A Structural Analysis of Economic Processes by the Use of “Energy Content Value”

Since currency is a means of exchange, it forms a standard of value. Modern economics uses the function of currency as a “general standard of value” and describes the economic processes in the terms of value by the quantity of money. The most notable indicator to symbolize this situation is “Gross Domestic Product” (GDP). However, GDP, in general, does not indicate the economic process as a whole. It is necessary to add intermediate inputs to the GDP in order to calculate the total amount of industrial output of a country, and this total industrial output can never realize without energy supply. In other words, the total industrial output of a country and the total amount of energy supplied (= consumed) constitute an inseparable relationship like the front and back of the coin. This research tries to propose an alternative evaluation indicator based on “energy”, which is the most important economic substance and the indispensable requirement for all human activities. Regarding this issue, this study deals with the following problems. First, we refer to a dualistic composition which Soddy had adopted, from the beginning, to classify wealth, which is a product of economic processes, into two categories: one on a physical dimension (Wealth I · II) and the other on a psychological dimension (Virtual Wealth). Then, based on the dualistic framework proposed by Soddy, we present that we can evaluate the economic process, through a compound-eye view, on two dimensions: the physical dimension (energy flow) and the institutional dimension (money flow). Next, we focus on ‘the economic process presented by monetary value’ (A) and ‘the energy quantity which effectually supports this process’ (B). We have introduced how to project (B) onto the constituent elements of (A). Thus, we take a case study on Japan by use of dualistic aspects approach.