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I just went public with a FREE election-year ticker to help you take advantage of a shocking situation unfolding in Washington D.C. [thefinancialfreedomright]( September 24, 2024 | [View in browser]( Georg Wilhelm Friedrich Hegel (/ˈheɪɡəl/;[1][2] German: [ˈɡeːɔʁk ˈvɪlhɛlm ˈfʁiːdʁɪç ˈheːɡl̩];[2][3] 27 August 1770 – 14 November 1831) was a German philosopher and one of the most influential figures of German idealism and 19th-century philosophy. His influence extends across the entire range of contemporary philosophical topics, from metaphysical issues in epistemology and ontology, to political philosophy, the philosophy of history, philosophy of art, philosophy of religion, and the history of philosophy. Born in 1770 in Stuttgart, Holy Roman Empire, during the transitional period between the Enlightenment and the Romantic movement in the Germanic regions of Europe, Hegel lived through and was influenced by the French Revolution and the Napoleonic wars. His fame rests chiefly upon The Phenomenology of Spirit, The Science of Logic, his teleological account of history, and his lectures at the University of Berlin on topics from his Encyclopedia of the Philosophical Sciences. Throughout his work, Hegel strove to address and correct the problematic dualisms of modern philosophy, Kantian and otherwise, typically by drawing upon the resources of ancient philosophy, particularly Aristotle. Hegel everywhere insists that reason and freedom are historical achievements, not natural givens. His dialectical-speculative procedure is grounded in the principle of immanence, that is, in assessing claims always according to their own internal criteria. Taking skepticism seriously, he contends that we cannot presume any truths that have not passed the test of experience; even the a priori categories of the Logic must attain their "verification" in the natural world and the historical accomplishments of humankind. Guided by the Delphic imperative to "know thyself", Hegel presents free self-determination as the essence of humankind – a conclusion from his 1806–07 Phenomenology that he claims is further verified by the systematic account of the interdependence of logic, nature, and spirit in his later Encyclopedia. He asserts that the Logic at once preserves and overcomes the dualisms of the material and the mental – that is, it accounts for both the continuity and difference marking of the domains of nature and culture – as a metaphysically necessary and coherent "identity of identity and non-identity". Life[edit] Formative years[edit] Stuttgart, Tübingen, Berne, Frankfurt (1770–1800)[edit] The birthplace of Hegel in Stuttgart, which now houses the Hegel Museum Hegel was born on 27 August 1770 in Stuttgart, capital of the Duchy of Württemberg in southwestern Germany. Christened Georg Wilhelm Friedrich, he was known as Wilhelm to his close family. His father, Georg Ludwig, was secretary to the revenue office at the court of Karl Eugen, Duke of Württemberg.[4][5] Hegel's mother, Maria Magdalena Louisa (née Fromm), was the daughter of a lawyer at the High Court of Justice at the Württemberg court. She died of bilious fever when Hegel was thirteen. Hegel and his father also caught the disease, but they narrowly survived.[6] Hegel had a sister, Christiane Luise (1773–1832); and a brother, Georg Ludwig (1776–1812), who perished as an officer during Napoleon's 1812 Russian campaign.[7] At the age of three, Hegel went to the German School. When he entered the Latin School two years later, he already knew the first declension, having been taught it by his mother. In 1776, he entered Stuttgart's Eberhard-Ludwigs-Gymnasium and during his adolescence read voraciously, copying lengthy extracts in his diary. Authors he read include the poet Friedrich Gottlieb Klopstock and writers associated with the Enlightenment, such as Christian Garve and Gotthold Ephraim Lessing. In 1844, Hegel's first biographer, Karl Rosenkranz described the young Hegel's education there by saying that it "belonged entirely to the Enlightenment with respect to principle, and entirely to classical antiquity with respect to curriculum."[8] His studies at the Gymnasium concluded with his graduation speech, "The abortive state of art and scholarship in Turkey."[9] Hegel, Schelling, and Hölderlin are believed to have shared the room on the second floor above the entrance doorway while studying at this institute – (a Protestant seminary called "the Tübinger Stift"). At the age of eighteen, Hegel entered the Tübinger Stift, a Protestant seminary attached to the University of Tübingen, where he had as roommates the poet and philosopher Friedrich Hölderlin and the future philosopher Friedrich Schelling.[10][5][11] Sharing a dislike for what they regarded as the restrictive environment of the Seminary, the three became close friends and mutually influenced each other's ideas. (It is mostly likely that Hegel attended the Stift because it was state-funded, for he had "a profound distaste for the study of orthodox theology" and never wanted to become a minister.[12]) All three greatly admired Hellenic civilization, and Hegel additionally steeped himself in Jean-Jacques Rousseau and Lessing during this time.[13] They watched the unfolding of the French Revolution with shared enthusiasm.[5] Although the violence of the 1793 Reign of Terror dampened Hegel's hopes, he continued to identify with the moderate Girondin faction and never lost his commitment to the principles of 1789, which he expressed by drinking a toast to the storming of the Bastille every fourteenth of July.[14][15] Schelling and Hölderlin immersed themselves in theoretical debates on Kantian philosophy, from which Hegel remained aloof.[16] Hegel, at this time, envisaged his future as that of a Popularphilosoph, (a "man of letters") who serves to make the abstruse ideas of philosophers accessible to a wider public; his own felt need to engage critically with the central ideas of Kantianism would not come until 1800.[17] The poet Friedrich Hölderlin (1770–1843) was one of Hegel's closest friends and roommates at Tübinger Stift. Having received his theological certificate from the Tübingen Seminary, Hegel became Hofmeister (house tutor) to an aristocratic family in Berne (1793–1796).[18][5][11] During this period, he composed the text which has become known as the Life of Jesus and a book-length manuscript titled "The Positivity of the Christian Religion." His relations with his employers becoming strained, Hegel accepted an offer mediated by Hölderlin to take up a similar position with a wine merchant's family in Frankfurt in 1797. There, Hölderlin exerted an important influence on Hegel's thought.[19] In Berne, Hegel's writings had been sharply critical of orthodox Christianity, but in Frankfurt, under the influence of early Romanticism, he underwent a sort of reversal, exploring, in particular, the mystical experience of love as the true essence of religion.[20] Also in 1797, the unpublished and unsigned manuscript of "The Oldest Systematic Program of German Idealism" was written. It was written in Hegel's hand, but may have been authored by Hegel, Schelling, or Hölderlin.[21] While in Frankfurt, Hegel composed the essay "Fragments on Religion and Love."