Reason
The premise of this method is that each individual possesses ownership of their body through the power of reason. Whether considered a gift from God or a product of evolution, reason is the cornerstone of civilization. To establish the existence of human reason, one need only contemplate the concept itself. This act of thinking inherently uses reason, making the initial assumption self-evident. Attempting to define reason presupposes its existence; without the capacity to reason, one cannot even engage in the process of definition.
Reason is an ultimate given; for our purposes, it is unnecessary to trace back to a time before reason emerged.
It is crucial to recognize that reason drives human action, and human action is the foundation of society.
Human Action
Humans possess reason and act in accordance with it. They set goals and choose means to fulfill their ambitions. This is why Homo sapiens is Homo agens—humans are beings that act. However, reason is fallible; an action that is ill-suited to its purpose will fail to meet expectations. Through experience and training, humans become more effective at achieving goals, but their capacity for reason remains unchanged.
Acting is not merely doing—it also includes refraining from actions that could be taken. For example, a survey may reveal intentions or preferences, but it cannot predict the actual actions someone will take. An action, unlike a mere preference, is set in motion by the will. Even those deemed insane can set goals and pursue them. To an outsider, their actions may seem "irrational," but irrationality in this context refers to reflex actions only; a genuinely irrational person would be a somnambulist, acting without conscious reason.
Humans act in pursuit of happiness—a state of mind that neither demands nor generates further action. Action is initiated to eliminate discomfort in existence.
Praxeology
Human action and social cooperation form the basis of a science of relations, not a normative discipline dictating what should occur. Human action involves choosing one course and forsaking another. Praxeology is a deductive science (from the Ancient Greek “praxis,” meaning “action,” and “-logos,” meaning “science”). It is the general theory of human action.
While psychology delves into the subconscious, praxeology examines the conscious aspects of human action, encompassing all social sciences.
Economics, perhaps, is the most developed branch of praxeology.
Economics
Economics must address at least one critical question: What is the relationship between its theories and the reality of human action?
Economists must explain human action by elucidating concepts such as money, property, capital, goods, credit, price, exchange, interest, production, labor, wages, unemployment, opportunity cost, markets, competition, and more. The goal of economic studies is to clarify these concepts and the issues they present. What is money? How did it originate? How are prices determined? Who is the true entrepreneur? Is interest real? What constitutes a fair wage? Can we prosper without capital? What is an economic crisis? Do business cycles exist? Is there an invisible hand guiding the market? Is it possible to avoid opportunity costs? The list is endless.
Economics is a theoretical science that refrains from making value judgments; its role is not to prescribe actions or purposes but to offer a science of means that can be applied to achieve desired outcomes.
The principles of economics apply to all human actions, regardless of their motivations, causes, or goals.
Economics is not a laboratory science; it differs from the natural sciences, which rely on observation and experimentation. Consider a water molecule: it consists of two hydrogen atoms and one oxygen atom, and this combination consistently creates water. Atoms lack reason and therefore cannot act—they do not "change their minds."
Apriorism
Humans possess the advantage of reason, manifesting through action and a priori knowledge about society—knowledge that does not require empirical verification. Reason does not make humans omniscient; no matter how much their knowledge increases, at least one ultimate given will remain: reason itself. To acquire knowledge, humans must rely on reason. Through the deductive method, they come to understand how economics functions.
For instance, in a voluntary exchange between two people, both parties benefit; if they did not expect to gain, they would not agree to the exchange in the first place.
To obtain a hamburger, one must pay for it. If a person decides to buy it, they value the hamburger more than the money spent. The vendor, on the other hand, values the money more than the hamburger. If these conditions are not met simultaneously, the voluntary exchange will not occur.
Society
In every action, the individual is the actor, whether in the context of a state or a group of people. However, "mob mentality" can sometimes take over. For example, a group may form to catch a thief—a task no individual might undertake alone. But it is the individuals within the group who act, not the group itself.
Society is the voluntary cooperation of individuals.
Society is an intellectual and spiritual phenomenon. The division of labor is its central pillar, enabling human emancipation. Social cooperation is based on natural conditions: the innate inequality of individuals' abilities, the unequal distribution of resources, and the need for forces beyond a single person's capabilities to achieve certain successes.
Society does not have its own life and purposes; it is formed through the peaceful cooperation of individuals within the division of labor.
Liberalism
Liberalism is a set of ideas, not a theory, but a method for applying theories developed within praxeology, particularly in economics. Liberalism aims to establish a system of governance that preserves peace, as peace is a prerequisite for the division of labor and the flourishing of society.
It operates on the principle that people act with purpose, striving to create an optimal framework for using appropriate means to achieve desired results. Furthermore, it seeks to free individuals from material concerns so they can pursue higher goals beyond mere subsistence.
Liberalism is fundamentally rationalistic.
It asserts that most people, when properly informed, will recognize that their long-term interests are better served by peaceful cooperation within society than by conflict and social disintegration.
A Final Thought
Ludwig von Mises held an optimistic view of the world and high hopes for humanity's future. He believed in the power of free human action and peaceful cooperation, leaving us with an evergreen saying:
Mises University is the training ground for students looking to learn sound economics
