Praxeology: The Importance of First Principles

Praxeology maintains its importance precisely because it implies fundamental principles as the guiding action in scientifically studying human action and understanding its dynamics and relations. From coming from these principles, human actions can be understood as having particular reasoning’s and laws which inform how further understandings of human action can be qualitatively determined and mapped.

The two most fundamental principles are that of seeing human action as purposive, rather than as purely instinctual or reactive, and of seeing non-aggression as a moral axiom of human relations. Thus coercive activity perpetrated by individuals or groups cannot be seen as legitimate socio-economic relations. This helps underpin a conception of society as removed from government. Understanding these principles as the basis of reasoning and action allows one to see the illegitimacy of the state and the importance of voluntary action in creating positive outcomes relative to the robbery and theft of the state. “An individual reflects, discovers the concept of action and its applicability to all human individuals, analyzes its components, and then sets it forth orally or by the written word”[1]. Individual action is the basis of human response. These of course can be shaped by particular customs and learnt activities, as well as surrounding structures of governmentality which shape individual behaviour. However, purposive human action still can trump such influences if so decided so long as one lives in a society free of enforced, legitimised aggression (as represented via the state).

Arguments against this usually take the form of understanding different conceptions of value and ownership, such as those stated by Lewis[2], that deny the capacity for understanding praxeological axioms. Because of innately social obligations and customs which develop and evolve from spontaneous order and the dynamics of institutions and little platoons, one cannot truly have a society free of institutionalised coercion. However I think Rothbard excellently negates this here:”Man’s necessity to choose means that, at any given time, he is acting to bring about some end in the immediate or distant future, that is, that he has purposes. The steps that he takes to achieve his ends are his means. Man is born with no innate knowledge of what ends to choose or how to use which means to attain them. Having no inborn knowledge of how to survive and prosper, he must learn what ends and means to adopt, and he is liable to make errors along the way. But only his reasoning mind can show him his goals and how to attain them”[3]. Human action is purposively brought about by individual choices that are shaped by subjective values both learned innately and purposefully. Thus the social contract argument, that of future generations caught in the obligations and debts of custom and law that are slowly developed by linked and overlapping institutions[4], does not deny the ability of individuals to purposefully decide their actions in a society and economy. In the conception of an anarchistic society, that of true freedom and the ability to decide on how oneself is governed, people make decisions on how customs and law shape them. They make subjective valuations that can adapt existing customs toward newer understandings and forms of governance.

Of course some may reject the impressing of such customs upon themselves and thus outright reject them. But of course that is the right of free individuals in a truly free society. However it is not something to really worry about when understanding human evolution and the development of particular advantageous ways of allowing for evolution to continue. Kropotkin’s understanding of mutual aid shows that the continuation of customs and the maintenance of systems of mutual governance actually further those in-groups’ evolutionary development and adaptability. “The mutual protection which is obtained…, the possibility of attaining old age and of accumulating experience, the higher intellectual development, and the further growth of sociable habits, secure the maintenance of the species, its extension, and its further progressive evolution. The unsociable species, on the contrary, are doomed to decay”[5]. Natural evolutionary progress effectively necessitates in-group behaviours which maximise sociability and mutuality.

Therefore, the idea that is suggested, particularly by Lewis, that the development of socially contractual arrangements which bind generations is the initiation of coercive institutionalisation really doesn’t hold up. Rather, social obligations, customs and duties, as codified de jure in common law and de facto in particular rights and legal understandings, are both unofficial codifications as well as adaptable understandings of surrounding society. They are not truly set in stone as such, but rather open to changes in precedence and the evolving oscillations of societies and economies. Such can be understood in my conception of decentralised common law which has the capacity to reinterpret legal precedents and rulings[6]. If anything, such customs and binding settlements are always open to change, and do not fundamentally violate the tenet of purposeful human action as they can be adapted.

Returning to the understanding of fundamental axioms as the way of understanding human action and therefore society, we also begin to see the direction of secondary principles which evolve from the first ones. Rothbard shows this in seeing how the laws that govern markets, from “uncertainty, time preference, the law of returns, the law of utility”[7] to Gresham’s Law and the laws of supply and demand under conditions of a market removed from coercive institutions, are praxeologically determined as a result of human actions on free markets. This then allows us to see subjective valuation as direct result of human action, as best represented by price discovery, consumption patterns and firm ownership on the market.

