From: Jurriaan Bendien (andromeda246@HETNET.NL)
Date: Mon May 17 2004 - 21:48:15 EDT
I wrote: If economic value itself cannot be measured other than in terms of priced costs, or else in terms of labor-hours performed, then trying to prove an identity of total prices and total values is just pointless. We're not interested in values as such, but in value-relations. I could add of course that a third method of objectively measuring the value of assets consists of estimating the exchange-ratio's applying to specific goods traded, a method of importance in studying countertrade and structural unequal exchange. But I was thinking here of "value as such" such as it pertains to outputs. Various other methods of measuring economic value could of course be devised, for example patterns of real consumption. Here's an interesting quote I am using for my article "The transformation problem and the Marxian law of value": "But the question remains, what is the value of a company ? The answer depends on who is asking the question. A business owner would be interested in the market value of the company, whereas, the accountant cares little or nothing about capitalizing knowledge and wants to know instead the book value of the company. Accordingly, not all the factors determining the value of the company are included in the book value. Stock exchange analysts for example are particularly interested in the economic value of the company. They look at a future cash flows, and convert them into present values against weighted average costs of capital. An important point of criticism about existing annual reporting is the lack of future-oriented information. The rowboat represents the old way of thinking of a company's value and of financial reporting. The metaphor of the rowboat says something about the role of the accountant. In effect, an accountant is sitting in a rowboat; he is going forward but looking backward; while the entrepreneur is sitting in a canoe; he is going forward and looking forward. Or, in the words of Paul Fentener van Vlissingen (1995): "The figures from an annual report say something about the past but nothing about the future. It's as if you are sitting on the back of a horse, backwards: what you can see is already behind you. Where the horse is going is unknown, because you have your back to it. Maybe it is heading for the edge of a ravine..." - Stephen Goldman and Dimitri Hoogenboom, "De waardebepaling van kennis in ondernemingen" (Longman, 1998), p. 93. The reference is to P. Fentener van Vlissingen, "Business Owners are like Donkeys". Leuven: Van Halewijk, 1995. Jurriaan
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