The multilayered structure of market economies

The case of industrial manufacturing countries

There are on the one hand goods whose prices are decided by competitive trading (agricultural and mining products etc.), and on the other hand goods whose prices are determined by the full-cost principle (mainly manufactured industrial products). The prices of commodities in the national economy are not regulated by a single principle; commodities may be put into two separate compartments in which quite different principles predominate. That is, the price mechanism of the national economy is grounded on two different principles, but this dual price mechanism is not simply a parallel mix of the sectors where the full-cost principle operates and those which accord with the competitive formula. It is more like a multilayered structure with one founded on the other, as we shall see below.

Such a multilayered structure will certainly not crumble away even in the case of a pure industrial manufacturing country whose agricultural and mining sectors have completely disappeared, so that all the prices of commodities produced in that country will be decided by the full-cost principle. For such a country to produce, raw materials (agricultural and mining products) which must be imported from abroad are necessary, but in the markets from which they are shipped their prices will be decided by competitive trading.