I wouldn’t consider myself an authority on the matter, but in a free market, prices approximate costs. Why? Simply because of arbitrage. If James producing widgets learns by experience that he is unable to sell them at a price high enough to satisfy his outlays, he will exit that line of work and find some other more worthwhile endeavor. With enough iterations, the results of this game are something like: price = opportunity cost.
But the causality is key: the cost of production does not determine the prices. On the contrary, the prices (or rather the expectation of future prices) determines what costs will be incurred in what lines of work.
Franc is a smart guy, with whom I no longer associate. If he can’t explain these ideas with the same clarity with which he introduced me to something called “market anarchy” back in 2004 or 2005, I’m not inclined to take them seriously. I wouldn’t spend too much time trying to understand something, if by all outward appearances it is nonsense. Focus on the stuff that’s not nonsense - your brain will thank you for it.
This is still one of the best critiques, although there are so many that can be made now that I’ve had some interaction with them. The sad thing is, lots of people will be attracted to mutualism because it sounds “fair” and yet still libertarian, like those people who just can’t bear to admit that animals equal property. But because they have these odd views, they’ll never have the capital or influence to move much. It’s just going to be a big morass of libertarians forever planning their next sit-in or baking granola snacks.
Right. I looked at the Wiki entry for this last night via the Mutualism page. But in a free market, prices don’t and won’t approximate costs. There are simply too many variables from the time a project is started to when it is completed to when it is sold. Not to mention, there is little accounting for value in secondary and subsequent markets with a “cost limit of price”. Seems to me to just be a slight twist on the LTV and has the same issues with scarcity that all progressive economics does.
I think many of the problems with mutualism stem from anarchonistic ideas about capital, similar to how the Georgists are still stuck in the 19th century when it comes to ideas of property. This is where Hoppe comes in handy, as he exposes how under the democratic state, the old paradigm of classes based strictly on property no longer apply, and classes are defined by the use of political power.
All economics involve some form of arbitrage. Leftoids and Mutualists have a lot of trouble wth this because ideologically, they are opposed to the concept of one man making a profit from the work of another. They are unable to fully commit to the notion that there are two sides in every trade. Sorta how I have been squeezing the leftoids on how bossism and racism are non-issues in a free market, unless they think people acting voluntarily will lead to an unjust society.
For reasons you suggest, sure. They don’t “equal” cost. I think my statement is (as fashion dictates) predicated upon the hypothetical equilibrium, so it would be more accurate (as I try to keep in mind) to suggest that prices tend towards an equilibrium, and that equilibrium is bound predominately by opportunity costs.