In our initial analyses, we assume that Crusoe and Friday interact in a peaceful manner, forming a miniature free market. (These terms will be defined shortly.) We do not make any assumptions about the ethical desirability of a free market at this point. In fact, praxeology in general makes no ethical assumptions, since it is concerned with subjective and not objective value. The relative desirability of different politico-economic systems will be addressed later in the course, using principles drawn from ethics. We begin with analyses of human action in peaceful social situations, because peaceful and non-peaceful actions are fundamentally different in kind and generate very different consequences.

In order to understand what we mean by "peaceful" action, we first introduce the concept of force. In the context of praxeology, force is human action that directly interferes with another person's pursuit of maximum value on his or her subjective value scale. At first glance, this definition might seem overly broad—until one recognizes that it is intended to encompass both initiated force and defensive force. The distinction between initiated and defensive force will be explored further later, but a simple example can be offered here: Friday attempts to destroy Crusoe's newly completed tree house (initiated force), while Crusoe endeavors to protect it from Friday (defensive force). In our miniature free market, of course, such conflicts are absent, and Crusoe and Friday deal with each other in a more civilized manner.