal, he assigns to the total amount of the various means the same value he attaches to the end which they are fit to bring about. For the moment we may disregard the time needed for production of the end and its ...

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12. The Sphere of Economic Calculation

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pp. 212-228

Economic calculation can comprehend everything that is exchanged against money. The prices of goods and services are either historical data describing past events or anticipations of probable future events. Information about a past price conveys the knowledge that one or several acts ...

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13. Monetary Calculation as a Tool of Action

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pp. 229-231

Monetary calculation is the guiding star of action under the social system of division of labor. It is the compass of the man embarking upon production. He calculates in order to distinguish the remunerative lines of production from the unprofitable ones, those of which the sovereign consumers are likely to ...

Volume II Title Page, Copyright

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pp. v-vi

Volume II Contents

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pp. vii-xvii

Part 4. Catallactics or Economics of the Market Society

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p. 232-232

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14. The Scope and Method of Catallactics

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pp. 232-256

There have never been any doubts and uncertainties about the scope of economic science. Ever since people have been eager for a systematic study of economics or political economy, all have agreed that it is the task of this branch of knowledge to investigate the market phenomena, that is, the determination of ...

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15. The Market

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pp. 257-326

The market economy is the social system of the division of labor under private ownership of the means of production. Everybody acts on his own behalf; but everybody’s actions aim at the satisfaction of other people’s needs as well as at the satisfaction of his own. Everybody in acting serves his fellow ...

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16. Prices

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pp. 327-397

In an occasional act of barter in which men who ordinarily do not resort to trading with other people exchange goods ordinarily not negotiated, the ratio of exchange is determined only within broad margins. Catallactics, the theory of exchange ratios and prices, cannot determine at what point within these ...

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17. Indirect Exchange

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pp. 398-478

Interpersonal exchange is called indirect exchange if, between the commodities and services the reciprocal exchange of which is the ultimate end of exchanging, one or several media of exchange are interposed. The subject matter of the theory of indirect exchange is the study of the ratios of exchange ...

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18. Action in the Passing of Time

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pp. 479-523

Acting man distinguishes the time before satisfaction of a want is attained and the time for which the satisfaction continues. Action always aims at the removal of future uneasiness, be it only the future of the impending instant. Between the setting in of action and the attainment ...

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19. Interest

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pp. 524-537

It has been shown that time preference is a category inherent in every human action. Time preference manifests itself in the phenomenon of originary interest, i.e., the discount of future goods as against present goods. Interest is not merely interest on capital. Interest is not the specific income ...

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20. Interest, Credit Expansion, and the Trade Cycle

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pp. 538-586

In the market economy in which all acts of interpersonal exchange are performed by the intermediary of money, the category of originary interest manifests itself primarily in the interest on money loans. It has been pointed out already that in the imaginary construction of the ...

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21. Work and Wages

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pp. 587-634

A man may overcome the disutility of labor (forego the enjoyment of leisure) for various reasons. 1. He may work in order to make his mind and body strong, vigorous, and agile. The disutility of labor is not a price expended for the attainment ...

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22. The Nonhuman Original Factors of Production

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pp. 635-645

In the frame of Ricardian economics the idea of rent was an attempt at a treatment of those problems which modern economics approaches by means of marginal-utility analysis.1 Ricardo’s theory appears rather unsatisfactory when judged from the point of view of present-day insight; there is no doubt that the ...

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23. The Data of the Market

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pp. 646-663

Catallactics, the theory of the market economy, is not a system of theorems valid only under ideal and unrealizable conditions and applicable to reality merely with essential restrictions and modifications. All the theorems of catallactics are rigidly and without any exception valid for all phenomena of ...

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24. Harmony and Conflict of Interests

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pp. 664-688

The changes in the data whose reiterated emergence prevents the economic system from turning into an evenly rotating economy and produces again and again entrepreneurial profit and loss are favorable to some members of society and unfavorable to others. Hence, people concluded, the gain of one man is ...

Volume III Title Page, Copyright

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pp. v-iv

Volume III Contents

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pp. vii-xvii

Part 5. Social Cooperation Without a Market

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p. 689-689

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25. The Imaginary Construction of a Socialist Society

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pp. 689-697

When the social philosophers of the eighteenth century laid the foundations of praxeology and economics, they were confronted with an almost universally accepted and uncontested distinction between the petty selfish individuals and the state, the representative of the interests of the whole society. However, ...

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26. The Impossibility of Economic Calculation Under Socialism

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pp. 698-715

The director wants to build a house. Now, there are many methods that can be resorted to. Each of them offers, from the point of view of the director, certain advantages and disadvantages with regard to the utilization of the future building, and results in a different duration of the building’s serviceableness; ...

Part 6. The Hampered Market Economy

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p. 716-716

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27. The Government and the Market

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pp. 716-736

Private ownership of the means of production (market economy or capitalism) and public ownership of the means of production (socialism or communism or “planning”) can be neatly distinguished. Each of these two systems of society’s economic organization is open to a precise and unambiguous description and ...

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28. Interference by Taxation

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pp. 737-742

To keep the social apparatus of coercion and compulsion running requires expenditure of labor and commodities. Under a liberal system of government these expenditures are small compared with the sum of the individuals’ incomes. The more the government expands the sphere of its ...

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29. Restriction of Production

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pp. 743-757

We shall deal in this chapter with those measures which are directly and primarily intended to divert production (in the broadest meaning of the word, including commerce and transportation) from the ways it would take in the unhampered market economy. Each authoritarian interference with business ...

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30. Interference with the Structure of Prices

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pp. 758-779

Interference with the structure of the market means that the authority aims at fixing prices for commodities and services and interest rates at a height different from what the unhampered market would have determined. It decrees, or empowers—either tacitly or expressly—definite groups of people to decree ...

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31. Currency and Credit Manipulation

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pp. 780-803

Media of exchange and money are market phenomena. What makes a thing a medium of exchange or money is the conduct of parties to market transactions. An occasion for dealing with monetary problems appears to the authorities in the same way in which they concern themselves with all other objects ...

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32. Confiscation and Redistribution

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pp. 804-811

Interventionism is guided by the idea that interfering with property rights does not affect the size of production. The most naïve manifestation of this fallacy is presented by confiscatory interventionism. The yield of production activities is considered a given magnitude independent of the merely accidental ...

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33. Syndicalism and Corporativism

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pp. 812-820

The term syndicalism is used to signify two entirely different things. Syndicalism, as used by the partisans of Georges Sorel, means special revolutionary tactics to be resorted to for the realization of socialism. Labor unions, it implies, should not waste their strength in the task of improving the ...

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34. The Economics of War

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pp. 821-832

The market economy involves peaceful cooperation. It bursts asunder when the citizens turn into warriors and, instead of exchanging commodities and services, fight one another. The wars fought by primitive tribes did not affect cooperation under the division of labor. Such ...

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35. The Welfare Principle Versus the Market Principle

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pp. 833-854

The objections which the various schools of Sozialpolitik raise against the market economy are based on very bad economics. They repeat again and again all the errors that the economists long ago exploded. They blame the market economy for the consequences of the very anticapitalistic policies ...

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36. The Crisis of Interventionism

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pp. 855-861

The interventionist policies as practiced for many decades by all governments of the capitalistic West have brought about all those effects which the economists predicted. There are wars and civil wars, ruthless oppression of the masses by clusters of self-appointed dictators, economic depressions, mass ...

Part 7. The Place of Economics in Society

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p. 862-862

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37. The Nondescript Character of Economics

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pp. 862-866

What assigns economics its peculiar and unique position in the orbit both of pure knowledge and of the practical utilization of knowledge is the fact that its particular theorems are not open to any verification or falsification on the ground of experience. Of course, a measure suggested by sound economic ...

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38. The Place of Economics in Learning

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pp. 867-880

The natural sciences are ultimately based on the facts as established by laboratory experiment. Physical and biological theories are confronted with these facts, and are rejected when in conflict with them. The perfection of these theories no less than the improvement of technological and therapeutical ...

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39. Economics and the Essential Problems of Human Existence

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pp. 881-954

It is customary to find fault with modern science because it is wertfrei, it abstains from expressing judgments of value. Living and acting man, we are told, has no use for Wertfreiheit; he needs to know what he should aim at. If science does not answer this question, it is sterile. However, the objection is ...

Volume IV Title Page, Copyright

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pp. v-vi

Volume IV Contents

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pp. vii-xvii


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pp. 887-894


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pp. 895-1015


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pp. 1017-1037

Publication Information

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p. 1045-1045

E-ISBN-13: 9781614878377
E-ISBN-10: 1614878374
Print-ISBN-13: 9780865976313

Page Count: 1128
Publication Year: 2012

Edition: New Edition