[22] In 1799, he wrote another essay entitled "The Spirit of Christianity and Its Fate", unpublished during his lifetime.[5] Career years[edit] Jena, Bamberg, Nürnberg (1801–1816)[edit] While at Jena, Hegel helped found a philosophical journal with his friend from Seminary, the young philosophical prodigy Friedrich Wilhelm Joseph Schelling (1775–1854). In 1801, Hegel came to Jena at the encouragement of Schelling, who held the position of Extraordinary Professor at the University of Jena.[5] Hegel secured a position at the University of Jena as a Privatdozent (unsalaried lecturer) after submitting the inaugural dissertation De Orbitis Planetarum, in which he briefly criticized mathematical arguments that assert that there must exist a planet between Mars and Jupiter.[23][a] Later in the year, Hegel's essay The Difference Between Fichte's and Schelling's System of Philosophy was completed.[25] He lectured on "Logic and Metaphysics" and gave lectures with Schelling on an "Introduction to the Idea and Limits of True Philosophy" and facilitated a "philosophical disputorium."[25][26] In 1802, Schelling and Hegel founded the journal Kritische Journal der Philosophie (Critical Journal of Philosophy) to which they contributed until the collaboration ended when Schelling left for Würzburg in 1803.[25][27] In 1805, the university promoted Hegel to the unsalaried position of extraordinary professor after he wrote a letter to the poet and minister of culture Johann Wolfgang von Goethe protesting the promotion of his philosophical adversary Jakob Friedrich Fries ahead of him.[28] Hegel attempted to enlist the help of the poet and translator Johann Heinrich Voß to obtain a post at the renascent University of Heidelberg, but he failed. To his chagrin, Fries was, in the same year, made ordinary professor (salaried).[29] The following February marked the birth of Hegel's illegitimate son, Georg Ludwig Friedrich Fischer (1807–1831), as the result of an affair with Hegel's landlady Christiana Burkhardt née Fischer.[30] With his finances drying up quickly, Hegel was under great pressure to deliver his book, the long-promised introduction to his philosophical system.[31] Hegel was putting the finishing touches to it, The Phenomenology of Spirit, as Napoleon engaged Prussian troops on 14 October 1806 in the Battle of Jena on a plateau outside the city.[11] On the day before the battle, Napoleon entered the city of Jena. Hegel recounted his impressions in a letter to his friend Friedrich Immanuel Niethammer: "Hegel and Napoleon in Jena" (illustration from Harper's Magazine, 1895), an imaginary meeting that became proverbial due to Hegel's notable use of Weltseele ("world-soul") in reference to Napoleon ("the world-soul on horseback", die Weltseele zu Pferde) I saw the Emperor – this world-soul [Weltseele] – riding out of the city on reconnaissance. It is indeed a wonderful sensation to see such an individual, who, concentrated here at a single point, astride a horse, reaches out over the world and masters it.[32] Hegel's biographer Terry Pinkard notes that Hegel's comment to Niethammer "is all the more striking since he had already composed the crucial section of the Phenomenology in which he remarked that the Revolution had now officially passed to another land (Germany) that would complete 'in thought' what the Revolution had only partially accomplished in practice."[33] Although Napoleon had spared the University of Jena from much of the destruction of the surrounding city, few students returned after the battle and enrollment suffered, making Hegel's financial prospects even worse.[34] Hegel traveled in the winter to Bamberg and stayed with Niethammer to oversee the proofs of the Phenomenology, which was being printed there.[34] Although Hegel tried to obtain another professorship, even writing Goethe in an attempt to help secure a permanent position replacing a professor of botany,[35] he was unable to find a permanent position. In 1807, he had to move to Bamberg since his savings and the payment from the Phenomenology were exhausted and he needed money to support his illegitimate son Ludwig.[36][34] There, he became the editor of the local newspaper, Bamberger Zeitung [de],[5] a position he obtained with the help of Niethammer. Ludwig Fischer and his mother stayed behind in Jena.[36] Hegel's friend Friedrich Immanuel Niethammer (1766–1848) financially supported Hegel and used his political influence to help him obtain multiple positions. In Bamberg, as editor of the Bamberger Zeitung [de], which was a pro-French newspaper, Hegel extolled the virtues of Napoleon and often editorialized the Prussian accounts of the war.[37] Being the editor of a local newspaper, Hegel also became an important person in Bamberg social life, often visiting with the local official Johann Heinrich Liebeskind [de], and becoming involved in local gossip and pursued his passions for cards, fine eating, and the local Bamberg beer.[38] However, Hegel bore contempt for what he saw as "old Bavaria", frequently referring to it as "Barbaria" and dreaded that "hometowns" like Bamberg would lose their autonomy under new the Bavarian state.[39] After being investigated in September 1808 by the Bavarian state for potentially violating security measures by publishing French troop movements, Hegel wrote to Niethammer, now a high official in Munich, pleading for Niethammer's help in securing a teaching position.[40] With the help of Niethammer, Hegel was appointed headmaster of a gymnasium in Nuremberg in November 1808, a post he held until 1816. While in Nuremberg, Hegel adapted his recently published Phenomenology of Spirit for use in the classroom. Part of his remit was to teach a class called "Introduction to Knowledge of the Universal Coherence of the Sciences."[41] In 1811, Hegel married Marie Helena Susanna von Tucher (1791–1855), the eldest daughter of a Senator.[5] This period saw the publication of his second major work, the Science of Logic (Wissenschaft der Logik; 3 vols., 1812, 1813 and 1816), and the birth of two sons, Karl Friedrich Wilhelm (1813–1901) and Immanuel Thomas Christian (1814–1891).[42] Heidelberg, Berlin (1816–1831)[edit] Having received offers of a post from the Universities of Erlangen, Berlin and Heidelberg, Hegel chose Heidelberg, where he moved in 1816. Soon after, his illegitimate son Ludwig Fischer (now ten years old) joined the Hegel household in April 1817, having spent time in an orphanage after the death of his mother Christiana Burkhardt.[43] In 1817, Hegel published The Encyclopedia of the Philosophical Sciences in Outline as a summary of his philosophy for students attending his lectures at Heidelberg.[5][11] It is also while in Heidelberg that Hegel first lectured on the philosophy of art.[44] In 1818, Hegel accepted the renewed offer of the chair of philosophy at the University of Berlin, which had remained vacant since Johann Gottlieb Fichte's death in 1814. Here, Hegel published his Elements of the Philosophy of Right (1821). Hegel devoted himself primarily to delivering lectures; his lectures on the philosophy of fine art, the philosophy of religion, the philosophy of history, and the history of philosophy were published posthumously from students' notes. In spite of his notoriously terrible delivery, his fame spread and his lectures attracted students from all over Germany and beyond.