Cost, Profit, and Loss

The next essential element of the idea of human action is that of cost: another pivotal concept around which economic science has revolved since its inception. Cost is a value, and therefore, it is subjective. Cost is a value attached to an end but take note: it is not attached to the end the actor is pursuing. Instead, the cost is the value we as actors attach to the end we give up when we decide to direct our action toward a particular end. I repeat: Whenever we undertake an action, we intend to accomplish an end that has value for us. When we choose a course of action, we always simultaneously give up the chance to accomplish other, alternative ends. These are ends we could achieve with the same means available to us, but we give up the chance to achieve them, because we consider a priori that the worthwhile end is the one we are pursuing. Well, the value we attach not to the end we are pursuing, but to the ends we relinquish when we act, is what we will call our “cost.”