Action based on reason, action therefore which is only to be understood by reason, knows only one end, the greatest pleasure of the acting individual. The attainment of pleasure, the avoidance of pain — these are its intentions. By this, of course, we do not mean ‘pleasure’ and ‘pain’ in the sense in which these terms used to be used. In the terminology of the modern economist, pleasure is to be understood as embracing all those things which men hold to be desirable, all that they want and strive for.

All human action, so far as it is rational, appears as the exchange of one condition for another. Men apply economic goods and personal time and labour in the direction which, under the given circumstances, promises the highest degree of satisfaction, and they forego the satisfaction of lesser needs so as to satisfy the more urgent needs.

The terms ‘Capitalism’ and ‘Capitalistic Production’ are political catchwords. They were invented by socialists, not to extend knowledge, but to carp, to criticize, to condemn. To-day, they have only to be uttered to conjure up a picture of the relentless exploitation of wage-slaves by the pitiless rich. They are scarcely ever used save to imply a disease in the body-politic. From a scientific point of view, they are so obscure and ambiguous that they have no value whatever. Their users agree only in this, that they indicate the characteristics of the modern economic system.

The common habit of economists of distinguishing between ‘economic’ or ‘purely economic’ and ‘non-economic’ action is just as unsatisfactory as the old distinction between ideal and material goods. For willing and acting are unitary. All ends conflict among themselves and it is this conflict which ranges them in one scale. Not only the satisfaction of wishes, desires and impulses that can be attained through interaction with the external world, but the satisfaction also of ideal needs must be judged by one criterion. In life we have to choose between the ‘ideal’ and the ‘material’.