Action and Choice

This introductory textbook explores the foundations of economic theory, emphasizing psychological principles over empirical methods in Action and Choice.

This textbook presents a philosophical approach to economics, emphasizing logical deduction from fundamental principles such as scarcity, individual choice, and subjectivism. In Action and Choice, the authors illustrate how complex economic phenomena—including consumer goods pricing, production factors, saving, consumption, interest, and profit—can all be understood through basic psychological principles. These principles, rooted in scarcity and marginal substitution, are applicable to simple scenarios, such as Robinson Crusoe's resource management on a deserted island or two cavemen exchanging goods. The authors aim to distill the core of economic science as it existed prior to the 1930s, arguing that this framework is superior to many contemporary mainstream theories, all while maintaining an accessible and engaging format for students.

Written in the tradition of notable economists like Menger, Bohm-Bawerk, Mises, and Hayek, Action and Choice distinguishes itself from the more common approaches of Alfred Marshall and John Maynard Keynes. The authors reject the notion of 'physics envy'—the idea that economics should mimic the physical sciences through empirical evidence, statistics, and verification. Instead, they advocate for a more foundational understanding of economic principles that respects the unique nature of economic inquiry.

By focusing on the underlying psychological aspects of economic behavior, Action and Choice provides a refreshing perspective for students and scholars alike. This textbook not only serves as an introduction to economic theory but also encourages readers to think critically about the principles that govern human choice and action in the economic realm.