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altruism

The ethical view that a person should sacrifice his or her interest for the supposed benefit of others. 3.5:1, 3.5:7-11

anarchy

A political system that does not include any form of government. 5.3:11

associative synergy

See synergy of means.

autocracy

Government based on rule by the wishes of one individual. 5.3:10

average return

The ratio c/f, where c is the quantity of a consumers' good produced by a quantity f of a given factor, with the quantities of the other factors held constant. 4.4:46

axiom

A fundamental truth that must be accepted, at least implicitly. As Rand observes, an axiom "defeats its opponents by the fact that they have to accept it and use it in the process of any attempt to deny it" (For the New Intellectual). Contrasted with the term postulate in this course. 1.2:1-4

black market

A market consisting of exchanges prohibited by a government. 4.11:20

borrower

A person or organization selling future units of a good in exchange for present units of that good. 4.7:10

burden-of-proof principle

The epistemological principle that the burden of proof falls on whoever (in the last analysis) asserts a positive claim. 1.3:72-3, 1.3:78-9

business licensing

A law or other governmental policy that coercively prohibits or discourages sales of certain goods by sellers outside of a designated class. 4.11:142

capital good

A means produced at a higher stage of production for use at a lower stage. Also called simply capital. 4.4:5 ff.

capital value

See money value.

capitalism

See free market.

cardinal

Pertaining to the measurement of quantities that are subject to addition, subtraction, and other arithmetic operations. Cf. ordinal. 1.3:17

causal influence

A condition that tends to affect the actions of humans or other entities, indirectly either contributing to a second condition (positive causal influence) or tending to reverse that second condition (negative causal influence). 4.6:18 (including "Details" box)

censorship

The initiation of force against persons or their property with the intent or effect of repressing, modifying, or imposing particular forms of speech or expression. 4.11:145

certain

Pertaining to a hypothesis or proposition that is supported conclusively by evidence. 1.3:76

coercion

See initiated force.

concept

A mental integration of units (either percepts or lower-level concepts) based on their distinguishing characteristics. 1.3:9-55

conceptual gerrymandering

The attempt to form concepts by means of groupings based on subjective criteria rather than objective distinguishing characteristics. 1.3:46-7

conscription

Forcible seizure of a human being's labor. 4.11:78, 4.11:86-9

consumer regulation

A government policy that attempts through the use or threat of force to prohibit exchanges of particular goods in the market. 4.11:59 ff.

consumers' good

An entity or condition that has subjective value as an end in itself. 4.4:5 ff.

consumption

The application of a good to a human being's ultimate purposes, rather than to the generation of another good. 4.4:8

cooperative

A corporation whose owners share some additional function with respect to the corporation. 4.6:42-3

copyright

A condition accepted voluntarily by receivers of a good, restricting uses of an idea expressed in linguistic or coded form by that good. Cf. patent. 5.5:42-8

corporation

An association of individuals (or organizations) pooling capital goods and land for common purposes and sharing ownership of those assets. 4.6:38

cost

The utility forgone at any stage of production. The cost is determined by the alternative purposes that the means at that stage might otherwise have served. The term "cost" may also refer to the specific quantities of those means. 4.4:13-6

currency depreciation

See depreciation.

defensive force

force that is used to maintain human life or property in response to initiated force. 4.11:3-5

definition

An identification of the units subsumed under a concept. Definitions may be either verbal or ostensive. 1.3:37-43

demand

The number of units of a good that one or more buyers are willing to purchase in a market at a given price. 4.6:8

demand schedule

A chart or graph showing the relationship between the demand for a given good in a given market and its price. 4.6:8-9

democracy

Government based on rule by the "people," usually interpreted as majority rule. 5.2:62

depletion

Reduction of the quantity or utility of any good as it is used. 4.4:9-10, 4.8:10

depreciation

A decline in the subjective value of a good, especially paper money. 4.11:36

differentia

[pl. "differentiae"] A characteristic specified in a concept's verbal definition that distinguishes its units from others of the same genus. 1.3:37-41

