A couple of weeks ago President Jacob Zuma was widely quoted as having said that he refused to accept that the value of a product was "only" determined by supply and demand. After all, it’s human labour that makes the difference and thus should determine the value of goods and services. Well, I can sit my whole life in the basement trying to come up with the best-ever origami piece. It will mean nothing in terms of market value if nobody buys it. Marxist labour theory always has been a tempting policy instrument, but from an economic viewpoint it’s just plainly wrong. Now Neva Makgetla has put forward an astonishing claim in her column (Monopoly power needs policy solutions, February 14): "In a competitive economy prices should be determined by the cost of production…. That is how competitive markets push producers to reduce costs." While Zuma forced us into a time travel trip back to the late 19th-century economics of Marx, Makgetla now takes us back even further, to the early 19th...
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