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Source link: http://archive.mises.org/7969/the-myth-of-the-just-price/

The Myth of the Just Price

March 31, 2008 by

The concept of the just price is the basis of a great deal of erroneous economic thought that permeates our supposedly free market, capitalistic society.

Laws regarding usury, loan sharking, price gouging, ticket scalping, dumping, profiteering, equal pay, price discrimination, predatory pricing and lending, product bundling, and antitrust — these are all prime examples of this fallacious way of thinking. Opinions expressed on these practices, and things like pay for supermodels, executives, actors, and athletes, as well as nebulous concepts of fairness, are likewise predicated on just price theory — regardless of whether the opinionist has any concept of basic economics or has ever even heard of just price theory.

Regulations establishing price ceilings, price floors, a minimum wage, a living wage, a family wage, rent control, government subsidies, price supports, and in many cases tariffs, also result from the pursuit of the just price.FULL ARTICLE

{ 32 comments }

TLWP Sam March 31, 2008 at 9:41 am

Actually I do have a couple of points to raise about this article:

1. The Bible, I agree, is mostly consistent with laissez-faire but not anarchism. Does not St Paul insist all authority comes from God?

2. I would have guessed the ethical claim against usury is one whereby a desperate person can become a bond slave to a devious lender. And if the borrower can never ever pay off the debt does not debt get passed on the borrower’s descendants? And so on and so forth only until the lender or the rightful descendent voluntarily waives the debt and sets the borrowing family free?

P.S. Interestingly Jesus and the Apostle could also been seen NOT as social reformers. As none had said anything about redistributing wealth per se nor creating a system that makes everyone socially or economically equal. One telling part is line “Slaves, be obedient to those who are your earthly masters . . .”

fundamentalist March 31, 2008 at 12:28 pm

Very well done! Thanks!

David V March 31, 2008 at 4:31 pm

The Mises Institute notwithstanding, anyone who believes that truth of morality ought to be judged by whether it’s written in a magical book or proclaimed by some shaman is a perfect citizen of the total state. It’s no coincidence that all totalitarian states subordinate or invent a state religion. Defending liberty on a religious basis only encourages the kind of blind law-worship that all politicians rely on.

Inquisitor March 31, 2008 at 5:34 pm

David, as much as I’d like to agree, it can also force religious individuals into reconsidering their support for totalitarian regimes, so I think there is some value in so doing.

fundamentalist March 31, 2008 at 6:04 pm

David: “anyone who believes that truth of morality ought to be judged by whether it’s written in a magical book or proclaimed by some shaman is a perfect citizen of the total state.”

Your ignorance is showing. To correct that, you should at least visit http://www.acton.org, the web site of the Acton Institute.

Free Market Phooey March 31, 2008 at 6:31 pm

A poorly written article that goes to great length to make the case for “Laissez-faire” but does not provide a definition of “Laissez-faire”. It then concludes “Laissez-faire is natural, moral, and biblical.” Those 3 terms aren’t defined either.
The article has 126 references but not one reference to define the thing it is writing about. A completely worthless and deceptive article.

Dennis March 31, 2008 at 7:17 pm

In my opinion, the Ten Commandments represent an exemplary personal moral code, especially the commandments that apply to interaction between human beings.

David V March 31, 2008 at 7:50 pm

Dennis,

The Ten Commandments are vicious, unjust, anti-responsibility, anti-free will and an anti-Western mockery of morality.

The first commandment sanctions slavery. The second, especially the Hebrew and Protestant versions present the impossible and degrading deterministic concept of sin as collective and genetic. (“unto the third and fourth generation”)

The 3rd, 4th and 5th (depending on which book and version of the bible you read) raise the observance of meaningless mind-numbing rituals above the later commandment against murder.

The commandment to honor thy parents is obscenely unjust as it disregards the whole concept of justice, and demands that we honor even monsters.

The second set of commandments is unobjectionable (and common to all civilizations), but presents no reason to abstain from murder, theft or perjury apart from divine punishment – destroying the concept of a rational, secular moral philosophy.

All the commandments, including the concept of a moral “commandment” is diametrically opposed to the conception of man as an self-owning, self-reliant, man of independent judgment.

Free Market Phooey March 31, 2008 at 8:03 pm

Further to the comment from “David V” the commandment not to steal is an absurdity because it comes with no definition of private property rights nor does it state who will determine them. So in response to “Thou shalt not steal” you have to ask “Not steal what exactly?”
The 10 commandments are obviously the product of the inferior mind of an ancient man.

fundamentalist March 31, 2008 at 10:02 pm

David V: “The Ten Commandments are vicious, unjust, anti-responsibility, anti-free will and an anti-Western mockery of morality.”

