Escape the matrix 1

Introduction

The video, titled "Escape the Matrix: Austrian Economics in a Broken World," is the first in a series by Adam Livingston, who identifies himself as "the Bitcoin Wizard." He frames the series as a journey into the fundamental principles of Austrian economics, a school of thought he credits as being intellectually foundational to his journey as an early adopter of Bitcoin. His interest was sparked during his high school years through the libertarian circles surrounding Ron Paul's presidential campaigns.

Livingston argues that a proper understanding of economics cannot begin with complex, top-down metrics like GDP or CPI. Instead, it must start at the "atomic unit" of all economic activity: the single human being making a choice. This focus on the individual actor and their purposeful decisions is presented as the "Austrian red pill"—a tool for seeing through the flawed models and destructive policies of mainstream economics and central banking. The series' mission is to dissect the "fiat matrix" from the inside out, armed not with complex models but with the "raw truth" derived from the logic of human action.

The unabridged transcript follows below
You can watch the original video here

The Foundational Axiom: Why Humans Act

The bedrock of Austrian economics, as presented by Livingston, is a single, irrefutable axiom: Humans act purposefully. This is not a mere assumption but a self-evident truth. Action is distinguished from mere behavior or reflexes; it is conscious behavior aimed at achieving a specific goal. Every purposeful act is an attempt to change a less preferred state of affairs into a more preferred one.

Livingston emphasizes the undeniable nature of this axiom by pointing out that any attempt to refute it is, itself, a purposeful act. To argue, "I do not act purposefully," is to engage in a purposeful action with the goal of winning an argument. This logical trap, what he calls a "praxiological petard," makes the axiom a rock-solid foundation for an entire system of economic thought.

This starting point immediately sets Austrian economics apart from mainstream approaches that rely on statistical analysis, historical data, or assumptions about "spherical consumers in a vacuum." The Austrian method, known as praxiology, is the logical deduction of economic laws from this single, undeniable axiom of purposeful action.

Praxiology: The Logic of Human Action

Praxiology is the "scalpel" used to dissect economic phenomena. Livingston outlines its core principles:

1. The Terrain: Ends, Means, and Scarcity: Every action involves three components.
   • Ends: These are the desired states or goals that exist solely in the mind of the actor. They can range from satisfying hunger to achieving financial sovereignty or gaining social status.
   • Means: These are the scarce resources in the real world that the actor employs to achieve their ends. Means include time, money, skills, physical objects, and even reputation.
   • Scarcity: This is the fundamental condition that forces choice. Because means are limited and cannot satisfy all possible ends simultaneously, individuals must choose which ends to pursue and which to forego. Without scarcity, there would be no need for choice and thus no economics.
2. Action as the Bridge: Action is the bridge between the subjective world of ends and the objective world of means. An individual chooses a specific configuration of means because they believe it is the most effective path to their desired end. This process inherently involves judgment, uncertainty, and the possibility of error, leading to regret or loss.
3. Choice Reveals Preference: Every choice is a demonstration of preference. By choosing to spend money on coffee instead of saving it, a person reveals that, at that moment, they ranked the immediate satisfaction of coffee higher than the future security of saving. This is not a moral judgment but a simple observation of demonstrated value. The sum of these billions of revealed preferences creates the entire market cosmos.
4. Trade-offs and Opportunity Cost: Because of scarcity, every choice has a cost. The opportunity cost is the value of the next-best alternative that was foregone. When you choose to spend two hours watching a movie, the opportunity cost is whatever else you could have done with that time and money, whether it was working, exercising, or spending time with family. This concept is central to understanding that there are no cost-free decisions in economics.

Pillar 1: The Subjectivity of Value

Livingston argues that one of the most significant errors of mainstream thought is the idea of intrinsic value. The Austrian school torches this concept, positing instead that value is entirely subjective.

