What has been said so far about prices only relates to goods offered for sale that directly satisfy wants: apples and bread satisfy hunger, Becky’s three-inch nails can be used to repair one’s shelter, and so on. The prices of those goods are determined through an implicit bidding between consumers and producers. Or, more accurately, between potential consumers and potential producers. Why potential? Because consumers may express an interest in a certain good, but whether this leads to an exchange to acquire that good depends on the price one has to pay and all the options present: there may be a myriad goods and services that can be bought for money, and what good the consumer ends up buying depends on his or her subjective valuation and ranking of all of those goods – and the subjective valuation of the moneys necessary to buy them.
The same is true for producers, but the issue of production necessarily leads us to entrepreneurship and therefore – as we saw in chapter 1 – future-oriented action. We already established that production must precede consumption, but whereas this point could seem obvious there is more to it than the fact that you have to bake bread before you can eat it (a lesson Bart could probably tell us more about). Indeed, we saw in the previous chapter that the people bidding to buy apples from Adele and her competitors can bid because they have already engaged in production and then sold the produced goods for money. So production is not simply the process that is necessary to make a good available, but also the process that makes it possible to demand other goods. Had Becky not produced and sold three-inch nails, she could not offer to buy apples for money; had Bart not produced and sold bread, he could not offer to buy apples for money. And the same logic applies for everyone else in an economy.
So we see that this example of simple one-stage production when we have a universally accepted medium of exchange – money – means production is highly interdependent because it is a means to some other end. All of our friends in this economy produce in order to consume, and they all produce something that they know (or, more accurately, anticipate) will be demanded by others and therefore sold for money. The point of producing is not because labor itself is fun (though it can be) or because what is produced will be immediately consumed (though it might be) – but to sell for money, which can be used to buy what each of these people really want. As producers produce for others than themselves, they don’t need to stop when they’ve produced exactly what they need – they can keep producing. So we can see how this means that it is likely that more is produced because production is a means used to raise each producer’s own standard of living by increasing their purchasing power (that is, money on hand after selling the produced goods). With the money acquired through selling the produced goods, practically any goods produced by anybody are available and can be purchased.
Value of the Means of Production
For our little economy, this means that all consumers are also producers and – therefore – entrepreneurs. Adele doesn’t wake up one day surprised to find an orchard full of ripe apples. The orchard is the result of her investment of labor – and possibly other things – over a long period of time. So the apples she now has for sale, and that Adam and Bart and Becky are competing to buy for money, are really the “fruits” of her labor. She probably started years ago to clear the land, plant the seeds, and then care for the seedlings so that they grew into productive apple trees. The reason, as we’ve seen, is that Adele believed that she could sell apples to Adam and the others for sufficiently high prices to provide her with the purchasing power to get what she needs. By producing and selling apples, she acquires the money she needs to buy nails from Becky to repair the house, bread from Bart to feed herself and her family, and so on.
It may be the case that Adele has discovered an opportunity in the market, by which we mean that there was unmet demand that nobody had seen before. So Adele, alert to this opportunity, acted to profit from it. Or, which could be just as likely, Adele believes she has a certain knack for growing apples and that this would therefore be the most productive use of her time. In both cases, the point is that Adele doesn’t have an insatiable hunger for apples and therefore plants apple trees, but that she thinks it is a good use of her time – because it gives her the best possible means to procure what she actually needs from other producers.
Since growing apples takes time, the outcome of the endeavor is uncertain. Since Adele bears this uncertainty, which means she will suffer the loss if it doesn’t work out, she’s the entrepreneur.
The same is true for all the others: they invest in production of goods that they hope to sell for money so that they can then purchase the goods and services they really want. They all, therefore, bear the uncertainty of the undertaking. For Adele, the uncertainty involves a lot of different things: from rabbits and deer eating the seedlings via storms breaking the trees or insects destroying the apples to others – like Agnes and Anton – undercutting Adele or people simply not desiring apples anymore. So there are several parts to the uncertainty that Adele must consider and attempt to deal with. The easiest to deal with is technological uncertainty, which relates to the production process and includes anything that can go wrong with it. Adele can minimize the problems by being very careful, acquiring skills, and perhaps buying insurance to make sure she’s protected if something goes wrong.
