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Price system

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This article is about price systems generally. For the Technocracy movement's view, see technocratic views of the price system.

In economics, a price system is any economic system that effects its distribution of goods and services by means of goods and services having prices and employing any form of money or debt tokens. Except for possible remote and primitive communities, all modern societies use price systems to allocate resources. However, price systems are not used for all resource allocation decisions today.

Fixed price versus free price systems

A price system may be either a fixed price system where prices are set by a government or it may be a free price system where prices are left to float freely as determined by unregulated supply and demand. Or it may be a combination of both with a mixed price system.

History

Fundamentally, price systems have been around as long there has been trade or money.

Thorstein Veblen, a member of the Technical Alliance, wrote a tract which was seminal in development of the term as discussed in this article: The Engineers and the Price System[1][2]. Its chapter VI, A Memorandum on a Practicable Soviet of Technicians discusses the possibility of socialist revolution in the United States comparable to that then occurring in Russia (the Soviets had not yet at that time become a state (USSR formed in 1922)).

From its beginnings, the price system has evolved into the system of global capitalism that is present in the early 21st century[3]. The Soviet Union and other communist nations were controlled price systems. Whether the ruble or the dollar is used in the economic system, the criteria of a price system is the use of money as an arbiter and usual final arbiter of whether a thing is done or not. In other words, few things are done without a view to making a profit in a price system.

See also

References

  1. ^ Harbinger Edition, 1963. LCCCN 63-19639. First Published as a series of essays in The Dial (1919) then as a book in 1921.
  2. ^ Full Text (HTML)
  3. ^ http://www.technocracy.org/Archives/I%20Am%20The%20Price%20System-r.HTM I Am The Price System R. B. Langan Great lakes Technocrat April 1944, # 66.
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