4. Further Implications: Time
Time is omnipresent in human action as a means that must
be economized. Every action is related to time as follows:
. . . A is the period before the beginning of the action; A is the
point in time at which the action begins; AB is the period during
which the action occurs; B is the point at which the action ends;
and B . . . is the period after the end of the action.
AB is defined as the period of production—the period from the
beginning of the action to the time when the consumers’ good
is available. This period may be divided into various stages, each
itself taking a period of time. The time expended during the
period of production consists of the time during which labor
energy is expended (or working time) and maturing time, i.e., time
required without the necessity of concurrent expenditure of
labor. An obvious example is the case of agriculture. There
might be six months between the time the soil is tilled and the
time the harvest is reaped. The total time during which labor
must be expended may be three weeks, while the remaining
time of over five months consists of the time during which the
crop must mature and ripen by the processes of nature. Another
example of a lengthy maturing time is the aging of wine to
improve its quality.
Clearly, each consumers’ good has its own period of pro-
duction. The differences between the time involved in the
periods of production of the various goods may be, and are,
innumerable.
One important point that must be emphasized when
considering action and the period of production is that acting
man does not trace back past production processes to their orig-
inal sources. In the previous section, we traced back consumers’
goods and producers’ goods to their original sources, demon-
strating that all capital goods were originally produced solely by
labor and nature. Acting man, however, is not interested in past
processes, but only in using presently available means to achieve
anticipated future ends. At any point in time, when he begins
the action (say A), he has available to him: labor, nature-given
elements, and previously produced capital goods. He begins the
action at A expecting to reach his end at B. For him, the period
of production is AB, since he is not concerned with the amount
of time spent in past production of his capital goods or in the
14 Man, Economy, and State with Power and Market
methods by which they were produced. 14 Thus, the farmer
about to use his soil to grow crops for the coming season does
not worry about whether or to what extent his soil is an origi-
nal, nature-given factor or is the result of the improvements of
previous land-clearers and farmers. He is not concerned about
the previous time spent by these past improvers. He is con-
cerned only with the capital (and other) goods in the present
and the future. This is the necessary result of the fact that action
occurs in the present and is aimed at the future. Thus, acting
man considers and values the factors of production available in
the present in accordance with their anticipated services in the
future production of consumers’ goods, and never in accor-
dance with what has happened to the factors in the past.
A fundamental and constant truth about human action is that
man prefers his end to be achieved in the shortest possible time. Given
the specific satisfaction, the sooner it arrives, the better. This
results from the fact that time is always scarce, and a means to
be economized. The sooner any end is attained, the better.
Thus, with any given end to be attained, the shorter the period
of action, i.e., production, the more preferable for the actor.
This is the universal fact of time preference. At any point of time,
and for any action, the actor most prefers to have his end
attained in the immediate present. Next best for him is the
immediate future, and the further in the future the attainment
of the end appears to be, the less preferable it is. The less waiting
time, the more preferable it is for him. 15
Fundamentals of Human Action 15
14 For each actor, then, the period of production is equivalent to his
waiting time—the time that he must expect to wait for his end after the
commencement of his action.
15 Time preference may be called the preference for present satisfaction
over future satisfaction or present good over future good, provided it is
remembered that it is the same satisfaction (or “good”) that is being com-
pared over the periods of time. Thus, a common type of objection to the
assertion of universal time preference is that, in the wintertime, a man
will prefer the delivery of ice the next summer (future) to delivery of ice
Time enters into human action not only in relation to the
waiting time in production, but also in the length of time in which
the consumers’ good will satisfy the wants of the consumer. Some con-
sumers’ goods will satisfy his wants, i.e., attain his ends, for a
short period of time, others for a longer period. They can be
consumed for shorter or longer periods. This may be included
in the diagram of any action, as shown in Figure 2. This length
of time, BC, is the duration of serviceableness of the consumers’
good. It is the length of the time the end served by the con-
sumers’ good continues to be attained. This duration of ser-
viceableness differs for each consumers’ good. It may be four
hours for the ham sandwich, after which period of time the
actor desires other food or another sandwich. The builder of a
house may expect to use it to serve his wants for 10 years. Obvi-
ously, the expected durative power of the consumers’ good to
serve his end will enter into the actor’s plans. 16
16 Man, Economy, and State with Power and Market
in the present. This, however, confuses the concept “good” with the
material properties of a thing, whereas it actually refers to subjective sat-
isfactions. Since ice-in-the-summer provides different (and greater) satis-
factions than ice-in-the-winter, they are not the same, but different goods.
