=Paper=
{{Paper
|id=Vol-3603/Shortpaper2
|storemode=property
|title=Beyond the Goods-Service Continuum
|pdfUrl=https://ceur-ws.org/Vol-3603/Shortpaper2.pdf
|volume=Vol-3603
|authors=Peter Koch,Barry Smith
|dblpUrl=https://dblp.org/rec/conf/icbo/KochS23
}}
==Beyond the Goods-Service Continuum==
https://ceur-ws.org/Vol-3603/Shortpaper2.pdf
Beyond the Goods-Services Continuum
Peter Koch 1, Barry Smith 2,
1
Villanova University, 800 Lancaster Avenue, SAC 166, Villanova, Pennsylvania, United States
2
SUNY @ Buffalo, 105 Park Hall, Buffalo, NY 14260, United State
Abstract
Governments standardly deploy a distinction between goods and services in
assessing economic health and tracking national income statistics, of which
medical goods and services carry significant importance. In what follows we draw
on Basic Formal Ontology (BFO) to introduce a third kind of entity called patterns,
which help capture the various ways in which goods and services are intertwined
and help also to show how many services generate a new kind of non-goods-related
products. Patterns are an overlooked yet essential features of many economic
sectors including medicine. Studying patterns offers new insights into various
components of economic analysis, including outcomes-oriented evaluations of
medical services and the value of human capital in the medical sphere.
Keywords 1
Goods, Services, Medical Care, Economics, Basic Formal Ontology (BFO)
1. Introduction: Goods, Service, and the Goods-Services Continuum
The income statistics created by different governments standardly deploy a distinction between
goods and services in assessing the economic state of a nation. Gross Domestic Product, for example,
is described by the United Nations as “a basic economic growth indicator [that] reflects changes in total
production of goods and services.” [1] On the one hand, goods are generally understood as alienable,
often material things produced in an economic system, such as bottles of milk, songs, or combs – things
that can be sold, lent, consumed, gifted, and so forth. On the other hand, services are typically
understood as tasks performed for the benefit of a consumer and are marked by the fact that production
and consumption occur simultaneously [2,3]. When a person goes to a comedy show, for example, that
person simultaneously consumes what the comedian produces (jokes) in exchange for money. Drawing
upon the terminology codified in the Basic Formal Ontology (BFO), 2 goods are independent
continuants, which preserve their identify over time; services are occurrents, which unfold through time
and have successive temporal parts, such as when a mechanic services a car by draining the old oil,
changing the oil filter, adding new oil, and so on [4]. We note here that goods are often used in the
performance of a service – we shall see more generally in what follows that goods and services overlap.
In coming to a clear understanding of the ontology of goods and services, it is useful to differentiate
between pure goods, which are those goods that are unaccompanied by a service, and pure services,
which lack any accompanying good. Examples of the former are books and bracelets; examples of the
latter are financial consultation services and tours of historical monuments. Between these two extremes
are many items of economic significance that fall along a continuum between goods and services and
in which goods and services are in various ways intertwined. For example, when you purchase a car,
Proceedings of the International Conference on Biomedical Ontologies 2023, August 28th-September 1st, 2023, Brasilia, Brazil
EMAIL: peter.koch@villanova.edu (A. 1); smith@buffalo.edu (A. 2);
ORCID: 0000-0002-7923-0436 (A. 1); 0000-0003-1384-116X (A. 2);
© 2023 Copyright for this paper by its authors.
Use permitted under Creative Commons License Attribution 4.0 International (CC BY 4.0).
CEUR Workshop Proceedings (CEUR-WS.org)
2
Basic Formal Ontology is a top-level realist ontology that conforms to the standards specified in ISO/IEC 21838‑1. As an established top-
level ontology, BFO provides a standardized framework for effectively acquiring, analyzing, and integrating information from multiple
disparate domains. BFO has been adopted in over 500 ontology-based projects in domains such as biomedical sciences, genomics, and military
research.
CEUR
ceur-ws.org
Workshop ISSN 1613-0073
Proceedings
173
the act of purchasing often involves a salesperson who assists in selecting among different cars and
different features of cars, such as color, performance specifications, and so forth. The salesperson may
also give you an overview of how to operate features of the car and of how you can best pay for it.
These are what we can call supportive services. A restaurant server will provide supportive services of
taking your order, running the food to your table, and so on. The purchase of a car and the experience
of a restaurant meal are composed in different ways of bundles of goods and services; they each fall
along the goods-services continuum.
2. Beyond Goods and Services: Patterns as Products
While the distinction between goods and services and the accompanying idea of a continuum of
cases which fall between them is useful and frequently invoked, we contend that this framework is in
an important respect faulty. Consider the product provided by a masseuse. Typically, this product (a
massage) is described as a ‘pure service’, since there is no accompanying good and the production and
consumption occur simultaneously. This follows from an understanding of a good as a tangible,
alienable product. After all, there seems to be no good that we can point to or buy or sell following a
massage.
