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    • The Economy
    • Commodities
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    • Distribution
    • Wages
    • Interest
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    • Money
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Home› Part II – Political economy propositions›Chapter 11 - Prices

Chapter 11 – Prices

On prices, as exchange values expressed in a quantity of money, untruths abound. In the field of cost prices, the allocation of common costs and margin targets can only be arbitrary. It's not true. The most general law that should normally govern the market economy would be well known and more often respected than circumvented. It's not true. The biases on the theory of value, the basis of higher education in economics, would be insurmountable. It's not true.

Numerous untruths pervade the discourse on prices, which are merely as exchange values quantified in monetary terms. It is a common fallacy that the allocation of common costs and the determination of margin targets are inherently arbitrary processes. Likewise, the assertion that the market economy's most fundamental law is more often circumvented than respected is without merit. Finally, the supposed insurmountable biases within value theory—the cornerstone of economic education—represent a profound misunderstanding of the field's intellectual foundations.

Propositions

  • 11.1 This chapter deals only with prices, other than interest, at which enterprises sell their products.
  • 11.2 The immediate relationship between supply and demand governs only some of these prices.
  • 11.3 A legal-entity enterprise almost always has a tree structure of enterprises in the enterprise.
  • 11.4 Like legal-entity enterprises, enterprises with enterprises have direct costs and generate a direct margin.
  • 11.5 The distribution of the direct costs of an internal workshop in proportion to physical quantities is objective.
  • 11.6 Within legally incorporated enterprises, enterprises within the enterprise have common costs.
  • 11.7 Enterprises within the enterprise are the object of direct investment, all financed in exactly the same way.
  • 11.8 Profitability, productivity and direct profitability are the same belonging.
  • 11.9 Competition is failing when it does not reduce the inequalities of direct profitability of the same belonging.
  • 11.10 The most competitive distribution of direct margins, and thus of common costs, is often in proportion to direct investment.
  • 11.11 The prices at which an enterprise sells are sufficient when, for that enterprise, the direct profitability of the same ownership is equal.
  • 11.12 All prices, including wages and profits, have in common only that they are economic exchange values.

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