All Commentary
Saturday, June 1, 1985

Language Traps

The origin of language is shrouded in antiquity. No matter how we may speculate, we can never really know how language actually started—long, long ago before the dawn of history. Words may have begun as grunts and cries of fear, joy, expressions or interjections. Or perhaps as attempts to imitate the sounds of nature, the cries of wild creatures. Modern linguists are inclined to believe, however, that words developed as people tried to express themselves vocally and to describe reality through symbols. The origin of language is not as important for us today, however, as what language is and how it enables us to express ourselves.

Language is a major tool for communicating. It has helped to unify societies and to develop cultures. It has encouraged individual expression and intellectual development. Language permits us to transmit knowledge from person to person throughout society and down through the ages. Thus, language makes it possible for us to learn, not just from our own personal experiences, but from other persons, even from many who lived far away and long ago. Properly used, language can facilitate teamwork and cooperation, making increased production possible. If misused, however, it can mislead, distort and misrepresent, its words becoming veritable “language traps.” To communicate successfully, therefore, it is important to choose one’s words carefully so as to convey the ideas we want to express and avoid misunderstandings.

An Ongoing Process

The development of language is an ongoing process. It is evolving continually as people conceive of new ideas and want to pass them along to others. Many persons, specialists, scientists and scholars, often find existing words inappropriate for their purposes. As they seek to express themselves ever more precisely they enrich our language. Thus, new words are being created every day, some by specialists, some borrowed from other languages and other cultures. To accommodate new ideas, fads and fashions, as well as expanding scientific knowledge, the usage and meanings of old words also change from time to time. Witness the many new words and terms that have entered our language with the Beatnik generation, for instance, and the development of electronics and computers. Some new words and new meanings for old words prove helpful and in time are accepted into language; others tend to confuse rather than to clarify and are eventually dropped and forgotten.

After World War II, the German people found they had not only to clear away the rubble left from the bombings. They had also “to revive the German language” to undo the damage done by Nazi propaganda. German novelist Hans-Werner Richter noted in a recent interview (Pan American Clipper, July 1983):

After 12 years during which German had been distorted to a mumbo jumbo of Nazi propaganda . . . even ordinary words had lost their true meanings. You couldn’t use such words as heart, spirit, blood, soil, folk, country, because during the Third Reich they had acquired a sense and implication that those of us who returned from the war rejected . . . Then, slowly, we began using traditional words and expressions again, though very cautiously, in order to give them once more their lost meaning and content.

Leonard Read, FEE’s President from 1946 until his death in 1983, used to tell a story to illustrate how the words we hear and use can influence not only language but also thought. In 1947, Read attended the founding meeting of the Mont Pelerin Society in Switzerland. Also attending the meeting were Ludwig von Mises, “dean” of Austrian economists, and Walter Eucken, noted German professor and free market economist. Eucken had lived in Germany throughout World War II. Though a critic of the Nazi regime, he had been so well respected that the authorities had left him pretty much alone. Eucken addressed the Mont Pelerin meeting. After hearing him speak, Mises commented to Read, “It is amazing how the Nazi jargon has unwittingly been admitted into his speech. He always spoke such perfect German and he used to be a good economist.” Through its jargon, the Nazi propaganda had even affected the economic ideas of Eucken, one of Nazism’s most severe critics.

In the Mises seminars at New York University, which I attended for many years, Mises frequently spoke of the importance of carefully choosing one’s terminology. He often warned against using mechanical terms or similes and metaphors from the physical sciences to explain human action. As shorthand expressions, they may be helpful at times to illustrate an abstract point. However, the danger exists that such similes or metaphors may be taken literally. Moreover, they are never really suitable for describing human action, which is always purposive, intentional, never mechanical.

Some words are appropriate, others inappropriate, for expressing the ideas we want to convey. Some may actually conceal and distort the meaning we have in mind. And, as we have seen, some may even change the opinions of those who use and hear them. Among the worst offenders nowadays are words that have been borrowed by economists from the languages of violence, mechanics, the physical sciences and mathematics. Such words may even become “language traps.”

Terms of Violence

Consider the word “revolution,” with its two basic meanings. The first comes from the verb “to revolve,” meaning to rotate around a single point, the second refers to the violent overthrow of a regime. “Revolution” was first applied to the industrial world by writers who noticed the important technological developments of the late 18th and early 19th centuries. They obviously did not consider these developments to be rotating around an axis; rather they used “revolution” to describe the overturn, within a fairly short period, of earlier production methods.” ‘A revolution is making,’ said Arthur Young in 1788 when he saw the textile machines spread from the cotton to the woolen industry.” The Marxians later drew a parallel between the technological “revolution” that was taking place and the changes in political and intellectual life which they hoped that “revolution” would bring about.

