A succinct definition of wealth would state that a person possesses wealth if they have stuff that other people want. You may have a temptation to say, "Of course, people want the valuable property that wealthy people own." But that is not what I meant. The property of wealthy people has market value because people … Continue reading Define Wealth

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

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

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

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

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

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

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