A-Scalping We van Gogh
, by Sheldon Richman
, Future of Freedom
, Feb 1999
Explains the economics concepts of opportunity cost, money, prices and entrepreneurship, based on analysis of scalping of "free" tickets for a Van Gogh exhibit at the National Gallery
"... the Gallery chose not to sell the tickets. If it had sold them, fewer people would have lined up — the higher the price, the shorter the lines. On the other hand, imagine how long the lines would be if the Gallery had given away a $20 bill with each ticket! Anything that people value commands a price. Of this we can be absolutely certain. That is what we mean by 'value.' A value is anything people act to achieve; that is, anything they willingly give up something else to obtain. ... What they give up is called the price. If the asking price isn't in terms of money, you can be sure it'll be in terms of time."
Biography of Carl Menger: The Founder of the Austrian School
, by Joseph Salerno
Biographical and bibliographical essay, discussing his life and work and delving into various aspects of Austrian economic theory as presented by Menger
"... A would agree to exchange the first of his six horses for a cow, if and only if, the marginal utility, and, therefore, the value of a horse—in this case, equal to the sixth-ranked satisfaction attributable to a horse—was less than the marginal utility and value of a cow—since he was starting with a zero supply, equal to the highest-ranked satisfaction dependent on his possession of one cow. Moreover, once the exchange has been completed, the marginal utility and value of horses to A will rise to the fifth-ranked satisfaction dependent on a horse, and the marginal utility and value of an additional cow to him will fall to the second most important satisfaction yielded by a cow."
Book Review: Say's Law and the Keynesian Revolution
, by Richard Ebeling
, Future of Freedom
, Feb 1999
Review of Say's Law and the Keynesian Revolution: How Macroeconomic Theory Lost Its Way
by Steven Kates, 1998
"If Robinson Crusoe ... wants some commodity that Friday has ... [he] must offer some good in exchange to acquire it. He plans to supply just that quantity of commodity 'A' that he believes will be sufficient to buy the amount he desires of commodity 'B' owned by Friday. This clearly requires Robinson to correctly estimate what commodity Friday might be willing to take in trade and the price Friday would be willing to pay ... Robinson will not be able to successfully sell all he wants to offer if he incorrectly guesses that Friday wants 'A' at all, or if he wrongly estimates the price Friday is willing to pay for 'A.'"
Cantillon, Richard (c.1680-1734)
, by George H. Smith
, The Encyclopedia of Libertarianism
, 15 Aug 2008
"Cantillon distinguishes between the 'intrinsic' price of a commodity and its 'market' price. The intrinsic price ... is basically the cost of production, which is the minimum price that sellers must receive as an incentive to bring their goods to market. Although there is a tendency for the market price of a good to gravitate toward the intrinsic price, 'it often happens that many things which have actually this intrinsic value are not sold in the market according to that value.' Rather, market prices, which are arrived at through bargaining, depend on the subjective 'humors and fancies of men and their consumption.'"
Does the Market Commodify Everything?
, by Thomas Woods, Mises Daily
, 18 Sep 2006
Contrasts the behavior of participants in a free market vs. the state's attitude towards those it considers its subjects
"Market prices serve an important function, apart from making possible both economic calculation and the indefinite extension of the division of labor. Market prices imply ownership, which in turn implies the right of disposal over the thing owned. ... They remind us that social cooperation must involve genuine cooperation, which means that no one side of a transaction has the right to cheat or steal from the other."
Economics of Prices
, by Walter E. Williams
, 31 May 2006
"Say you owned ... coffee that you purchased for $3 a pound. Each week you'd sell me a pound for $3.25. Suppose ... the world price ... [rises] to $5 a pound. ... I'm betting that you're going to charge me at least $5 a pound. Why? Because that's today's cost to replace your inventory. Historical costs do not determine prices; what economists call opportunity costs do."
Eugen von Böhm-Bawerk: A Sesquicentennial Appreciation
, by Richard Ebeling
, The Freeman
, Feb 2001
Broad biographical essay, including Böhm-Bawerk relationships with Menger, Mises and Schumpeter, and his two major works
"In the section on price formation, Böhm-Bawerk develops a theory of how the subjective valuations of buyers and sellers create incentives for the parties on both sides of the market to initiate pricing bids and offers. He explains how the logic of price creation by the market participants also determines the range in which any market-clearing, or equilibrium, price must fall, given the maximum demand prices and the minimum supply prices, respectively, of the competing buyers and sellers."
