Dimensions of Value: Land & Water

This post is part of my attempt to grapple with the connection between money and value - especially how money reflects our attempt to put a numeric value on virtually everything. The idea here is to replace one-dimensional value (like money) with a multi-dimensional concept.

In the end, I abandoned this effort in favor of a dynamic model of value (IOUTopia). The task of the "dimensional" view was to avoid the need to trade one kind of value for another, yet this is perhaps the core idea of an "economy". The issue then becomes how to envision how we trade one thing of value for another.

But here are the initial ramblings about "dimension" ...

Land is perhaps the oldest and most recognized form of wealth. A big chunk of land is called "territory" and wars are fought over it.

Land poses a problem for money=debt theory. Land seems to sit outside this equation, even though land can be turned into money by using it as security on a loan. Of course, money can be used to purchase land.

Land seems to be especially real to some people - something that always confused me. Obviously, the value of land is in the eye of the beholder.  A simple case is land purchased from a farmer to "develop" as commercial real estate. The value is not in the land. It's in the opportunity to create income, perhaps. Or maybe just the love of the land itself ...

In some economic theories (such as Marx), land occupies a place of honor like gold or labor - something of fundamental value that all value is built on. In feudal societies, the "land" comes with human beings tied to it, along with rights to the product of their labor. Sometimes the modern nation-state doesn't look much different. We call that kind of nation a "kleptocracy".

Land & water seem to be candidates for "dimensions" of value. Maybe air or a similar "right to pollute", as in "cap and trade" schemes.

I wonder if, at one time, land seemed as free and infinite as we now think of water. Just a place for the buffalo to roam. Now, the world is edging to a water crisis and we are starting to treat "water rights" like property or as part of property rights.

Land, water and air seem to be the simplest and most obvious proxies for the concept of environment and the value of it. In modern terms, we speak of environmental "services".

Dimensions of Value: Money Under the Microscope

One basic claim of "Dimensions of Value" is that money is a poor yardstick for measuring value. Unfortunately is the language we use to speak about value. Even so, money itself is not as "real" as it seems, even when we look at it all on its own. How is it that we, as individuals, see money to have value?

Money appears to be simple. It obeys the rules of arithmetic. You can add or subtract money to money, divide or multiply money by a number, multiply. This tends to give money an extra aura of "reality", hiding what it stands for, namely debt.

With its mask off, money can be obtained by accumulating debt. Money can be used to pay a debt. Money can be used to pay or collect "interest" on a loan. Money is a way to create, buy, sell and ultimately eliminate debt. According to capitalist economics, every single thing is "worth" the amount of debt the buyer is willing to incur to "own" it. This may seem to be a crazy way of putting it, but it is increasingly exactly how ownership is acquired by individuals and the nation-state. But most of us don't think of it that way. In this post, we will treat money as "worth" something in itself. Why is that?

Of course, the main thing about money is that we value it and use it a lot to buy things we value. The more money we have - the more money "floating around in the economy" - the better things are. Right? Well no ...

ANOTHER LOOK AT MASLOW

If we bring Mr. Maslow back we can see how money relates to our basic needs.

PHYSIOLOGICAL

We are in deep trouble if we can't "afford" to meet our "physiological needs". We need to buy food and shelter. Even water is not free in most of the world these days. We need a certain "subsistence" income to stay alive. Capitalist economies tend to drive worker's salaries down to this level or below since these economies value only the work the person can put in. If the person has no "job", persistence income is somebody else's problem. To the individual, obtaining this level of income is literally a matter of life and death.

Subsistence income may come from subsistence property, such as a little plot of land that is farmed to produce the essentials. Capitalist economies put a market value on the land itself. Land may be used to secure a loan. If the land doesn't produce enough income to service the loan, the land (and the income it produces) is lost. This is the dynamic underlying thousands of suicides by farmers in India.

SAFETY

Once subsistence income is obtained, safety becomes important. If you are close to subsistence income, safety is a luxury. If you have more than enough, you can live between walls and pay staff to preserve your safety.

LOVE / BELONGING

Income plays a large role in the selection of partners. People select mates from the "class" created by relative income. Establishing a family requires income beyond "subsistence".

ESTEEM

At some level of income, money is available for visible signs of social class to signal membership in that class and "keep up with the Joneses". This operates in society with surprisingly low income. For some, ownership of knives and plates is a status symbol.

SELF ACTUALIZATION

Many people decide early on what kind of income would be "appropriate". I remember feeling a bit cheated as I struggled to obtain an income. It bothered me that many people in my same field made more than this - sometimes astonishingly more (Bill Gates and Steve Jobs were in my field). It wasn't just the money - it was connected to my own feeling of self-worth.