Hayek denotes a similar praxis. “For example, Hayek’s ideas of praxeology and catallactics show us the microcosm of economic knowledge that exists within an economy. Hayek specifically used the term catallaxy to describe ‘the order brought about by the mutual adjustment of many individual economies in a market’, showing that the idea of an economy is primed by individual needs and desires”[8]. However Weber “showed us that the development of these individual needs and desires are developed through cultural and ethical elements, and that pure economic rationalism can take a back seat to the social influence on our economic habits. We can fundamentally see this in Hayek’s price system, whereby prices are set by our desire for certain products. Hayek saw this as based on economic rationalism, however because of his belief in dispersed knowledge in the economy, it can be logically concluded that people couldn’t always act on pure economic rationality in their decision making, and instead social factors would become involved”[9].

This economic rationalism is only one denotation of praxeological understanding. It is based around seeing the market as a particular institution of economic praxis. But of course there exist other systems that may well sprout up in conditions of freedom and the unlocking of human desires and actions from the coercive state. This could include production for direct use, collective decentralised planning systems for public goods, primitivist economies, recommoning (as seen in Zomia and some of the right to repair movements[10]) and economies of abundance, as are developing in filesharing and 3D printing. The market need not be “turned into an idol”[11], but rather understood and codified as a major area of human activity and value creation and maximisation. Markets and capital are heterogeneous due to their subjective valuation by individuals. In the same way one chooses between different products or services in a market, and leads oneself to different bargaining strategies and forms of price discovery, in a freed market one could and should have the ability to subjectively value and choose different economic governance structures and different forms of market and capital. This also expands to concepts of value and ownership. How an individual determines the ownership of his body and labour are subjectively decided by his or herself, as is how one values particular objects and commodities in an economy. Out of this, many different social relations and value axioms can be developed which codify different types of ethics and economic dynamics.

Effectively, this is a weak reading of praxeology, expanding its definitions along the lines of a radically subjective form of deduction which sees multiple economic systems as created by purposive human action. Markets are simply one form of these actions and systems. Whether it be the complex market systems of Shenzhen, the black markets that overlap and intersect the world, or the decentralised planning which communities in India and Brazil use, successful economic systems such as these require (and have) decentralised knowledge, true freedom and the capability to be free of institutionalised coercion when developing and honing human action. Even historically during periods of non-market exchange, we can see market precepts that are present in evolving gift economies. Felix Martin documents the economy of the Aegean Dark Ages[12], with the long-term transactional order of communal sharing and religious sacrifice, effectively representing the demos, and the short-term transactional order of gift exchange amongst and within tribes, effectively representing the agora. Viewing such an order praxeologically, we see the precepts of market-like human action that is not necessarily the dominant economic order, but rather a central function of a complex economic system.

If we take the praxeological view that human action is purposive, and value is fully subjective, we arrive at the idea that the governance of economies, as well as their internal characteristics, are shaped by individual economies interacting and creating particular forms of governmentality, as well as developing complex price and legal systems. By using these praxeological axioms, we can deduce forms of human action and see their wider applicability as well as their capability to provide subjective quantities of happiness and efficiency. This is why such first principles are important, as they allow us to understand particular human actions and dynamics. Rather than inductive ratiocination which denies any movement away from specific and engendered ideological positions, the power of praxeology is in its simplicity and capability to understand multiple forms of human action and how they govern and create positive and negative effects. Markets and economic rationalism need not be the defining characteristic of praxeology, but rather a wide range of economic systems can be seen to have different outcomes relative to their innate coercion and creation of utility and efficiency.

[1] Rothbard, M. Praxeology: Reply to Mr. Schuller, 2005, 943-946




[5] Kropotkin, P. Mutual Aid, 1972, 176


[7] Rothbard, M. Praxeology: Reply to Mr. Schuller, 2005, 943-946





[12] Martin, F. Money: The Unauthorized Biography, 2013

Anarchy and Democracy
Fighting Fascism
Markets Not Capitalism
The Anatomy of Escape
Organization Theory