'What is your name?' 'firstname.lastname@example.org.' 'IT DOESN'T MATTER WHAT YOUR NAME IS!!!':
> I think what Billy is saying is that the iron (which would normally be
> considered raw material, not capital) costs $5 ultimately because that
> is the cost of the labor to make that iron. Someone had to mine it,
> refine it, etc., and the efforts of all of those people are what produce
> the cost of $5 for the iron.
OK... but in that case "production cost" depends on the demand for labor, which seems to contradict the way Billy characterized it. In this example, the demand for iron-making labor rose without an increase in the demand for turning-iron-into-widgets labor. Since "production cost," defined this way, is just the sum of the value of the labor, production cost rose when demand rose.
Billy, on the other hand, seemed to be saying that production cost did not depend on demand, but was simply determined by how much actual work was needed to cause the thing to come into existence. I'd argue that there is no way of thinking about production cost OR value which does not bring demand into the picture, even at the most fundamental level.
(BTW, the reason I called the iron "capital" is because I was, at first, going to provide a different example, in which there were two ways of making widgets, one which included iron and required little labor, and one which did not include iron and was labor intensive.)
-unless you love someone-
-nothing else makes any sense-