People often say things like, “If that person had ever had to meet a payroll, they’d understand private enterprise.”
I don’t think that says much… Lots of people pay other people for stuff and don’t understand the private enterprise system.
A better comment would be to say, “If that person had ever had to set a price, they’d better understand private enterprise.”
The #1 thing I find misunderstood or not understood, is the intricate (and ongoing) balancing act that goes into setting money prices.
You quickly begin to believe in free will when you discover how incredibly easily customers will say no. You quickly comprehend marginal value when you see your sales drop off dramatically after increasing a price by a few cents. You very quickly experience employee power when negotiating salaries and benefits. You very quickly see substitution, supply & demand, incentives, knowledge creation, and all the rest of those boring things your Econ 101 teacher droned on about, come to life before your eyes as soon as you try to say X costs $Y.
Shockingly, people ARE setting prices all the time all around us… as consumers. None of us want our sovereignty as buyers taken away. To research, define our values, examine our budgets, determine what we can afford and for what or how much.
Yet we constantly want to take that sovereignty away from people as sellers and commercial actors. We tell companies how to put products together, we tell people how and for how much they are allowed to work, we tell young people they aren’t allowed to volunteer their time, we make it illegal to work without ridiculous licenses, we block trade and travel.
I worry we have become a society which has stopped believing that individual sovereignty is the assumption, only to be excepted in extreme cases. I worry we have become this way (in part) because we stopped understanding the purpose and power of prices. How they make the complex manageable, how they mostly closely approximate voluntary exchange, how they transfer knowledge at incredible speeds, how they allow those of enormously different means to negotiate on roughly even ground, how they simultaneously incentivize moderation of consumption and increase of supply, how they allow the coordination of priorities and values across the ENTIRETY of increasingly complex economies (Impossible without market prices!).
Money prices are one of the most beneficially powerful social technologies humans have ever created. I wish more people understood them better.