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Advancing Austrian Economics, Liberty, and Peace

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Mises Made Easier
Percy L. Greaves Jr.


Ultima ratio, (Latin) Final reason or argument, which is force.

Understanding. The power of the human mind to grasp or comprehend the significance of a situation faced by men, from the knowledge of given, but incomplete, data not subject to identical repetition. Understanding seeks the meaning of action in intuition of a whole. Understanding takes into account not only given facts but also the reactions of other men, value judgments, the choice of ends and the means to attain such ends and the valuation of the expected outcome of actions undertaken. Understanding is the result of intellectual insight rather than factual knowledge, but it must always be in harmony with (not contradict) the valid teachings of all other branches of knowledge, including those of the natural sciences. Understanding is practiced by everyone and is the only appropriate method for dealing with history and the uncertainty of future conditions, or any other situation where our knowledge is incomplete.

Epistemological Problems of Economics 12, 48, 130-45 (essay title translated "Conception and Understanding"; Mises preferred "Comprehension and Understanding"); HA. 49-59,68,112,118; TH. 310-11; UF. 48-51.

Unearned income. A term which socialists, syndicalists, interventionists and tax authorities apply to rent, interest and entrepreneurial profits. This idea is derived from the early classical or labor theory of value, according to which only labor produces or "earns" increased values.

HA. 396,772; PF. 122.

Unemployment, catallactic. Unemployment due to the voluntary decision of those unemployed. Given the prevailing market conditions and the personal situations of the unemployed, they prefer not to accept the pay, place, type or other terms of employment open to them. They remain unemployed either because they prefer leisure or because they believe that by waiting they can obtain employment they consider more satisfactory than that available to them at the moment.

HA. 579,598-602.

Unemployment, frictional. Term sometimes used for certain forms of "Unemployment, catallactic" (q.v.). The term is used by some when the unemployment is assumed to be the result of difficulties in matching job openings and applicants due to certain "frictions" such as lack of information or differences as to skills, training or geographical locations. Mises dislikes all such metaphorical terms which falsely imply a similarity between the automatic movements of mechanics and the individual choices involved in all human actions.

HA. 600.

Unemployment, institutional. Unemployment due to interferences with free market conditions rather than the voluntary decisions of those unemployed. Such interferences include all attempts to raise wage rates above the flexible rates which in a free market tend to adjust the supply of every type of labor to the demand for it. Such interferences are usually the result of so-called "pro-labor" legislation, although they may also be the result of custom, union activity or fear of violence.

HA. 600,615,769-79,789-93; OG. 105; PF. 10-14; also PLG. 120-39, 239-46.

Unemployment, technological. Unemployment erroneously attributed to the introduction of improved methods of production, such as the use of more efficient capital equipment (tools, machinery, "automation," etc.). As long as unused, or not fully utilized, natural resources exist, there are always opportunities for additional employment in an unhampered market economy.

HA. 136-37,774.

Unfavorable balance of payments. See "Balance of payments."

Unhampered market economy. See "Market economy, the free or unhampered."

Unio mystica, (Latin). Literally, unity or union by secret rites. More generally, the unity or union in the spirit of an individual with that of the Supreme Being or some other superior or leader.

Union, Unionists. Names given to the Northern States of the United States, and to their soldiers and citizens during the Civil War (q.v.).

United Nations. An international association of the governments of member nations (1945- ), successor to the League of Nations (q.v.). Proposed early in World War II, the UN's Charter was drafted and went into force in 1945. Headquarters were later established in New York City. It consists of the Security Council with five permanent and ten elected members, the General Assembly with equal representation for each of its 135 member governments (as of September 18, 1973), the International Court of justice with fifteen members, a Secretariat and a growing number of subsidiary specialized agencies, most of which have been organized for the promotion of specific types of interventionism among the member nations. UN actions and debates have indicated that its nationalist-minded members are almost unanimously imbued with the ideology that peace and economic progress can best be attained by policies of political interventionism rather than liberalism (see "Liberal").

HA. 368,686-88,825.

Universalism. A holistic or collectivist concept that considers a society as an acting entity with its own will and ends which are independent and separate from those of its individual members. The ends of the group are determined by a superhuman power and revealed through a leader whose authority and statements of "truth" can never be questioned by reason or faithful believers. Holding that families and communities direct the development of individuals, rather than vice versa, universalists consider social aggregates, such as nations, as an articulated whole to which the functions of individuals must be subordinated. Society's desired ends are realized solely by compelling individuals to function as prescribed by the political community. A modern proponent of universalism was Othmar Spann (1878-1950) whose ideas formed the basis for much of Nazism.

EP. 43, 47-48, 153, 209-10; HA. 44-45,145-53.

Uno acto, (Latin). By a single doing; with one action.

Unpropitious. The opposite of propitious (q.v.).

Usufruct. The right to use and enjoy the property of another to the extent that such use and enjoyment does not destroy or diminish its essential substance.

Usurers. Lenders of money at interest, carrying the implication that such lenders charge an exorbitant, or excessively high interest rate.

Utilitarianism. A school of thought, neutral as to ends, that holds that social cooperation, ethical precepts and governments are, or should be, merely useful means for helping the immense majority attain their chosen ends. It holds that the ultimate standard of good or bad as to means is the desirability or undesirability of their effects. It rejects the notions of human equality, of natural law, of government as an instrument to enforce the laws of God or Destiny; and of any social entity, such as society or the State, as an ultimate end. It recommends popular government, private property, tolerance, freedom and equality under law not because they are natural or just but because they are beneficial to the general welfare.

HA. 148,175-76; OG. 50-51; TH. 49, 55-61.

Utopia. An utterly impractical plan or scheme for an ideal human existence which is unattainable because of the inherent character of man. Utopians are impractical idealists or dreamers removed from reality.

Utopians, socialist. See "Socialism, scientific and utopian."

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