Principles of economic calculation and pricing

Matúš Pošvanc

E-LOGOS, vol. preprint, No 85

Abstract: The principles of economic calculation set out by Mises (1990, 1976, 1953, 1998), namely that an agent is inspired by past prices in economic calculation, face the problem of circular argument, infinite regress, and the empirical question of which past prices the agent is inspired by, and are inconsistent with Mises's correct assertion that action is aimed at changing the future. Principles of calculation must be based on attributions of valuation, and calculation must be based on value determinations, which Mises explicitly rejects. I provide an alternative interpretation of the problem that is future-oriented and presents principles of calculation based on the agent's value determinations. This is made possible by a paradigm shift in interpretation based on defining individual utility and individual equilibrium. The paper presents philosophical-economic speculations on the unit of utility (util) and how it can be ontologically-informationally defined. The propositions are supported by in-depth philosophical argumentation alongside Platonic-Aristotelian-Kantian-Hegelian-Brentanian-Hayekian lines, inspired by the works of Ján Pavlik. A logical consequence of the principles presented is a description of the dynamics of price-setting (as a consequence of individual intentions) based on the individual utility of the agent. Demand-supply that are usually used as preconditions for price formation are described in the interpretation as consequences of individual intentionality and dynamic of individual utility.

Keywords: economic calculation; theory of pricing; human action; individual utility; individual equilibrium; final equilibrium; problem of util; Aristotelian motion; intentionality; causa finalis; ekonomická kalkulace; teorie cen; lidské jednání; individuální užitek; individuální ekvilibrium; ekvilibrium; problém užitku; aristotelský pohyb; intencionalita (search for similar items in EconPapers)
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