Economics and psychology

What is the difference between psychology and economics? Many opponents of "economics as a science" point out that human action is examined by psychology, that is, that economics is useless. But is that so?

Ludwig von Mises
Ludwig von Mises

Many times I have argued that opponents of "economics as a science" claim that the definition of economics as "the science of human behavior" is wrong, because psychology does.

However, this relatively common argument shows that the anti-economist does not understand both economics and human behavior and, last but not least, what psychology is.

If we want to say that psychology is also a "science of human action" instead of economics, we must first say what "action" is.

Human behavior

Human behavior is above all purposeful. It is an attempt to replace the dissatisfaction felt as much as possible. It is an act whose aim is to replace a less satisfactory state with a more satisfactory state.

The precondition for a person to act is perceived dissatisfaction. Dissatisfaction is the trigger for action. A person perfectly satisfied with his state of affairs does not act. He has no desires or desires because he is perfectly satisfied.

Let's admit that a non-acting person does not seem to exist.

However, dissatisfaction is not the only precondition for action. Another prerequisite is vision of a better arrangement a expectation.

One must expect that any purposeful action can alleviate or eliminate that dissatisfaction. There is no action without expectations.

Let's take the killer as an example. A man who goes and kills someone - completely unknown to him. His actions may become irrational to us - but is that so?

Filling versus method

The killer may have a mental disorder - why not. However, it is here that we come across the difference between psychology and economy. An economist sees a killer in a person who has some personal preferences - for example, he wants to kill people. What the economist is watching is how the killer fulfills his personal preference. The economist is no longer so interested in how the personal preferences of individuals are created.

An economist can have a value judgment according to which the killer is bad - for sure. Like a historian, it can be a value judgment that communism was the happy era of our state. Why not. However, both economists and historians, if they are real scientists, should not include this value judgment in their scientific analysis. The economist in the above-mentioned killer is interested in the same thing as in all other people - how he achieves his goals, how he acts as above definition and assumption of conduct.

What the psychologist is interested in about the killer is how the killer 's preferences are created, ie in what environment the killer acts, what are the killer' s wishes, feelings, what are the value judgments of the killer. What a psychologist is interested in is the content of the meeting, what the economist is interested in course of action.

I will now borrow three sentences from the glossary of terms for the Czech edition of the book Human Action - A treatise on economics by Ludwig von Mises: Psychology, like economics, begins with the individual. It deals with the inner invisible and intangible events in the human mind that determine the human scales of value that result in action. Economics begins where psychology ends.


  1. As with most of the articles I've seen here, I agree almost 100%. I'm interested in both economics and psychology, and I think they complement each other perfectly (as opposed to competing).

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