Value

value n. 1. An amount considered to be a suitable equivalent for something else; a fair price or return for goods or services. 2. Monetary or material worth: the rising value of gold. 3. Worth in usefulness or importance to the possessor; utility or merit: the value of an education. 4. A principle, standard, or quality considered worthwhile or desirable: a background that emphasized traditional values. 5. precise meaning or import, as of a word. 6. Math. An assigned or calculated numerical quantity. [ME valew < OFr. value < valoir, to be worth < Lat. valere.]

I think we're all guilty to some extent. We use words quite casually and assume all the while that other people, or even that we, know precisely what we mean by them. The bigger the word, the greater the assumptions: God, love, freedom, justice, wealth. They sound so simple but try to pin one down and it becomes like a blob of quicksilver. Sometimes I think it a miracle that we have any effective communication at all.

Last time, we looked at wealth and money and saw that these are both far more abstract than we often believe them to be. Though these are often equated, in fact, they are only loosely related and their intersection is often problematic. This intersection involves the notion of value. Yet how do we determine value? And who, or what, decides? To reduce value to monetary value alone is a mistake at best and, sometimes, we can come up against the absurd. A few examples:

You have carefully selected a new car. You have brilliantly negotiated the best price possible. You pick the car up and drive it home. Congratulations. You have just lost several thousand dollars. It was the single most expensive trip you will ever take in that car. Why? What has changed?

An old man on my street died recently. His house was almost identical to mine. His son and daughter didn't want to keep it so they cleaned it out and put it up for sale. They priced it to move and lowered the price by $10,000 every few days until it sold. Based on this "comparable sale," my house is now worth less. Why? What has changed?

I needed a new spatula. I found a name brand one that usually goes for seven dollars in the dollar store. I bought it. It was now worth one dollar of store credit only. I took the tag off. At this point, I'd be lucky to sell it for a quarter at a yard sale. I used it to make a burger. Now, I probably couldn't sell it at all. Does it follow that the spatula has no value?

In 2006, Jackson Pollock's No. 5 1948 sold for $140 million, making it the most expensive painting in the world. Is the painting worth that much? Did the seller get a good price? Did the buyer get a good deal?

How would one find out?

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Determining value is not a simple matter. To suggest that "the market" determines value is an evasion. The market, insofar as it exists at all, is only equipped to deal with a commodity. This can work well enough if two conditions are met: first, there must be an actual physical commodity; and second, this commodity must actually change hands at some point. Meeting these conditions does not prevent distortions, of course. The common notion of supply-and-demand is so oversimplified as to be worse than useless. These merely define the appropriate sphere of a market: essentially, to facilitate exchange of commodities. This is what a market ought to do.

When these conditions are not met, we begin to see the problem in applying market logic beyond its proper sphere. For example, labor is not a true commodity. It is not a thing but an action. Yet as things stand nationally, and even more so globally, there are far more people than jobs. By market logic, labor is essentially worthless. The contradiction is obvious: we praise hard work, yet we give it little or no monetary value. If we agree that work has value, then market logic has failed.

This situation will only get worse. It is not a question of job skills. It is the obvious result of an ever-increasing population combined with an ever-shrinking job pool. A single backhoe or assembly line robot can replace many human beings. Other technologies enable the export of work to countries with the lowest labor costs. Yet even here the job pool is destined to shrink. This is what "the market" has decreed.

It is also necessary, if a market is to function properly, that the commodities involved actually change hands. This is necessary to prevent rampant speculation. In a situation where, eventually, someone must take possession of a million barrels of oil or bushels of wheat, there is far less incentive to bid up the price of these in search of a quick profit. This is, for example, the main source of rising gasoline prices: not war, not government policy, not even the oil cartels, but rampant speculation in oil futures.

This is what the market has decreed.

Yet to speak of "the market" is itself an evasion. It implies that this situation is the natural state of affairs, almost divinely ordained. This is not so. The market, insofar as it exists, is a human creation. Furthermore, to refer to "the market" hides the obvious; in a very real sense, the market does not exist at all as an independent thing. There is no impersonal "market," but human beings making deliberate choices: choices for which they are responsible. The question is not trivial: Do we exist to serve the market, or does it exist to serve us?

We could begin to answer these questions any number of ways. Still, before we do, we need to recognize one important point. Properly considered, wealth, money, markets and more are human creations. They are not things; they are ideas. We decide what they mean. We will see the answer to another question in the choices we make.

What do we value?

Respectfully Yours,

Cricket