Summary: Economics does not know how to take full account of value beyond its sphere, such as of environment. This may be done systematically using Dooyeweerd's aspects.
Status of chapter: + argument stable but in need of critique and refinement; - needs proof-read. pdf available.
Value is central to economics; it is Good seen through the lens of the economic aspect of life. Unfortunately, the field of economics has reduced this to monetary value, which ignores or grossly distorts most other kinds of value. That was what concerned Mark Carney when he delivered his 2020 Reith Lectures and published his 2021 book, entitled Value(s), which is what sparked the RLDG discussions. As Mark Carney argued, we need to bring all such kinds of value into economics theory and practice.
For example when GDP (Gross Domestic Product) is used as a measure of a nation's wellbeing, its 'value' compared with other nations, it misleads in major ways because, by including only monetary transactions, it ignores much good that is not paid for, such as household activity of care and cooking, or cannot be measured by money, such as biodiversity or love.
But what is value? What kinds of true value are there? How may we increase value? How may we assess it? (And what role can and should money play?)
Insofar as it is the mandate for economics activity to resource contributions to Multi-aspectual Good, insofar as economics should be embedded among all other spheres of live, and insofar as there are multiple kinds of value, then we must find a way in which economics can take all kinds of value into account, not only economic value. Whereas reductionism in economics and elsewhere (see Chapter 4) tries to reduce all value to economic value (and even to numbers), our discussion in this chapter moves in the opposite direction, to take each kind of value seriously for what it is, yet in ways meaningful to economics.
Summary: There are multiple, irreducibly distinct kinds of value. Economic value is only one kind and needs to be able to express all others faithfully.
Mark Carney expressed the tacit concern that many other recent thinkers had, that value has been reduced to economic value, or even monetized as financial value or price, and much has been lost. This is a form of reductionism and the detachment of economics discussed earlier. The 2020 Covid-19 pandemic, however, revealed that we know there is something valuable beyond economic value - including nature, silence, fresh air and generosity. So does the climate crisis: biodiversity and climate are of immense value. So did the 2008 credit crisis: trust and appropriateness. Carney saw the origin of value as lying in values, i.e. what we value and called for economic value to truly reflect such values, rather than narrowing what we value down to a price, as so often happens at present.
Unfortunately, Carney does not show us how. He does not even offer a discussion of what kinds or possibilities of value there may be, apart from a list in his concluding chapter, "responsibility, fairness, integrity, dynamism, solidarity and resilience" [p.519] and, elsewhere, mentioning trust, health and ecological sustainability. So the first thing we need is to understand these wider kinds of value and how they are possible.
Other recent thinkers also call for a variety of good things to be valued in economics, such as:
The RLDG discussed these and others, and readers can bring in more. They are values that make an economy, and life in general, more fruitful. Various economic schools understand value in different ways, and none should be ignored but incorporated in the overall understanding of economics.
Mark Carney's main message was that economic valuing should reflect and incorporate what he called "human values" - responsibility, integrity, resilience, etc. These can be held as what we wish for nostalgically or aspire to wistfully, and such are often expressed in poetry, song and art, and sometimes theorized about by ethicists etc. but our actual values.
Actual values are those we hold in our heart rather than our expressed wishes, being what we actually live by or allow ourselves to be driven by. Our real values are within our hidden mindset-attitude. And it is in our economics, the science of value, and our economic activity, where our actual values come to the surface. Looking at actual economic activity in affluent cultures and what their economic systems reward and their media applauds, reveals what they actually value: selfish unconcern instead of Carney's responsibility, inequality instead of his fairness, hypocrisy and the curating of reputation rather than integrity, individualism rather than solidarity, technology more than trust, sexual freedom more than ecological sustainability, pleasure and prodigality more than planetary resilience and so on [Note: Is That Too Harsh?]. The way we have structured our economics expresses and embodies what society values at heart - and most of it is harmful or frivolous.
Worse: the whole world is succumbing to the spread of such values as they percolate across the entire world.
