Economic Balance as Natural Prices

The Fourth Law of Value Icon

January 2, 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.

Fourth law

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 manifest 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)
Monday $5 $4
Tuesday $4 $4
Wednesday $4 $4
Thursday $3 $4
Friday $4 $4

The Natural Price would be $4, representing the most frequent and low real price, assuming that profit maximization was not observed.

The natural price is the lowest..he is likely to sell them for any considerable time.. [It is]..the central price, to which the prices of all commodities are continually gravitating...
The market price..is regulated by the proportion between the quantity..actually brought to market, and the demand of those who are willing to pay the natural price.

Fourth law definition

In Pantrynomics, 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 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.

The Resulting Concepts from the Fourth Law

The resulting concepts from the Fourth Law of Value are:

  • Natural Price
  • Socio-economic Balance as Demand-Capital-Industry-Trade ratios
  • The militant class (as a ruling government) to ensure this balance

Putting it all together

We can now make a table for the four classifications of Exchangeable value in pantrynomics, using “price” as its snapshot:

Pantrynomics Personal Society
Subjective and Variable (Buyer’s perspective) Nominal Price (value in currency) Market Price (value to the buyer)
Objective and Natural or Invariable (Seller’s perspective) Real Price (value in grain or labour) Natural Price (value to the seller)

This is in contrast to Economics which has no concept of Real and Natural Price as it would prevent arbitrage, profit maximization, and consequently private sensory pleasures. It only has economic value (nominal price) and market value (market price):

Economics Personal Society
Subjective and Variable Nominal Price (value in currency) Market Price (value to the buyer)

We can now summarize our laws:

Law Price Purpose
1 Nominal Utilization - exposes the lack and the need
2 Real Specialization - increases quality and quantity to deal with the lack
3 Market Diffusion - addresses the lack
4 Natural Balance - prevents the crashes that leads to a recurrence of lack

In addition, we can see how the four laws of value are the reverse of the laws of thermodynamics. For example:

  • the Zeroth law or the balancing of temperature is the first in Physics, but is the last in Pantrynomics as economic balance of the Fourth law
  • the Third law, as absolute zero, is the last in Physics, but is the first in pantrynomics as its First law, as everything having a value.

This is because Physics believes that the universe began as an energetic Big Bang where energy began first, whereas humans start from birth or low-energy sleep where lack begins first

Pantrynomics law Thermodynamics law counterpart
1st 3rd
2nd 2nd
3rd 1st
4th 0th

Next we will explain Primary and Secondary Abitrage.

Updates

4/2017: added Economics value matrix

8/2020: overhauled to match Superphysics

7/2021: overhauled to base everything on the four laws

2/2022: Added the four classes (Populist, Militant, Philosopher, Merchant) onto the four laws