Discounted Marginal Value Product (DMVP)

The monetary contribution of a unit of a factor to the output of the consumers' good, after subtracting the interest accumulated across that factor's period of production. 4.8:11-2

dissociative synergy

See information synergy.

disutility of labor

The cost associated with providing labor, including the expenditure of a worker's time and taking into account any psychic benefits or losses associated with that labor. 4.4:23

DMVP

See Discounted Marginal Value Product.

durable

Pertaining to a good that can render services more than once. 4.8:11, 4.8:20

economic means

See power over nature.

economic power

See power over nature.

egoism

The ethical view that a person's own life should be his or her highest value. 3.5:1, 3.5:4-5

egotism

The ethical view that a person should pursue his or her desires without concern for the lives of others or other facts of reality. Contrasted with egoism. 3.5:1-3

emotion

A psychosomatic experience reflecting an automatic subconscious evaluation of some aspect of reality. 1.3:84-93

epistemologically essential

Pertaining to the distinguishing characteristic(s) of a concept upon which the largest number of its other distinguishing characteristics depend, in one's current context of knowledge. Such essential characteristics form the differentiae of proper verbal definitions. 1.3:38-9

epistemologically possible

Pertaining to a hypothesis or proposition that is supported by some evidence and not contradicted by other evidence. (Distinguished from metaphysically possible.) 1.3:74-6, 1.4:16-7

epistemology

The branch of philosophy that deals with the nature and derivation of (valid) knowledge. 1.2:5-7

equilibrium point

The market condition represented by the point where the supply schedule and demand schedule intersect. 4.6:15

ethics

The science that determines objective values and the principles by which human beings can act to gain and/or keep them. 2.5:1

evil

Pertaining to self-destructive human action or to the failure to take action necessary to one's life and well-being. 3.9:1

exchange-value

The utility of a good as a means of obtaining some other good through trade in a market. 4.6:29-31

existence

Defined ostensively. Refers to that which exists, i. e., reality. 1.2:1-4

factor of production

See means.

faith

Belief not derived by a process of logic from one's experience of reality. 1.3:57

Fallacy of Political Reductionism

The logical error that assumes that human purposes can be attained only through the exercise of governmental force. 3.12:13

fascism

See national socialism.

feedback loop

See positive-feedback loop, negative-feedback loop.

feeling

See emotion.

force

Human action that directly interferes with another person's realization of maximum subjective value on his or her value scale. 4.5:8

fraud

The acquisition of another person's higher subjective value X in exchange for a lower value or a non-value Y by deceiving that person as to the basic nature of Y. 4.5:10

free market

A market in which the exchanges are not affected by the use of force. 4.5:15

free will

See volition.

freedom

A state of human action in which the actor is not constrained by the coercion of others. 3.12:10

function

A process or role that explains an entity's existence and by which it promotes the life of an organism. 1.4:21-2

functional entity

An entity whose existence and nature are explained by the life requirement(s) it serves for a living being. 1.4:22-9

genus

The portion of a concept's verbal definition that identifies the broader concept in which it is included. 1.3:37

good

[adj., in value theory and ethics] Pertaining to a well-functioning entity or to actions or goals it may pursue in the process of functioning well. 2.3:1, 3.2:2

good

[n., in praxeology] An entity or condition having subjective value. 4.4:3 ff.

government

An organization that is the ultimate arbiter of the use of force within a geographical territory. 4.11:1

gray market

A market consisting of exchanges that may not be prohibited outright by a government, but whose legal status is not clearly defined. Cf. black market. 4.11:20

hedonism

The ethical view that pleasure per se should be a person's highest value. 3.5:1, 3.5:7-9

higher stage

A stage in the structure of production relatively remote from the consumers' good. 4.4:3 ff.

