In Defense of Valuation

aikido image I think that estimates of the market value of non-market work are a worthwhile exercise (as my last two posts suggest) as long as they are done carefully and presented as an approximate lower-bound. But conceptual resistance to valuation remains remarkably fierce–which is a big reason we don’t see more of it.

One common objection is that estimation is just too crude–we now have good measures of the number of hours devoted to market work, but we can’t directly assess its value and, as a result, often use a market wage rate as an approximation. This objection doesn’t make sense to me, because conventional measures of both national and household income¬† currently assign a value of ZERO to non-market work; it’s hard to imagine a worse estimate than that.

Another objection is that assignment of market value elevates the logic of the market, and capitulating to commodification. In other words, there’s something culturally, if not morally dangerous about assigning a dollar value to work that is not actually motivated by dollars. I don’t buy this objection either. For one thing, a lot of work that is paid in dollars is not purely motivated by dollars (e.g. work in caring occupations). Just because you measure something in dollars (like wages) doesn’t mean that you are reducing it to dollars.

Also,¬† “keep dollars out of it” is essentially a defensive strategy that concedes all the power of economic reasoning to pro-market advocates. It makes it easier to deride advocates for care and sustainability as impractical idealists. Let’s keep our ideals front and center but back them up with economic analysis.

Estimates of the value of non-market transfers in the family–like estimates of the value of environmental assets and services–make the market look very small relative to the overall value of goods and services consumed.Right now, I’m imagining a visual image, a kind of info-graphic, that could make this point: market transactions actually represent a relatively small subset of all important economic transfers.

Exchange is just one form of transfer, and a broader look at transfers from both families and the environment reveals the limits of market logic.

Consider market valuation of non-market goods and services as a kind of martial art, like aikido, that can turn the energy of the attacker against himself and send him flying.




Posted July 23, 2015

Thanks to Paul Kalupnieks for making his cool aikido image available for public use with a Creative Commons license.




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