Subjectivism
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This article is part of the Basic Course on Libertarianism and the Austrian School of Economics-> Module 1: Required foundational topics
Last updated: 2026-07-15
NOTE: Subjectivism and Individualism are the philosophical foundations of Liberty and the Austrian School of Economics.
Subjectivism
Subjectivism: Ideas and purposes create social reality
For the Austrian School of Economics, the social and economic world is not shaped by physical matter, but by people’s ideas, knowledge, expectations, and valuations.
Mind over matter:
- A piece of yellow metal is not “money” or “valuable gold” because of its objective atomic properties; it is so because human minds (people) subjectively assign it the function of medium of exchange.
- An oil deposit in the year 1500 was not “capital” or a “productive force”; it was only useless black liquid because the human mind had not yet discovered how to use it.
- Therefore, matter only becomes a “resource” or “good” when a human mind imputes utility to it (assigns it a value).
- What exists for social science are individuals acting with purposes. Economic categories (value, cost, interest, capital) are not objective properties of things, but subjective meanings that people attribute to things in light of their ends.
Marginal utility:
- Value is not in the object; it is in the person who judges it. Preference scales are internal, non-transferable, dynamic, and purely psychological.
The humility of the Austrian School of Economics:
- If you believe that social reality is composed of infinite subjective and changing valuations that occur inside each person’s head, you understand that centralized design is a logical impossibility.
- The ideas of Liberty respect each person’s valuation.
Subjectivism and liberty
Here the connection is even more direct and powerful.
If value is subjective —that is, if only the individual can determine the importance a good or an action has for them at a given moment— then:
- No one other than the individual themselves possesses the knowledge needed to judge what is best for them.
- Any external authority that claims to impose an “objective value” (whether labor time, the “general interest,” “social justice” defined by the State, or a technocrat’s plan) is necessarily substituting its own subjective valuation for that of the coerced individual.
- This destroys the possibility of the person acting according to their own scale of values. Human action ceases to be genuinely human and becomes obedience.
Contrast with Materialist Objectivism
When subjectivism is denied, individual liberty loses its foundation:
- If value is “objective” (Marxism), then someone can claim to “know” the true value of ALL THINGS and regulate it from power.
- Decisions can be made by a single person, since they know the value of everything that exists, because everything is objective.
- Everyone knows and must approve the value of things (goods and services).
- No one may think for themselves, or think that things have another value.
- With this idea of “objective value,” the decisions of centralized power would always be valid because the value of things is objective; it does not depend on each person.
- Anyone who thinks differently is wrong; there is no subjective thought; everything is objective.
- And so the idea of “objective value” leads to collectivism, centralization of power, dictatorships, communisms, fascisms, etc., etc.
In summary:
- Subjectivism implies that only you can know what is valuable for you.
- It implies Liberty, which is owning your choices.
This article is part of the Basic Course on Libertarianism and the Austrian School of Economics-> Module 1: Required foundational topics
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Last updated: 2026-07-15
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