When examining economic questions, however, we are confronted with the unfortunate reality that the causative factors shaping economic reality are human beings and their actions, motivated by their own subjective considerations and personal preferences. Far from being inanimate objects reacting in mathematically predictable ways, humans react in irreducibly complex ways. Attempting to paper over all of the complexity of the actions of millions of humans by examining only superficial aggregate measures of some economic phenomenon is the core mistake of failed modern pseudosciences like macroeconomics and epidemiology, which ignore the real actual causative factors in the phenomena they study, and instead attempt to hypothesize based on whatever aggregates can be measured. A century after economics left is classical methodological foundations to attempt to ape physics, and it has still failed to produce one quantitative law or formula that can be independently tested and replicated. Macroeconomic equations come and go with the fashions of modern schools of thought, but none of them has been measured and replicated in a way that can allow it to be called a law.

DiLorenzo, Thomas. “The Myth of Natural Monopoly.” The Review of Austrian Economics, 1996, pp. 43-58. Chapter 13 explains the term capitalism in the Misesean tradition, and how it is an entrepreneurial system inseparable from private property and economic calculation. We examine Mises’ litmus test for determining if a society has a market economy, and what it can tell us about economic prospects, and how it can help us understand economic history. The world already has far too many economics textbooks written in the pseudo-scientific quantitative tradition, but this book will definitively not be one of them. It will not try to explain economics in the terms of the natural sciences, and it will have no sophisticated aggregate equations. Such an approach promises much but delivers little in terms of reliable, useful, and actionable insight. I have taught these textbooks for years and witnessed droves of intelligent students leave the class with more questions than they entered it, struggling to understand the significance of these equations, or see any convincing reason to believe their output, and incredulously try to convince themselves to undertake the astounding leaps of logic necessary to make Keynes’ ridiculous equations conform with reality. The Austrian method, in contrast, promises little in quantitative terms, but it does deliver a deeper understanding of economic concepts and phenomena which learners find far more insightful, actionable, and useful. Where P is pressure in bars, V is volume in liters, n is the number of moles (where each mole is 6.022 x 10e23 atoms), T is temperature in Kelvin degrees, and R is the Regnault constant of 0.083145 L.bar/mol.K Having so far focused on free exchange and human relationships built on peaceful consent, the book’s Part IV introduces the topic of violence and its economic analysis and implications. We begin with an exploration of the economic rationale and implications of violence in Chapter 15, as well as the role the state plays in an economy. Chapter 16 examines the real-world application of violence to the conduct of economic affairs through coercive central planning, by examining one of the most pivotal concepts of the Austrian school: economic calculation. Mises’ century-old explanation of the economic calculation problem has proven a fatal blow to economic socialism, with socialists unable to solve the calculation problem intellectually, and witnessing the consistent collapse of all their economic plans in precisely the manner Mises’ analysis would predict.Kinsella, Stephan. “The Case Against IP: A Concise Guide.” Mises Daily Articles, Ludwig von Mises Institute, 4 Sep 2009. This is not to say that all statistical measures are worthless noise, as there can be value to be had from examining these aggregates as close approximations of economic phenomena. The Austrian objection is in treating these statistical artifacts as causal factors and assuming the relationships can be extrapolated to the future predictively.

