The Energy Theory of Value

of

Frater Ponderator

     Value is in the eye of the beholder.  A ton of gold, or the world's fastest computer, each "worth" millions to many, mean very little to the ascetic.  However the book printed upon 3 dollars of paper may be worth millions to him and nothing to others.  Knowledge could be said to be more valuable because unlike gold, it is never lost unless it is not shared.  It is the wealth that can be distributed without loss to he who gives.  However in a material world one must deal with finite material things thus a system to fairly achieve that distribution must be wrought.   The Individualists believe that simplicity is the strongest system, thus all value, use-value, exchange-value, worth, price must be reduced to a simple system.

   Apart from Price, which is desire of profit and even feelings of entitlement, (what one feels like one deserves for the effort applied) there exists True Value.  True Value is beyond the feelings and desires of man.  It is in the realm of pure energy.  For any one item, X amount of energy was applied to extract, refine and transport the resources.  Y amount of energy was applied to design it, Z amount was applied to create it and distribute it to the end user.  Thus the True Value is the sum total of the exact time and energy utilized to manifest that item in its present form, composition, and location.  The True Value does not compensate for inefficiency of the crafter, or any inefficiency along the system.  Thus something completely useless could have a tremendous True Value, like many present day products.  Gasoline being one of them, if the costs of war over oil was added into the price, we would most likely be paying over ten dollars per gallon.

     True Worth unveils the True level of mastery of the craftsman (or production method).  True worth is a comparison between the True Value of two (or more) things over their respective times.  The lowest true value is considered "one" and the higher becomes a percentage of that.  These two values are then divided by their times to yield true worth.  For example:

 

Two souls, both create the exact same object of exact quality etc. save the one took twice the energy and twice the time to produce it.   Soul A's energy efficiency would be one while soul B's use of twice the energy would be 1/2.  Thus soul A's True Worth is: 1e/1t = 1.  Compared to soul B's True Worth of 0.5e/2t = 0.25.  Thus soul B's item is truly worth only a quarter of soul A's item even though the items are exactly the same.

 

     True Worth reflects the degree of wisdom as efficiency.  Yet it will never determine practical worth to an individual which is a judgement solely in the mind of that individual.  Furthermore, it does not reflect the emotion which the item was wrought in be it Love, Fear, War, Peace etc.

 

     To build a system of this nature from scratch would not be so challenging.  To implement the system into another system already working is slightly more challenging.  Adhering strictly to the above definitions one must first know all energy consumption beginning at the raw resources.  Each human and machine used to mine uses X amount of energy over Y amount of time per volume of resources produced.  The machine itself was built from raw materials which were refined, shaped into the machine and shipped, thus its True Value must also be divided amongst the volume it produces.  Even the train transporting these goods has very high true value that must be considered.

     If implemented from scratch the energy of extraction of resources would be divided by the produced volume.  Thus different iron ore mines would have different true values for their products simply because of differences in digging difficulty through different rock hardness, let alone different choices in equipment, even though the end product is simply iron in both cases.  The product's total energy of creation would be stamped upon it and registered.  When transported, an additional stamp would be placed adding a calculated portion of the true value of the transporting vehicle and amount of fuel used upon arriving at its destination.  When fashioned into a shape an additional stamp is added recording the amount of the plant's consumption of time and energy used in shaping the item along with a portion of the plant's true vale.  A final stamp is placed recording fuel consumption and a portion of the true value of the final distribution vehicle upon arrival at its final destination.

     The end result is a time and energy breakdown on the side of a product that is no different than the nutritional breakdown on the side of food packages and just as simple to implement.  It would label the raw ingredients, and the time and energy consumption of each stage, the total being its True Value.  All the plants, farms, mines and mills etc. would have to include their registered number so that consumers can look into them if desired, assisting consumers to be aware of the relative efficiency of each plant, farm, mill, mine etc.  This system would allow consumers to make wiser comparisons of items clearly seeing their True Worth.

