Human Action at 75: Von Mises’ Magnum Opus Still Remains Relevant

Jan 2

Written By SanMan

Human Action: A Treatise on Economics by Austrian School economist Ludwig von Mises marks its 75th anniversary this year and deserves to remain a classic alongside Adam Smith’s An Inquiry into the Causes and Nature of the Wealth of Nations. As an ideological treatise and economic manifesto, it was monumental in scope and broad in its case against socialism and government interventionism and defense of free market capitalism. Its original publication in 1949 marked a momentous occasion for the libertarian movement, bringing timeless lessons about economics that remain relevant today. The work by von Mises inspires people to take up the cause of freedom because of its vital ideas about laissez-faire capitalism that allows freedom to prosper.

Von Mises became famous in his native country of Austria for being a spokesman for the Austrian School of Economics founded by Carl Menger. Mises argued that the economic calculation problem demonstrated the failure of socialism to adequately allocate resources without private property under central planning in a famous essay written in 1920. Von Mises published several works in favor of free-market economic liberalism and against bureaucracy, economic interventionism, socialism, and totalitarianism. He fought as an artillery officer during the First World War, served as a chief Austrian economic minister, and witnessed the rise of national socialism firsthand. After the Nazis ransacked his apartment and confiscated his personal papers, he and his wife Margit fled Austria for Switzerland in 1934 and ultimately the United States in 1940.

Mises had served as a founding member of the free-market Mont Perlin Society alongside his informal student F. A. Hayek among other prominent economists and philosophers. Mises became a visiting professor at New York University in 1945 in their economics department and championed the cause of free market capitalism at a time when leading intellectuals were strongly sympathetic to Keynesian and Marxian economics. Mises carried a German copy of the economic treatise Nationalokonomie published in Switzerland in 1940 which was translated into English and further developed as Human Action.

Mises wrote his masterwork over several years and comprised nearly 900 pages of content in its initial print run. Human Action from its first page contained many insights about the nature of free market economics. Mises explained how market phenomena were made possible through “the outcomes of countless conscious, purposive actions, choices, and preferences of individuals”. Civilization was made possible through the existence of private property rights and supply and demand rather than conquest and theft. He argued that economics was a science whereby man acts. His ideological framework was based on methodological individualism. Consumers through their actions and choices were the sovereigns in determining success in a market system and a meritocratic framework for economic liberty.

Mises outlines the concept of economics as a theoretical science, which he defines as praxeology. He describes this phenomenon as a system of human action. The author understood that the foundation of human action and a free economy is readily self-evident in our behavior as people. The sum of the whole economy is made of countless individuals freely buying, trading, competing, and selling goods using their own preferences and choices. They are responding to personal subjective value judgments and acting on behalf of their own decisions irrespective of those in power. Government attempts to regulate our behavior on behalf of making people equal are counterproductive and ultimately futile to Mises who wrote that "Men are born unequal and...it is precisely their inequality that generates social cooperation and civilization."

Mises writes in his magnum opus that human action is “purposeful behavior” that governs the success of an economy. To Mises, market phenomena exist as "the outcomes of countless conscious, purposive actions, choices, and preferences of individuals, each of whom was trying as best as he or she could under the circumstances to attain various wants and ends and to avoid undesired consequences”. According to Mises, “The body of economic knowledge is an essential element in the structure of human civilization; it is the foundation upon which modern industrialism and all the moral, intellectual, technological, and therapeutical achievements of the last centuries have been built”. He strongly opposed socialist central planning, writing that “Socialism is an alternative to capitalism as potassium cyanide is an alternative to water.” His challenging philosophical tome of economic and political theory became a strong counterweight to Marx’s Das Kapital and Keynes’ General Theory of Employment, Interest, and Money.

Mises established an axiomatic framework for a free-market economy in his masterwork. Individuals determine prices in a competitive market rather than government management. A classical liberal order that respected private property rights was essential to the existence of civilization itself. Human Action challenged Marxist, Keynesian, and neoclassical economic theory on anti-positivist grounds and made it clear that there was no reasonable alternative to the success of the free market system. Mises warned readers at the end of his work that those who disregard the teachings of economics “will stamp out society and the human race.”

Human Action was first published in the United States on September 19, 1949, under Yale University Press to great fanfare. Mises earned the support of President Leonard Reed of the Foundation of Economic Education, one of the first libertarian think tanks, which he joined to promote his work and spread his ideas. Free market journalist Henry Hazlitt praised the work in Newsweek magazine, stressing that “If any single book can turn the ideological tide that has been running in recent years so heavily toward statism, socialism, and totalitarianism, Human Action is that book”. Calling it a masterpiece, he also argued that the work “should become the leading text of everyone who believes in freedom, in individualism, and the ability of a free market economy”. Human Action left a mark on the libertarian world that continues to inspire.

Human Action became widely accepted as a foundational text of the emerging libertarian right in the United States. Mises as a spokesman for the Austrian School was very influential on several free-market economists and philosophers, writing over twenty-five books and over a hundred articles in his lifetime. He befriended novelist Ayn Rand and appreciated her 1957 novel Atlas Shrugged—his informal student F. A. Hayek won the Nobel Prize in Economics on behalf of the Austrian School in 1974. The works of Ludwig von Mises have inspired the careers of American politicians like Congressman Ron Paul and anarcho-capitalist economists and philosophers like Murray Rothbard and Hans Hermann Hoppe. The Mises Institute is dedicated to spreading Mises’ ideas by publishing his works and hosting conferences on Austrian economic theory. Von Mises has also been praised by Argentinian libertarian president and economist Javier Milei and remains a highly cited economic thinker in Latin America.

The intellectual contributions of Mises and his students have seen a resurgence in the world largely due to the success of Human Action. Mises among many others provided the groundwork for the libertarian movement to grow in the United States and around the world. He reminds us to take human action and take heed of his warnings. Mises had a motto “Do not give into evil but proceed ever more boldly against it”. The power of an idea whose time has come cannot be stopped by any man or any government. Mises and his students of his generation and ours continue to inspire. The path to prosperity is within our grasp and the choice is ours.

-@HLMenckenFan

SOURCES

https://www.amazon.com/Human-Action-Scholars-Ludwig-Mises/dp/1933550317/ref=sr_1_5?crid=26H2QW00F0USX&dib=eyJ2IjoiMSJ9.d6KK9yCQ30GuEJEcE5WmjG-8SgDOdKFGUCH_Vt96JJ_OCNfzSKtBPKsJjfLuR_H6c6IwCB_uQ6Pqm9GJa6EiMx_I77KLn1dVfNoNCtwvzlYaJbNiFt7Bmo6dKbtDtDkw5BrY2M5PNBupTiURpnOMa2lAE62pEmQvL5vPGK7iLu6ijGQXYNrzOdhVfBlGSNBVTz0AwbdJdQcGUd2zfY-XF0b67sAMjGeBswFbXQB4bLA.Y7lZkHs1Fx14TgMVqcrGDpJIWjaCHodMxhozJe1J_L4&dib_tag=se&keywords=human+action+von+mises&qid=1713700578&sprefix=human+action+von+mises%2Caps%2C89&sr=8-5

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https://mises.org/mises-daily/two-masterpieces-mises