Fourth Law of Value: Natural PriceJanuary 31, 2022
The market price is the nominal price that is applied on all customers for some time, from the customer’s perspective.
The Natural Price
The natural price is the lowest common real price from all sellers over time, from the seller’s perspective.
This assumes that:
- the three prior laws were observed
- there is a sense of community instead of excessive ego that leads to profit maximization
The natural price is established by the Fourth Law of Value which says that there must be balance in any economy, whether it be a family, company, or nation. This mirrors the Zeroth Law of Thermodynamics that has the concept of thermal equilibrium* leading to temperature.
This concept does not exist in Economics because profit maximization prevents it. This is why modern economic systems have recurring crashes as a result of the violation of this natural law of value. Pantrynomic systems are crash-resistant because they know that there exists a natural price and so the system is designed to stay near it.
- In Medical Superphysics, this manifests as the balance between things that affect our health to maintain an equilibrium as good health.
- In Supersociology, this is balance of giving value to all classes of society in order to maintain stability and prevent revolutions.
In our cake example, let us assume that Mr. Chef’s labor at ordinary profits is $2 and his ingredients and inputs vary daily from $1 to $3, and he sold the cake at $4:
|Day||Real Price (Cost)||Market Price (Selling Price)|
The Natural Price would be $4, representing the most frequent and low real price, assuming that profit maximization was not observed.
In Superphysics, the balance between market and natural prices is checked through a grain index which compares the prices of commodities relative to the common grain eaten by the people.
Even without a grain index, people will naturally feel the imbalance in the economy and start to protest if the increase in market prices no longer keep their ratio to the natural prices. Such an unnatural increase would occur if there were:
- excessive primary arbitrage as monopoly of production, or
- excessive secondary arbitrage as monopoly of distribution.
Modern Economics has no concept of natural price and so there are often wild fluctuations in prices in modern economic systems which allow maximum profits, but also losses.