The sensational controversy between Donald Trump And Jeff Bezos on the duties and their display on the labels of the products sold by Amazon They are significant of a fatal risk that runs the market economy. And not only because of the protectionist measures announced by the American administration. For the market economy, prices are like the elections for democracies: essential. To impose duties, break the balance of the market and damage it seriously. Prices are nothing more than information, as he taught us Milton Friedman and in Italy Antonio Martino. They do not represent the intrinsic value of an asset (think of how much a glass of water in the desert can apply), let alone the effort to produce it. The price informs us of the optimal level with which supply and demand meet.
Trump breaks this balance and the private company how do you think about responding? Highlighting on the label how much part of the sale price is due to the taxation of Trump. The offense is terrible, the answer is Marxist. Because on the products, mostly Chinese, that Bezos sells on his platforms is not indicated, to follow the same perverse logic, how much the Chinese worker earns who produced it? The consumer would know the weight of Trump’s duties, but also the exploitation of the work in Beijing.
Folding prices to a political logic is monstrous. Someone could appreciate the duties and someone else be disgusted from the low wage level of those who produce the good we are buying. In short, in this way the peaceful cooperation between market operators breaks. And why not indicate in the price, the profit fee? Or the stake paid to the banks? You can continue indefinitely: looking for the signal that our political sensitivity likes.
The price does not have a moral value, it must not be “right”. Indeed it is only to the extent that a buyer agrees to pay it to satisfy his own need. It will seem cynical to you, but if we do not accept this principle we do not accept the market economy. What, for legitimate charity, but which we should openly confess.
The risk that politics interferes on the price mechanism and therefore on the functioning of the market is high all over the world. We talked about America.
Europe is even worse. We destroyed the automotive industry, because we imposed an environmental solution that claded with market demands: available to buy an electric car only as long as the price of that car was artificially reduced with public subsidies. And what about the Spanish blackout? We have encouraged, by changing the game of relative prices, the electrical production system: we found ourselves in the embarrassing paradox, from an economic point of view, that the system jumped because much more energy was produced than required by the market.
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