Let's see if I got this right. Neoclassical capital and labor are fund-service resources, while raw materials inventory and finished goods inventory are stock-flow resources. A company naturally uses different accounting methods for each. Dividing it up that way, if a company wishes to cut costs, it should reduce incoming raw materials before laying off labor. If a resource can be identified first as a fund-service type, then we have to ask if it is excludable or rival to determine whether to manage it as a public good or to privatize it. Sometimes there is a gray area where a formerly non-excludable, nonrival resource can be made excludable and/or rival for the purpose of privatization. An example might be seeds. Formerly, they were non-excludable because anyone with physical access to a seed producing plant could gather some seeds, and non-rival, though maybe congestible, in that one farmer gathering seeds didn't prevent the next farmer from gathering them. "Green Revolution" industry, such a Monsanto, made seeds excludable by patenting them and made them rival by making the resulting crop plants sterile, thus allowing it to privatize seeds. Did I get it?
interesting categorization of resources, but I still wonder in which larger model it fits and, more importantly, what can one do with this? (what's the purpose of this categorization?)
Let's see if I got this right.
Neoclassical capital and labor are fund-service resources, while raw materials inventory and finished goods inventory are stock-flow resources. A company naturally uses different accounting methods for each. Dividing it up that way, if a company wishes to cut costs, it should reduce incoming raw materials before laying off labor.
If a resource can be identified first as a fund-service type, then we have to ask if it is excludable or rival to determine whether to manage it as a public good or to privatize it. Sometimes there is a gray area where a formerly non-excludable, nonrival resource can be made excludable and/or rival for the purpose of privatization. An example might be seeds. Formerly, they were non-excludable because anyone with physical access to a seed producing plant could gather some seeds, and non-rival, though maybe congestible, in that one farmer gathering seeds didn't prevent the next farmer from gathering them. "Green Revolution" industry, such a Monsanto, made seeds excludable by patenting them and made them rival by making the resulting crop plants sterile, thus allowing it to privatize seeds.
Did I get it?
Thanks a lot.
interesting categorization of resources, but I still wonder in which larger model it fits and, more importantly, what can one do with this? (what's the purpose of this categorization?)
we should be careful the way we spend money, if you are not spending to get profits at the end, your gradually moving into poverty.