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To the analysis validity of this decision. But before it is necessary to consider
III. What is the optimum pricing?
I DEFINE price system as system, in which separate consumers
Dispose of the various sums of money and spend them for acquisition of the blessings and
Services, being guided by indicators of system of the prices. It, of course, not the unique
Method of distribution of the blessings and services (or, more precisely, uses of factors
Manufactures) between consumers. The government could solve - that
To make, and then directly to distribute the blessings and services between consumers.
But this way has lacks in comparison with use the price
Systems. Any government not in a status however it in details to consider
Tastes of separate consumers (why in a wartime "card" (points)
Economics of Control, p. 53]; in the absence of price system at us will not be
The most useful index of consumer preferences; further, though the price
The system assigns to consumers and firms the additional costs connected with
Market mechanism use, they can be in practice less, than
Organizational costs which otherwise should be born
To the government [the item "the firm Nature" (an ice crust see. It.)]. Here the reasons, which
Should induce the educated government to acceptance of price system.
Later we will see that they have a direct bearing to considered by us
If the choice in favour of price system is made, it is necessary to solve two cores
Problems. The first: how much money will be at each separate consumer -
Problem of optimum distribution of the income and riches. The second: what will be
System of the prices, in conformity with which the blessings and services should become
Accessible to consumers, - a problem of optimum system of the prices. In this
To article I mention the second of these problems. The first carries partly, though and not
Completely, ethical character. But it is important to realise that there are both problems,
And they should be solved, that the price system gave the satisfactory
Results. As in this section I deal only with the second of them, I
I will start with the assumption that distribution of incomes and riches
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