But while a massage does not result in an alienable product, the service provided by a masseuse does
create a physical alteration in the consumer, such as the unbinding of knots and an accompanying
relaxation of the back muscles. A new pattern emerges in the physical makeup of the consumer as a
result of the massage. This change in pattern is valuable; the exchange of money is testament to this.
Yet, standard accounts of services fail to incorporate the patterns that many, if not at all, services
produce because – while they are continuants, in the BFO sense (see section 2.2, below) – they are not
alienable; they are not something that is left over after the service is provided that can be bought and
sold.
Such patterns are prevalent in every economic sphere; they are the products of many familiar
services, which create, maintain, or protect these patterns. A hairdresser might create a new pattern on
your head – a product that is neither a good nor a service as standardly understood. A landscape architect
might transform a neglected lawn into a well-curated garden. This produces a new pattern in the terrain,
though this product, again, cannot be transferred as a good to some third party. A gardener may maintain
this pattern by weeding, fertilizing, and trimming the garden. They might lay mulch to protect the
garden from future unwanted growth. These acts, too, are typically considered pure services, as no new
good has been produced. However, the design of the garden is here not created but rather preserved and
protected through the actions of ridding the garden of unwanted growth and introducing measures
against future weeds. As it stands, the typical goods-services distinction does not account for this feature
of economic production, in which a non-alienable physical change has taken place as a result of the
provision of a service.
Yet the coming into existence of products of this sort frequently accompanies the provision of a
service, despite not being recognized as an entity that is produced by the service. The principal reason
for this, of course, is that the patterns in question are non-alienable. They cannot be bought or sold or
gifted, and as a result do not enter, for example, into national income statistics. Yet they are of economic
significance, nonetheless. Such patterns include, for example, the patterns in human beings we call
skills and capabilities, the sorts of patterns that are created through the provision of those services we
call education and training. Taken together the latter form what is called human capital, which we
discuss further in section 2.3 below.
These patterns are valuable yet underappreciated products of myriad services and, as such, are
critical components of market economies. Once patterns are recognized as products, it appears that
most, if not all, services derive their value from the value of the resulting patterns that they produce. If
this is the case, then patterns in our technical sense – non-alienable products of services – could
constitute an important category for assessing and tracking the health of an economy beyond the
traditional goods-services continuum.
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2.1. Patterns and Health Care Services
In any market economy one important pattern-producing economic sector is health care. In 2021 health
care spending in the United States accounted for over 18% of the Gross Domestic Product, and much
of the underlying expenditure is directed towards health-related services.[5] For example, in 2017 the
Centers for Medicare and Medicaid Services (CMM) estimated that Physician and Clinical Services
accounted for about 20% of health care expenditures, or $694.2 billion dollars, where Other Health,
Residential, and Personal Care Services accounted for about 5 percent of health care service costs. [6]
Many medical services are pattern-producing, typically by altering, maintaining, or protecting patterns
that inhere in a patient’s body. Curing an infection, analyzing bloodwork, reducing inflammation, and
myriad other common medical practices and services result in non-alienable products that promote
health and healing. These products – patterns that results from, or are maintained through, medical
services, are (arguably) the basic unit of value for assessing such services. For the services are of value
only insofar as they are pattern-producing or -protecting in one or other medically relevant sense.
Analyzing such services in terms of patterns provides an alternative framework for assessing and
tracking the impact of the health care sector on an economy. Identifying patterns allows for a non-
goods-related analysis of the outcomes of health care services – something the goods/services
continuum does not provide. And we believe that focusing on patterns offers new insights into, the
typical kinds of services that are offered by the medical profession.
Some medical services, such as cosmetic or therapeutic surgery, create patterns in patients. If a
patient undergoes cleft lip and palate repair surgery, then a new pattern emerges in the patient. The
same occurs for breast augmentation surgery or bunion correction. In each case, a service is rendered;
no traditional good is produced; yet an important change occurs: a product emerges in the patient. This
product is a created pattern. Other services, such as wellness checks from a primary physician, might
contribute to the maintenance of patterns. Still others provide protective patterns – patterns which
protect against the emergence of unwanted new patterns, as when a physician provides a vaccine against
polio. Finally, many services restore patterns to their desired state, such as the removal of a cancerous
mole or the treatment of mental trauma through therapy.
The inclusion of references to patterns in the analysis of health care interventions captures an
important traceable and analyzable feature of the contributions of the medical profession. The notion
of patterns is also useful when services are poorly rendered or abandoned. If services are tracked without
reference to patterns, then it becomes possible to track the outcomes of medical interventions in more
coherent ways, for example by allowing distinctions to be drawn between services with no ostensible
outcome, services with a desired outcome, and services with adverse outcomes.