[45] Meanwhile, Hegel and his pupils, such as Leopold von Henning, Friedrich Wilhelm Carové, were harassed and put under the surveillance of Prince Sayn-Wittgenstein, the interior minister of Prussia and his reactionary circles in the Prussian court.[46][47][48] In the remainder of his career, he made two trips to Weimar, where he met with Goethe for the last time, and to Brussels, the Northern Netherlands, Leipzig, Vienna, Prague, and Paris.[49] Hegel's tombstone in Berlin During the last ten years of his life, Hegel did not publish another book but thoroughly revised the Encyclopedia (second edition, 1827; third, 1830). In his political philosophy, he criticized Karl Ludwig von Haller's reactionary work, which claimed that laws were not necessary. A number of other works on the philosophy of history, religion, aesthetics and the history of philosophy[50] were compiled from the lecture notes of his students and published posthumously.[51] Hegel was appointed University Rector of the university in October 1829, but his term ended in September 1830. Hegel was deeply disturbed by the riots for reform in Berlin in that year. In 1831 Frederick William III decorated him with the Order of the Red Eagle, 3rd Class for his service to the Prussian state.[52] In August 1831, a cholera epidemic reached Berlin and Hegel left the city, taking up lodgings in Kreuzberg. Now in a weak state of health, Hegel seldom went out. As the new semester began in October, Hegel returned to Berlin in the mistaken belief that the epidemic had largely subsided. By 14 November, Hegel was dead.[5] The physicians pronounced the cause of death as cholera, but it is likely he died from another gastrointestinal disease.[53] His last words are said to have been, "There was only one man who ever understood me, and even he didn't understand me."[54] He was buried on 16 November. In accordance with his wishes, Hegel was buried in the Dorotheenstadt cemetery next to Fichte and Karl Wilhelm Ferdinand Solger.[55] Hegel's illegitimate son, Ludwig Fischer, had died shortly before while serving with the Dutch army in Batavia and the news of his death never reached his father.[56] Early the following year, Hegel's sister Christiane committed suicide by drowning. Hegel's two remaining sons – Karl, who became a historian; and Immanuel [de], who followed a theological path – lived long and safeguarded their father's manuscripts and letters, and produced editions of his works.[57] Tim Sykes here with something that can’t wait. I just went public with [a FREE election-year ticker]( to help you take advantage of a shocking situation unfolding in Washington D.C. I believe most traders will be blindsided by this looming $2 trillion shock in the next 30 days… But I don’t want that for you. I want you to win. [Click here to see how to prepare with this FREE election-year ticker now…or else you’ll be left out.]( Sincerely, Tim Sykes Occasionally, we identify opportunities that we believe will be beneficial for readers such as yourself. We highly recommend reviewing the previous message from one of our partners, as we believe it may be of value to you. [N.EVANS] [Nicholas Evans signature] [N.EVANS] Stark Media LLC values your feedback and inquiries. However, please be aware that legal regulations prevent us from providing personalized advice. To ensure that our emails continue to reach your inbox, we kindly ask you to add our email address to your contacts. [Privacy Policy]( [Terms & Conditions]( [Unsubscribe]( A price is the (usually not negative) quantity of payment or compensation expected, required, or given by one party to another in return for goods or services. In some situations, especially when the product is a service rather than a physical good, the price for the service may be called something else such as "rent" or "tuition".[1] Prices are influenced by production costs, supply of the desired product, and demand for the product. A price may be determined by a monopolist or may be imposed on the firm by market conditions. Price can be quoted in currency, quantities of goods or vouchers. In modern economies, prices are generally expressed in units of some form of currency. (More specifically, for raw materials they are expressed as currency per unit weight, e.g. euros per kilogram or Rands per KG.) Although prices could be quoted as quantities of other goods or services, this sort of barter exchange is rarely seen. Prices are sometimes quoted in terms of vouchers such as trading stamps and air miles. In some circumstances, cigarettes have been used as currency, for example in prisons, in times of hyperinflation, and in some places during World War II. In a black market economy, barter is also relatively common. In many financial transactions, it is customary to quote prices in other ways. The most obvious example is in pricing a loan, when the cost will be expressed as the percentage rate of interest. The total amount of interest payable depends upon credit risk, the loan amount and the period of the loan. Other examples can be found in pricing financial derivatives and other financial assets. For instance the price of inflation-linked government securities in several countries is quoted as the actual price divided by a factor representing inflation since the security was issued. "Price" sometimes refers to the quantity of payment requested by a seller of goods or services, rather than the eventual payment amount. In business this requested amount is often referred to as the offer price or selling price, while the actual payment may be called transaction price or traded price. Economic price theory asserts that in a free market economy the market price reflects the interaction between supply and demand:[2] the price is set so as to equate the quantity being supplied and that being demanded. In turn, these quantities are determined by the marginal utility of the asset to different buyers and to different sellers. Supply and demand, and hence price, may be influenced by other factors, such as government subsidy or manipulation through industry collusion. When a raw material or a similar economic good is for sale at multiple locations, the law of one price is generally believed to hold. This essentially states that the cost difference between the locations cannot be greater than that representing shipping, taxes, other distribution costs and more. Functions of prices According to Milton Friedman, price has five functions in a free-enterprise exchange economy which is characterized by private ownership of the means of production:[3] Transmitting information about changes in the relative importance of different end-products and factors of production. Providing an incentive for enterprise (a) to produce those products valued most highly by the market, and (b) to use methods of production that economize relatively scarce factors of production. Providing an incentive to owners of resources to direct them into the most highly remunerated uses Distributing output among the owners of resources Rationing fixed supplies of goods among consumers. Price and value The paradox of value was observed and debated by classical economists. Adam Smith described what is now called the diamond – water paradox: diamonds command a higher price than water, yet water is essential for life and diamonds are merely ornamentation. Use value was supposed to give some measure of usefulness, later refined as marginal benefit while exchange value was the measure of how much one good was in terms of another, namely what is now called relative price.