[jmherbener]

All values and costs considered in action are anticipations of the future, not facts of the past. The current prices of factors of production reflect entrepreneurs’s predictions of the revenue that will be generated in the future by their use in production today. Thus, any entrepreneur who buys an input today pays for the value that will be lost in the future from not using it in other lines of production today.

Monetary costs are not a method of estimating social opportunity costs, but the only manifestation of such costs because the subjective valuations made by different persons cannot be compared. There is no other method to determine the economizing use of resources for society at large.