Another problem is that many things are not valued in affluent cultures but should be. One is what are called externalities by economists, the impacts of, or on, economic activity that are meaningful in aspects other than the economic and hence 'invisible' when seen through the lends of the economic aspect alone, and hence are not explicitly taken into account - things like biodiversity loss, climate change, obesity, addiction (and maybe a few good things too, such as love and delight). Another is unpaid work, such as childcare, care of the sick or elderly, voluntary work, housework, growing one's own food, doing one's own repairs, and s on. These are all important for life and even the economy but are assigned zero economic value by not being paid.
History shows that each generation of thinkers emphasises certain values and ignores others. The ones ignored are not thereby of zero value; they will arise as important later. It is little use building a new framework around a limited set of values. Fortunately, most future-recognised values are not completely hidden today; it is just that they are not fashionable in academic or professional circles.
A foundation for rethinking economics therefore needs a basis for how to bring all kinds of good value into the heart and core of economics systematicaaly, and into the structure of economies. Dasgupta [2021] has suggested a way to bring biodiversity into treasury calculations. The UN Statistics Department is trying to bring unpaid work into national accounts. Such attempts are creditable and important but they tackle individual kinds of value. What is needed is a basis for giving due and explicit respect to all kinds of value within all theory and practice of economics. By asking "What is value?" we discuss how Dooyeweerd's aspects can help us do this
Summary: Value has been variously understood. We link value of something to the Good in contributes, or could contribute, to Multi-aspectual Good. Dooyeweerd's aspects can help us understand the diversity of kinds of value.
"As he looked up, Jesus saw the rich putting their gifts into the temple treasury. He also saw a poor widow put in two very small copper coins. 'I tell you the truth,' he said, 'this poor widow has put in more than all the others. All these people gave their gifts out of their wealth, but she out of her poverty put in all she had to live on." [Luke 21]
All these raise the question of What is Value? Or, more precisely, Whence arises value? What makes value possible? What makes it possible to value things? Why is it important or meaningful? These questions many be answered in two ways, causally (By what mechanisms or functioning does value come about?) and conceptually (What is it that makes value meaningful?), though they are often merged together. We briefly overview a few theories of value, but then economic value in more detail.
Summary: Different ideas about what value is. An integrating framework is needed.
We do not plumb the depths of Value Theory here, but mainly understand how value has been categorised in that theory.
Debreu's [1959] Theory of Value, is highly mathematical, his aim being a more rigorous treatment than previously. Laudable aim, but he presupposes price as value, and price as emerging purely from willingness to pay. He completely fails to think about what value is, which what we need here. There is one positive about his theory of value that is relevant to us, apart from his desire for rigour, is that, in defining "goods", "services", etc., he opens up some of the multiple aspects that contribute to what they are, including date, location, quality, etc. These are each meaningful in certain aspects.
Mazzucato [2018] offers a useful outline of how various thinkers charted the origin of value. To early merchantilists, like Sir William Petty and Gregory King, value is the excess of income over expenditure and is generated by astute selling. To physiocrats like Quesnay, value is increased by the generation of new things from existing things, such as plants from seeds or minerals from earth, rather than from mere shaping of things already there - so he valued land more than human craft . To Adam Smith, by contrast, it was human formative labour that adds value, as found in manufacturing industries, where it is multiplied by machines. Ricardo and Marx developed other versions of this labour theory of value.
Those were seen as seeking objective ideas of value; attention switched to subjective views of value, as originating from the free human attribution of value. A thing is of value because we believe it to be. Subjective value theory emphasises preferences as value, presumes that the mandate of economics is to satisfy those preferences, and often measures preference value by willingness to pay.