• Value Resides in the Mind, Not the Object: Value is not a property of a good or service, like its weight or chemical composition. It is a judgment made by an individual within a specific context. The famous example of the diamond-water paradox is easily solved: a person dying of thirst in a desert values a gallon of water far more than a diamond, while a wealthy individual in a hydrated city values a diamond more than another glass of water. The objects haven't changed, but the context and the chooser's ends have, thus changing their valuation.
• Value is Ordinal, Not Cardinal: Because value is a subjective judgment, it cannot be measured in cardinal units (like 10 or 27.5 "utils" of happiness). It can only be ranked ordinally (1st, 2nd, 3rd). A person can say they prefer steak to salad, but they cannot say how much more they prefer it in a quantifiable, objective unit. This insight renders the mainstream economic concept of "aggregate social welfare" nonsensical. One cannot add up the subjective, unmeasurable happiness of millions of people to determine if a policy creates a "net good." Doing so is what Livingston calls "theological math"—politics disguised as science.
• Prices are Exchange Ratios: If value is subjective, then a price is not a measure of an object's intrinsic worth. A price is simply the exchange ratio that emerges when two individuals with inverse preference rankings agree to a trade. The buyer values the good more than the money, and the seller values the money more than the good. The price is the "temporary truce between two minds" that allows the trade to happen. Myths like "fair price" or "cost-based pricing" are fallacies because the market ultimately does not care what something cost to make; it only cares about what individuals are willing to sacrifice to obtain it.

Pillar 2: Methodological Individualism - Only Individuals Choose

The third pillar of this framework is methodological individualism. This principle asserts that collective entities like "society," "the market," or "the nation" do not think, feel, or act. Only individuals do.

• The Danger of Aggregates: Pundits and policymakers frequently use collective terms ("America decided to save less," "The market failed"). Livingston argues this is a dangerous abstraction. These statements are statistical summaries that smear together millions of discrete, individual choices, some of which may run completely counter to the aggregate trend.
• Aggregates Erase Victims and Costs: The love of aggregates in policymaking serves a political purpose: it hides the real-world trade-offs and victims of policy. A statement like "raising the minimum wage helps society" is meaningless. It helps specific individuals who keep their jobs at a higher wage, but it simultaneously hurts other specific individuals—those who lose their jobs, the small business owners whose costs increase, and the consumers who face higher prices. By dissolving individuals into the fog of "society," politicians can pretend the harm doesn't exist. Livingston urges his audience to always ask, "Which we, exactly?" to force speakers to name the actual choosers and cost-bearers.

Weaponizing the Austrian Toolkit: Critiques of Policy

Armed with these principles, Livingston demonstrates how to dissect common economic policies:

• Prices as Information Signals: Prices are not merely numbers to be controlled; they are vital, compressed signals carrying information about scarcity and demand from millions of individuals. When a government imposes a price control (e.g., a cap on rent), it isn't making things more affordable; it's blinding the market. It destroys the incentive for landlords to maintain properties or build new ones, inevitably leading to shortages and slums.
• Interventions and Malinvestment: Policies like stimulus checks or artificially low interest rates from central banks distort these price signals. Fake interest rates, for instance, signal to entrepreneurs that there are more real savings available for long-term projects than actually exist. This leads to malinvestment—the pouring of capital into projects that are not sustainable and do not align with consumers' actual time preferences. The subsequent collapse is not a "market failure" but the inevitable consequence of acting on false information.
• Profit and Loss as Moral Feedback: In a free market, profit is a signal that an entrepreneur is successfully using scarce resources to satisfy the ends of others. Loss is an equally crucial signal that says, "Stop wasting resources on things people don't value." Bailouts sever this essential feedback loop, creating "zombie firms" that continue to consume capital that could have been used more productively elsewhere.

Anticipating the Critics: Rebutting Mainstream Objections

Livingston preemptively addresses several common objections to the Austrian framework:

• "People are irrational." Austrian economics doesn't require people to be perfectly rational or infallible. It only requires that they act purposefully. A person spending their rent money on meme stocks is still acting with a purpose (the hope of getting rich, the thrill of gambling), even if the choice is unwise. Bad goals do not negate the existence of a goal.
• "We can model utility." You can assign numbers to anything, but assigning them to subjective internal states gives the illusion of scientific precision without any connection to reality. It's an exercise in "theology in MATLAB."
• "Behavioral economics disproves it." Behavioral economics, which highlights human biases, doesn't negate purposeful action; it only adds nuance to understanding why people choose certain ends and means, even if those choices are short-sighted or inconsistent.
• "Society needs coordination." Austrians agree. That coordination mechanism is the price system, which communicates more information more effectively than any central committee ever could.