Careful historians know that the old order was not “suddenly broken in pieces by the mighty blows of the steam engine and the power loom,” as sociologist and economist Arnold Toynbee (1852-1883) put it. From 1760 to 1830, industrial production was going through “the slow gradual process of economic evolution . . . . [there was] no sudden shift of scene” but rather “a constant tide of progress and change, in which the old is blended almost imperceptively with the new.” (E. Lipson, An Introduction to the Economic History of England). Economic historian T. S. Ashton also deplored the use of the word “revolution” in this context for, as he writes:

The word “revolution” implies a suddenness of change that is not, in fact, characteristic of economic processes. The system of human relationships that is sometimes called capitalism had its origins long before 1760, and attained its full development long after 1830. (The Industrial Revolution, 1944/1964. p. 4)

The factory system with its assembly lines did not spring full blown from the system of medieval hand-tooled production to destroy the small scale industry with a single blow. Yet that is the implication in Toynbee’s use of the term. And since his day, the phrase, “industrial revolution,” has gained broad acceptance in our language, carrying with it the connotation of violence and the implication that the changes wrought by the “industrial revolution” were antagonistic to the interests and wants of the people.

Terms of violence—“strike” and “pickets”—are also used to describe the activities of modern labor unions. To “strike” implies the use of force. The word “picket” originally referred, in military terminology, to the pointed posts or stakes used to build a defensive stockade or to the soldiers ordered to stand guard around a military position. Literally speaking, “peaceful pickets” and “educational picketing,” dignified by references in U.S. Supreme Court decisions, are contradictions in terms.

Members of modern, specially privileged, labor unions are often not prohibited from using force or threat of force. And when they “strike” or “picket” their previous places of employment, they sometimes actually engage in acts of violence. So terms of violence may not be inappropriate to describe their activities. However, such terms are not suitable for describing the peaceful employer-employee relations of a free market society.

Nor are terms of violence suitable for describing the other processes of free and open competition on the market. Nevertheless, frequent references to “cutthroat competition,” “the law of the jungle,” and the like, appear in the popular economic literature. Persons who understand the principles of human action and the market process look on the operations of the market from a very different perspective.


Competition in the marketplace is part of a cooperative process rather than a physical struggle among entrepreneurs, investors, workers and selling personnel. All these various categories of producers cooperate in the effort to attain their common goal, to try to serve consumers better. Producers of the same or similar products may sometimes feel as if they are in a race with one another. Yet a producer’s prime goal is not to destroy or defeat others. Rather each is looking for ways to provide con sumers with something they want more than the other goods and services then being offered.

The fact that many consumers are demanding the same or similar items does not make them turn on one another tooth and claw. Rather it works to their advantage. It stimulates increased production and makes economies of mass production possible. Everyone who wants a hammer, a television set or any other item, benefits from the fact that other people also want hammers and TVs, for instance, for it leads producers to manufacture more hammers and TV sets, better hammers and TVs, cheaper hammers and TVs or better and cheaper hammers and TVs. And the demands of many producers for specific raw materials, or specialized workers, for instance, help other producers of the same or similar products in an unanticipated way—by inducing savers and investors to enter and/or to expand those particular fields of production.

Thus, market competition results in a complex process of cooperation among producers of all the goods and services needed at every stage of production to transform and transport raw materials from their natural state into finished goods in the hands of final consumers. This process bears no similarity at all to anything like brutal “cutthroat competition” or “the law of the jungle.”

Terms from the Physical Sciences

The tremendous advances made in the physical sciences, especially during the last hundred years, has led to remarkable technological developments. We now enjoy the fruits of countless inventions undreamed of only a few decades ago. Many of these improvements were made possible because the physical scientists could conduct controlled experiments, analyzing physical phenomena quantitatively as well as qualitatively.

As the prestige of the physical sciences has advanced, many persons have come to expect that the science of human action, economics, should also be transformed from a qualitative to a quantitative science. Yet both the subject matter and the methodology of the science of human action are very different from those of the physical sciences. The terms that describe and explain the one are not suitable for describing and explaining the other. They may even become veritable “language traps,” distorting meaning, leading to misunderstandings and preventing the clear expression of economic ideas.

Economics deals with the conscious, purposive actions of individuals, based on their ideas, ideas which are always changing. Neither ideas nor actions can be quantified or measured as physical phenomena can be. Moreover, there are no constant relations in the field of ideas and actions, so that controlled experiments are impossible. Yet it is the actions of individuals on the basis of their ideas that make the economy, the market, which economists study. Without individuals, ideas and actions, there would be no economy, no market. Thus, market phenomena are always the outcomes of the conscious and purposive actions of living, thinking, acting individuals, not of machines, automatons, or robots.

