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Annals of DAAAM for 2009 & Proceedings of the 20th
International DAAAM Symposium, Volume 20, No. 1, ISSN 1726-9679
ISBN 978-3-901509-70-4, Editor B. Katalinic, Published by DAAAM
International, Vienna, Austria, EU, 2009
Make Harmony Between Technology and Nature, and Your Mind will
Fly Free as a Bird
Annals of DAAAM International
THE KNOWLEDGE-BASED SOCIETY-A CONSEQUENCE OF THE ENTROPY -
VALUE
THEORY
NICOLAE, S[imona]
Abstract: The Knowledge-Based Society has started to affect
the work and lives of the most of human resources. People
need
particular skills to work effectively and the workplace and
other structures need to be properly organized to take the
greatest advantage of the Knowledge-Based Society. The main
aim of this paper is to show how the model of value based on
entropy can be applied into a knowledge-based society and
how
much this kind of society is a consequence of this theory.
Key words: human capital, entropy-value theory, labor-value
theory, knowledge - based society, utility-value theory
1. INTRODUCTION
The Knowledge-Based Society is not a relatively new
concept for the most developed countries and become more andmore
a real challenge for the developing ones.
Theoretically, the concept dates from 1945 when F.A.Hayek wrote
an article entitled "The Use of Knowledge inSociety" which
highlighted the importance of the knowledge in
society. He said: we need to remember only how much wehave to
learn in any occupation after we have completed our
theoretical training, how big a part of our working life we
spendlearning particular jobs, and how valuable an asset in all
walksof life is knowledge of people, of local conditions, and
of
special circumstances (...) If we can agree that the
economicproblem of society is mainly one of rapid adaptation to
changes
in the particular circumstances of time and place, it would
seemto follow that the ultimate decisions must be left to the
people
who are familiar with these circumstances, who know directlyof
the relevant changes and of the resources immediatelyavailable to
meet them. (Hayek, 1945)
The technological revolution of Automation, already underway,
requires a tremendous increase in the number of trainedand educated
people. Already the short supply of such people is
the major limiting factoron the rapid growth of our economyand
of our principal industries. We need not worry, therefore,
about our ability to absorb these millions of college-trained
people; we have to worry principally about increasing their
number and quality fast enough. (Drucker, 1957)Today this
concept has become more broadly and its
importance not require arguments anymore.But, what has led to
such an important extend of this
concept? What is the cause of such a phenomenon?
One of the answers probably lies in the very economicaland
political evolution of the world. We have passed from a
human being as a tool, led by the famous slogan, heard
untilrecently in Romania: "we do not think we work, to the
self-sufficient human being type of: live the moment, its
valuable if I like it and not ultimately "the king consumer.This
latter concept, too often underlined in the market
economy, has given to the consumer the impression that has
akingdom at his feet ready to serve him any time. Day or night!
The bombardment of advertising has also created, inaddition to
otherwise desirable behaviours, false dependencies
of product. The vortex of information has not left any chancefor
human brain to examine the needs he has perceived and to
construct a conscious future strategy. Everything has
beenreduced to "now".
This system of values based on marginal utility has its
goodparts but is insufficient for a sustained human development.
At
least in the long term and at least regarding the human
resourcethat in a Knowledge-Based Society is called human
capital.
We have arrived this way at the key element of Knowledge-Based
Society namely the human capital that is the only vital
input in this kind of society. Human capital can be defined
asthe knowledge, skills, competencies and attributes embodied
in
individuals that facilitate the creation of economic, social and
personal wellbeing. Human capital is closely linked to thequality
of the worker and explains why one worker is moreproductive with
the same capital equipment than another.
But this concept does not have a static dimension. Itinvolves
the lifelong acquisition of professional abilities that
have to be used and processed this being so to enable
theobtaining a maximum yield in the future processes in which
will be involved.This is actually the main difference between
the society
based on human capital and the society based on labor
force.While the first combines Entropy-Value Theory with
Utility-Value Theory the second combines Labor-Value Theory
with Utility-Value Theory.
In what follows we will present the key points of
theEntropy-Value Theory as they were set out by the founder ofthis
theory, Professor Paul Bran.
2. THE ENTROPY-VALUE THEORY MODEL
AND THE KNOWLEDGE-BASED SOCIETY
Entropy Value Theory was developed by the Professor Paul
Bran since 1990 but its final form would see the light of
printing at the Economic Publishing House in 1995 as
"Economy of Value".For our approach we consider useful only the
presentation
of the mechanism of obtaining the value and the comparisonsmade
by Professor Paul Bran between Entropy - Value Theory
and the other two theories of value, Labor Value Theory
andUtility Value Theory. This being so, we try to demonstrate
towhat extent the knowledge society is a consequence of the
Entropy Value Theory.The scientific theory in the economic field
has replaced the
support of value called labor, expressed by socially
necessary
working time, by the support called utility or satisfaction. In
theEntropy-Value Theory, the author has chosen a more generaltype
of physical support: low entropy, or degree of organization
existing in simple systems (elementary forms of
matter:substance, free energy, information) or in complex
systems
(plants, animals, etc.)The assumptions underlying the
construction of the model
are:
- The inputs of potential from natural processes (Pn),
social
processes (Ps) and economic processes consumption - type(Pes),
all of them being "produced" in period T0;
- Three successive processes: production (in t1),
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consumption (in t2) and again the production (in tn);
- The externalization of the action of Entropy Law byentropy
loss triangle
The mechanism of obtaining the value is carried on as
follows:
1. Attracting potential from the processes taking placeeither
outside the company (processes from the environmentand society) or
from the consumption process in which the firm
has entered during the t0 moment, when its internal elementshave
been charged with economic potential services - type;
2. Processing the potential attracted (Pn, Ps, Pes), under
thespecific laws and principles of production, achieving, within
the
limits determined by the coefficient of transformation
pt2,economic potential product-type (Pept1) and entropy loss;
3. It follows the consumption process from t2 moment.This
process takes the potential product-type and converts itaccording
to the principles of consumption under the limits
given by the coefficient of transformation pt2. This
processgenerates economic potential services-type (Pes) and
entropyloss.
