Industrial Bill of Rights
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Article 5. Government shall make no law which abridges the right of managers or owners of a business to enter or leave a specific market, or to charge for their product or service what they deem proper and necessary.

The Right to Set Prices, and to Enter or Leave Markets

During the Middle Ages, ideas about economics were dominated by the concept of the "just price." Following Aristotle, it was assumed that things exchanged for each other were of equal value, and that laws were necessary to establish the "just price" of items, in order to prevent either sellers or buyers from taking advantage of the other.

One of the most important principles of modern economic science is that "value" is purely subjective. People exchange things of less value to them for things of greater value to them. Each party of an exchange increases his wealth by making the exchange. No third party can tell whether an exchange is fair. Only the parties to the exchange can judge the values involved. The fact that a voluntary exchange takes place is proof not only that each party is better off as a result, but is better off than under any alternative exchange actually available to either party.

Unfortunately, the idea underlying the "just price" theory still plagues us. Thus we have laws and court decisions penalizing businesses for prices which are too low ("predatory") or too high ("monopolistic"). (If the seller is a foreign firm, prices deemed too low are called "dumping.")

In reality, there is no way a third party - Congress, judges, juries, or regulatory agencies - can determine whether a price is "too low" or "too high." Only the people actually making the exchange can judge that. The buyer might wish the price were lower. The seller might wish the price were higher. However, the fact that the transaction actually takes place shows that neither buyer nor seller do better in the marketplace. For some outsider to later decide the price was too low or too high amounts to turning a voluntary exchange into a crime.

For either party to the transaction to demand a law which tilts the transaction in his favor is to violate the rights of the other party. Such a law forces the other party to agree to a transaction which in his judgment makes him worse off. It makes the transaction a forced one rather than a voluntary one. In the long run, it means such transactions will no longer be consummated in the marketplace but in a court of law.

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