The Riches of the Ocean for Humankind: Rethinking Value in Economics and Development

5. The Global Stock of Our Riches: The Dowry and Patrimony
The stock of riches, which provides all the resources and the environment for our life on Earth, can be summarized in the following table (See Figure 2). We call this stock Dowry and Patrimony (D&P) and we would like to underline the fact that it is the ultimate source of economic value. Within these different types of riches, there is one, the monetarized patrimony, which represents the contribution of the Industrial Revolution to the overall accumulation of wealth.

Obviously the oceans, as any other Earth resource, are a combination, in terms of riches, of the various types of D&P mentioned in Figure 2.

6. Assessing Riches, Wealth and Welfare
In the previous paragraphs we have already tried to point out two key elements that make conventional economics an inadequate tool to evaluate the economic value of common heritage and of the oceans in particular. The first concerns the very notion of value, which relates to a flow of monetarized (or implicitly monetarized) goods and services. This flow is always supposed to be positive, but in fact it is also negative in terms of wealth accumulation. Secondly, it is a measurement that is very partial with regards to both the nonmonetarized flows and the results of all flows on the level of riches or D&P. All this intellectual construc­tion of classical economics rests upon the assumption that the flows of added values are adding to wealth, at least as a priority tool, and as such remain the major reference for econom­ic policy.

We contend that although the management and stimulation of value added in this sense is still very important, it tends to be of secondary importance, at least in the terms conceived during the Industrial Revolution, in an economy where one has to evaluate the final results on the level of the riches on the one side, and where the very process of the production of added value depends more and more on service activities.11 The real problem we have to face at this stage is to reformulate a definition of value so that we can elaborate a system of indicators more appropriate to evaluate, monitor, and establish economic policies, and to complement the single indicator of the monetarized value added.

Figure 2: Dowry and Patrimony (D&P): The Accumulation Process of Resources12


At this stage we have to go back to consider all the indicators that have been provided for the last decades to measure various aspects of economic activities. Many indicators have been proposed and used in both a socioeconomic context (“social accounting”), in an institutional company context (“social audit”), and even in an individual context (“satisfaction indices”). The World Bank has made in the last few years consistent steps in our direction by publishing reports integrating various welfare indices. The problems and criticism against such indices vary.

The first criticism, coming from economists, is that social indicators are sociological tools that do not directly concern economics. This criticism derives once more from the identification of economics with the monetarized economy. In fact, it should be recognized that these indicators are related to the definition of and search for wealth and welfare, and that their existence and even proliferation are a sign of the growing dissatisfaction with the traditional tools of economic measurement, precisely in view of economic goals (i.e., developing the wealth of nations) and research objectives.

The second criticism is that the indicators are very often too qualitative and difficult to quantify. This is obvious; however, there are also clearly many cases in which quantification is, in reality, a meaningless process. For example, because value added entails certain deducted values, it can no longer be considered a reliable indication of wealth and welfare even though it can be measured relatively easily. The first requirement is to be sure that the measurement in question has the expected significance. To select factors in a system on the basis of their direct measurability and not in terms of the behaviour of the system in itself and its goals clearly leads to aberrations.

The third criticism relates to the multiplicity and variety of these indicators. The “indicators” movement may seem to be the outcome of different situations; it leads to very different types of motivation. Two types of answers can be discussed. The first is that wealth and welfare can be differently defined in different places and cultures, as well as in different moments in time. It is the very inflexibility of the traditional concept of value in econom­ics that may constitute an unacceptable factor, because it presupposes a world in which living conditions, constraints, and appreciations are uniform. The diversity which, in fact, exists should not be taken as evidence of any lack of consistency and logic of the “indicator” movement. On the other hand, the earlier-mentioned lack of any adequate theory of wealth and welfare has probably impeded a more successful use of such indicators.

A more comprehensive theory of wealth and welfare of the kind proposed here tries to provide a basis for a more consistent approach and actually encourages utilization of the indicators. In fact, the whole target of this article can be defined in the following way:

  • first define a new theory of value (utilization value);
  • then devise the most appropriate methods and possibilities of measurement and the judgment (selection of indicators);
  • in this way open the possibility of defining new operational economic policies, for instance, in the fiscal and monetary field as well as in the preservation and development of nonmonetarized resources.

We will therefore bring together the various ideas on D&P, utilization value, and deduct­ed and added value in an attempt to set out a systematic reference framework for assessing wealth and welfare on the basis of figure 3. Figure 3 proposes a logical sequence of D&P formation and use in time and space, a prerequisite for any research on its general structure.

Figure 3: The Dynamics of Dowry and Patrimony and the Classification of Indicators


Central to the notion of wealth and welfare is the concept of Dowry and Patrimony (D&P, box 1), including every available resource and asset, material and nonmaterial, monetarized or nonmonetarized. Economists have taken a timid partial step in this direction when they talk of human capital, including qualitative indicators. D&P, as we have already indicated has a utilization value (box 2), which represents the (objective) availability of D&P (e.g., apples on a tree, the music of Beethoven, a bank account) and the (subjective) accessibility to it (i.e., both material and cultural: I appreciate Beethoven, I am in a position to use my bank account and to get the apples from the tree). It represents, to use a keyword much in favour with economists, the notion of utility in its widest sense.

Utilization value allows humankind to live and therefore to produce (i.e., positive and negative yields, and added and deducted values in their monetary and nonmonetary sense). Box 3 relates to man-made formation and depletion of D&P, and box 4 indicates the natural D&P formation and depletion process, which influences directly the total D&P, but which develops in synergy (point 5) with the man-made process. Boxes 3 and 4, in their synergy (point 5) determine the level of total D&P. Utilization value is then the reference for identifying the economic value of a stock, which in fact in our case would also refer to common heritage and the oceans.

If we take the notion of utilization value from another angle, we can identify this notion with the contemporary “service economy,” which we have tried to identify in another context.13 We are here, in fact, confronted with another fundamental crossroad: the manufacturing industry, the producer par excellence of value added, has become in a modern economy more and more based on service functions (70 percent to 80 percent of their total “production” costs). Within the industrial system, this is transforming the notion of value from a reference related to the instant encountering of supply and demand in a given moment in time, to a notion of value incorporating performance of systems in future time. Whereas, uncertainty becomes a key issue for management and the idea of equilibrium in economics is replaced by the notion of dynamic disequilibrium. In other words, the reality and the evolution itself of modern industry on the one side, constraints of the environment on the other side, are converging in a way to put in evidence what are the key concepts for the economics of common heritage:

  • acknowledgment of the value of a stock;
  • the identification of its economic value in terms of performance or utilization in time (i.e., in a probabilistic setting).

In a theoretical sense, what it is at stake here is in fact the development of a general new economic theory that will provide the basic groundwork to mobilize researchers on issues related to indicators. This is to have a consistent frame of reference that can be used and managed for the purpose of efficiently managing our common heritage, our stock of riches, and the use of resources of all sorts in a new context. Many fundamental questions and some of the answers of traditional economics are still valid, but the frame of reference for their application has changed too much today to be used as simple adaptations. If you are used to driving a car, you do not simply fly an airplane applying the same rules as those used for driving.

Our final pledge would then be that to establish the economics of common heritage, it is essential today to stimulate fundamental research in economics on which depends the development of adequate measurement tools for applicable economic policies.

11. Ibid.
12. Ibid.
13. See Chapter 3 of Giarini, Dialogue on Wealth and Welfare.

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