Time Is Money. Theory of Value Depreciation.

The article describes “the theory of value depreciation” developed by the author. In accordance with this theory, economic growth takes place using two inter-connected phenomena: (a) reduction in time necessary to produce “the set of goods currently consumed” (first form of value depreciation) and (b) using the free time to produce additional goods, as a result of which a new set of goods is created, a new “living standard” (second form of value depreciation). The theory allows the fallacy of identifying utility with wealth to be proved, for example, the article shows that “marginal utility” is equivalent to the “degree of poverty". The importance of time is stressed, as well as the interconnection between the free time in natural economy and savings in modern money economy. The theory allows one to take a new view of the economic history, the theory of economic growth, the theory of international trade.