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Flashcards in Rothbard: Man, State and Economy Deck (48)
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The Three Fundamental Axioms of Rothbard's economics

  1. Men employ means to achieve ends (Action Axiom)
  2. There is a variety of human and natural resources.
  3. Leisure is a consumer's good.


What is praxeology?

The a priori study of human action, first articulated by Ludwig von Mises.  


Who or what, according to Rothbard, is capable of action? 

Only individuals, not groups or collectives. (Note that Mises explicitly disagrees with this in Human Action, where he says groups can act but only by virtue of the individual actions of their members.)


What is required for an individual to initiate action?

He must: 

  1. Have unachieved ends he wants to fulfill. 
  2. Expect that certain modes of behaviour available to him will enable him to attain those ends.


How can the environment be divided into two parts with reference to any act?

First part: those elements the actor believes he can't change and must leave as they are (general conditions). 

Second part: those elements he believes he can change (means). 


What is a plan? 

A set of technological ideas about ways in which elements of the environment can be rearranged in order to bring about an end.

A set of idea about how to use means as definite pathways to desired ends.


What are the logical parts of any action?

  1. An end.
  2. A plan (which the actor believes will enable him to attain the end). 
  3. Some means (which always include nature, labor and time).

(This isn't explicitly stated by Rothbard but is clearly implied). 


What are general conditions?

Elements of the environment that an actor believes he cannot change. 


What are means?

Elements of the environment that an actor believes he can change.  


With regard to any action, what periods of time can be distinguished?

  1. The period before the action.
  2. The period absorbed by the action (production and maturing time).
  3. The period after the action has been completed (may include the period of consumption). 


What makes time scarce? 

The fact that whichever ends an individual chooses to satisfy, he must leave others unsatisfied.


How can choice be defined praxeologically?

As the act of economising the available means to serve the most highly valued ends. 


How are an actor's ends ordered?

They are ranked on an ordinal scale according to their value to him, and the order may change over time. The ordinal ranking means that the values of ends cannot be added, subtracted, multiplied or divided.


What is a scale of values or preferences?

The ranked order of ends which an actor desires at any given moment.


Uncertainty and action

The future is always uncertain, and so action always involves a kind of speculation.

Error in our plans/beliefs and failure in our execution are always possible.


What is action?

Purposful behaviour, based on a plan, that employs means to attain ends in some future period that will involve the fulfillment of wants otherwise remaining unsatisfied. 



What is the expected outcome of action?

A state of affairs that is less unsatisfying than the one which would obtain in the absence of the action.


What are goods?

Means that can satisfy an individual's wants.


What are the two fundamental categories of goods?

  1. Consumer goods (immediately and directly serviceable goods, goods of the first order).
  2. Producer goods (indirectly serviceable means needing trasformation into directly serviceable goods at some time in the future; factors of production; goods of higher order; co-operating factors).


What are factors of production or co-operating factors?

  1. Higher order goods that co-operate in the production of factors of lower order. 



What are the classes of factors of production? 

Produced: factors of production that must themselves be produced. Otherwise known as Capital Goods. 

Original: found already available in the environment. These come in two varieties: 

  • Labor: the expenditure of human energy
  • Nature or Land: nonhuman elements provided by nature. 


Which factors of production are indispensable to every stage of production? 

Labor, Land, Time and Technological Ideas (plans)


A very important feature of plans or recipes

Once learned, they are generally not forgotten and hence become unlimited factors of production from the perspective of the actor. 


What is consumption?

The act of using a consumer good to satisfy some human want.


What can be a consumer good?

Almost anything, from physical objects like food, to immaterial ones like friendship. 


What is a consumer good's 'service'?

Its ability to be used to satisfy some human want(s).


How do higher order goods get their value?

By being useful in helping to produce future consumer goods or to produce lower-order producer goods that will help in the production of consumer goods.


The period of production can be divided into what main parts?

  1. Working time (in which labor is expended)
  2. Maturing time (in which labor is not required)


What are the categories of means available at the start of any action?

  1. Labor
  2. Land or Nature given elements
  3. Previously given capital goods
  4. Time 
  5. Plans/knowledge

(The last two are implicit in the text)


What is time preference?

The preference for present satisfaction over future satisfaction, or present good over future good (provided this is the same good). Results from the fact that time is scarce, and hence for any given end a shorter period of production is preferable to a longer.