How do we define value? What makes one thing more valuable than another? And does that logic apply to human beings?
These questions hinge on a deeper question about reality. If reality is just a sum of human constructs – an agreed consensus framework – then value itself must also be subjective and ultimately a question of mutual consent. If reality is objectively true – if it exists independent of human perception – then it should be possible to use the framework of that higher reality to determine what is valuable and what is not.
Fundamentally, this is an unanswerable question, so I prefer to short-circuit it. There may or may not be a higher reality, but because I am human all I can know about reality is limited by my own perceptions, and the same is true for each living being on this planet. Therefore, even if there is a higher truth, humans have no objective way of assessing whether they recognise it correctly, so it is better and more practical for all concerned to be operate within the lower, subjective, consensus model of reality.
In this model, each of us brings to the table a unique perspective on the world. Reality is the net sum of all those perspective, weighted by our relative abilities to influence other people’s perspectives. The value of something is determined by the sum total of the world’s opinion on its value. This is a very circular proposition, as if something has traditionally been highly valued, it will tend to remain so. If it has traditionally been valued lowly, it would take a paradigm shift (e.g. a revolution) for its higher value to be recognised by a critical mass of humanity.
Thus, gold is valuable because it has been traditionally used as a valuable material. Proxy reasons include its relative durability, its scarcity, and its difficulty of extraction, but the same is true of any number of different commodities, metal or otherwise. Gold is pre-eminent in the human psyche as a marker of value because it has culturally cemented its position over millenia of use.
Over more recent centuries, certain currencies like the US Dollar, the Japanese Yen, and the British Pound Sterling have also been highly valued as so-called “reserve currencies“, held in relative esteem over others not because of the intrinsic worth of the paper – or electrons – underlying their value, but because of faith in those countries’ ability to repay their debts consistently. Whether they all hold their positions into the future remains to be seen, given Moody’s downbeat assessment of the USA’s credit-worthiness and the general concerns over sovereign debt levels.
But ultimately, whether these currencies retain their value or not will be down to the same reason why gold retains its value or not: faith in the mutually agreed consensus on reality and the worth of objects within it. It sometimes scares people to think of our entire financial system being built upon pure faith, but it should not be a frightening proposition once you consider that our entire reality is also built upon pure faith in much the same way. Of course, some have gone insane pondering that latter issue…
If the mutual consent of a large enough group of people can determine value, that means that ideas, and not just commodities and currencies, can be differentially valued. One aspect of this is politics. Over the long-term, countries get the governments the majority of their populations want. That applies just as much to tyrannies as to democracies; it’s merely the way that governments change that varies. Democracies are more sensitive to changes in large-scale public opinion, but it really is only a matter of degree.
If commodities, currencies and ideas can be valued in this way, it is not a significant stretch to realise that humans can also be compared, both as individuals and as groups. Some readers will be appalled by this, and point out that this line of thinking led to atrocities like the Holocaust and similar episodes of genocide and ethnic cleansing. They are right, of course. But the process of considering one person as more valuable than another still happens. For instance, on a small scale, family members and mutual friends generally value each others’ happiness higher than they do a stranger’s. If all humans were equally worthy in their eyes, this would not happen.
What then is the counterweight to prevent genocide?
Merely that a large mass of humanity also consensually agrees that despite our implicit measuring of value of one person versus another, we also choose as a population to limit the impact of that value judgement on smaller groups in society. This is a paper-thin protection against abuse, but all our societies can ultimately do.
On a less dramatic, but perhaps even more meaningful, scale, these relative valuations of one human’s life against another underpin the field of cost-utility analysis, which is increasingly used by governments, agencies and companies worldwide, to determine how best to spend money in order to maximise value. It’s all about getting the biggest bang for your buck for the most people for the greatest amount of time… and if you think about that carefully, you’ll realise that will always persistently work to the advantage of some groups relative to others. For instance, in healthcare, such QALY assessments will consistently benefit younger people relative to the elderly.
So, value is both mutable and dependent on mutual consent. Reality is as thin and fragile as a pane of glass, and it is only because we add our panes together that a viable edifice can be constructed. Our societies implictly use this model of value to determine the relative worth of ideas, objects, people and even money itself. And they will only value us as individuals or groups if we can convince a sufficient mass of others that we are indeed worthwhile.
If that sounds too tiring a task, the only alternative is limiting contact with society to necessity and protecting one’s isolated position by accumulating sufficient quantities of things that society already finds valuable.
The themes of this post are explored further in the next two entries: