tailieunhanh - Luận án kinh tế - "Human and action" - Chapter 16

XVI. PRICES 1. The Pricing Process In an occasional act of barter in which men who ordinarily do not resort to trading with other people exchange goods ordinarily not negotiated, the ratio of exchange is determined only within broad margins. Catallactics, the theory of exchange ratios and prices | XVI. PRICES 1. The Pricing Process IN an occasional act of barter in which men who ordinarily do not resort to trading with other people exchange goods ordinarily not negotiated the ratio of exchange is determined only within broad margins. Catallactics the theory of exchange ratios and prices cannot determine at what point within these margins the concrete ration will be established. All that it can assert with regard to such exchanges is that they can be effected only if each party values what he receives more highly than what he gives away. The recurrence of individual acts of exchange generates the market step by step with the evolution of the division of labor within a society based on private property. As it becomes a rule to produce for other people s consumption the members of society must sell and buy. The multiplication of the acts of exchange and the increase in the number of people offering or asking for the same commodities narrow the margins between the valuations of the parties. Indirect exchange and its perfection through the use of money divide the transactions into two different parts sale and purchase. What in the eyes of one party is a sale is for the other party a purchase. The divisibility of money unlimited for all practical purposes makes it possible to determine the exchange ratios with nicety. The exchange ratios are now as a rule money prices. They are determined between extremely narrow margins the valuations on the one hand of the marginal buyer and those of the marginal offerer who abstains from selling and the valuations on the other hand of the marginal seller and those of the marginal potential buyer who abstains from buying. The concatenation of the market is an outcome of the activities of entrepreneurs promoters speculators and dealers in futures and in arbitrage. It has been asserted that catallactics is based on the assumption contrary to reality that all parties are provided with perfect knowledge concerning the market data .