Product Details

• Amazon Sales Rank: #1622866 in Books
• Published on: 1996-07
• Original language: English
• Binding: Paperback

Customer Reviews

Human Action
Human Action by Ludwig von Mises starts with the most simple observation: humans act. Sounds pretty obvious, but Mises takes this simple premise and develops a wide ranging treatise on economics.

If you've read other texts on economics, and you're expecting page after page of indifference curves and equilibrium graphs, then you're in for a shock. This book doesn't touch them. In fact, it reads more like a book on philosophy (and really, that's exactly what it is).

To brutally summarize Mises' argument (and obviously I'm engaging in lossy compression here, for otherwise Mises would've written a pamphlet, not a weighty tome): empirical observation of economic data does not constitute economic theory. At best, it's just economic history, nothing more. To interpret that data in any way, you must already have (or develop) a theory which is not in itself derived from that data. And to get your theory, you need to use a priori arguments and logical deduction.

Here's a simple example. If a desirable product is available for human consumption, then a human will prefer to consume it sooner rather than later - all other things being equal. That last comment is essential; we can all conjure up scenarios in which we are presented with a product that we'd rather be given next week, or next year. Ice-cream in the middle of winter, pancakes when you've just had a huge meal, and so on. But we are saying all other things being equal. So we're talking about an (admittedly artificial) conception that there are literally no other relevant differences between the times of consumption that we are considering. We are equally hungry, the temperature is the same, etc.

Note that there is absolutely no observation you can make, no experiment you can perform that will verify this fact that humans prefer to consume today rather than tomorrow. You cannot observe a human both consuming and not-consuming in identical circumstances (Schrödinger's cat notwithstanding). (If you want to argue about this, feel free, but please read Human Action first, because Mises covers a heck of a lot of argumentational ground.)

From this fact, Mises successfully derives the idea of originary interest, that rate that reflects the time-preference of the consumers. If people tend to want their goods right now rather than wait for them, then the rate of originary interest will be higher. (In fact, some scholars currently are suggesting that the progress of civilization is marked by a decrease in time-preference; when institutions are perceived as stable, and constant improvement in wealth is expected, then people will be more prepared to defer current consumption in favor of increased consumption at a later date.)

Some of the results of Mises' analysis may look wholly unoriginal if you have studied mainstream neo-classical economics. There are, indeed, areas of agreement. But the means by which the results are derived really does matter. In Mises' view (and that of the other Austrian school economists), there is no assumption of equilibrium, no need to assume that the real world is somehow an imperfect version of the theory. Mises explains the role of the entrepreneur as a category of human action, a vital feature of the economy that makes possible actual wealth creation. This leads on to the theory of the business cycle, which provides a much more satisfying explanation of booms-and-busts - and what we should do about them - than you'll find in Econ101.

Lastly - and for me, most importantly - Mises provides a damning argument that socialism just cannot work. He shows that economic calculation - the arrangement of the plans of disparate human beings, each with their own needs and wants - cannot be performed without a genuine free-market. Yes, it's surely possible to make a socialist economy 'run'; after all, it has been done several times in the 20th century. But it will not provide the consumer goods that people actually want, the things that they consider the most urgent items that they want in exchange for their labor. His argument is so convincing that I will no longer listen to any socialist scheme unless they first do one of two things: either show me why Mises' calculation argument is wrong, or explain how their proposal solves the calculation problem.

Human Action provides the intellectual background you need in order to understand why liberty demands a free-market capitalist economy.

A Masterwork
This is the greatest economics book ever written. Mises was an absolute genius and this is his magnum opus. After reading this there are no doubts left about the greatness of capitalism and the depravity of socialism. He covers every aspect of the market economy, as well as the characteristics of the socialist and hampered economies. He explodes fallacy after fallacy. This book reveals that capitalism is the greatest thing that has ever happened to the world. It has elevated living conditions to previously unthinkable heights. It is the only system that fosters human beings to live in civilized manner. This book is unparalled in human thought. It is the economic equivalent to Ayn Rand's fiction masterpiece Atlas Shrugged.

In two words: Master Work.
I do not dare to give a professional opinion about this master work, as I am not an economist. I can only say that this book is a fundamental and brave work which enlight your view about economy and human action, far away from socialist and socialdemocrat topics.
It is divided in seven parts (I translate the titles from my spanish edition, sorry if it is not as accurate as I'd wish):
1. The human action.
2. The accion in the social frame.
3. The economic calculation.
4. The theory of market.
5. The social cooperation in absence of the market.
6. The market under intervention.
7. The place of economic science in the social frame.