In a helpful summary of some of the economic thought of Ludwig von Mises, Robert P. Murphy quotes “Mises’s definition of the market and his understanding of its most important features” as follows:
The market economy is the social system of the division of labor under private ownership of the means of production. Everybody acts on his own behalf; but everybody’s actions aim at the satisfaction of other people’s needs as well as at the satisfaction of his own. Everybody in acting serves his fellow citizens…
This system is steered by the market. The market directs the individual’s activities into those channels in which he best serves the wants of his fellow men. There is in the operation of the market no compulsion and coercion. The state, the social apparatus of coercion and compulsion, does not interfere with the market….It protects the individual’s life, health, and property against violent or fraudulent aggression on the part of domestic gangsters and external foes….Each man is free; nobody is subject to a despot. Of his own accord the individual integrates himself into the cooperative system. The market directs him and reveals to him in what way he can best promote his own welfare as well as that of other people…
The market is not a place, a thing, or a collective entity. The market is a process, actuated by the interplay of the actions of the various individuals cooperating under the division of labor. The forces determining the–continually changing–state of the market are the value judgments. The state of the market at any instant is the price structure, i.e., the totality of the exchange ratios as established by the interaction of those eager to buy and those eager to sell…..Every market phenomenon can be traced back to definite choices of the members of the market society.
The market process is the adjustment of the individual actions of the various members of the market society to the requirements of mutual cooperation. The market prices tell the producers what to produce, how to produce, and in what quantity. The market is the focal point to which the activities of the individuals converge. It is the center from which the activities of the individuals radiate. (Choice, 116-117)
I figured an economics post was way overdue, as ‘Bastiat’ is there at the top of the page on every post. I think this quote will come in handy for reference in the future, too.
Bob Murphy’s got a couple podcasts, by the way, that are usually a lot of fun.