     The initial challenge is the assessment taken to implement the system.  Once it is implemented it gets progressively more accurate as each manufacturer beings purchasing machines that already have an accurate True Value stamped upon them making its division amongst the products created by or with it that much easier.  The division of the True Value of a machine into the production must be exactly the same throughout the society.  The suggested time is 365 days.  For a simple example: If a machine has a true value of fifty units divided over fifty years its addition to a product which took a year to build was 1 unit.  If a machine with a true value of one unit builds the same product in the same year its added value is also one.  But if the standard division was one year (365 days) the first machine would have to add fifty units to the product clearly showing its possible inefficiency allowing the customers to then research this machine by following the plant registration number and determining if there is some valid reason.  In short it eliminates concealing inefficiency.

     This system of True Value and Worth does nothing directly to the price which a manufacture can place.  It simply allows greater energy consciousness to the entire society permitting clearer discernment as to what are wise alternatives.  This would eventually cause inefficient systems to either evolve or die out.  This system is made stronger by the implementation of the GEP, which would constantly evaluate manufacturers for accurate energy assessments.

     To keep fools from raising prices because they know an energy conscious society will purchase their energy efficient product, another standardization is made.  It is the minimum hourly wage converted to an estimated consumption of energy.  This value is created and updated yearly by the GEP.  It also has nothing to do with price, but simply gives consumers another benchmark to judge price on the basis of energy converted to average man hours.  For example, if one was told that a product took 8 average man-hours to build, he would immediately have an idea of the worth of the product in relation to his own individual output per hour and his own personal judgement of himself as average, above or below.  Normally, expended human work energy is an ambiguous and rough determination.  With the mechanism described below it becomes a much more "real" value. 

 

     This Minimum wage value is determined as the average amount of calories burned by the average worker in the average occupation plus all daily needs:

1.  At rest the average body burns about 11 calories per pound per day so that a 155 lb. man burns 1,705 kcal.  During light work the same will burn roughly an additional 245 calories per hour or 1960 calories per 8 hr day, plus the 1,705 just to keep the body running, yields 3,665 kcalories or 14,535 BTU just to repay the man the work energy he expended. 

2.  The average distance traveled per day is 30 miles, most of this is in commute to work.   Thus an additional 2 gallons of gas at 15m/gal yields 227,000 BTU 

3.  The average daily electricity he will use is 9.6kWh or 32,757 BTU

4.  The average daily heat is 75 kWh or 255,911 BTU

5.  Depending on the various systems for water retrieval and wastes removal it is assumed an addition $1.11/day to accomplish these tasks or 42,252 BTU*

6.  His communication with phone and Internet are $3/day or 113,738 BTU*

7.  A 100,000 dollar home over 30 years approximately $33.33/day or 1,263,629 BTU*   (A mere 346,143 BTU without interest)

* Based on $0.09 per kWh

** Does not include a vehicle payment

 

     Thus 1,949,822 BTU per day or 243,728 BTU per hour is the minimum wage.  This is the bare minimum energy an average individual utilizes daily, therefore needs to be compensated this amount to maintain equilibrium.  For additional perspective this value is shown below converted into the equal amount in other energy forms and the price in that form:  (note: federal minimum wage is 5.85 now, to increase to 6.55 7/24/08)

 

1.  Electricity: 71.43kWh @ $0.09kWh or $6.43 2. Corn (&cob): 614 lbs  {$20.83} 3.  Soy:  33.88 lbs {$4.23} 4. Sunflower seeds: 24.41 lbs. {$2.93} 5. Ethanol: 3.17 gal {$8.70} 6.  Gas: 2.15 gal, {$6.42} 7. Soy derived diesel: 1.86 gal {$5.77} 8. Sunflower derived diesel: 1.87 gal {$4.62}

One can clearly see that corn is an anomalous figure.  The average above, including corn, is $7.49.  Without corn, $5.59.  The average between these figures: $6.54.  Almost exactly what it is to soon be.  So it can be seen, that to equate everything to energy would not change the current system dramatically.  It will simply give much greater detail and meaning to a “wage” and a “value”, etc, making the flow of energy, literally, visible.

