On several occasions I have defined the object value of the Science of Economy as a real relationship of complementary and future convenience of the object valued by the objectives of the end users. One of the deductions of that nature of economic value is its reference to the future. Different resources have certain values, not because of their previous historical trajectory, but because of their capacity today to generate wealth, work and capacity of service in the future. Bhöm Bawerk already affirmed in his work Capital and Interest that "Finally, those theories that totally overcome the old superstition that the value of goods should be looked for in their past and not in their future, occupy a higher rung on the ladder. These doctrines know what they intend to explain and they also know in which direction they should explain it."

If accounting is understood as a basic instrument of economic calculation for the taking of managerial decisions and not as a mere formalist routine to reflect, for inspection or audit reasons, mercantile historical phenomena that have occurred, then it is as well to give importance to these future expectations of the capacity and suitability of different goods.

Historical facts are important to create order, control and make deductions from past experience, but it is as well to highlight the importance that budgetary accounting has for the management of any project, more real than the determinist extrapolation of events occurred in previous exercises. Budgetary accounting looks to the future and that should include managerial expectations. It is a subjective and originally estimated accounting on the part of general policy management of each entity that measures the economic value of different goods, not by past events, but by the dynamic and intelligent understanding of its future capacity. Being a valuation before an uncertain future it is, paradoxically, a more real valuation as long as it is in accordance with the nature of the economic value that it wants to measure. The game of the pioneer effort of the future that starts with the budgetary accounting exercise allows its comparison with the one that, later on, really happens. Those positive or negative differentials enrich our visions of the economic facts that are to come and they are the grounds for the study and correction of new future expectations. Hutchison already indicated in his History of Economic Thought that the distinction of Fisher between the concepts of "existences" and "current" taken from Newcomb, would inevitably lead to the necessity of a "dated" dynamic analysis and he pointed out in turn that it was necessary to pay more systematic attention to the expectations on which all capitalization processes are based.

The value of a patrimony, of a certain supplemented group of wealth, does not depend directly on the profit or loss generated in the past, but on the capacity today of generating future profit. However much profit a company has generated in previous financial periods, it does not necessarily imply, with a determinist and bureaucratic inertia, that it will generate more in the future. In order to calculate its value the most important is to estimate future capacities at the beginning of the new period, independently of the results account of past periods.

Another application to accounting, as an instrument that tries to reflect the vicissitudes of economic value, is the sometimes-underestimated importance, that certain real concrete goods have as a whole. The necessity and habit of measuring the very different goods of a company in monetary terms by accountancy, have the danger of abstracting and forgetting the potential completion of the different components of the patrimonial whole. With the aggregation of monetary values, we homogenize the complementary wealth that each integral part of the group possesses so that, if we do not bear it in mind, the concrete subjective measures of economic value and our decisions can lose veracity.

Meticulous inventories of the different goods, if possible with their specific characteristics, are indispensable for a greater approximation to the value of each one and of the group. Managerial agents should be concerned with the itemized study of these relationships of physical and immaterial goods as much or more than the balances that only reflect monetary values, that is to say the exchange values. It should never be forgotten that the values in use (the definitive ones) pass to different and superior levels than the exchange values. What usually occurs is that a certain inventoried resource has an internal value in use for the company, superior to the exchange value. If this were not the case then it would be better to sell it.

In economics, real goods and the movements and relationships of the real economy are more important than currency values. Those values in terms of prices, although facilitating economic calculation, shroud a part of the real values in use of the goods and distort the complementary relationships between different resources that the company presently or potentially has access to.

I consider these applications of the theory of economic value obvious and well known but maybe their importance is banned in the managerial daily practice in which we are immersed.

Joseph John Franch Menéu
Gaceta de los Negocios, Wednesday 21st July 1993