Subjectivism

Presented at Mises University 2019.

Anti-capitalists love to claim that consumers don't really have free choice — that advertisers and peers really dictate to others what they should buy. In truth, consumers choose freely, but use others to filter information and simplify the process.

The concept of economic cost seems to confuse people. It is not the price you pay for a good, but the reason you pay it.

Prices are set by how much people value goods and services. And people value things based on what they think will improve their life and well-being. 

What does it mean for two goods to be the "same good"? Wysocki and Block argue that Austrian subjectivism leads to the possibility of perfect economic homogeneity or heterogeneity.

Valuation of businesses must be based on appraisement, investment appraisal, and—terra incognita in Austrian economics—negotiation. Discounted cash flow and "relative valuation" methods are well-suited for negotiation purposes.

All human action stems from the value judgments of individuals. Economics, properly understood, was never so foolish as to believe that all that people are after is higher incomes and lower prices.

The marginalist revolution posed a fundamental problem for economic theory. Mises’s approach not only solved the problem of economizing resources in a division of labor, but provides a robust framework for economic research.

Scrooge was wrong, and his Nephew Fred was right. While it's true the benefits of feasting with friends and family can't be calculated in a ledger, that doesn't mean those things have no value.

For the positivist, a man is a machine like an automobile, and the positivist denies to his fellow men the faculty of choosing ends and the means to attain these ends.