Right-wing free market economists often make the bold claim that “prices are subjective”, and can vary unpredictably based on peoples’ preferences. They then postulate that because prices are subjective, central planning can’t work, because it takes a myriad of market participants expressing their preferences in the marketplace in order for prices to accurately reflect supply and demand. But these ideas have long been disproven by the Efficient Market Hypothesis, which states that prices are objectively determined by “information”, and that at any snapshot in time, the price of a security is objectively correct.
What this means is that, contrary to what free market economists say, central planners can objectively set prices, and all they need to do is make sure that they’re taking into account all relevant information. If their methodology is right, it would be impossible for anyone to disagree with the prices set by their models, as prices are objective, not a matter of opinion. When I go to the grocery store to buy tomatoes, I might think they are too expensive at the price set by our central planners, whereas someone else might think that they are a bargain. But we would both be wrong, because information determines prices, not human preferences and this price simply be correct.
The long discredited “socialist calculation problem” also relies on the crazy idea that prices are subjective to discredit socialism. It states that because prices are subjectively determined, it’s impossible for central planners to replicate the complex and finely priced systems of trade which exist within the free market, without knowing exactly what choices people are going to make in the future. This idea is a blow to economists and central bankers, who dream of controlling the markets using a sophisticated array of financial models. however, many now believe that free will does not exist, which would allow economists to predict human action in fine detail after all (for which they would deserve no credit, because they were predetermined to do so).
It’s time for us to dispel the myth that prices are somehow quantified opinions, determined by peoples’ choices. Prices are objective, and can be accurately determined by financial models created by economists. Central planners should be setting prices, not market participants, because this is the most efficient way to do things (even though the EMH states that everything is already as efficient as can be).