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NOTE 1.02. First Implications of the Concept

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2. First Implications of the Concept

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The first truth to be discovered about human action is that it can be undertaken only by

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individual actors. Only individuals have ends and can act to attain them. There are no such

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things as ends of or actions by groups, collectives or states, which do not take place as actions

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by various specific individuals.

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Societies or groups have no independent existence aside from the actions of their individual

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members.

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Thus, to say that governments act is merely a metaphor.

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Actually, certain individuals are in a certain relationship with other individuals and act

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in a way that they and the other individuals recognize as governmental.

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To say that only individuals act is not to deny that they are influenced in their desires

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and actions by the acts of other individuals, who might be fellow members of various societies

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or groups.

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We do not at all assume, as some critics of economics have charged, that individuals are

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atoms, isolated from one another.

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The metaphor must not be taken to mean that the collective institution itself has any

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Many Reality Apart from the Acts of Various Individuals

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Similarly, an individual may contract to act as an agent in representing another individual,

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or on behalf of his family.

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Still, only individuals can desire and act.

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The existence of an institution such as government becomes meaningful only through influencing

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In order to institute action, it is not sufficient that the individual man have unachieved ends

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that he would like to fulfill.

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He must also expect that certain modes of behavior will enable him to attain his ends.

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A man may have a desire for sunshine, but if he realizes that he can do nothing to achieve

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He does not act on this desire. He must have certain ideas about how to achieve

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his ends. Action thus consists of the behavior of individuals directed towards

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ends in ways that they believe will accomplish their purpose. Action requires

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an image of a desired end and technological ideas or plans on how to

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How to Arrive at This End

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Men find themselves in a certain environment or situation.

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It is this situation that the individual decides to change in some way in order to achieve

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his ends.

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But man can work only with the numerous elements that he finds in his environment by rearranging

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them in order to bring about the satisfaction of his ends.

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In its reference to any given act, the environment external to the individual may be divided into two parts, those elements which he believes he cannot control and must leave unchanged, and those which he can alter, or rather thinks he can alter, to arrive at his ends.

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Every actor may be termed the general conditions of the action, the latter the means used.

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Thus the individual actor is faced with an environment that he would like to change in

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order to attain his ends.

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To act, he must have technological ideas about how to use some of the elements of the environment

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as means, as pathways to arrive at his ends.

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Every act must therefore involve the employment of means by individual actors to attempt to

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arrive at certain desired ends.

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In the external environment, the general conditions cannot be the objects of any human action.

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Only the means can be employed in action.

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All human life must take place in time.

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Man reason cannot even conceive of an existence or of action that does not take place through

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time.

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At a time when a human being decides to act in order to attain an end, his goal, or end,

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can be finally and completely attained only at some point in the future.

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If the desired ends could all be attained instantaneously in the present, then man's

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Actions would all be attained, and there would be no reason for him to act, and we have seen

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that action is necessary to the nature of man.

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Therefore, an actor chooses means from his environment in accordance with his ideas to

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arrive at an expected end, completely attainable only at some point in the future.

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For any given action, we can distinguish among three periods of time involved, the period

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before the action, the time absorbed by the action, and the period after the action has

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been completed.

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All action aims at rendering conditions at some time in the future more satisfactory

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for the actor than they would have been without the intervention of the action.

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A man's time is always scarce.

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He is not immortal.

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His time on earth is limited.

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Each day of his life has only twenty-four hours in which he can attain his ends.

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Furthermore, all actions must take place through time.

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Therefore, time is a means that man must use to arrive at his ends.

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is a means that is omnipresent in all human action.

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Action takes place by choosing which ends shall be satisfied by the employment of means.

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Time is scarce for man only because, whichever ends he chooses to satisfy, there are others

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that must remain unsatisfied.

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When we must use a means so that some ends remain unsatisfied, the necessity for a choice

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For example, Jones is engaged in watching a baseball game on television.

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He is faced with the choice of spending the next hour in A, continuing to watch the baseball

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game, B, playing bridge, or C, going for a drive.

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He would like to do all three of these things, but his means, time, is insufficient.

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As a result, he must choose.

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One end can be satisfied, but the others must go unfulfilled.

