Prices

The CPI release this month features its usual aggregation and concludes that prices are r

The essence of the phenomenon of interest is the cost that a lender or an investor endures. This cost stems from the fact that the lender or the investor has given up some present benefit.

In the history of money, bartering was awkward because wants were not divisible. Direct exchange depended upon a double coincidence of wants. Demand for a medium of exchange grew until a general medium of exchange emerged, like gold and silver.

In May, the House of Representatives passed a bill that could lead to fines as high as $3 million per day for gasoline price gouging, which it defi

Factors of Production are economic goods: scarce means used to achieve an individual’s ends. They are land, labor and capital. Each is examined. Incomes are earned by factor owners as production takes place. There is no separated production and distribution.

As with all government intervention, price controls do not achieve what their originators think they will. Trying to maintain a supply of milk by putting a price control on it will cause shortages, which are the very situations the price manipulators said they wanted to avoid.

What determines market prices? Buyers and sellers must know of feasible trades. They can learn from their mistakes. They prefer higher profits to lower profits. They think in discreet terms. Both participants win in market exchanges.

Contrary to mainstream thinking, the Austrian framework shows that it is the importance of various ends that determine the selection of goods by individuals. The means-end framework also shows that the prices of goods are not set mechanically by some kind of supply-demand curves but by the goal-seeking choices of individuals.

I rather like this chart from the

I’m intrigued by this NYT explanation: “a surp