QotD: Prices

Price is the single most important item of information that's necessary for individuals to act effectively within that part of our civilization we call the market. Price tells every market participant what to offer, how much of it to offer, and at what level of quality. Yet orthodox Marxism forbids the very activities that generate that all-important information.

The idea, of course, is that the benevolent State should establish "fair" prices, so the lovely Proletariat won't get screwed by evil capitalist pigs. But no single individual or institution can establish price (although that never keeps them from trying), it is established by facts of objective reality, playing against an aggregate of all the economic decisions each of us makes every day, practically every hour, in the process of living and working, buying and selling, bidding in the market for what we need or want, accepting bids on what we make or do.

This doesn't require any sort of formal auction process. If, for instance, something about the idea of high-quality gourmet earthworms in marinara sauce is unappealing, people simply won't buy them — no matter how little you charge — the message conveyed by price is that you should stop making the stuff and leave the poor little earthworms alone.

L. Neil Smith, "The End", Libertarian Enterprise, 2007-10-14