August 07, 2006

The Source of Prices
by Ludwig von Mises

The ultimate source of the determination of prices is the value judgments of the consumers. Each individual, in buying or not buying and in selling or not selling, contributes his share to the formation of market prices. But the larger the market is, the smaller is the weight of each individual's contribution. Thus the structure of market prices appears to the individual as a datum to which he must adjust his own conduct. What is called a price is always a relationship within an integrated system which is the composite effect of human relations.

Money prices are exchange ratios. The divisibility of money, unlimited for all practical purposes, makes it possible to determine the exchange ratios with nicety.

Prices are determined between extremely narrow margins; the valuations on the one hand of the marginal buyer and those of the marginal offerer who abstains from selling, and the valuations on the other hand of the marginal seller and those of the marginal potential buyer who abstains from buying. (Read the rest here. Click the "back button" to return to The Price of Liberty.)

Editor's Note: Follow the links to a greater understanding of the real free market and individual liberty. Unless you understand these concepts - which are impossible to separate - you can't be an effective voice or example for liberty and justice. You have everything to gain and nothing to lose, except some of the misconceptions learned in government "schools" and the puppet media.

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Ludwig von Mises Institute
Probably the most active Austrian institution today. It has a large range of useful links for the...

The Free Market, published by the Mises Institute
The Ludwig von Mises Institute is the research and educational center of classical liberalism and the Austrian School of economics.

The Independent Institute
A nonprofit, scholarly research and educational organization which sponsors comprehensive studies...

Foundation for Economic Education (FEE)
Offers online education, a bookstore, and links to its seminars.

Ayn Rand Institute
Institute seeking to promote the philosophy of Objectivism via educational and cultural programs....

Institute for Humane Studies
Assists students by offering scholarships, grants, internships, and free summer seminars.

National Center for Policy Analysis
NCPA is a non-profit public policy research institute seeking innovative private sector solutions to public policy problems.

Reason Foundation
A national public policy think tank based in Los Angeles.

Acton Institute
Promotes a free society informed by religious faith and moral absolutes.

Future of Freedom Foundation
Advances its ideas through educational programs available online.

Archives

The Ethics of Liberty
Murray N. Rothbard

Classical Liberal Roots of the Marxist Doctrine of Classes

What If Governments Had Not Destroyed Money?
by Thorsten Polleit

The Idea of a Private Law Society
by Hans-Hermann Hoppe

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