George W. Bush's Nixonomics
, by Gregory Bresiger, Mises Daily
, 22 May 2006
Describes the various fiscal, monetary and economic policies during the Nixon presidency and compares them to those under George W. Bush
"Wage and price controls always seem popular before they are actually used. And price controls ... are often intriguing as an economic cure for millions of people who are upset ... but have little understanding of their history. ... 'The announced aim of a maximum price control is to benefit the consumer by giving him his supply at a lower price,' wrote Murray Rothbard, 'yet the objective effect is to prevent many consumers from having the good at all. The announced aim of a minimum price control is to insure higher prices to the sellers; yet the effect will be to prevent many sellers from selling any of their surplus.'"
Give America a Raise?
, by Sheldon Richman
, 5 Feb 2014
Reflects on a remark in the 2014 State of the Union address and explains why legislating a minimum wage tends to harm those it supposedly intends to help
"As economists say, 'Demand curves slope downward.' This means simply that when the price of something rises, the quantity demanded (other things equal) falls. You know this: You are likely to buy fewer oranges or go to the movies less often when the price rises. ... Labor is a service that employers purchase from workers. It follows that if its price rises because of a government decree, employers will buy less. ... Most people, including advocates of the minimum wage, understand that a rising price generally discourages purchases. ... So why is the pricing of unskilled labor an exception? "
Got Price-Fixed Milk?
, by Vin Suprynowicz, 16 Dec 2006
"Under a 1937 law ... most American dairy farmers participate in a complex system of interlocking subsidies and protection measures that have the effect of keeping the free market from forcing the price of milk ... down. ... A recent study by the U.S. Department of Agriculture acknowledges federal 'dairy programs raise the retail price' of milk."
Government Medical "Insurance"
, by Murray Rothbard
, Making Economic Sense
Excerpt from Chapter 20. Written around the time of Hillarycare (Clinton's 1993 plan) but even more applicable now to Obamacare
"Only in our system of medical insurance does the government or Blue Cross pay, not a fixed sum, but whatever the doctor or hospital chooses to charge. In economic terms, this means that the demand curve for physicians and hospitals can rise without limit. In short, in a form grotesquely different from Say's Law, the suppliers can literally create their own demand through unlimited third-party payments to pick up the tab. If demand curves rise virtually without limit, so too do the prices of the service."
Hayek, Friedrich A. (1889-1992)
, by Ronald Hamowy, The Encyclopedia of Libertarianism
, 12 Aug 2008
Biographical and bibliographical essay
"It was while at the LSE that Hayek also first published his essays on knowledge and prices ... In 'Economics and Knowledge' (1937) and 'The Use of Knowledge in Society' (1945), Hayek maintained that the rational allocation of resources was dependent on the coordination of the dispersed bits of knowledge possessed by each actor in an economy and that only free markets could provide the necessary coordinating structure. Knowledge, he argued, takes a variety of forms and need not even be conscious. It is through the individual pursuit of private ends that bits of knowledge are transmitted to economic actors in the form of prices."
Jean-Baptiste Say: Neglected Champion of Laissez-Faire
, by Larry J. Sechrest
Biographical and bibliographical essay, discussing Say's life, methodology and his writings on money, banking, the law of markets, entrepreneurship, capital, interest, value, utility, taxes and the state
"On the other hand, Say eloquently expresses a clear understanding that it is wholly beneficial for a society to experience generally falling prices whenever such declining prices are the result of productivity gains. ... Moreover, Say correctly perceives that (a) the prices of goods reflect their utility to the buyer, (b) the prices of the factors of production are derived or 'imputed' from the prices of the goods produced, and therefore (c) costs of production represent an interface between the utility of the good and the productivity of the factors of production."
Les Economistes Libertaires
, by Carl Watner, Reason
, Jan 1977
Discusses the French economists of the 19th century and in particular Gustave de Molinari and his thoughts on the provision of security and defense services by private agencies
"It is obvious that consumers, regardless of the commodity involved, are interested in obtaining it at the cheapest possible price. The économistes had already seen that free competition results in the cheapest price on the market. Therefore, let supply and demand set their own price for security. ... Until free competition can be established between competing defense agencies, there is simply no way for citizens of a country to determine whether they are getting the best possible defense services at the cheapest possible prices."