Conclusion: The Path Forward

Livingston concludes by welding the core pillars together. Understanding that humans act purposefully, that value is subjective, and that only individuals choose provides a map that matches the terrain of the real world. This framework is more robust and useful than complex mathematical models that ignore these foundational truths. Taking this "red pill" is the first step out of the "fiat matrix," empowering individuals to see that the economy is not driven by the decrees of central planners but by the cumulative choices of billions of acting human beings.

Unabridged transcript

Hello everyone, my name is Adam Livingston and I am the Bitcoin Wizard. I am happy to announce that this is my first video in a series on Austrian economics. It is called Escape the Matrix: Austrian Economics in a Broken World. I discovered Bitcoin in 2010 or 2011 when I was in high school. I was very much into Ron Paul's 2008 and 2012 presidential campaigns. And in those libertarian circles, Bitcoin was mentioned quite a lot. In my journey to becoming a Bitcoiner, there was arguably nothing more fundamental to my intellectual development than studying Austrian economics. I read Bastiat, Hayek, Mises, etc. So, this will be a very meaningful project for me and I appreciate all of you coming along on this journey.

Welcome to episode 1, why humans act, the secret engine behind every economy.

Before anyone mentions GDP, CPI or some PhD's 10th order polynomial, let's start where every real economic story actually begins: with a single human making a choice. Coffee or water, save or spend, scroll or ship. That tiny moment of "I want X more than Y" is the atomic unit of the entire market cosmos. If you don't get that, you'll spend your life trusting broken models and wondering why the Fed keeps lighting the economy on fire.

Here's the Austrian red pill. Humans act purposefully, not randomly, not mechanistically, not because a regression told them to. Action is always aimed at changing a less preferred state into a more preferred one. If there's no goal, it's a reflex, not economics. Your cat knocking a glass off the counter, probably not praxiology. You deciding to buy another hardware wallet at 2:00 a.m., 100% praxiology.

Praxiology is simply the logical analysis of that purposeful action. We take an axiom that's impossible to deny without performing it. Try to argue you don't act, you'll be acting, and we derive the implications. No lab rats, no "let's assume a spherical consumer in a vacuum." Just reasoning from the undeniable truth that people choose. That truth detonates a lot of mainstream dogma. Value isn't living inside objects like some metaphysical price tag. It's in your skull. Subjective value means your ranking of ends is what matters. The same gallon of gas is liberating to the guy escaping a hurricane and irrelevant to a billionaire on a private jet. Economists who treat value like it's measured in joules are doing econfiction.

And no, you can't measure utility. You rank it: ordinal, not cardinal. First choice, second choice, third choice. You can't add my happiness to yours and then divide by inflation to get aggregate welfare. That's like comparing poetry to plumbing with a thermometer. Mainstream econ keeps trying to strap numbers to things that only make sense as orders of preference, then act shocked when their models detonate on contact with reality.

Methodological individualism is the next landmine. The market doesn't act. Society doesn't decide. Only individuals choose. Every statistic that pretends to capture an aggregate will erase the very people making the decisions. Policymakers love aggregates because it lets them treat you like a spreadsheet cell that can be overwritten. Meanwhile, prices, actual prices, are signals coded by millions of tiny value judgments. Mute those signals with policy, you blindfold the entire economy and then blame greed when everyone walks into a wall.

Tonight I am locking in three pillars: Humans act purposefully. Value is subjective. And only individuals choose. This is the scalpel you will use to dissect every price control, stimulus check, and central bank fever dream you'll ever see. If you keep this axiom front and center, you'll watch policymaker narratives disintegrate like wet toilet paper. We start at the molecule because the macro only makes sense if the micro is honest. Welcome to Austrian economics version red pill. No models, no propaganda, just raw truth. Let's blow up the fiat matrix from the inside.

