ACTION

Chapter 2: Action and Preference, Part 1 19

(I hope). But this is not something that you have decided to do: it is a process that goes on automatically in your body. Reading, of course, is an action. You don’t read just by having a newspaper page put in front of you; you have to decide to do it; and, while you’re reading, the process is under your conscious control.

Some actions don’t require much conscious control. For most people, walking takes place without having to think explicitly about each step. You don’t say to yourself, “Left foot, right foot; now left again, etc.,” you just walk. Nevertheless, the process is under your conscious control. Imagine what it would be like if things were different. Suppose you suddenly found your legs moving by themselves, and your efforts to will them to stop failed. Then you would- n’t be acting, although your body would be moving.

with this argument?

Normally, an action includes some physical movements of the body. When you walk, your legs move; when you read, your eyes are constantly shifting focus. Some “actions” don’t seem to involve physical movement, e.g., thinking. (There are all sorts of things going on in your brain when you think, but are these thinking itself? Could thinking take place altogether apart from any physical entity? Fortunately, we don’t have to solve these issues here.)

But the actions we’ll be concerned with in economics do, for the most part, involve physical movements; examples include buying, selling, investing, and laboring. We’ll take thinking for our

20 An Introduction to Economic Reasoning

purposes as part of action, rather than as a separate act itself. (Note, however, that ordinary usage includes “acts of thought.”)

Not all outward actions, however, do involve physical movement. Suppose you are thinking about going for a walk. You decide not to; you find appealing the remark of R.M. Hutchins: “Whenever I feel like exercise, I lie down until the feeling goes away.” You still act; in this context, staying put is an action.

There are even a few cases in which you can do something besides waiting or staying put without any physical movement taking place. Imagine that you are a member of Congress. A resolution has been proposed to increase taxes by 50 percent. The Speaker announces: “All those in favor, please stand; opposed, remain seated.” Since you have, by the time of your election, finished studying this book, you understand why taxation is theft. You decide to vote “no”; and, following the Speaker’s instructions, you remain seated. You haven’t moved; but you have voted, just as much as if, ignorant of sound economics, you had stood up. To reiterate, though, most of the actions that we’ll be studying do involve physical movement.

IS THE AXIOM TRUE?

Well, we have our initial axiom; and the next step appears obvious. As promised, we must deduce conclusions about economics from it. But something has been left out. Recall, we must have a true initial premise in order to be sure that the conclusions we draw from it are true. So far, all that I have done is to state the axiom, and say a few things about it. But is it true? Unless it is, we’re in trouble, for the reason already stated.

Fortunately, the problem is easily solved. Isn’t it obvious that the axiom is true? When I explained the axiom, I deliberately picked examples such as walking and reading that we all do. You wouldn’t be reading these words now, unless you were acting. Once you think about “man acts” you will see that it is silly to doubt it. (If

Chapter 2: Action and Preference, Part 1 21

you think about the axiom but don’t see that it’s obviously true, you would be probably better off to drop economics and take up sociology instead.)

The action axiom, then, is a common-sense truth. And this is enough to get the science of economics going. In this respect, economics differs from chemistry, biology, and (most of) physics. In these sciences, we usually need to experiment in order to find things out. It isn’t an obvious, common-sense truth that a molecule of water is composed of two hydrogen atoms and one oxygen atom. This was something scientists discovered only by careful testing.

Not everything in the physical sciences rests on experiment. The ancient Greeks identified a body in the sky which they called “Hesperus,” the Morning Star. They picked out another body, “Phosphorus,” the Evening Star. Careful observation showed that the two bodies are identical. “The Morning Star is the Evening Star” is part of astronomy, but it didn’t require experiment to establish. Nevertheless, it isn’t a common-sense truth: careful observation was needed to discover it.

In the physical sciences, you can sometimes get the wrong results if you rely on common sense. What could be more obvious, for example, than the fact that the sun moves round the earth. “Of course the Earth is stationary. Use your eyes!” a character in one of George Bernard Shaw’s plays remarks. But in fact (or so at least modern astronomers tell us) the earth is moving at an enormous rate of speed. Common sense does not inform us of this, and com- mon-sense observations don’t refute it. “If the earth were moving, we’d all fall off” is not a good reason to doubt that the earth moves.

This suggests a problem. If, in the physical sciences, commonsense observations can turn out to be false, why not in economics as well? Perhaps the action axiom, however apparent its truth, will one day be shown false. Have we started down a false trail?

You will be glad to know that we haven’t. Why do commonsense judgments about the physical world sometimes turn out to be mistaken? This involves difficult issues in the philosophy of science;

22 An Introduction to Economic Reasoning

but, basically, the answer is straightforward. In the physical world, there is an underlying level of things not directly open to observation. Common sense can tell you how the world is on the surface: it does not disclose the world’s inner structure.

But human action isn’t like that. There is no underlying level for human action, in the same way that there is for the physical world: What you see is what you get. Since we act ourselves, we grasp the nature of action directly. We don’t have to guess at the inner structure of thought. Physical objects consist of atoms, but there aren’t “atoms of thought.”

You might think that economists would be glad to have a com- mon-sense foundation for their discipline. But some of them are not. In contrast to the Austrian School, which fully accepts the deductive approach, many economists think that it is unscientific to rely purely on deduction. Deduction plays an important role in economics, no doubt; but premises ought not to be accepted just because they are held “self-evident.” Rather, what is important is the conclusions which these premises imply. These must be subject to test. Whether the premises are self-evident or even true matters little; only predictions count. As we shall see, Austrians reject this view.