Pricing:Supply - Demand => Price
The trade: pricing from supply - demand On one side of the economic process we have the formation of values, on the other side the consumption of values. At the transition point, the value of goods or services is transferred to the consumer. The consumer pays a value in return. "... so in buying and selling we essentially have exchange of values, exchange of values ... what is exchanged are values ... when value for value collide to some extent in order to exchange, that is the price", (B024, 25.7.1922). A value is exchanged for another value, behind these values only hide goods, goods, services or money. Here the price is formed in reality, this is a momentary state, it can therefore be different again in the past and in the future. "If value is already something fluctuating that cannot be defined, then yes, if you exchange value for value, then in a certain sense that which arises in exchange is the price, that is something fluctuating in the square", (B024, 25.7.1922). In trade, buyers and sellers seek an advantage through the exchange of value. An exchange of values that causes permanent losses to one or both sides could not be maintained for long. An exchange of values should in the majority of cases lead to a surplus, from which an increase in value also follows. "Thus, through the mere exchange, what is exchanged becomes worth more on one side as well as on the other", (B024,p.141). Goods that are in stock and cannot be sold lose value, money that is not used also loses value. This also corresponds to the essential basic force of economic life: the desire of people for advantage. "So that there is no place in the economic process where advantage and profit need not be spoken of." Where there is no advantage and no profit, we are dealing with economic decline, disinvestment, the disappearance of supply and goods and impoverishment. "And this attachment to this advantage is what actually creates the whole economic process, what is the power in it." (both B024, 2.8.1922). The basic forces of economic activity are the consumer's need for a good or service, the pursuit of value creation by the producer and profit on the trader's side. Price formation The value of a good or service comes about through value creation (work, mind), the value of money comes about through people's awareness of it. A thing of which nobody has knowledge (consciousness), therefore has no value for any human being and has no price1. Because for an unknown thing no one would give something in return. On the other hand, the well-being of an economic organism depends on the prices of all goods being in a healthy balance. The price of a good is established between the seller and the buyer, and only when the process is completed, i.e. when the full service is matched by the price paid in full. This should reflect that the performance meets the need of the buyer and the possibilities of the seller and the price should reflect the availability of capital of the buyer and the capital needs of the seller. In the long run, a price is therefore not arrived at by calculation on the part of the seller or the buyer, nor by a desire for a price, but by interpersonal determination. Through work and spirit values are formed in the value chain, in every exchange of values (trade) prices are formed. These prices change the value. These values are further processed in the intermediate stages of the value creation process, which are based on the division of labour, and the values generally increase. Then there is the next sale, a price is found again, this price again influences the value. So we have to regard work, spirit and price as value-forming. "... in the economic process, products value each other", (B024, 30.7.1922). If the price does not meet the requirements of all parties involved, this type of economy will change, as either the buyer or the seller cannot live with it or with it. Thus, the price formation process can be seen as the essential point of the economic process, because in it the needs, abilities, availabilities, thinking and wanting of people meet, create a price tension, and in the agreement they can adjust to each other and find a just corresponding state of equilibrium. This equilibrium corresponds, seen over all worldwide price formation processes, to the economic system2 with all its abilities, thoughts and members that is actually present at this moment. The sum of the available goods and services which the consumer can purchase in the economic system corresponds to the sum of the disposable income of all people. All these goods had to or have to be produced once, their values have to be created. Therefore, the ability to create value, the supply of goods and services and income are interrelated, influence each other accordingly. If the income of certain social groups falls, the corresponding supply also decreases. Therefore, the sum of all prices that are achieved in a period of time is the sum of all incomes of people. Price formation is therefore always a decision concerning the distribution of income. The people who by nature produce goods through work will be interested in achieving higher values for these goods and those who change work through mental activity will be interested in the value of their goods achieving higher values. The businessman is a trader in the sense that he gets goods from his workers and gets transformed work from his development and organization workers and brings them together to pass them on to other members of the economic system through exchange of value. On the other hand, the price expresses how much money is spent in the economic cycle for a certain product and the proportionate amount of money in relation to the total amount of money, establishes the connection between how many people participate in the production of a product. If the price is low, there will be fewer people than if it is high, so pricing is also a question of the quantity of jobs, cheap prices result in job losses and high prices result in job creation3 . Or if a product becomes too expensive, then too many people work on it and it becomes necessary to find new jobs in other areas to add jobs and costs there. The price influences the activity and supply of goods in the economic system. "The right price is when a person gets so much in return for a product he has made that he can satisfy his needs, the sum of his needs, which of course includes the needs of those who belong to him, until he has made the same product again. (B024, 29.7.1922). In the times of the coming full automation of production, logistics and trade, it is becoming increasingly important that all the economically, legally and intellectually active people involved receive an income that covers their needs. And they can only receive this from the goods, goods and services they produce. Income is therefore dependent on the ability of an economic area to create value and set prices. The price paid for a good must therefore put the producer of that good in a position to manufacture the same product again