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NOTE IV. A First Analysis of the Category of Action

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CHAPTER IV A FIRST ANALYSIS OF THE CATEGORY OF ACTION

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1.

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ENDS AND MEANS.

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The result sought by an action is called its end, goal or aim.

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One uses these terms in ordinary speech also to signify intermediate ends, goals or aims.

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These are points which acting man wants to attain only because he believes that he will

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will reach his ultimate end, goal or aim in passing beyond them.

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Strictly speaking, the end, goal or aim of any action is always the relief from a felt

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uneasiness.

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A means is what serves to the attainment of any end, goal or aim.

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Means are not in the given universe.

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In this universe there exist only things.

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A thing becomes a means when human reason plans to employ it for the attainment of some

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end, and human action really employs it for this purpose.

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Thinking man sees the serviceableness of things, that is, their ability to minister to his

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ends, and acting man makes them means.

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It is of primary importance to realize that parts of the external world become means only

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through the operation of the human mind and its offshoot, human action.

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External objects are as such only phenomena of the physical universe and the subject matter

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of the natural sciences.

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It is human meaning and action which transform them into means.

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Praxeology does not deal with the external world, but with man's conduct with regard

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to it.

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Physical reality is not the physical universe, but man's conscious reaction to the given

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state of this universe.

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Economics is not about things and tangible material objects, it is about men, their meanings

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and actions.

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Goods, commodities and wealth, and all the other notions of conduct, are not elements

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of nature, they are elements of human meaning and conduct.

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He who wants to deal with them must not look at the external world.

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He must search for them in the meaning of acting men.

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Praxeology and economics do not deal with human meaning and action as they should be

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or would be if all men were inspired by an absolutely valid philosophy and equipped with

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a perfect knowledge of technology.

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For such notions as absolute validity and omniscience, there is no room in the frame

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A system of a science whose subject matter is erring man. An end is everything which men aim at. A means is everything which acting men consider as such.

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It is the task of scientific technology and therapeutics to explode errors in their respective fields.

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It is the task of economics to expose erroneous doctrines in the field of social action.

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But if men do not follow the advice of science but cling to their fallacious prejudices, these errors are reality and must be dealt with as such.

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Economists consider foreign exchange control as inappropriate to attain the ends aimed at by those who take recourse to it.

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However, if public opinion does not abandon its delusions and governments consequently resort to foreign exchange control,

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The course of events is determined by this attitude.

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Present-day medicine considers the doctrine of the therapeutic effects of Mandrake as

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a fable.

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But as long as people took this fable as truth, Mandrake was an economic good, and prices

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were paid for its acquisition.

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In dealing with prices, economics does not ask what things are in the eyes of other people,

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But only what they are in the meaning of those intent upon getting them, for it deals with

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real prices, paid and received in real transactions, not with prices as they would be if men were

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different from what they really are.

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Means are necessarily always limited, that is, scarce with regard to the services for

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which man wants to use them.

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If this were not the case, there would not be any action with regard to them.

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Where man is not restrained by the insufficient quantity of things available, there is no

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need for any action.

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It is customary to call the end the ultimate good and the means goods.

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In applying this terminology, economists mainly used to think as technologists and not as

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praxeologists.

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They differentiated between free goods and economic goods.

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They called free goods things available in superfluous abundance which man does not need

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to economize.

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Such goods are, however, not the object of any action.

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They are general conditions of human welfare.

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They are parts of the natural environment in which man lives and acts.

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Only the economic goods are the substratum of action.

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They alone are dealt with in economics.

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Economic goods which in themselves are fitted to satisfy human wants directly, and whose

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serviceableness does not depend on the cooperation of other economic goods, are called consumer's

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goods, or goods of the first order.

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Means which can satisfy wants only indirectly, when complemented by cooperation of other

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Other goods are called producer's goods, or factors of production, or goods of a remoter

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or higher order.

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The services rendered by a producer's good consist in bringing about, by the cooperation

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of complementary producer's goods, a product.

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This product may be a consumer's good, it may be a producer's good, which, when combined

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with other producer's goods will finally bring about a consumer's good.

