Only by means of the market can we determine what to produce, in what quantities and qualities, and by what methods. Since consumption goods provide us with immediate benefits we can value them directly, without monetary calculation. However, the means of production are valued only indirectly. And as production grows more complex it becomes simply impossible to ascertain, intuitively, their contribution to our well-being. Thus money, an auxiliary method of calculation, is required.
Money reduces everything to a common unit, thereby permitting exact calculations.
Only then can we determine the appropriate methods of production, i.e., whether in a given circumstance to use, say, more steel, and less manpower, or vice versa. Without the ability, afforded us by money, to calculate and compare relative costs there would be no rational way to choose between the plethora of possible alternatives. This obviously presupposes the existence of private property throughout the economy. Thus, the existence of money and the market imply each other, and together, they enable us to calculate. It enables us to extend judgments of value which apply directly only to consumption goods . . .