There are two major problems in both objective and subjective views of value. First, why is the value actually Good? For objective ideas of value, we need some justification for why each proposed basis of value is actually Good, and worth taking seriously. For subjective preference-value, Sagoff [2004, 101-2] expresses the challenge well:
"Economists suppose that the satisfaction of preferences taken as they come on a willingness-to-pay (WTP) basis bounded by indifference curves is a good thing - but why is it good? To explain why preference-satisfaction is a good thing, microeconomists assert a relation between preference and welfare. According to this theory, since welfare is a good thing, and since preference-satisfaction is a means of obtaining it, preference-satisfaction is a good thing."
(His "welfare" he also calls "wellbeing" and includes environmental as well as human, thus approximately what we call Multi-aspectual Good.) But to what extent is preference-satisfaction really a means of obtaining this? If soceital attitude is self-centred and its mindset is narrow (as is true in most affluent cultures) then preferences are often for things that reduce rather than ensure wellbeing. There being no correlation between this and preferences, that entire edifice of economics theory and practice based on preferences can never be relied on to work towards Multi-aspectual Good. Preferences do not indicate true value.
Most of those theories are about how economic value is generated, not the origin of value as such, what makes value possible. Instead of - and for - both objective and subjective theories of value, Dooyeweerd offers a better foundation. Making use of Dooyeweerd, Gunton et al. [2017] argues for considering the activity of valuing rather than trying to define precisely a property called "value". It is the aspects that make valuing possible, because we value by reference to a sphere of meaningfulness, which is what Dooyeweerd's aspects are. We value landscape for its aesthetic appeal, its biotic value as ecosystem, its formative value as productive, its economic value as resource, and so on. Gunton et al.'s idea of valuing bridges subjective-objective divide, in that valuing is by a subject, but is always by reference to given possibilities of doing so that transcend subjectivity. Dooyeweerd's idea of aspects as irreducibly distinct spheres of meaningfulness and law (Chapter 3) offers a useful foundation for understanding value that can become economic value.
Summary: Each aspect defines a distinct kind of value. They may be combined in multi-aspectual things or situations.
Kenter et al. [2019, 1440] describes values as "lenses of worthiness" or "of what is considered to matter". Aspects, as understood by Dooyeweerd, are exactly that: "modalities of meaning" - and therefore ways in which things matter and ways of seeing reality that define some good or worthiness. This is why we may use Dooyeweerd's aspects as kinds of value. All the supposed origins of value above presuppose one of other aspect.
In Dooyeweerd the subjective and objective go together in that they transcend, and make possible, both value itself (objective value) and the attribution of value (subjective value). They need no longer be opposed to each other, as they have been in most theories of value. We reinterpret objective value as about the fundamental Good that each aspect makes possible and subjective value as about the human mandate to open up through time this potential for Good (shalom).
Aspects always pertain, whether we are aware of them or not, and especially whether they are fashionable or not in a discipline. This is one reason we do not restrict our Rethink to responding to problems that have so far presented themselves.
Every aspect contributes to Multi-aspectual Good, potentially and actually, so each defines a distinct kind of value, with examples given in Table t5-asp-values - and economic value is just one among many.
IG "pix/t5-asp-values.iff" -w4 -h4.5 -ra
Seeing value by reference to aspects offers four major benefits to economics. One is that the 'poor' and the poorly-resourced may be seen as of equal importance with the wealthy, the well-resourced, whereas conventional economics of both left and right presupposes the superiority of wealth. The functioning of the 'poor' might contribute just as much to Multi-aspectual Good as that of the wealthy, especially in other aspects - and we note elsewhere that it might even be more (since the wealthy often tend to engage in what we later call Useless or Harmful economic activity). (x It so happens that many religious perspectives see poverty as superior, but that is not why we state that. x)
A second benefit is that we are no longer confined to human-centric value. As mentioned earlier. Gunton et al. [2017; 2022] argue that there is value without reference to human needs or preferences at all, especially in the non-human part of Creation. This is why the Ecosystem Services approach is only a partial solution, which Gunton et al.'s approach goes beyond.
A third is that aspects enable us to include unpaid activity in economics, which has been ignored by economics for too long. We will discuss this later.