higher-order good

A factor at a higher stage. 4.4:12 (response message)

homesteading

The establishment of ownership in a previously unowned item of land as a means to one's actions. 4.5:13

honesty

Allegiance to the truth in dealing both with oneself and with others. 3.10:17

human

A rational animal. "Rational" in this context means not that all humans think and act rationally, but rather that they possess a faculty of reason, regardless of whether or not they use it. 1.3:37-41

idea

[in praxeology] The mental plan underlying production, including the stages of production, the quantities of means required at each stage, and the goods produced. 4.4:6 ff.

independence

The recognition that reality (rather than consciousness) is primary and that one must therefore take the responsibility of attaining truth by one's own reason. 3.10:9

inflation

An increase in the quantity of paper money in a market without any corresponding increase in the good underlying that paper money. 4.11:39

information synergy

Synergy that often arises from an increased flow of information when individuals function independently or decision-making is decentralized. 5.4:15

initiated force

force that is introduced into previously peaceful human relations. 4.11:2-5

integrity

The consistent application of one's ethical principles to all of one's actions. 3.10:11

interest

The additional quantity of a future good that is included, because of time preference, in an exchange of that good for a present good of the same kind. 4.7:10

intervention

The alteration of a market by initiated force. 4.11:2

intrinsicism

The belief that concepts or values exist in reality (perhaps in some hidden dimension) independently of any conceiving or valuing human being. Contrast subjectivism, Objectivism. 1.3:13-4, 1.3:48-9

investment

The allocation of a good to production instead of immediate consumption, or to a longer production process instead of a shorter one. 4.7:5

involuntary

Pertaining to actions taken by a human individual in the presence of force or threatened force. 2.4:9

judging

The mental action leading to justice, by which one evaluates the actions of an individual. 3.10:19

justice

The practice of dealing with each individual in the manner merited by his or her actions, evaluated by the standard of objective value. 3.10:19

knowledge

The mental grasp of some aspect of reality (i. e., existence). 1.3:1

labor

A means provided directly by human beings. 4.4:5

laissez-faire capitalism

See free market.

land

A means provided directly by the natural environment. 4.4:5

law of association

The principle that multiple participants in a free market producing the same two or more goods will all realize reductions in cost through specialization and trade. Only in mathematically rare situations (p. 4.5:28) will such reductions not be achieved. 4.5:22-32

law of comparative advantage

See law of association.

law of diminishing marginal utility

The principle that the units of a good decline in subjective or objective value as a person's stock increases, and increase in value as the stock declines. 4.4:29-31

law of displacement

The principle that states: If a good that would otherwise be provided by the free market is provided by the government at a lower marginal cost to the consumer, then such provision will tend to displace market provision of the good. 4.11:11

law of political selection

The principle that the highest positions in any government tend in the long run to be held by those persons who are most skillful at obtaining and maintaining political authority in that environment. 5.4:45

law of returns

The principle that there exists an optimum quantity of any factor of production, beyond which any additional units of the factor (with the other factors held constant) will yield a diminishing average return. 4.4:46-50

legal monopoly

A law or other governmental policy that coercively prohibits or discourages sales of certain goods by any party other than one designated provider. The term may also refer to that favored provider. 4.11:128

leisure

Action undertaken primarily for the immediate satisfaction it provides the acting human being. 4.4:8

lender

A person or organization purchasing future units of a good in exchange for present units of that good. 4.7:10

liberalism

The political philosophy that espouses individual freedom. 4.11:79, 5.2:16-39

liberty

See freedom.

life

"A process of self-sustaining and self-generated action" (Ayn Rand). 1.4:19

logic

The process or methodology by which we arrive at knowledge. 1.3:1-11

lower stage

A stage in the structure of production relatively near to the consumers' good. 4.4:3 ff.