I’m so glad you enlightened us. The greatest minds in the Western have been under the illusion for close to 2,000 years that the Ten Commandments are the foundation of Western Civilization.

Phooey:L “Further to the comment from “David V” the commandment not to steal is an absurdity because it comes with no definition of private property rights nor does it state who will determine them.”

In other words, because Moses didn’t write like Hoppe or Rothbard, you can’t understand him. Strange thing though, no one else in history had as difficult a time understanding him as you have.

Honest people use context, history, culture and other tools to determine an author’s meaning. They don’t just make things up as you guys have.

Dmitry Chernikov March 31, 2008 at 11:35 pm

The Bible is our final authority in all matters — secular and sacred — not the natural law, not denominational creeds, not the decisions of church councils, not papal encyclicals, and not Human Action, however highly Christians regard — and rightly so — the economic thought of Ludwig von Mises.

That is crazy, man. The Gospels are 167 pages long in my The New American Bible. Human knowledge extends to millions of subjects, often highly technical. Exactly which passages in the Bible are the final authority on, say, the art of baking cookies?

The most charitable interpretation of this is that the Bible is a source of wisdom, in particular, explaining the highest causes of all that there is. It belongs to a wise man to order and judge. The Bible’s subject matter is the totality of the universe. Thus, every other science, art, etc. is ordered or directed to its final end through the wisdom revealed. This, however, won’t do. For it is written that God’s wisdom “orders all things sweetly” (Wis 8:1), not the meager wisdom contained in the sacred texts.

Dmitry Chernikov March 31, 2008 at 11:59 pm

David: The commandment to honor thy parents is obscenely unjust as it disregards the whole concept of justice, and demands that we honor even monsters.

It’s a general rule and as such, correct. There may, of course, be exceptions.

Oh yeah, I found a way to make sense of the statement I criticize above: “The Bible is our final authority in all matters” on which it says something definitive. That I may accept.

useless spectator April 1, 2008 at 1:08 am

The second set of commandments is unobjectionable (and common to all civilizations), but presents no reason to abstain from murder, theft or perjury apart from divine punishment blah blah blah

These “modern,” “Western” legal systems you refer to also allude to the Deity. “We hold these truths to be self-evident, that all men are created equal and are endowed by their Creator certain inalienable rights….”

Was the Declaration also the by-product of an “ancient, inferior mind”?

All the commandments, including the concept of a moral “commandment” is diametrically opposed to the conception of man as an self-owning, self-reliant, man of independent judgment.

Uhhh, sure! Whatever.

Well I’m going to go ponder whether I should rob a bank. I’m a self-owning man of independent judgment, and I don’t have to follow any kind of law if I don’t agree with it. Bye!

David C April 1, 2008 at 7:00 am

Speaking as a devout agnostic, it is refreshing to see such clarity of economic thought coming from within Christian circles.

the avowed sense of compassion for the less fortunate that proponents of the welfare state and the myriad other interventions, not least price regulation, that it leads to, rides on a wave of bogus morality.

Very few people, believers and atheists alike, recognise that there can be no virtue in compelled charity.

Precisely the same principle applies to legal sanctions based on moral opprobrium against private consensual behaviour, which sort of legislation invaribaly finds enthusiastic favour among the devout of many faiths. Since this fals outside the scope of this thread, perhaps Mr Vance would like to address the morality of prohibition in a future article.

fundamentalist April 1, 2008 at 7:59 am

David C: “Speaking as a devout agnostic, it is refreshing to see such clarity of economic thought coming from within Christian circles.”

Yes, it is. Most Christians today are socialists, but that wasn’t always the case. As I have written many times before, modern liberalism began with the Dutch Republic of the 17th century and was based on the Biblical principles espoused by the Catholic scholars at the school of Salamanca. The Acton Institute’s Journal of Markets and Morality for this month (subscription required) has a good section on the priest who introduced scholastic ideas on economics (heavily free market) to the Dutch, Lessius. Without mentioning its religious foundation, the new book, “God and Gold: Britain, America, and the Making of the Modern World” by Walter Russell Mead also traces liberalism back to the Dutch Republic.

Most Christians were freedom and free market oriented until the late 1800′s when beginning in Germany, they abandoned the content of Christianity but kept the shell. At that time, the unbelieving “Christians” all became devout socialists and the trend has continued.

Inquisitor April 1, 2008 at 8:23 am

Not a Christian myself, but Fundamentalist is correct that the notions of theft and the like are sufficiently well-defined in regular discourse to not need the Bible to define them all in extreme exactitude, and will make sense when taken in its context. I am no Bible scholar though, so this is merely my intuition.

