Price Points

The walls and counters of the world-Famous Gold & Silver Pawn Shop, home of the hit cable show Pawn Stars, display the kind of merchandise you might expect in a joint at the wrong end of the Las Vegas Strip. Gaudy jewelry, expensive watches, musical instruments, gold coins, Super Bowl rings: they're what the tide of fortune leaves behind when it runs out on people. And in Las Vegas, it runs out on a lot of people.

But you'll also find in the shop Picassos, Chagalls and a 16th century print by German engraver and artist Albrecht Drer that Rick Harrison, the gregarious star and creator of the show, thinks he can sell for $65,000. He thinks this because he understands the value of a Drer as much as that of a piece of bling some gambler brings in. In pre-Internet days, Harrison, 46, would spend nights at the library researching the oddities that people offered him. "I have one of the weirdest businesses in the world," he says. "I don't pick my merchandise. It's whatever walks in the door."

The carnival of people and objects that crosses that threshold--combined with Harrison's animated curiosity about antiques, autographs and a variety of ephemera no other pawnshop in Vegas could handle--has turned the Gold & Silver into reality-show platinum; the program appears in more than 150 countries and 30 languages. Today, thousands of people queue up to get inside the store and perhaps catch a glimpse of Rick, his dad Richard (called the Old Man), son Corey (a.k.a. Big Hoss) or their clueless but much admired employee Chumlee. "He's like a big teddy bear," Amber Mitchell, 18, says of Chum, whom she hoped to meet when she was in town for a beauty pageant. She wrangled a spot in one segment as an extra. But like most other viewers, Mitchell, who is Miss Arkansas Teen USA 2012, ended up being as intrigued by the merchandise as by the people on the show. "I'm kind of a history geek," she says.

And so are many of Pawn Stars' fans, who have made it the History Channel's highest-rated show. The program isn't so much a vulgar Vegas version of Antiques Roadshow as it is a lesson on where objects come from, which is key to how much they are worth. The show is devoted to the basic economic concept called price discovery. And while it's fun for viewers to guess the value of an antique gun or a vintage Coke machine, the process of buyers' and sellers' determining the fair market price of an asset also plays a hugely important role in an economy, whether we're discussing stocks or a gallon of gasoline. According to the Austrian school of economics, whose anti-Keynesian standard bearer Friedrich von Hayek is a current favorite among conservatives, anything that gets in the way of true price discovery--a central bank that manipulates interest rates, say, or a tax code that incentivizes people to flip houses--will do more harm than good in the long run.

For the most part, Pawn Stars is a series of vignettes about how lousy we are at understanding value. People often get caught up in family folklore and think that because something has been around for generations, it must be worth a lot. "For years, the No. 1 reason I was told to f--- off was because of Grandma's perfect diamond," Rick says. He'd tell would-be sellers, "No, it's not perfect, and Grandpa was cheap."