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Economics

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Market prices — Purpose vs arbitrariness

by EconomicsJunkie

Pursuit of Happiness

Society is a system of people connected via mutually inflicted actions. Individuals always feel uneasy about things in their lives at any specific moment. Uneasiness about one state of affairs makes us act in order to exchange it for a different one. If we felt no uneasiness at all we would at once cease all action. The removal of uneasiness is synonymous to what’s behind the term ‘pursuit of happiness’.

Purposeful Action

Mutual voluntary exchange is but one way of removing uneasiness for both parties involved. The fact that one person desires to consume certain goods or services, be it material goods, services, spiritual inspiration, or other things, is what gives another person purpose. But that other person also has demands that he needs fulfilled. This is what also gives the former person purpose. If something that one person has to offer meets the demands of another and vice versa then both are fulfilling a purpose in the process.

The place where mutual voluntary demands meet is by definition the market. Subjective and unknown value preferences find objective expression in the form of visible actions and ultimately in the form of prices. Where money is used in exchange, money prices emerge.

These prices give individuals indication as to what purposes they can fulfill out in the world. Wherever individuals aspire to meet such demands their action can be viewed as purposeful action.

Money prices are the main drivers of purposeful action. Wherever freely acting people sway from the path of fulfilling a purpose they are reminded of it in the form of price indicators on the market, and have the opportunity to get back on track.

Arbitrary Action

Wherever acts of aggression replace voluntary action, prices cease to exist or matter. Without prices it is impossible to perform purposeful acts on a large scale and on a sustainable basis.

Uncalled for action that does not even attempt to meet any demands, yet demands a remuneration in exchange, is the exact opposite of purposeful action. This is what we refer to as arbitrary action.

Theft is the ultimate arbitrary act. It is the act of taking one’s property for nothing in exchange. All action that results from this theft will continue to have arbitrary character.

Arbitrariness and Government

Arbitrary action is as the root of all governmental activities. The government perpetrates theft on its citizens under the pretense of providing something in exchange. Hence they hire workers and contractors to do things that can be presented to the public as that which they get in exchange. The fact that most of it goes into the coffers of individuals to spend it for personal pleasures at their whim is of course conveniently overlooked.

But all those actions they do perform are always arbitrary. We all know this, at least subconsciously. When people support a governmental program they are in their heart of hearts well aware that they have no idea what is really behind it. They don’t know if they will get what they asked for. It is the fact that they feel warm and fuzzy around other people regurgitating the same ideas that makes them go along. It is the hope for salvation rather than the knowledge about it. It is thus, in itself, also an arbitrary act.

Popularity of Arbitrary vs. Purposeful Action

To find purpose in life can be, at times, a strenuous and annoying undertaking. It is by many perceived as the subordination of one’s own desires to others’ whims. Those who act purposefully and succeed are by many scorned as cold and calculating individuals. Yet, at the same time, those who scorn them do feel the deepest respect for these accomplishments and really only live out their anger at the fact that they themselves did not achieve the same success. This is also the reason why many individuals lack respect for prices. Prices are always too high if you are a consumer and too low if you are a producer/worker. But we are all sometimes consumers, sometimes producers. Prices are a scientific fact of reality, not some arbitrary measure, they are the ultimate manifestation of purpose.

The reason why arbitrary action on a grand scale is so popular with the majority is that it introduces the perceived opportunity of acting without meeting anybody’s demands, of living out one’s fantasy’s of what should be done and how in this world with no constraints whatsoever. When someone cheers on a politician’s plan he always does so with the implicit assumption that this plan is actually his own plan. He blithely ignores the fact that millions of other people are projecting the same desires upon that same person.

To look over the fact that all actions performed by that politician will be carried out on one’s own shoulders with extorted money thus becomes a psychological necessity. For how could those acts be justified otherwise? Thus one has to go through the mind bending self-violation of morphing the ultimate arbitrary act of taxation into a purposeful and moral necessity of life.

But to truly pursue happiness one has to find purpose in life rather than arbitrary fantasies. Only a rejection of arbitrary action can lead people there. In the sphere of economics, this means that the respect for market prices should be the primordial maxim of all economic analyses and opinions. For if we can’t accept the most natural and basic element of the science of economics, we will inevitably come to flawed conclusions. To wish to hamper with market prices by the means of aggression is equivalent to aspiring to abolish gravity in the realm of physics.

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