[dubious – discuss] Negative prices Main article: Negative pricing See also: 2020 Russia–Saudi Arabia oil price war Negative prices are very unusual but possible under certain circumstances. Effectively, the owner or producer of an item pays the "buyer" to take it off their hands. In April 2020, for the first time in history, due to the global health/economic crisis situation, the price of West Texas Intermediate benchmark crude oil for May delivery contracts turned negative, with a barrel of oil at -$37.63 a barrel, a one-day drop of $55.90, or 306%, according to Dow Jones Market Data. "Negative prices means someone with a long position in oil would have to pay someone to take that oil off of their hands. Why would they do that? The main reason is a fear that if forced to take delivery of crude on the expiration of the May oil contract, there would be nowhere to put it as a glut of crude fills up available storage."[4] In a sense the price is still positive, just the direction of payment reverses, i.e. in this case you are paid to take some goods. Negative interest rates are a similar concept. Austrian School theory One solution offered to the paradox of the value is through the theory of marginal utility proposed by Carl Menger, one of the founders of the Austrian School of economics. As William Barber put it, human volition, the human subject, was "brought to the centre of the stage" by marginalist economics, as a bargaining tool. Neoclassical economists sought to clarify choices open to producers and consumers in market situations, and thus "fears that cleavages in the economic structure might be unbridgeable could be suppressed".[5] Without denying the applicability of the Austrian theory of value as subjective only, within certain contexts of price behavior, the Polish economist Oskar Lange felt it was necessary to attempt a serious integration of the insights of classical political economy with neo-classical economics. This would then result in a much more realistic theory of price and of real behavior in response to prices. Marginalist theory lacked anything like a theory of the social framework of real market functioning, and criticism sparked off by the capital controversy initiated by Piero Sraffa revealed that most of the foundational tenets of the marginalist theory of value either reduced to tautologies, or that the theory was true only if counter-factual conditions applied.[citation needed] One insight often ignored in the debates about price theory is something that businessmen are keenly aware of: in different markets, prices may not function according to the same principles except in some very abstract (and therefore not very useful) sense. From the classical political economists to Michał Kalecki it was known that prices for industrial goods behaved differently from prices for agricultural goods, but this idea could be extended further to other broad classes of goods and services.[citation needed] Price as productive human labour time Marxists assert that value derives from the volume of socially necessary labour time exerted in the creation of an object. This value does not relate to price in a simple manner, and the difficulty of the conversion of the mass of values into the actual prices is known as the transformation problem. However, many recent Marxists deny that any problem exists. Marx was not concerned with proving that prices derive from values. In fact, he admonished the other classical political economists (like Ricardo and Smith) for trying to make this proof. Rather, for Marx, price equals the cost of production (capital-cost and labor-costs) plus the average rate of profit. So if the average rate of profit (return on capital investment) is 22% then prices would reflect cost-of-production plus 22%. The perception that there is a transformation problem in Marx stems from the injection of Walrasian equilibrium theory into Marxism where there is no such thing as equilibrium.[citation needed] Confusion between prices and costs of production Price is commonly confused with the notion of cost of production, as in "I paid a high cost for buying my new plasma television"; but technically these are different concepts. Price is what a buyer pays to acquire products from a seller. Cost of production concerns the seller's expenses (e.g., manufacturing expense) in producing the product being exchanged with a buyer. For marketing organizations seeking to make a profit, the hope is that price will exceed cost of production so that the organization can see financial gain from the transaction. Finally, while pricing is a topic central to a company's profitability, pricing decisions are not limited to for-profit companies. The behavior of non-profit organizations, such as charities, educational institutions and industry trade groups, also involves setting prices.[6]: 160–65  For instance, charities seeking to raise money may set different "target" levels for donations that reward donors with increases in status (e.g., name in newsletter), gifts or other benefits; likewise educational and cultural nonprofits often price seats for events in theatres, auditoriums and stadiums. Furthermore, while nonprofit organizations may not earn a "profit", by definition, it is the case that many nonprofits may desire to maximize net revenue—total revenue less total cost—for various programs and activities, such as selling seats to theatrical and cultural performances.[6]: 183–94  Price point The price of an item is also called the "price point", especially if it refers to stores that set a limited number of price points. For example, Dollar General is a general store or "five and dime" store that sets price points only at even amounts, such as exactly one, two, three, five, or ten dollars (among others). Other stores have a policy of setting most of their prices ending in 99 cents or pence. Other stores (such as dollar stores, pound stores, euro stores, 100-yen stores, and so forth) only have a single price point ($1, £1, €1, ¥100), but in some cases, that price may purchase more than one of some very small items. [7] The term "price point" is also used to describe non-linear areas of the price curve. Market price In economics, the market price is the economic price for which a good or service is offered in the marketplace. It is of interest mainly in the study of microeconomics. Market value and market price are equal only under conditions of market efficiency, equilibrium, and rational expectations. Market price is measured during a specific period of time and is greatly affected by the supply and demand for a good or service. For example, if demand for a good increases and supply of the good is held constant, the price for the good will rise in a marketplace with open competition.[8] Under the UK's Sale of Goods Act 1979, damages for non-delivery of contracted goods take account of the market price for the goods where there is an available market.