>From: "Mark Plus" <email@example.com>
>by William L. Anderson
>[Posted April 3, 2001]
>One of the things that seems to be "understood" in this
>sustainable-growth movement is that a price system is meaningless.
>Prices, in the minds of these planners, are simply arbitrary
>obstacles to a better life for people. In reality, of course, the
>outcomes of policies that ignore the price system are higher
>prices and a lower standard of living.
I don't think that this is what they "understand" at all. I believe
what they are saying is that the current market system ignores
costs that would reduce it's profits. In other words they are not
paying the real world costs at all.
>In a free market, prices reflect the demand for a product and its
>relative scarcity. As competent economists long have noted, prices
>determine the direction of the market, what will be produced, and
>how much will be produced. Prices also reflect who is willing to
>give up the most for these goods. Eliminate a price system, and it
>is the economic equivalent of a ship trying to sail without a
>rudder. What remains is chaos.
Agreed, but since the market is reluctant to pay all the costs
involved, this leaves a niche for government.
>A free-market system permits the relative scarcities of goods to
>be brought in line with the demand for them. The system deals not
>only with the present but also with the future. Without prices, it
>is inevitable that a good will be either over- or underutilized.
>There really is no middle ground.
The current market deals in a much shorter timeframe than is
currently socially acceptable.
>Ludwig von Mises understood well the chaos that erupts when
>government attempts to take control of those processes that are
>best left to private property and markets. Socialism, he said, is
>a poor substitute for the free market, and it will quickly break
>Those who would advocate sustainable development claim that the
>free market does not adequately differentiate between present and
>future needs. Conversely, those same advocates hold that they
>possess clairvoyance when it comes to understanding the future.
With the creation of futures, some of these issues are being
addressed. I would argue that it makes good economic sense to have
a much greater timeframe involved.
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