ssrn-id893502 - The Nature of Capital and the Money-Goods...

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Unformatted text preview: The Nature of Capital and the Money-Goods Economy in a Contemporary Energetics Approach Mieczyslaw Dobija, Bartosz Kurek General Accounting Theory Working Paper No. 68/KR/1/2004/S/178 December 2004 This paper was presented during 14 th World Congress, Marrakech, Morocco, 2005, organised by International Economic Association, 2 The Nature of Capital and the Money-Goods Economy in a Contemporary Energetics Approach 0LHF]\VAEDZ ’RELMD 1 , Bartosz Kurek 2 Abstract At the beginning of time, Prime Energy began Her labour creating Universes – matters and spirits and laws of their evolution towards societies of human beings. Therefore all creatures are energetic by nature and must maintain an adequate level of energy’s concentration to continue their life in their existing shape. In economic language, economic power is called capital, although academics have not been fully aware of this connection. Much trouble with real economies, and economic theories as well, has its roots in the lack of reconciliation of energy concept with physics and economics. Capital, in its sense of being used to “do something”, is analogous to a property in physical science that is labelled as “energy”. Energy is often defined as “the capacity to do work”. And thermodynamics is the field in which the applications of energy and heat are thoroughly studied. Thermodynamics provides us with a useful analogy for understanding capital. The second law of thermodynamics is a key to understanding the properties of energy and is used as a prime analogy for understanding capital and its theories. This approach to capital and value sheds new light on such economics and accounting topics as human capital, labour cost, the nature of the money unit, interest rates and discount rates. Finally, as the result of this new approach, some new ideas about how to reduce taxes emerge from the inner quality of the money-goods economy. This paper includes an outlook of the main ideas of the money-goods economy as seen from the capital point of view. 1. What is capital? Law of energy conservation Although the term is widely used in economics and finance and has been researched by recognised economists, their efforts basically failed and in 1975 Ch. Bliss [p. 7] could write: “(…) When economists reach agreement on the theory of capital they will shortly reach agreement on everything. Happily, for those who enjoy a diversity of views and beliefs, there is very little danger of this outcome. Indeed, there is at present not even agreement as to what the subject is about (…)". Let us remind that the term capital has been used as early as in thirteenth century and some simple accounting systems, which enabled the measurement of periodical capital changes, had appeared in this time. In 1921, E. Cannan offered the following explanation of capital: “(…) It would not have been at all surprising if the adjective capitalis, formed by the Romans...
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This note was uploaded on 10/24/2011 for the course SCIENCE PHY 453 taught by Professor Barnard during the Winter '11 term at BYU.

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ssrn-id893502 - The Nature of Capital and the Money-Goods...

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