marginal cost of production

The money value of the costs of producing one additional unit of a consumers' good, including interest costs. 4.8:2

marginal product

The incremental quantity of the consumers' good that is produced by the marginal unit of a factor. 4.4:42

marginal productivity

The subjective value of the marginal product of a factor. 4.4:42

marginal return

The difference between the money value of one additional unit of a consumers' good and its marginal cost of production. 4.8:2

marginal tax

The additional tax incurred by an individual as a result of providing an additional unit of labor or taking a particular productive action. 4.11:90

marginal unit

The last unit in the available stock of a factor. 4.4:42

Marie-Antoinette syndrome

The belief that the poor have as wide a range of available options as the affluent and will therefore not suffer if they are deprived of free-market choices. 4.11:35

market

A connected set of exchanges of two or more goods among two or more individuals. 4.5:15

market value

See money value.

means

An entity or condition that has subjective value not as an end in itself but for its potential contribution toward a further end. Also called a producers' good, a factor of production, or simply a factor. Cf. land, labor, capital good. 4.4:5 ff.

measurement

The identification of relationships among entities with respect to an attribute that is similar in kind for those entities. 1.3:17-35

medium of exchange

A good sought primarily for its exchange-value. 4.6:30-1

metaphysically possible

Pertaining to an action or state that is consistent with an entity's nature. (Distinguished from epistemologically possible.) 1.3:74, 1.4:16-7

metaphysics

The branch of philosophy that deals with the nature of reality (i. e., existence). 1.2:5-7

methodological collectivism

The analytical approach that assumes that the source of human action is society or particular social groupings. 2.4:12-4

methodological individualism

The analytical approach that recognizes that the source of human action is the values and purposes of individual human beings. 2.4:12-4

mixed economy

A politico-economic system that combines features of capitalism with those of fascism and/or other forms of socialism. 5.3:6-7, 5.4:50-99

monetary value

See money value.

money

A medium of exchange that acquires general acceptance in a certain market. 4.6:31

money value

The number of units of money for which a unit of a good can be exchanged in the market. Also called market value, monetary value, or (especially in the case of durable goods) capital value. 4.8:1

monopoly

See legal monopoly, natural monopoly.

national socialism (Nazism)

A form of socialism in which a false facade of private ownership of some or all of the means of production is maintained. 5.3:2-5

natural monopoly

An individual or business that is the only seller of certain goods and that does not obtain that position by coercion. 4.11:128, 4.11:139-42

need

A thing that is required to maintain or enhance the life of an organism. 1.4:30-7

negative-feedback loop

A chain of two or more conditions C₁, . . ., C_n, where C_n is a negative causal influence on C₁, while every other C_i is a positive causal influence on C_i+1. 4.6:18 (including "Details" box)

objective value

An entity or condition that one must act to gain and/or keep in order to maintain or enhance one's life. (That entity or condition may also be described as having objective value to that person.) Cf. subjective value. 2.4:17

Objectivism

A philosophy that regards reality as absolute and knowable only through reason. Objectivism, first developed in detail by Ayn Rand, recognizes that each human being is an end in himself or herself and that a proper social system must uphold every individual's rights to life, liberty, and property. 1.2:1, 1.3:15

ordinal

Pertaining to the measurement by relative position (i. e., "first," "second," "third," . . .) of attributes that are not subject to addition, subtraction, and other arithmetic operations. Contrasted with. cardinal. 1.3:17

original factor

A factor not previously produced. Original factors include land and labor, but not capital goods. 4.4:5 ff.

ostensive definition

A definition by direct reference to reality (e. g., pointing). Although most concepts can be defined in words (that is, by reference to other concepts), concepts referring to specific sensations (such as "hot") and axioms (such as "existence") are defined ostensively, thus avoiding circularity. 1.3:42

owner

An individual or organization that obtains and/or keeps an item of property. 4.5:13-15

partnership

A corporation having a small number of owners, known as partners. 4.6:42

patent

A condition accepted voluntarily by receivers of a good, restricting uses of an idea expressed in non-linguistic form by that good. Cf. copyright. 5.5:42-9

peaceful

Pertaining to human action and human relations from which force is absent. 4.5:11-5

percept

The mental result of an act of perception. 1.3:8-9

perception

The automatic integration of a group of related sensations by the brain of a human or other advanced animal. 1.3:8-11

period of production

The length of time separating a particular means in the structure of production from the final consumers' good. 4.4:11 ff.

