Everything has a beginning. This is also true for economics. When we are talking about an economic activity we mostly refer to the price, or even only the profit of a product or service. To produce any entity we need a production process. The driving force for all processes is not money but energy. So if we really want to be concise about circular economy we should measure the ‘added value’ of these processes and derived products in an adequate quantity i.e. joule…
Energy is indeed indispensable in any (economic) activity. In the accepted economics the scope is limited to transactions that can be expressed in monetary terms and added to values like the turnover, the GDP, etc… The price of something is the result of the functioning of markets but also of many other powers that intervene.
Everything starts with the energy sent to the earth by the sun. That energy is transformed on the globe in many ways: wind, clouds, streams, minerals, vegetation, animals, men, etc… Men have learned to use direct sunlight and a lot of the transformed appearances of sunlight. The flows described in the accepted economics are only a subset of all the flows that occur on the earth.
What we call production (in the accepted economic sense) are transformations induced by men of the transformed appearances of energy made available by what we call nature. But those transformations are only possible thanks to a massive quantity of production in family-households. Without the reproduction of strong, sound, intelligent men and woman by caring, feeding, and educating children the economy, wether circular or not, would soon come to a standstill.
The division of the economic entities in business / production and families / consumers is artificial and untenable. The most concise and most correct way to describe the societal activities is to see it as a network of economic entities realizing transactions while they all are functioning as cells characterized by input, production, and output. That is the way economics is formulated in the Economic Reality System.
Economics, to represent the reality in a sufficient realistic way, has to described and based on flows instead of markets. It is clear that not all flows can be described in terms of money, and even for flows where it is possible the monetary value cannot reflect their importance and effect on the worldwide limited availability and the possibility to realize an optimal circular economy. The choice of an adequate unit for energy is very important in this respect.
Thanks André, for your vision on the processes that make up our economy…it is completely in line my vision as explained elswhere in ‘the doughnut’…after all Hereklitos seems to be right with his ‘Panta Rhei’ philosophy…