MARGINAL VALUE OF MONEY

This brings us to consider an aspect of money that is not reflected in its numerical nature. For the mathematician, what we are talking about is a derivative of money - either by time (which is income) or income by wealth - the amount of income as compared to the wealth one already has.

For some, an income of $1,000 per year is the difference between a miserable life and starving to death. For most "middle class" people in the West, it's a rounding error. $1,000 is not likely to make any difference in meeting our needs anywhere in Maslow's pyramid.

This holds true as income levels rise. To the very rich, $1 million is a rounding error. We tend to think of money as a percentage of either income or wealth. We laugh at the old lady who has a $2 million estate and comparison-shops for the cheapest light bulbs.

We conclude that the value of money varies greatly between individuals - a fact that is ignored in GDP figures. "Growth" of GDP (a central goal of political policy) means different things to different people and can actually mean the reverse of what it seems to show. If "growth" adds a few percentage points to the income of the very rich but pushes the general population "down the pyramid", "general happiness" is reduced by growing GDP. In fact, the capitalist economic system is engineered to do exactly that since capitalism drives labor costs to subsistence level or entirely out of the picture. 

People don't just look at their income and their cash-equivalent assets. They compare these to what they had a year ago and what their neighbors have. They are unhappy if their incomes remain stagnant and their assets are more and more pledged to the bank. A great number of people in Western Economies have a negative net worth - and it gets worse for them. This is a problem for them even if their standard of living is beyond the imagination of most people on the planet. We can see this as a problem of "Esteem" in Maslow's hierarchy, but it may even be a matter of safety and physiological needs as the household teeter on the edge of bankruptcy and/or a job is lost. Many people in the over-50 demographic are crushed to see their career hopes dashed. Their plans of "self-actualization" were psychologically tied to their jobs.

$1 million per year income can be seen as a problem if your next door neighbor makes $2 million.

Again we see the subjective value of money is not measured by the amount in question. That would not be a big problem except that, beyond subsistence, the value of money is only subjective.

This simple observation puts a lie to fundamental assumptions of traditional economics. A dollar is not the same to all consumers, employees, investors or any of the other supposedly interchangeable cogs of a market economy. Add to this the relentless efforts of producers to suck as much money out of consumers, which is another way of saying that the consumer is motivated to pile on as much debt as the system can bear. Advertisers play with Maslow's pyramid, convincing consumers (for example) that their old car harms their status - a new one is "needed". Or even that the world "owes" you a Lamborgini. Show the world that you have "made it".

What need is met by this $488,888 car?

While we are at it, we should mention the 680 billion dollars spent every year to make Americans feel "safe". 680 billion is not 328 million Americans spending $2,000 each to feel "safe". Nor is it $5,350 each to make 127 million households feel safe. Is it really true that America spends 2/3 of its GDP per capita to feel safe? The math doesn't seem to provide much insight. Somewhere along the line, we have lost sight of what $1 billion means. Perhaps we need to ask who or what is actually being protected and at whose cost.

Dimensions of Value: Maslow's Hierarchy

After writing it, I felt that this post was a bit "over the top". I thought of deleting it, but decided to leave it in, since it actually does connect to many of other ideas. It's just that I don't think our situation is quite this dark. I've got to stay away from Russian novels ...

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Maslow's Hierarchy of Needs

We really should give a nod to Maslow's attempt to visualize the human situation in terms of "needs", which are almost the same thing as "values". Let's discuss Maslow's ideas - assuming that we somehow manage to "value" what we "need". My general impression is that Maslow's summary is somewhat misleading. It tempts us to over-simplify human motivation and overlook the fantastic complexity of these "needs". Once we shift to "values" and unpack the "values", we wind up with something that can actually explain practical things like political parties, war, persistent poverty, "fake news" and all the other things that seem to arise from the depths of human nature to form "social hurricanes" that leave us feeling helpless and in need to at least understand what's going on.

Maslow's "analysis" doesn't seem to provide much immediate help to individuals wondering how to organize their lives and priorities. But that's not the worst of it.

Maslow's cute diagram was flashed on the screen in millions of "Social Studies" classes around the world as a quick and dirty way of getting the issue out of the way and providing teachers with a good source of multiple choice questions. But it is horribly misleading. It is a lie to imagine that the business of human life boils down to the individual seeking to meet individual needs. The fact is that one must choose between (a) abandoning society naked savage in the jungle or (b) absorbing oneself into the society which may or may not allow you to live.

NETWORKS

We all exist within social networks. We also find ourselves in a physical environment which, for many of us, is man-made and (therefore) a world of ideas-made-real. We are born into such a world that has been designed by society to meet the needs Maslow discusses. In fact, we find ourselves in a "matrix" that society provides for us to meet at least the bottom 3 tiers of Maslow's pyramid. For most of us, whether we struggle to meet our "needs" at the bottom of the pyramid or the top is a matter that society makes for us.

