Nominal Value

The First Law of Value Icon

January 4, 2022

Our First Law of Value is derived from the Third Law of Thermodynamics which says that absolute zero temperature is impossible to reach or maintain*. This translates to pantrynomics as every thing in the universe having value, otherwise it would not exist.

First law

*In Medical Superphysics, this manifests as everything being able to affect a person’s health in varying degrees. In Supersociology, this manifests as everyone having a value to society

Mr. A might not see value in a cake. But Mr. B might, as he might want it for his wife’s birthday tomorrow. The value of the cake to Mr. B is then due to:

  • his inherent dharma or tao (nature) of giving gifts during birthdays, and
  • the tao (nature) of the cake as being a kind of gift. In contrast, an iguana does not have the tao of being a gift, and so Mr. B would not assign value to an iguana, except if his wife were an Iguana-lover (had the tao of loving iguanas). This tao is not present in Mr. A and so he sees no value in the cake.

Thus, value is always relativistic to the general society and the personal self, just as energy has a general and special relativity.

Use-Value (Utility) and Nominal Price

This value is called use-value or utility value in Economics. Pantrynomics allows sentimental value, but since the mechanism to objectively compare sentiments is not yet established*, we shall stick to use-value.

*We’re working on that too

If the cake was baked by Mr. Chef, then Mr. B would want to buy it and by offering a nominal price. This price is a kind of exchangeable value from the perspective of the buyer.

We can plot the relationships created by this law, as well as the supply and demand model that arises:

First law definition
The first law of value creates the downward sloping demand curve for both Pantrynomics and Economics

The Paradox of Value in Economics Leading to Sinister Profit Maximization

Economics uses the difference between use-value and nominal exchangeable value to create a non-problem called the "paradox" of value.

This paradox states that water is essential to life and has a high use-value, but is nominally cheap. Diamonds, on the other hand, are nominally expensive but have low use-value. So economists create the concept of marginal utility to "solve" the paradox.

Marginal utility says that the frequent consumption of an item, such as water, reduces the utility or use-value of that item. Therefore, to make it more valuable, its consumption should be limited. For example, if we drink 4 liters of water everyday, then we will appreciate water twice more if we only had 2 liters daily. This would then raise its use-value and subsequently its nominal exchangable value to be more like diamonds.

This then leads to its child concept called utility or profit maximization that would urge us to sell this scarce water to get more nominal revenue and riches for ourselves. We should find a sweet spot via maximization wherein we can cut the supply of water to give us higher revenues, but not too much that it would kill our market (by dying from thirst, for example).

All of this is morally absurd, yet this is what Economic Calculus teaches. This can be seen most commonly in the prices of oil, utilities, medical services, and real estate which everyone needs.To Adam Smith and Pantrynomics, use-value should not be compared to exchangeable value just as apples should not be compared to oranges. This is because use-value is personal while exchangeable value is social. Without the comparison, no paradox is created and no profit maximization, artificial scarcity, and social suffering is created for personal gain.

The Resulting Concepts from the First Law

The resulting concepts from the First Law of Value are:

  • Effective and Absolute Demand
  • Nominal Prices
  • The Popular social class and cycle

The next post will explain the Second Law or Real Value.