Abstract
It is enough to look at the contents of economic courses to become easily convinced that the common thing for all of them is ‘a substance’ of value. It is convenient to use the name economic dynamics (econodynamics) for the discipline. It investigates the processes of emergence, motion and disappearance of value, just as hydrodynamics investigates processes of motion of liquids; electrodynamics, those of changing electric and magnetic fields; thermodynamics, processes connected with the motion and conversion of heat. In this chapter, the concept of value is reviewed, and the role of basic production equipment, as a set of sophisticated devices which allow human beings to attract energy from natural sources for the production of useful things, is discussed.
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- 1.
Let us pay attention to the distinction of the concepts of a product and a commodity. The latter is defined as something that is made for sale that is for an exchange at which value is disposed. From here some people wrongly conclude that the thing made for the producer’s consumption does not possess value. This statement has been rejected by Marx [1, Chap. 1, Sect. 4]: “Since Robinson Crusoe’s experiences are a favourite theme with political economists, let us take a look at him on his island. Moderate though he be, yet some few wants he has to satisfy, and must therefore do a little useful work of various sorts, such as making tools and furniture, taming goats, fishing and hunting. Of his prayers and the like we take no account, since they are a source of pleasure to him, and he looks upon them as so much recreation. In spite of the variety of his work, he knows that his labour, whatever its form, is but the activity of one and the same Robinson, and consequently, that it consists of nothing but different modes of human labour. Necessity itself compels him to apportion his time accurately between his different kinds of work. Whether one kind occupies a greater space in his general activity than another, depends on the difficulties, greater or less as the case may be, to be overcome in attaining the useful effect aimed at. This our friend Robinson soon learns by experience, and having rescued a watch, ledger, and pen and ink from the wreck, commences, like a true-born Briton, to keep a set of books. His stock-book contains a list of the objects of utility that belong to him, of the operations necessary for their production; and lastly, of the labour time that definite quantities of those objects have, on an average, cost him. All the relations between Robinson and the objects that form this wealth of his own creation, are here so simple and clear as to be intelligible without exertion, even to Mr. Sedley Taylor. And yet those relations contain all that is essential to the determination of value.”
- 2.
Still Aristotle, analysing the exchange of various things, wrote “…all things that are exchanged must be somehow comparable” [2, Book 5, Sect. 5]. Marx [1, p. 14] wrote: “…when commodities are exchanged, their exchange value manifests itself as something totally independent of their use value. But if we abstract from their use value, there remains their value as defined above. Therefore, the common substance that manifests itself in the exchange value of commodities, whenever they are exchanged, is their value.” The brief history and the analysis of concept of value are exposed, for example, by A.N. Usoff in a work “What is value” (http://www.usoff.narod.ru/Us4.htm, in Russian). Having begun with concepts of use-value and production-value, Usoff has shown how it is necessary to introduce the concept of value, free from the pre-prepared interpretations. Everyone who was studying in a higher educational institution in the USSR until 1990 knows the statement that ‘value is the expenses of labour.’ However, there is no indispensability to reduce concept of value to expenses of labour in advance. Factorial theories of value, that is the reduction of value to labour, capital and other universal factors of production, are considered in the following section.
- 3.
One can understand work as a process of conversion of energy in technological processes from one form to another, for example, from mechanical into thermal form.
- 4.
An earlier formulation was presented by Beaudreau [31, 32], who accounts for work of the production equipment W and another factor named by the organisation which is considered as something distinct from work. To exclude a discussion of the process of transformation of consumed power carriers into work and the second-law efficiency of the process, for simplicity (it is mainly a technical problem which is not universal), work W is identical to the substitutive work or true work of the production equipment, which is discussed in this monograph. The organisation can correspond to workers’ efforts L, as to the control, which is, apparently, also actual work requiring energy consumption. These two factors, accordingly, are called inanimate and animate work by Beaudreau [31, 32]. The output now can be considered as a function of two factors, Y=Y(W,L), but Beaudreau [31, 32] identifies output and primary work of the production equipment, including efficiency in the discussion. The output measured as an added market value depends, apparently, on the chosen unit of value, which should be set independently (see Sect. 10.3).
- 5.
It is customary to speak about energy consumption, though, for the sake of precision, the word consumption should be replaced by the word conversion. Energy cannot be used up in a production process. It can only be converted into other forms: chemical energy into heat energy, heat energy into mechanical energy, mechanical energy into heat energy and so on. The measure of potentially converted energy (work) is exergy.
- 6.
Primary energy is the name for the amount of primary energy carriers (oil, coal, running water, wind and so on) measured in energy units. It is convenient to measure huge amounts of energy in a special unit quad (1 quad=1015 Btu≈1018 joules), which is the unit usually used by the U.S. Department of Energy.
- 7.
Before the year 2000, it was realised that primary energy or total consumption of energy (or exergy) cannot be a proper production factor. In my book [35, pp. 62–63] I refer to a production factor called final energy, which, by its definition, is primary energy input times a coefficient of efficiency. The definition is completely equivalent to that of useful work, used by Ayres [47]. The growth rate of final energy differs from that of primary energy by 1.5%; it is the growth rate of efficiency of usage of primary energy. Later I realised [36] that it is substitutive work (not useful work) that has to be exploited as the production factor.
- 8.
The introduction of energy can also be justified from a thermodynamic point of view. In terms of modern thermodynamics [48] all the artificial things, as well as all biological organisms and natural structures, ought to be considered as deviations from equilibrium in our environment, the latter being reasonably considered a thermodynamic system, and the process of production of useful things is the process of creation of far-from-equilibrium objects (the dissipative structures), as is explained by Prigogine with collaborators [48, 49] (see also Chap. 10). To create and support these structures in our environment, as in any thermodynamic system, the matter and energy fluxes must run through the system [48, 50]. In our case, energy comes in the form of human effort and the work of external sources which can be obtained by using the appropriate equipment. The system of a social production is the mechanism which involves a huge quantity of energy to transform ‘wild’ substances into useful things. The production of useful things can be connected with an establishment of the order (complexity) in the environment by human activity.
- 9.
The principles of the theory were discussed earlier in the author’s monograph [35], though some issues have been reformulated here. In particular, the concept of substitutive work was not clearly defined, and the important contribution to production of value from technological and structural changes was erroneously omitted. The correct version is given in the author’s article [36].
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Pokrovskii, V.N. (2012). Introduction: Concept of Value and Production Factors. In: Econodynamics. New Economic Windows. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-2096-1_1
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