Before we touch a single chart, answer this. What was the last economic choice you made today? Did you brew coffee at home or surrender $5 to Starbucks? Did you hit buy on SATS or Doomscroll X for free dopamine? Did you skip breakfast to save calories and cash or Door Dash $18 eggs because time felt scarcer than money? That's the economy, not the Federal Reserve PDF, not a CNBC headline. It's you. It's you triaging scarce time, money, and attention every 5 minutes. Picture a god's eye drone shot over Earth. 8 billion micro decisions, firing off like neurons, colliding into prices, wages, shortages, and surprise bankruptcies. Policy makers call that noise, the Austrian calls it reality.

So, pause and rewind your day. Coffee, commute, content, calories, and crypto. Each choice reveals a ranking of ends. You revealed something about yourself, and the market recorded it in a price somewhere, even if you never saw the receipt. Drop your answer in the comments. What did you choose? What did you skip? And why? I want the messy truth. "I bought gas station sushi because it was faster than cooking" beats "I optimized my caloric utility function." Honesty is the point. We're dissecting real action.

Here's the bedrock. Humans act purposefully. Action is behavior with intent. A move from a state you like less toward one you like more. If there is no goal, it is a reflex or an accident. Interesting to biologists, perhaps, useless to economists. Try to deny this and you instantly prove it. "I don't act purposefully" is itself a purposeful act aimed at winning an argument or looking clever. Congratulations. You just hoisted yourself on a praxiological petard.

From that simple axiom, we get an entire cathedral of logic. Ends exist in your head. Means exist in the world. Scarcity forces trade-offs. Tradeoffs force choice. Choice reveals preference. You rank outcomes. You do not measure happiness units. You choose steak over salad, not 74 utils over 63. Every policy that pretends to override individual purpose is guessing at ends it cannot see and wrecking means it does not own. Notice what we did not need. A regression, a confidence interval, a representative agent. We needed honesty about what humans do all day. Choose, pursuit, adjust, repeat. This axiom is our scalpel. With it, we slice open any economic claim and check for a beating heart of purposeful action. Lock this in. Every episode will refer back to it.

Amazing. Now we have the basics covered. Time to launch into more detail. Time to put a name on the scalpel we're using: Praxiology. The systematic study of purposeful human action. No lab coats, no petri dishes, just logic applied to the fact that people choose. Here's how it works.

Number one, start with an axiom you cannot deny without performing it. Humans act. You are choosing to listen or hatewatch or clip this for Twitter. The moment you try to refute it, you reveal intent which confirms the axiom. Clean, elegant, brutal.

Use deductive reasoning, not statistical causeplay. We do not need to randomize half the population into control groups and force them to live without toothpaste to see if demand curves slope downward. We already know people prefer more to less, sooner to later, cheaper to pricier. Logic beats tortured regression output.

Number three, recognize the terrain, means, ends, and scarcity. Every action is an attempt to move from a less preferred state to a more preferred one using scarce means. Scarcity injects drama into every decision. If everything were free and infinite, economics would be a dead field and every PhD would need a real job.

Number four, stick with ordinal rankings. Avoid fake numbers for psychic states. You do not have 87 utils for ice cream. You prefer pistachio over vanilla, vanilla over broccoli. Done. The moment someone says "aggregate social welfare increased by 2.3%," know that you are hearing theological math.

Number five, individual minds, individual choices. Praxiology analyzes the chooser, not the statistical artifact. Society does nothing. The market does nothing. Individuals act. Everything else is shorthands that politicians use to turn you into a spreadsheet cell.

Why this matters? Once you accept praxiology, you get weaponized clarity. Policies get dissected in seconds. Want to impose price controls? You just detached means from ends, distorted signals that coordinate choice, and guaranteed shortages or waste. Want to stimulate demand with printed money? You just faked signals about real savings so entrepreneurs misallocate capital, then you call the collapse a mystery.

