[This article is part 3 of a series of articles and a section taken out of the longer essay “Do You Even Prax, Bro?” Over the span of the following days the corresponding sections will be published until finally the essay is published in full along with the missing  and additional sections added since first publication. For previous articles on Austrian epistemology/methodology, see here and here.]


Mises coined the phrase “Human action is purposeful behavior.”  Austrians define action as deliberate action, which implies purpose, or a goal, an action that is a means to that end.  From this Austrians deduce that acting man employs means (via action) to achieve ends (the goal of his action). From there we can deduce that he will only act if there exists in his mind a future more satisfactory to him than the future he believes will come about without action, or else he wouldn’t act.  As previously stated, only by acting can he bring about that future. From there, we say that given many possible ways to improve his situation, he will act in the way he thinks will satisfy the most urgently felt uneasiness.


An objection to this is that actors (or humans) do not always act rationally.  But all we need to know about human nature is that we act. “Rational” doesn’t describe the action; it describes how the action is selected from among the known possibilities given the subjectively chosen goal. Therefore, I may err in my selection of means to achieve a given end, but I still employ reason for that purpose.


Deliberate action implies purpose, with the intention of bringing about some objective. That you have an objective implies that you can imagine a more satisfactory state of affairs than the one you’re in, or the one you believe would come about in the absence of an action. That is, a state of affairs more satisfactory to you. That is, one that better serves your interests.


If you do something deliberately, by definition you do it to serve an objective or goal. It wouldn’t even make sense to ask, “Why else would he act?” other than to serve a goal, because to answer that question would be to name an objective. If I ask, “Why did you do that?” you might say “I didn’t mean to,” or, “It was an accident,” in which case whatever you did was not deliberate, and therefore not “action” at all by our definition.  Otherwise, you state your purpose because if you acted deliberately, you had a purpose.


“If a man drinks wine and not water I cannot say he is acting irrationally.  At most I can say that in his place I would not do so. But his pursuit of happiness is his own business, not mine.”

~ Ludwig von Mises [1]


Now, say I go out with my friends to a bar, end up spending too much money, and wind up hung over the next day. From another person’s perspective, this would seem “irrational,” yes? Well, no, not if we go by our definition. At best, the observing party can only say that they would not have done this, as Mises states. When we have an end in mind and utilize resources towards this end, we are being “rational,” regardless of the end or means. Rational, here, means purposeful, nothing more. So, we could be incredibly hasty in our actions and constantly thinking them through poorly, but since we are using our resources to attain a certain goal, we are still, by Mises’ definition, “rational.”  I do have an end in mind; perhaps I like to drink, perhaps I want to meet an attractive woman, perhaps I just want to be around my friends. Thus, my actions are rational, based upon my subjective preferences.


“Rational” in mainstream economics is different than “Rational” in Austrian economics.  “Rational” in Austrian terms simply means “purposeful behavior” as contrasted by reactive behavior or unconscious behavior.


In making this point, Mises writes:


“Human action is necessarily always rational. The term ‘rational action’ is therefore pleonastic and must be rejected as such. When applied to the ultimate ends of action, the terms rational and irrational are inappropriate and meaningless. The ultimate end of action is always the satisfaction of some desires of the acting man.” [2]


Mises deals with this conclusively and in great depth, along with Rothbard who wrote:


“[…]Human action, on the other hand, can be meaningfully interpreted by other men, for it is governed by a certain purpose that the actor has in view. The purpose of a man’s act is his end; the desire to achieve this end is the man’s motive for instituting the action.


All human beings act by virtue of their existence and their nature as human beings. We could not conceive of human beings who do not act purposefully, who have no ends in view that they desire and attempt to attain. Things that did not act, that did not behave purposefully, would no longer be classified as human.” [3]


Whether or not men or actions “are “rational” isn’t even a sensible question. Do men employ reason? Yes. Are other factors besides reason used which impact their choices?  Obviously. Does that mean men are “irrational”? No.


An objection some have to the idea that man is always “rational” could be that “rational” does not mean “purposeful.” To some, “rational” behavior is that which is guided by conscious reasoning, by logic and fact, not emotion. Thought is different than emotion. Purposeful behavior is often the result of an emotional, not “rational” process. Emotion is inescapable. That’s their stipulated definition, not Mises’.  If one’s goal is to, say, win the affection of someone you have affection for, you are still acting rationally even though emotion is clearly in play.


We must also remember that if “rational” means “purposeful,” then we don’t need a new word, at least among people trying to be clear and specific with their nomenclature.  No, “rational” means “guided by the use of reason.” Mises deals extensively, even exhaustively, with this. Men have ends, subjectively chosen, always. Perhaps psychologists can elaborate on the basis for these ends, but economists have no reason to care about that basis. People want what they want, and reason is not involved in that selection. The question is, how best to achieve those ends with a minimal sacrifice of other ends? There we always utilize reason. That’s an error-prone process, but we always attempt to reason our way to the means we think will be most suited to our ends. One cannot do anything but select goals and choose means to attain them.  Rationality is the use of logic and reason, irrelevant of the validity of the conclusions.


To elaborate more, say we have a man going to work. Now assuming he wants to keep his job, as observers, we can predict how this man will get to work; he will take the subway, bus, or drive in one of the most direct routes to get there. Seeing how he wants to keep his job, we could rule out the other means of getting to work that fall under “irrational,” such as walking in reverse around the globe, hitchhiking, or skipping there while stopping every ten feet to spin on his head for a minute. However, even if we did observe him doing one of these “irrational” actions, does that automatically mean he is being “irrational”?  In no way. We don’t know the ends he wishes to achieve so we should never assume so. In this case, his end goal may be to get fired.


Over the span of time, out and out “irrational” behavior gets taken care of by evolution.  As those who behave rationally and achieve desirable ends are more likely to prosper and pass on their genes while those who behave in an actual “irrational” manner are less likely to achieve their ends, less likely to prosper, and less likely to pass on their genetic material.


If individual actors aren’t the best judge, then the individual actors that say they aren’t aren’t either. Thus, you are caught in a vicious circle. If I am not the best judge of what is the most “rational” behavior for myself, then how can another person — a person who has the same failing himself — be any better? How can this be distinguished by yet more people? If Person A cannot judge the rationality of his action, no other person can either. A third party cannot really judge what is in my own “best” interests, or what is “irrational.” The fact that I consider your action to be in contradiction with what I think your interests should be, or what I think you should rationally do to achieve your goals, does not mean anything whatsoever. Part of the problem is a core misunderstanding of “rational”ity on the part of various individuals as “irrational” action, according to some objective standard. This is not accurate. Rationality is simply the use of reason to select means to achieve goals. Whether these goals or means are “irrational” is irrelevant to the question. All people are, by definition, “rational” thinkers. Anyone denying this is caught up in a performative contradiction and might as well be saying, “I am dead.”


Lastly, self-interest does not say one acts in one’s “best” interests according to some objective standard. It merely says that one acts first to achieve the most important goal according to their own subjective determinations.  As such, one cannot logically say that another is not acting in this way.



Jeff Peterson II

We the Individuals



[1] Socialism by Ludwig von Mises p. 405

[2] Mises in Human Action p. 19

[3] Man, Economy, and State with Power and Market by Murray Rothbard

Chapter 1 FUNDAMENTALS OF HUMAN ACTION. Part 1  The Concept of Action