50 virtual dollars and a box of Elvis Costello Memorial Ale (metric bottles) if you can tell us which blues singer first warbled that epistle so mentioned, sung so raucously by Eric Burdonian of Animal fame. And a further 75 like dollars, if one can name of the top of one's head the other members of the Animal musical group. Without peaking of course.
Hints are Mississippi John Hurt, Fred McDowell, Willie Dixon, Gatemouth Brown, and Robert Johnson.
As an aside perhaps one can tell me, while we are the subject of intellectual pretension, whether anyone ever came up with a tri-modal theory of economic pricing. We have a. "hedonistic" or pure demand oriented, b. supply side or labour-cost "utility" oriented, and c. dual-mode or supply plus demand mitigation of pricing. When we say supply what we mean is the Adam Smith concept of using the root cost of labour-to-produce to establish the cost-price equation of a good. Desirability alone had little do with price per se in Smith's world. It either cost a lot to find/make/market or it was valued little.
What about a system that takes into account the "basic needs" concept, availability of money, and the desire for the product as well to establish price structure? This is a three legged stool. Some would say that money availability is moot, as price is relative to money supply. i.e all prices and all costs = money supply. Fair enough. At first this would seem inarguable, but the related concept may not be that easy to dismiss. Let us argue that there are extrinsic needs, and intrinsic wants. Let us further argue that for whatever reason, the money supply control is independent of consumer will. It therefore has its own supply demand equation, and thus limits by virtue of its availability, irrespective of what goods are out there, both what will be spent on any thing and what will be spent period. So, for a moment, we say that prices are set according to cost, and a lot of what is offered for sale is from a pool of necessities, of the perceived desirable life-state, or style desired. At a certain point choices are made more discerningly after basic needs are accounted for, and these choices are based on desirability that is more intrinisically based. The pure demand part of price is therefore more operative at a certain point. But if the money supply is limited artificially to take care of only basic needs, it makes the cost of supplying luxuries higher, and the perhaps the profitability of supplying them poor. Therefore, they may not be available in sufficient quantities to spark a demand. The possibility of this inefficiency of the money supply being an economic operator in establishing prices of whole sectors of goods, is high enough that perhaps a three way system should be considered as being important to consider. The money supply, the desire for goods, and the need for certain goods base goods, as well as any good, are all part of the cost equation. Is cost to produce itself a dominant factor in price level? After all, it limits the availability of all goods. I say it is not, as the limitation of production, will itself limit the money supply and all things will be certibus paribus. Of course we know we are speaking comparitively, but the question is are we labouring or wasting greatly (i.e. oil) to produce goods that are anomalously cheap? I say we are, as a matter of course.
The inherent cost, or effort needed to produce a good would seem to be part of the pricing scheme. This seems to be tied to need, as the amount of effort to supply the good should be engendered directly from perceived need, and one only hopes it can be produced economically. But what we find is that prices are generally apportioned as low as possible to cover the basic needs for life subsistence. Food and energy are generally priced cheap, but do not inflate the dollar despite widespread consumption. This is because excess consumption is hard to produce in a need. So labour to produce is not always the dominant factor driving price, or demand.
Prices seem to be tied to perceived utility, excess consumption, and the number of excess dollars chasing the good, or that are available to chase luxuries. So although we would think labour cost to produce makes prices, we can rule it out as setting price levels per se. The amount we can produce of a good does not dictate the amount we will produce, and the amount used does not dictate increased demand over and above normal supply. The cost to produce does not automatically dictate that we can get the sale if there is any substitutes, or the perception exists of even the possibility of substitution.
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