It is much harder to deal with market uncertainty, which is the uncertainty of what the market will be like when the apples are ready to be picked and sold. Maybe consumers will not be interested in apples anymore. Perhaps everyone has succumbed to a fancy trend of eating gourmet pears instead of staple apples. So it could be the case that Adele has simply misjudged the situation and what people will want. But it could also be the case that Agnes and Anton, who also thought of selling apples, offer their ripe apples for sale before Adele’s trees are ready to bear fruit. Or perhaps Anton is a master apple grower and can produce apples at much lower cost than Adele, and is willing to sell apples for so little money that Adele can’t cover her costs. So customers willing to buy apples will buy from Anton instead. In these cases, Adele was right about people desiring apples, but didn’t quite get the production right – she was too slow or too inefficient. She estimated the demand correctly, but underestimated the supply.
These problems alone would probably be enough for many of us to not endeavor to start our own businesses and become entrepreneurs, but instead seek seemingly more stable and safe careers as employees – that is, suppliers of labor – to an entrepreneur. By doing this, we escape some of the downside of uncertainty by giving up the upside: instead of the possibility of profit and the threat of suffering losses, we earn a fixed salary. Of course, if the entrepreneur fails, we won’t get to keep our income or our jobs, so employment doesn’t make us uncertainty-proof. It only means we do not directly have to bear it in the sense that Adele does.
The uncertainty of entrepreneurship gives rise to another issue that follows directly from our example of Adele’s investment in an orchard to sell apples. But the conclusion may not seem entirely obvious. We know that Adele invests in the orchard because she believes it will allow her to sell apples and thereby earn money in exchange, which will allow her to purchase the things she really wants. She believes the outcome is worth more than the time, effort, and resources she puts into it. But what, then, is the “value” of the orchard? There is only one way it can have actual value and it is only recognizable after its completion: if the entrepreneurial undertaking works out and the orchard produces plenty of apples that Adele then sells for money, then the orchard has value. Its value is directly imputed from the value consumers place on the apples it produces. In other words, if consumers are desperate for apples and willing to give up loads of money for Adele’s apples, then that makes the orchard highly valuable because it is the means to producing those apples that provide income. But if consumers are flocking towards gourmet pears instead, so that Adele doesn’t get to sell any of the apples, then the value of the orchard is practically zero. Since the orchard isn’t consumed directly, its only value is as a means of production – for Adele in our example, the production of apples. Consequently, the value of production goods consists only of its contribution to the value consumers place in the consumption good. In our example so far, there are only two means of production: Adele’s labor tending to the apple trees and the orchard (that is, the land, trees, and so on). The value of both is entirely due to the fact that Adele has put them to good use: they were used as means to produce apples that consumers desired and were willing to give up money to buy. The realized value of Adele’s invested labor and the orchard is the value it produced for consumers.
Of course, Adele put labor into making the orchard too. The value of this labor, an already incurred and therefore sunk cost, is its contribution to the orchard, whose value is the contribution of apples that directly satisfy consumers’ wants. So Adele’s labor was invested in two ways: first, to produce the orchard, and then to tend to the trees and make sure the orchard produced apples. Her labor must be valued accordingly, by how much each type of labor invested contributed to the value realized for consumers. If not Adam and others valued and were willing and able to buy the apples, Adele’s investments would be for nothing – and they would also be valued nothing, unless they could be used in some other way to satisfy other consumer wants. Adele’s undertaking was therefore a speculation, since she could not in advance know the value of the outcome of her effort. She bears the uncertainty of whether it is a successful undertaking.
Prices of the Means of Production
What matters to us here, however, is not the theoretically derived value of the means of production, but rather how this gives rise to market prices. As we discussed in the previous chapter, prices of consumption goods are directly related to the value consumers place on the goods and their ability to satisfy real wants. That is, each consumer has his or her subjective valuation of each good and each producer has his or her subjective valuation, and by allowing all of the consumers and producers to bid for goods and money, respectively, their subjective tradeoffs bring about prices for the goods that reflect the joint or social valuation of the goods. But there are no consumers of an orchard just like there are no consumers of labor or an automobile manufacturing plant; these are means of production, not consumer goods, so their pricing is a little different. We already touched on how production goods can be valued above, and in chapter 1 we cursorily discussed entrepreneurial bidding for such resources, but we need to understand this in greater detail to understand how an advanced economy produces goods and allocates scarce resources toward one end over the other.
