Why call these exchange values “prices of production,” rather than “costs,” “costs of production,” “natural prices,” or “necessary prices?
These are all roughly equivalent terms in Classical and Marxian economics, but “prices of production” seems the least likely to mislead. The expressions “costs” and “costs of production” seem to imply that prices of production depend merely on what must be paid for the means of production, wages, and profits. But this impression is one-sided for commodities that enter directly or indirectly into the production of all other commodities. Their prices of production depend upon their use in the production of other commodities as much as they depend upon the extent into which they enter their own production. For instance, the price of iron in the second example above depends both on the commodities needed to produce it and on how much iron is used in producing wheat. The Classical economists, particularly Adam Smith and David Ricardo, used the expressions “natural prices” or “necessary prices.” These terms are avoided here because of their association with mistaken or unclear theories in th
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