Letters to Thomas Robert Malthus, on Several Subjects of Political Economy, and on the Cause of the Stagnation of Commerce
, by Jean-Baptiste Say
Series of five letters from Say to Malthus, written in response to the latter's criticisms in Principles of Political Economy
(1820); the letters were translated from the French by John Richter
"In order to constitute riches, the value must be recognised, not by the possessor merely, but by other persons. But what more irrefragable proof that its value is recognised can be given than that other persons are ready to give for it a certain quantity of other things which are valuable. Notwithstanding the value of ten thousand pounds which I set upon my house, yet if I cannot find any body who will give me more than five thousand pounds for it, I cannot say that it is worth ten thousand pounds: it is really worth no more than five thousand pounds; it will produce me no greater amount than five thousand pounds, or whatever value may be had for that sum."
Related Topics: Capital Goods
, Free Trade
, Adam Smith
, United States
Ludwig von Mises: An Economist for Freedom and Free Enterprise
, by Richard Ebeling
, 29 Sep 2016
Discusses three major themes in the works of Mises, namely, business cycle theory, his critique of socialism and the unfettered market economy; includes list of suggested additional readings
"Market-generated prices enable entrepreneurs to undertake economic calculations that facilitate rational and efficient uses of income and resources in society. Prices for consumer goods tell entrepreneurs what goods consumers may want and the relative values they place on them. The prices for the factors of production—land, labor, resources, capital equipment—inform competing entrepreneurs about the alternative demands and opportunity costs of producing desired goods with differing combinations of scarce means of production."
Machiavelli and U.S. Politics, Part 4: War
, by Lawrence M. Ludlow, 22 Aug 2005
Part of a six-segment series examining The Prince
vis-à-vis contemporary U.S. politics; this article covers Machiavelli's simple advice on war and contrasts it with that of James Madison and Robert Higgs in Crisis and Leviathan
"U.S. soldiers, for example, currently are posted in 135 countries around the world — many in or near oil-producing countries. Consequently, the price consumers pay for heating oil, gasoline, and other petroleum-based products does not reflect the high cost of maintaining this military presence or of sending foreign aid to the leaders of these nations. In other words, the true cost of petroleum products is unknown because U.S. taxpayers subsidize their supply — distorting energy markets and other sectors that rely on petroleum."
Middle-of-the-Road Policy Leads to Socialism
, by Ludwig von Mises
, 18 Apr 1950
Speech to the University Club of New York; argues that the middle of the road policies of interventionism, such as price controls and progressive taxation, eventually lead to socialism via central planning
"The government believes that the price of a definite commodity, e.g., milk, is too high. It wants to make it possible for the poor to give their children more milk. Thus it resorts to a price ceiling and fixes the price of milk at a lower rate than that prevailing on the free market. The result is that the marginal producers of milk, those producing at the highest cost, now incur losses. As no individual farmer or businessman can go on producing at a loss, these marginal producers stop producing and selling milk on the market."
, by Tibor Machan
, Rational Review
, 8 Sep 2004
"In a free society whoever is selling something is free to ask whatever price he or she desires. ... It is when some take advantage of those hit with ... multiple emergencies ... that the charge of gouging makes sense ... Exactly when this is cannot be said ahead of time, nor from afar ..."
Our Secret Desires
, by Frédéric Bastiat
Originally "Abondance, Disette" (Abundance, Scarcity), an essay in Economic Sophisms
, translated in 1964 by Arthur Goddard
"The consumer becomes richer in proportion as he buys everything more cheaply; he buys things more cheaply in proportion as they are abundant; hence, abundance enriches him; and this argument, extended to all consumers, would lead to the theory of abundance! It is an imperfect understanding of the concept of exchange that produces these illusions. If we analyze the nature of our self-interest, we realize clearly that it is double. As sellers, we are interested in high prices and, consequently, in scarcity; as buyers, we are interested in low prices, or what amounts to the same thing, in an abundance of goods."
, by Ludwig von Mises
, The Freeman
, Sep 1981
Extracted from Human Action
by George Koether
"The valuations which result in determination of definite prices are different. Each party attaches a higher value to the good he receives than to that he gives away. The exchange ratio, the price, is not the product of an equality of valuation, but, on the contrary, the product of a discrepancy in valuation. The characteristic feature of the market price is that it tends to equalize supply and demand. Any deviation of a market price from the height at which supply and demand are equal is—in the unhampered market—self-liquidating."