Let’s continue with the example of Adele and her apple-growing business. But we need more details about her entrepreneurship experience to make the logic clear. When Adele’s apple trees bear fruit, the seeds have already been in the ground for three years. During these years, Adele has worked on pruning and watering and otherwise tending to the trees in order to make sure they bear as much and as tasty fruit as possible. And before this time, she needed to clear the land and she also readied it for the seeds that she then planted. So let’s say she’s been working on this for a total of exactly four years, which makes a round and easy number to work with, when she finally gets to those pick ripe, beautiful apples from the trees. Three of those years consisted of waiting for nature to have its course as well as to tend to the orchard, including use of fertilizers and water to make sure the trees developed in the best way possible. Most of the hard labor was invested during the year prior to the tending, however, after Adele planned her undertaking. When she knew what she needed to do, she got to work clearing a piece of land from the wild bushes and trees already growing there, putting in an irrigation system, adding fertilizer, and so on. Then she planted the seeds and kept watering and pruning and otherwise making sure to ready the orchard for picking the apples when ripe. After four years, she’s ready to sell the apples to Adam.
All Adam sees, of course, is the apples offered for sale. He neither knows about nor needs to know about the process and all the toil and trouble that Adele has gone through to be able to offer the apples for sale. He might not even care, for all we know. But he cares about apples, and that’s all that really matters – to him, to Adele, to the economy, and therefore to us. So we can see, then, the truth of how the means of production are valued in an economy: they are valuable only because they contribute to producing something that is directly valued by the consumer who consumes it. If they do not, they have no value.
In our example, as there is a market for apples, there are several valuable inputs. Economists traditionally categorizes them as land, labor, and capital, but another important category that also contributes to production is time. Our example makes it clear that time – the waiting for the trees to mature and bear fruit – plays an important role. Whether or not we rely on “nature” to take part in the production process, production always takes time and as we cannot use unlimited time to produce what we later hope to sell, it is a scarce resource that we must also consider. In fact, time makes a huge difference in terms of opportunity cost: if production was instantaneous, we would only need to consider the different possible uses for resources. But as production extends through significant periods of time, and during this time requires that a certain subset of productive resources is committed to the specific production process, the calculation of opportunity costs are much more difficult. So when Adele chose to clear the land to begin her multi-year production process of apples, she must have estimated the time it would take to complete the process – and then compare the total cost, including the time element, with other possible alternatives of different temporal length. This is of course very difficult, which means Adele is better off the more she can rely on market prices rather than her own work. In other words, the more she can rely on purchasing seeds, shovels, fertilizers, irrigation systems, and water from other producers in the open market, at anticipated market prices, then it is much easier to appraise the value of her apple-growing project – total proceeds compared to her total expenditures, that is, the net value – and compare it to other projects. Again, we see the value of having a money as the universally accepted medium of exchange and unit of account; it simplifies things a great deal for entrepreneurs, both by providing a common denominator for economic calculation and by facilitating trade, thereby making it easier to distribute the tasks that comprise production processes onto multiple separate entrepreneurs.
For Adele’s entrepreneurial undertaking we have several inputs used in each of the categories already mentioned: the land (which includes any natural processes such as the growing of planted apple trees), her labor at different stages of the production process (to clear the land, plant the seeds, tend to the orchard, and pick the apples), capital to assist in production (the seeds, fertilizer, water, etc. that she purchases from others, and that are therefore made available through other entrepreneurs’ production processes), and time (the four years it takes to complete the process). All of these categories have distinct market valuations: there is a market value of land, which depends on its quality and therefore usability for production; of labor, which depends on how it could otherwise be used productively; of capital, which is the price Adele pays; and of time, which is noticeable through the discount rate we must use to compare expenditures in the present with revenues in the future. The discount rate is the valuation of time – or, more accurately, of waiting – according to Adele’s subjective time preference; it is the difference in valuation that Adele would attribute to receiving a certain good now or the exact same good at a later time. Time preference is important in any individual’s comparison of values in a temporal world (that is, a time-dependent world as the one we live in) and is aggregated into the social cost of waiting through the market’s natural interest rate. It is therefore part of all other valuations, since we are all temporal beings.