This tells us that our fundamental need (and value) is to be accepted into a network of social relationships that provide for our needs in detail. Through this web of relationships, we acquire food, money, safety and all the other good things that keep us (and our society) going. Of course, it remains to discuss how these networks and value-transactions work in real life.

It turns out that there is not an exact correspondence between "need" and "value". We value lots of things we don't need - such as drugs, sugar, jewelry, viral videos, alcohol, new cars ... We also tend to not value things we actually do need, such as a healthy mind and body. It is more fruitful to analyze values than needs. For example, where, in Maslo's, hierarchy do we find cocaine? Prostitution? Child soldiers? Nuclear weapons? Obesity? There seems to be something missing in the assumption that human life is mainly concerned with meeting our needs.

SELF ACTUALIZATION (TOP NEED)

I have always found this term to be an annoying catchphrase of the self-involved California hippy. We still hear it a lot - mostly from people who have - through skepticism or laziness - rejected all other value systems and wound up with "be all you can be". Back when Maslow did this work, the choice seemed to be between "religion" (discredited) and nihilism. A false choice.

Maslow is here assuming that humans, in general, do not regard self-sacrifice and/or self-denial as a value. For example, he's assuming that humans won't be happy living as Muslims, Christians, following Confucious, joining the armed services or devoting their life to service of any kind.   The challenge for Maslow would be to ask if the ultimate need in human life is not to lose oneself in a higher goal - something that transcends the self. I seem to remember that Maslo himself acknowledged the ultimate need is to lose oneself in something beyond yourself - transcendence. I also remember that this was taken in a kind of mystical "hippy" kind of way.

To a certain degree, one needs to surrender to this need/value if one expects to be a valued member of a group. On a very basic level, this means that one may be asked to clean toilets in a MacDonalds in order to make enough money to eat. The fact is that society rather strongly forces the individual into a role that serves society at large. In post-WW II America, this pressure was widely resented. Although we may regard some spectacular examples of "self-made men" "being all they can be", if we scratch the surface, we find people who are massively supported by society for the ends of society itself. Many others who have followed this path are known as criminals - especially psychopaths. The self-actualizing individual who rises to the top of a major corporation effectively surrenders himself to the myopic and psychopathic goals of the corporation (profit at all cost). Maslow's hierarchy makes no distinction between the people we call heroes and the people we call criminals.

I'm sure that Maslo imagined that everyone would become a philosopher like him if they could only succeed in "being all they could be". The fact is that freezing to death on the street is about all that some of us can manage. Beyond that, we all seem to need a lot of help. Some of us have come to the conclusion that the highest values of life are to be found with "a little help from our friends". Not just finding but providing help.

THE FOURTH TIER - BEING ACCEPTED

This is the need to "fit in". Maslow provides few details about how this is achieved, but we can see that the general idea is to find one's place in the social network to maximize the flow of value transfer between the individual and those who he/she is connected by bonds of employment, debt, business, obligation etc.  We note that Maslow makes no distinction between "fitting in" with the Mafia, fitting in with the Republican Party and fitting in with a campaign to save the whales. Doesn't it matter which group we "fit in" with? Doesn't it matter what we surrender, as individuals, to "fit in"?

The nature of these bonds needs to be "unpacked" if we are to wind up with a general view of what motivates human beings, which seems to be what Maslow is going for.

A CULTURE'S PYRAMID OF VALUES

Perhaps I will come back and put this in a pretty picture, but let's consider things from the point of view of a "network" or "superorganism" S, starting at the bottom. We can think of S as being a corporation, or nation-state.

Physiological

The continued existence of S doesn't depend on the survival of individuals - they are expendable. What needs to be preserved is the agreed-to system of values that prevent mass defection of individuals required to keep things going. Workers who are no longer needed can be off-loaded and taken care of like other externalized costs, like pollution and wounded soldiers. They are somebody else's problem. 

Safety

Again, the individual is expendable. The safety of S preempts the safety of the individual. The individual must be convinced that the bravest thing to do is to die for S, or at least work himself/herself to death for S at the expense of any personal benefit. Beyond a certain size, the corporation is immune from prosecution for any crimes it may commit. The nation-state need never acknowledge crimes committed in its name. Superorganisms are immortal or at least act as if they have a natural right to exist and grow forever.

Love/Belonging

It is necessary for S to maintain some kind of social cohesion by promoting values that make sense to individuals (both employees and customers) but may or may not be actually promoted in practice by S. A Strong feeling of "us" and "them" is necessary. "They" can be killed or starve to death or slowly killed by a poison produced by S. Whatever is good for "us" (namely S) is good. It is essential that unanimity be achieved on this score. Those individuals who challenge the common value system must be suppressed or expelled. "They" must handle the "externalities", preferably without taxing S.

