 | |
Figure 3 The Food-Chain Process |
| |
Figure 3 The Food-Chain Process |
Production and consumption form a dual concept in economics. A commodity, that which is produced and consumed, is the central concept in economics.
It is not possible to produce a commodity out of nothing. Something has to be input and made use of in the process of production. Thus, it has been said that land, labor, and capital are the factors of production. The land factor is sometimes called the resources factor, because land is also used to indicate natural resources, in addition to referring to the space or environment of a specific piece of land. The capital factor is identical to the production system itself. It is noteworthy fact that waste and useless heat are inevitably produced in the course of the production. Hence, the production process requires resources and labor as inputs, and produces commodities and waste as outputs.
It should be noted, however, that consumption does not necessarily mean the vanishing of a commodity. The household, a consuming entity, provides the labor force for the production process, and consequently produces waste and useless heat. Thus, consumption is a process into which commodities and household labor are inputs, and from which labor and waste are outputs.
From where do resources come? And to where do wastes go? In the past, when nature and the environment seemed to be immense and boundless, nature furnished the resources and the environment accommodated the wastes. However, this can no longer be the case if present conditions continue, because resources are being exhausted and the environment is being destroyed.
In order to fill the gap between waste and resources in the matter cycle (sometimes called material circulation), a decomposition system that converts waste into resources has to be introduced into the economic system.
More than one million species of animals and more than three hundred thousand species of plants live on Earth. These living things, linked in the food-chain, are dependent on each other and maintain action/reaction relationships with the mineral system.
Figure 3 The Food-Chain Process, is a schematic expression of the food-chain or the carbon cycle of the ecological system. It is possible to envisage a conceptual model of the economic system based on this ecological system.
By way of analogy, the production-consumption-decomposition processes with plant-animal-microorganism entities in the ecological system correspond to the production-consumption-decomposition processes with the enterprise-household-government entities in the economic system, as shown in Figure 3 The Food-Chain Process.