Principles of Economics by Carl Menger Chapter 1.1 - The Nature of Goods

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What makes something a “good”? Is it just something we buy or sell—or is there more to it?
In this video, we break down Carl Menger’s definition of goods from his classic work Principles of Economics. Menger, the founder of the Austrian School of Economics, explains how everything in the world, including economic value, follows the principle of cause and effect. If a thing satisfies a human need, has the right qualities, is known to be useful, and is within our control—it qualifies as a real good.
But many things people value don’t meet these conditions. Think of magic potions, superstitions, or products sold for fake illnesses. These are imaginary goods—valued only because of false beliefs or misinformation.
Menger goes further, challenging modern economists who treat things like brands, customer bases, or monopolies as vague “relationships.” He argues these are real goods, too—because they produce value through useful human actions (or inactions).
By understanding the true nature of goods, we can separate real economic value from illusions. This knowledge leads not only to better personal choices, but also to a more rational, prosperous society.
If you want to understand the roots of Austrian Economics and how it all begins with defining what a “good” really is—this is where to start.

-What qualifies something as a “good” in economics?
-What are the four conditions for something to be considered a good?
-What are imaginary goods, and why do people value them?
-Why do some economists hesitate to call brands or customer bases “goods”?
-How do actions or inactions by others create real economic value?

00:00 - Introduction to the Nature of Goods
00:12 - Cause and Effect
00:56 - What are Goods?
01:20 - Conditions for Goods
01:42 - Imaginary Goods
02:23 - Real Goods VS Imaginary Goods
02:43 - Relationships and Conditions
03:17 - Useful Actions
03:51 : Types of Goods
04:29 : Outro

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