Esteem

Depending on the type of S, it's called "protecting the brand". The national "brand" -  "national pride" should preempt the individual's desire to live. The "brand" should seek to preempt the individual's freedom of choice as a consumer. The actual benefit to the consumer (from Maslow's pyramid) is irrelevant. The consumer must be lead to think there is a benefit - even a need. Ideally, the consumer will see benefit from the bare brand itself - on a flag pole or T-shirt for example.

Self Actualization

A corporation becomes the ideal corporation by crushing competition, driving down wages or possibly eliminating human workers entirely. It dictates prices and convinces consumers to buy its products. All risks and costs are externalized. Ideally, the corporation can buy back its own shares, eliminating the need for pesky shareholders demanding return. It can suck up capital by leveraged finance, offloading risk by issuing bonds and buying insurance. The ideal corporation has no employees and no shareholders. It has no tangible product but accumulates profit and grows solely by amassing patent rights and leveraged financial capital. It is everyone's absentee landlord. It manages to "tax" every financial transaction while outsourcing all risk. Imagine one bank absorbing all the others and being run by a machine. Sometimes I think of this as being the ultimate state of Amazon. Just a machine that taxes the movement of goods from manufacturer to consumer, all done by robots and a vast machine we call the "cloud".

The ideal nation-state has crushed all other nations and dominates the world. Outside its own borders, there are only "they". Inside its borders, a tiny cadre has the precarious honor of being "us". All others are "they", under constant suspicion of treason. Imagine Stalin's Soviet Union covering the world. Imagine, in this world, all material goods being crap sold by Amazon.

The ideal nation-state and the ideal corporation are actually the same thing. The goals of a nation-state are best served by co-opting the corporation. The goals of the corporation are best served by absorbing the nation-state. Such a nation-state is called a "kleptocracy". To me, Russia looks like it "wants" to be like this. Where do the "oligarchs" end and the nation of Russia begin?

THE DARK TRUTH

In the real world, there is nothing to prevent superorganisms from taking over the planet while humans chase after Maslow's "needs". The world of "Terminator" is not as far-fetched as it seems. We need to understand that we are not the only sentient beings on the planet. The "needs" of every cell in my body are met by a system they don't understand. In fact, the organism called "me" doesn't understand much about the process either. But the analogy breaks down when we consider that I am (presumably) "smarter" than any of the cells in my body. The survival of all these cells is (mostly) up to me. But the "superorganisms" of which we are apart are usually pretty stupid. Their rules of growth and survival seem to make them even more destructive and stupid.

It is important to understand that "morality" exists only on our scale of things. 

I'll leave it there. I've talked myself into feeling rather unsafe. A nice friendly chat is called for. Besides, I'm kinda hungry...

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More dark thoughts on the malignant influence of superorganisms may be found here

Dimensions of Value: Influence, Power and Status

In a previous post, I mentioned how our world view - especially our perceived system of values - comes into our politics. At the same time, political players tend to misrepresent their own value system and the value system of their opponents to gain power. Power itself is a value worth looking into. In fact, "political" power seems to show up in all the "social great apes" and many other species. My aim here is simply to visualize this dimension - to come up with a visual metaphor that helps us think of this type of value. There are many values similar to "political power". I chose to talk about "influence" as a representative of this class of values. These networks are essential to understanding one of the themes of this entire blog: the superorganism. Networks of value play a role similar to the nervous system of the individuals who make up these organisms. They account for "why" these organisms value what they value and do what they do. They explain the "nuts and bolts" of how individuals are "programmed" by the superorganism.

From "Connected: The Surprising Power of our Social Networks .." Page 289

Social networks transmit all kinds of social things, including "influence", "political power" and "debt".

As already noted, debt is the shadow of "money", but this is a rather abstract idea that we can conveniently ignore. In practice, each of us in debt to identifiable entities, such as the government, the bank, and persons such as our society, our mentors and political patrons. Much of our behavior is governed by perceived obligation, even if we pretend to ourselves that we act freely.

In "Thieves of State", Sarah Chayes provides a detailed description of the architecture of one particular well developed "kleptocracies" - Afghanistan. This networked structure is composed of two-way relationships between the "boss" and the "client". Money (bribes etc.) flow "up" to the boss and perks, protection and status flow down. The link is usually established by the "client" paying for the position in the first place.  Sarah's analysis is particularly helpful in revealing how the corruption of the entire "government" structure works. It is, in effect, a criminal conspiracy that has captured the government. It is extremely durable since it comes to be an accepted aspect of the culture itself.

As Chayes points out, there are different structures in different countries, all lying on a spectrum of "corruption" - from outright capture of the economy by organized crime (Russia) to "white glove" capture of the economy by the rich, where political power and wealth are assumed to be interchangeable.

Networks of influence effectively control governments (including ours) where "corruption" is technically illegal.