Consider, for example, coronary bypass surgery. Imagine that three patients are each of them
counted as undergoing the service of having this surgery performed. The first has a successful outcome;
a new desired pattern emerges in the patient. When the surgeon operates on the second, she finds while
operating that a previously undetected issue makes it unfeasible to continue the operation, and so she
abandons the surgery mid-operation; new significant knowledge arises, but no new significant pattern
results in the patient. In the third patient the surgeon accidentally nicks an artery, causing an adverse
outcome; a significant, though unintended, pattern is produced. On its own, the goods/services
distinction fails to capture the resulting changes in the patient, where the three different outcomes of
the surgeries when understood in terms of patterns can help differentiate between the outcomes and so
provide a more systematic framework for assessing value of the respective services.
Many other professions likewise offer services that create, maintain, restore, or protect patterns as
products. A car mechanic might manipulate a car’s engine, creating a new pattern through their service.
They maintain patterns through oil changes, for example, or protect patterns through lubricating the
undercarriage of a car. In these cases, the patterns are features of the car. Dentistry is focused on the
maintenance, protection, restoration, and (in the case of cosmetic dentistry) creation of teeth. This
involves in each case a focus on the pattern that inheres in the jaw or faciocranial features of the patient.
The digital world, too, is host to many services that result in altered patterns. Friedrich’s Instagram
curator might scrub his account of some photos and modify others – services that result in products not
typically categorized as goods but are captured by the idea of patterns. Software developers manipulate
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code, which as it appears on your hard drive forms patterns in the sense intended here; the job of the
software developer is to create, inspect, modify, and protect patterns of code.
Focusing on health outcomes of medical services is, of course, nothing new. Outcome-focused
assessments are a widely recognized and powerful tool for evaluating and comparing the contributions
of the medical profession within market economies, and service-outcome relations have been explored
in terms of ontological concepts[7][8][9]. However, our contribution lies in the recognition that these
outcomes are neither goods nor services, traditionally understood, but rather non-alienable products
here called patterns.
2.2. Basic Formal Ontology (BFO) and Patterns
Basic Formal Ontology offers the resources to categorize these entities: namely, as dependent
continuants. Dependent continuants are entities that exist through time and exist only in virtue of
another entity which is their physical bearer – an independent continuant in BFO terms. Examples of
dependent continuants include qualities and dispositions, both of which inhere in independent
continuants) and are, as such, non-alienable from their bearers [2]. For example, the quality of redness
always requires a bearer, such as a tulip or an oil painting; the disposition of fragility requires a bearer,
such as a vase. The “dependent” feature reflects the non-alienability of these products, which
importantly distinguishes their production from the production of standard goods. We call these
dependent continuants patterns. Patterns are the value-adding dependent continuants that are produced
by many services; they are immensely prevalent in all economies of production. Thus, in assessing the
production of an economy we need to move beyond the standard goods-services distinction in order to
reflect the various relations between services and patterns, which may take different forms.
The standard kinds of services include the following:
1) Pure Services: Services that are unaccompanied by any sort of good. For example, a psychiatrist
assesses a person’s decision-making capacity, which produces no ostensible good. (She is not
required, for instance, to produce any report.) Therapists assist in resolving trauma; occupational
and speech therapists change patterns of movement or speech. In all of these cases no good (no
alienable continuant) is produced.
2) Goods-Accompanied Services: Services that complement or are required for the use of a good,
such as for training or installation purposes. In medicine, examples include the development and
use of removable prosthetics or devices such as a Left Ventricular Assist Device (LVAD), which
are external, alienable goods that require high levels of service for maintenance and use.
3) Pattern-Producing services: Services that produce enduring ostensible dependent continuants,
or patterns, e.g. an Instagram curator produces visible content, a fitness trainer produces enhanced
physique, a dentist whitens teeth. In medicine, these might include cosmetic and therapeutic
surgeries that result in altered features of the patient’s body.
However, there are also other kinds of services that are valuable on account of their relation to patterns:
4) Pattern-Maintaining services: these are services that maintain (though they do not necessarily
alter) existing patterns. These might include the services offered by a physician who performs a
wellness check, the services provided by a car maintenance mechanic, or a dental hygienist, etc.
In these cases, services are provided to ensure that an existing pattern – the healthy human body,
in the case of medicine – retains its form.
5) Pattern-Restoring services, or those that restore patterns to their desired previous form. This
might include landscaping to restore garden beds; a doctor treating a fungal infection; the
restoration of an oil painting. Medical services of this sort might include occupational therapies,
which restore a patient’s movements to a previous level of functionality.
6) Pattern-Protecting services, or those that protect against the threat of damage or impairment to
an existing pattern through the introduction of a distinct service, for example those services offered
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by a bodyguard or security firm. An example of such a medical service is the provision of
vaccinations against certain diseases or topical creams that prevent rashes from poisonous plants.
