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Government 1A Lesson 35: Who should have the authority to set prices, the free market or the state? Why?

I think the authority should have the free market set the prices down, because the businesses know what kind of prices to set for their products according to how they see fit.

To explain the sentence above, I’ll give an example. For example, a small business that sells coffee and bagels, would require the businesses storage to be filled with all the prep ingredients such as: flour, milk, eggs, salt, coffee beans, and other things required to make these products. Think about it, all these prep ingredients cost something as well. And you don’t just buy ingredients as if you were making just one serving of bagels, you would buy a big box of eggs. Right? It’s also not just because of the pricing of these prep ingredients to take into consideration. It’s also how they are made that might just increase the pricing value. The time spent into making the coffee and bagels, with love and care too can increase the product’s value.

Taking consideration into all the investments, all the purchase of the prep ingredients, the quality of the making process make the owners of the business choose the price that would make the whole bagel making business balanced out. They put the price so that they can use some of it for the continuation of running this small business and for profit as well of course.

State workers also citizens, yes, but they are kinda set apart, for they have some control over the market. But with the free market, you can talk with business owners and as well as the employees easier and be able to negotiate with them, with the state i couldn’t say the same. The state will also put a lock on prices, regardless the state of the market or if people want the product or not. 

If the state were to put the prices as they see fit and small businesses wouldn’t have control over the pricing, the business’ success would be in big risk if the prices are put too high. The business would no longer be serving the customer as it should, would it? It is serving the state instead. I think that the state should just collect taxes and leave the business be letting them decide how to price things according to how they see fit.

When prices are established by the free market, there is a natural balance of supply & demand. When the government imposes price controls, there will be an alteration to the natural order of the free market. This is because of Government often setting prices much different than that of its real market value. 

In conclusion, I think the authority should have the free market set the prices down, because the businesses can price things in a balanced way, so that the business can continue to bloom, to be able to make profit for themselves, and also serve the state by paying them taxes. Everything is balanced whenever you let the free market do the pricing and that way everyone is happy.

Thanks for reading this essay. I hope you liked it or learned something new from it. I’ll be posting more soon and have a great rest of your day!

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