Human Action - Action, Means, Goods, and Production
- By Alex Doran
- Published 10/11/2008
Alex Doran
A C# .Net and PHP developer, a student of the Austrian school of economics, and libertarianism.
I have decided to start a series of blog posts based upon Murray N. Rothbard's work Man, Economy, and State. We must start at the beginning, that is, with praxeology.
What is praxeology? It is the study of human action, and it forms the foundation of sound economics (which is especially needed nowadays). The foundational axiom of praxeology is that human action exists. It cannot be disputed. To assert that human action does not exist is itself a human action. In fact all humans act due the very nature of our existence and of humans. What is human action? It is purposeful behavior that can be meaningfully interpreted by others; it is driven by a purpose the actor has in mind. The purpose of the act is the end, and it is the desire to attain this end that is the motive for the action. Importantly, human action can only be carried out by individuals. There is no such thing as an end or action by a group. Groups have no separate existence apart from the actions of the individuals constituting the group.
So how do individuals attain ends? Individuals are in a particular environment or situation. It is this environment or situation that the individual must change to attain his or her ends. An individual can only work with the elements found in his or her environment. Elements he or she believes cannot be controlled and must remain unchanged are general conditions of an action. Those an individual can change or believes he or she can change are means.
All humans exist within time. When an individual acts, the end can only be attained some time in the future. If all ends could be attained in the present, then there would be no need for action; however, human action exists. So, an individual chooses means from his or her environment to arrive at an end at some time in the future. An individual's time is scarce. Considering that all actions must take place in time, time is a means individuals must use to attain ends.
Action consists of choosing what ends will be attained by use of means. Time is scarce because whatever ends an individual chooses, there are others that remain unattained. Furthermore, all means are scarce. In other words, means are limited with respect to the ends that they could attain. Scarce means must be chosen by an individual to attain certain ends and leave other ends unattained. This is what Rothbard called economizing means to attain the most desired ends. In other words, an individual ranks his or her prospective ends in a way that aligns with their value to him or her. The process assigning ranks of value to ends is called valuation. The result is an individual's scale of values or scale of preferences.
Another truth that arises from human action is the uncertainty of the future. If an individual knew the future completely, action would not exist as it would be impossible to change the outcome; however, human action exists. Uncertainty comes from two sources--the unpredictability of human choice and limited knowledge about nature. All actions are in essence speculations based upon judgment of future events. There is, of course, always the possibility of error in action.
Means that satisfy wants are called goods. Goods are objects of economizing action. There are two types of goods--consumers' goods and producers' goods (i.e. factors of production or goods of higher order). Consumers' goods are immediately and directly useful for satisfaction of wants. Producers' goods are transformed into directly useful goods at some time in the future.
Individuals must use indirect means as cooperating factors of production to reach direct means. This is called production. Production is the use of available elements in an environment as indirect means (i.e. cooperating factors) to attain consumers' goods that can be used directly to attain an end. Each stage of production occurs in time. There are two types of factors of production--produced factors of production and original factors of production. Produced factors of production are produced themselves. Original factors of production are found already available in one's environment and can be divided into two types--expenditure of human energy (i.e. labor) and the use of non-human elements in nature (i.e. nature or land, which includes natural resources). Produced factors are called capital goods.
What is praxeology? It is the study of human action, and it forms the foundation of sound economics (which is especially needed nowadays). The foundational axiom of praxeology is that human action exists. It cannot be disputed. To assert that human action does not exist is itself a human action. In fact all humans act due the very nature of our existence and of humans. What is human action? It is purposeful behavior that can be meaningfully interpreted by others; it is driven by a purpose the actor has in mind. The purpose of the act is the end, and it is the desire to attain this end that is the motive for the action. Importantly, human action can only be carried out by individuals. There is no such thing as an end or action by a group. Groups have no separate existence apart from the actions of the individuals constituting the group.
So how do individuals attain ends? Individuals are in a particular environment or situation. It is this environment or situation that the individual must change to attain his or her ends. An individual can only work with the elements found in his or her environment. Elements he or she believes cannot be controlled and must remain unchanged are general conditions of an action. Those an individual can change or believes he or she can change are means.
All humans exist within time. When an individual acts, the end can only be attained some time in the future. If all ends could be attained in the present, then there would be no need for action; however, human action exists. So, an individual chooses means from his or her environment to arrive at an end at some time in the future. An individual's time is scarce. Considering that all actions must take place in time, time is a means individuals must use to attain ends.
Action consists of choosing what ends will be attained by use of means. Time is scarce because whatever ends an individual chooses, there are others that remain unattained. Furthermore, all means are scarce. In other words, means are limited with respect to the ends that they could attain. Scarce means must be chosen by an individual to attain certain ends and leave other ends unattained. This is what Rothbard called economizing means to attain the most desired ends. In other words, an individual ranks his or her prospective ends in a way that aligns with their value to him or her. The process assigning ranks of value to ends is called valuation. The result is an individual's scale of values or scale of preferences.
Another truth that arises from human action is the uncertainty of the future. If an individual knew the future completely, action would not exist as it would be impossible to change the outcome; however, human action exists. Uncertainty comes from two sources--the unpredictability of human choice and limited knowledge about nature. All actions are in essence speculations based upon judgment of future events. There is, of course, always the possibility of error in action.
Means that satisfy wants are called goods. Goods are objects of economizing action. There are two types of goods--consumers' goods and producers' goods (i.e. factors of production or goods of higher order). Consumers' goods are immediately and directly useful for satisfaction of wants. Producers' goods are transformed into directly useful goods at some time in the future.
Individuals must use indirect means as cooperating factors of production to reach direct means. This is called production. Production is the use of available elements in an environment as indirect means (i.e. cooperating factors) to attain consumers' goods that can be used directly to attain an end. Each stage of production occurs in time. There are two types of factors of production--produced factors of production and original factors of production. Produced factors of production are produced themselves. Original factors of production are found already available in one's environment and can be divided into two types--expenditure of human energy (i.e. labor) and the use of non-human elements in nature (i.e. nature or land, which includes natural resources). Produced factors are called capital goods.