Individual voters imagine that their "influence" flows to their representative in the form of their vote. In fact, such influence is openly sold to large campaign donors. "Fundraising" actually takes up the lion's share of the time available to elected officials. One of the key ideas of "socialism" is that each individual citizen should have an equal influence on the decisions of the government. This is specifically denied by the capitalist system, which is effective "one dollar, one vote". Capitalist politicians, such as Republicans in the USA, devote their energies to voter suppression - specifically standing against "equal representation" - "equal influence". They also vigorously defend mechanisms that maximize the influence of individuals and organizations with "deep pockets" (PACKS). We should note that the purpose of a PACK is to reverse the flow of influence - to influence the voter in favor of the PACK's agenda.

A whole library of books could be written on this subject. For the moment, I'd just like to point this out as one of the "dimensions of value" that matter in a fundamental way. Dimensions like "money" obviously play a role, but political power itself is a key value, most obviously to politicians but also to those who feel they are being left out - those who can be convinced to vote against their own interest in the name of some populist rhetoric. The dynamic "works" for the politician, but seldom for the disenfranchised voter. "Money talks". The rules of the game are set by those currently in power, resulting in a system as resilient to change as that in Afghanistan.

In political networks, loyalty functions more or less the same way it does in the Afghan-type kleptocracy. Individual representatives commit political suicide if they don't support the party agenda. In turn, the party provides financial help to get the representative re-elected. Loyalty networks function to draw the compliant politician closer and closer to the center of power while banishing anyone who shows a hint of disloyalty to the political wilderness. Newly elected politicians are "shown the ropes" by senior experts at the game, resulting in powerful loyalty networks between mentor and student.

Before leaving aside this topic for the moment, I should mention how "money" is only a value in itself when it buys the basics of life (food, shelter, security). Beyond that, money is a symbol of status and valued membership in a group. Status and membership are values on their own. Beyond "minimum wage", money buys status. A with all the great social apes, status figures into every minute of every day. It is the key to obtaining access to other values, such as mates, medical care, education, information and, of course, power. They also allow the individual to obtain shiny things like gold, jewels, and fancy cars, whose main function is to signal social status, even if this status is empty and devoid of actual influence or power - "status in the mirror".

Dimensions of Value: Socialism and Capitalism

Socialism and Capitalism are both ways of combining theories of value with practices "on the ground" which purportedly reflect these perceived values.

SOCIALISM

It seems that Socialism pays special attention to three value-related concepts:

• "Fairness" in the system of allocating things of value. This needs to be unpacked a bit since there is a different concept, also called "fairness" in capitalism. The two concepts are so different that we can see part of the dispute as encouraged by a problem of language. The same word used in opposite senses, as in "newspeak".
• Equal influence on public policy. The "government" should act on behalf of all citizens and not be dominated by a certain segment. Being "rich" should not equate to being politically powerful. One person, one vote, not one dollar one vote.
• Since "Socialism" is fundamentally a political world view, "socialists" are, of course, willing to stretch the truth, sweep details under the rug and ally themselves with the devil to "win power for the people". This process often seems to throw the baby out with the bathwater, as with the Canadian NDP, who seems to totally accept the capitalist lexicon in an attempt to grab power. The ultimate value with any political party is political power itself.
• "Socialist" countries are willing to sacrifice the lives of their citizens for the sake of "society". I regard the willingness to do so on a spectrum. At one end are the "democratic socialists" who will fight to preserve general welfare. At the other end are "communists" who regard "society" as an abstract entity that has little do do with the actual welfare of actual citizens. Actual citizens are expendable. Dissent is to be suppressed to preserve the illusion of "society" as a "thing" worth defending. I regard "society" to be an illusion - a fiction - quite like the "Invisible hand" of the market so popular on the right.

CAPITALISM

• "Fairness" in capitalism boils down to holding property rights sacred - baked into the constitution. Any re-distribution of property, especially by the Government in (for example) taxes is "unfair". Morally wrong.
• In Marxist terms, those who own the "means of production" are entitled to all profits that arise from the use of those means of production. Profits, as well as the means themselves (industry), are private property. Re-distrubtion of these is morally wrong.
• Modern capitalist thinking makes room for "middlemen" - merchants and "platforms" such as Amazon, to have a moral right to their profits. It's a simple matter of arithmetic to see that the allocation of such profits is a zero-sum game between labor and capital. Therefore, the capitalist (valuing property rights) sees the suppression of wages (and therefore the value of life itself) as an "externality".  "Culture" or "society" is meant to deal with these "externalities" but not by means of expropriating of capital, especially through taxation.
• Capitalistic rhetoric often features "jobs" as a substitute for the value of human life. "Jobs" are the rabbit pulled out of the hat that, mysteriously, leads us to think of people as raw material for capitalistic production and therefore profits. The purpose of society, in general, is to provide "inputs" to industry and consumers for its outputs.
• Capitalists tend to treat "money" as the measure of all things. The entire discipline of "economics" is an effort to reduce all human value to money. If there is anything such as "socialist economics" I have failed to find it.
• To the capitalist, political power, like everything else, is to be purchased and owned. The capitalist loves to risk other people's money and other people's lives. You often see this attitude emerging in claims that the rich "own" the country because "they" built it. "They" own the real estate, the factories, the banks. They, therefore, have the moral right to "run the country". This is a claim that is rarely challenged in open debate. We tend to forget that their claim to ownership extends beyond the borders of our country (including Canada), resulting in "shooting wars" and the deaths of hundreds of thousands of politically misguided peasants in "other" countries. "Ownership" is everywhere achieved, maintained and defended at the point of a gun.

