The Importance of Market Signals in a Free Market

Sorry for being Captain Obvious but some people don't understand praxeology.

That made my day ... It is so pleasing to see that someone else understood what I was referring to in that post.

Personally, I depart from this in a way. I understand that a corporation exists due to Government decree but if you remove Government you will still have a virtually identical organizational structure. At its core a Corporation's characteristics are: personhood, limited liability (protection of personal assets), infinite life, and easily transferable ownership. Each of these characteristics are vital when doing business efficiently, so even if you were to remove Government, you can still recreate each of these essential elements (except personhood) through contract. To me the form is the same but the way in which it is organized is different. So, I think that the sentiment of the statement is correct, in the sense that it would be different than it is today (absent special Government privileges), but the core elements that are vital to conducting business efficiently, that make a Corporation a Corporation, would still exist in a pure "free market" (absent intervention).

By the way, personhood is beneficial in the sense that when a Corporation is sued, you can list the Corporation's name and address rather than the 2 million shareholders' names and addresses. Same goes when entering into contracts or ownership of assets/liabilities. This is the only item that I cannot envision being resolved by a contract in a society absent Government, which would be a big problem from an investor and raising capital stand point.

What are your thoughts?

What does doing things "purposefully" mean? Any sane person understands that people don't always act rationally. Huge fallacy to assume that human behavior is driven by intellect.

When I say that they act purposefully, I mean this is a strong general trend, not a rule. Most human behaviour, especially that which focuses on economic activity is purpose-based, rather than reflexive or purely emotional.

I don't know.. many people sure get emotional and obsessive over money. I think any sociological theory which assumes people to be rational beings is fundamentally flawed.

Humans are rational beings. This doesn't mean they always act rationally 100% of the time.

EDIT: If you think the free market is ridiculous, I'd love to hear your explanation for why people are able to allocate resources efficiently and non-violently in the market.