The Price of Everything and the Value of Nothing

I've been having an interesting off-topic discussion on this Crooked Timber thread.

The discussion revolves around the concept of value: what is valuable, what constitutes value, and how do various things acquire value?

The traditional answer given by economists is that things are only valuable insofar as humans place a value on them. Economists don't question people's wisdom when it comes to value - if you believe that the clay ashtray your child made in arts-and-crafts class is worth $100 to you, an economist will not dispute your claim. (As long as your actions are consistent with your words, of course - if you decide to sell the ash tray for $1, we know that it isn't actually worth $100 to you.)

What an economist will dispute, at least the one's I've spoken with and read, is the claim that objects have value in and of themselves, independent of any values a human might bestow upon them. This issue comes up frequently in environmental economics, where economists must determine how much a natural resource is worth to society even when there may not be a market price for that resource. Economists typically measure value through some kind of willingness-to-pay methodology, either through indirect (or secondary) market pricing methods, travel-cost methods, or simply through surveys when no other methods are available.

But we also have to ask what constitutes value - for example, what is it about trees that we find valuable? There are many answers, of course, depending on who you ask. Trees are valuable for fuel, timber, asthetics, and oxygen production, for example.

Economists also recognize existence value - the value people place on simply knowing that certain things exist, even if they get no other direct utility from them. I might feel happy knowing that the rainforest in Ecuador exists, even if I never plan to travel to Ecuador to visit it, and even if I don't expect its existence to provide any technological or environmental benefits to me.

But apart from use value, existence value, and any other value humans derive from a good, the good itself is valueless.

To see why, consider the following thought experiment. Suppose a tree exists on some faraway planet - a planet so far away that we will never observe it or even realize it is there. Does this tree have value? To whom? Humans living on planet Earth do not derive value from it - not even existence value - because we don't even know if it exists.

To say that this tree has value in and of itself is to say that the tree has the ability to make value judgements, or that God or some other mystical entity (?Mother Nature?) places value on it. But we have no way of knowing what values trees place on themselves or on each other, or what values God or Gaea, The Earth Goddess might place on these trees.

When people argue that we must take such values into account, they have removed the argument from the realm of empirical science and placed it in the realm of theology. And like most - if not all - religious arguments, empirical evidence and even logic are thrown out the window, and replaced with faith. One cannot argue against faith; such a discussion is a futile waste of time.

Steven Landsburg, in a chapter titled "Why I Am Not An Environmentalist:
The Science of Economics Versus the Religion of Ecology
" from his book The Armchair Economist: Economics & Everyday Life writes:

The hallmark of science is a commitment to follow arguments to their logical conclusions; the hallmark of certain kinds of religion is a slick appeal to logic followed by a hasty retreat if it points in an unexpected direction. Environmentalists can quote reams of statistics on the importance of trees and then jump to the conclusion that recycling paper is a good idea. But the opposite conclusion makes equal sense. I am sure that if we found a way to recycle beef, the population of cattle would go down, not up. If you want ranchers to keep a lot of cattle, you should eat a lot of beef. Recycling paper eliminates the incentive for paper companies to plant more trees and can cause forests to shrink. If you want large forests, your best strategy might be to use paper as wastefully as possible ? or lobby for subsidies to the logging industry. Mention this to an environmentalist. My own experience is that you will be met with some equivalent of the beatific smile of a door-to-door evangelist stumped by an unexpected challenge, but secure in his grasp of Divine Revelation.

This suggests that environmentalists ? at least the ones I have met ? have no real interest in maintaining the tree population. If they did, they would seriously inquire into the long-term effects of recycling. I suspect that they don't want to do that because their real concern is with the ritual of recycling itself, not with its consequences. The underlying need to sacrifice, and to compel others to sacrifice, is a fundamentally religious impulse.

The entire chapter is worth reading, and the point is worth keeping in mind: when environmentalism moves from science to religion, rational debate is impossible.

