To our observation, economists have generally contrived to have ‘valuations’ emerge from their theoretical flights only by smuggling covert indicia of value onboard at takeoff. This sensation is relieved here and there in the writings of Swedish economist Gustav Cassel, who analogized prices to the swirls and eddies appearing upon waters near the opening of great locks, expressing a vast unseen turbulence below. We proceed on supposition that a charting of this turbulence is the object of economic science.

SFEcon prices are mundane insofar as they constitute our material philosophy’s ‘information carrying particle’. They achieve what we consider an apt distinction in terms of the information they carry, viz.: all of it. Any and every price references all of the state variables and parameters with which the economy is currently described. Thus every price contains the same information, albeit organized differently to properly epitomize each commodity in each economy.

Strictly speaking, SFEcon supports no distinct theory of prices. We presume, rather, that ‘prices’ are co-definitional with ‘economics’; that to understand the one is to understand the other. This view particularizes our prejudice that economics should be the science of value: while perfectly respectable sciences might proceed from the notion of value, it is the primary calling of economics to proceed toward value.

We approach the problem of price calculation having developed a formal description of the general economic optimum [x_IK,Q_IJK] in terms of a system of hyperbolic production and utility tradeoffs. This development established that the optimum is a singular state with a plethora of redundant descriptors. We have also set forth physical state variables in terms of the rates of change by which these state variables’ respective levels are controlled. The physical rates of exchange are presently determined except for prices.

Completion of Model 0 now requires the inference of cardinal prices from the model’s current state and utility parameters — this being the stuff of economic science as we conceive it. A neoclassical dynamic would require that prices operate to shape the system’s state into an expression of the general optimum. Our strategy for price computation will be to 1) substitute corresponding elements of the current state [Y_IK,E_IJK] for [x_IK,Q_IJK] in the equations for an optimal state, and 2) use these equations to infer prices. Recursive application of this strategy via emulation of macroeconomic adjustment can then be tested to determine whether or not the system converges to an optimal stasis.

The infamous economic calculation problem requires a demonstration as to how discreet economic actors, operating only on knowledge of their own current states, can jointly find their way to a stable and general economic optimum. SFEcon’s experience would suggest that the knowledge problem formulated in Hayek’s famous 1945 AER paper is no impediment to economic calculation. The problem would seem to be that the science calling itself economics cannot conceive of the commodity prices to which economic actors respond such that the combined outcome of these atomistic responses is the one foreseen by Pareto.

SFEcon’s solution to this problem is obvious enough in outline. We presume that the prices of the moment operate toward always liquidating the supply of the moment. This price is given by a demand schedule, i.e.: prices are continuously reset so that what is being supplied will be demanded. The reason our demonstrations work where others do not is that our demand schedules are a more effective way of abstracting market dynamics than the tâtonnement of more conventional analysis. Our crieur is constantly probing among his customers’ current marginal valuations for what he is selling. He is quoting prices independently from those quoted in other markets; and has no more awareness of Pareto’s criterion than do the economic actors he serves.