More from Philip Wicksteed, The Common Sense of Political Economy:
We can now see how "cost of production," which is simply and solely "the marginal significance of something else," directly affects the quantity of anything produced, and thereby indirectly affects its price, so that there is a constant tendency for prices to conform to cost of production; that is to say, for the price of the thing I make and the price of the thing I might have made instead of it to coincide….
Even clearer. Thanks for this.
ReplyDeleteWicksteed was a good writer, and he goes over things more than once just to make sure. Henry Hazlitt said Wicksteed's book was one of the three biggest influences on his thinking about economics. Not a bad recommendation.
ReplyDeleteWhat this all comes down to is this: It is only a slight exaggeration (if that) to say that in the market, everything is related to everything else.
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