political means

See power over people.

political power

See power over people.

positive-feedback loop

A chain of two or more conditions C₁, . . ., C_n, where C_n is a positive causal influence on C₁ and every other C_i is a positive causal influence on C_i+1. 4.6:18 (including "Details" box)

possible

See epistemologically possible, metaphysically possible.

postulate

An assertion assumed without proof in a system (such as in mathematics), although it may be rejected by other systems. Contrasted with the term axiom in this course. 1.2:2-4

power

A human capability of acquiring subjective values. See power over nature, power over people. 5.2:6

power over nature

The capability of creating new subjective values through peaceful human action. 5.2:6

power over people

The capability of acquiring subjective values through the initiation of force. 5.2:7

pragmatism

The ethical policy that treats each new situation as an isolated case, viewed concretely without regard to any abstract principles. 3.7:7

praxeology

The science that examines how human beings act to pursue subjective values and the consequences of such action. 2.5:1

pride

A dedication to achieving one's highest potential. 3.10:37

principle

A general truth that is correctly integrated within the full context of one's knowledge. 1.3:63-4, 3.4:1-7

probable

Pertaining to a hypothesis or proposition that is supported by the preponderance of the evidence and not contradicted by any evidence. 1.3:76

producers' good

See means.

production

Action undertaken for the direct or indirect purpose of generating a good for later consumption. 4.4:8

productivity

See Discounted Marginal Value Product, marginal productivity.

property

Subjective values obtained and/or kept by an individual or organization as a result of peaceful human action. 4.5:13-5

psychic utility (or disutility)

Utility (or disutility) attached to an action and deriving from the mental satisfaction (or dissatisfaction) produced by the action rather than from its physical product. 4.4:23

psycho-epistemology

A person's fundamental method of awareness. 1.3:58 (response message)

racism

The belief that a person's ideas, values, or character are determined not by that person's mind but by his or her race. 3.10:26

rational egoism

See egoism.

rationality

The consistent application of one's reason to all areas of one's life. 3.10:6

reality

See existence.

reason

The faculty that integrates percepts into concepts and measurements. 1.3:38-41

recipe

See idea.

rent

The money value of a single use of a durable good. 4.8:20

repression

An automatized subconscious process whereby certain emotions or ideas are blocked from conscious awareness. 1.3:92

republic

Government representing the interests of all of the people. 5.2:62

responsibility

The recognition that one must act to produce the objective values necessary to life and happiness and that one must therefore accept the consequences of one's actions or inaction. 5.4:122-5

restitution

Repayment to the victim by a violator of individual rights of costs resulting from that violation. 5.4:136-8, 5.5:60-77

Ricardo's law of association

See law of association.

right

[adj.] See good [adj.]. 5.2:40-42

right

[n.] An ethical principle prohibiting interference with an individual's freedom of action. 5.2:39-42

risk

Uncertainty (cf. certain) as to the outcome of a human action. 4.9:1 ff.

rule of law

Governance by established standards, as opposed to arbitrary, capriciously administered power. 5.2:2 ff.

saving

The withholding of a good from consumption or from allocation to another end that would have led to earlier consumption. 4.7:5

scarce

Pertaining to a thing that is not available in sufficient supply to satisfy all the uses for which it is sought. 4.4:25

self-esteem

A person's fundamental sense that he or she is capable of and worthy of living. 3.11:1

selfishness

The pursuit of those values that sustain and promote one's own life. 3.5:4, 3.5:12

sensation

The response of a sense organ to a stimulus from reality. The response is automatic and non-volitional. It informs the observer that something is, but does not identify its nature. 1.3:5-8

shortage

An excess of demand over supply. 4.6:17

slavery

Seizure of another human being's life by force. 4.11:78

socialism

A politico-economic system in which all means are allocated by the state, purportedly to serve the ends of "the people" or "the good of society." 5.3:2-4

speculation

The intentional acceptance of high risk in order to obtain increased gains in a market. 4.10:15

stage of production

The smallest unit within a structure of production, in which two or more means are combined to attain an end. 4.4:3 ff.

