The only valid meaning for the word consists of an increase in the supply of money. Beware of relying on the CPI to inform you about "general increases in prices." What is Inflation, Really? In economic terms "inflation" means increasing the supply of money. If you look up the term "inflation" in an economics textbook … Continue reading What is Inflation, Really
Month: April 2023
Difference Between Price vs. Cost
Price and cost have different meanings. Learn the difference and keep it in mind when you hear them talk. If possible, ask them to make their meaning clear. Price vs. Cost Many people use the words "price" and "cost" as synonymous. Price and cost have subtle but important differences in meaning. Price A price amounts … Continue reading Difference Between Price vs. Cost
Define Commodity
A commodity consists of a product (or economic good) that a producer or middleman holds in readiness for sale. Define Commodity The word "commodity" has a somewhat different meaning in economics than in common usage. Most people consider commodities interchangeable products sold in relatively large quantities - frequently raw materials. We use a more precise … Continue reading Define Commodity
What is Exposition
The importance of "exposition" comes from how one uses it. The Free Market Center Journal will use expositions to give you something to think about, not to give you something to believe. Exposition I felt that I should include a short post describing the idea of exposition because it describes concisely what I want to … Continue reading What is Exposition
Individualism
Humans cannot be part of a collective. They must accept their individualism and responsibility for their actions. Describing Individualism The term individualism describes a metaphysical fact rather than a philosophical principle. Humans cannot give up their individuality. Despite what the collectivists would like you to believe, you will never be an inseparable part of a … Continue reading Individualism
Economic Imbalance
Healthy economies arise from the voluntary interaction of parties in a free market. I feel it appropriate to refer to this type of interaction as Economic Balance. In this post, I want to look at Economic Imbalance. Economic Imbalance I coined the term Economic Balance to reflect the results of free market transactions. Both parties … Continue reading Economic Imbalance
Brief Summary of Subjective Value
The elegance of the Subjective Theory of Value lies in its 1) simplicity and 2) ubiquity. The subjective theory provides the only consistent "source" and "measure" of value in any place at any time. Brief Summary of Subjective Value Economic value has only one source: the subjective judgments of individuals. This source applies to all economic goods … Continue reading Brief Summary of Subjective Value
The Action Axiom
People do not have the option of "not acting." The actions they take reveal their actual preferences. This axiom plays a vital role in understanding free markets, Introduction to the Action Axiom Ludwig von Mises usually gets credit for introducing the "action axiom" to economic thinking. He recognized that all economic activity begins with the … Continue reading The Action Axiom
A Priori
Synopsis We must consider some knowledge as a priori. We can derive that knowledge only by using reason. Always test what people tell you about economic systems with reason. When you think about it, you will realize why government control and socialism cannot work effectively and efficiently. A Priori I consider myself lucky that I … Continue reading A Priori
Return to The Journal
After many more months than I planned, I am returning to posting on The Free Market Center Journal. I have adopted a new design for The Free Market Center Journal because I felt that the previous design distracted from the messages. Also, I plan to post short daily messages that I will refer to ask … Continue reading Return to The Journal