AbstractWealth is defined as one that has 'Value in Exchange' and 'Value in use'. Accountants, in financial statements show items like goodwill, loss and depreciation that may/maynot have 'Value in exchange'. Who is right? Mathematics has an answer. Can we add 2a and 3a? Yes. Can we subtract 2a from 7a? Yes. Can one add or subtract 2a to/from 7b? No. Can we add 2meters and 3meters? Yes. Can we subtract 3grams from 5grams? Yes. Can we add or subtract 3 grams from 8seconds? No. Only wealth can be added or subtracted to/from wealth. This is in other words Law of Conservation of Wealth. As items like loss, depreciation and goodwill are added/subtracted to/from other forms of wealth these are forms of wealth. When one says that crop worth $4million is lost, he is expressing loass in units of money and money is a form of wealth. If loss is not a form of wealth, why is it expressed in units of wealth? What is the unit of non-wealth? Therefore, the words 'Value in Exchange' have no relevance.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by EconWPA in its series General Economics and Teaching with number 0503009.
Length: 8 pages
Date of creation: 17 Mar 2005
Date of revision:
Note: Type of Document - doc; pages: 8. Law of Conservation and Law of Equilibrium are two laws that apply to matter, energy and wealth alike. Economics is a material science.
Contact details of provider:
Web page: http://18.104.22.168
Value in Exchange; Value in Use; Law of Conservation of Wealth and Law of Equilibrium;
Find related papers by JEL classification:
- B - Schools of Economic Thought and Methodology
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-04-16 (All new papers)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).
If references are entirely missing, you can add them using this form.