Facts and Logic
The concept of "average profit" (a general profit rate) suggested that a process of competition and market-balancing had already established a uniform (or ruling average, or normal) profit rate previously; yet, paradoxically, what profit volumes would be (and consequently profit rates) could be established only after sales, by deducting costs from gross revenues. An output was produced before it was definitively valued in markets, yet the quantity of value produced affected the total price for which it was sold, and there was a sort of "working knowledge" of normal returns on capital. This was a dynamic business reality Marx sought to model in a simple way.
Read more about this topic: Prices Of Production
Famous quotes containing the words facts and/or logic:
“Some facts should be suppressed, or, at least, a just sense of proportion should be observed in treating them.”
—Sir Arthur Conan Doyle (1859–1930)
“The American Constitution, one of the few modern political documents drawn up by men who were forced by the sternest circumstances to think out what they really had to face instead of chopping logic in a university classroom.”
—George Bernard Shaw (1856–1950)