The following observable facts will be explored in greater detail in Sections 4 and 5, where they will be shown to be explainable and predictable, once one understands that the fundamental acting unit in human action is the individual. The methodological collectivist, who begins with the assumption that action arises from society or some social group, cannot relate any of these facts to the basic nature of that society or group. At best, he or she can invent ad hoc hypotheses or rules of thumb to explain what is undeniably observed. The twenty-eight facts below may even generate twenty-eight different "explanations," analogous to the "epicycles" by which pre-Copernican astronomers "explained" planetary motions. The hypothesis of social action does not enable the collectivist to predict any newly observed facts—only to concoct new "explanations" after the fact.

1. Why do prices rise when a good is scarce or fall when it is abundant? If "society" desires a scarce good, why does it make it more expensive for itself to acquire the good? Why does "society" make diamonds more costly than bread, if the latter is so much more useful to its survival? The collectivist, of course, can posit a "law of supply and demand" to encompass such observations, but cannot explain why that law is true (as will be shown in Section 4). In short, the collectivist cannot relate the marketplace's price system to the nature of human beings.

2. Why are markets competitive? If grocers constitute a social group that acts as a whole, then why do they not maximize their collective income by charging much higher prices, leaving the consumer with no discretionary funds to buy such luxuries as automobiles, jewelry, or TV sets? Why do they instead engage in price wars and competitive sales? The collectivist's only "explanation"—that grocers reduce prices in order to be "good citizens"—flies in the face of common experience.