We’ll begin by explaining the prices that Adele pays for the inputs she uses in the process. Of those, we’ll first discuss capital or the “produced means of production,” i.e. the seeds, fertilizer, irrigation system, and water that she buys in the market. This discussion will shed light also on the valuation of land and labor. In order to procure inputs such as apple seeds in the market, how does Adele figure out how much she can pay without incurring a loss? The answer is that she must begin by estimating how much she will be able to charge for the apples and how many apples she will be able to sell. From this number, she can then subtract estimates of the expenses she will have for each input, including her own labor. This, of course, includes considering alternative inputs and their effects on the quantity and quality of the produced apples, which could mean she might have to reassess her anticipated sales. If her calculations for the chosen production process end up in the black (that is, a profit), she can decide whether she thinks the whole thing is “worth it” based on the time difference between the present and the time when she completes producing and selling and compared to alternative uses of her time. In other words, Adele calculates – even if it is only roughly and far from exact – the present value of the four-year enterprise and compares this with the present value of alternative uses of those four years.
Having decided that she will pursue the career of apple-growing, she already has an idea of how much she can spend on inputs without suffering a loss. It doesn’t really matter to her whether she spends 99% on apple seeds and 1% on everything else – or vice versa. She wants to minimize her expenditures and keep the total cost below the money amount she believes is her breakeven point. In other words, she could bid for resources and pay for them as long as she doesn’t exceed what she deems is the max she will be able to afford without losing value through the process. She and other budding apple-growers therefore “appear as bidders at an auction, as it were, in which the owners of the factors of production put up for sale land, capital goods, and labor.” Whether the process actually appears like an auction or not is beside the point: the fact is that these entrepreneurs compete to buy the apple seeds in the same sense that consumers will bid to buy the picked apples. In the same sense, sellers of apple seeds compete to sell those seeds by offering them at low prices. Most trades will take place somewhere in-between the high- and low-price extremes. The result is a market price for apple seeds.
There is a major difference between the determination of prices for the factors of production and consumer goods, however, and it has to do with timing. Consumers bid for and therefore help determine prices of products they can consume in the present, and producers likewise bid for consumers’ money expecting to cover their costs or satisfy other wants in the present. But means of production have value only because they will contribute to producing a value arising in the future. So whereas consumers in some sense speculate due to their having incomplete knowledge about both their own wants and the product’s ability to satisfy those wants, entrepreneurs bid because they expect the capital good (a produced means of production) to contribute to an undertaking that they anticipate will realize value at a future time. In other words, entrepreneurs do not bid for inputs based on their valuation but based on their anticipation of how it contributes to the salability of the final good and thus their judgment of the future market situation in which the final good will compete with others to satisfy consumer wants. More specifically, they place their bids based on their estimates of what price the final good can be sold for to consumers.
The prices of the means of production are therefore future prices, whereas prices of consumer goods are present prices. The former are pure speculation based on the entrepreneurs’ judgment of the market and their belief that their undertaking will earn a profit. This doesn’t mean that factor prices are random or arbitrary, only that they are based on anticipations of what will (that is, what could) happen. As entrepreneurs risk their own money they have a strong incentive to be careful rather than haphazard, and because only those entrepreneurs who are better at anticipating what consumers (will) really value will earn a profit – remember, those entrepreneurs who fail won’t get a second chance (they lose their investment) – these should be close to our best possible guesses. It doesn’t mean entrepreneurs are superheroes with insights that others don’t have, only that investments aren’t made at random but almost exclusively when there is very good reason to believe they’ll turn out profitable. Over time, those entrepreneurs with inferior judgment will tend to get weeded out since they lose their capital.
The price of a means of production therefore comes to reflect the guesses of entrepreneurs competing to satisfy consumer wants. Note that there are entrepreneurs at both ends of each exchange: entrepreneurs who sell the factor and entrepreneurs who buy the factor. The former won’t sell at prices that are much lower than what they estimate that they will be, which means they will not go down so much in price that they would – based on their own judgment – be better off waiting and selling at a later point. How much resources they invested in producing the factor is not part of this calculation – this cost is sunk. The only thing that matters is whether they will be able to sell their product (the factor) and the best possible price. It is all about their anticipation, in other words, not what their expenses were: either they anticipate the price they can sell it for will go up, which means they are unwilling to go down in price, or they think it will go down, which makes them more willing to accept a lower price.
