LT Essays #2:

Value

ur discussion of ownership calls to mind the question of values. It is one thing to say we have the right to own certain things; it is quite another to say that such things are good things to have, or that they are worth our effort. How do we judge how much things are worth?

Recently I spent an afternoon with a fellow teacher, helping a friend of hers shop for some American consumer goods to take back to his family in India. We went to a shopping mall and a toy emporium, both overflowing with (what I considered to be) useless, faddish products — and presently found ourselves in the cosmetics department at Macy’s. I was addled by this consumer-overload, and I asked my friend, “If we had Henry George’s remedy in effect, we’d have even more of this infernal stuff, wouldn’t we?”

“Oh, heavens yes,” she replied, “lots more.” It’s true: people want “this stuff” — and a market purged of land monopoly would be even more adept at supplying it.

A Quaker friend of mine, reporting on his trip to the 1992 Rio Earth Summit, observed that, “More wealth and energy is spent on taking photographs of children in the U.S. than is spent on feeding children in many nations of the world.”

There are different types, or conceptions, of “value”, depending on context. The easiest to define is economic value. Economists differ about its precise genesis, but those in business understand what it is: the price. Those who are in business must restrict their conception of value to that sense; they incorporate personal or spiritual values at the peril of their bottom line.

This does not mean that economists are all cold-hearted calculators who disdain the meaning of things. Rather, the meaning of things is not the primary concern of economists, whose insights come from the study of averages and aggregates. It is perfectly correct, for example, to say that the average US family size is 2.6 children — even though no mother anywhere has ever given birth to six tenths of a child!

Statements made by economists can always be made with greater confidence when they are talking about large numbers of people. This is because we are all individuals! One person may behave in wildly idiosyncratic ways. But people in general can be expected to, say, seek the highest available return for their goods and services, or to increase the price of something in response to greater demand. Enough people will do these things, enough of the time, that confident predictions of aggregate behavior can be made.

But, economic value is not the only kind of value. Paradoxically, the personal value of things plays a vital role in economics! As sellers of things, we are concerned with their economic value, since we want to get the best price for them. But as consumers, personal value becomes important. We trade away things we value less to get things we value more. Because people are individuals and tend to value things differently, this makes mutually advantageous trade possible.

There is also such a thing as spiritual value — but its meaning is even more subjective and elusive. We all perform tasks out of love or kindness or filial devotion — or even sheer serendipity — for which we don’t expect payment. We devote labor and its products to certain causes, groups or activities simply because we believe it is the right thing to do — or because we feel “called” to do them.

Many are uncomfortable with this rigid dualism between economic value and personal or spiritual values. They feel that society has become ruled by an “economic” conception of things which has shoved aside communality and caring. They want to refashion the science of economics “as if people mattered”. The problem with such a plan, though, is that people do not matter to economists, any more than they do to chemists or botanists. People matter to each other — or they should. But the task of economists is to understand aggregate human behavior in the endeavor of making a living. There is nothing in economic science, per se, that denies (or even regards) human individuality or meaning. (Now, of course, that statement refers only to economic science when it is being authentically scientific. When it is being mis-used by hired guns to cloud reality with theoretical smoke in order to preserve privilege, it is anti-human indeed.)

Marxists, on the other hand, approach value from an entirely different direction, and Marx’s “labor theory of value” lies at the heart of Marxist economic analysis. In effect, Marx attempted to merge economic value with personal and social meaning. The true value of a product, according to Marx, is the labor time socially necessary to produce it. Any return higher than that value is “surplus value” and represents exploitation of workers by capitalists (landowners were dumped in this class also).

Unfortunately, it is exceedingly difficult — probably impossible — to come up with an objective figure for the labor time socially necessary to produce a given product. Marx’s political economy locates exploitation in the very nature of the market — and therefore must postulate a post-market stage of economic evolution in which labor is not commodified, and there is no surplus value.

In one sense, Marx’s theory of surplus value is a truism. It is undeniable that when employees are hired by employers, the employers make a profit (unless they are incompetent managers). If that were not so, employees would never be hired and everyone would be self-employed. So “surplus value” in that sense is indeed an integral part of the market economy. Why do workers put up with it? Because they can get the most satisfaction out of their labor power that way. Employees examine their alternatives and determine that if they worked for themselves, their wages would be (even) lower.

It is very hard to imagine how these basic relationships could be done away with, without trading the tremendous efficiencies of free markets for the lumbering confusions of a planned economy. Marx’s effort to devise a moral economy fails, because ultimately, economics is not about morals. Economics is about how human beings use scarce resources to satisfy unlimited desires. This is not a denial of moral and spiritual principles — no more than scientific method is a denial of Methodism. Justice — or injustice — is not a function of how we define “value”. Justice is fundamentally a matter of human rights, beginning with the inalienable right to life.

What we do have to do, though, is resist that process of commodification. As individuals we are commanded, if you will, not to commodify each other or our world, and to live in such a way that recognizes economic value as only one — and possibly the least important — of our values.

— Lindy Davies