[9] On restaurant menus, the market price (often abbreviated to m.p. or mp) is written instead of a specific price, meaning "price of dish depends on market price of ingredients, and price is available upon request", and is particularly used for seafood, notably lobsters and oysters.[10] Other terms Basic Price: It is the amount that producer receive from buyer for a unit of good or service produced minus any taxes payable and plus subsidies payable on that unit as the result of its production or sales. It does not include any producer transport charges which are involved separately.[11] Producer Price Index: It measures the average change in the selling price of domestic producers' products over time.[12] Purchase Price: It refers to the amount paid by the purchaser for receiving a unit of goods or services at the time and place required by the purchaser and any deductible taxes will not be included. The purchase price also include any transport charge for purchase to pick up the goods to a specific location in the required time.[13] Price optimization is the use of mathematical techniques by a company to determine how customers will respond to different prices for its products and services through different channels. In economics, economic value is a measure of the benefit provided by a good or service to an economic agent, and value for money represents an assessment of whether financial or other resources are being used effectively in order to secure such benefit. Economic value is generally measured through units of currency, and the interpretation is therefore "what is the maximum amount of money a person is willing and able to pay for a good or service?” Value for money is often expressed in comparative terms, such as "better", or "best value for money",[1] but may also be expressed in absolute terms, such as where a deal does, or does not, offer value for money.[2] Among the competing schools of economic theory there are differing theories of value. Economic value is not the same as market price, nor is economic value the same thing as market value. If a consumer is willing to buy a good, it implies that the customer places a higher value on the good than the market price. The difference between the value to the consumer and the market price is called "consumer surplus".[3] It is easy to see situations where the actual value is considerably larger than the market price: purchase of drinking water is one example. Overview The economic value of a good or service has puzzled economists since the beginning of the discipline. First, economists tried to estimate the value of a good to an individual alone, and extend that definition to goods that can be exchanged. From this analysis came the concepts value in use and value in exchange. Value is linked to price through the mechanism of exchange. When an economist observes an exchange, two important value functions are revealed: those of the buyer and seller. Just as the buyer reveals what he is willing to pay for a certain amount of a good, so too does the seller reveal what it costs him to give up the good. Additional information about market value is obtained by the rate at which transactions occur, telling observers the extent to which the purchase of the good has value over time. Said another way, value is how much a desired object or condition is worth relative to other objects or conditions. Economic values are expressed as "how much" of one desirable condition or commodity will, or would be given up in exchange for some other desired condition or commodity. Among the competing schools of economic theory there are differing metrics for value assessment and the metrics are the subject of a theory of value. Value theories are a large part of the differences and disagreements between the various schools of economic theory. Explanations In neoclassical economics, the value of an object or service is often seen as nothing but the price it would bring in an open and competitive market.[citation needed] This is determined primarily by the demand for the object relative to supply in a perfectly competitive market. Many neoclassical economic theories equate the value of a commodity with its price, whether the market is competitive or not. As such, everything is seen as a commodity and if there is no market to set a price then there is no economic value. In classical economics, the value of an object or condition is the amount of discomfort/labor saved through the consumption or use of an object or condition (Labor Theory of Value). Though exchange value is recognized, economic value is not, in theory, dependent on the existence of a market and price and value are not seen as equal. This is complicated, however, by the efforts of classical economists to connect price and labor value. Karl Marx, for one, saw exchange value as the "form of appearance" (This interpretation of Marx is along the lines of the Marxist thinker Michael Heinrich) [Erscheinungsform] of value, in his critique of political economy which implies that, although value is separate from exchange value, it is meaningless without the act of exchange. In this tradition, Steve Keen makes the claim that "value" refers to "the innate worth of a commodity, which determines the normal ('equilibrium') ratio at which two commodities exchange."[4] To Keen and the tradition of David Ricardo, this corresponds to the classical concept of long-run cost-determined prices, what Adam Smith called "natural prices" and Marx called "prices of production". It is part of a cost-of-production theory of value and price. Ricardo, but not Keen, used a "labor theory of price" in which a commodity's "innate worth" was the amount of labor needed to produce it. "The value of a thing in any given time and place", according to Henry George, "is the largest amount of exertion that anyone will render in exchange for it. But as men always seek to gratify their desires with the least exertion this is the lowest amount for which a similar thing can otherwise be obtained."[5] In another classical tradition, Marx distinguished between the "value in use" (use-value, what a commodity provides to its buyer), labor cost which he calls "value" (the socially-necessary labour time it embodies), and "exchange value" (how much labor-time the sale of the commodity can claim, Smith's "labor commanded" value). By most interpretations of his labor theory of value, Marx, like Ricardo, developed a "labor theory of price" where the point of analyzing value was to allow the calculation of relative prices. Others see values as part of his sociopolitical interpretation and critique of capitalism and other societies, and deny that it was intended to serve as a category of economics. According to a third interpretation, Marx aimed for a theory of the dynamics of price formation but did not complete it. In 1860, John Ruskin published a critique of the economic concept of value from a moral point of view. He entitled the volume Unto This Last, and his central point was this: "It is impossible to conclude, of any given mass of acquired wealth, merely by the fact of its existence, whether it signifies good or evil to the nation in the midst of which it exists. Its real value depends on the moral sign attached to it, just as strictly as that of a mathematical quantity depends on the algebraic sign attached to it. Any given accumulation of commercial wealth may be indicative, on the one hand, of faithful industries, progressive energies, and productive ingenuities: or, on the other, it may be indicative of mortal luxury, merciless tyranny, ruinous chicanery." Gandhi was greatly inspired by Ruskin's book and published a paraphrase of it in 1908.