More people added to the population of the country adds nothing to its economy, unless they bring capital. Invaders generally don't bring capital, they consume it. Television screens have been filled with images of a large group of people marching across Mexico with the stated intent of seeking asylum in the United States. Many of … Continue reading Economics of Invasion
Preference has tremendous power because it guides all transactions in a market economy. The preferences of individuals govern all economic activity. You have power because of your preferences. Choose them with care. For the most part we take our preferences for granted. After all, they are ours and ours alone. We get to choose whether … Continue reading The Power of Preference
No one can build a model to either determine or predict prices, despite the useful information that prices provide. Attempts to predict prices will always prove fruitless. Knowing prices in advance would prove useful to owners and managers in all businesses. Imagine the profitability a company that could accurately predict the future prices of its … Continue reading A Pricing Model
The worth—or value—of any good is always unknown and unknowable. Use the consideration of this reality to trigger useful questions regarding market behavior. If you have followed my posts to this point, you realize this question—"What's It Worth?”—has only one answer: "The worth—or value—of any good is always unknown and unknowable." Even an individual cannot … Continue reading What’s It Worth?
The discrete nature of humans makes the individual the center of all market activity. They decide what has value and how much. Their actions based on those evaluations make free markets operate effectively and efficiently. The subjective theory of value reveals that the individual plays the most important role in the development of all economic … Continue reading The Importance of the Individual
Value and price have a very close and important relationship. Value exists entirely in the subjective realm, whereas price provides objective evidence of an economic transaction. The price results from action taken based on value. It does not, as many people believe, provide a measure of value. Value As I have laid out in previous … Continue reading Relationship of Value to Price
Because I will frequently return to the subject of value, and its measure, over the course of these blog posts I have decided to publish the text of the same article I posted May 16, 2016 (with some edits). If individuals provide the only sources of value, how do those individuals measure value? Does every … Continue reading Value Measure-Review