Dear Roy, I would love to learn from you the problems you see with the poor definition of production and the associated confusions. Your own messages on HES archives of April and May 1997 are good ones about this. It would be stimulating to see how you see the transition from political economy to economics as it was partly shaped by unclear conception of production. Your long-standing interest in a sharper focus on the real wealth, and the problems you see in the obfuscating mathematization that seemingly loses the implications of property relations could be of great benefit to us if you cared to point out what the recent literature has overlooked. Please allow me to point out a few things. 1. There seems to be room for a historical review of the evolution of the concept of production, and the many confusions surrounding it. In particular, the Physiocrat views, Smithian notion of division of labor being guided by profit, Marxian notion of mode of production, marginal productivity theory of distribution, Coasian ideas about transaction cost and the firm, Hayeks Prices and Production, and Sraffas production of commodities by means of commodities would be excellent candidates for inclusion in a minimal review. A broader review ought to cover reproduction of human capital a la Malthus, Gary Becker, Julian Simon, and Mark Blaug as well as the capital controversy and the IS-LM analysis. Then reproduction of physical capital ought to receive attention with associated matters of technological change and structural transformation. I suspect that it was a bumpy ride, but I am eager to hear your opinion. 2. It seems that prevailing semantic usages of the term includes what you call rendering of services. I am not aware of any great benefit from keeping services separate from tangible goods. In particular, recent efforts to build indices of development other than GDP seem to include quality of life and similar ideas in which the rendering of services plays vital roles. I am curious about your views on how the distinction between commodities and services can help us better understand the economy, and how others might have thought about it. 3. I also suppose that most people now-a-days feel comfortable with the mathematical precision that comes from separating stocks from flows. I believe that this separation is useful, at least for analytical purposes. Thus taking stocks of output at a point of time as wealth, and then counting a part of it as capital (though seemingly excluding human capital) may seem reasonable. The flow of goods and services over a period of time is taken as production, whose value is counted as income. The capital-output ratio seemingly plays a vital role in the growth literature. I am eager to learn what you think about this. 4. Being a little crazy guy, my own madness seeks theoretical clarity about production. It involves connecting production to the pursuit of profit through exchange in the market. And I agree that Smith provides a good starting point. While I wish to agree with you that financial values do not reflect the reality of the annual produce of the nation because nominal values are artificially changed by money, I wish to think about the connection between the flow of money and the flow of output. The central issue in macroeconomics is indeed about the role of money in market clearing, though it is not seen to be so. The most critical problem is to separate output from price and I think that there is no tenable price theory. I am ignorant of whether poor definition of production is part of the problem. 5. My own madness has been too figure out a simple way of connecting tradable physical output to fiat money, and then to relate output to employment and investment in non-human capital. I like to believe that money as a means of payment exerts a very vital influence on what and how much is actually produced. To show that, I have to abandon both micro and macroeconomics, and certainly avoid monetary theory altogether. The reason I must abandon micro and macro is that I must provide an explanation of both the prices and the quantities of output in one coherent model. The coherence means that micro and macro must be the same, and trade theory must also be monetary theory. 6. I strongly share your interest in production as being a process of creating real wealth, not just paper values in some book of accounts. Most people are happy with the notion of zero-profit equilibrium, and the irrelevance of money as a store of value or a unit of account to the volume of output or employment. To relate production to money by seeing money as a means of payment (and not as a store of value) requires much creative destruction. Let this good season be of good service to you. Mohammad Gani PS: In case you wish to see what I think about micro-macro confusion between price and output, and the trade-theory -monetary theory confusion about the relation between output and money, the following working papers are downloadable at a click. New Trade Theory Takes Over Monetary Theory http://econwpa.wustl.edu:80/eps/it/papers/0405/0405005.pdf Micro Takes Over Macro http://econwpa.wustl.edu:80/eps/mac/papers/0404/0404012.pdf Money in Market Clearing http://econwpa.wustl.edu:80/eps/mac/papers/0410/0410009.pdf