Chapter Summary

1. ENDS AND MEANS

The end (or goal or aim) is the result sought by an actor. The means is whatever is used to attain the end. Ends and means do not exist in the physical universe but rather are the product of a valuing mind as it surveys its physical environment.

Chapter Summary

1. THE TEMPORAL CHARACTER OF PRAXEOLOGY

In a logical system (such as mathematics) all of the implications are coexistent and interdependent. It is not true that the axioms of geometry “cause” its theorems to be true, even though a limited human mind must work step by step through a geometrical proof.

In the sense that praxeology is a logical system, it too is “out of time.” However, the system itself contains parts such as change, causality, and the notions of sooner and later.

Chapter Summary

1. UNCERTAINTY AND ACTING

Action implies uncertainty of the future. If the future were known, there would be no impetus to action. The praxeologist can recognize this truth without taking a stand on the philosophical question of whether men are really “free.” Even if all events really are determined by natural laws, nonetheless we are nowhere near the ability to accurately predict all future events, and hence there is still scope for human action.

Chapter Summary

1. THE LAW OF MARGINAL UTILITY

Acting man must place all ends onto a single scale of values. If he is to choose between (say) acquiring a steak or attending the opera, he must decide which outcome yields the most utility, and thus these entirely different satisfactions must be compared according to a common denominator. Even so, action doesn’t measure utility; rather, it is action that demonstrates the end most highly valued by the actor.

Part Two—Action Within the Framework of Society

Chapter Summary

1. HUMAN REASON

Reason distinguishes man from other animals. All action is preceded by thinking. The reasoning employed may be faulty, but, by definition, action is the purposeful attempt to remove uneasiness. It is always an individual, not “society,” who thinks. Tradition—primarily through language—allows present actors to incorporate into their own thinking the reasoning of their ancestors.

Chapter Summary

1. AUTISTIC EXCHANGE AND INTERPERSONAL EXCHANGE

All action is an exchange, of giving up what is less satisfactory for (the actor hopes) what is more satisfactory. Autistic exchange concerns only one actor, while interpersonal exchange involves cooperation between two or more individuals. Although the emergence of social cooperation occurred gradually in the course of history, the conceptual line between autistic versus interpersonal exchange is sharp.

Part Three—Economic Calculation

Chapter Summary

1. THE GRADATION OF THE MEANS

Acting man values means according to the valuation he places on the ends they can achieve. (An apple seed is valued through consideration of the future apples it can produce for consumption.) The totality of means needed for a given end would possess the same value as the end, except for the discount due to the waiting time involved. (The concept of time preference will be discussed in a later chapter.)

Chapter Summary

1. THE CHARACTER OF MONETARY ENTRIES

Economic calculation encompasses everything that trades against money. Despite their apparent precision, most of the entries on balance sheets reflect the speculative anticipation of owners regarding future market conditions. Therefore, there is nothing “objective” about them. Even so, economic calculation is as effective as it could be. It cannot give a perfect guide to the future, because the future is inherently uncertain.

Chapter Summary

1. MONETARY CALCULATION AS A METHOD OF THINKING

Monetary calculation is the guiding principle of action in any society with a division of labor. It transforms the very thought process of anyone considering action that involves the property of others. Potential actions are evaluated on the basis of expected costs and revenues, while past actions are evaluated with the accounting of profit and loss.