The Role of Value in Human Action
[Understanding the Dollar Crisis (1973)]
In this lecture we address ourselves to the role of value in economics.
Some people, thinking economics merely a matter of opinions, question the “value” of economists. When people are sick or have trouble with their bodies, they consult a doctor. They ask him what to do and what not to do. They take whatever bitter medicine the doctor prescribes, pay him, and thank him. When the same people have economic problems they rarely consult an economist. When they do, and he tells them that a popular expense will have undesirable consequences, they scorn his advice and call him “an enemy of the people.” As one prominent economist once implied, it is almost impossible for a man to be both a true patriot and a popular economist at the same time. If an economist is popular with the economically ignorant, it may well be that his advice is not sound.
We are addressing ourselves tonight to a phase of economics that is responsible for many of our problems. Most people do not understand the full importance and significance of value in human action. This ignorance goes back many centuries. We must first deal with some popular fallacies, before presenting the positive theory that must become more popular if our civilization is to be saved. But let’s go back to where we left off in the last lecture.
All life is change. For men, life is a series of choices by which we seek to exchange something we have for something we prefer. We know what we prefer. No other man or bureaucrat is capable of telling us what we prefer. Our preferences are our values. They provide us with a compass by which we steer all our purposeful actions. Because few people fully understand this, we have some serious economic problems.
Aristotle Misunderstood Exchange
Part of our trouble goes back all the way to Aristotle (384–322 BC), who in some asides in his books suggested a fallacious idea which many people now accept as gospel truth — the idea that the only fair exchange is
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