Human Action: A Treatise on Economics

by Ludwig Von Mises

  This state of affairs could be changed by such an increase in population figures that all material factors required for the production of the foodstuffs indispensable—in the strict meaning of the word—for the preservation of human life are fully exploited. But as long as this is not the case, it cannot be changed by any improvement in technological methods of production. The substitution of more efficient methods of production for less efficient ones does not render labor abundant, provided there are still material factors available whose utilization can increase human well-being. On the contrary, it increases output and thereby the quantity of consumers' goods. “Labor-saving” devices reduce want. They do not bring about “technological unemployment.”

  Every product is the result of the employment both of labor and of material factors. Man economizes both labor and material factors.

  Immediately Gratifying Labor and Mediately Gratifying Labor

  As a rule labor gratifies the performer only mediately, namely, through the removal of uneasiness which the attainment of the end brings about. The worker gives up leisure and submits to the disutility of labor in order to enjoy either the product or what other people are ready to give him for it. The expenditure of labor is for him a means for the attainment of certain ends, a price paid and a cost incurred.

  But there are instances in which the performance of labor gratifies the worker immediately. He derives immediate satisfaction from the expenditure of labor. The yield is twofold. It consists on the one hand in the attainment of the product and on the other hand in the satisfaction that the performance itself gives to the worker.

  People have misinterpreted this fact grotesquely and have based on this misinterpretation fantastic plans for social reforms. One of the main dogmas of socialism is that labor has disutility only within the capitalist system of production, while under socialism it will be pure delight. We may disregard the effusions of the poor lunatic Charles Fourier. But Marxian “scientific” socialism does not differ in this point from the Utopians. One of its foremost champions, Karl Kautsky, expressly declares that a chief task of a proletarian regime will be to transform labor from a pain into a pleasure.9

  The fact is often ignored that those activities which bring about immediate gratification and are thus direct sources of pleasure and enjoyment, are essentially different from labor and working. Only a very superficial treatment of the facts concerned can fail to recognize these differences. Paddling a canoe as it is practiced on Sundays for amusement on the lakes of public parks can only from the point of view of hydromechanics be likened to the rowing of boatsmen and galley slaves. When judged as a means for the attainment of ends it is as different as is the humming of an aria by a rambler from the recital of the same aria by the singer in the opera. The carefree Sunday paddler and the singing rambler derive immediate gratification from their activities, but no mediate gratification. What they do is therefore not labor, not the employment of their physiological functions for the attainment of ends other than the mere exercise of these functions. It is merely pleasure. It is an end in itself; it is done for its own sake and does not render any further service. As it is not labor, it is not permissible to call it immediately gratifying labor.10

  Sometimes a superficial observer may believe that labor performed by other people gives rise to immediate gratification because he himself would like to engage in a kind of play which apparently imitates the kind of labor concerned. As children play school, soldiers, and railroad, so adults too would like to play this and that. They think that the railroad engineer must enjoy operating and steering his engine as much as they would if they were permitted to toy with it. On his hurried way to office the bookkeeper envies the patrolman who, he thinks, is paid for leisurely strolling around his beat. But the patrolman envies the bookkeeper who, sitting on a comfortable chair in a well-heated room, makes money by some scribbling which cannot seriously be called labor. Yet the opinions of people who misinterpret other people's work and consider it a mere pastime need not be taken seriously.

  There are, however, also instances of genuine immediately gratifying labor. There are some kinds of labor of which, under special conditions, small quantities provide immediate gratification. But these quantities are so insignificant that they do not play any role at all in the complex of human action and production for the satisfaction of wants. Our world is characterized by the phenomenon of the disutility of labor. People trade the disutility-bringing labor for the products of labor; labor is for them a source of mediate gratification.

  If a special kind of labor gives pleasure and not pain, immediate gratification and not disutility of labor, no wages are allowed for its performance. On the contrary, the performer, the “worker,” must buy the pleasure and pay for it. Hunting game was and is for many people regular disutility-creating labor. But there are people for whom it is pure pleasure. In Europe amateur hunters buy from the owner of the hunting-ground the right to shoot a definite number of game of a definite type. The purchase of this right is separated from the price to be paid for the bag. If the two purchases are linked together, the price by far exceeds the prices that can be obtained on the market for the bag. A chamois buck still roaming on the precipitous rocks has therefore a higher cash value than later when killed, brought down to the valley, and ready for the utilization of the meat, the skin, and the horns, although strenuous climbing and some material must be expended for its killing. One could say that one of the services which a living buck is able to render is to provide the hunter with the pleasure of killing it.

  The Creative Genius

  Far above the millions that come and pass away tower the pioneers, the men whose deeds and ideas cut out new paths for mankind. For the pioneering genius11 to create is the essence of life. To live means for him to create.

