Separate Individuals

I mentioned in my previous post that only separate individuals can determine value. In this post I would simply like to add emphasis to that point. It will take on critical importance as we study other aspects of economic systems. Not shared value We frequently hear people speak of shared value (or values). In fact, individuals cannot … Continue reading Separate Individuals

Subjective-Value Theory

In a previous post I introduced the topic of Subjective Value. I used an anecdote to demonstrate how an individual in the process of shopping decides about value. In the text below I will define some of the important characteristics and qualifications of subjective value. Because economic value consists of a crisscross matrix of concepts, … Continue reading Subjective-Value Theory

Conflicting Value Theories

Since the beginning of economics as a specialized study, economist have realized that the concept of value lies at the core of economic theory. They have developed several value theories over the years but most of those theories have suffered from fatal flaws. The only theory that holds up to logical scrutiny is the Subjective … Continue reading Conflicting Value Theories

A Return to Value Theory

After a prolonged hiatus, I want to return to my discussion of value theory. A workable theory for value plays such a fundamental part in economic theory, regardless of the school of thought, that it cannot be overemphasized. Because The Free Market Center Journal advocates the validity of the Subjective Theory of Value, which many … Continue reading A Return to Value Theory

Introduction to Complexity

In listening to discussions about markets and economics you seldom hear the word complexity. Most economic theory tends to be linear in construction. Markets, however, consist of very complex systems. Because of its importance in understanding markets, I want to offer a brief introduction to the concept of complexity. I will get back to this … Continue reading Introduction to Complexity

Who Really Determines Wages?

Many people have the impression that business owners unilaterally determine wages and prices. They believe that consumers have little control in the process of setting either prices or wages. People who believe this are gravely mistaken about how the price discovery process actually works. Prices are ultimately determined by what consumers willingly pay. In any … Continue reading Who Really Determines Wages?

Changing Interest Rates

Last week I discussed value as it relates to the recent volatility in the stock market. Some commentators have attributed price volatility to recent changes in interest rates. They have gone on to speculate about when the Federal Reserve will “raise interest rates.” I figured now would be a good time to open the subject … Continue reading Changing Interest Rates