2. The Law of Returns
Quantitative definiteness in the effects brought about by an economic good means with regard to the goods of the first order (consumers’ goods): a quantity a of cause brings about--either once and for all or piecemeal over a definite period of time--a quantity {a} of effect.
3. Human Labor as a Means
The employment of the physiological functions and manifestations of human life as a means is called labor. The display of the potentialities of human energy and vital processes which the man whose life they manifest does not use for the attainment of external ends different from the mere running of these processes and from the physiological role they play in the biological consummation of his own vital economy, is not labor; it is simply life.
4. Production
Action, if successful, attains the end sought. It produces the product.
Production is not an act of creation; it does not bring about something that did not exist before. It is a transformation of given elements through arrangement and combination. The producer is not a creator. Man is creative only in thinking and in the realm of imagination. In the world of external phenomena he is only a transformer. All that he can accomplish is to combine the means available in such a way that according to the laws of nature the result aimed at is bound to emerge.
Mises Daily Wednesday by Julian Adorney:
When it comes to romantic relationships, people ruthlessly discriminate and make an endless number of subjective judgments. Most agree that it is absurd to regulate these relationships while not realizing that the same is true of all business relationships as well.
Once upon a time, it would have been shocking and stunning for a politician to mention any Austrian economist. Then, Ronald Reagan started mentioning Hayek a lot, and as time progressed, Hayek became a “safe” economist who many self-proclaimed “free market” invoked when wanting to prove their intellectual chops.
7. Conclusion: Economics and Public Policy
1. Economics: Its Nature and Its Uses
ECONOMICS PROVIDES US WITH TRUE laws, of the type if A, then B, then C, etc. Some of these laws are true all the time, i.e., A always holds (the law of diminishing marginal utility, time preference, etc.). Others require A to be established as true before the consequents can be affirmed in practice. The person who identifies economic laws in practice and uses them to explain complex economic fact is, then, acting as an economic historian rather than as an economic theorist.
2. Implicit Moralizing: The Failures of Welfare Economics
As we have reiterated, economics cannot by itself establish ethical judgments, and it can and should be developed in a Wertfrei manner. This is true whether we adopt the modern disjunction between fact and value, or whether we adhere to the classical philosophical tradition that there can be a “science of ethics.” For even if there can be, economics may not by itself establish it.
3. Economics and Social Ethics
If the economist qua economist must be Wertfrei, does this leave him any room for significant pronouncements on questions of public policy? Superficially, it would seem not, but this entire work has been testimony to the contrary.
4. The Market Principle and the Hegemonic Principle
Praxeological analysis of comparative politico-economic systems can be starkly summed up in the following table:
