What is Value?

This assessment was made in 1936 by John Maynard Keynes (widely considered the founder of macroeconomics).11John Maynard Keynes, The General Theory of Employment, Interest, and Money (Amherst, NY: Prometheus Books, 1997 [1936]), 383. The power of economists has increased exponentially since then, as those trained in economics are found in every major corporation and government institution. Further, the scope of ideas and methodologies that comprise mainstream economics has significantly narrowed since Keynes.

With each installation in this series, I have examined a fundamental concept of economics: economy, market, growth, innovation, price. The examination followed the concepts as they circulated among: 1) the theoretical edifice of marginalist economics, 2) the practical operations of powerful commercial entities, and 3) popular economic discourse. I hope to offer insights supporting the suspicion of most critical thinkers that economics is a dangerous ideology masquerading as a science. I have tried to highlight both how these concepts are constructed to serve an ideological function and the effects of their deployment. Overall, these concepts are deeply implicated in the climate crisis and have to be critically analyzed as part of addressing this crisis.

In the opening installment, “What is The Economy?” I noted Margaret Thatcher’s famous quote: There is no such thing as society. However, the idea actually goes back to Jeremy Bentham, the progenitor of utilitarianism, the basis of marginalist value theory.22Jeremy Bentham, An Introduction to the Principles of Morals and Legislation (Kitchener, ON: Batoche Books, 2000 [1781]). According to the theory, economies are simply the outcome of individuals calculating what resources to expend to maximally service their selfish desires. In 1898, Thorstein Veblen ridiculed the individualist conception of humans that is the basis of utility value theory:

The hedonistic conception of man [sic] is that of a lightning calculator of pleasures and pains, who oscillates like a homogeneous globule of desire of happiness under the impulse of stimuli that shift him about the area but leave him intact. He has neither antecedent nor consequent. He is an isolated, definitive human datum, in stable equilibrium except for the buffets of impinging forces that displace him in one direction or another. […] When the force of the impact is spent, he comes to rest, a self-contained globule of desire as before.33Thorstein, Veblen, “Why Is Economics Not an Evolutionary Science?” The Quarterly Journal of Economics 12, no. 4 (1898): 389–90.

As discussed in “What is The Market?” marginalist theory analyzes markets as a mechanism singularly capable of ensuring a just, optimal outcome, in which every individual has maximized their utility. We are left unaffected by our transactions: we remain self-contained globules of desire as before. With social relations ejected from economic theory, history is largely eliminated—there is no basis for questioning unequal purchasing power. We cannot ask where our desires come from. Nor can we consider how our participation in different social collectives affects either our desires or our purchasing power.

The one thing that marginalist value theory gets right is the subjective component of value. However, by treating subjectivity as individual, it developed a theory that bears no relation to actual economic process, as subjectivity is socially constituted.

An under-considered aspect of value—within all value debates—is the process of evaluation. Evaluation is best considered as a quasi-objective, inter-subjective process. On the one hand, there is an objective material component to evaluation, and on the other, evaluation involves subjective assessment and decision-making. However, and importantly, the objective and subjective are folded into each other.

Consider diamonds, which are difficult to mine and also popular expressions of wealth, power, love, and commitment. Part of the diamond narrative is based on the perception of the stones as rare. While the sources of natural stones are becoming more remote and costly to access, there is a massive stock of diamonds distributed among consumers. The De Beers diamond cartel has also exploited the durability of diamonds in its slogan “A diamond is forever”; however, that durability also means that, in theory, every diamond ever extracted has the potential to be recommodified. This poses a huge risk. Should a sizeable second-hand market emerge, it could undermine the prevailing high price of diamonds.

The value assigned to a diamond is not a distinct or complete representation of the objective and subjective facets of diamonds. That value feeds back into the entangled mess comprising the diamond assemblage. Consider the security needed for jewellery stores. Those security measures are a product of the value of diamonds, but also become an aspect of the evaluation of diamonds. The mark-up a jewellery store puts on diamond jewellery must cover the costs of security. At the same time, securing diamonds is part of the popular narrative, as seen in the use of diamond heists as a film trope.

Despite this complication, every diamond, as it moves through the supply chain, will come to bear multiple values emerging from numerous shifting evaluations. All of these values, to quote Marx’s Aristotle—as described in “What is Price?”—are “makeshift for practical purposes.”

Participation in evaluation is not evenly distributed. As described in “What is Innovation?”, our economy is based on the principle of “one dollar, one vote.” The more financial resources an evaluator commands, the greater their ability to determine values. If the aggregate evaluation of the current state of an economy is greater than the evaluation of the previous state of that economy, then the economy is said to have grown, as argued in “What is Growth?”

Value is a function of power. Under capitalism, wealth—and therefore, power—is heavily concentrated among the ownership class. Evaluations done by, and on behalf of, owners are largely informed by their need to preserve and expand their power, which has broad social and ecological consequences. These evaluations, for example, have led to the displacement of Indigenous populations,44See Shiri Pasternak, Grounded Authority: The Algonquins of Barriere Lake against the State (Minneapolis: University of Minnesota Press, 2017); Stuart Kirsch, Mining Capitalism: The Relationship Between Corporations and Their Critics (Oakland, CA: University of California Press, 2014); Anna Lowenhaupt Tsing, Friction: An Ethnography of Global Connection (Princeton, NJ: Princeton University Press, 2005). the homogenization of crops,55Etienne Turpin, “Biomonotony,” in Broken Nature: XXII Triennale Di Milano (Milan: Electra, 2019). the increased predictability of Hollywood,66James McMahon, “Is Hollywood a Risky Business? A Political Economic Analysis of Risk and Creativity,” New Political Economy 24, no. 4 (2019): 487–509. the securitization of our data,77Shoshana Zuboff, The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power (New York: PublicAffairs, 2019). and the global climate crisis. Meanwhile, mainstream economic theory makes power disappear with its theorization of atomistic individuals maximizing their utility via market competition.

Evaluation should not be abdicated to markets or owners—and wealth redistribution would redistribute power, which would alter evaluations. There is no given, necessary, or objective basis for value. As such, there can be no true value. Instead, value is what we make it to be, it is a social responsibility. And indeed, what values would democratic evaluation produce?