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CHAPTER XIII. Monetary Calculation as a Tool of Action 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

Chapter XXI. Work and Wages Chapter Summary 1. Introversive Labor and Extroversive Labor A man may overcome the disutility of labor — which is the same thing as saying he will be willing to forego the pleasures of leisure — for various reasons, including: He works in order to strengthen his body and mind, for example through weightlifting or study

Chapter XXII. The Nonhuman Original Factors of Production Chapter Summary 1. General Observations Concerning the Theory of Rent The Ricardian treatment of rent was actually quite similar to the marginal utility analysis of prices; the classical economists were simply wrong in applying the concept of “differential rent” only to parcels of land, and

Chapter XIV. The Scope and Method of Catallactics Chapter Summary 1. The Delimitation of Catallactic Problems The scope of praxeology — the science of human action — is precise: it is the study of goal-seeking rational behavior. However, the scope of catallactics or specifically “economic” problems is somewhat ambiguous. Economics is mainly

Consumers shell-shocked by ever higher records for oil and gasoline prices may have been surprised by the mild Producer Price Index (PPI) update recently issued . The Labor Department reported that from March to April, wholesale prices rose only 0.2 percent, half of what the markets had been expecting. The primary cause for this tame reading was

Chapter XV. The Market Chapter Summary 1. The Characteristics of the Market Economy The market economy is a social system where individuals specialize in their occupations and the means of production (natural resources, tools, etc.) are privately owned. Although everyone acts to serve his own interests, in a market economy this is achieved by

The recent political controversies over record oil prices have underscored the sad truth that even nominal friends of the market don’t understand how it really works. Because they have only a superficial grasp of this complex “organism” and how it coordinates interactions among billions of Homo sapiens spread across the entire planet, they quickly

Anyone who peruses the top mainstream economics journals will quickly realize that economic theory has been crowded out by mathematical formalism. The neoclassical economists’ uncompromising quest for precision in their models has been achieved at the expense of the accuracy of their predictions. The old joke of the drunk searching for his keys

In a previous article , I showed that the proposals to curb “excessive” speculation in oil futures markets were based on ignorance of how the market coordinates production and consumption over time. In the present article, I will explore the issue of opening up the Arctic National Wilderness Refuge (ANWR) to oil drilling. We’ll see once again that

On July 29, the SEC announced that it would extend its original 10-day restriction on “naked” short sales of 19 major financial companies through August 12. Analysts across the board agree that this particular SEC rule, by itself, will have little effect except to raise transaction costs for those wishing to short Fannie Mae, Freddie Mac, Goldman