George Gaskell April 1, 2008 at 9:05 am

Most Christians were freedom and free market oriented until the late 1800′s when beginning in Germany, they abandoned the content of Christianity but kept the shell. At that time, the unbelieving “Christians” all became devout socialists and the trend has continued.

Hmm, that seems to coincide with the first generation of graduates following Bismarck’s rather disastrous Kulturkampf initiative.

Combine that with an entrenched Prussian compulsory school system, and you can, as Fichte said, fashion the citizen-subject “in such a way that he simply cannot will otherwise than what you wish him to will.”

newson April 1, 2008 at 11:06 am

to fundamentalist:
i really haven’t got a dog in this fight, but here’s a question for you – the late pope john paul II seemed to have done a thorough job in purging the vatican senate of social justice/liberation theology supporters. but his pronouncements on commerce always disappointed me.

i hoped benedict xvi would continue to steer the church away from the social justice quicksands, but have the impression that things have remained fairly static.

your thoughts?

fundamentalist April 1, 2008 at 12:26 pm

newson: “i hoped benedict xvi would continue to steer the church away from the social justice quicksands…”

Sorry, I’m not Catholic, so don’t know much about the Pope’s positions. You might find something over on the Acton web site.

It’s good to see Catholics warming to capitalism, though. Although the Dutch protestants took their thinking on free markets from Catholic scholars, the Church the capitalism that resulted from the implementation of those ideas as purely protestant and reacted against them as such. The Church remained anti-capitalistic until fairly recently, as Novac has pointed out in his books.

David V April 1, 2008 at 3:27 pm

Useless,

>”These “modern,” “Western” legal systems you refer to also allude to the Deity. “We hold these truths to be self-evident, that all men are created equal and are endowed by their Creator certain inalienable rights….”"

John Adams:
“The government of the United States is not in any sense founded on the Christian religion.”

“…Thirteen governments [of the original states] thus founded on the natural authority of the people alone, without a pretence of miracle or mystery, and which are destined to spread over the northern part of that whole quarter of the globe, are a great point gained in favor of the rights of mankind.”

>”Was the Declaration also the by-product of an “ancient, inferior mind”?”

No, it was the creation of a mind which had rejected the shackles of mysticism and tradition.

Thomas Jefferson:
“Our civil rights have no dependence on our religious opinions, more than on our opinions in physics and geometry….The legitimate powers of government extend to such acts only as are injurious to others. But it does me no injury for my neighbor to say there are twenty gods, or no god. It neither picks my pocket nor breaks my leg.”

“…that our civil rights have no dependence on religious opinions, any more than our opinions in physics and geometry.”

>”Well I’m going to go ponder whether I should rob a bank. I’m a self-owning man of independent judgment, and I don’t have to follow any kind of law if I don’t agree with it. Bye!”

If you believe that you must obey laws because they are written on a pieces paper (holy or otherwise), you’re indeed a perfect candidate of the Total State. I, on the other hand, recognize the same rights in others that I ascribe to myself, regardless of what the law might say they are.

nick Gray April 2, 2008 at 1:49 am

So David wants to treat others as he wants them to treat him? Where have we heard that before? Oh, right! That guy Jesus said it!

George Gaskell April 2, 2008 at 8:24 am

No, it was the creation of a mind which had rejected the shackles of mysticism and tradition.

This is what irks me about the Aggressive Atheist. The arrogance. The tiresome implication (sometimes made as an explicit claim) that only the Aggressive Atheist has figured it all out. That everyone else, not only everyone in the world but everyone all of human history, is a stone-cold idiot. That only the Aggressive Atheist really gets it, man.

I, on the other hand, recognize the same rights in others that I ascribe to myself …

As though no one has ever thought of that before.

http://en.wikipedia.org/wiki/Ethic_of_reciprocity

Inquisitor April 2, 2008 at 8:38 am

Haha I used to he just that way George – when I first finished reading Rand. Anyway, having finally taken the opportunity to make my way through this article, I must thank Mr Lawrence for it. I’m no Christian, but I will be pointing this piece out to any friends of mine who are and already lean toward the market.

TLWP Sam April 2, 2008 at 10:07 am

Acutally Agressive Atheism is conductive to anarchism – a true atheist cannot provide any real reason for any regulation or much of anything at all. If there’s no higher moral power or no morally-defined hereafter then arguing over what should be right or wrong is pointless.

fundamentalist April 2, 2008 at 10:33 am

TLWP: “Acutally Agressive Atheism is conductive to anarchism…”

It’s also conducive of anything else. As either Sartre or Camus used to say, it makes no difference whether you help the old lady across the street or throw her under the bus, as long as you act.