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i especially love the

i especially love the "important notify" "improper using" bits. the whole damn thing reads like somebody's attempt to write engrish--which is the surest indication it's genuine engrish indeed.

The value of trees, or more

The value of trees, or more properly forests, is unknown because we don't yet understand ecosystems. Determination or assignment of value is based on known uses and services forests provide. The unknown but suspected facets are not processed by these mechanisms. The same is true for grasslands, wetlands and other ecosystems.

While it is true that there are pseudo-environmentalists that are natural theologists there are also those who are able to hold the mark and waffle about value since we just don't know yet. We suspect that forests have greater value than we yet understand because we continue to discover services they perform.

Perhaps concepts of risk or present value could be applied to improve tree valuation before we understand the science? Who knows? A curios perspective on tree fetish is that only societies that hail from forested areas have the fetish. People from plains areas or tundra dislike trees. They find them gloomy and threatening. They block the light and the line of sight. Inuits make poor Druids.

Back40, True, we never has

Back40,

True, we never has access to perfect information, and we must constantly make decisions without knowing the true costs and benefits of our available options. But remember, this doesn't necessarily bias us in any particular direction; we could be overvaluing or undervaluing the resource in question.

You're a theist aren't you,

You're a theist aren't you, Micha? If not, you oughta try the shrimp--it's delicious.

And if so, do you not believe the created order has some value independent of the valuations of individual humans?

Micha Ghertner: But apart

Micha Ghertner: But apart from use value, existence value, and any other value humans derive from a good, the good itself is valueless.

That is a rather anti-materialistic view, don?t you think?

I agree with what you are saying completely Micha, it is just that I am surprised to hear you say it.

Micha Ghertner: Suppose a tree exists on some faraway planet - a planet so far away that we will never observe it or even realize it is there. Does this tree have value? To whom? Humans living on planet Earth do not derive value from it - not even existence value - because we don't even know if it exists.

This is an interesting topic Mr. Ghertner. From reading the above paragraph one could almost get the impression that material (a tree in this case) which is valueless is somehow analogous to material which is non-existent.

Micha Ghertner: To say that this tree has value in and of itself is to say that the tree has the ability to make value judgements, or that God or some other mystical entity (?Mother Nature?) places value on it. But we have no way of knowing what values trees place on themselves or on each other, or what values God or Gaea, The Earth Goddess might place on these trees.

This would seem to have some rather large ramifications for the concepts of libertarianism, and materialism to name but a few.

Micha Ghertner: When people argue that we must take such values into account [?intrinsic value?], they have removed the argument from the realm of empirical science and placed it in the realm of theology. And like most - if not all - religious arguments, empirical evidence and even logic are thrown out the window, and replaced with faith. One cannot argue against faith; such a discussion is a futile waste of time.

hmmm ?

I am thinking of this in terms of preservation of species ? preservation of diversity.

Suppose there is some creature which is completely valueless from the standpoint of humans. And let us further suppose that humans have the ability to drive this species to extinction (the small pox virus comes to mind).

Should humans drive the species to extinction, just because they are able to and just because the species is ?valueless? from the present human point-of-view?

How does that question relate to your point:

Micha Ghertner: ? the value people place on simply knowing that certain things exist, even if they get no other direct utility from them. I might feel happy knowing that the rainforest in Ecuador exists, even if I never plan to travel to Ecuador to visit it, and even if I don't expect its existence to provide any technological or environmental benefits to me.

Kevin, I am an

Kevin, I am an athiest.

Serpent, to say that something has no value is not to say that it exists; many things exist which have no value to humans. A rock on some faraway planet, for example. Or Gigli.

The mere existance of certain species may be valuable to some people. However, if the existence of the species has no value whatsoever to humans, then there is no reason to worry about destroying it. That does not mean that we should destroy it just for the sake of destroying it; only that we need not take its destruction into account as a cost when we make decisions.

Micha Ghertner: The mere

Micha Ghertner: The mere existance of certain species may be valuable to some people. However, if the existence of the species has no value whatsoever to humans, then there is no reason to worry about destroying it.