state

See government.

statism

The belief that the demands of the state must take precedence, when deemed "necessary," over the welfare of the individual. 1.3:86

stock

The units of a good available to an acting human being at a given time. 4.4:29

stockholder

An individual (or organization) sharing in the ownership of a corporation. 4.6:38

structure of production

The hierarchy of means and ends that culminates in a consumers' good. 4.4:3 ff.

subjective value

An entity or condition that a human being seeks by a specific action to gain and/or keep. (That entity or condition may also be described as having subjective value to that person.) Cf. objective value. 2.4:17

subjectivism

The belief that concepts or values exist solely in the minds of human beings, independently of reality. Contrast intrinsicism, Objectivism. 1.3:13-4, 1.3:48-9

subsidy

An allocation to particular persons, businesses, or other organizations of money or other goods acquired by taxation or other forms of initiated force. 4.11:155

supply

The number of units of a good that one or more sellers are willing to exchange in a market at a given price. 4.6:2

supply schedule

A chart or graph showing the relationship between the supply of a given good in a given market and its price. 4.6:4-5

surplus

An excess of supply over demand. 4.6:19

synergy

A mutual enhancement that sometimes results when agents work in combination. 5.4:15

synergy of means

Synergy often arising when individuals allocate their means in a cooperative manner. 5.4:15

tariff

A tax imposed upon exchanges of goods across national or geographical boundaries. 4.11:121

tax

A particular policy of taxation. The term "tax" may also denote a particular quantity of property seized under such a policy. 4.11:78, 4.11:89-121

taxation

Forcible seizure by a government of a human being's property. 4.11:78, 4.11:89-121

theft

Forcible seizure of a human being's property. 4.11:78

time preference

The greater subjective value of a good provided at an earlier time, compared with the same good at a later time. 4.4:11, 4.7:1 ff.

truth

The recognition of reality. 1.3:70

unemployment

A surplus of labor. 4.11:30

unit

[in praxeology] The smallest quantity of a good that satisfies all of the ends for which it is sought by the individuals under consideration. 4.4:28

utility

The potential service of a good to an individual's purposes. The utility of a good determines its subjective value. 4.4:13 ff.

utility ex ante

The anticipated utility of a thing or alternative (distinguished from utility ex post). 4.4:32

utility ex post

The utility of a thing or alternative as experienced after it is chosen (distinguished from utility ex ante). 4.4:32

utility scale

See value scale.

value

Ayn Rand defines value as "that which one acts to gain and/or keep." In this course, that definition is shown to be ambiguous, and two primary concepts of value are distinguished: objective value and subjective value. The term may also be used in the third sense of money value. 2.2:1-2, 2.4:17

value scale

The hierarchy of subjective values directing an individual's actions at a given point in time. 4.4:19

vertical integration

The management of two or more successive stages of production by one producer. 4.11:115-20

victim

A person who suffers directly or indirectly from a violation of rights. 5.2:56

virtue

A character trait that a human being must cultivate in order to maintain and enhance his or her life. 3.10:1

volition

The capacity of a human being to select freely among alternatives in thought and consequently in physical action. 1.4:12

voluntary

Pertaining to actions taken by a human individual in the absence of force or threatened force. 2.4:8, 4.11:7

wage

The price for which a unit of labor is exchanged in a market. 4.8:14

wealth

Goods (including services) that are valued by human beings. 5.2:6

well-functioning

Effective fulfillment by a functional entity of the need(s) that explain its existence. Other evaluative terms, such as "good," "bad," "well," "properly," and "poorly," may be applied to the entity or its function based on its degree of well-functioning. 2.3:1-7