But, Shackle argues,
“The idea of an economic valutum arising ex nihilio or vanishing inexplicably is contrary to the whole meaning of the accountant’s operation.” (Shackle pg.8)Supposedly according to accounting, values are produced by tangible industrial processes: adding materials, storing, dividing. Value can be lost by aging and consumption. BUT, isn’t value something mythological/”an act of the mind” as he puts it?
People in a certain market for a certain product agree on the value of an item as to its expected future potential. He argues, valuation is expectation; (Just as in finance, the value of stocks and bonds are equal to their expected future cash flows) which can change from moment to moment depending on circumstances. “VALUATION IS EXPECTATION and EXPECTATION IS IMAGINATION” (Shackle) which means that accountants are accounting for the unaccountable.
G. L. S. Shackle, author of Epistemics and Economics: A Critique of Economic Doctrines