A fourth is that it can cope with harm that undermines Multi-aspectual Overall Good. We might call this "anti-value". This is because the aspects inherently define evil as well as good and the repercussions thereof as harm or benefit. For example, climate change, biodiversity loss and pollution are biotic harm, stress from overwork is mental and social harm, addition is psychical, social and economic harm, crime is juridical harm, and so on, as discussed in Chapter 3 for all aspects.
This allows us to consider net value of many kinds in an elegant systematic way, as set out in Chapter 7.
Summary: Economic value is the value of an object as resource that enables us to function with wisdom in contributing sustainably to Multi-aspectual Good.
Note: This has still to be discussed, critiqued and refined, so should be treated as a provisional place-holder idea.
How do we bring such disparate kinds of value into economics? What we have been talking about thus far is what is often called use-value, the value of a resource in use to enable functioning in some aspect(s) to bring Good. (We extend its definition beyond satisfying human needs or desires, to include the non-human.) There is also exchange-value (when a bed is exchanged for a pig) and labour-value (the part of somebody's life needed to generate a good or service). The ultimate medium of exchange-value is, of course, money. Aristotle's view of value was restricted to use-value and he never managed to get to grips with exchange-value [Skidesky & Skidelsky 2012]. "Understood in its original sense, as real usefulness rather than mere utility in consumption, use-value can no more be transformed into exchange-value than colour into length." [p.91]
We agree and disagree. We agree that aspectual value (as we call use-value) can never be fully and unambiguously transformed into change-value. But we disagree insofar as it usually is, and we may understand this transformation aspectually (both ontically and axiologically-normatively). (We deal with labour-value later.)
1. Contribution. Referring back to Chapter 4's discussion of the kernel meaning of the economic aspect, as we function in the economic aspect among all the others in the multi-aspectual functioning that is life, we need to treat all kinds of value with respect and the things that bear that value as a resource to be carefully conserved, keeping the future in mind, rather than just used. Each kind of value contributes to Multi-aspectual Good (potential or actual) in its own way. It is when we function well in that aspect that we turn potential into actual.
Example: As we function, we engage objects temporally (e.g. using pen to function lingually in writing). The value of a pen is that it enables the poet to write poems that contribute to Multi-aspectual Good. A pen might also have aesthetic value if of high quality, or social value when pens indicate status, or psychical value, of the feel of a good pen gliding over the paper. What is written using the pen also has value, aesthetic value of a poem, social value of the poem's reputation, analytical value and also occasional reputational value of an academic paper, and so on. All these may be viewed simultaneously as economic value when viewed as resource.
2. Value and values. Usually, to a pen, the concept of value is applied, but not values. The pen makes literacy possible, but most readers in the Global North would not consider literacy one of the values, because it is taken for granted. The word "values" is usually applied to abstract goodnesses especially in the later aspects, such as courage (pistic), generosity (ethical), justice (juridical), beauty (aesthetic), self-control (economic) and togetherness (social). One reason for this may be that our aspectual functioning in these aspects retrocipatorily affects and gives flavour to that in earlier aspects. The difference however, between value and values, is not absolute, often being cultural. In cultures without universal literacy, literacy might be seen as one of the values. So here, we treat values as not qualitatively different from value but as merging into each other and differentiated according to aspect.
3. So, what is economic value? Though usually restricted to monetary measures and to things that contribute to 'the economy', we widen its definition according to the kernel meaning of the economic aspect, as discussed in Chapter 4. We also extend it to contributing to Overall Good whether part of the economy or not (for example in unpaid household work).
True economic value is a thing's value as a resource, an object to be respected rather than just used, i.e. with a frugality that enables us to continue contributing to Multi-aspectual Good into the future. The monetary version of economic value is a quantification of this true economic value, assessed as discussed later, with all the problems doing that incurs. But the actual value a (object treated as) resource offers derives from the main aspect in which it functions: psychical and aesthetic Good for clothes, kinematic Good for trains, lingual Good for pens, formative Good for Smith's pins, and so on.