[non sequitur] Economists such as Ludwig von Mises asserted that "value" is a subjective judgment. Prices can only be determined by taking these subjective judgments into account, and that this is done through the price mechanism in the market. Thus, it was false to say that the economic value of a good was equal to what it cost to produce or to its current replacement cost. Silvio Gesell denied value theory in economics. He thought that value theory is useless and prevents economics from becoming science and that a currency administration guided by value theory is doomed to sterility and inactivity.[6] Connected concepts The theory of value is closely related to that of allocative efficiency, the quality by which firms produce those goods and services most valued by society. The market value of a machine part, for example, will depend upon a variety of objective facts involving its efficiency versus the efficiency of other types of part or other types of machine to make the kind of products that consumers will value in turn. In such a case, market value has both objective and subjective components. Economy, efficiency and effectiveness, often referred to as the "Three Es", may be used as complementary factors contributing to an assessment of the value for money provided by a purchase, project or activity. The UK National Audit Office uses the following summaries to explain the meaning of each term: Economy: minimising the cost of resources used or required (inputs) – spending less; Efficiency: the relationship between the output from goods or services and the resources to produce them – spending well; and Effectiveness: the relationship between the intended and actual results of public spending (outcomes) – spending wisely.[7] Sometimes a fourth 'E', equity, is also added.[7][8] In philosophy, economic value is a subcategory of a more general philosophical value, as defined in goodness and value theory or in the science of value. Value or price Theories Adam Smith agreed with certain aspects of labor theory of value, but believed it did not fully explain price and profit. Instead, he proposed a cost-of-production theory of value (to later develop into exchange value theory) that explained value was determined by several different factors, including wages and rents. This theory of value, according to Smith, best explained the natural prices in the market. While an underdeveloped theory at the time, it did offer an alternative to another popular value theory of the time. The utility theory of value was the belief that price and value were solely based on how much "use" an individual received from a commodity. However, this theory is rejected in Smith's work The Wealth of Nations. The famous diamond–water paradox questions this by examining the use in comparison to price of these goods. Water, while necessary for life, is far less expensive than diamonds, which have basically no use. Which value theory holds true divides economic thinkers, and is the base for many socioeconomic and political beliefs.[9] Silvio Gesell denied value theory in economics. He thought that value theory is useless and prevents economics from becoming science and that a currency administration guided by value theory is doomed to sterility and inactivity.[10] Labor theory of value Main article: Labor theory of value See also: Cost-of-production theory of value In classical economics, the labor theory of value asserts that the economic value of a commodity is determined by the total amount of socially necessary labor required to produce it. When speaking in terms of a labor theory of value, value without any qualifying adjective theoretically refers to the amount of labor necessary for the production of a marketable commodity, including the labor necessary for the development of any capital used in the production process. Both David Ricardo and Karl Marx attempted to quantify and embody all labor components in order to develop a theory of the real, or natural, price of a commodity.[11] In either case, what is being addressed are general prices—i.e., prices in the aggregate, not a specific price of a particular good or service in a given circumstance. Theories in either class allow for deviations when a particular price is struck in a real-world market transaction, or when a price is set in some price fixing regime. Monetary theory of value See also: Value-form Critics of traditional Marxian economics, especially those associated with the Neue Marx-Lektüre (New Readings of Marx) such as Michael Heinrich, emphasize a monetary theory of value, where "Money is the necessary form of appearance of value (and of capital) in the sense that prices constitute the only form of appearance of the value of commodities."[12] Similarly to the exchange theory, this theory emphasizes value as being socially determined, rather than having a physical substance. According to this analysis, when money incorporates production into its M-C-M' circulation, it functions as capital implementing the capitalist relation and the exploitation of labor power constitutes the actual presupposition for this incorporation.[13] Power theory of value Radical institutional economists Jonathan Nitzan and Shimshon Bichler (2009) argue that it was never possible to separate economics from politics.[14] This separation is required to allow for neoclassical economics to base their theory on utility value and for Marxists to base the labour theory of value on quantified abstract labour. Instead of a utility theory of value (like neoclassical economics) or a labour theory of value (as found in Marxian economics), Nitzan and Bichler propose a power theory of value. The structure of prices has little to do with the so-called "material" sphere of production and consumption. The quantification of power in prices is not the consequence of external laws—whether natural or historical—but entirely internal to society. In capitalism, power is the governing principle as rooted in the centrality of private ownership. Private ownership is wholly and only an act of institutionalized exclusion, and institutionalized exclusion is a matter of organized power.[15][16] And since the power behind private ownership is denominated in prices, Nitzan and Bichler argue, there is a need for a power theory of value. There is, however, a causality dilemma to their argument that has drawn criticism: power is based on the ability of firms to set monopoly prices yet the ability to set prices is based on firms possessing a degree of power in the market. Capitalization, in their theory, is a measure of power, as illuminated through the present discounted value of future earnings (while also taking into account hype and risk). This formula is basic to finance which is the overarching logic of capitalism. The logic is also inherently differential as every capitalist strives to accumulate greater earnings than their competitors (but not profit maximization). Nitzan and Bichler label this process differential accumulation. In order to have a power theory of value there needs to be differential accumulation where some owners' rate of growth of capitalization is faster than the average pace of capitalization. Subjective theory of value and marginalism Main articles: Subjective theory of value and Marginalism The subjective theory of value emphasizes the role of consumer preferences[17] in influencing price. According to this theory, the consumer places a value on a commodity by determining the marginal utility, or additional satisfaction of one additional unit.