Economists Favour the Price System Who Else Does?*

SUMMARY Most people except professional academic economists resist or reject the use of the price system. The four main reasons are lack of information, undesirable distributional consequences, unfairness and reluctance to trade, and adverse effects on preferences. The reasons brought forward against the price system are only partly convincing, particularly in comparison to other decision‐making systems. The use of the price system may create more problems than traditional neoclassical economics admits. The difficulties and paradoxes connected with the use of the price system provide a challenge to existing economic theory.