Let's make it vivid. Imagine a central planner trying to optimize shoe production for 330 million Americans with a giant AI dashboard. It knows each person's ranking of comfort, style, budget, foot pain, and social status. And time preference changes hourly. No model captures that kaleidoscope. Prices do. Profit and loss do. The planner ends up with a warehouse of size 13 neon crocs and a black market for normal shoes. Meanwhile, the Austrian economist sits back, sips coffee, and watches the catastrophe like it's reality TV. Praxiology is not mystical, it's forensic. We examine action like detectives. Trace the logic, derive the implications. No appeals to authority. No, "the data says so" when the data was tortured in a basement. Just: given that humans act purposefully, what follows?

All right, let's open the hood on purposeful action. Every move you make is a surgery on reality, carving scarce means to reach craved ends. Ends first. Ends are the states of the world you want. Relief from hunger, more sats, status points from ordering the single origin Ethiopian roast like a snob. They live in your head, not the object. You want alertness, warmth, identity, maybe an excuse to procrastinate for seven more minutes. The cup is just the ritual.

Means are these scarce, rearrangeable tools you mobilize to get there. Money, time, skills, social capital, reputation, that one favor your cousin still owes you from 2019. Scarcity is the antagonist in this drama. If everything were free and omnipresent, you wouldn't act. You'd just be. Economics would vanish. Politicians would have to get real jobs. Tragedy.

Now, the punchline: action is the bridge. You choose a configuration of means because you believe it will yank you closer to your end. When you misjudge, welcome to regret, loss, and learning experiences. Your therapist charges $175 an hour to reinterpret.

Let's dissect a mundane example to make the abstraction bleed. The end: You want to feel productive and financially sovereign. Candidate means A: Spend two hours building a PowerPoint on Austrian economics. Candidate means B: Spend two hours arguing with a Keynesian on Reddit while eating stale Cheetos. You rank ends, match them with feasible means, and act. If you pick B, fine. Your revealed preference is dopamine and self-righteousness over productivity. Praxiology doesn't moralize. It just says, "Yep, that's what you valued at that moment."

Tradeoffs are the heartbeat. Choosing one bundle of means and ends implicitly rejects infinite others. That's why every decision is a tiny price you pay in foregone alternatives, aka opportunity cost. You didn't just buy the coffee, you sold 5 minutes and $5 that could have gone to stacking sats or bribing your dog with better treats.

Notice what this kills stone dead: The fantasy of optimal social welfare. The idea that planners can reallocate resources efficiently. Efficient for whose ends? Which planner has the omniscient org chart of everyone's internal ranking? Spoiler: none. The belief that stimulus magically creates prosperity. No, it shuffles means away from savers and toward political ends and then calls the hangover unexpected.

Means are heterogeneous. Time at 2 a.m. is not the same means as time at 2 p.m. A $100 bill in a recession is not the same as $100 in an inflationary blowout. Your social clout with Bitcoiners isn't interchangeable with clout in a knitting forum. Unless you start knitting on lightning, in which case, respect. Ends are dynamic. You revise them mid-flight. You thought your end was six-pack abs, but halfway through week two, your updated end is not feeling like death at CrossFit. Preferences shift. Austrian econ doesn't need them frozen for a model to converge. It respects the chaos and still derives law-like truths from action structure.

Here's the dark comedy. Every policy that pretends to help society is just politicians hijacking your means for their ends. "Reallocating resources" is code for "we're reallocating your resources." When the bill halts, they blame market failure. Translation: You didn't pick their ends voluntarily. So they called it a glitch. So imprint this formula on your cortex. Action equals: choose end, select means, confront scarcity, accept trade-offs, and reveal preference. Everything we analyze next—marginal utility, capital structure, the business cycle—is just this logic scaled across time and networks of actors. You'll start seeing it everywhere. It's like those magic eye posters. Once you spot the hidden dolphin, you can't unsee it.

Here's where we torch the holy altar of intrinsic value. Nothing has value floating in it inside like midi-chlorians. Value is a ranking inside of a human brain at a specific moment. That's it. Your brain, your context, your thirst level, your insanity level. The object just sits there until someone assigns it a spot in their preference stack. Picture two people staring at the same gallon of water. One is in the Mojave at noon, lips cracked, praying to cacti. The other is ankle deep in a flooded basement full of moldy insulation. Same H2O molecules, wildly different ranking. The Austrian doesn't ask "what is the water worth?" It asks "to whom, compared to what, right now?"

