Monday, May 9, 2016

Notes on Value in Use vs Value in Exchange

In a value in exchange world, is there still room for value in use in any real context? To a utilitarian such as myself, that matters. Often, one hears that not everything in life is - or even "should" be - economic. But given the fact that people structure the majority of their lives around value in exchange routines, too few patterns remain, for value in use activity to contribute to important outcomes. A marketplace for time value, would help to restore personal habits and routines which include value in use functions.

Here's a Wikipedia definition for value-in-use:
Value-in-use is the net present value (NPV) of a cash flow or other benefits that an asset generates for a specific owner under a specific use. In the U.S., it is generally estimated at a use which is less than the highest-and-best use, and therefore is generally lower than market value.
While this description is more cash oriented than my "time as meaning" interpretation, "a specific owner under a specific use" is on the mark. Internal definition for consumption potential, could lead to cost savings for both service formation and building components, in group settings specified to meet that purpose. Participating groups would be able to consider a full range of resource potential, to generate new non tradable sector growth.

Contrast the above definition of value-in-use with value in exchange, from InvestorWords:
The ability to trade an asset, such as money, for goods and services. Money has no "value in use". In itself, it does not satisfy wants or needs. To satisfy wants and needs, it must be traded. Although money has no value in use, it has value in exchange.
Money needs to be exchanged in order to have value, just as time needs to be exchanged in order to have value in use. A new form of corporate structure could legally back value in use functions, for purposeful time based activity. In this setting, time value would exist as a basic production commodity, available to almost everyone who is willing and able to take part in a marketplace for services, knowledge and skill.

Time as value in use, still contributed to value in exchange activity, as recently as the twentieth century. Familial value in use functions began to decline, as the production patterns of agriculture changed. This is also when women began to enter the workplace in large numbers, and marriage became more associated with consumption roles instead of production roles.

Given the present lack of organizational capacity for value in use functions, the majority of aggregate time value has been structured according to the wealth of other existing resource capacity. However, organizational patterns for time value don't exist in direct relation to marketplace representation for services and goods.

Instead, present nominal income depends on how profits for tradable sector production are diffused through other means. How many time based services - for instance - have to be paid for twice through fiscal policy? Roughly speaking, when time based services are fiscally generated and have to be paid for twice, the result is half the time based services product in the marketplace than would otherwise be possible. Which is an unfortunate result for both potential producers and consumers of time based product.

This also helps to explain why there is limited utility in revealed preferences, which do not sort by direct or linear patterns with the goods and services that are actually available. A marketplace for time value, which would create a base price structure for time use alongside income potential, could help to alleviate the resource disconnect between preferences for services and goods. By generating new value in use patterns on monetary terms, value in exchange activity would be reinforced as well.

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