Introduction
1. Economics and Praxeology
Economics is the youngest of all sciences. In the last two hundred years, it is true, many new sciences have emerged from the disciplines familiar to the ancient Greeks. However, what happened here was merely that parts of knowledge which had already found their place in the complex of the old system of learning now became autonomous. The field of study was more nicely subdivided and treated with new methods; hitherto unnoticed provinces were discovered in it, and people began to see things from aspects different from those of their precursors. The field itself was not expanded.
Foreword to the 3rd Edition by Ludwig von Mises
IT GIVES me great satisfaction to see this book, handsomely lprinted by a distinguished publishing house, appear in its third revised edition.
Foreword to the 4th Edition by Bettina Bien Greaves
Mises’ contribution was very simple, yet at the same time extremely profound. He pointed out that the whole economy is the result of what individuals do. Individuals act, choose, cooperate, compete, and trade with one another. In this way Mises explained how complex market phenomena develop.
Human Action
5. Binary Intervention: Government Expenditures
WHEN1 WRITERS ON PUBLIC FINANCE and political economy reach the topic of “government expenditures,” they have traditionally abandoned analysis and turned to simple institutional description of various types of governmental expenditure.
1. Government Subsidies: Transfer Payments
There are two and only two ways of acquiring wealth: the economic means (voluntary production and exchange) and the political means (confiscation by coercion). On the free market only the economic means can be used, and consequently everyone earns only what other individuals in society are willing to pay for his services. As long as this continues, there is no separate process called “distribution”; there are only production and exchange of goods. Let government subsidies enter the scene, however, and the situation changes.
2. Resource-Using Activities: Government Ownership versus Private Ownership
The bulk of government activities use resources, redirecting factors of production to government-chosen ends. These activities generally involve the real or supposed supply of services by government to some or all of the populace. Government functions here as an owner and enterpriser.
Mises Daily Tuesday by Benjamin Wiegold:
The US, Russia, Canada, Denmark, and other states are racing to take control of the Arctic Ocean. Outside of a few tiny outposts, however, these states have never “homesteaded” the region, so their claims of true ownership are fanciful at best.
Economic historians of the 21st Century will undoubtedly be puzzled by the reception accorded to economic theorists of the 20th Century. They will be particularly puzzled by what occurred in the span of years between World War I and 1970.