Social Cooperation

Social cooperation and the market began countless centuries ago as people discovered that it was to their advantage to cooperate, divide the labor, specialize and trade the results of their efforts. They learned they could increase the total amount of goods and services produced and thus improve the situation of all participants. As people became aware of the benefits of social cooperation, society developed. Thus, society itself, as Mises points out, “is a product of social cooperation.” And the market evolved gradually over centuries, out of countless conscious and purposive actions of individuals, as people reached out to touch more and more persons throughout the world.

As individuals noticed more and more opportunities to gain through cooperation and trade, the complexity and extent of their cooperation increased. The division of labor became more and more specialized and trading transactions expanded. Step by step there evolved the extremely complicated and interrelated production processes and far-reaching market transactions we see today, which make it possible for all of us to have and consume goods and services that come from many lands. The long-term, large scale, effects of this widespread social cooperation, dovetail so perfectly that it is tempting to look on the market as something that functions “mechanically” or “automatically.” While it is true that today’s social cooperation and market arrangements were not consciously planned, it is not true that they are in some way “mechanical” or “automatic.” Each of the many separate steps that led to them was purposively undertaken by some individual or individuals.

It is to the credit of Friedrich Hayek, winner of the 1974 Nobel prize in economics, that he has explained explicitly that “the spontaneously grown institutions” such as private property, the market, language, media of exchange (i.e., moneys), moral codes, and so forth, although not intentionally designed by men are in effect man-made, in the sense that they are the outcomes of countless purposive individual actions. Hayek cites the early English economist, Adam Smith (1723-1790) who noted that man in society is led “to promote an end which was no part of his intention.” He also refers to his Austrian predecessor, Carl Menger (1840-1921), who considered “the major problem of theoretical interpretation” to be “the origin of social structures arising unintentionally.”

Orderly Activities

The actions of the unnumbered millions who have participated in the market may each have been planned by an individual, i.e., they were all “micro.” Certainly, they were all conscious, purposive, intentional, and not “automatic” or “mechanical.” However, no one intentionally planned the totality of the results, i.e., the “macro” effects. The overall results, though unforeseen, appear “orderly” and are generally beneficial to society. Hayek explains in The Counter-revolution of Science that “the independent actions of individuals will produce an order which is no part of their intention.” As he puts it there is nothing mysterious in the fact that: “. . . money or the price system enable man to achieve things which he desires, although they were not designed for that purpose, and hardly could have been consciously designed before that growth of civilization which they made possible . . .”

Hayek is well aware of “language traps.” In The Counter-revolution of Science, he specifically calls attention to the fact that “the term institution itself is rather misleading in this respect as it suggests something deliberately instituted.” (p. 83). Hayek certainly must appreciate also the difference between the way things “grow” in nature and the way human institutions develop out of the conscious actions and choices of individuals. Yet, enchantment with the phrase “spontaneously grown institutions” can easily lead one into a “language trap.” It is most important not to forget that Hayek’s “spontaneously grown institutions,” though not specifically conceived or intended by man, are actually outcomes of many separate, conscious, purposive actions of individuals.

Adam Smith’s “invisible hand” metaphor is somewhat analagous to Hayek’s “spontaneously grown institutions.” Smith’s “invisible hand” metaphor dramatized the fact that, thanks to market forces, the structure of prices and free and open competition, no Production Czar was needed to control production and equate supply and demand. Yet, some of Smith’s admirers have fallen into a “language trap” Smith certainly didn’t intend to set. They have interpreted his phrase to imply that an all-knowing, all-powerful God actively intervenes in human affairs to assure that supply on the market will tend to equal demand, and vice versa. This misinterpretation reinforces Mises’ words of caution that similes and metaphors may lead to misunderstandings if interpreted literally.

Individuals Choose

Persons who introduce into economic discussions and analyses terms from the fields of the physical sciences and mechanics fail to understand clearly the nature of economics. They do not realize that economics deals with personal ideas and conscious actions of individuals which are neither quantifiable nor measurable. Nor do they realize that there are no constant relations in the field of human action. There is nothing “automatic” or mechanical about the market. Using terms that imply that there is denies, in effect, the essence of market transactions based on individual ideas and subjective values and purposive actions. It ignores the inevitability of change and may very well mislead unwary users into unfortunate “language traps.” Thus such terms as “market mechanism,” “automatic forces of the market,” “business cycles” or “equilibrium prices” are never appropriate for describing market phenomena.

Terms from Mathematics

The current infatuation with aggregate economics and computers has enhanced the popularity of mathematical terms for describing market phenomena. However, they are not appropriate for dealing with the principles of human action. To understand why not, consider the origins and definitions of mathematical terms.