Profiting from Misfortune
, by Sheldon Richman
, 5 Oct 2005
Reflects on the fairness of those who profit from the "misfortune of others", such as medical doctors and farmers, in view of gas price hikes due to hurricanes
"Prices are not determined by past costs. ... To replace the gas sold today, the station will have to pay the new higher price. That fact will and should influence his conduct, not yesterday's price, which has no relevance today whatsoever. . A fair price is one a seller and buyer agree to. ... ask yourself whether you intend to sell your home for the price you paid rather than the higher price you might be able to get."
, by Walter Block
, The Concise Encyclopedia of Economics
Defines rent control, its general effects, its effects on tenants and offers some solutions
"As in the case of other price ceilings, rent control causes shortages, diminution in the quality of the product, and queues. ... Economists have shown that rent control diverts new investment, which would otherwise have gone to rental housing, toward greener pastures—greener in terms of consumer need. They have demonstrated that it leads to housing deterioration, fewer repairs, and less maintenance."
, by David Prychitko, The Encyclopedia of Libertarianism
, 15 Aug 2008
Describes socialism, the economic calculation debate and some socialist variations such as market socialism, decentralized participatory socialism, anarcho-communism and the welfare-regulatory state
"Market socialism ... conceded to the Austrians that markets are necessary—advanced economies cannot coordinate millions of independent plans without the information signals generated by market prices—which encouraged Lange and his followers to devise abstract economic models that combined social ownership of the means of production with what amounted to capitalist-like markets for consumer goods. Informed alone by these consumer goods prices, Lange believed, central economic planners would possess the kind of knowledge necessary to calculate the values of all the scarce resources and capital goods needed to produce consumer goods and services."
Stigler, George J. (1911-1991)
, by Aaron Steelman, The Encyclopedia of Libertarianism
, 15 Aug 2008
"Economists had a hard time reconciling how similar, or even identical, products could fetch different prices from one seller to another. This diversity of price, some argued, was an example of market failure. But Stigler made the case that it was the result of rational decisions by consumers. Attaining information about products is costly, so in many cases it simply does not make sense to acquire 'perfect information.' Consumers will search until the marginal expected gain is equal to the marginal cost of additional searching."
Stiglitz is Wrong on Government
, by Michael S. Rozeff, Mises Daily
, 6 Sep 2006
Criticises the 1986 Bruce C. Greenwald and Joseph E. Stiglitz paper "Externalities in Economies with Imperfect Information and Incomplete Markets", which posits that certain government interventions "can make everyone better off"
"The Stiglitz model is an equilibrium model, which means that everyone has already done the best they can possibly do. From that perspective, private parties already have done the best they can do in order to internalize the externalities (create contracts, exchanges, and prices for them). It is then inconsistent with the spirit of optimizing models and equilibrium models to introduce ad hoc externalities. Where do they come from, and why aren't they already priced out? "
Teaching Basic Economics to Fifth Graders
, by Arthur E. Foulkes, Mises Daily
, 21 Jun 2006
Recounts the experience of teaching economics to fifth graders, one concept per week, for five weeks, focusing on trade, money, savings, competition and prices
"To illustrate 'prices' we held an auction. ... Items that had several bidders sold for higher prices than items with few bidders — establishing a role for 'demand,' and when only one or two units of a particularly appealing item, such as chewing gum, remained, its price had a tendency to sky-rocket, showing that the physical quantity of a good matters in light of the human demand imposed on that quantity."
The Austrian Economists
, by Eugen Böhm von Bawerk
, The Annals of the American Academy of Political and Social Science
Explains some of the major tenets of the Austrian school -just two decades after publication of its seminal treatise, contrasting them with the views of classical economics and the historical school; paper solicited by the editors of the magazine
"... the price or 'objective value' of goods is a sort of resultant of the different subjective estimates of the goods which the buyers and sellers make in accordance with the law of final utility ... on the one hand, the price which can be asked in the market is influenced by the estimate which the buyer sets upon the goods, but, on the other hand, it is just as undeniable that in many cases the buyer's estimate is influenced by the state of the market ..."