[18][19] Marginalism employs concepts such as marginal utility, marginal rate of substitution, and opportunity costs[20] to explain consumer preferences and price. Subjectivist or marginalist theories of value were created by William Stanley Jevons, Léon Walras, and Carl Menger in the late 19th century.[21] These theories contradicted earlier labour theories of values proposed by classical economists which emphasize the role of socially necessary labour in producing value.[22] The subjective theory of value helped answer the "diamond–water paradox," which many believed to be unsolvable. The diamond–water paradox questions why diamonds are so much more valuable than water when water is necessary for life. This paradox was answered by the subjective theory of value by realizing that water, in total, is more valuable than diamonds because the first few units are necessary for life. The key difference between water and diamonds is that water is more plentiful and diamonds are rare. Because of the availability, one additional unit of diamonds exceeds the value of one additional unit of water.[22] The subjective theory emphasizes the role of supply and demand in determining price. 222 Delaware St Ste 2071 New Castle, DE 19720 Or you can contact us by email at support@thefinancialfreedomright.com. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, [click unsubscribe](. Please note that any reproduction, copying, or redistribution of our content, whether in whole or in part, is strictly prohibited without obtaining written permission from Stark Media LLC. All rights reserved. © 2024 Stark Media LLC. A price is the (usually not negative) quantity of payment or compensation expected, required, or given by one party to another in return for goods or services. In some situations, especially when the product is a service rather than a physical good, the price for the service may be called something else such as "rent" or "tuition".[1] Prices are influenced by production costs, supply of the desired product, and demand for the product. A price may be determined by a monopolist or may be imposed on the firm by market conditions. Price can be quoted in currency, quantities of goods or vouchers. In modern economies, prices are generally expressed in units of some form of currency. (More specifically, for raw materials they are expressed as currency per unit weight, e.g. euros per kilogram or Rands per KG.) Although prices could be quoted as quantities of other goods or services, this sort of barter exchange is rarely seen. Prices are sometimes quoted in terms of vouchers such as trading stamps and air miles. In some circumstances, cigarettes have been used as currency, for example in prisons, in times of hyperinflation, and in some places during World War II. In a black market economy, barter is also relatively common. In many financial transactions, it is customary to quote prices in other ways. The most obvious example is in pricing a loan, when the cost will be expressed as the percentage rate of interest. The total amount of interest payable depends upon credit risk, the loan amount and the period of the loan. Other examples can be found in pricing financial derivatives and other financial assets. For instance the price of inflation-linked government securities in several countries is quoted as the actual price divided by a factor representing inflation since the security was issued. "Price" sometimes refers to the quantity of payment requested by a seller of goods or services, rather than the eventual payment amount. In business this requested amount is often referred to as the offer price or selling price, while the actual payment may be called transaction price or traded price. Economic price theory asserts that in a free market economy the market price reflects the interaction between supply and demand:[2] the price is set so as to equate the quantity being supplied and that being demanded. In turn, these quantities are determined by the marginal utility of the asset to different buyers and to different sellers. Supply and demand, and hence price, may be influenced by other factors, such as government subsidy or manipulation through industry collusion. When a raw material or a similar economic good is for sale at multiple locations, the law of one price is generally believed to hold. This essentially states that the cost difference between the locations cannot be greater than that representing shipping, taxes, other distribution costs and more. Functions of prices According to Milton Friedman, price has five functions in a free-enterprise exchange economy which is characterized by private ownership of the means of production:[3] Transmitting information about changes in the relative importance of different end-products and factors of production. Providing an incentive for enterprise (a) to produce those products valued most highly by the market, and (b) to use methods of production that economize relatively scarce factors of production. Providing an incentive to owners of resources to direct them into the most highly remunerated uses Distributing output among the owners of resources Rationing fixed supplies of goods among consumers. Price and value The paradox of value was observed and debated by classical economists. Adam Smith described what is now called the diamond – water paradox: diamonds command a higher price than water, yet water is essential for life and diamonds are merely ornamentation. Use value was supposed to give some measure of usefulness, later refined as marginal benefit while exchange value was the measure of how much one good was in terms of another, namely what is now called relative price.[dubious – discuss] Negative prices Main article: Negative pricing See also: 2020 Russia–Saudi Arabia oil price war Negative prices are very unusual but possible under certain circumstances. Effectively, the owner or producer of an item pays the "buyer" to take it off their hands. In April 2020, for the first time in history, due to the global health/economic crisis situation, the price of West Texas Intermediate benchmark crude oil for May delivery contracts turned negative, with a barrel of oil at -$37.63 a barrel, a one-day drop of $55.90, or 306%, according to Dow Jones Market Data. "Negative prices means someone with a long position in oil would have to pay someone to take that oil off of their hands. Why would they do that? The main reason is a fear that if forced to take delivery of crude on the expiration of the May oil contract, there would be nowhere to put it as a glut of crude fills up available storage."