{"id":339,"date":"2017-09-13T17:46:39","date_gmt":"2017-09-13T17:46:39","guid":{"rendered":"https:\/\/moneydelusions.com\/wp\/?p=339"},"modified":"2017-09-20T14:18:07","modified_gmt":"2017-09-20T14:18:07","slug":"cafe-hayek-about-prices","status":"publish","type":"post","link":"https:\/\/moneydelusions.com\/wp\/2017\/09\/13\/cafe-hayek-about-prices\/","title":{"rendered":"Cafe Hayek: About prices"},"content":{"rendered":"
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Bonus Quotation of the Day\u2026<\/a><\/h1>\n

by Don Boudreaux<\/span> on September 12, 2017<\/abbr><\/p>\n<\/div>\n

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\u2026 is from the opening paragraph of Chapter III<\/a>, section 5, of James Mill<\/a>\u2018s 1821 Elements of Political Economy<\/em><\/a> (original emphases):<\/p>\n

\"\"The benefit which is derived from exchanging one commodity for another, arises, in all cases, from the commodity\u00a0received<\/strong>,\u00a0not from the commodity given. \u00a0When one country exchanges, in other words, when one country traffics with another, the whole of its advantage consists in the commodities\u00a0imported<\/strong>.\u00a0 It benefits by the importation, and by nothing else.<\/em><\/p><\/blockquote>\n

DBx: UPDATE<\/strong>: There is one modification to make to Mill\u2019s statement: when producers \u2013 domestic and foreign \u2013 are better able to take advantage of economies of scale in production and distribution because of access to larger numbers of consumers, consumers \u2013 domestic and foreign \u2013 also gain in the form of greater output and lower prices of those goods and services. \u00a0That is, by allowing the prices of some domestically produced goods to fall, freer trade that enables domestic producers of those goods to take advantage of the economies of scale that enables production to take place at lower per-unit costs benefits domestic consumers in a way in addition to greater access to imports.<\/p>\n

MD:<\/strong> This has always perplexed me about the Mises Monks and their Austrian Economics. Why are they so fixated on prices. Prices are strictly a perception between two parties in a trade. When they have negotiated a trade to the satisfaction of both, that perception is the same for both. It has nothing to do with any other trader or trade (unless the traders themselves choose it to be).<\/p>\n

A “proper” MOE process cares absolutely nothing about prices … ever. And by its very process, it guarantees that the money in and of itself has zero influence on prices … perpetually … and everywhere.<\/p><\/blockquote>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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Bonus Quotation of the Day\u2026 by Don Boudreaux on September 12, 2017 \u2026 is from the opening paragraph of Chapter III, section 5, of James Mill\u2018s 1821 Elements of Political Economy (original emphases): The benefit which is derived from exchanging one commodity for another, arises, in all cases, from the commodity\u00a0received,\u00a0not from the commodity given. … <\/p>\n

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