Value in a Free Market

Here is a response to a comment posted by TheOneSpam on May 30, 2016, on “What If There Were No Prices?“, a Learn Liberty video by Tomasz Kaye and me:

+TheOneSpam I’m one of the authors of this video; I like much of what you say; here are my responses to your comments:

  • “how “value” could be estimated without capitalism.” – Value, we economists say, is subjective, meaning different people value things differently; hence there is no “true value” for anything. What free markets give us is not some “true value”—that makes no sense because value is subjective—but a decent approximation of its value to the person next most willing to buy one more and its cost to the person next most willing to sell one more, at that particular time and place. That piece of information, that market price, is extremely valuable because we have no better way to estimate how much others value the good or service.
  • I agree that lots of people spend money they don’t have on crap they don’t need, and I regret it as you do. But I also think 1) they should be free to act so unwisely with their own and 2) no one else is more likely to know what a person wants or needs than that person herself.
  • I have to disagree with you on the power of marketing to get people to buy what they really don’t want (e.g. an “over-priced Apple product”). Yes, marketing sometimes does that, but more often it provides people very useful information about what’s out there, so that they can make an informed choice. I see no way to make sure the valuable information gets out to people who need it without inducing some unwise people to buy what really won’t be worth to them the money they spend on it. People make mistakes.
  • “How about government subsidies and grants?” you ask. That’s easy. The more of them, the less free the market and the more prices are distorted. We oppose all government subsidies and grants; they have no place in a free market.
  • Your point about environmental costs is well-taken. People should not be permitted to impose environmental harms on others. The best general rule for reducing such environmental harms is to define and enforce property rights to everything possible, including lakes and rivers and even air, where that is possible, so that those harmed can sue and those that do the harm must pay. The worst general rule for reducing such environmental harms is to have resources commonly owned. So here again, the closer we can get to a true free market, meaning a set of rules that maximizes private ownership and freedom of exchange, the healthier our environment will be.
Facebook Twitter Linkedin Email

More on Campus Free Speech

After the exchange about free speech on campuses that I put into this earlier post, Cliff wrote back at length. With his permission I respond here so that others can look in on the conversation. Here are the substantive portions of Cliff’s message, indented, with my reactions not indented: (1) There are a lot ofContinue Reading

Freedom of Speech on Campus: Even Racial Slurs?

Last week I shared on Facebook this video of J.K. Rowling supporting Donald Trump’s right to travel to Britain and “be offensive and bigoted,” because “his freedom to speak protects my freedom to call him a bigot.” I wrote, “The same goes for offensive and bigoted speech on college campuses.” That comment elicited this responseContinue Reading

Minimum Wage Laws Are Immoral, Part II

Two weeks ago I posted on Learn Liberty’s blog this open letter rejoinder to my friend Adam, who strongly objected to a claim I had made in a Facebook post that minimum wage laws are immoral. Adam responded to that rejoinder, and I replied again in turn with this second open letter. A slice: Adam: I accept the disemployment, suchContinue Reading

Make Parents Responsible for Schools

Here’s a recent letter to the Baltimore Sun: May 11, 2016 Editor, the Baltimore Sun Dear Editor, Kurt Schmoke, Matt Gallagher and Tom Wilcox ask “Who’s responsible for city schools?” (Commentary, May 9, 2016). The broad answer to that question is also the fundamental reason why our city schools stay mediocre to poor, decade afterContinue Reading

Minimum Wage Laws Are Immoral

Here is an open letter to a respected friend with whom I have strong differences about minimum wage laws. It was recently published at the Learn Liberty blog. A slice: Your indignation at allowing companies to pay (and workers to accept) wages below “a living wage” seems based in an assumption that all employers canContinue Reading

Government, Stop Trying To Help Uber

Here is a letter to the editor of the Baltimore Sun, published at FEE’s Anything Peaceful and by the Sun yesterday (the online version somehow dropped the first paragraphs): An open letter to State Senator Bill Ferguson and Delegate Kathy Szeliga: Thank you for your commentary, “Give ridesharing a home in Maryland,” (Baltimore Sun, April 3). While it is gratifyingContinue Reading

“There’s No Such Thing as an Unregulated Market”

That’s the title of my piece just published in The Freeman online. The subtitle: “It’s a choice between regulation by legislators or by consumers.” Here’s a slice: We want the aims of regulation — regularity and predictability in markets, decent quality and reasonable prices for the goods and services we buy — and thinking thatContinue Reading

One and Only “Trigger Warning”

The following just arrived in my mailbox from FIRE (The Foundation for Individual Rights in Education), which I admire and support: Today, FIRE presents a timely new video featuring Brookings Institution senior fellow Jonathan Rauch. In the wake of last week’s horrifying attack on Charlie Hebdo in France, Americans and Europeans are rediscovering the importance of unfetteredContinue Reading

Of Fiat Currencies and Central Banks

A grad student in Italy just asked me to suggest topics for research in Money and Banking. Here is my reply: Dear Alessandro, I think the most important topic in Money and Banking in our time is how to replace fiat currencies and central banks with some kind of base money that cannot be debasedContinue Reading

availableonamazon
Contact Dr. Baetjer

Enter your email address:

Skip to toolbar