The Six Types of Effort

Part 2 explained the effort theory of value which says that useful work or effort is the foundations of exchangeable value in a socio-economy.

This is totally different from Economics and Mercantilism which uses money as the basis, through marginal pricing theory.

Since effort is very important, its definition becomes very important. In our theory, we have defined human effort, whether physical or mental, as ultimately rooted in psychological or metaphysical toil and trouble. This is opposite of the labor theory of value from Karl Marx which is based on physical work.

Next, we will categorize effort according to Smith’s system of productive and unproductive labor, which he seems to have gotten from the Physiocrats. He defines productive labor as that which produces some vendible commodity, while unproductive labor as something that does not produce anything vendible.

This definition was later frowned upon by economic writers such as Jean Baptiste Say, who didn’t like the name of ‘unproductive labor’ being applied to statesmen, singers, doctors, and people who render services.

1-2. Material and Immaterial Effort

Nowadays, unproductive labour is called ‘services’ and productive labour is ‘manufacturing’ or ‘agriculture’. To make the naming systematic, we use the First Law of Value to replace them with Material and Immaterial Effort:

Material Effort: produces something that can be bound by a specific space and time, manifesting as a thing or object. Examples are:

• Manufacturing, Agriculture, Mining

Immaterial Effort: produces something that cannot be bound by a specific space and time, manifesting as a service or project such as an event or experience

• Services, Healthcare, Government, Education

A singer singing in a concert, as well as the effort in setting up the lighting and sound systems, is immaterial effort. The revenue for them is realized through the sales of tickets which is the material effort.

3-4. Skilled and Unskilled Effort

We then use the Second Law to classify effort as skilled or unskilled, according to the relativistic real values of their outputs:

Skilled Effort requires many years of training and education. Examples are:

• 3-star chefs
• Professional athletes or Olympians
• Engineers, Doctors, and Industrial farmers

Unskilled Effort requires little training and education. Examples are:

• Ordinary cooks in households and community eateries
• Amateur sportsmen
• Construction workers, caregivers, and small-scale farmers

A wealthy country will be able to support more skilled effort than unskilled ones. For example, Olympic medals are a good metric that indicates national wealth.

5-6. Value-adding and Value-Maintaining

Lastly, we use the Fourth Law to classify effort as value-adding or value-maintaing:

Value-adding effort creates or adds new value. Examples are:

• Manufacturers, farmers, miners, construction, utilities, recyclers, innovators, successful writers and scientific discoveries

Value-maintaining effort maintains the value already created. Adam Smith calls these unproductive labor. Examples are:

• Governments, Militaries, Security personnel, Reporters, Lawyers, Lawmakers, Finance and Insurance

A wealthy country will have more value-adders than value-maintainers. A country can become poor if its maintainers turn into rent-seekers that cannibalize the value-adders:

• This happens most obviously in military dictatorships since the military values its effort more because they put their own lives at risk. An example is Cuba, North Korea, Myanmar, and Venezuela
• This also can happen in countries that adopt state religions which stifle value-creation. Examples are Saudi Arabia, Brunei, Iran, and Aceh.
• Similarly, it sometimes can happen in traditional or unprogressive states. Examples are China under Mao, Tibet, and Vietnam.

With this, we can classify any profession easily according to these 6 types of effort:

The goal for a socio-economic system is to:

• balance the immaterial and material efforts
• increase effort to become skilled
• increase the efficiency of value-maintaining effort so that more effort can go to value-creation or addition

This classification system allows our pantrynomy to be automated in order to further reduce the value-maintaining effort. A rich country can use its skilled labor to code the AI that can be used by poor countries to help them rise to wealth faster, bypassing the usual corrupt rent-seekers that made them poor in the first place.