I can't believe there aren't any Austrian / Von Mises people in this thread! I thought theyd be common.
Price is extremely important: It is the collective honest judgement of subjective valuation by millions of people. The purest form of swarm intelligence.
Price isn't hard to understand, but it is fascinating and will change the way you see the world.
ELI5: First, understand that "value" is not an objective thing. Every person values a thing according to their subjective experience. If I go to a south-american tribe with gold, but find that their religion forbids shiny metal, then the value of gold for them is zero. For me it´s not! So I'm gonna try to find a better market.
This is why Free Markets and Free Speech are the cornerstones that you always hear us austrians talk about. Both Marx and Adam smith believed that price was intrinsic somehow, marx thought it related to the labor required to create the thing, smith (who called this true price the "natural price" as opposed to the current "market price", expressing it in this way:
the 'natural price' of a good identifies the product's price, which is equal or almost equal to the amount required to cover all the costs of the supplier such as rent, labor wages, cost of production, and processes
Both are wrong. What is the objective price of something? It is what someone is willing to pay for it. The market price is the only price. Bigger market, better price (as in, more accurate). More perspectives, more vision. Regulate the market, control the price manually, you create a lie that affects the entire nation. Why did communists starve? Except for killing experts.
Well, the price of food had to be "fair". Based on labor, but as everyone needs it, it must be cheap. But then farmers couldn't afford to work. Then the people who built equipment for farmers were out of business, and so on until full collapse.
Price is extremely important: It is the collective honest judgement of subjective valuation by millions of people. The purest form of swarm intelligence.