Abundance Journal/Abundance Vol I, Issue 2

The Theory of Value

Economics has no coherent Theory of Value and we must solve this problem if we are to establish the field of Abundance. The Labor Theory of Value has advantages in that it is objective and normative—it states that price should tend toward the cost of production; it also allows us to determine what constitutes equitable exchange. Unfortunately, the LTV does not acknowledge that the amount of labor embodied in products is constantly diminishing with the advance of automation and improvements in capital. Marginal Utility Theory was held to be the replacement for the Labor Theory of Value but this type of utilitarianism is ultimately subjective and can't provide a sane basis for economics. In this approach, all that matters is satisfying an agent's subjective preference. But people might prefer anything at all ( in the case of preference adaptation a person who is used to being abused or deprived—starving—actually adjusts to this condition). Preference satisfaction alone can't serve as the basis for well-being—an agent can easily prefer things that are objectively bad for him. See Amartya Sen-the Capabilities approach to measure agent's welfare in terms of the intrinsically valuable doings/beings he has the capability to achieve.

Binary Economics (Kelso/Adler) put forth after the great depression, advocated a new concept of "productiveness" in which Capital was conceptualized as autonomously doing work.

I propose a theory tentatively dubbed the Automation/Technological Theory of Value. All economic value starts with a Gift, the sun, thus there really is such a thing as a free lunch, provided we intelligently use technology to satisfy needs. Man simply uses his mind to harness energy to do work. Rather than a labor theory of value, a "play" theory is more appropriate, as all advances in standard of living come from using technology to always do more with less.