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Pastimes : Austrian Economics, a lens on everyday reality -- Ignore unavailable to you. Want to Upgrade?

To: Wildstar who wrote (163)	2/26/2003 4:13:53 AM
From: Don Lloyd	Read Replies (1) \| Respond to of 445

Wildstar, In the post to which I am responding, you observed that market prices help determine individuals' subjective values. Is this at all related to Mises's critique of socialism, in which he said that without private property, there are no market prices, and thus, decision makers are not able to rationally calculate the alternative uses of capital goods? I don't think so. The point that I would make is that, contrary to historical descriptions, an economic good cannot have a meaningful subjective value in and of itself, independent of what must be exchanged for it the marketplace. No preference for one good over another matters unless it results in an actual exchange action. No matter how much I might desire to have a given good, there is always some range of prices for it that make it too expensive to acquire, and thus result in no action whatever. There is always some single possible combination of purchases or exchanges that results in a state of satisfaction that is subjectively ranked higher than any alternative. The particular goods purchased to achieve that highest ranked state of satisfaction will tend to rise in market price as their actual purchase has removed them from the market supply starting at the low price end for a particular good. Regards, Don