Cost the limit of price
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Cost the limit of price was a maxim coined by Josiah Warren, based on the labor theory of value, that holds that it is unethical to charge a higher labor price for a commodity than the labor cost of producing or acquiring, and bringing it to market. "Cost" here refers to an amount of labor exerted rather that monetary cost. Warren believed all trades should be based on equal amounts of labor. Therefore, he advocated the use of labor notes which are money denominated in labor hours, in order to ensure no one received a product that required less labor to produce than what they exchange in return.
[edit] Literal meaning
On its face the sentence seems to mean that "the limit of price is total cost" (including one-time cost, cost of capital and opportunity, such that over time in a free, efficient, and competitive market, the price of a good will come arbitrarily close to the total cost in providing it. In practice, barriers to entry and inefficient markets increase the amount of profit at which firms with market power are willing to enter a market at a competitive price. If we consider such barriers (at times put up by anti-competitive behavior) to be unethical, then it might follow that even where the market may bear a higher price, it is unethical to capitalize on a larger-than-minimal profit. Companies such as Walmart, which operate at very low profit margins (generally 3%), might therefore be assumed to be acting particularly ethically, since their price seems to approach their total costs in providing goods. Although Wal-mart does have many hidden costs including, free or reduced price land, infrastructure assistance, tax increment financing, property tax breaks, state corporate income tax credits, sales tax rebates, enterprise zone (and other zone) status, job training and recruitment funds, tax-exempt bond financing, general grants([1]). All of these considered, they receive at a minimum, 1 billion dollars. This is not a full representation of their subsidies. If transportation subsidies were to be included in the figure, and may be considered to be the tip of the iceberg.
