After 75 Years, Human Action Is Still the Standard for Understanding Economics

[The Influence and Significance of Human Action After 75 Years edited by Joseph T. Salerno (Mises Institute, 2026; v +256 pp.)]

The Mises Institute held a conference in 2024 to commemorate the 75th anniversary of the publication of Human Action in 1949; and, in the present volume, the papers presented at that conference have been published. The contributors to the book reflect the vast scope of the book about which they have written. 

Here we find Paul Cwik on the law of association; Thomas J. DiLorenzo on the way in which Human Action influenced his work on monopoly and antitrust; Jeffrey M. Herbener on the contrast between praxeology and mathematical modeling; Randall G. Holcombe on his discovery of Human Action and how it has influenced his work on entrepreneurship; Hans-Hermann Hoppe on the relation between thought and action and on the nature of a priori knowledge in praxeology; Jörg Guido Hülsmann on his efforts to provide a different philosophical foundation for praxeology from that of Mises and the modifications of Misesian economics to which these efforts have led him; Peter G. Klein on the importance of property rights for understanding the activity of the entrepreneur and the ensuing differences between the Misesian capitalist-entrepreneur and the Kirznerian entrepreneur; Robert P. Murphy on methodological dualism and on the differences between Mises’s calculation argument and Hayek’s knowledge argument; Jonathan Newman on class and case probability and on the application of this distinction to understanding entrepreneurship; Patrick Newman on Mises’s discussion of credit contraction after an economic boom and the difference between Mises and Rothbard about whether such a contraction could speed economic recovery; Shawn Ritenour on what Human Action tells us about the requirements for economic growth; Joseph T. Salerno on the place of Human Action within Mises’s larger project of a comprehensive analysis of all possible economic systems and his identification of the Marxist basis of “progressivism” and the inevitable failure of its interventionist measures; Timothy D. Terrell on the application of Mises’s calculation argument to programs that attempt to deal with environmental conservation; Mark Thornton on the impact of Human Action on the economics profession; and the present writer on Mises’s Epicurean ethics. It must be left to others to evaluate my essay, but all of the other contributions are outstanding. I cannot discuss all of them, but in what follows I shall comment on a few points of interest.

In a brilliant essay, Hans Hoppe discusses Mises’s claim that human action is “the ultimate given.” He contends that this is true but must be supplemented with the fact that communication takes place in language:

Speaking and writing, and all philosophizing, are done in language. There is no other beginning, and these activities, indeed all communicating in meaningful words, are themselves also actions. So Mises is ultimately right. But it is real actions, and the success or failure of real actions, that precede and provide the ultimate testing ground for all mere talk about actions. Actions, that is, speak louder than words and serve as ground to verify or falsify words. . .there is no infinite regress so far as our knowledge of man is concerned: such is only the case as long as you stay exclusively within the realm of words; but once you recognize how words are tied to objects and get down to the level of real actions, all further questions disappear. You are on unmovable ground. You cannot ask for a justification of action, as this question would be an action itself. (emphasis in original)

This is indeed an intriguing argument, but I confess that I do not understand what is meant by a “justification” of action. If Hoppe means that if someone claimed that action is derived from some more fundamental category, he would entrap himself in a performative contradiction, in that his purported derivation would itself be an action, does this not confuse the activity of deriving with the content of the derivation? And does Mises claim that human action is the ultimate given of knowledge? I had understood him to make only the limited claim that in praxeology, human action is an ultimate given.

In his discussion of the ways he has sought to make economics “more realistic than even Mises imagined,” Guido Hülsmann challenges Mises’s use of the evenly rotating economy. He thought that, “Only in very few cases was it necessary to build the demonstration [of economic theorems] on the imaginary construct of the ‘evenly rotating economy,’ and he even argued that the use of such constructions was ‘the specific method of economics.’”

Hülsmann proposes to dispense with imaginary constructions:

The purpose of equilibrium analysis is to explain the differences between equilibrium and disequilibrium. This difference does not depend on whether equilibrium ever exists at all. Even if the real world were always in disequilibrium, this would not reduce the necessity and utility of comparing it to a counterfactual world in which it was in equilibrium.

Once more I am not sure that I have grasped the argument, but I take it to be this: A counterfactual world is a possible but non-actual world, but an imaginary construction is not a possible world. Hülsmann is right that Mises’s evenly rotating economy is not a possible world, but I do not see why this point gives him an epistemological advantage over Mises. If by being “realistic,” he intends to be commending a practice but just means “does not use imaginary constructions,” is he not begging the question? And if he means something else, what is it?

I have space to discuss only one more essay. Timothy Terrell warns supporters of the free market against uncritical embrace of the Coase Theorem. Coase was taken by many supporters of the Chicago School to have struck a near-fatal blow against the use of Pigouvian taxes and subsidies to correct positive and negative externalities. Coase showed that, in certain conditions, those harmed or benefited by the externalities could deal with them without having to bring in the government.

Terrell argues that supporters of the Theorem fail to take account of Mises’s socialist calculation argument. In the absence of market prices, there is no way to estimate the costs involved in such claimed externalities. Terrell forcefully tells us that,

Coase has not dealt adequately with Mises’s arguments concerning economic calculation. And in failing to do so, Coase leaves a hole large enough to drive an electric-powered bus full of environmental conference attendees through. What are these cost conditions? As Coase says, “We can imagine cost conditions in which this presumption [the presumption that government intervention is desirable] would be correct and also those in which it would not.” But that is all Coase has: imagining. In the absence of free markets, there is no way to pin down these “cost conditions” in particular situations, or to do anything more than speculate about what the costs of intervention might be. Coase is tied to this cost-measurement chimera.

I hope that my readers will read these stimulating essays about Human Action and, even more importantly, read Human Action. If they do so, they will generate a boom in economic understanding that is in no danger of collapsing into a bust.