Doesn?t it have ?potential value? intrinsic to its uniqueness?

What about the possibility that its genetic information could be useful to you at some point in the future?

Doesn?t it have ?potential

Doesn?t it have ?potential value? intrinsic to its uniqueness?

Only insofar as its uniqueness is valuable to humans.

What about the possibility that its genetic information could be useful to you at some point in the future?

Then that is a legitimate value, because it can be put in terms of value to humans. Of course, altrernative uses might prove more beneficial, in which case, so much for that species.

Micha Ghertner: Only insofar

Micha Ghertner: Only insofar as its uniqueness is valuable to humans.

In your assessment when is uniqueness (same as ?diversity??) not valuable to humans?

Serpent: What about the possibility that its genetic information could be useful to you at some point in the future?

Micha Ghertner: Then that is a legitimate value, because it can be put in terms of value to humans.

Wouldn?t that be a kind of ?intrinsic value? then because I imagine if you go far enough into the future you could find a use for anything?

Micha Ghertner: Of course, alternative uses might prove more beneficial, in which case, so much for that species.

I?m not sure I follow.

If you destroy the species, then what alternative use are you deriving from it?

I mean, I could see where you could derive maybe a ?defense benefit? from destroying the small pox virus, but in a way isn?t that analogous to capital punishment?

You?ve essentially deemed that some organism is beyond your ability to rehabilitate for positive purposes..

I think the most succinct

I think the most succinct way to put it, at least for those with a strain of math/computer science geekery in them, is to state that "to value" is a binary, not a unary operator.

That is, in the same way that
= x
makes no sense,
"A tree has value"
makes no sense. You're missing an operand. So,
y = x
makes sense, as does
"A tree has value to me."

Serpent, In your assessment

Serpent,

In your assessment when is uniqueness (same as ?diversity??) not valuable to humans?

I don't want to go out on a limb and give examples, because any example I give might be valuable to someone. But the whole concept of species as unique and distinct is flawed. Species are not "Platonic forms" or perfect essences. There is no strong demarcation between one species and another, when both species are closely related genetically.

Wouldn?t that be a kind of ?intrinsic value? then because I imagine if you go far enough into the future you could find a use for anything?

No. We have to make decisions based on the information we have available now. If we saved everything simply because we might discover a use for it later on, we would not be able to use any depletable resource at all. And even if we did operate with such an assumption, that still wouldn't be an intrinsic value, because it is still a value in human terms.

If you destroy the species, then what alternative use are you deriving from it?

Food, fur, etc.

I?ve been thinking about

I?ve been thinking about what you said, but I keep coming back to this section.

Micha Ghertner: Then that is a legitimate value, because it can be put in terms of value to humans. Of course, alternative uses might prove more beneficial, in which case, so much for that species.

the whole concept of species as unique and distinct is flawed. Species are not "Platonic forms" or perfect essences. There is no strong demarcation between one species and another, when both species are closely related genetically.

It seems to me that if I replace the term ?(Individual) species? with the term ?Individual? your logic should still hold true.

But for some reason it doesn?t seem to.

Then that is a legitimate value, because it can be put in terms of value to humans. Of course, alternative uses (i.e. harvesting the individual as a ?material? resource) might prove more beneficial, in which case, so much for that Individual.

the whole concept of Individual as unique and distinct is flawed. Individuals are not "Platonic forms" or perfect essences. There is no strong demarcation between one Individual and another, when both Individual are closely related genetically.

It seems to me that if I

It seems to me that if I replace the term ?(Individual) species? with the term ?Individual? your logic should still hold true.

Well, this gets into the question of why we should respect individual rights. There are a number of possible answers, none of them completely satisfying to me: natural rights, contractarianism, etc. Regardless, there is no scientific basis for believing that species are especially distinct or unique.

Supposing we reject individual rights and accept some form of utilitarianism, then perhaps your argument holds true. But we could still argue over whether strict utilitarianism is desireable, or whether some kind of rule utilitarianism might be better.