• ISSN: 2155-7950
  • Journal of Business and Economics

 An Inquiry into the Nature of Service Economics


Harry Katzan, Jr.
(Webster University, Webster Groves, MO 63119, USA)

Abstract: Modern economics is based on the pioneering work of Smith and Ricardo and subsequently supported to a large degree by Fawcett, Jevons, and Mill. Early work focused on products and commodities, and that emphasis is evident in supporting activities in business and accounting. Service currently constitutes approximately 90% of the GNP of developed nations, so academics have begun to place some emphasis on an up-to-date model of the new commercial environment. Traditionally, economic theory was based on tangible resources, embedded value, and transactions, whereas an economy based on service is based on intangible resources, the co-creation of value, and relationships. All commercial, governmental, and educational endeavors actually involve service, as do most products and social activities. This paper takes the view that the study of service economics subsumes traditional economics, as well as manufacturing, supply chains, transportation, finance, law, medicine, government, education, and practically all other undertakings in the modern commercial ecosystem. This paper builds on the groundbreaking work of Adams, Mill, Jevons, and Fawcett and explores how the knowledge of service principles can serve as the basis for today’s complex civilization.

Key words: capital; cooperation; distribution; information; labor; profit; specialization; value; wages; wealth;
service; service systems

JEL codes: B12, B20, E60, L21, L80, M21

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