Yes, that article makes some good points (it’s a similar point to the Cambridge Capital Controversy, right?). It fits in with what I was saying about the Austrian/neoclassical view of exchange here. It’s as if workers have preexisting things that they just throw into a pot and the capitalist then sells the pot as merely the sum of everything inside. It ignores how labor changes things qualitatively. I think people are having trouble grasping why its wrong because they are unconsciously substituting the correct view of things when looking at the examples.
Mises says: “Economic goods which in themselves are fitted to satisfy human wants directly and whose serviceableness does not depend on the cooperation of other economic goods, are called consumers’ goods or goods of the first order.” He goes on to say that the price of higher order goods is determined by the consumer goods. Neither the house without plumbing nor the plumbing itself is a consumer good because their “serviceableness depends on the cooperation of other economic goods.” Only the finished house is a consumer good (although Mises’s definition might actually exclude all goods from being consumer goods). So the finished house must determine the price of both the unfinished house and the plumbing. But how can it do that? It can only tell us the sum of the two factors and not what each is worth individually.
UE: Given that the only coherent way to think of produce is as a result of all of the factors of production combined, what determines each factor of production’s share of the produce? Each wants as much as possible, but each requires the others in order to gain any produce at all. So the share for one factor of production is determined by its relative ability to replace the other factors of production. Or, to put it another way, the produce is distributed by bargaining power.
Bingo. I started developing such a perspective in this thread.