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It is possible to think of the producer's goods as arranged in orders according to their

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proximity to the consumer's good for whose production they can be used.

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Those producer's goods which are nearest to the production of a consumer's good are

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arranged in the second order, and accordingly those which are used for the production of

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of Goods of the Second Order in the Third Order, and so on.

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The purpose of such an arrangement of goods in orders is to provide a basis for the theory

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of value and prices of the factors of production.

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It will be shown later how the valuation and the prices of the goods of higher orders are

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dependent on the valuation and the prices of the goods of lower orders produced by their

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expenditure.

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The first and ultimate valuation of external things refers only to consumers' goods.

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All other things are valued according to the part they play in the production of consumers'

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goods.

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It is therefore not necessary actually to arrange producers' goods in various orders

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from the second to the nth.

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It is no less superfluous to enter into pedantic discussions of whether a concrete good has

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is to be called a good of the lowest order or should rather be attributed to one of the

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higher orders. Whether raw coffee beans or roast coffee beans or ground coffee or coffee

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prepared for drinking or only coffee prepared and mixed with cream and sugar are to be called

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a consumer's good ready for consumption is of no importance. It is immaterial which manner

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and the manner of speech we adopt. For, with regard to the problem of valuation, all that we say about a consumer's good can be applied to any good of a higher order, except those of the highest order, if we consider it as a product.

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An economic good does not necessarily have to be embodied in a tangible thing. Non-material economic goods are called services.

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2. The Scale of Value

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Acting man chooses between various opportunities offered for choice. He prefers one alternative

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to others. It is customary to say that acting man has a scale of wants or values in his

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mind when he arranges his actions. On the basis of such a scale, he satisfies what is

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What is of higher value, that is, his more urgent wants, and leaves unsatisfied what

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is of lower value, that is, what is a less urgent want.

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There is no objection to such a presentation of the state of affairs.

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However, one must not forget that the scale of values or wants manifests itself only in

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the reality of action.

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These scales have no independent existence apart from the actual behavior of individuals.

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The only source from which our knowledge concerning these scales is derived is the observation

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of a man's actions.

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Every action is always in perfect agreement with the scale of values or wants because

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these scales are nothing but an instrument for the interpretation of a man's acting.

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Social doctrines are intent upon establishing scales of value according to which man should

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act, but does not necessarily always act.

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They claim for themselves the vocation of telling right from wrong, and of advising

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man concerning what he should aim at as the supreme good.

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They are normative disciplines, aiming at the cognition of what ought to be.

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They are not neutral with regard to facts.

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They judge them from the point of view of freely adopted standards.

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This is not the attitude of praxeology and economics.

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They are fully aware of the fact that the ultimate ends of human action are not open

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to examination from any absolute standard.

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Ultimate ends are ultimately given.

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They are purely subjective.

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They differ with various people and with the same people at various moments in their lives.

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Psychology and Economics deal with the means for the attainment of ends chosen by the acting

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individuals.

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They do not express any opinion with regard to such problems as whether or not separatism

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is better than asceticism.

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They apply to the means only one yardstick, namely, whether or not they are suitable to

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attain the ends at which the acting individuals aim.

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The notions of abnormality and perversity therefore have no place in economics.

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It does not say that a man is perverse because he prefers the disagreeable, the detrimental

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and the painful to the agreeable, the beneficial and the pleasant.

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It says only that he is different from other people, that he likes what others detest,

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that he considers useful what others want to avoid, that he takes pleasure in enduring

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The Polar Notions normal and perverse can be used anthropologically for the distinction

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between those who behave as most people do and outsiders and atypical exceptions.

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They can be applied biologically for the distinction between those whose behavior preserves the

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vital forces and those whose behavior is self-destructive.

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They can be applied in an ethical sense for the distinction between those who behave correctly

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and those who act otherwise than they should.

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However, in the frame of a theoretical science of human action, there is no room for such

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a distinction.

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Any examination of ultimate ends turns out to be purely subjective, and therefore arbitrary.

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Value is the importance that acting man attaches to ultimate ends.

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Only to ultimate ends is primary and original value assigned.

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Means are valued derivatively, according to their serviceableness in contributing to the

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attainment of ultimate ends.

