There has just been published by the Yale University Press a book that is destined to become a landmark in the progress of economics. Its title is Human Action, and its author is Ludwig von Mises. It is the consumation of half a century of experience, study, and rigorous thought.
No living writer has a more thorough knowledge of the history and literature of economics than Mises, and yet no living writer has been to more pains to take no solution of any problem on faith, but to think out each solution, step by verified step, for himself. The result is a work of great originality written in a great tradition. Although it builds on what was sound in the classical economists and on the revolutionary revision of Menger, Böhm-Bawerk, Jevons, Clark, and Wicksteed, it extends beyond any previous work the logical unity and precision of modern economic analysis.
I know of no other work, in fact, which conveys to the reader so clear an insight into the intimate interconnectedness of all economic phenomena. It makes us recognize why it is impossible to study or understand “collective bargaining” or “labor problems” in isolation; or to understand wages apart from prices or from interest rates or from profits and losses, or to understand any of these apart from all the rest, or the price of any one thing apart from the prices of other things.
It makes us see why those who specialize merely in “monetary economics” or “agricultural economics” or “labor economics” or “business forecasting” so often go astray.
So far is Mises’s approach from that of the specialist that he treats economics itself as merely part (though the hitherto best-elaborated part) of a more universal science, “praxeology,” or “the science of every kind of human action.” This is the key to his title and to his 889 comprehensive pages.
Mises is so concerned to lay the foundations of his work with unassailable solidity that he devotes the first 142 pages to a discussion of “epistemological” problems alone. This is apt to discourage all but the most serious students of the subject. Yet there is nothing pretentious or pedantic in Mises’s writing. His sentences and vocabulary are as simple and clear as his profundity and closely woven logic will permit. Once his more abstract theoretical foundations have been laid his chapters are models of lucidity and vigor.
Outstanding among his many original contributions are his “circulation credit” theory of business cycles, which emphasizes the harm of cheap-money policies, and his demonstration that partial socialism is parasitic on capitalism and that a complete socialism would not even know how to solve the problem of economic calculation.
This book is in fact, as the publishers declare, the counterweight of Marx’s Das Kapital, of Lord Keynes’s General Theory, and of countless other books recommending socialization, collectivist planning, credit expansion, and similar panaceas. Mises recognizes inflationism under its most sophisticated disguises. He demonstrates repeatedly how statist interventions in the market economy bring about consequences which, even from the standpoint of those who originally advocated the interventions, are worse than the state of affairs they were designed to improve.
Human Action is, in short, at once the most uncompromising and the most rigorously reasoned statement of the case for capitalism that has yet appeared. 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.
It should become the leading text of everyone who believes in freedom, in individualism, and in the ability of a free-market economy not only to outdistance any government-planned system in the production of goods and services for the masses, but to promote and safeguard, as no collectivist tyranny can ever do, those intellectual, cultural, and moral values upon which all civilization ultimately rests.