Neutrality of the economic unit of measure

SSET 06 – NEUTRALITY of the Economic Unit of Measure

The new Subjective and Solidarity Economic Theory (SSET) has shown that economic neutrality is pertinent to place in the theory of the unit of measurement, but not in the theory of currency, as this is an economic good cannot be neutral in economy.

Let us see graphically the demonstration of the neutrality of the economic unit of measure:

Choosing the unit of measure

To different currency different relative values


If we consider the value-price of $ (gold) as a unit of measure, both of the non-currency wealth q (it is not means of universal use change), us the paper currency (PC), we have this economics indicator of the economy:

v$(q) = 1,786 / 1,875 = 0,952

v$(PM) = 1,786 / 1,429 = 1,25

P$(q) = 6,4 / 5,60 = 1,143

P$(PM) = 6,98 / 5,60 = 1,245

If we consider the value-price of the PC (Paper Currency) us a unit of measure, both of non-currency wealth q (it is not means of universal use), and of gold, we have this economic indicator of the economy:

vPM($) = 1,429 / 1,786 = 0,800

vPM(q) = 1,429 / 1,875 = 0,762

PPM($) = 5,60 / 6,98 = 0,802

PPM(q) = 6,40 / 6,98 = 0,917

Then we deduce: [2]

Pq($) = 1 / 1,143 = 0,875 $

Pq(PM) = 1 / 0,917 = 1,09 PM

Pq = 0,875 $ = 1,09 PM

That indicates:

P$(PM) = 1,09 / 0,875 = 1,245

PPM($) = 0,875 / 1,09 = 0,802

     Prices that we had previously arrived at, [3] which indicates that the unit of measurement is neutral, [4] as in physics; it is a question of choosing the reference body to which the other calculations will be relative. Thus, money (present economic good, such as gold) is an economic good distinct from paper currency (currency-credit-irregular); although the value-price of both can be used as a unit of measure. That is, there is no consistent theoretical entity to make currency theory from assimilating currencies that are different economic goods; as it is: pretending to study the rotation of gold “immersed” in the use of a gold standard system; assimilate “currency aggregates”; etc. ― inadequate instruments to pretend “directing” the free human valuation, with its consequences of economic inefficiency and inequity.

Thus, the neutrality of unit of economic measure allows us to express the natural positive cross correlation of ALL exchange, including currency (monetary): [5]

Natural correlation of currency exchange

 v$(q) ↔ ↑P $(q)   $i ↔↑q ↔↑q t

Carlos A. Bondone

[1] Our currency theory said that: currency can be money (present economic good: gold), or credit. The credit can be regular (gold pattern) or irregular (paper money).

[2] Calculate by the inverse of the economic relatives of the Subjective and Solidarity Economic Theory (SSET).

[3] Relative prices among themselves, although we have used the economic good q us means of calculation that corroborated with the axiom of the ONE of the relative values: 1,245 * 0,802 = 1.

[4] Theoretical demonstration is in the Subjective and Solidarity Economic Theory (SSET), Chapter V.

[5] There is a real and currency world, not a real one and a currency one “to balance”.

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