     Without any system to convert a True Value amount of energy into a relative price, a consumer is simply left with a true worth comparison as described above.  Thus the individual who creates an energy efficient product with a capitalizing mindset realizes this society will magnetize to his product because its true worth is far better than similar items.  He uses this to his advantage and raises the price.  This is not to say that there is anything wrong with this.  It is simply saying that the consumer is at a disadvantage because there are no further benchmarks to judge the final price and gain insight into the demeanor of the manufacturer, such as if he is over charging or fair.  With this minimum wage value the energy value of the product can be directly converted into a dollar figure thus exposing the approximate markup of the manufacture.  Assisting the consumer in his final decision.

     This breakdown also shows where efficiency can be increased in society as a whole as it reflects the average individual consumption.  One can see above that simply the removal of mortgage interest alone eliminates 917,486 BTU per day per individual.  The implementation of self-sufficiency will further decrease this consumption.  Furthermore this value allows the labor of men to be converted into an approximate True Value to be divided over their products produced enhancing the accuracy of True Worth.

     As can be seen in all of the above prices for the exact same amount of energy in different forms, they all have a different price.  One would expect differences due to the application of energies such as Food Energy, Motive Energy, or Raw Electrical Energy, but each of these groupings should be similar, yet they are not.   This allows it to be clearly seen which type of energy is cumbersome to produce and which system of conversion to energy is less efficient than another clearly delineating to the people what systems need to be improved.

     With the energy efficiencies of fuel production able to be compared to price, people will begin to question why should they pay more for the exact same amount of energy, causing expensive fuels to either refine their efficiency methods or phase out.  The prices of all fuels will reflect a True Worth value in addition to their Fuel Energy value both in addition to price.  This is where waste will clearly be seen.  It is possible that the true worth (the amount of energy taken to create and move the product) will be far greater than the energy contained in the product.  Simply, it will be like spending two dollars to buy a dollar.  With an energy conscious society, even if the price is low, negative products as these will soon be abandoned or forced to increase efficiency.

 THE ENERGY STANDARD

     The Individualists implement one final system to galvanize the energy awareness of their society: The implementation of the Energy standard.  No different than what the gold standard was, the energy standard allows one at any time to trade in issued certificates for real energy, either Food Energy, Motive Energy, or Raw Electrical Energy at a Populus Resource Reserve or use them as currency at any Populus facility.  This allows the self-sufficient to trade in crops, self made fuels, surplus electric from wind and water turbines and even labor to fill the voids in their environment.  With bills/notes as Energy Certificates, the society becomes further energy conscious being that its bills and trade constantly refer the mind back to energy efficiency. 

     The Individualists do not arbitrarily print their certificates like the hollow systems of today.  Aside from the energy created by Populus facilities and stored as reserves.  They issue one registered certificate for each real trade.  The entire transaction recorded in detail and added to the reserve.  For instance, if a man trades in a fifty-five gallon drum of diesel containing approximately X Btu of energy, he is issued a certificate(s) for Y, and the amount of diesel is sent to the reserves and duly recorded.  When certificates are used at a Populus facility they are then registered as "expended" and may be destroyed to prevent human temptation to corrupt the system if seen fit.  For simple example, the above man's diesel had 4 units of energy (e).  After the conversion he was issued a certificate for 1e.  Therefore the reserve now has 4e.  This man then uses a Populus fabrication shop spending his 1e there.  The fabrication shop physically used 1e of electricity to power his activity.  Thus the 1e is registered as expended.  The reserve now has 3e and 1e of disbanded currency.

   Populus issued certificates are accepted as hard currency at any Populus facility.  As the system gains in use, individuals and private businesses will also begin to use them and the old hollow currency will phase out.  The certificates issued are based on raw electrical energy.  Any item traded for a certificate is reduced to it simplest form by the functions listed below and issued a certificate for that amount in energy.  For example:

     A man wishes to trade 1 lb of soy for certificates. 1 lb of soy is know to contain V amount of Vital energy and yield W amount of fuel with the loss of X amount in conversion, that fuel yields Y amount in raw electric at the cost of Z amount in conversion.  Therefore V - W - X - Y - Z = the energy value of the certificate issued.  The GEP will establish an old market conversion value for raw energy until the old market is phased out.  This is the Standard Energy Value (SEV), this value links the Individualistic system to the old market. For example $0.09/kWh, a common price of electricity.  This value will be assessed each year and as efficiency increases this figure will drop.  Assisting the phasing out of the old system and increasing the accuracy and fairness of the functions below, as some only exist because the old market still exists.  As ideally the Populus reserve attempts to see only energy and efficiency not human desire of entitlement for expended effort (price).

