Originally Posted by serge40t

What do you mean by "human greed raises prices?" Are you inferring that "greedy" companies raise prices to make more of a profit or inferring that the consumer "greed" for more of a product raises the demand for that product which in turn raises the price?

Prices are determined by supply and demand, and demand is determined by how intensely people want a commodity and what they have to offer in exchange for it.

When people want more of a commodity, their competitive bidding raises its price. This increases the profits of the producers who make that product. This stimulates them to increase their production. It leads others to stop making some of the products they previously made, and turn to making the product that offers them the better return. But this increases the supply of that commodity at the same time that it reduces the supply of some other commodities. The price of that product therefore falls in relation to the price of other products, and the stimulus to the relative increase in its production disappears.

In the same way, if the demand falls off for some product, its price and the profit in making it go lower, and its production declines.

It is only the price system that solves the enormously complicated problem of deciding precisely how much of tens of thousands of different commodities and services should be produced in relation to each other. These otherwise bewildering equations are solved quasi-automatically by the system of prices, profits and costs.

So if you freeze prices, there will not be any stimulus to produce.