BETWEEN THE CRACKS

Both of these worldviews tend to systematically ignore whole categories of value. At bottom, they represent different worldviews along with different ideas about the way political power should be allocated in a "fair" way. Mostly economic power. Money power. Jobs. Taxes. GDP. 

We all seem to agree that political power is a value worth fighting for. In personalities likeMitch McDonnell, we see people who are willing to sacrifice anything to gain power, even allowing the country to be ruled by Russia rather than the Democrats. In every "political" struggle, it is power itself, rather than "values" of any type that are being fought over.

Stalin was the ultimate capitalist, clothed in Socialist rhetoric. Stalin owned the country. Its wealth was his to distribute. Every citizen lived and died at his whim. He starved millions to death to build up a modern industrial economy (capital). Individual citizens had zero political power and zero value in themselves. They lived in fear of their lives. Allowing millions to starve and millions of others to be imprisoned or exiled represents the logical end of a system of thought that attaches no significance to any human value. Yet, "right wing" rhetoric paints Stalin as the "ultimate socialist".

I tend to see the "Nordic" countries as examples of socialism at work. Everyone is guaranteed access to the necessities of life. Such values as a good education are taken for granted and "fairly" distributed. Major resources (such as fossil fuels) and the revenue from them are owned by the state. There are instructive differences between these countries. Iceland is not Sweden. Denmark is not Finland. But you see a commonality of assumptions - how people think of value. I call this system of values "democratic socialism". It is not even a close relative to "communism" - a totally different animal which I may come back to at some point. 

America is a country without a coherent system of values. "Capitalist" assumptions fill the vacuum, resulting in an atmosphere of false alternatives and alienation. Ignorance of the population (itself a consequence of education being a "commodity" to be bought and sold) leaves America open to almost any rhetoric. There are no accepted values worth defending. The American voter is effectively for sale, resulting in de facto rule by the rich. 

Even in this brief introduction, we see that our left wing/right wing assumptions place us with a false alternative. Socialism seems to cast a wider net than traditional capitalism and it seems to attract those who want to make the net bigger, such as "environmentalists". Even so, Socialists seem

to find it hard to admit to any concern that is not fundamentally economic. Who pays for health care? Why do the rich not pay their fair share of taxes? Why do a small number of people own the lion's share of wealth? The "left" cedes the floor to the capitalist "right wing" by treating these sorts of issues and this dimension as fundamental.

Climate change is an example of an issue "falling between the cracks". Both sides struggle to find an economic reason to avoid destroying the planet. Both sides manage to find the logic that supports massive investment in weapons that will if used, destroy us all. Both sides have trouble seeing over their borders to the suffering created for the masses who "fall between the cracks" as they arm wrestle for power within their borders and struggle to expand their domination at the expense of actual people.

The most glaring example of this is the USA, which makes laws for the entire planet, assumes the right to invade any country, kill anyone, destroy any economy but claims no responsibility whatsoever for the catastrophe it leaves behind for "others". There is a large aspect of "entropy" in this project. The USA doesn't leave "order" behind (such as tame capitalist economies). It leaves chaos behind. Ruined economies. Impoverished political debate. Kleptocracies. We need to step back and see the entropy in this situation. We can see it also in pictures of Europe in the aftermath of World War II. We can see it in failed nuclear reactors and the unrecoverable environmental mess that military activities leave behind in their wake.

MORALITY

Both "sides" of the political debate regard the "other side" as morally corrupt. Yet, in private, the individual is rudderless when it comes to defining what is or is not "moral". It seems arbitrary. It's in the "eye of the beholder". Yet, our "eye" is being steered in definite directions and away from the horrible truth.

Pope Paul's encyclical (on Human Life) points the way to a moral issue that both sides skip over. Are we morally obligated to leave an inhabitable planet for our descendants? Is it morally right to steal that planet for the benefit of people now living? Pope Paul attempts to expand orthodox Catholic theology to include a few "new sins". He also makes a brave attempt to convince non-Catholics that they need to re-assess their view of morality even if they reject "religion". There is a troubling connection between the Catholic concern for the "unborn" fetus and the welfare of the people who do actually get born. Most non-Catholics don't want to go anywhere near this way of seeing things.

