What are price systems?

Question

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Answer 1

The term price system is used to describe any economic system whatsoever that effects its distribution of goods and services by means of goods and services having prices and employing any form of debt tokens, or money. Except for possible remote and primitive communities, all modern societies use price systems to allocate resources. However, price systems are not used for all resource allocation decisions today. A variety of Non-market economics type proposals have been presented as alternatives to a price system such as Energy Accounting.[1]



  Fixed price versus free price systems

A price system may be either a fixed price system where prices are set by a government or it may be a free price system where prices are left to float freely as determined by unregulated supply and demand. Or it may be a combination of both with a mixed price system.

  History

Fundamentally, price systems have been around as long there has been trade or money. From its beginnings, the price system has evolved into the system of global capitalism that is present in the early 21st century[2]. The Soviet Union and other communist nations were controlled price systems. Whether the ruble or the dollar is used in the economic system, the criteria of a price system is the use of money as an arbiter and usual final arbiter of whether a thing is done or not. In other words, few things are done without a view to making a profit in a price system.