by Joe Chavez
Mises.org
The conventional definition of inflation—as a sustained rise in the general price level, tracked through metrics like the Consumer Price Index—dominates economic discourse, reducing human behavior to statistical trends. Neoclassical and Keynesian models emphasize macroeconomic factors—money supply growth, demand shocks, or cost pressures—while largely ignoring the purposeful actions of individuals. Even Austrian economists, despite their praxeological commitment to human action, as articulated by Mises, often remain tethered to market-based terms like “price inflation” or “monetary expansion” when critiquing mainstream views. This focus—perhaps a byproduct of engaging with neoclassical arguments—risks diluting the insight that economic phenomena stem from intentional human choices.
Ludwig von Mises’s Human Action (1949) establishes economics as the study of purposeful behavior—individuals acting to achieve their subjective ends. Unlike aggregate models that prioritize statistical outcomes, like price indices, praxeology centers on the intentions behind choices. To reframe inflation, we must begin with this principle: what we call “inflation” is not merely a market phenomenon, but a manifestation of deliberate human actions, particularly those that alter the conditions under which individuals trade. This shift moves us away from impersonal metrics and toward the motivations driving economic interactions.