Before discussing the possible advantages and disadvantages of the price system, it should probably be established what a price system is. Generally, a price system refers to an economy in which prices allow for an exchange to take place between people.
For example, say Stewart makes quality mittens and sells them online. Now, say that someone named Lawrence needs a pair of mittens for the cold week ahead. Lawrence, alas, can’t make the mittens himself because he doesn’t know how. Thanks to the price system, Lawerence can buy the quality mittens that Stewart makes and keep his hands warm next week.
In this example, the advantages of the price system are twofold. It allows Stewart to profit off of his labor, and it gives Lawrence the means to acquire a good that he himself can’t produce.
Alas, there are many disadvantages to the price system. A real-life example is healthcare in the United States. According to reports, America’s healthcare institutions regularly waste billions of dollars on tests and treatments that don’t result in clear benefits for the patient.
In these cases, the price system appears to have failed. There is not a fair exchange taking place. The person is not paying for a good that helps them. They, or their insurance provider, are, more or less, giving money away.
Indeed, the exorbitant price of healthcare in America might cause one to wonder if the price system is the best way to organize all services and goods in a given society. Perhaps some things should not be assigned a price—not because they’re not valuable, but because everyone should have access to them regardless of how much money they can or can't exchange for them.