In this case, it is different satisfactions that are being compared, despite
the fact that the physical property of the thing may be the same.
16 It has become the custom to designate consumer goods with a longer
duration of serviceableness as durable goods, and those of shorter duration as
nondurable goods. Obviously, however, there are innumerable degrees of
durability, and such a separation can only be unscientific and arbitrary.
Clearly, all other things being equal, the actor will prefer a
consumers’ good of greater durability to one of lesser, since the
former will render more total service. On the other hand, if the
actor values the total service rendered by two consumers’ goods
equally, he will, because of time preference, choose the less
durable good since he will acquire its total services sooner than
the other. He will have to wait less for the total services of the
less durable good.
The concepts of period of production and duration of
serviceableness are present in all human action. There is also a
third time-period that enters into action. Each person has a
general time-horizon, stretching from the present into the
future, for which he plans various types of action. Whereas
period of production and duration of serviceableness refer to
specific consumers’ goods and differ with each consumers’
good, the period of provision (the time-horizon) is the length of
future time for which each actor plans to satisfy his wants. The
period of provision, therefore, includes planned action for a
considerable variety of consumers’ goods, each with its own
period of production and duration. This period of provision dif-
fers from actor to actor in accordance with his choice. Some
people live from day to day, taking no heed of later periods of
time; others plan not only for the duration of their own lives,
but for their children as well.
5. Further Implications
A. E NDS AND V ALUES
All action involves the employment of scarce means to attain
the most valued ends. Man has the choice of using the scarce
means for various alternative ends, and the ends that he chooses
are the ones he values most highly. The less urgent wants are
those that remain unsatisfied. Actors can be interpreted as rank-
ing their ends along a scale of values, or scale of preferences.
These scales differ for each person, both in their content and in
their orders of preference. Furthermore, they differ for the
same individual at different times. Thus, at some other point in
time, the actor mentioned in section 2 above might choose to
go for a drive, or to go for a drive and then to play bridge,
Fundamentals of Human Action 17
rather than to continue watching the game. In that case, the
ranking on his preference scale shifts to this order:
(First) 1. Going for a drive
(Second) 2. Playing bridge
(Third) 3. Continuing to watch baseball game
Moreover, a new end might have been introduced in the mean-
time, so that the actor might enjoy going to a concert, and this
may change his value scale to the following:
(First) 1. Going for a drive
(Second) 2. Going to a concert
(Third) 3. Playing bridge
(Fourth) 4. Continuing to watch baseball game
The choice of which ends to include in the actor’s value scale
and the assignment of rank to the various ends constitute the
process of value judgment. Each time the actor ranks and
chooses between various ends, he is making a judgment of their
value to him.
It is highly useful to assign a name to this value scale held by
all human actors. We are not at all concerned with the specific
content of men’s ends, but only with the fact that various ends are
ranked in the order of their importance. These scales of prefer-
ence may be called happiness or welfare or utility or satisfaction or
contentment. Which name we choose for value scales is not
important. At any rate, it permits us to say, whenever an actor
has attained a certain end, that he has increased his state of satis-
faction, or his contentment, happiness, etc. Conversely, when
someone considers himself worse off, and fewer of his ends are
being attained, his satisfaction, happiness, welfare, etc., have
decreased.
It is important to realize that there is never any possibility
of measuring increases or decreases in happiness or satisfaction.
Not only is it impossible to measure or compare changes in the
18 Man, Economy, and State with Power and Market
satisfaction of different people; it is not possible to measure
changes in the happiness of any given person. In order for any
measurement to be possible, there must be an eternally fixed
and objectively given unit with which other units may be com-
pared. There is no such objective unit in the field of human val-
uation. The individual must determine subjectively for himself
whether he is better or worse off as a result of any change. His
preference can only be expressed in terms of simple choice, or
rank. Thus, he can say, “I am better off” or “I am happier”
because he went to a concert instead of playing bridge (or “I will
be better off” for going to the concert), but it would be com-
pletely meaningless for him to try to assign units to his prefer-
ence and say, “I am two and a half times happier because of this
choice than I would have been playing bridge.” Two and a half
times what? There is no possible unit of happiness that can be
used for purposes of comparison and, hence, of addition or mul-
tiplication. Thus, values cannot be measured; values or utilities
cannot be added, subtracted, or multiplied. They can only be
ranked as better or worse. A man may know that he is or will be
happier or less happy, but not by “how much,” not by a meas-
urable quantity. 17
All action is an attempt to exchange a less satisfactory state of
affairs for a more satisfactory one. The actor finds himself (or ex-
pects to find himself) in a nonperfect state, and, by attempting
to attain his most urgently desired ends, expects to be in a bet-
ter state. He cannot measure the gain in satisfaction, but he
does know which of his wants are more urgent than others, and
Fundamentals of Human Action 19
17 Accordingly, the numbers by which ends are ranked on value scales
are ordinal, not cardinal, numbers. Ordinal numbers are only ranked; they
cannot be subject to the processes of measurement. Thus, in the above
example, all we can say is that going to a concert is valued more than play-
ing bridge, and either of these is valued more than watching the game.