Let's nail the core points.
Number one, value is subjective, ordinal, contextual. You rank ends. You don't measure them. First choice, second choice, third choice.

Number two, objects don't carry value like a barcode. Gold, Picasso paintings, Bitcoin, your grandmother's ceramic cat collection. They become valuable when someone ranks them high enough to sacrifice other means to get them. When nobody cares, the price tanks, even if the object didn't chemically change. Ask Beanie Baby investors.

Number three, subjective does not equal arbitrary. People have reasons, even dumb ones. You might value a worn out concert t-shirt more than a brand new one because memory hits harder than cotton thread count. The reason can be nonsense to me, but praxiology doesn't need me to like it, only acknowledge you chose it.

Number four, interpersonal comparison of value is impossible. I can't add your joy to mine and make a policy pie chart. Economists who pretend they can do this are basically saying, "Trust me, I know how much happiness you get from broccoli." No thanks, Karen.

Number five, prices are exchange ratios, not moral verdicts. A price is where two subjective value scales intersect. You valued Bitcoin more than dollars. The seller valued dollars more than that slice of Bitcoin. Handshake. Done. That number wasn't the object's intrinsic worth. It was a temporary truce between two minds.

Let's make it bloody with a real-world vignette. You sitting on Coinbase eyeing 0.05 BTC at 120K per BTC. The end: Security, sovereignty, dopamine rush, bragging rights. The means: $6,000 foregone rent money. Maybe one month of eating rice and scrambled eggs. Meanwhile, Karen from HR, same price, same sat stack, but her ends rank new patio furniture and Peloton subscription higher. She walks, you buy. Price didn't decide your values. Your values decided whether you hand over the means.

Subjective value wrecks a bunch of popular nonsense. Fair price rhetoric: Fair to whom? Compared to what alternative? Bring two buyers and a seller into a room, you'll get three fair prices and four accusations of greed. Cost-based pricing myths: "But it cost X to make." Congrats on your sunk cost. The market still doesn't care if nobody values the product. Ask Bud Light's marketing department. The diamond water paradox is solved. The paradox only exists if you think value is inside the object. At the margin, diamonds rank higher than yet another glass of water for a hydrated city dweller. Flip the context, the ranking swaps.

Let's preempt the mainstream screams. "Subjective? Then economics is just opinion." Wrong. The inputs—value rankings—are subjective. The logic of how choices play out is objective. Gravity doesn't care about your feelings. Austrian logic doesn't care about your brand loyalty. "So, we can't do policy if everything is subjective." You can do policy, you just can't pretend it raises net welfare without picking winners and losers. Own the tradeoff or sit down.

Here's the truth. Politicians scream about price gouging when value spikes in a crisis. Yet they never scream about value gouging when they tax you to death for projects you rank below literally everything else. Your preferences are subjective, theirs are sacred. Convenient. Watch how this shows up in every market anomaly headline. Why are NFTs worth millions? Because enough people ranked owning that JPEG above owning those dollars at that moment. Will they still next year? Maybe not. Subjective value isn't permanent. It's mercurial, which is why speculation exists and markets move. So, also embed this in your mind. Value is a ranking inside of a mind exposed through choice. Prices are where those two rankings intersect. Nothing is worth anything until someone sacrifices something for it.

Time to murder another sacred cow. Utility is ranked, not measured. You don't stroll into a store with a happiness meter strapped to your forehead. You stand there thinking "coffee is greater than energy drink is greater than tap water is greater than licking condensation off the freezer." That's a ranking, ordinal. First, second, third. No imaginary units needed.

Here's the core. You compare. You don't quantify. "I prefer A to B" is meaningful. "A gives me 12 more utils than B" is fanfiction. Try talking vibes and see how scientific it feels. Number two, interpersonal comparison is impossible. My joy from pizza cannot be added to your joy from pizza and averaged into social welfare. Economists who claim otherwise are doing spiritualism on a macro scale. Policy built on utility sums is politics in disguise. When regulators say "net happiness rises if we tax X and subsidize Y," what they really mean is "our ends trump yours. Deal with it." They can't measure your internal scale, so they substitute theirs.