But how may we express the value meaningful in another aspect as economic value? There are two ways. First we must understand the functioning of the thing in that aspect, and how it brings the Good that is meaningful in that aspect. Then we take account of the functionings in other aspects that impact, or are impacted by, this functioning because of inter-aspect retrocipation or antecipation.
Example: The economic value of a landscape might express its aesthetic value, its biotic value and its productive (formative) value - its functioning in these three aspects. We already have some expertise in how to express the latter (even though it may be flawed, by reducing it to quantitative prices etc.). But we can also consider the Overall Good that is biodiversity of the area. A seemingly barren patch of moorland in the Pennine Hills, above Glossop, England, contributes a surprising number of species locally, which do not occur further down. It contributes globally because it is a nesting place for Golden Plover, which migrate from other parts of the world. It therefore has biotic value, and viewed through the lens of the economic aspect, a resource for biodiversity. It likewise contributes aesthetically and productively.
The second way, relevant to quantified (usually monetary) economic value is to transduce this functioning to the quantitative aspect, as discussed later. Of course, the second way is common, and often done tacitly via market pricing, but for a genuine rethink we must question whether that is the only way; it is not, and so we have deconstructed the usual way to see what is going on, and revealed the first way.
4. Moreover, each of the theories of value mentioned earlier derive it from a different aspect: Petty from the quantitative, Quesnay form the biotic, Smith from the formative, Marx from the juridical, subjective theories from the pistic and analytical, and so on.
5. Economics presupposes the future. Too often in current economics, the future is sacrificed for the present, such as expressed in the widely-accepted idea of discounting the future. This might be questioned, especially philosophically:
"In cost-benefit analysis and other applications of welfare economics, economists typically discount future goods for less than present goods. To many philosophers, this seems a reprehensible practice. ... How, they ask, can the mere date at which a good occurs make any difference to its value? Discounting seems to these philosophers a device for unjustly promoting our own interests t the expense of our descendants." [Broome 1994, 128].
Discounting the future seems meaningful only in the quantitative version of the economic aspect, i.e. ruled by money, and even there only in a situation in which interest is expected to be paid. Recognising all kinds of value avoids this.
6. We differentiate value from anti-value. Anti-value is when a resource is employed in aspectual dysfunction, i.e. bringing Harm rather than Good. This is discussed in Chapter 7. It goes against the grain of most economists, who conflate them.
6. The generally-accepted types of value may be understood aspectually as follows:
This offers a first attempt at forming a foundation for rethinking value in economics. It does, of course, require refinement (and research).
Summary: Assessing value is a useful tool, but is complex and inherently distorts our understanding of real value, which need to be properly understood.
"God saw that the light was good ... land ... seas ... And God saw that it was good ... plants ... And God saw that it was good ... lights ... And God saw that it was good ... birds ... And God saw that it was good ... animals ... And God saw that it was good ... humans ... God saw all that he had made and it was very good. Thus the heavens and the earth were completed in all their vast array." [Genesis 1,2]
Here we have God assessing value ("saw ... good"). From a religious perspective, if God assesses value, it must be OK to do so. Economic analysis and planning involves assessment of value. The question is not whether to assess value but how: is our assessment good, valid and trustworthy, or is it distorting, false or misleading?
Summary: What, why and how of assessing value.
"Economics has become increasingly an arcane branch of mathematics rather than dealing with real economic problems." [Friedman 1999, 137, cited Fullbrook 2009, 5]
There are three main distortions, from the what, why and how we assess value, and they combine. Money is an assessment that distorts in all three ways.
1. What kinds of value do we measure or assess? All kinds, and somehow incorporated into economic value, but not just as price. Money and price usually reduce the number of aspects they measure to one or two, often only the economic value, such as rarity, or the social value dictated by popularity. Our assessing should explicitly take all this diversity of kinds into account.