When physical scientists analyze the world and the universe, they seek to describe distance, area, weight, volume, time, sound, heat, light, and so on, in units of measurement that do not change, or at least do not change perceptibly enough to distort the particular measurements being taken. Each unit of measurement is related in some way to the physical world itself. Units of distance and area are defined in terms of the earth’s surface. The unit of time by which we reckon years, months, days, hours, minutes and seconds, is based on the rotation of the earth and the movement of the stars. The weight of an object is a measurement of its resistance to the earth’s gravitational pull, i.e., according to Webster’s New Collegiate Dictionary (1951), weight is “the force with which a body is attracted toward the earth. It is equal to the mass of a body multiplied by the acceleration due to gravity.” Volume is a measure of solid content, or a dry or liquid measure.

Various scales have been devised to record temperatures—Centigrade, Fahrenheit, Kelvin, Reaumur, etc.-all easily convertible for “on each of these [scales] are two fixed points, the melting point of ice and the freezing point of water under standard pressure” (The Columbia Encyclopedia). The most frequently used units of measurement for heat are the Calorie and the British Thermal Unit, both defined as “the amount of heat required to raise the temperature [of a certain amount] of water at its maximum density one degree” Centigrade or Fahrenheit, respectively. Scientists can also measure sound, heat and light now by the waves they emit.

Units of Measurement

These units of physical measurements are all precisely defined. They do not deal with ideas, opinions or values. Scientists may mismeasure or misread measurements. Their instruments may be wrongly calibrated. Their very attempts to measure an element may raise or lower its temperature, influence its chemistry or physiology in some way and so affect the measurements taken—the Werner Heisenberg principle. Their experiments may go awry and their interpretations of their results may vary. However, the existence of such difficulties does not affect the basic fact that physical scientists can deal with physical objects as if they are constant, or variable only within certain inconsequential limits. And they can expect that physical experiments and measurements carefully carried out, under controlled conditions, will be precise and accurate.

Mises used to say, “economics is not potatoes.” Rather economics is a study of the ideas, actions and values of men. The study of economics provides the theories and understanding that help men determine how best to supply consumers with precisely enough potatoes, neither too few nor too many, so as to satisfy their demands for potatoes without wasting time, labor and other resources, resources that might better be used to satisfy other market demands, more urgent than the demand for more potatoes. This, in essence, is the “economic problem.”

Now it is true that some of the consequences of conscious, purposive human action may be measured in mathematical terms. The raw materials and agricultural products brought forth from the earth, potatoes for example, may be counted, measured and weighed. The physical goods produced with the cooperation of entrepreneurs, investors and workers may also be totaled and measured in various ways. However, these physical goods and services are distinct from the values men place on them and it is their values to men that interest economists.

Economics is the science of human action, of individuals, their ideas and values. It deals, not with physical phenomena, goods and services themselves, Whose size, weight, volume, heat, cold, light, sound, and the like can be measured—but with human responses to them—emotions, sensations, feelings, values and the ideas they evoke. Such responses are personal and subjective. They can only be compared by the individual experiencing them. It is not even possible for an individual to measure his/her emotions, sensations, feelings, values and ideas, nor to compare them with other persons’ emotions, sensations, feelings, values and ideas. And there is certainly no universal, constant, scale of measurement, that can be precisely defined and calibrated, against which the emotions, sensations, feelings, values and ideas of one, several, many or all persons may be measured.

A Study of Human Action

If we forget that economics is a study of human action and begin to look on it as being concerned simply with the production of potatoes—or of the many and sundry other goods and services on the market—it becomes tempting to describe economic phenomena in terms of mathematical “language traps.” However, the popular mathematical terms frequently applied to economic concepts—the “balance of payments,” “price levels,” “stable prices,” the “rate of profit,” “market equilibrium,” business or trade “cycles,” “index numbers”—imply something that is not true. They imply that market phenomena—the outcomes of ideas, values and actions of individuals—are in some way quantifiable, measurable and predictable. Thus, such terms are more apt to mislead than enlighten.

The goal of economics is to try to alleviate insofar as possible the “economic problem,” the fact that there is a scarcity of goods and services relative to the demand for them. Economics seeks to determine how best the world’s resources should be arranged so as to provide people with the goods and services they want, not too many or too few, without wasting scarce resources. However, this is not a question of technology, mathematical measurement or of business and commerce. Only on the basis of an understanding of the principles of human action and the role of ideas and values can economists determine how individuals should cooperate, divide the labor, exchange the goods and services and calculate so as to plan production to yield the best possible results as valued by consumers. Terms that misrepresent or conceal the contribution economics can make toward alleviating the “economic problem” are “language traps” to be avoided.

  • Contributing editor Bettina Bien Greaves was a longtime FEE staff member, resident scholar, and trustee. She attended Ludwig von Mises’s New York University seminar for many years and is a translator, editor, and bibliographer of his works.