Ethics and Economics: The Value of Value

Fresno Bee, March 14, 2021

What is anything really worth? Numbers flash across our screens. But real value remains elusive.

A new round of COVID relief is coming to individuals making less than $75,000. Some argue this is too generous. Others say it is not enough. Meanwhile, Wall Street valuations baffle and confuse. GameStop has bounced around. Bitcoin’s total market value surpassed $1 trillion this week. But Bitcoin is an enigma, seemingly built on the thin air of cyberspace.

What is the intrinsic value of things? Value is often measured in terms of labor. But labor is not all equal. How much is a man — or a mayor — worth? We learned recently that the mayor of Fresno makes over $400,000 a year when his salary is combined with his retirement income. Is that enough or too much? And how about the minimum wage, should it be $15/hour? Some talk about a living wage. But there is a difference between merely living and living well.

Americans are free to earn what the market will pay. Value is a matter of exchange. It is whatever buyers are willing to pay sellers. But exchange value gets weird, as Bitcoin and GameStop show.

Perhaps value should be cashed out in usefulness. Food is essential to life. So, the use-value of an apple or a loaf of bread appears grounded in reality. But why does a pound of apples or a loaf of bread cost about the same as a fancy cup of coffee?

We disagree about what is essential. Our judgments about necessity are colored by other values. Pricing is about hopes and dreams as much as it is about supply and demand.

Economic reflection leads to more fundamental questions about the meaning of life. Simple folk could live well on modest pay. Some folks may be content with $15/hour. But most of us want apple pie instead of apples.

Capitalist culture inflates our aspirations. We are not content with what we have. We compare our wages and piles of goods with those of others. This is not the inevitable reality of economics. It is a matter of ethics and worldview.

Once we see this, value looks even more arbitrary and capricious. Lines are drawn. But those lines are not fixed by nature. They involve perspective. If you make $76,000/year, you might resent the COVID cutoff. The mayor’s $400,000 seems like a lot of money. But in San Francisco that won’t buy a bungalow. And while $15/hour may seem generous for a teenager living with his parents, it is not enough for a single mom.

The circumstances matter, as do our expectations. The whole system hovers on hope. It is leavened by bubbles. A pandemic can pop these balloons. A credit crunch can cause a crash.

Economic value reflects a complicated social process. Bitcoin and GameStop show us that valuations can be manipulated. Momentum matters, as does peer pressure, the bandwagon effect, and the fear of missing out. People game the system. Buyers want bargains. Sellers want profits. Real value remains hidden.

Markets are not as rational as we might hope. Adam Smith suggested that an “invisible hand” guides this process. But the market is more like an invisible casino, a game of chance that is neither rational nor benevolent.

It is good to step back and ask bigger questions when thinking about the economy. Economics should not be untethered from ethics. Fairness and equality remain primary concerns. Poverty stands as an accusation against wealth. There is a fundamental flaw in a system where some people own more than one home, while others are homeless.

Most ethical traditions teach that envy and greed are vices. These vices leave us feeling incomplete. They count what we do not have. Envy and greed prevent us from enjoying the presence of simple goods that are near at hand.

Socrates said that virtue cannot be purchased. The best things have no cash value. Friendship alone can buy friendship, as Emerson said. The Beatles said that money can’t buy love. And integrity is the price for peace of mind.

Let’s keep these perennial insights in mind when thinking about economic issues. Happiness and wisdom are not for sale. They are earned and enjoyed in a sphere of value beyond the market.

Imagining a better economy after the Covid crisis

Imagine kinder future

Fresno Bee, March 27, 2020

The president wants to resurrect the economy by Easter. The scientists say it is too soon to get back to normal. But is getting back to normal really the solution?

Easter is a celebration of transformation. Maybe we should imagine a transformed economy on the other side of the corona crisis. We could even imagine the kind of economy that Jesus would hope for: an economy that prioritizes caring for the poor, the sick and the downtrodden.

The government is going to give direct handouts to people and extend unemployment benefits. Now is a good time to consider the idea of universal basic income. The stock market collapse is killing people’s retirement savings. Now is a good time to imagine how we might ensure a decent retirement for everyone. The pandemic also gives us a reason to consider disparities in public health and access to health care. And social distancing is an opportunity to rethink making a living and living well.

Henry David Thoreau said that there was more to life than making a living. He asked us to imagine “how to make getting a living not merely honest and honorable, but altogether inviting and glorious.” It may be too much to ask for an economy that is honest, honorable, and glorious. But we could benefit from a less materialistic approach to life.

The frantic pace of consumer society helped propel the pandemic. In a simpler time, people lived in small towns and villages, more in tune with nature, more connected to friends and family. A more localized economic model might impede future pandemics.

But reverting to pre-industrial life is not a viable solution. Instead of going back, let’s imagine how we might leap forward. A new vision of human life is made possible by the infrastructure that is helping us through this crisis.

People have rapidly shifted to working remotely. A generation ago, this would not have been possible. Universities have quickly gone online. Students have vacated dorms and professors teach from home. People don’t waste time commuting. Pollution is down as a result. Perhaps we have stumbled upon a new paradigm in business and education.

We are adapting in other ways. This week a couple in Green Bay, Wisconsin got married. Because of social distancing they had to invite their friends to participate via Facebook Live. That’s a cool idea, facilitated by technology. We are rapidly evolving how we work, play, learn, and love.

Or consider shopping and entertainment. The home delivery economy is thriving. There is a surge in grocery deliveries and restaurant carry-out. Movie theaters are closed. But we’ve got big TV’s and streaming content. Perhaps we’ll exit this crisis with new habits of consumption and amusement.

We may also reconsider the extent to which shopping and entertainment drive our economy and daily lives. This viral sabbatical provides an opportunity to spend more time with family, to re-learn the art of conversation, and to rediscover simpler pastimes, such as reading and playing cards. In my neighborhood, more people are taking walks with their families. It would be great if some of these new habits hung around.

But long walks and card games are not the only solution. The younger generation already spends a lot of time online chatting and gaming. Old folks have been forced to join in. Vulnerable and isolated oldsters need to turn to technology to keep in touch with friends and family. Social distancing will drive us further toward electronic social networking.

These are interesting times. Crises create opportunities for innovation. We need a vision of a post-corona economy that is not simply a return to normal. A new normal can build upon what we’ve discovered under quarantine about making a living and living well. Let’s imagine a new economy that conserves earth resources, avoids future pandemics, and enhances spiritual and mental health.

It may seem too soon to talk about life after corona. The scientists tell us it is too soon to reopen the economy. But now is the time to imagine a post-corona future that is kinder, gentler, and more supportive of the weak, the sick, and the vulnerable. Let’s not resurrect bad habits. Instead, let’s seek transformation and renewal.