Dimensions of Value

I have written a lot in the past about what I called "The Zen of Value". The "Zen" idea refers to the concept of sitting back, clearing your mind of preconceptions and seeing things as they really are. Another title that occurs to me is "Dimensions of Value". It turns out that this metaphor is quite fruitful and worth exploring. It grows out of a previous post: "Human Welfare And the Four Economies". Upon thinking of it, there are more than four and the mental picture of "dimensions" is helpful. The "dimensional" aspect promises to add some rigor to the underlying subject. The "royal road" to the "Zen" view of this subject is the realization that "money" is a poor measure of "value".  You already know in your bones that this is wrong but you have never wondered how, in detail, it's wrong and how, specifically you could see things better in a way to make better decisions for yourself, your family, your society and whoever comes next.

This post is basically an outline of a new line of thought in this blog: "Dimensions of Value", tagged "#Dimensions" in the index.

MONEY

Many folks are totally unfamiliar with "money" in general. I won't repeat myself on that subject. The bottom line is that every dollar of "money" is backed by a dollar of debt. When the debt turns out to be uncollectable, the money vanishes from the system, as in 2008. For some background on that subject, along with lots of reading links, check here.

So, "money" is one "dimension" of value. In fact, in "finance capitalism", money itself, rather than any assumed underlying value, is what as seen as "value". With the "dimensional" approach, we take a close look at how this presumed value can be projected on other forms of value. As already mentioned, "debt" is the "real" basis of this form of value, so it makes sense to take a look at "debt" itself as a value, which it obviously is to the creditor. If this isn't immediately obvious, consider the "books" of the bank, where debts (outstanding loans to customers) are listed as assets. But we should go a bit deeper to take a look at debt itself as a measure of value, remembering that the correspondence of money and debt is an assumed relationship that can turn out to be wrong, as it did in 2008 where 4 trillion in money was backed by debt that was, in fact, uncollectable. Another thing we could look at is government debt, which can turn out to be uncollectable in cases such as Greece.

There are other promising "dimensions" of value with connections to money that are so loose that they shout out for separate analysis. Most obvious is human life itself, perhaps the value that we can all agree on. However, we find many situations where the lives of others are routinely valued at zero or cases where an individual will value his/her own life worth throwing away for some perceived value. What is that value and how can we visualize the transaction.

LIFE ITSELF

Insurance companies provide some useful guesses for the money value of human life - we'll take a look at that. Lawsuits against polluters that compensate for the loss of life and quality of life are useful sources of information. Such information effectively places a floor on the value of life. We can all agree that nobody can compensate anyone for the loss of a loved one. And, of course, if a person is dead, the whole idea of compensation to the victim becomes meaningless - a bit like dividing by zero.

For centuries, the value of labor has been assumed to be a fundamental value (Marx assumed this for example). This can be a bit slippery since we tend to only value "work" that can somehow be turned into money and we ignore the fact that "work" adds to the value of life for some people and amounts to throwing away time you will never get back for others. Nonetheless, with our "dimensional" approach, we can perhaps get a new way of seeing why labor, the compensation for it and the economic value of it varies so mysteriously.

RESOURCES

Centuries ago, the economic theories of "mercantilism" assumed that gold and silver were the basis of all value - driving the policies of governments and a wave of colonial conquest. Even though this theory is long dead (except in the minds of Donald Trump), we need to take it seriously. There are three aspects of it that seem to be almost independent (dimensions). One is the actual value of the resource (its "utility" or usefulness). The other is scarcity. The third is widespread acceptance of the resource as a kind of "money". Bitcoin is a recent attempt to create a "store of value" that is based on scarcity and trust alone. Bitcoin believers tend to think that "real" money - what they call "fiat" money - is "nothing but" arbitrary tokens that we trust and scarcity.

There are a few resources that are undoubtedly valuable and are becoming scarce, at least locally. Their value depends on how we use the resource and many "technical" features. There are many examples of this, namely:

• Water
• Fossil fuels
• Coltan
• Uranium

It's useful to look at what these resources have in common as well as how they differ. Since water is emerging as a "physical" resource of this type that's "in the news" these days, it's a good example to consider in detail.

THE ENVIRONMENT

Many people regard the "environment" in general, including the animals that live in it, are in this category. For example, expansion of "arable land" has an opposite cost in "habitat". Whether you care about this tradeoff or not, it eventually comes back to bite you when, for example, "commercial" fish stocks vanish due to pollution and/or climate change. 

At bottom, the issue is whether to treat the environment as a "resource". If we see it that way, only human values apply. If not, we see only the human value of maintaining life on the planet.

We can treat the "environment" as a dimension whether or not people care about this dimension. We have objective measures available, including the rate of species loss, the rate of habitat destruction and, of course, the mother of all environmental costs: climate change, which is being studied to death.

ENERGY

Another interesting source of value is energy and its evil twin "entropy". Life of any type requires an energy source. The big picture is that life fights "uphill" against entropy which is increasing everywhere in the universe at all times at all scales. This is perhaps the fundamental struggle of life, making energy the basic "value" and entropy the basic "negative" value. Life is a constant gamble in the casino of the Universe, where the "house" always wins in the long run.

We all see energy costs translated into money in our fuel and electricity bills. But, by the basic laws of nature (namely the laws of thermodynamics), energy "creation" involves an opposite creation of entropy (actually more entropy than energy is created). An irreversible consequence of all human political systems is that "entropy" is created by irreversible pollution of water sources - something that the energy companies magically avoid accounting for - passing it on to society and the environment itself. Such systems also tend to regard direct costs in other dimensions (such as the value of life itself) as somebody else's problem. 

The same phenomenon can be seen in nuclear energy. Even in "renewable" sources, the same laws apply, although you need to follow the energy transactions. For example, "free" energy from wind power ignores the energy cost of creating the hardware, transmitting the energy and maintaining the system. 

POLITICS

The subject of politics cannot be avoided here. All political theories involve a "meta-theory" about the value and dangerously ignore or misunderstand most dimensions.

For example, political debate in Canada (where it happens at all) is about "money" and its assumed relationship to "jobs" which are a proxy for "life itself". All other considerations can be set aside as long as we can grow "GDP" (Itself an abstraction of an abstraction). We are unable to discuss other "dimensions" intelligently. Capitalism assumes that all resources are "owned" by someone. Even the idea that the "Government" "owns" resources not owned by others is an assumption with sweeping consequences. Assumptions about the "value" of "work" and "money" are buried so deeply in our debates that it can seem crazy to challenge them. The effect of this is that major problems sneak up us from unknown "dimensions". We lack even the language to recognize the enemy.

So, in this blog, we will frequently discuss how political theories perceive the multidimensional world of human value. I know of no political theory that does justice to this subject. We are left with a choice between sets of dangerous misconceptions.