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Their valuation is derived from the valuation of the respective ends.

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They are important for man only as far as they make it possible for him to attain some

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ends.

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Value is not intrinsic.

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It is not in things.

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It is within us.

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It is the way in which man reacts to the conditions of his environment.

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Neither is value in words and in doctrines.

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It is reflected in human conduct.

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It is not what a man or groups of men say about value that counts, but how they act.

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The bombastic oratory of moralists and the inflated pompousness of party programs are

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significant as such, but they influence the course of human events only as far as they

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really determine the actions of men.

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3.

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The Scale of Needs

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Withoutwithstanding all declarations to the contrary, the immense majority of men aim

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first of all at an improvement of the material conditions of well-being.

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They want more and better food, better homes and clothes, and a thousand other amenities.

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They strive after abundance and health.

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Taking these goals as given, applied physiology tries to determine what means are best suited

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to Provide as Much Satisfaction as Possible. It distinguishes, from this point of view,

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between man's real needs and imaginary and spurious appetites. It teaches people how

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they should act and what they should aim at as a means.

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The importance of such doctrines is obvious. From his point of view, the physiologist is

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He is right in distinguishing between sensible action and action contrary to purpose.

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He is right in contrasting judicious methods of nourishment from unwise methods.

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He may condemn certain modes of behavior as absurd and opposed to real needs.

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However, such judgments are beside the point for a science dealing with the reality of

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human action.

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Not what a man should do, but what he does, counts for praxeology and economics.

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Hygiene may be right or wrong in calling alcohol and nicotine poisons, but economics must explain

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the prices of tobacco and liquor as they are, not as they would be under different conditions.

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There is no room left in the field of economics for a scale of needs different from the scale

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Deal of Values as Reflected in Man's Actual Behavior

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Economics deals with real man, weak and subject to error as he is, not with ideal beings,

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omniscient and perfect as only gods could be.

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4.

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Action as an Exchange

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Action is an attempt to substitute a more satisfactory state of affairs for a less satisfactory

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We call such a willfully induced alteration an exchange. A less desirable condition is

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bartered for a more desirable. What gratifies less is abandoned in order to attain something

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that pleases more. That which is abandoned is called the price paid for the attainment

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of the end sought. The value of the price paid is called costs. Costs are equal to the

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The value attached to the satisfaction which one must forgo in order to attain the end

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aimed at.

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The difference between the value of the price paid, the costs incurred, and that of the

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goal attained is called gain or profit or net yield.

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Profit in this primary sense is purely subjective.

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It is an increase in the acting man's happiness.

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It is a psychical phenomenon that can be neither measured nor weighed.

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There is a more and a less in the removal of uneasiness felt, but how much one satisfaction

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surpasses another one can only be felt.

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It cannot be established and determined in an objective way.

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A judgment of value does not measure, it arranges in a scale of degrees, it grades.

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It is expressive of an order of preference and sequence, but not expressive of measure

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and weight.

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Only the ordinal numbers can be applied to it, but not the cardinal numbers.

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It is vain to speak of any calculation of values.

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Calculation is possible only with cardinal numbers.

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The difference between the valuation of two states of affairs is entirely psychical and

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personal.

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It is not open to any projection into the external world.

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It can be sensed only by the individual.

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It cannot be communicated or imparted to any fellow man.

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It is an intensive magnitude.

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Physiology and psychology have developed various methods by means of which they pretend to

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have attained a substitute for the unfeasible measurement of intensive magnitudes.

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There is no need for economics to enter into an examination of these rather questionable

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makeshifts.

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Their supporters themselves realize that they are not applicable to value judgments.

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But even if they were, they would not have any bearing on economic problems, for economics

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deals with action as such and not with the psychical facts that result in definite actions.

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It happens again and again that an action does not attain the end sought.

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Sometimes the result, although inferior to the end aimed at, is still an improvement

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when compared with the previous state of affairs.

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Then there is still a profit, although a smaller one than that expected.

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But it can happen that the action produces a state of affairs less desirable than the

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previous state it was intended to alter.

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In addition, the difference between the valuation of the result and the costs incurred is called

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loss.