in the future. If consumers do not want to pay the necessary price for certain products in the long term, this supply will disappear in this quantity and quality. By paying an appropriate price, the consumer decides that this product should continue to exist in the future. The price is based on the current ability to create value and influences its future development. When setting the price, it must always be taken into account that there is a real price, which is formed by the living interweaving of circumstances, but that there are also forces which continually falsify the price. If an entrepreneur wants to conquer a market, he lowers the price below the real price in order to entice the consumer to buy from him rather than from the previous entrepreneur. Other entrepreneurs recognise the fear of consumers that they can no longer satisfy their needs, for example on the fuel and energy market, and use this to demand more than the real price. "... will study the function of commercial capital particularly well if we consider the function of competition in economic life", (B024, 1.8.1922). So how capital is used to compete in the so-called "competition", how commercial capital is used to increase supply and use price as a market tool. The exchange of goods and money can be understood in thought, in cost accounting and calculation, but beyond this many such exchanges are carried out by people who have a living experience of the proportionality of goods to price. Man can judge from his experience and the sensations connected with it, if he can listen within himself, how much money he can or cannot give for a thing. "Well, even in the most complicated economic process this perceived experience cannot be eliminated. It's pictorial imagination." (B024, 2.8.1922). Man cannot overlook the world wide weaving and living process of goods, but he can see the inner connections in a mental view and thus form an idea of the production, trade and consumption events "It is not at all true that we have something to gain in the economic process if we work concepts into it. We only have something if we work views into it", (B024, 2.8.1922). Every price that a person pays for a commodity dissolves into income for the people involved in the creation of the commodity. Thus, fraternity in economic activity is a fact that only needs to be understood and thus leads to a just price that is realized in a reasonable social distribution of income. Supply, demand and price Anyone who offers goods is at the same time also a demander of money. Those who demand goods can only do so because they have an offer of money. "If I want to develop demand, I need supply of money", (B024, 31.7.1922). A supply of goods can only enter the economic process if the goods are matched by a corresponding supply of money. People who offer goods must be confronted with people who can and want to offer sufficient money for these goods. A commodity for which nobody can or wants to offer money can not achieve a price in the economic cycle. From the trader's point of view, who mediates supply and demand, who is flexible with regard to which goods he trades and to which people he passes them on, for whom the price is most likely to result from the interrelation of supply and demand. For the consumer, who has a certain amount of money at his disposal and can therefore give a certain price for a good, who as a human being has a certain need for one or the other good, sees how there is a correlation between price and demand, which influences supply. The consumer has a supply (a) of money (personally available money supply) which is in relation to the demand (n) and the price (p) demanded by them. a = f (p n). After all, he can only afford what he can ultimately pay. On the other hand, he can create a suction effect on emerging offers through price and demand. From the manufacturer's point of view, what he can offer in terms of goods at what price has an influence on demand. The producer interrelates his supply (a) of goods with the resulting price (p) and his demand (n) for money. n = f (a p). The producer has to reckon with an available amount of money at the consumer's disposal and can therefore influence demand through the nature of his supply and the price. So that in the exchange of goods there is an interaction between price, demand and supply, that these three together cause a real state, which occurs at the moment of the exchange of goods and money. The function of the exchange of goods is therefore "x = f ( a n p ) = f (supply demand price)", (B024, 31.7.1922) The price is not a function of supply and demand, but supply, demand and price are in interplay and result in a fourth. The price that is formed in the economic process can now be distorted by various factors. This then leads to imbalances, income problems and crises. If prices are kept low artificially, e.g. through state-social influence. In order to secure the basic supply of the population with e.g. housing and food. However, this underpriced segment of an economy must be supported by the other parts of the economy. The more the economy moves into a global economy without internal borders, the less such state price regulations can have an effect. However, prices can also rise disproportionately due to power or legal relationships. Where there are monopoly-like legal or ownership relationships for land, this can be used to inflate property prices. People who work in state administrations can use their power to keep their own income higher than that of other people. "Therefore, the price of all that is capable of submission to such legal relations has a tendency to rise above its truth." (B024, 30.7.1922). Then incomes and prices (taxes, real estate, raw materials, rights) will be disproportionately high, leading to economic imbalances. The present state of supply, demand and price could only be achieved through the system of division of labour. Whoever wants to be self-sufficient today, decides to carry out these production processes in a more uneconomical and expensive way. Nobody today can reach the industrially low production costs in self-sufficiency. Thus, self-sufficiency4 results in an unintended increase in the overall economic production costs. "The further the division of labour advances, the more it must come to the situation that one person always works for the others, for the indefinite firm, never for himself. That is, but in other words: As the modern division of labor has come up, the national economy, in terms of economic activity, is dependent on eradicating selfishness with blunt force. ... Altruism as a demand ...", (B024, 26.7.1922). Price formation thus arises in the interplay with supply and demand and is the essential parameter for the question of economic equilibrium. "The question of prices is the last question to which the most important economic disputes must lead: For everything that is actually active in the national economy in terms of impulses and forces culminates in the price", (B024, 25.7.1922).
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