  The activities of these prodigious men cannot be fully subsumed under the praxeological concept of labor. They are not labor because they are for the genius not means, but ends in themselves. He lives in creating and inventing. For him there is no leisure, only intermissions of temporary sterility and frustration. His incentive is not the desire to bring about a result, but the act of producing it. The accomplishment gratifies him neither mediately nor immediately. It does not gratify him mediately because his fellow men at best are unconcerned about it, more often even greet it with taunts, sneers, and persecution. Many a genius could have used his gifts to render his life agreeable and joyful; he did not even consider such a possibility and chose the thorny path without hesitation. The genius wants to accomplish what he considers his mission, even if he knows that he moves toward his own disaster.

  Neither does the genius derive immediate gratification from his creative activities. Creating is for him agony and torment, a ceaseless excruciating struggle against internal and external obstacles; it consumes and crushes him. The Austrian poet Grillparzer has depicted this in a touching poem “Farewell to Gastein.” 12 We may assume that in writing it he thought not only of his own sorrows and tribulations but also of the greater sufferings of a much greater man, of Beethoven, whose fate resembled his own and whom he understood, through devoted affection and sympathetic appreciation, better than any other of his contemporaries. Nietzsche compared himself to the flame that insatiably consumes and destroys itself.13 Such agonies are phenomena which have nothing in common with the connotations generally attached to the notions of work and labor, production and success, breadwinning and enjoyment of life.

  The achievements of the creative innovator, his thoughts and theories, his poems, paintings, and compositions, cannot be classified praxeologically as products of labor. They are not the outcome of the employment of labor which could have been devoted to the production of other amenities for the “production” of a masterpiece of philosophy, art, or literature. Thinkers, poets, and artists are sometimes unfit to accomplish any other work. At any rate, the time and toil which they devote to creative activities are not withheld from employment for other purposes. Conditions may someti
mes doom to sterility a man who would have had the power to bring forth things unheard of; they may leave him no alternative other than to die from starvation or to use all his forces in the struggle for mere physical survival. But if the genius succeeds in achieving his goals, nobody but himself pays the “costs” incurred. Goethe was perhaps in some respects hampered by his functions at the court of Weimar. But certainly he would not have accomplished more in his official duties as minister of state, theatre manager, and administrator of mines if he had not written his plays, poems, and novels.

  It is, furthermore, impossible to substitute other people's work for that of the creators. If Dante and Beethoven had not existed, one would not have been in a position to produce the Divina Commedia or the Ninth Symphony by assigning other men to these tasks. Neither society nor single individuals can substantially further the genius and his work. The highest intensity of the “demand” and the most peremptory order of the government are ineffectual. The genius does not deliver to order. Men cannot improve the natural and social conditions which bring about the creator and his creation. It is impossible to rear geniuses by eugenics, to train them by schooling, or to organize their activities. But, of course, one can organize society in such a way that no room is left for pioneers and their path-breaking.

  The creative accomplishment of the genius is an ultimate fact for praxeology. It comes to pass in history as a free gift of destiny. It is by no means the result of production in the sense in which economics uses this term.

  4. Production

  Action, if successful, attains the end sought. It produces the product.

  Production is not an act of creation; it does not bring about something that did not exist before. It is a transformation of given elements through arrangement and combination. The producer is not a creator. Man is creative only in thinking and in the realm of imagination. In the world of external phenomena he is only a transformer. All that he can accomplish is to combine the means available in such a way that according to the laws of nature the result aimed at is bound to emerge.

  It was once customary to distinguish between the production of tangible goods and the rendering of personal services. The carpenter who made tables and chairs was called productive; but this epithet was denied to the doctor whose advice helped the ailing carpenter to recover his capacity to make tables and chairs. A differentiation was made between the doctor-carpenter nexus and the carpenter-tailor nexus. The doctor, it was asserted, does not himself produce; he makes a living from what other people produce, he is maintained by carpenters and tailors. At a still earlier date the French Physiocrats contended that all labor was sterile unless it extracted something from the soil. Only cultivation, fishing and hunting, and the working of mines and quarries were in their opinion productive. The processing industries did not add to the value of the material employed anything more than the value of the things consumed by the workers.

  Present-day economists laugh at their predecessors for having made such untenable distinctions. However, they should rather cast the beam out of their own eyes. The way in which many contemporary writers deal with various problems—for instance, advertising and marketing—is manifestly a relapse into the crude errors which should have disappeared long ago.

  Another widely held opinion finds a difference between the employment of labor and that of material factors of production. Nature, it is asserted, dispenses its gifts gratuitously; but labor must be paid for by submitting to its disutility. In toiling and overcoming the disutility of labor man adds something to the universe that did not exist before. In this sense labor is creative. This too is erroneous. Man's capacity to work is given in the universe as are the original and inherent capacities of the land and the animal substances. Nor does the fact that a part of the potentiality of labor can remain unused differentiate it from the nonhuman factors of production; these too can remain unused. The readiness of individuals to overcome the disutility of labor is the outcome of the fact that they prefer the produce of labor to the satisfaction derived from more leisure.