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Suppose that he decides on Course A. This is a clear indication that he has ranked the

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satisfaction of End A higher than the satisfaction of End B or C.

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From this example of action, many implications can be deduced.

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In the first place, all means are scarce, that is, limited with respect to the ends

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that they could possibly serve.

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If the means are in unlimited abundance, then they need not serve as the object of attention

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of any human action.

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For example, air, in most situations, is in unlimited abundance.

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It is therefore not a means, and is not employed as a means to the fulfillment of ends.

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It need not be allocated, as time is, to the satisfaction of the more important ends, since

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it is sufficiently abundant for all human requirements.

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Air, then, though indispensable, is not a means, but a general condition of human action

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and human welfare.

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Secondly, these scarce means must be allocated by the actor to serve certain ends and leave

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other ends unsatisfied.

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This act of choice may be called economizing the means to serve the most desired ends.

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Time, for example, must be economized by the actor to serve the most desired ends.

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The actor may be interpreted as ranking his alternative ends in accordance with their

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value to him.

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This scaling of ends may be described as assigning ranks of value to the ends by the actor, or

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as a process of valuation.

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Thus suppose that Jones ranked his alternative ends for the use of an hour of time as follows.

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First, one, continuing to watch the baseball game.

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Second, two, going for a drive.

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Third, three, playing bridge.

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This was his scale of values, or scale of preferences.

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The supply of means, time, available, was sufficient for the attainment of only one of these ends.

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And the fact that he chose the baseball game shows that he ranked that highest or first.

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Suppose now that he is allocating two hours of his time and can spend an hour on each

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pursuit.

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If he spends one hour on the game and then a second hour on the drive, this indicates

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that his ranking of preferences is as above.

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The lowest ranking end, playing bridge, goes unfulfilled.

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Thus the larger the supply of means available, the more ends can be satisfied, and the lower

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the rank of the ends that must remain unsatisfied.

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Another lesson to be derived is that action does not necessarily mean that the individual

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is active as opposed to passive in the colloquial sense.

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Action does not necessarily mean that an individual must stop doing what he has been doing and

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He also acts, as in the above case, who chooses to continue in his previous course, even though the opportunity to change was open to him.

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Continuing to watch the game is just as much action as going for a drive.

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Furthermore, action does not at all mean that the individual must take a great deal of time in deliberating on a decision to act.

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To Act, the individual may make a decision to act hastily or after great deliberation

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according to his desired choice.

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He may decide on an action coolly or heatedly.

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None of these courses affects the fact that action is being taken.

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Some writers have unfoundedly believed that praxeology and economics assume that all action

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Action is cool, calculating, and deliberate.

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Another fundamental implication derived from the existence of human action is the uncertainty

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of the future.

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This must be true because the contrary would completely negate the possibility of action.

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If man knew future events completely, he would never act, since no act of his could change

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the situation.

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Thus, the fact of action signifies that the future is uncertain to the actors.

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This uncertainty about future events stems from two basic sources, the unpredictability

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of human acts of choice and insufficient knowledge about natural phenomena.

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Man does not know enough about natural phenomena to predict all their future developments,

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And he cannot know the content of future human choices.

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All human choices are continually changing as a result of changing valuations and changing

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ideas about the most appropriate means of arriving at ends.

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This does not mean, of course, that people do not try their best to estimate future developments.

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Indeed, any actor, when employing means, estimates that he will thus arrive at his desired goal.

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But he never has certain knowledge of the future.

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All his actions are of necessity speculations based on his judgment of the course of future events.

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The omnipresence of uncertainty introduces the ever-present possibility of error in human action.

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The actor may find, after he has completed his action, that the means have been inappropriate

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to the attainment of his end.

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To sum up what we have learned thus far about human action, the distinguishing characteristic

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of human beings is that all humans act.

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Action is purposeful behavior directed toward the attainment of ends in some future period

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which will involve the fulfillment of wants, otherwise remaining unsatisfied.

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Action involves the expectation of a less imperfectly satisfied state as a result of

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the action.

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The individual actor chooses to employ elements in his environment as means to the expected

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achievement of his ends, economizing them by directing them toward his most valued ends,

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The Theory of Money and Credit