Output Life Cycle

ENL considers an output of production to be part of a long chain of activities that ends in consumption, and this unified process is called the output life cycle.

Standard economics usually takes a very different perspective, which is aligned with current business realities and sees each output as a separate profit-making opportunity.

In this view, for example, the extraction of raw materials for bus components, the manufacture of these components, the construction of the bus itself, and the recycling or disposal of the disused bus are all treated as discrete commercial products.

The ENL view might be called the social perspective. This sees all bus-related activities as a unified process that results in bus transportation services.

Output life cycle
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ENL has a “cradle-to-grave” view of final outputs, which allows it to track all associated costs. This is necessary in order to make rational production decisions.

For durable outputs like houses, ships, furniture, and buildings, all the stages shown in the diagram are applicable. For non-durable outputs like food there is no maintenance stage, but disposal does apply—this is the vexing problem of dealing with human wastes in a sanitary manner to prevent disease and to return nutrients to the soil.

ENL uses a life-cycle approach because one of its central tasks is to help determine if, and at what quantity, an output should be produced. Ignoring environmental factors for the time being, this can be rationally addressed only if the human value and cost associated with the entire production-consumption-maintenance-disposal chain are estimated and compared.

The commercial production of tires can be analyzed separately for business purposes, but the human desirability of such production can never be considered in isolation. Tires on their own cannot be consumed and therefore have no human value to offset against the human cost of their production. For ENL the life-cycle perspective is thus unavoidable.

Of course, the figure above is a highly simplified version of an extremely complex economic reality. Each intermediate output has it own life cycle, which includes other intermediate outputs, each of which has its own life cycle in turn. Adding to the complexity is the fact that we must assess the contributions of each intermediate output to the various final outputs with which it is associated.

For example, if one intermediate output is used to produce five final outputs, we must decide if each final output will be "charged" with 20% of the intermediate output's cost and natural resource use, or if some other division is more appropriate. At the present stage of its development, ENL does not address this question.

The life-cycle perspective is only now being seriously considered by standard economists, but it has long been accepted by progressive thinkers. This example is from E.F. Schumacher, writing in 1973:

Economics… deals with goods in accordance with their market value and not in accordance with what they really are. The same rules and criteria are applied to primary goods, which man has to win from nature, and secondary goods, which presuppose the existence of primary goods and are manufactured from them. All goods are treated the same, because the point of view is fundamentally that of profit-making…1

The following example, from the 1987 United Nations report Our Common Future (the Brundtland Report), used wording that is very similar to that of ENL:

Industry and its product have an impact on the natural resource base of civilization through the entire cycle of raw materials exploration and extraction, transformation into products, energy consumption, waste generation, and the use and disposal of products by consumers.2

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