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.