2. Why do we assess value? We must keep to valid purposes and eschew harmful or useless ones. The RLDG briefly discussed some valid purposes of quantitative assessment: giving an overview, judging whether we are improving in any given venture or activity or not, presentation, benchmarking, prioritizing in decision-making. League-table rivalry (e.g. national GDPs) is not a valid purpose. When comparison is involved, as in prioritizing or judging improvement, it must be done with wisdom; choosing the lowest tender price, or castigating a manager for exceeding budget by a small amount, are often not wisdom. Decisions and policy should not be made on the basis of numbers alone, but only on functioning and its repercussion. This calls for qualitative assessment, which takes account of meaningful issues directly, without tranducing them to numerical form. So, GDP (see below) cannot be used as a proxy for wellbeing at all without both (a) being careful on which denominators to normalize it, (b) taking into account the real value of aspects other than the economic, and (c) recognising harmful as well as good economic activity (Chapter 7).
How do we assess value? This may be either qualitative or quantitative. Qualitative assessment often takes better account of the diversity of kinds of value but often we need to judge the less and more of some value: quantitative assessment, sometimes precisely measurable, sometimes not. But there are dangers. Lawson 2003 argues that it is the very insistence on methods of "mathematical-deductivist modelling" that prevent modern mainstream economics from realizing its potential. So we must understand these dangers.
All this calls for humility in assessment and using assessments.
Summary: Assessing value is inherently flawed and distorting, because of two main kinds of fundamental limitations.
"Even the most sophisticated mathematical model is, de facto, a story, a parable, our effort to (rationally) grasp the world around us." Tomas Sedlacek
As a story or parable, assessment is fundamentally limited. In both qualitative and quantitative assessment we find two fundamental types of limitation, which makes assessment of value dangerous, because it introduces distortions into all assessment that cannot be escaped, so all assessors, analysts, and those who use assessments, should take the limitations always into account and exercise humility. Statisticians know this, but some politicians and pundits do not.
There are two typed of fundamental limits on assessing value, and both have dangers. One comes from different kinds of thing requiring different ways of assessing, each way presenting its own challenges for assessing value. The other comes from the very nature of the activity of assessing. Both present challenges and frequently mistakes are made because they are not understood, sometimes by the analysts and assessors themselves but more frequently by those who make use of analyses and assessments. Both types need to be clearly understood.
Regarding the types of thing being assessed: Some kinds of characteristic can be measured (such as length of cloth or weight of flour) by comparing with some standard; this is value for characteristics meaningful in the physical and pre-physical aspects. Some kinds of thing can be counted, and we must be aware of the fundamental role of human analytical functioning here, in distinguishing the types of thing to include in and to exclude from the count (which can be meaningful in any aspect). For example, when we count beds, do we include sofas and benches that could be used as beds? When we count beliefs, do we include day-to-day beliefs or only religious beliefs? Those who use counts - such as politicians - need to understand clearly what the analyst chose to include and exclude. They must also understand the implications of denominators against which raw counts are normalised. For example GDP of China is thrice that of Japan, but if we divide by population, we find GDP per capita is higher in Japan than in China. Even within a country, even GDP per capita is misleading as a proxy for wellbeing; for example financial services grossly inflate GDP in a region. Counting is not an end in itself but always has some meaningfulness beyond itself, and in most cases counting and measuring fundamentally distort that meaning because most kinds of value cannot be accurately transduced to quantitative form. Sometimes such values are given precise quantitative values by finding the price that markets will bear (see below) but this is distorted by cultural and communal biases and attitudes. Precisely quantified assessments may be valid when the purpose is overview, but is often invalid and misleading when the purpose is decision-making, because such attributions of precise quantities are arbitrary and open to bias. Some things cannot be counted or measured precisely but for which the approximate quantitative concepts of more and less make some sense, such as biodiversity, anxiety, confusion, innovativeness, informativeness, friendship, agreement, and, arguably, the aesthetic quality of music. This is what Raworth relies on in Doughnut Economics, when giving the norm that the economy must be "more than" social floor and "less than" the ecological ceiling. Some things there are, for which even "more / less" is meaningless but nevertheless exhibit value, such as love or the value of landscape. For these, qualitative assessment is appropriate.
