Book contents
- Frontmatter
- Contents
- Preface
- Notation Guide
- 1 Introduction
- Part I The physical economy-environment system
- Part II The economic system
- 5 The price system
- 6 Prices, property, and the environment
- 7 Economic conflict and environmental change
- Part III Environmental strategies in an evolutionary economy-environment system
- References
- Index
5 - The price system
Published online by Cambridge University Press: 20 March 2010
- Frontmatter
- Contents
- Preface
- Notation Guide
- 1 Introduction
- Part I The physical economy-environment system
- Part II The economic system
- 5 The price system
- 6 Prices, property, and the environment
- 7 Economic conflict and environmental change
- Part III Environmental strategies in an evolutionary economy-environment system
- References
- Index
Summary
Value in general
The physical system described in Part I includes a number of informationally distinct subsystems, with a subsystem said to be informationally distinct if it generates and responds to a set of signals different from the signals generated by all remaining subsystems. Although each informationally distinct subsystem may be technically dependent on all others, it operates on the basis of a separate set of signals. It has a separate identity. The human economies are among these informationally distinct subsystems.
As a first approximation, a human economy was defined in Section 1.2 to be a physical system of production organized according to a social set of signals. More particularly, it is a set of mutually dependent processes designed to satisfy an arbitrary range of human wants within the constraints of existing knowledge and resources, and organized according to a common set of signals. The basis of these signals is the value system, where the value of a resource is defined to be a corresponding transaction weight fixed by the conditions of production, distribution, and exchange. In classical terms, value is “value in exchange.” We are not interested in the utility or use value of resources, although it is taken as axiomatic that resources will command a positive price only if they yield positive utility at the margin. Positive marginal utility is, however, necessary but not sufficient to ensure that a resource commands a positive price.
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- Economy and EnvironmentA Theoretical Essay on the Interdependence of Economic and Environmental Systems, pp. 65 - 78Publisher: Cambridge University PressPrint publication year: 1987