I maintain that "morality" reflects the way we see (or fail to see) "dimensions of value". It boils down to how we see (or fail to see) the world with the full range of dimensions of value. Similarly, we see (or are made to see) certain aspects of value (such as money and the "good life") as the only values worth attention.

To a certain extent, we are free to challenge the way we see things. To exactly the same extent, morality is a matter of choice. But all of these frameworks of value are sold to us like Corn Flakes. They are woven into the very language we use. We can't address the question without figuring in the way that humans are "programmed" to see things a certain way, just as our biology programs us to see light in certain wavelengths and hear certain sounds but not others.

We arrive at the conclusion (not so surprising) that morality and values are intimately linked. The link is not something "out there" like the laws of physics. Or laid down by some supernatural being. It is the link between the individual and society. The individual sees morality (and therefore value) only through the filter held up by society and the environment. Under the spell of the capitalist, we can be made to "see" the "Invisible Hand" and the "Market" at work.  Under the socialist spell, we are tricked into feeling like we are supporting the "common good" without really knowing what this means.

Break the spell and a whole different world comes into view.

More on "Dimensions" here.

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.

Human welfare and the four economies

My thoughts about the four economies have emerged from thinking about money and debt. Some writers, especially Graeber do a great job of sketching what money is (debt) and prying the concept away from "value". Graeber makes dire predictions about the fate of the world based solely on the nature of money. Graeber seems to think that, by the very nature of money, debt expands to choke the "real" economy - a phenomenon he calls "debt deflation".

I think that Graeber's misunderstands the way that money works and its relationship to the other economies we live in, most obviously value (which is constantly being created and destroyed) and information (which mostly grows at an exponential rate, contributing to a growing percentage of the value of everything we buy). However, Graeber's analysis is helpful in pointing out that many transactions involving money and the creation of debt take place entirely in the "money universe" without increasing value. In the big picture, this seems to increase debt relative to value, in effect, reducing the amount of value available to ordinary people. I'm not sure this analysis holds water when you realize that value doesn't obey the same rules as money. We usually acquire debt in order to obtain ownership (directly or indirectly) of something of value (other than money). "Net" value can dramatically change with ownership. The classic example is when the thing of value is a "plant" that can be used to manufacture things of value - value that exceeds the cost of production.

Graeber takes us on the intellectual journey of Marx and explains why things don't work the way Marx thought or even the way Marx wanted things to work. Borrowing money to "make" money is, as he says, a drag on the "real" economy and does little more than manufacture debt. The business of entire "finance" industry is based on the value of money for its own sake, resulting in the byproduct of growing debt floating around in the economy.

An example, dear to Graeber's heart, is real estate. One might argue that changing ownership of a house does not, as a rule, change its value. In practice, real estate prices (not values) tend to inflate and a lot of debt is generated in the process. Banks manufacture money for mortgages. For this reason, Graeber lumps real estate in with Finance as the bad guys. The insurance industry gets tossed in with the others for reasons I won't discuss (FIRE = Finance, Insurance, Real Estate).

I have my doubts about Graeber's analysis of a real estate transition.  Real Estate is a market like any other. The amazing thing about a market is that it matches every buyer who thinks something is worth X with someone who thinks that something is worth getting rid of and is, therefore, it's worth less than X. In other words, the basic mechanism of any market is based on fundamental disagreement over the value of the goods being traded. Both opinions are subject to feedback (what people think other people think things are worth and what other people think about what other people think ...), resulting in a classic example of a chaotic system. You get a mass movement of investment into real estate when people think it can't possibly lose money and massive losses (crash) when real estate does, in fact, lose value.*

Mandelbrot has convincingly argued that markets are inherently chaotic According to this line of thinking, price "inflation" is just part of a truly chaotic pattern, where collapse of "bubbles' is inevitable. Chaos is guaranteed by the "math" underlying the system. If true, this refutes Graeber's thesis, not just about real estate, but about finance, which is the core market that Maldelbrot uses an example. If Mandelbrot is right, the amount of money (and therefore debt) in the "system" can be expected to fluctuate wildly to the degree that a market for money itself exists. That's not what Graeber is predicting and the difference is hardly trivial. Sadly, Mandelbrot and Graeber give us two different pictures of Hell: A long strangulation of the real economy (Graeber) versus an endless sequence of fundamentally unpredictable crashes and booms (Mandelbrot).

