If you trade logs for salt, the tailor trades shirts for salt, and the baker trades bread for salt, then a “price” emerges in your community—the exchange value of one commodity expressed in units of another, which we call money. In fact, the emergence of price is the first and principal consequence of using money.
Perhaps the most important thing to grasp about price as a phenomenon is its relativity. If I say a loaf of bread costs 100 hryvnias, this information tells me nothing without knowing the prices of other goods. As I write this, 100 hryvnias for a loaf seems “expensive” because I know what other things cost. It is this knowledge that allows me to judge “expensiveness” (which is, of course, also relative). But in the not-too-distant future, 100 hryvnias for a loaf may well become a “normal” price. There is no spherical price in a vacuum. Price exists only as part of some price grid, and this must be remembered.
Another point follows from the price grid. Seeing prices expressed in units of the monetary commodity, one must remember that in reality we exchange some goods for others. Money is merely an intermediary in this process. This fact also seems obvious, but only seems so. The habit of reasoning about social phenomena outside the patterns of human activity leads many people to find themselves stumped by questions like “how much does gold cost under the gold standard?” If you understand how the system works, the answer comes easily—gold is worth however many units of other commodities it can be exchanged for.
Money’s ability to make the commodity exchange network “visible” allows us to choose the direction of our efforts. If, for example, they pay 300–400 hryvnias per notice, and you feel capable of writing two or three notices a day, then journalism is your calling.
Prices also illuminate the mechanics of supply and demand. If a commodity begins to be produced in excess—supply rises—or people lose interest in it—demand falls—its price drops. This dynamic tells a young man contemplating life to focus his efforts on producing something else. In economics, there is probably no more important or comprehensive regulatory mechanism, because for “society as a whole,” supply and demand is the only “rational” way of distributing the scarce resources that people possess.