An abridgement of Human Action, a treatise on economics An abridgement of Human Action a Treatise on Economics by Ludwig von Mises selected and arranged by Gérard Dréan 1 An abridgement of Human Action, a treatise on economics Table An abridgement of Human Action a Treatise on Economics ................................................... 1 Table ......................................................................................................................................... 2 Preface ...................................................................................................................................... 5 The Austrian school of economics....................................................................................... 5 Human Action ...................................................................................................................... 7 This abridgement: why and how........................................................................................ 10 The structure of this abridgment........................................................................................ 11 The place of economics in the sciences.................................................................................. 13 The scope of economics..................................................................................................... 13 The physical sciences and the human sciences.................................................................. 14 Praxeology ......................................................................................................................... 16 Human reason .................................................................................................................... 18 Economics as a discipline....................................................................................................... 20 The procedure of economics.............................................................................................. 20 The method of imaginary constructions ............................................................................ 21 The states of rest ................................................................................................................ 22 The imaginary construction of the evenly rotating economy ............................................ 23 The imaginary construction of the stationary economy..................................................... 25 Logical economics versus mathematical economics ......................................................... 25 Judgments of value ............................................................................................................ 28 Economics and the citizen ................................................................................................. 28 Economics as a profession................................................................................................. 30 Human action.......................................................................................................................... 32 The definition of human action.......................................................................................... 32 Methodological individualism ........................................................................................... 33 Goals .................................................................................................................................. 33 Ends and means ................................................................................................................. 34 Value.................................................................................................................................. 35 Utility................................................................................................................................. 37 Exchange and profit........................................................................................................... 38 Time................................................................................................................................... 40 The valuation of time periods ............................................................................................ 41 2 An abridgement of Human Action, a treatise on economics Uncertainty......................................................................................................................... 43 Rationality.......................................................................................................................... 44 Freedom ............................................................................................................................. 45 Labor.................................................................................................................................. 46 The division of labor.......................................................................................................... 48 Money and economic calculation........................................................................................... 50 Indirect exchange and money ............................................................................................ 50 The demand for money...................................................................................................... 51 The purchasing power of money ....................................................................................... 52 The supply of money ......................................................................................................... 53 The money-substitutes ....................................................................................................... 55 Economic calculation......................................................................................................... 57 The market as a condition for economic calculation ......................................................... 58 Capital and interest ................................................................................................................. 61 Capital goods ..................................................................................................................... 61 Capital................................................................................................................................ 61 Capital accounting ............................................................................................................. 62 The convertibility of capital goods .................................................................................... 64 The mobility of the investor............................................................................................... 65 Originary interest ............................................................................................................... 66 The market rates of interest ............................................................................................... 67 Business cycles....................................................................................................................... 70 Credit expansion ................................................................................................................ 70 The boom ........................................................................................................................... 70 The breakdown .................................................................................................................. 72 The consequences .............................................................................................................. 73 The market.............................................................................................................................. 76 The market process ............................................................................................................ 76 The formation of prices...................................................................................................... 77 The market economy ......................................................................................................... 79 The entrepreneur................................................................................................................ 80 The sovereignty of the consumers ..................................................................................... 82 The prices of the factors of production.............................................................................. 84 Entrepreneurial profit and loss........................................................................................... 85 3 An abridgement of Human Action, a treatise on economics Competition ....................................................................................................................... 86 Private property.................................................................................................................. 88 External costs and external economies .............................................................................. 90 Wages................................................................................................................................. 91 Wages and subsistence....................................................................................................... 93 The labor market...............................................................................................................