I predict a nonzero number of people reading this will not find it enlightening or insightful. The exact verbiage involves some profanity, but I ask the forbearance of the Glibertariat.
I frequently ruminate on why I don’t understand other people, and speculate on how they might have come to some rather bizarre conclusions. While often fruitless, it does exercise the neurons, and leave pieces of dross lying around the brain pan like this one. It seems to me how one views the world can imply a great deal about how one sees value. I think, at a basic level, there are two ways of looking at value. I’m going to dub them the Theory of Absolute Value, and the Theory of Relative Value.
The names more or less contain all there is to know about the core of the theories. Absolute value means that if something has value, that value is the same, for everyone. It is a very easy thing to intuit, especially when you look at how a child is taught about money. “This piece of cotton and linen with ink on it is worth something. If you go to the store, you can trade it for other things.” Since that value is fairly consistent, it’s easy to infer it’s worth the same to everybody. And with prices being fairly consistent, it’s not hard to make the leap to value being intrinsic.
In of itself this intuitive leap doesn’t harm the person’s ability to function. But when you start to draw logical conclusions from it, things begin to look different. If the value is absolute, then that value can be determined objectively, and centrally. Also, there is no such thing as a mutually beneficial trade. Either both parties break even, or one side gets cheated. But what of artisans? How does a cobbler take pieces of leather that don’t seem to have much value and make a shoe that does? Clearly this means the labor is adding something, and that labor has a value. But then that labor’s value must also be the same in all cases. So in any exchange of services, you’re going to end up with one party fleecing the other, or a grudging lack of gain on either side. From there it’s easy to look at a business and conclude that the only way it could be making a profit was if it was cheating its customers, employees, suppliers, or any combination of the three.
But why would so many people willingly participate in a system where they’re losing out or barely breaking even most of the time? Clearly they must not have a choice. Before you know it, you’ve gone from a simple intuitive inference to chanting anti-capitalist slogans.
Backing up to the beginning, the alternative proposition is the Theory of Relative Value. It supposes that value is not intrinsic but subjective and situational. Our cobbler may have made a fantastic shoe, but if it’s a size ten, it’s too small for my feet, so I’m not going to value it a whole lot. Likewise, those pieces of inked cotton and flax don’t themselves have value, beyond the ability to facilitate exchange. Once nothing intrinsically has value, but some measure of utility, it becomes easy to see mutually advantageous exchanges where both sides might walk away satisfied with the result.
But if everything is relative, it is impossible to determine an objective value. Not for those shoes. Not for an undeveloped piece of land. Not even for yellow-hued, chemically resistant metal. This causes problems then for doing things centrally. And that business? Well, it’s entirely possible that it can turn a profit without cheating the customers, suppliers, or employees.
The thing is, if your brain has wired in the Theory of Absolute Value, then the Theory of Relative Value becomes almost alien to it. This conclusion, I fear, is drawn almost entirely from my own thought processes. I passed economics, so logically I can figure out that the Theory of Relative Value more accurately reflects reality. But intuitively, I still jump to Absolute Value. The initial reaction of, “Why would anyone buy that?” betrays the old childhood pathways still in use. Because it still makes no sense why anyone pays a dime for a Jackson Pollock splatter, or Florida real estate.