Regarding the very activity of assessing: There are dangers because it involves taking a theoretical stance, the issues of which are outlined in Chapter 3, which the following summarises. Assessment involves picking out aspects of the situation being assessed and ignoring others; this yields data from which to draw insights.
For example, GDP picks out the economic aspect and ignores for example the biotic or ethical (see below). The Human Development Index picks out biotic, lingual and economic aspects (long healthy life, education, Gross National Income). Dasgupta [2021] (Economics of Biodiversity) picks our mainly economic and biotic.
Drawing useful insights from the data involves reasoning according to the rationalities of various aspects, which requires fallible human judgement and responsibility, since there is no over-arching rationality onto which one can fall back. Here are some examples.
Examples: GDP involves the economic and quantitative rationalities but other aspects must be brought in to make good decisions.As Mark Carney points out, a $1 bag of rice for a poor, hungry man is worth far more in 'use value' than the same rice supplied to a rich, well-fed man: biotic rationality.
HDI does so too but brings in some biotic and lingual rationality (health, education) but few others. This calls for caution, because it presupposes the idea of development as seen in the Global North / affluent cultures (and indeed has been criticised for being "neo-colonial").
Dasgupta does employ some biotic rationality in addition to economic and quantitative, because in his calculations he must understand ecology, but it over-emphasises the biotic idea of extinction of (human) species rather than full ecology. In his lengthy document he does bring in other rationalities from time to time to tackle specific issues, such as formative when dealing with technological possibilities or pistic when dealing with religions. See our comments on his document.
Value depends on context, and context introduces unforeseen kinds of rationality and meaningfulness. Discerning in which aspects what we want to assess is meaningful can often help analysts untangle all that. Making such judgements is undertaken relative to presuppositions about what is ultimately meaningful (taking into account what Dooyeweerd called "origin of meaning"). We need presuppositions that welcome the full range of aspects rather than limiting them to a few, and often to a dualism like nature-freedom, objective-subjective, right-left. This is why the RODG operated under the ground-motive that Dooyeweerd adopted.
Assessment (or measurement) is a tool, but it is not neutral. Sadly, we often allow assessment to reinforce rather than challenge or test our beliefs (confirmation bias). We come to assessment with beliefs, assumptions and presuppositions, expectations and even aspirations for what we wish to find, and most of these are deeply hidden and not immediately obvious. Using aspects, which transcend our societal prejudices, can ameliorate this danger somewhat.
Summary: Aspects may be used to separate out issues, uncover hidden issues and deepen our understanding of issues.
Before either qualitative or quantitative assessment, we need to know what we are assessing - what issues it is meaningful (important or relevant) to assess. Aspects, as modalities of meaningfulness, can help enormously here. For full discussion of aspectual analysis, see Chapter 11 of Basden [2020]; for now, the following steps can be useful, using Mazzucato's values as examples.
This should furnish us with a rich picture of meaningful issues to be assessed either by qualitative or quantitative means. More steps are described in Chapter 7, when we bring Harm as well as Good into account.
The idea of aspects lends itself usefully to visual display of both qualitative and quantitative analyses. A full set of visual displays may be found in Chapter 11 of Basden [2020], but the following subset must suffice here.
For display of qualitative information, the box-and-arrow diagram is useful, showing things and their relationships. One is the MAKE (MultiAspectual Knowledge Elicitation) diagram, pioneered by Mike Winfield, which is excellent for making tacit knowledge explicit. His version of box-and-arrows seeks to show expert knowledge of things, which aspect primarily makes them meaningful, and the relationships among them. Figure f-make shows a simplified version of his aspectual analysis of vetinerary practice, with aspects, concepts meaningful therein and how they relate to each other.
Figure f-make. Multi-aspectual view of vetinerary practice, obtained by Mike Winfield, using his MAKE (Multi-aspectual Knowledge Elicitation) method.
