In economics, a price system is any economic system that affects its distribution of goods and services with prices and employing any form of money. Except for possible remote and primitive communities, all modern societies use price systems to allocate resources. However, price systems are not used exclusively for all resource allocation decisions.^[1]

Fixed price versus free price systems[link]

A price system may be either a fixed price system where prices are set by the government or it may be a free price system where prices are left to float freely as determined by unregulated supply and demand. Or it may be a combination of both with a mixed price system.

History[link]

Fundamentally, price systems have been around as long as there has been trade or money.

The institutional economist Thorstein Veblen wrote a tract which was seminal in development of the term as discussed in this article: The Engineers and the Price System.^[2][3] Its chapter VI, A Memorandum on a Practicable Soviet of Technicians discusses the possibility of socialist revolution in the United States comparable to that then occurring in Russia (the Soviets had not yet at that time become a state (USSR formed in 1922)).

From its beginnings, the price system has evolved into the system of global capitalism that is present in the early 21st century.^[4] The Soviet Union and other communist nations with a centralized planned economy were controlled price systems. Whether the ruble or the dollar is used in the economic system, the criterion of a price system is the use of money as an arbiter and usual final arbiter of whether a thing is done or not. In other words, few things are done without consideration for the costs and the potential making of a profit in a price system.

Friedrich A. Hayek on the price system[link]

Austrian School economist Friedrich A. Hayek argued that a free price system allowed economic coordination via the price signals that changing prices send, which is regarded as one of his most significant and influential contributions to economics.^[5]

From "The Use of Knowledge in Society"...'The price system is just one of those formations which man has learned to use (though he is still very far from having learned to make the best use of it) after he had stumbled upon it without understanding it. Through it not only a division of labor but also a coördinated utilization of resources based on an equally divided knowledge has become possible. The people who like to deride any suggestion that this may be so usually distort the argument by insinuating that it asserts that by some miracle just that sort of system has spontaneously grown up which is best suited to modern civilization. It is the other way round: man has been able to develop that division of labor on which our civilization is based because he happened to stumble upon a method which made it possible. Had he not done so, he might still have developed some other, altogether different, type of civilization, something like the "state" of the termite ants, or some other altogether unimaginable type'...Friedrich A. Hayek^[6]

See also[link]

References[link]

Jeffrey A. Tucker

Jeffrey Albert Tucker is the executive editor of Laissez Faire Books.^[1] He is past editorial vice president of the Ludwig von Mises Institute and past editor for the institute's website, Mises.org. Tucker is also an adjunct scholar with the Mackinac Center for Public Policy^[2] and an Acton University faculty member.^[3]

Writer and editor[link]

Tucker compiled an annotated bibliography of the works of Henry Hazlitt, entitled Henry Hazlitt: Giant For Liberty, which is now in print. A Foundation for Economic Education review described the book, which "includes citations of a novel, works on literary criticism, treatises on economics and moral philosophy, several edited volumes, some 16 other books and many chapters in books, plus articles, commentaries, and reviews," as "an apt eulogy of Henry Hazlitt."^[4]

As a writer, Tucker has contributed scholarly efforts and humorous essays to LewRockwell.com, Mises.org and elsewhere. Examples of the latter essays include his defense of morning drinking,^[5] his advice on "How to Dress Like a Man",^[6] his attack on shaving cream,^[7] and his admiration for the speedy-service haircut.^[8] He is a critic^[9] of the Grameen Bank which, along with its founder Muhammad Yunus, was awarded the Nobel Peace Prize in 2006.^[10]

Tucker was editor of Mises.org from 1997 until late 2011 when he was hired by Addison Wiggin as executive editor of Laissez Faire Books.^[1]

Catholicism[link]

Tucker is a convert^[11] to Roman Catholicism and is managing editor of Sacred Music. He is one of the leading champions of traditional music in the Catholic Church, and a high-profile member of the "Reform of the Reform" movement.^[12] Tucker recently spoke to the National Catholic Register about the importance of sacred music.^[13]

Books[link]

• Sing Like a Catholic (2009; also as e-book) ISBN 1-60743-722-8
• Bourbon for Breakfast: Living Outside the Statist Quo (2010; also as e-book) ISBN 1-933550-89-9
• It's a Jetsons World: Private Miracles and Public Crimes (2011; also as e-book) ISBN 978-1-61016-194-7

Notes[link]

External links[link]

• Jeffrey Tucker archive at Mises.org
• Jeffrey Tucker archive at LewRockwell.com
• The Chant Cafe
• The New Liturgical Movement Blog
• MusicaSacra.com
• " Victims on Trial: The Everyday Business of Courts ", by Tucker
• "Society in Jail", by Tucker