Human Action and Economics
It is important to understand the context and the scope of the science of economics. It is a common misconception that economics is a science that primarily deals with maths, numbers, statistics, averages, medians, and charts. Myriad university professors all across the globe teach students about supply and demand curves and how to calculate market equilibrium through the derivative of those, and perform many other numbers games.
All this accomplishes nothing but to obfuscate the true essence of economics. Little attention is paid to important concepts, such value and time preference, the formation of prices, the importance of consumption goods vs. factors of production, the concepts of money and monetary policy.
All market data is nothing but the outcome of actions performed by individuals, cooperating, producing, consuming, and competing on the market. Economics is first and foremost a science of human action, so before embarking upon an analysis of statistical data and mathematical concepts it is indispensable to understand the motivating forces behind actions performed by humans. Those have been fully explained by Praxeology.
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- “It is what you do that defines you.”
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