Art Carden on Price Theory & Its Discontents

What do competitive markets have to do with truth? Ask a philosopher and you might get one answer. Ask an economist and you will get another. Ask an economist with a philosophical grounding, and you get Art Carden’s fantastic piece, The Misuse of Knowledge in Society: Intervention Means Prices are Lying.Carden is a senior fellow with [the American Institute for Economic Research. He joined the show to discuss the article that caught my eye on AIER.org, which is one of the best explanations I’ve ever read of the price mechanism of free markets.What happens when we stop the price system of competitive markets from working? In a word, untruth. It’s why price-gouging laws always fail, and increase human misery. A price control, Carden says, is a kind of institutionalized lie. Just because the government says it’s so, doesn’t mean that the underlying scarcity of the good has been altered.You don’t have to be either a philosopher or an economist to understand the importance of having reliable information when making decisions. Hear Carden’s accessible explanation of the complex topic of price theory only on the Show of Ideas, not attitude.