My last post on my attempts to create a general theory of prices met with some positive responses. I’m not hugely surprised. Any thinking person who has ever entered an undergraduate micro course has questioned the validity of what’s being taught. Although neat, it does seem to fly in the face of the economic realities encountered in the real-world.
One of the purposes of laying out a general theory of prices is to allow for a framework that can accommodate the massive variety of decisions undertaken by everyone from investors to firms to set prices in capitalist economies. The aim is to get rid of the notion that there is some sort of pre-determination to these decisions and that they can be modeled in some a priori manner.
Again, the idea is that in order to understand pricing in capitalist economies it is the responsibility of the economist to actually…
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