Austrian Economics - Human Action

Human Action

A cornerstone of Austrian Economics is this concept: we all operate striving to exchange our current situation for a better one. It is referred to as purposeful human action or all humans act purposefully. An individual acts when they use
means means:
A means is what serves to the attainment of any end, goal, or aim. Means are not in the given universe; in this universe there exist only things. A thing becomes a means when human reason plans to employ it for the attainment of some end and human action really employs it for this purpose. (Human Action - Mises) Means are also called goods.

to achieve
subjectively subjectively:
Based on or influenced by personal feelings, tastes, or opinions. (Oxford)

valued
ends Ends:
The result sought by an action is called its end, goal, or aim. One uses these terms in ordinary speech also to signify intermediate ends, goals, or aims; these are points which acting man wants to attain only because he believes that he will reach his ultimate end, goal or aim in passing beyond them. (Human Action - Mises)

making this action purposeful, it is for a reason. Essentially this action is occurring whenever an individual, let’s call them an actor, is conscious or awake. Since human action is defined as purposeful, reflexive or unconscious bodily movements then are not considered action in this context. Coughing because of dust for example.

All action is based on exchange or choice: we are attempting to put ourselves in a better or happier position that we would have been had we chose differently. No choice at all is also an action. The benefit of the choice or exchange is material gain and/or the psychic revenue/profit. The cost is the next item below the chosen action in our value scale; more on this later. Action in this context can be as simple as a cup of coffee in the morning: making and drinking coffee is purposeful action and if you weren't expecting or wanting some form of pleasure AKA psychic profit from drinking it, you wouldn't bother. Even if it is simply habit, this is still purposeful action in order to better your current situation, just not at the totally conscious level.

Quick mention: 'the why'. The study of human action in the economic sense is not about what motivates us to take this action or that, simply that purposeful action is taken and what that action is. Why this or that action was taken is a different study altogether, psychology in some cases, history in others perhaps. One might argue that acting in a  survival sense is a motivation, a why, however, IMHO that's really a condition of human existence instead of motivation: we act to survive or we perish. Perhaps in this case they are one in the same.

Ludwig von Mises said

Most of a man's daily behavior is simple routine. He performs certain acts without paying special attention to them. He does many things because he was trained in his childhood to do them, because other people behave in the same way, and because it is customary in his environment. He acquires habits, he develops automatic reactions. But he indulges in these habits only because he welcomes their effects. As soon as he discovers that the pursuit of the habitual way may hinder the attainment of ends considered as more desirable, he changes his attitude.

A man brought up in an area in which the water is clean acquires the habit of heedlessly drinking, washing, and bathing. When he moves to a place in which the water is polluted by morbific germs, he will devote the most careful attention to procedures about which he never bothered before. He will watch himself permanently in order not to hurt himself by indulging unthinkingly in his traditional routine and his automatic reactions. The fact that an action is in the regular course of affairs performed spontaneously, as it were, does not mean that it is not due to a conscious volition and to a deliberate choice. Indulgence in a routine which possibly could be changed is action.

a few deets

There are two parts to an action: a value judgment made by the actor based on their value scale and the actor's belief that they possess the required means to achieve the desired end. For example: a person may prefer thunderstorms to blue sky but no action will be taken if the person does not believe they can alter weather.

While we often tend to speak in terms of groups or categories, only individuals can act. 'The people of Canada elected such and such' or 'Germany has attacked Britain' are merely metaphor as it is individuals who have acted. It makes no difference if, in the latter example, they were acting under orders of a military command, they were still acting as individuals. Society, government, the military, a country name, etc., these are not entities unto themselves but rather just groupings of individuals.

We exist in the concept of time and therefore action takes place in time. There is the time before the action, the duration of the action and the time after the action. Action is future facing, that is, all actors are working to create a more desirable future from their individual standpoint. Humans also possess time preference, that is, they prefer to obtain the desired satisfaction sooner rather than later. In the context of value ranking, this means that present goods are valued higher than future goods.

This next one is a bit tricky to grasp, more detail later on when we talk about marginal utility. Robert Murphy puts it this way: "Individuals make decisions on the margin. No one ever chooses between “diamonds” and “water.” Rather, an individual must choose between a definite amount of diamonds and a definite amount of water."

Finally, action involves uncertainty of the future; if the future were known and therefore determined, there would be no scope for action since you would just submit 'a one time list' with all the choices leading to the most desired ends and then just sit back, action free.



While all of this may sound like complex gobbly gook, take each part and apply it to examples in your own life. I bet you'll be surprised to realize that you do all of this too but we humans tend not consider our actions in these terms.