The buying entrepreneurs equally depend on their anticipation of the price of the factor, since they might prefer waiting if they expect the price to fall. They will also be more eager to buy in the present if they expect prices to go up. And their bids ultimately depend on how much they anticipate that they can charge for the final good. For Adele, therefore, this means she will make bids for buying apple seeds based both on how much she thinks she can make from selling the apples, adjusted for her other costs and her required rate of profit, as well as whether she thinks the price of apple seeds will rise or fall at sufficient rate that she would prefer waiting (or increase her bid in the present).
As the prices are set by apple growers like Adele, on the one hand, and apple seed producers, on the other, all of whom are entrepreneurs, the final market price signals how entrepreneurs collectively value apple seeds – which is based on their joint anticipation of what consumers will value. The price therefore embodies the knowledge and judgments of all the entrepreneurs, revealed through their bids placed for specific means of production. This price, determined through entrepreneurial bidding, is what we can refer to as a combined “market valuation.” It is a collective effort that represents the social value of apple seeds. Or, to say the same thing in layman’s terms, the market price is what apple seeds “are worth.”
What we have now said about prices is that they carry and aggregate information about the state of the world and its expected future. Indeed, if prices of apple seeds go up it is because each seed is considered relatively more valuable than before. The reason for this could be an expected rise in future sales due to an anticipated increase in consumer demand. When entrepreneurs anticipate that they will be able to sell more apples or at higher prices, more entrepreneurs will consider becoming apple growers and therefore bid up the prices. The reason could also be that something has happened further “up” in the chain that makes apple seeds more hard to come by. Perhaps there has been a severe infestation of orchards used for seed production so that there are not as many seeds available. With fewer seeds for sale, the sellers will receive higher prices as the buyers bid them up. This will lead to higher profits among seed producers, which attracts more entrepreneurs (and this increases future supply, which forces prices down), and lower prices among apple growers, which leads entrepreneurs to leave this trade (it is not sufficiently profitable, so they will choose to grow other things – or not grow at all).
Prices consequently reveal what entrepreneurs as a group anticipate the future will bring with respect to a specific good. Entrepreneurs can of course be wrong in their anticipations, and many of them are, but is of little consequence as what matters in price determination is not cheap talk but what is revealed through their actions. In other words, they literally bet their money that they are right so there is no reason to think they don’t do their utmost; they are, after all, the ones who suffer if they are wrong. Consequently, their actions speak louder than words.
The Invisible Hand in Production
OK, so we now know that prices reveal information. Prices of consumer goods reveal consumers’ real valuation of the goods bought and not in the present: if they’re not bought, their value is zero or at least lower than the sellers are willing to go (i.e. the sellers’ reservation price, which means they anticipate they may get higher prices elsewhere or at a later time). When such prices go up, they reveal that entrepreneurs have made mistake by producing fewer goods than they should have; when prices go down, they reveal that entrepreneurs have made the obverse mistake: they have produced too many. “Too many” and “too few” aren’t objective magnitudes, but an indication of production value relative other goods produced. So if prices paid for apples go up relative pears, it simply means that entrepreneurs as a group have produced too many pears relative apples – that is, too few apples relative pears. The should have, in order to maximize value for everyone, produced more apples.
Changes in consumer prices also signal to entrepreneurs what to do. If prices of apples rapidly go up, it is an indication that there are way too few apples produced in the economy. For an entrepreneur, this means that there is an opportunity to earn profits by entering the business of apple growing. But only if the entrepreneur sees the change in prices and anticipate that this will continue. It could also be something ephemeral or a fluke. If entrepreneurs believe prices reveal a real shortage rather than a temporary mismatch between supply and demand, then we will likely see some of them change their line of business. In this case, with increasing apple prices, they will go into apple growing because that is what the prices say they should do.
Prices of the means of production, in contrast, reveal what entrepreneurs anticipate will be valued by consumers in the future. They could be a result of changing consumer prices, but this is not always the case. In the example above, for instance, if consumer prices for apples rapidly increase then Adele will make a much larger profit than she expected. This means she can use this additional income to go on vacation, but more likely – if she expects the higher prices to last – is that she will use this additional money to expand her business. What this means in real terms is that she will buy more apple seeds and fertilizer, she might buy more land to expand her orchards and hire people to work for her. By demanding more of these specific means of production, she bids up their prices. If she is large enough a player or if there are more like her doing the same thing, then this will have a noticeable effect on the market prices for apple seeds, fertilizer, land, and labor – and this will attract other entrepreneurs to produce apple seed and fertilizer. For land and labor, neither of which can be produced, their higher prices mean other uses will become relatively more expensive – some such uses will no longer be profitable. This causes resources to shift from their current uses that are made unprofitable to producing the more profitable factors that Adele and her competitors use when growing apples.