Ordinal logic still gives iron laws. You don't need numbers for demand to slope downward. As the price rises, fewer people rank the good above their next best alternative. Done. That's why Austrian theory survives without PowerPoint charts full of Greek letters.

Let's make it stupidly concrete. You face three lunch options. Number one, a $12 burrito. Number two, an $8 salad. Number three, $0 leftovers that taste like regret. You chose the salad. Revealed preference: Salad > burrito > regret bowl. I can learn from your action. I cannot say the salad gave you +27 hedonic points. Later someone asks how much happier are you? You only know you liked it more than the others. The ranking is clear. The magnitude is unknowable.

Why mainstream econ cheats here? Cardinal utility makes math easy. It lets them integrate curves, run regressions, and pretend they're physicists. Ordinal utility makes them grapple with messy humans. So, they slap numbers on preferences, call them proxies, and then act shocked when their models implode.

This matters for markets. Prices don't tell us how much someone values a thing in some cosmic unit. They tell us where two people's rankings intersect. The buyer values the good more than the money. The seller values the money more than the good. That's all we need to coordinate production across billions of strangers. This matters for you. The next time someone says "we should do X because it increases total happiness," ask them to show the units. Watch them pivot to moralizing or "the literature says." Translation: they're guessing but with citations from clowns.

Time to bulldoze the biggest ghost in economics. The economy doesn't choose. Society doesn't decide. The market doesn't feel anything. Only individuals act. Period. When a pundit says, "America decided to save less this quarter," what they actually mean is millions of separate humans, each juggling their own ends and means, shifted their rankings. Some saved less, some saved more. Some bought a flamethrower on Amazon at 3:00 a.m. Aggregates smear these choices into a sludge that politicians can sculpt into whatever narrative funds their re-election.

Why this matters? Causality lives in the skull. Every price change, every shortage, every boom is downstream of discrete human choices. Aggregates are statistical summaries, not actors. Policy loves aggregates because they erase victims. "We boosted GDP" sounds noble until you translate it: "We transferred purchasing power from these specific people to those specific corporations." Blame-shifting thrives on collectives. "The market failed" equals "a bunch of people made choices I don't like, so I'll pretend a phantom failed instead of naming names."

Imagine a collective mind making decisions. Whose mind is it? The median voter, the top donor, the loudest activist on TikTok. There's no coherent social preference curve. It's a myth used to justify overriding actual preferences. Example: the minimum wage. The sentence, "Raising the minimum wage helps society," is nonsense. It helps some individuals—those who keep their jobs and get higher pay—and hurts other individuals—those priced out, small business owners, consumers via higher prices. Only by dissolving individuals into the fog of "society" can you pretend the harm vanishes. So from now on when someone says "we," ask "which we, exactly?" Force them to name the chooser and the cost-bearer. Watch how fast the rhetoric collapses. Individuals act. Groups are abstractions. Aggregates describe. They do not decide. Any sentence that starts with "society should" is already hiding the bodies.

Let's weaponize what you've learned. If action is purposeful, value is subjective, and only individuals choose, what follows in the wild?

Prices are survival signals, not policy knobs. A price is a compressed telegram from millions of individual value rankings. It tells producers when resources are actually wanted. When a bureaucrat caps that price, they're not helping consumers. They're ripping the batteries out of the smoke alarm and calling it fire prevention.

Interventions jam coordination. Stimulus checks, rent controls, price ceilings, quantitative easing, infinity. Every one of these distorts the signals that entrepreneurs use to match means to ends. Malinvestment isn't some spooky Austrian buzzword. It's what happens when fake interest rates convince builders to pour concrete for projects savers never actually funded.

Aggregates hide collateral damage. "We reduced inflation." Translation: We crushed small borrowers and handed bond holders a gift. "We raised GDP." Translation: We built bridges to nowhere with money printed from nothing and you paid via higher prices later. Always ask who picked the ends and who paid with their means.

Number four, this is an important one. Profit and loss equals moral feedback. In a free market, loss is the slap that says, "Stop wasting scarce means on ends people don't actually rank high." Bailouts sever that feedback loop. Zombie firms stagger forward, consuming capital like a Walking Dead extra gnawing on your 401k.

