:Because maybe (like I said before) he sells it at cost? If you mean to say output prices influence (labor) input price, welcome to marginalism!  That has nothing to do with this though.  The employer estimates how much he can sell it for.  He bids for labor accordingly.  He sells such that he doesn't profit.  How does this affect the status of the labor? When you say "pre", what is it before?  Before he goes into business?  Before the beginning of time?