  Only the human mind that directs action and production is creative. The mind too appertains to the universe and to nature; it is a part of the given and existing world. To call the mind creative is not to indulge in any metaphysical speculations. We call it creative because we are at a loss to trace the changes brought about by human action farther back than to the point at which we are faced with the intervention of reason directing human activities. Production is not something physical, natural, and external; it is a spiritual and intellectual phenomenon. Its essential requisites are not human labor and external natural forces and things, but the decision of the mind to use these factors as means for the attainment of ends. What produces the product is not toil and trouble in themselves, but the fact that the toilers are guided by reason. The human mind alone has the power to remove uneasiness.

  The materialist metaphysics of the Marxians misconstrues these things entirely. The “productive forces” are not material. Production is a spiritual, intellectual, and ideological phenomenon. It is the method that man, directed by reason, employs for the best possible removal of uneasiness. What distinguishes our conditions from those of our ancestors who lived one thousand or twenty thousand years ago is not something material, but something spiritual. The material changes are the outcome of the spiritual changes.

  Production is alteration of the given according to the designs of reason. These designs—the recipes, the formulas, the ideologies—are the primary thing; they transform the original factors—both human and nonhuman—into means. Man produces by dint of his reason; he chooses ends and employs means for their attainment. The popular saying according to which economics deals with the material conditions of human life is entirely mistaken. Human action is a manifestation of the mind. In this sense praxeology can be called a moral science (Geisteswissenschaft).

  Of course, we do not know what mind is, just as we do not know what motion, life, electricity are. Mind is simply the word to signify the unknown factor that has enabled men to achieve all that they have accomplished: the theories and the poems, the cathedrals and the symphonies, the motorcars and the airplanes.

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  1. It is important to note that this chapter does not deal with prices or market values, but with subjective use-value. Prices are a derivative of subjective use-value. Cf. below, Chapter XVI.

  2. Cf. Carl Menger, Grundsätze der Volkswirtschaftslehre (Vienna, 1871), pp. 88 ff.; Böhm-Bawerk, Kapital und Kapitalzins (3d ed. Innsbruck, 1909), Pt. II, pp.237 ff.

  3. Classes are not in the world. It is our mind that classifies the phenomena in order to organize our knowledge. The question of whether a certain mode of classifying phenomena is conducive to this end or not is different from the question of whether it is logically permissible or not.

  4. Cf. Daniel Bernoulli, Versuch einer neuen Theorie zur Bestimmung von Glücksfällen, trans. by Pringsheim (Leipzig, 1896), pp. 27 ff.

  5. Cf. Max Weber, Gesammelte Aufsätze zur Wissenschaftslehre (Tübingen, 1922), p. 372; also p. 149. The term “pragmatical” as used by Weber is of course liable to bring about confusion. It is inexpedient to employ it for anything other than the philosophy of Pragmatism. If Weber had known the term “praxeology,” he probably would have preferred it.

  6. See below, pp. 138–140.

  7. Of course, some natural resources are so scarce that they are entirely utilized.

  8. Under free mobility of labor it would be waste to improve barren soil if the reclaimed area is not so fertile that it compensates for the total cost of the operation.

  9. Karl Kautsky, Die soziale Revolution (3d ed. Berlin, 1911), II, 16&.

  10. Rowing seriously practiced as a sport and singing seriously practiced by an amateur are introversive labor. See below, pp. 584–585.

  11. Leaders (Führers) are not pioneers. They guide people along the tracks pioneers have laid. The pioneer clears a road through land hitherto inacce
ssible and may not care whether or not anybody wants to go the new way. The leader directs people toward the goal they want to reach.

  12. It seems that there is no English translation of this poem. The book of Douglas Yates (Franz Grillparzer, a Critical Biography, Oxford, 1946), I, 57, gives a short English resume of its content.

  13. For a translation of Nietzsche's poem see M. A. Miigge, Friedrich Nietzsche (New York, 1911), p. 275.

  Part Two

  Action Within the Framework of Society

  VIII. HUMAN SOCIETY

  1. Human Cooperation

  SOCIETY is concerted action, cooperation. Society is the outcome of conscious and purposeful behavior. This does not mean that individuals have concluded contracts by virtue of which they have founded human society. The actions which have brought about social cooperation and daily bring it about anew do not aim at anything else than cooperation and coadjuvancy with others for the attainment of definite singular ends. The total complex of the mutual relations created by such concerted actions is called society. It substitutes collaboration for the—at least conceivable— isolated life of individuals. Society is division of labor and combination of labor. In his capacity as an acting animal man becomes a social animal.

  Individual man is born into a socially organized environment. In this sense alone we may accept the saying that society is—logically or historically—antecedent to the individual. In every other sense this dictum is either empty or nonsensical. The individual lives and acts within society. But society is nothing but the combination of individuals for cooperative effort. It exists nowhere else than in the actions of individual men. It is a delusion to search for it outside the actions of individuals. To speak of a society's autonomous and independent existence, of its life, its soul, and its actions is a metaphor which can easily lead to crass errors.