Policy can't see inside your head. The planner doesn't know if you value time with your kids more than a slightly cheaper avocado. They don't know your trade-offs. They guess, then legislate their guess as if it were science. When their guess fails, they blame market failure and double down.

Here's a case study speedrun. Rent control equals capped price, equals landlords exit or cut maintenance, equals shortages, equals slums, equals politicians' shocked Pikachu face. Minimum wage equals raise cost of low-skill labor, equals automate or fire them, equals fewer entry-level jobs, equals blame corporate greed. See every policy as a forced re-rank of ends using other people's means. Ask which individual signals got silenced. What misallocations follow? If the answer is "we'll model it," grab your wallet and run. The same people who say markets are irrational want to centrally plan the sum total of all those irrational choices. That's like declaring cats unpredictable and then opening a cat ministry to standardize purring.

Before the Keynesian cavalry charges in, let's pre-burn their straw men.
Objection one: "People act irrationally, so your logic collapses." Nope. Irrational does not equal non-purposeful. If a guy spends rent money on Doge memes, he's still aimed at an end: dopamine, clout, delusion. Praxiology doesn't bless his choice. It just analyzes it. Action with a bad goal is still an action.

Objection two: "We can model utility. Stop being allergic to math." You can model anything if you're cool with lying to yourself. Assigning numbers to internal rankings gives you pretty graphs and useless conclusions. It's theology in MATLAB. Ordinal logic gives you laws without pretending to read minds.

Objection three: "Behavioral econ disproves rational actors." Great. So, humans are biased monkeys with credit cards. Still doesn't negate purposeful action. It just means ends and means can be dumb, time-inconsistent, or hijacked by sugar. Austrian theory says, note the bias. Don't nuke the axiom.

Objection number four: "Society needs coordination beyond individuals." Exactly. And prices, profit, and loss are how it happens. The coordination mechanism already exists. Replacing it with committees is like replacing your nervous system with a Slack channel.

Objection five: "Without aggregates, how do we do policy?" Carefully, or not at all. Aggregates are descriptive, not prescriptive. If you steer a ship using average ocean depth, you'll ram coral reefs. Policy that ignores dispersed subjective valuations is a battering ram disguised as a safety net.

Objection six: "So, you're saying you'll do nothing?" I'm saying stop pretending coercive meddling creates net good when you can't measure the net. Voluntary coordination at scale is messy but antifragile. Central planning is tidy until it explodes.

Here's some speed round debunks for you.
"Fair price" translation: price I emotionally prefer.
"Price gouging" translation: value spiked and I don't like acknowledging scarcity.
"Market failure" translation: people didn't choose my ends. Deploy the guns.

If your critique requires denying purposeful action, measurable subjectivity or individual choice, you're arguing economics with a fantasy species: Homo statist. In this series, we deal with actual humans.

Let's weld the pieces together before we sprint into episode two. Core pillars you now own:
Humans act purposefully. Every economic event is just stacked choices. No chooser equals no economics.
Ends versus means under scarcity. You're always rearranging limited stuff to chase preferred states. Tradeoffs are the price of being mortal.
Value is subjective and ordinal. You rank outcomes. You don't measure happiness in teaspoons. Prices are truth points between two rankings, not moral truths.
Only individuals choose. Society is a narrative device. Individuals are the actors. Aggregates summarize. They don't decide.
Prices equal information signals. Jam them with policy and you blind producers, misallocate capital, and manufacture crisis.

Everything else—marginal utility, capital structure, business cycles—is just this logic zoomed in or stretched across time. You are now officially more dangerous than a room full of PhDs armed with DSGE models because your map matches the terrain. Real humans, real choices, real scarcity. You've taken the first step out of the fiat matrix. Recognizing that your choices, not their models, drive the economy. Keep going.

My name is Adam Livingston and I am the Bitcoin wizard. If you enjoyed this content, like this video, subscribe to the channel, and share this video with your friends and family. All right, close this tab or don't. Choice revealed preference. See you in episode two.