The Case for Free Trade
, by Milton Friedman
, Rose D. Friedman, Hoover Digest
, 30 Oct 1997
Discusses various arguments made about tariffs, protectionism and foreign exchange intervention, concluding with advocating completely free trade
"Government central banks have intervened on a grand scale in order to influence the price of their currencies. In the process they have lost vast sums of their citizens' money (for the United States, close to two billion dollars from 1973 to early 1979). Even more important, they have prevented this important set of prices from performing its proper function."
The Economic Way of Thinking about Health Care
, by Sheldon Richman
, 20 Feb 2015
Discusses the voicing of opinions on economic subjects without having knowledge of economics, the state of the health care and insurance industries and posits possible solutions
"This artificial stimulus of demand (other things equal) must then cause the real prices of medical inputs to rise, with multiple rippling consequences: the price of insurance goes up; the government's health care budget rises, requiring higher taxes now or later (because of the debt); and resources and labor flow into the stimulated health care industry and away from other valued purposes, raising the prices of other goods and services."
The Free Market Is the High Road
, by Bart Frazier, 2 Aug 2004
Discusses how government regulations bear on countless areas, how regulation distorts free market prices and the benefits of deregulation, both financial and moral
"Succinctly put, regulated markets are not efficient — they misdirect and waste resources by distorting the price system. A rise in the price of a good tells both sellers and buyers that, for whatever reason, conditions are different than they were before, and that the good is now harder to obtain. When the government blocks this process, buyers and sellers receive distorted or even false information."
The Historical vs. the Deductive Method in Political Economy
, by Eugen Böhm von Bawerk
, Henrietta Leonard (translator), The Annals of the American Academy of Political and Social Science
Contrasts the empirical and statistical approach of the German Historical school of economics with the abstract-deductive approach of the then nascent Austrian school
"... the existence of a certain empirical relation between cost and market price has long been beyond a doubt. Science has to answer the question on which side is the cause and on which the effect whether the high cost of production is the cause or the effect of a high price of the product. ... Numerous observed instances tend to support the former notion ... Other instances support the latter view ... it is not a greater accumulation of observed cases that will help, but a deeper insight into them. And thus it is with the whole category of theoretical problems as the question of the true character of the influence of supply and demand upon price ..."
The Market Is a Beautiful Thing
, by Sheldon Richman
, Future of Freedom
, Jul 2013
Explores whether most people's aversion to the market is aesthetic and explains the beauty in the dynamics of the (freed) market, with quotes from Bastiat and Adam Smith
"This dynamic (it is not a mechanism) operates for all goods and services simultaneously. So when the market price of a good falls below the level sufficient 'to bring it thither,' some producers will move to the production of some other good for which the market price is above the level required 'to bring it thither,' setting in motion a lowering of the latter good's market price. The preferences of consumers — reflected in prices — tell producers, 'We have enough of good X, but we need more of good Y.' And producers have an incentive to respond cooperatively and produce more of good Y."
The New Deal and Roosevelt's Seizure of Gold: A Legacy of Theft and Inflation, Part 1
, by William L. Anderson, Future of Freedom
, Aug 2006
Discusses the economy of the United States in 1933 and the measures taken by the Roosevelt administration in an effort to reduce unemployment and preventing deflation, namely restricting production and destroying crops, as lead-up to inflating the dollar
"Progressives who dominated the Roosevelt administration held that the principal cause of the economic downturn was falling prices, along with falling wages. Furthermore, they believed that the cause of falling prices was 'overproduction,' so the 'cure' was to find ways to limit the production of goods. Thus, in the minds of the New Dealers, the government needed to restrict production and force up prices. As prices rose, so would wages, and high wages would bring the country out of the Depression."
The Organization of Debt into Currency: On the Monetary Thought of Charles Holt Carroll
, by Robert Blumen, Mises Daily
, 27 Apr 2006
Review of the fractional reserve banking and monetary arguments made by Charles Holt Carroll, a 19th century Massachusetts merchant, in a collection of 36 essays re-published in 1964 in Organization of Debt into Currency and Other Papers
"The wealth of an individual depends on his purchasing power. And his purchasing power depends only on the ratio between the prices of what he has to sell and what he would like to buy. It is relative, not absolute prices that matter. Imagine, for example, that your wages (or the prices of the goods that you sell) were double what they are today, and at the same time the prices of all goods that you buy were also twice their current values. Then you would be no better off, nor any worse off, in purchasing power terms."
