Abstract

This paper introduces the concept of general value with two components—monetary and nonmonetary. The nonmonetary component reflects individual perception of value unrelated to the monetary part of it. The fundamental difference between the concept of general value and the conventional concepts of value is in the expansion of the concept from monetary only to a more general concept by adding a distinct nonmonetary component. The paper introduces the principle of increasing general value which states that in every action or transaction the general value for each participant should increase. This principle lays the foundation for value-based decision making. To make a decision, an individual needs to assess a difference of general values before and after the action or transaction or to order values rather than to accurately calculate the values themselves. General value can be measured either rationally, similar to utility, or with “bounded rationality”, as suggested in behavioral economics, or in any other way which is appropriate and convenient to use. General value in economics plays a similar role as energy in physics and can be referred to as “economic energy.” General value constitutes a more comprehensive foundation of economics than traditionally used pure monetary value, and thus goes beyond the classical and neoclassical approaches.

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