Inquisitor April 2, 2008 at 11:11 am

Sam, that’d only be true if defences of moral systems independent of the existence of a god were not possible.

fundamentalist April 2, 2008 at 1:26 pm

One reason that protestants are so convinced of socialism, or at least strong state intervention, is the influence of John Calvin on reformed theology. Calvin saw the role of the church as one of instantiating the Kingdom of God on earth. Part of the reasoning behind that was the Augustinian view of the future, which was post-millenial. In other words, Augustine believed that Christ would return after the Church had finished with recreating society in the image of the Kingdom of God. So reformed theologians continue to see their job as using the state to remake society in their image of the Godly society.

Fortunately, the Dutch Republic didn’t succomb to Calvinism with regard to the project of estbablishing the Kingdom of God on earth. Most Dutch were Erasmian protestants who focused on personal piety, not societal piety. Somehow we must convince Calvinists, and many Catholics, that the state has a very specific, limited purpose and the church should not use the state to do its work. That seems to be a difficult taks, though, even among Baptists.

David V April 2, 2008 at 2:31 pm

>”So David wants to treat others as he wants them to treat him? Where have we heard that before? Oh, right! That guy Jesus said it!”

Which proves what? That he wasn’t totally ignorant of a moral convention common to every single culture? Even at that, the Christian concept of love is corrupt and immoral – it demands that we “love” everyone regardless of whether they deserve, destroying the very idea of love and justice.

David Veksler April 2, 2008 at 2:36 pm

>”The tiresome implication (sometimes made as an explicit claim) that only the Aggressive Atheist has figured it all out.”

Atheism is not a claim to anything – it’s the denial of a claim. To be an atheist only says what one is not – it does not indicate anything about one’s beliefs. Does the fact that you do not believe in Zeus or Thor say anything about you? Neither does does my disbelief in your particular gods, whatever they are.

>”That everyone else, not only everyone in the world but everyone all of human history, is a stone-cold idiot. That only the Aggressive Atheist really gets it, man.”

That kind of straw-man attack is common to anyone who has no rational reasons to give.

George Gaskell April 2, 2008 at 4:21 pm

Does the fact that you do not believe in Zeus …

blah blah blah.

Please just give it a rest. I haven’t heard tripe that shop-worn since freshman year in the dorm lounge.

Besides, how do you know I don’t believe in Zeus? Zeus kicks ass.

Plus, my comments are not a straw-man argument. They are a statement of my impression of the disproportionately large percentage of atheists I have encountered over the years who exhibit an abrasive and sophomoric smugness.

I think it was your reference to the “casting off of shackles of tradition” that reminded me of that particular tendency.

useless spectator April 4, 2008 at 2:56 am

“If you believe that you must obey laws because they are written on a pieces paper (holy or otherwise), you’re indeed a perfect candidate of the Total State. I, on the other hand, recognize the same rights in others that I ascribe to myself, regardless of what the law might say they are.”

Wow, it appears you are changing your tune, David. You earlier said, “All the commandments, including the concept of a moral ‘commandment’ is diametrically opposed to the conception of man as an self-owning, self-reliant, man of independent judgment.” So I guess you believe in moral commandments after all.

Acutally Agressive Atheism is conductive to anarchism TWLP SAM

Karl Marx equated freedom of religion with private property and called for eradication of both at the hands of the state. “Of course, in periods when the political state as such is born violently out of civil society, when political liberation is the form in which men strive to achieve their liberation, the state can and must go as far as the abolition of religion, the destruction of religion. But it can do so only in the same way that it proceeds to the abolition of private property, to the maximum, to confiscation, to progressive taxation, just as it goes as far as the abolition of life, the guillotine.” Karl Marx, The Jewish Question

cavalier973 May 27, 2009 at 11:47 pm

Inquisitor writes: “Haha I used to be just that way George – when I first finished reading Rand. Anyway, having finally taken the opportunity to make my way through this article, I must thank Mr Lawrence for it. I’m no Christian, but I will be pointing this piece out to any friends of mine who are and already lean toward the market.”

And that’s the point of articles like this, I think. If you really care about individual liberty, and want to persuade others to care about it, too, it does no good to say “You’re just a stupid stupidhead who believes in fairy tales.” Whoever you are talking to will, at best, just ignore whatever you have to say. But when you meet people where they are; when you get to know enough Scripture to argue persuasively to religious people that Liberty is what the God they believe in has ordained, then you have a chance to gain allies in the struggle for Liberty.

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