Abstract
Almost everything which economists have written to this day on services is based on incomplete and even incoherent statistics and on inappropriate methods of analysis. Only a few of them have pointed to these deficiencies and to the directions in which research should be oriented in order to remedy them. There is now a greater, albeit only emerging consciousness of the need to find ways of measuring more precisely the value of service products and productivity in the services sector, and this justifies the hope that an improved understanding of realities will gradually be gained in the process. It will probably be necessary to revise a large number of theories of the contribution of services to economic growth and development, as well as of their role in international trade—in other words, of their contribution to the adjustment of production structures in response to modifications of the international competitiveness of firms. The subject is complicated not only because it is largely unexplored but also because it requires shedding certain habits of thought which are linked to the all-too-familiar idea that physical production is the source of all value. The solutions proposed in the present chapter should not, therefore, be considered as anything more than a first attempt to open the way toward a better understanding of the effective contribution of services to the development of society.
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Notes
On the evaluation of the value produced in services, see inter alia McMahon and Worswick [1961] and Anthony D. Smith [1972, pp. 109–114].
Authors who have given thought to this question in less macroeconomic terms than their colleagues include Shoup [1969], McMahon and Worswick [1961], Hall [1968], Gustafsson [1979], and Tucker [1979].
The French for service act, service performed or rendered, or benefits obtained from a service, is prestation. In the absence of a similar word in English, prestation has previously been translated as service act. As used here, the word act refers more to a general characteristic of service functions than to individual benefits or effects produced by services.
This reasoning, if stretched to its logical limit, would lead to the conclusion that in advanced economies, where the role of service activities in national production is predominant, external economies represent a preponderant portion of the total product of human activity. Given the fact that external economies are not included in national accounting, the national product of advanced countries would be underestimated accordingly. This would also be true for other countries, but the phenomenon would be much less marked in the latter because they are technically and scientifically less developed.
In the case of C s [greater than] C’ s , V’ s [is greater than] V s , that is, the final value of goods produced is higher when services are externalized. However, as the difference consists in external economies, the supplemental value obtained is not accounted for. It can be assimilated (see below) to an increase in the quality of the good produced.
It will be noted that equations 3.1 and 3.2 do not take into account the external economies which represent an equivalent share of the transfer value and of the efficiency value, so that the implicit expression for the transfer value is V s = C s instead of V s = C s + e s , where e represents the external economies in question. An increase in production more than proportional to the difference between direct costs would imply that e’ s is greater than e s .
The reasoning that precedes applies both to externalization and internalization of services. It is recalled that externalization is used here only as an example.
The economic nature of services covered by the notion of “public goods” is analyzed in great depth by Carl S. Shoup [1969, ch 4]. On this question, see also A. R. Prest [1982].
The following quotation is interesting from this point of view: “Information can be acquired by expanding resources but, once one has it, it is not diminished if someone else has it as well. It is an example of a public good. For quite obvious reasons the Fundamental Welfare Theorems cannot hold when there are public goods. Indeed, the market economy will perform disastrously in such cases. No one will invest in the production of information if its market price is necessarily zero. That is why we have patent and copyright laws.” [Hahn, 1982]
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© 1987 Kluwer Academic Publishers, Boston
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Nusbaumer, J. (1987). Value and Cost of Services. In: The Services Economy. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-3259-3_3
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DOI: https://doi.org/10.1007/978-94-009-3259-3_3
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