 

     The Populus Reserve recognizes three tiers of energy, Vital (food), Fuel and Raw.  Food being the most complex and raw being pure electricity.  When trading, one does not have to trade for a certificate, one can trade for real items by following the functions below, such as corn for soy, diesel for corn etc.  Below are examples of the Energy tier conversions:

1.  Food to food = 1a: (the lesser of Va/Vb and Fa/Fb) b where 'a' is the food to be traded to the reserve and 'b' is the food received.  V is the registered food energy value per amount and F being the registered fuel yield of that particular food.  The reason why it is the lesser of the two is so that one cannot trade a food that has a low fuel energy yield for a food with a higher one thus profiting even if they have identical food energy values.  For example, 1lb of corn has 397 Food BTUs and yields 4,125 Fuel BTUs (0.05 gal of ethanol).  1lb of soy has 7,194 Food BTUs and yields 3,054 Fuel BTUs (0.02 gallon of biodiesel).  If one came in with a pound of soy and traded it for an equal food energy amount with corn, one would get 18.12 pounds of corn which could yield 74,745 BTUs in fuel energy (nearly a gallon of ethanol), which is nearly 25 times the fuel yield of the pound of soy traded.

 

2.  Food to Fuel = The registered fuel yield of that particular food less the registered Conversion Efficiency Coefficient (CEC) of that conversion (such as soy to diesel, there is energy lost in conversion)

 

3.  Fuel to Food = simply Btu value to Btu value

 

4. Fuel to Fuel = ideally this would be simply Btu value to Btu value, for one type of fuel Btu generates no more electricity or motive energy than another does.  Some simply take up more or less space per Btu which is actually an inefficiency, such as ethanol which takes up nearly twice the space as biodiesel for the exact same amount of energy and is twice as expensive.  One would think that for such an inefficiency it would be half as expensive.  Therefore to keep the Populus reserve free from illogical corruption of this sort until the old market dies out the conversion must be 1a: (the lesser of Fa/Fb and Ma/Mb) b where 'a' is the fuel to be traded to the reserve and 'b' is the fuel received.  F is the registered fuel energy value per amount and M being the registered current market value of that particular fuel.  The reason why it is the lesser of the two is so that one cannot trade a fuel that has a low market price for a fuel with a higher one thus profiting even if they have identical fuel energy values.  For example one could trade 1 gal of gas worth $2.99 for 1.47 gal of ethanol which commands a price of $4.05 for the exact same amount of energy (113,500 Btu).

 

5.  Raw to fuel = ideally this would be Btu for Btu.  But, until phase out this function is used: 1a: (the lesser of Ra/Fb and Ma/Mb) b where 'a' is the raw energy to be traded to the reserve and 'b' is the fuel received. R is the Standard Energy Value of raw electricity (SEV) F is the registered fuel energy value per amount and M being the registered current market values.  The reason why it is the lesser of the two is so that one cannot trade electricity that has a low market price for a fuel with a higher one thus profiting even if they have identical energy values.

 

6. Fuel to Raw = registered Btu content of fuel less standard fuel CEC.

 

     At first glance at these conversions, all trade seems to be had at a loss to the individual, as with any pawn shop, but the loss is illusory because the gain goes to the reserve, which is the people, which includes that individual.  One gives up some energy in the trade for the convenience, to the benefit of society.

     The old market system charges others for the amount of difficulty they experience creating their product.  Effort, by the Individualist definition, is simply inefficiency.  One should not be charged for the inefficiency of others, thus rewarding the most inefficient.  By phasing this old market out all energy will have the same value, the currency then becomes energy itself.  Therefore profit becomes a function of efficiency.  For example if one makes a gallon of diesel containing X Btu, it will only trade for that amount regardless of the time and energy one put into it.  The man making that same gallon in half the time and resources therefore profits.  A further example is the homebuilder.  Each piece used to build the home, down to the simplest nail will have a true value.  All his men will work an exact time, the house would have a true value equal to the sum total of all these values.  Ideally the home is only worth this amount, thus the faster this homebuilder builds these homes, therein lies his profit.  This system allows for no making of profit out of nothing.  Only efficiency of technique will afford profit.  Soon profit will be found in growing energy, gathering it from wind and water, and efficient conversion of that energy.  Many fuels and fuel using devises will phase out along with the old hollow market system, as fully electric devises are found most efficient.  

