Ludwig von Mises developed the action axiom, which, because of its logical soundness, provides the basis for understanding all economic activities. Because of the fundamental nature of action, I have adopted it as one of the principles by which I hope to conduct my writing.

Axiom

Purposeful human action qualifies as an axiom because it’s indisputable. Because it’s impossible for humans to not act, this principle requires no empirical evidence. The proof can be derived by reason alone. Purposeful nonaction amounts to a logical impossibility. Even not acting amounts to an action. Thus, if a person has a purpose, it requires action (either affirmative action or negative action.)

The axiomatic nature of action has significance in the discussion of free markets (or all human interaction) because even “not acting” has consequences. To observe market intervention and not take action should not be considered benign. To witness a robbery and do nothing amounts to abetting the robbery. To complain about government intervention and take no action against it amounts to condoning the intervention.

The principle of action seems relatively insignificant when first encountered. A person must, however, consider it whenever discussing economic activity. Mises demonstrates the importance of the action axiom by writing an entire book titled Human Action.

Rationality

I have also adopted Mises’ idea that when humans act, they always act rationally. Because humans always act with purpose, they, by definition, also always act rationally. To use phrases like “irrational exuberance” dismisses the importance of a person’s actions. If you consider a person’s actions stupid or senseless, you are making an individual value judgment. The person taking the action has a reason, whether you agree with it or not.

Because of the rationality of all human action, it behooves any writer discussing free markets to ask why the person or people acted the way they did. To dismiss another person’s actions as irrational exposes your unwillingness to consider their point of view. You have no obligation to agree with their point of view, but for your own benefit (and the benefit of your readers), you have an obligation to understand their rationale.

Conclusion

I have included the principle of action amongst the principles I hope to follow in my writing because I want to examine all types of action in the market—both “action” and “nonaction.” I also want to understand why people take the actions they take—both the actions I agree with and those with which I disagree.