[4] In a sense the price is still positive, just the direction of payment reverses, i.e. in this case you are paid to take some goods. Negative interest rates are a similar concept. Austrian School theory One solution offered to the paradox of the value is through the theory of marginal utility proposed by Carl Menger, one of the founders of the Austrian School of economics. As William Barber put it, human volition, the human subject, was "brought to the centre of the stage" by marginalist economics, as a bargaining tool. Neoclassical economists sought to clarify choices open to producers and consumers in market situations, and thus "fears that cleavages in the economic structure might be unbridgeable could be suppressed".[5] Without denying the applicability of the Austrian theory of value as subjective only, within certain contexts of price behavior, the Polish economist Oskar Lange felt it was necessary to attempt a serious integration of the insights of classical political economy with neo-classical economics. This would then result in a much more realistic theory of price and of real behavior in response to prices. Marginalist theory lacked anything like a theory of the social framework of real market functioning, and criticism sparked off by the capital controversy initiated by Piero Sraffa revealed that most of the foundational tenets of the marginalist theory of value either reduced to tautologies, or that the theory was true only if counter-factual conditions applied.[citation needed] One insight often ignored in the debates about price theory is something that businessmen are keenly aware of: in different markets, prices may not function according to the same principles except in some very abstract (and therefore not very useful) sense. From the classical political economists to Michał Kalecki it was known that prices for industrial goods behaved differently from prices for agricultural goods, but this idea could be extended further to other broad classes of goods and services.[citation needed] Price as productive human labour time Marxists assert that value derives from the volume of socially necessary labour time exerted in the creation of an object. This value does not relate to price in a simple manner, and the difficulty of the conversion of the mass of values into the actual prices is known as the transformation problem. However, many recent Marxists deny that any problem exists. Marx was not concerned with proving that prices derive from values. In fact, he admonished the other classical political economists (like Ricardo and Smith) for trying to make this proof. Rather, for Marx, price equals the cost of production (capital-cost and labor-costs) plus the average rate of profit. So if the average rate of profit (return on capital investment) is 22% then prices would reflect cost-of-production plus 22%. The perception that there is a transformation problem in Marx stems from the injection of Walrasian equilibrium theory into Marxism where there is no such thing as equilibrium.[citation needed] Confusion between prices and costs of production Price is commonly confused with the notion of cost of production, as in "I paid a high cost for buying my new plasma television"; but technically these are different concepts. Price is what a buyer pays to acquire products from a seller. Cost of production concerns the seller's expenses (e.g., manufacturing expense) in producing the product being exchanged with a buyer. For marketing organizations seeking to make a profit, the hope is that price will exceed cost of production so that the organization can see financial gain from the transaction. Finally, while pricing is a topic central to a company's profitability, pricing decisions are not limited to for-profit companies. The behavior of non-profit organizations, such as charities, educational institutions and industry trade groups, also involves setting prices.[6]: 160–65  For instance, charities seeking to raise money may set different "target" levels for donations that reward donors with increases in status (e.g., name in newsletter), gifts or other benefits; likewise educational and cultural nonprofits often price seats for events in theatres, auditoriums and stadiums. Furthermore, while nonprofit organizations may not earn a "profit", by definition, it is the case that many nonprofits may desire to maximize net revenue—total revenue less total cost—for various programs and activities, such as selling seats to theatrical and cultural performances.[6]: 183–94  Price point The price of an item is also called the "price point", especially if it refers to stores that set a limited number of price points. For example, Dollar General is a general store or "five and dime" store that sets price points only at even amounts, such as exactly one, two, three, five, or ten dollars (among others). Other stores have a policy of setting most of their prices ending in 99 cents or pence. Other stores (such as dollar stores, pound stores, euro stores, 100-yen stores, and so forth) only have a single price point ($1, £1, €1, ¥100), but in some cases, that price may purchase more than one of some very small items. [7] The term "price point" is also used to describe non-linear areas of the price curve. Market price In economics, the market price is the economic price for which a good or service is offered in the marketplace. It is of interest mainly in the study of microeconomics. Market value and market price are equal only under conditions of market efficiency, equilibrium, and rational expectations. Market price is measured during a specific period of time and is greatly affected by the supply and demand for a good or service. For example, if demand for a good increases and supply of the good is held constant, the price for the good will rise in a marketplace with open competition.[8] Under the UK's Sale of Goods Act 1979, damages for non-delivery of contracted goods take account of the market price for the goods where there is an available market.[9] On restaurant menus, the market price (often abbreviated to m.p. or mp) is written instead of a specific price, meaning "price of dish depends on market price of ingredients, and price is available upon request", and is particularly used for seafood, notably lobsters and oysters.[10] Other terms Basic Price: It is the amount that producer receive from buyer for a unit of good or service produced minus any taxes payable and plus subsidies payable on that unit as the result of its production or sales. It does not include any producer transport charges which are involved separately.[11] Producer Price Index: It measures the average change in the selling price of domestic producers' products over time.[12] Purchase Price: It refers to the amount paid by the purchaser for receiving a unit of goods or services at the time and place required by the purchaser and any deductible taxes will not be included. The purchase price also include any transport charge for purchase to pick up the goods to a specific location in the required time.[13] Price optimization is the use of mathematical techniques by a company to determine how customers will respond to different prices for its products and services through different channels. [thefinancialfreedomright](