4. The mechanism for obtaining the value comprises onemore
production process in tn in which the potential services
type resulted from the previously consumption process is
transformed and conserved again in a new product taking
intoaccount the transforming index ptn. The rest of the
potentialremained from the entered potential in t0 and noted with
Per is
considered the real physical support of the product
valueobtained in the production process in t1. (Bran, 1995)
The link between this theory and the other two, well known
in fact, is pointed out in the same paper: if in the Labor -
ValueTheory the result of the production process from t1, at Pep
level,is the value of the product, for the Entropy Value Theory
is
only an intermediate level for the physical support of the
value.This intermediate character is given by the fact that in
the
production process of t1 is not reflected the contribution of
allfactors and processes: economical, environmental and
socialones.
Going further, the level of potential removed by theconsumer
from the consumption process and preserved in
services, level recognized as the value of the product (from t
1)by the Utility-Value Theory, can not be the physical support
of
the final value. It is also, an intermediate value.In the last
step it is necessary to give a final recognition,
also, to the potential services - type through a new process
oftransformation-conservation production - type (a sort of
utilityof services) to get real and final support of the value for
the
product (from t1). Also, we will point out the amplitude of
theloss of potential during the three economic processes:production
t1, consumption t2, production tn.
The basic idea, which is useful to our analysis, is that
forpreserving as much as we can from the natural, economic and
social potential we use, we should look into the futureanalyzing
the past. When well understand that the time does
not stop and it is not reduce at only now, and the mankind
isevolving along with it, we will try to exploit to a maximum
all
what the environment gives us, and, so, the relay of
thegenerations will be carried further efficiently.
Education and training are crucial to economic and social
changes. The flexibility and security needed to achieve moreand
better jobs depend on ensuring that all citizens acquire
keycompetences and update their skills throughout their lives.
(Commission of European Communities)Lifelong learning supports
creativity and innovation and
enables full economic and social participation. Human capital
building, producing the most productive human capital,requires a
workforce that is mentally flexible and receptive tonew
technologies and to the organizational changes.
Education is a key investment in human capital. It helps a
person to achieve and apply his/her abilities and
talents.Precondition for investing and spending money on
education
and healthcare, either by a private person or by the state,
restson a belief that in this way one increases the income
andproductivity in the long run. (Obradovic, 2008)
The information and lifelong learning are very dynamic, binding
the human resource constantly to review and revisionhis attitude
confronting the new. Moreover, as these two
elements to transform into knowledge is required activation
ofthe human cognitive ability. Information, as sum of
structured
and formatted data remains passive and inert until the
humanresource is able to interpret and to process it. If we
examine
education, science, health care, through the glasses of value,we
will see only the expenses for the staff in schools, research
institutes, art workshops, hospitals, etc, being unable to
noticealso the natural and social potential that is pumped
intoeconomy through these services (Bran, 2005) and well remain
the slaves of the Labor - Value Theory and, perhaps, only
wellthink that we are in the centre of the Utility - Value
Theory.
3. CONCLUSION
The ability to invent and innovate, that is to create new
knowledge and new ideas that are then embodied in products,
processes and organizations, has always served to fuel
development. (David & Foray, 2002) Differences in
productivity and economic growth between countries are becoming
less connected with their natural resource
endowment and more connected with the quality of their
humancapital and, also, with the quality of their factors of
production.
Life means change and change means life in a knowledge
based society. If the human resource will try to get the
bestfrom all type of resources that interact with, and, also, will
try
to apply further the potential services-type obtained from
theconsumption process, all his activities will become
valuable.
Making a choice it has to be much more linked to a
futureefficiency and less more linked to a momentary
satisfaction.
The domain that has to do, equally, with the Entropy-ValueTheory
and with the Knowledge - Based Society is Education.
We need to learn throughout our lives but the efficiency of
thelearning programs has to be adapted to the labor market needs.In
this way, the potential services type obtained from these programs
will be transformed and transferred into human
capital skills as the most efficient factor of production.I
intend to continue the research upon the proposed subject
of this paper that, I hope, will raise the awareness of
theEntropy-Value Theory role in the spread of the knowledge
based society in Romania. The big problem consists in
theimportance of political decision that will determine,
through
education, to what extent, the Entropy-Value Theory will betaken
into account in all types of choices that humans willmake.
4. REFERENCES
Bran, P. (1995). Economica Valorii (Economics of Value),
Ed.Economic, ISBN 9739648779, Bucharest, Romania
David, P. A. & Foray, D. (2002). Economic Fundamentals ofthe
Knowledge Society, Available
from:http://129.3.20.41/eps/dev/papers/0502/0502008.pdfAccessed
2009.04.02
Drucker, P.F. (1957). America's Next Twenty Years, Harper
&Brothers, New York
Hayek, F. A. (1945). The Use of Knowledge in Society, American
Economic Review, XXXV, No. 4, (September
1945) pp. 519-30Obradovic, S. (2008). Education and Economic
Growth,Lex ET
Scientia, Vol. 2, No. XV, (February 2008) p.197-205
*** (2007) Towards Common Principles of Flexicurity: more
and better jobs trough flexibility and security.
Commission of the European Communities, Commission
Communication, 359
0080