The fundamental point of contact between the two theories seems to be in the mind of the "players". Graeber's theory is that debt is non-negotiable, collectable under any circumstance and independent of what people think. If true, this would tend to remove (damp) chaos from the system. In 2008, we learned that some opinions about some forms of debt can change overnight, resulting in the sudden disappearance of trillions of dollars of financial "assets" and the corresponding trillions in debt. I think Mandelbrot is closer to the truth than Graeber. The crash occurs when the "system" suddenly realizes that vast sums of "money" are based on uncollectable debt.

The response of the banking system to the 2008 crash is a separate issue, involving some fancy footwork by the world's central banks. This massively involves the "reserve" system, which doesn't seem to factor into Graeber's story about money (at least in his book on debt). "Reserve" money - what banks owe each other - is not connected to debt. It's more like a way of making sure that there are enough tokens in the right pockets to keep the whole thing running, especially a way of making sure that there is enough "cash" (IOU's from the Government) around to allow depositors to "withdraw" their money (transfer debt from the bank to the government) and pass it around between banks in a more or less frictionless way.

Putting it all together to understand the world we live in would seem to require an understanding of more than money and debt. In fact, it would seem to involve re-evaluating a lot of things. It's not surprising at all to find ourselves retracing the thoughts of Marx on the subject. He thought deeply about money, debt and value. But the role of information was completely ignored in his time and the universe itself seemed to be nothing but a passive store of raw materials. In our time, the universe is fighting back.

Money

Money is created in the modern economy precisely in the amounts of debt people (including governments) are willing to assume. Most people have no idea how "money" works, yet it can control their lives.

The physical form of money is hardly relevant. It may exist purely as information and it is, in a sense, pure information. A dollar is a fact. That fact is that a government (Canada, say) owes the bearer one dollar. That would seem to be a circular statement, except the "fact" is supported by the Government, which is not a figment of anybody's imagination. When a dollar is deposited in the bank, its factual nature changes slightly. Now it is the bank who owes the depositor one dollar.

As information, a dollar is a unit of debt. Somebody owes somebody a dollar. It's the "somebody's" that make it real.

Biology and Value - The "Real Economy"

Value relates to living things and makes no sense in the inanimate world. Value is always relative to a living thing. One animal's mother is another animal's food. Perception of value is not necessary for value to exist, although the domain of perceived value by humans is the case we will discuss here.

As humans, we constantly weigh up the value of things in our environment, creating an economy of made up of all the "stuff" that matters to us. In the value universe of humans, most stuff of value is owned by someone (or, as in the case of the "commons" by society) and the rules whereby ownership is changed are complex and interesting. Money can be involved and usually is, but when goods are exchanged for money, the amount of money in the system remains unchanged but the value can dramatically increase or decrease. One example among many is the purchase of mineral rights.

For example, when I buy a banana from the grocer, a bit of money moves from my hands to his and the ownership of the banana changes from him to me. As food, the banana has value to me. But if nobody buys it, the banana will rot and be without value to the anyone. Laying aside a few details, value is created when I buy a banana, even more obviously, when I pick it from a tree.

The biological forms we perceive and name can be somewhat arbitrary. It's important to identify the form you are talking about to make sense of the relative value. To illustrate this point, internal discipline is a value to a human organization - it contributes to the survival of that organization. However, it may not coincide with the welfare of individuals in the organization - in fact, it may be seen as a negative value by certain individuals. such as soldiers ordered into certain death.


Information

The information economy is increasingly important in the modern world. Information can be created from nothing, duplicated and shared. It is very similar to the "stuff" in the value economy in that its importance is solely in the eye of the beholder. But efforts to apply the concept of ownership to information reveal its slippery nature. If I share information with you, we both have it. In fact, the value of information often seems to grow the more people have it. It obeys its own unique rules.

Life itself is the transmission of information (DNA) to future generations. This all takes place in a physical world where one thing is not as relevant to that transmission as another (value) and the whole process is taking place in the real world, where the laws of physics cannot be circumvented.


Energy and the "Real World"

The entire natural world is all about the exchange of energy in countless forms. These exchanges take place according to rules and patterns of their own, irrespective of human value or even the presence of humans. Biology is a subset of this world, where information becomes important (DNA, evolution, stimulus and response).

"Stuff" - matter - participates in the energy economy. Stuff can be bought and sold as can energy itself, but the financial details do nothing to circumvent the rules of the energy economy, such as the laws of thermodynamics, conservation of matter etc.

We buy and sell energy as part of the "money" economy, often ignoring the physics and biology involved in these transactions. Underlying all such transactions is a loss, due to entropy, of the thing being traded. It's like a sales tax on every money transaction except that in this case, the tax is simply thrown away. "Production" of energy often involves irreversible destruction of value in the form of environmental destruction and other ways that the energy industry regards as "external" costs.

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* Of course, many real estate transactions are not based on such "disagreement". The buyer simply pays a "fair price" for what the seller has and no longer needs. There is something "real" underlying the transaction. This is unlike purely financial trades, where some form of security is being traded.