We cannot say that going to a concert is valued “twice as much” as watch-
ing the game; the numbers two and four cannot be subject to processes of
addition, multiplication, etc.
he does know when his condition has improved. Therefore, all
action involves exchange—an exchange of one state of affairs, X,
for Y, which the actor anticipates will be a more satisfactory one
(and therefore higher on his value scale). If his expectation turns
out to be correct, the value of Y on his preference scale will be
higher than the value of X, and he has made a net gain in his
state of satisfaction or utility. If he has been in error, and the
value of the state that he has given up—X—is higher than the
value of Y, he has suffered a net loss. This psychic gain (or profit)
and loss cannot be measured in terms of units, but the actor
always knows whether he has experienced psychic profit or psy-
chic loss as a result of an action-exchange. 18
Human actors value means strictly in accordance with their
valuation of the ends that they believe the means can serve. Obvi-
ously, consumers’ goods are graded in value in accordance with
the ends that men expect them to satisfy. Thus, the value placed
on the enjoyment contributed by a ham sandwich or a house will
determine the value a man will place on the ham sandwich or the
house themselves. Similarly, producers’ goods are valued in
accordance with their expected contribution in producing con-
sumers’ goods. Higher-order producers’ goods are valued in
accordance with their anticipated service in forming lower-order
producers’ goods. Hence, those consumers’ goods serving to
attain more highly valued ends will be valued more highly than
those serving less highly valued ends, and those producers’ goods
serving to produce more highly valued consumers’ goods will
themselves be valued more highly than other producers’ goods.
Thus, the process of imputing values to goods takes place in the
opposite direction to that of the process of production. Value
proceeds from the ends to the consumers’ good to the various
20 Man, Economy, and State with Power and Market
18 An example of suffering a loss as a result of an erroneous action
would be going to the concert and finding that it was not at all enjoyable.
The actor then realizes that he would have been much happier continu-
ing to watch the game or playing bridge.
first-order producers’ goods, to the second-order producers’
goods, etc. 19 The original source of value is the ranking of ends
by human actors, who then impute value to consumers’ goods,
and so on to the orders of producers’ goods, in accordance with
their expected ability to contribute toward serving the various
ends. 20
B. T HE L AW OF M ARGINAL U TILITY
It is evident that things are valued as means in accordance
with their ability to attain ends valued as more or less urgent.
Each physical unit of a means (direct or indirect) that enters into
human action is valued separately. Thus, the actor is interested
in evaluating only those units of means that enter, or that he
considers will enter, into his concrete action. Actors choose
between, and evaluate, not “coal” or “butter” in general, but
specific units of coal or butter. In choosing between acquiring
cows or horses, the actor does not choose between the class of
cows and the class of horses, but between specific units of
them—e.g., two cows versus three horses. Each unit that enters
into concrete action is graded and evaluated separately. Only
when several units together enter into human action are all of
them evaluated together.
The processes that enter into valuation of specific units of dif-
ferent goods may be illustrated in this example: 21 An individual
possessing two cows and three horses might have to choose
between giving up one cow or one horse. He may decide in this
case to keep the horse, indicating that in this state of his stock,
Fundamentals of Human Action 21
19 A large part of this book is occupied with the problem of how this
process of value imputation can be accomplished in a modern, complex
economy.
20 This is the solution of a problem that plagued writers in the economic
field for many years: the source of the value of goods.
21 Cf. Ludwig von Mises, The Theory of Money and Credit (New Haven:
Yale University Press, 1953), p. 46.
a horse is more valuable to him than a cow. On the other hand,
he might be presented with the choice of keeping either his
entire stock of cows or his stock of horses. Thus, his stable and
cowshed might catch fire, and he is presented with the choice of
saving the inhabitants of one or of the other building. In this
case, two cows might be more valuable to him than three
horses, so that he will prefer to save the cows. When deciding
between units of his stock, the actor may therefore prefer good
X to good Y, while he may choose good Y if he must act upon
his whole stock of each good
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