As will now be clear, the patterns that are maintained, restored, or protected by services can take many
forms and inhere in many different kinds of bearers, whether individual or collective. A pattern can be
present in a garden in the form of a design; a pattern can be that of the forces operating within a family
in relation to which a family therapist or social worker might intervene; it can be the pattern of forces
created when a politician is present in a crowd, the many variations of which may include enhancement
through the services of a loudspeaker system or protection by a bodyguard. The resulting patterns are
dependent continuants; they are not goods, and so they are not captured by the goods-services
distinction, yet they are important value-adding components of services. Identifying which patterns are
the products of a given service can explain why that service has value in an economy when seemingly
no material goods are at stake.
2.3. Human Capital
An important aspect of any economy is human capital, or the assets of persons that positively
contribute to the production process. These assets might include capabilities such as personability, job-
related abilities, management skills, networking skills, and so forth. Companies invest directly in
developing these assets in employees through education, training, and other programs. The development
of human capital, then, is typically understood as a product of pure services, as training modules and
educational programs are services with few, if any, related goods.
While economists traditionally recognize human capital as an essential feature of an economy, the
nature of human capital and of its relation to goods and services has historically been a matter of debate
[10, 11]. Our discussion of patterns and services provides a clear structure for understanding human
capital and how services can contribute to its development. These valuable assets of persons are
capabilities, where capabilities are (roughly) beneficial dispositions of persons. Like dispositions in
general, capabilities are grounded in the physical makeup up of the person who is their bearer. This
makeup is a pattern, for example of a neurological sort. When companies invest in creating and
maximizing the capabilities of their workers – i.e., their human capital – they are attempting to use
services (e.g. training modules) to produce, maintain, or protect certain patterns, which are the
grounding of these capabilities. As a person’s patterns change through training and education, this
person develops new capabilities. Thus, once again: services oriented towards human capital are
producing something, namely those patterns which are formed out of capabilities.
2.4. Summary
Nearly all services are directed towards the altering of patterns. Consulting firms review patterns
manifested in the behavior of companies, for instance in their manufacturing processes or in their
financial distribution processes, and they recommend various ways to alter these patterns to maximize
efficiency or minimize costs. A sports psychologist attempts to reorganize an athlete’s physiological
patterns so that they might respond differently to pressure. A dog trainer alters a dog’s neurological
patterns so that the dog’s responses to the environment change. Sales training is an attempt to reorganize
a salesperson’s patterns to maximize that person’s capabilities to sell goods. Such services do not
themselves produce goods; but they do produce results. These results can be described as the
production, maintenance, restoration, or protection of patterns. Recognizing and tracking such patterns
is particularly important in medicine, as health care services often produce, protect, or maintain patterns
in or relating to patients or research subjects, especially in cases where no accompanying good is
produced. The full impact of many such health care services is not captured by the typical goods-service
distinction; the introduction of patterns-as-products, however, does well to fill this void. The
introduction of patterns is thus not merely an academic endeavor; recognizing the various relations
177
between services and patterns can contribute to the assessment of services through the value added by
the patterns which they produce.
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[2] A. Smith, (1776) The Wealth of Nations, with an Introduction by A. Skinner (1969) (London:
Penguin Books)
[3] Hill, Peter, ”Tangibles, Intangibles and Services: A New Taxonomy for the Classification of
Output.” The Canadian Journal of Economics / Revue Canadienne d’Economique, 32.2 (1999): 426–
446.
[4] R. Arp, B. Smith, A. Spear. Building ontologies with Basic Formal Ontology. MIT Press, 2015.
[5] Centers for Medicare and Medicaid Services. NHE Fact Sheet, 2023
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reports/nationalhealthexpenddata/nhe-fact-sheet
[6] ibid.
[7] Centers for Medicare and Medicaid Services. Quality Measurements and Quality
Improvement, 2023 https://www.cms.gov/medicare/quality-initiatives-patient-assessment-
instruments/mms/quality-measure-and-quality-improvement-
[8] The Commonwealth Fund: U.S. Health Care from a Global Perspective, 2022: Accelerating
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briefs/2023/jan/us-health-care-global-perspective-2022
[9] M. Fox et al., An Ontological Approach to Analysing Social Service Provisioning, in: 2022 IEEE
International Smart Cities Conference, ISC2, Pafos, Cyprus 2022, pp. 1-7, doi:
10.1109/ISC255366.2022.9922132.
[10] J.S. Mill, (1848) Principles of Political Economy, Chapter III. London: Longmans, Green, and
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[11] A. Marshall, (1898) Principles of Economics, Book II. ( 8th ed.), London: Macmillan and Co.
Ltd. 1962
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