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Human Action

Economics begins with individuals acting driven by the desire to alleviate present or future dissatisfaction. Logic and reason is the appropriate tool to analyze human action, not unrealistic complex statistical models.

Voluntary Exchange

For an economy to flourish, voluntary exchange and social cooperation through job specialization are critical. People produce specific goods or services that they are good at and then trade to meet their needs.

Profit & Loss

The market indicates what’s working. Profits signal effective operations, while losses call for change.

Freedom and Innovation

When individuals have the freedom to innovate, productivity and quality increases therefore raising the standard of living of the whole society

Consumer Sovereignty

Businesses exist to serve consumers. Because consumers create winners and losers based on where they chose to buy, businessmen are at the mercy of the consumers. Successful entrepreneurs are those who best satisfy consumer demands.

The Role of Prices

Prices are the compass of the market. They guide production decisions and inform consumer choices. Unstable prices can lead to malinvestments, threatening business viability.

Inflation

Is an expansion of the money supply. High prices are a symptom of inflation. The Central Bank can print more money but can’t print more goods. When more money enters the economy, that money competes for goods and services causing a demand and supply imbalance, which bids prices higher.

Value is Subjective

What something is worth depends on the person valuing it not the amount of labor it took to make it. Everyone values things differently. The Subjective Value theory is a pillar of the Austrian framework.

Sound Money

Having stable and reliable money is crucial because it keeps inflation under control. Furthermore, it encourages government fiscal responsibility because they can't just print more money to cover excessive spending. This means everyone can trust the value of their money will stay relatively steady over time.

For more information, see 

Mises.org > Beginners