Whereas the second section of the book examined individual economizing acts, the third section looks at economizing in a social context, introducing other human beings into the analysis and exploring the implications. As soon as another person is present, trade becomes possible, and both parties have an incentive to engage in it, as it benefits them both. Chapter 9 explains the rationale of trade, the benefits from it, and the implications of the growing extent of the market in which division of labor takes place. Principles of Economics is a university-level textbook offering a comprehensive, engaging, and easy-to-read overview of the field of economics that is valuable to the university student, the general reader, and the professional economist. Ludwig von Mises’ magnum opus, Human Action, offered an explicit redefinition of the field of economics as the study of human action and choice under scarcity. Mises found it essential that proper economic reasoning and analysis of economic phenomena must be based on analyzing human action, rather than analyzing material objects and their properties, or analyzing collectivist and abstracts units. While this might initially seem pedantic, I hope this chapter helps convince you otherwise. The fundamental deficiency implied in every quantitative approach to economic problems consists in the neglect of the fact that there are no constant relations between what are called economic dimensions. There is neither constancy nor continuity in the valuations and in the formation of exchange ratios between various commodities. Every new datum brings about a reshuffling of the whole price structure. Understanding, by trying to grasp what is going on in the minds of the men concerned, can approach the problem of forecasting future conditions. We may call its methods unsatisfactory and the positivists may arrogantly scorn it. But such arbitrary judgments must not and cannot obscure the fact that understanding is the only appropriate method of dealing with the uncertainty of future conditions.” Howden, David, and Joakim Kämpe. “Time Preference and the Process of Civilization.” International Journal of Social Economics, vol. 43, no. 4, 2016, pp. 382-99.Mises, Ludwig von. The Theory of Money and Credit. 2nd ed., Foundation for Economic Education, 1971. Part Three Energy, the topic of Chapter 8, is not a conventional topic in most economic textbooks, but it is the author’s consideration that understanding the economics of energy is essential to understanding all economics, particularly as the modern advanced capital-intensive and technologically advanced market economy would not be possible without the very large increases in modern humans’ power, or the ability to wield large amounts of energy in short periods of time. Moreover, approaching economics in the Austrian method, through marginal analysis, is essential to understanding the realities of energy production in the world today, and can correct many common misconceptions.

In the past, the kilgoram and meter, and indirectly, the Kelvin, were defined in terms of specific artifacts kept in Paris. Each degree on the Kelvin scale corresponds to a change in thermal energy by 1.380649x10e-23 Joules. The Joule is in turn defined as the energy transferred to an object when a force of one newton acts on that object in the direction of the force’s motion through a distance of one meter. The newton is defined as the force needed to accelerate one kilogram of mass at the rate of one meter per second squared in the direction of the applied force.

Course Content

Just because we are able to construct measures of unemployment, gross domestic production, consumption, investment, and other economic parameters does not mean that these factors have to be causally related to one another in scientifically ordained relationships based on quantifiable and testable magnitudes. In fact, since the actual drivers of this relationship are the actions of the individuals, there is no reason to suppose that the aggregate measures are any more than superficial epiphenomena unrelated to the causal mechanisms driving the relationships examined. Attempting to formulate such relationships is akin to scientists studying gases and attempting to formulate laws based on the color of different containers, the number of containers used, brand of manufacturer, first letter in the name of the experimenter, and various epiphenomena with no causative effect on the experiment. A scientist can indeed formulate relationships between these parameters, but it will be impossible for any meaningful such relationships to hold after repeated testing by independent parties. Repeating the same experiment with an experimenter with a different name, or a container of a different color will still yield the same results, making the original experimenter’s theorizing pointless. It is the gas inanimate gas particles whose temperature, pressure, and volume are the control knobs for the gas system being studied, and the container’s color and experimenter’s name are irrelevant. Similarly, it is the action of humans which shapes economic outcomes, not the aggregate measures constructed in government statistical offices. Mises, Ludwig von. Human Action: The Scholar’s Edition.Ludwig von Mises Institute, 1998. Chapter VIII

Dr. Ammous holds a PhD in Sustainable Development from Columbia University, where his doctoral thesis studied the economics of biofuels and alternative energy sources. He also holds an MSc in Development Management from the London School of Economics, and a Bachelor of Engineering from the American University of Beirut. Principles of Economics is a university-level textbook offering a comprehensive, engaging, and easy-to-read overview of the field of economics that is valuable to the university student, the general reader, and the professional economist.Mises, Ludwig von. Human Action: The Scholar’s Edition. Ludwig von Mises Institute,1998.Chapters 1 to 4