Prices Are Like Words
12th November 2013
People who are troubled by markets tend to treat prices as the problem in a market. Whether the price of labor or agricultural commodities is too low, or the price of housing or healthcare or payday loans is too high, prices are the problem in need of a solution. Prices, however, are not the problem. If there is a problem, prices are literally a symbol of it.
If low wages indicate that a person has a bad life, low wages do not indicate it because the dollar number per hour is low. What indicates that a life is bad is that low wages are not good enough to have a good life. The trouble with low wages is not that they are too low to have a good life. It is that a life of low wages is bad. “Not good enough to have a good life” is not equivalent to “too low to have a good life.” “Too low” treats the wage as a sign that directly points to something known. “Good enough” treats the wage as a symbol that makes multiple indirect connections to the unknown. Prices are more like symbolic words than simple indicating traffic lights.