From the point of view of the economy, therefore, we would see a shift of resources from their previous uses toward producing the means necessary for growing apples. Note that this shift is not really about the higher prices offered for apples, the final product, but the anticipation that this higher price will continue for some time. The changing prices of the means of production are therefore still purely speculative and based on entrepreneurial anticipations of what will be. The real implication is that entrepreneurs overall now anticipate to better satisfy consumers by growing apples than they previously did. So laborers involved in growing pears and oranges may find that employment on apple orchards to help with growing apples pays them better. Likewise, more land will be made available for planting apple trees than was previously the case. Exactly what they were used for before, whether it was for growing pears or farming or grazing cattle or parking cars or simply being idle – is of little importance. What we know is that other land uses, after the price increase for land due to more entrepreneurs bidding for land to plant apple trees, that are now relatively less profitable will diminish whereas apple growing will increase. This as a result of individual entrepreneurs responding to the incentive of higher profits – indicated by the price signal, but based on their anticipation that prices will remain higher than previously.
In this way, despite each decision being made by an individual entrepreneur, the overall usage of resources in a market economy continuously shifts away from the relatively less profitable toward the relatively more profitable. And resources tied up in production of goods that turn out to not have sufficient demand will soon be released as those entrepreneurs realize their mistakes and either move into other types of production or go out of business. At the same time, new types of production that entrepreneurs anticipate will earn high profits relative other lines of production will attract resources and will therefore be able to satisfy more consumers. The market, in aggregate, therefore responds to anticipated consumer demand by shifting scarce resources toward the uses where they are believed to be of greatest value. Entrepreneurs make these decisions partly in light of the existing prices, and by changing their buying and selling at the same time influence those very prices. For this reason, prices tend to represent entrepreneurs’ joint anticipation of what the future holds.
The price system, that is the entrepreneurial bidding for resources to use in production and therefore the continuous determination of factor prices, is what Adam Smith referred to as the “invisible hand.” This “hand” consists of the constant shifting of resources from one line of production to another and thereby directs production. More importantly, production is continuously adjusted to better meet consumer demand – that is, to satisfy consumer wants. It happens without anyone being in charge, and we now understand how and why this occurs. We can also understand why Smith referred to this mechanism as “invisible,” because while prices are visible the aggregate shift from one production line to another is not: it consists of a the choices of a myriad entrepreneurs who are trying to align their efforts with the best possible anticipation of where there will be consumer wants that remain unsatisfied. In other words, they seek opportunities for producing where they will earn profits. So they do indeed, as Adam Smith noted, work in their own self-interest – but by doing this in a market setting, and therefore bid for productive resources in competition with other entrepreneurs, it is in their interest to serve consumers. And for this reason, markets tend to perform very well as measured by consumer want satisfaction or growth because markets reward finding valuable uses for scarce resources. They also punish those who commit resources to less valuable uses. Entrepreneurs earn profits or suffer losses based on how well their actions satisfy with real consumer wants. And by doing this they generate the prices that guide other entrepreneurs.
We’ve looked specifically at production, which is core to any economy because production simply refers to how society’s scarce resources are used. But it is important to remember that while entrepreneurs create and respond to the prices they themselves create, the purpose of production is to facilitate consumption. It is only through consumption that the true value of production is revealed, and with it what entrepreneurs were better than others – and what entrepreneurs were simply wrong. Entrepreneurs in the last category will not be able to participate as entrepreneurs in future production, since they have lost their invested capital.
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Kirzner IM. 1973. Competition and Entrepreneurship. University of Chicago Press: Chicago, IL.
Menger C. 2007. Principles of Economics (Dingwall J, Hoselitz BF, Trans.). Ludwig von Mises Institute: Auburn, AL.
Mises Lv. 1998. Human Action: A Treatise on Economics. The Scholar’s Edition. Ludwig von Mises Institute: Auburn, AL.
 (Kirzner, 1973)
 (Menger, 2007: 63-67)
 (Mises, 1998: 332)
 (Hayek, 1945)