Financial safety

This crisis has been caused by arrogant central banks

It was Friedrich von Hayek, the great Austrian economist, who explained just how central the price system is to capitalism and our civilisation’s astonishing prosperity. The fact that goods, services, assets, money, time, ideas and risk all come with a price attached allows resources to be allocated remarkably effectively.

An increase in the price of oil means that demand has gone up, which encourages producers to invent new ways of extracting more of it. A reduction in the price of corn means that there is too much of it, and the fact that it becomes less profitable to sell it encourages producers to exit the market.