 

     Below are the forms taken by the Populus Reserve Certificates and their comparisons to present currency. The SEV value used as example in the below certificate comparisons will be 0.09/kWh. 

Hnote = 1 hectoWatt-hour or 341 Btu Similar to a penny

H5      = 5 hectoWatt-hours or 1,705 Btu Similar to a Nickel

Mnote = 1 megacalorie (3,965 Btu) Similar to a dime

M10    = 10 megacalories (39,656 Btu) Similar to a $1

M20    = 20 megacalories (79,312 Btu) Similar to a $2

M50    = 50 megacalories (198,250 Btu) Similar to a $5

M100  = 100 megacalories (396,566 Btu) Similar to a $10

M200  = 200 megacalories (793,132 Btu) Similar to a $20

M500  = 500 megacalories (1,982,500 Btu) Similar to a $50

Gnote  = 1 gigacalorie or 3,965,666 Btu Similar $100 (actually $104.60)

 

     The Individualists believe that this system allows the populace to clearly see the flow of energy, in single items, entire procedures and the whole of society.  Quickly exposing each and every inefficiency as well as their remedies with endless insights.   Causing the noise of the friction of this current market, its effort, to be alleviated.  The pace of life consequently will slow and relax as the race in waste and haste to nowhere is stopped, plummeting consumption to less than half of its present value and returning peace, harmony, reason and sanity to man. 

 

Some Rough Figures

 

- Corn: $1.90/ bushel at 56 Pounds yields 3 gallons of ethanol.

- Ethanol yields 77,000 BTUs/gal sells at $2.75 / gal or 28,000 Btu/dollar.

- As food one bushel (70 ears) corn yields 22,232 food Btu (5606kcal) Less than 3 days of food energy.

  (Due to inedible cob, about 45% of total ear mass.)

- Gasoline yields 113,500 BTUs/gal sells at $2.99 / gal or 37,960 Btu/dollar.

- Peanuts:  $4.00 for 1/100th ton (20lbs) yields 9.6 lbs. oil 7.7 lbs. gal (1.25 gal)

- PeaDesiel yields 130,900 Btu/gal sells at $3.43 / gal or 38,163 Btu/dollar

- As food 20lbs yields 207,065 food Btu (52,210 kcal) about 26 days of food energy.

- Soy: $7.50/ bushel at 60lbs yields 10.8 lbs. oil (1.40 gal)

- SoyDiesel yields 130,900 Btu/gal sells at $3.10 / gal or 42,226 Btu/dollar

- As food one bushel soy yields 431,640 food Btu (108,840kcal) About 54 days of food energy

- Sunflower: $3.36/ bushel at 28lbs yields 7.6 lbs. of oil (1gal)

- SunDiesel yields 129,200 Btu/gal sells at $2.47 / gal or 52,308 Btu/dollar.

- As food one bushel sunflower yields 291,564 food Btu (74,396kcal) About 37 days of food energy.

 

* The above biodiesel prices were figured using  $0.0925/lb for the value of meal remaining after extraction.  Plus an additional dollar per gallon as $0.80/gal for processing and $0.20/gal profit.

Natural oils that may be used as base oils for fuels include canola oil, castor oil, corn oil, cottonseed oil, crambe oil, hemp oil, jojoba oil, linseed oil, meadowfoam oil, oiticica oil, olive oil, peanut oil, rapeseed oil, sesame oil, soybean oil, sunflower oil, safflower oil, tung oil etc.   Allowing many diverse region types to be cultivated for renewable fuels.

1 kWh = 3412.14 Btu  // 3.966 Btu =1 kilocalorie


Continue to Individualistic Government

or to a video library of New Technologies or Corruption

or to a discussion on the Individualistic Understanding of Divinity