Tuesday, February 28, 2006

Price Theory is the Study of the 'Language' of Economic Order!

Order in the world cannot exist without a bridge between the individual and society. Human beings are social beings. Order is the outcome of cumulative expressions of value across the whole. It is directional and representative.

The communicative vehicle used to convey value is price. If I value something more than the person who sets a certain price and I value it more than other things then I buy it. Everyone does this, and this is like a language telling those who are listening how to order things.

Price theory is a study of this 'language.' Pursuing this analogy further it is the entrepreneur who listens most skillfully and it is the capitalist who publishes what the speakers ask for. Another use of the analogy makes it clear that the reason a 'planned economy' cannot work is because that would be the same as outlawing the use of words and then expecting the language to function.

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