The great Austrian political thinker and champion of free-market liberalism, F.A. von Hayek, made a famous distinction in his work between ‘values’ and ‘merits’, summed up in his famous slogan ‘There is no value to society’. (Margaret Thatcher was attempting to convey the same idea when she made her famous assertion that ‘There is no such thing as society’). Hayek argued that, when we assess the worth of a man’s labours – in providing us with symphonies, or paintings, or glass etchings, or plumbing, or shoes, or whatever – the marketplace provides us with the only accurate assessment of their value. The market, which is made up of individual buyers and sellers, assesses the value of, say, a pair of shoes at $90. If buyers disagree with the price charged by the shoe seller, the latter must drop his price, and sell at a discount, if he wants to move his product off the shelves. If he refuses to budge on prices, or if he is underestimated the demand for his product (mistakenly believing that there is a large demand for his shoes, when there wasn’t) he goes out of business.
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