An Introduction to Austrian Economics by Thomas C. Taylor

Author:Thomas C. Taylor [Taylor, Thomas C.]
Language: eng
Format: epub
ISBN: 978-1-933550-23-7
Publisher: Ludwig von Mises Institute
Published: 1980-11-06T16:00:00+00:00

5

The Market and Market Prices

The Nature of the Market

The tendency to ascribe to the market economy the characteristic of being something other than the events caused by the choices and actions of individuals is incorrect. The market arises as a result of the willingness of individuals to interact. Every development in the market is the outcome of purposive actions on the part of individuals who are seeking to improve their own state of affairs.

This process of economic interaction and cooperation is the essence of the market; the market is not something physical but a process. Through the consummation of market transactions, individuals seek to improve their situations, i.e., enhance their own subjective satisfactions. The prices that emerge in the market are not unexplainable; they always are the result of subjective valuations expressed by individuals who choose to buy or sell or to abstain from either action. Mises emphasizes the human quality of all market activities:

It is customary to speak metaphorically of the automatic and anonymous forces actuating the “mechanism” of the market. In employing such metaphors people are ready to disregard the fact that the only factors directing the market and the determination of prices are purposive acts of men. There is no automatism; there are only men consciously and deliberately aiming at ends chosen. There are no mysterious mechanical forces; there is only the human will to remove uneasiness. There is no anonymity; there is I and you and Bill and Joe and all the rest. And each of us is both a producer and a consumer…. There is nothing inhuman or mystical with regard to the market. The market process is entirely a resultant of human actions. Every market phenomenon can be traced back to definite choices of the members of the market society.1

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