The Origin of Economic Theory: A Portrait of Richard Cantillon (1680-1734)
, by Mark Thornton
, 3 Aug 2007
Examines the sections of Cantillon's Essai
relating them to episodes in the author's life, then delving into several Austrian economics insights that can be found in the work
"Cantillon has a sophisticated understanding of the price system, containing most of the elements of modern Austrian analysis. Price is determined by demand and relative scarcity. Demand is a subjective concept based on the 'humors' and 'fancies' of the people. It is the 'consent of the people' along with the relative scarcity of a product that determines the market price, where market price is understood to be the price paid to the seller. Likewise, the market value of metals 'varies with their plenty or scarcity, according to the demand.'"
The Use of Knowledge in Society
, by Friedrich Hayek
, The American Economic Review
, Sep 1945
Explains how particular knowledge is dispersed throughout society, making centralised planning impossible, and how prices empower individuals to achieve decentralised coordination
"Fundamentally, in a system in which the knowledge of the relevant facts is dispersed among many people, prices can act to coördinate the separate actions of different people in the same way as subjective values help the individual to coördinate the parts of his plan. ... The mere fact that there is one price for any commodity ... brings about the solution which (it is just conceptually possible) might have been arrived at by one single mind possessing all the information which is in fact dispersed among all the people involved in the process."
The Writings of F. A. Harper—A Review
, by Paul L. Poirot
, The Freeman
, Aug 1979
Slightly amended from the "Introduction" to The Writings of F. A. Harper
, published in 1978 by the Institute for Humane Studies, and serving as a review of the "two-volume memorial edition"
"So begins another step in free market economics, the process of competition and cooperation through voluntary exchange of private property. Exchange, yes, but at what rate of exchange, how much of mine for thine, at whose price? At the market price, suggests Baldy ... market prices afford businessmen a means of economic calculation or business accounting—a way of knowing their profit or loss. Out of this seeming bedlam of bids and offers, from individuals with various and ever-changing supplies of goods and services and demands for other things, emerges a series of market prices."
What's Wrong with Public Schools?
, by Sheldon Richman
, Separating School & State
, 25 Mar 2005
Excerpt from chapter 2 of Separating School & State: How to Liberate Americas Families
"A related problem is that tax financing precludes market prices for educational services. Market prices do not only let buyers know what they are paying. They are the fruit of a complex communications process that encapsulates information about the relative scarcity of resources and conveys it to all participants in the marketplace. That information is crucial to intelligent planning by buyers and producers of services. It is at the very heart of market competition, which Nobel-laureate F.A. Hayek properly called a 'discovery procedure.'"
Who Is Garet Garrett?
, by Jeffrey Tucker, Mises Daily
, 25 Oct 2007
Biographical and bibliographical essay, including both his novels and non-fiction writing
"Finally, ... there is Satan's Bushel (1924), a splendid book, not just from the point of view of economics but also as a piece of literature. What is Satan's bushel? It is the last bushel that the farmers put on the market, the one that 'breaks the price' — that is, reduces it to the point where wheat farming is no longer profitable. The problem that afflicts the wheat farmers is that they sell their goods when the price is low and have no goods to sell when the price is high. ... As implausible as it may sound, the central figure in this book is the price of wheat. It is the main source of drama."
Who Owns the Internet?
, by Tim Swanson, Mises Daily
, 4 May 2006
Explains how and why "net neutrality" proposals came about, monopolistic tendencies, comparisons to natural resources and others held in common, and how variable pricing has been used elsewhere to solve similar problems
"This phenomenon of adapting to supply and demand is also seen in other markets, such as sporting events. ... Several commercial airline providers ... have successfully used variable pricing based upon how far in advance you booked, the level of demand for a particular flight, weekdays versus weekends, and so forth. There is no shortage of empirical examples illustrating profitable business models that embrace variable pricing."
Will An Oil Price Fall Push Inflation Down?
, by Frank Shostak, Mises Daily
, 21 Sep 2006
"What is a price? It is the rate of exchange between goods established in a transaction. The price, or the rate of exchange of one good in terms of another, is the amount of the other good divided by the amount of the first good. In the money economy, price will be the amount of money divided by the first good."