(Click diagram for full size)
Figure f-tcd shows a similar type of diagram, but geared to showing inferences or causalities, which can be run as an expert system. It is actual screenshot of an expert system to assess town centre developments written by Gareth Jones. Click on the diagram for full version. Inferences are made from left to right, with the boxes without inputs being questions put to users when they run the expert system, and the right-most box, with no output, being the overall assessment. Notice how it assesses the impact of each aspect first then combines them together into an overall assessment.
Figure f-tcd. Multi-aspectual inference net for assessing Town Centre Development; used by permission.
(Click diagram for full size)
For display of quantitative information the "aspectual fir tree" has proven very useful. It is a two-sided bar chart, with a pair of bars for each aspect, those to the right being value and those to the left being anti-value (or positive and negative measures of some other quantitative amount meaningful in each aspect). An example is shown in f5-asptree.
Figure f5-asptree. Aspect 'fir tree' showing quantitative measurement of value and anti-value in each aspect.
The total value expressed here is not just one quantity but 30 together, which can give an overview at a glance of where (in which aspects) the main value and anti-value occurs. It is not so much the length of each bar that is important, as the overall pattern.
In this example, positive value is found more in the middle aspects and anti-value more in the later aspects (especially the ethical and pistic aspects that constitute 'culture'). When this is so, value is more obvious and short-term while anti-value is longer-term in becoming manifest and is usually less obvious, less often considered and often quite hidden. That means that the usual statistical analysis of value is likely to over-represent the value and under-represent the anti-value and, if policy is formed or decisions are made on such a basis then 'unforeseen' harm is likely to arise in the longer term. By considering later aspects such deleterious impacts, especially of or on 'culture' can often be foreseen and discussed. Considering value in later aspects is important for understanding future possibilities.
Comparing 'fir trees' or even one-sided bar-charts of aspects, can reveal subtle differences that are usually hidden, as exemplified in Figure f5-3trees. This example, from research by Opeoluwa Aiyenitaju, shows what teachers value in three primary schools. Though the overall aspectual shape (how much issues meaningful in each aspect are important) is similar in all, teachers in School A had more emphasis on the formative and economic aspect than those in Schools B and C.
Doughnut Economics uses a version of the double-sided aspectual barchart, bent round to make circles, one for social floor and one for ecological ceiling. Those bars rising above the social floor show elements in which a country is good, and those falling below (inside) are elements where they are bad, and the inverse for ecological ceiling. (Each element may be seen approximately as an aspect or two of social floor; see our discussion of Doughnut Economics.) As with our aspect trees, such doughnuts can be compared. Bending aspectual barcharts into a circle is aesthetically appealing but it has one disadvantage over the linear tree: it hides the inter-aspect dependencies by which later aspects retrocipatorily impact earlier ones and earlier ones anticipate later ones - and perhaps less able to stimulate discussion about future possibilities.
The challenge in quantitative analysis is, of course, "By what mechanism or method do we calculate a number for each aspectual kind of value?" For example, on what basis is it valid to translate between the value of resources in one nation compared with another? This all requires research on how to transduce value to a quantitative amount and then to a precise number, sometimes involving counting, sometimes measurement against a yardstick, sometimes both or other methods such as surveys using likert scales. Our methods could build on existing experience of calculating happiness, wellbeing, environmental value, etc. even though existing methods are not perfect.
Summary: Many quantitative indices: GDP, HDI, GPI, etc. All are limited and some work against others.
Governments like to use quantitative indices to show how they are getting on. An index is not just a measure but also expresses a statement of intent, a wish to intervene to move a (national) situation from A to B, where B is an improvement. The best-known one is GDP, but there are many others, which measure different things, each emphasising different aspects:
Many call for an index to replace GDP; we discuss GDP problems below. But which of these could replace GDP? All of them have problems.
1. There is the problem of being an aggregated total: that when we add several component numbers together information is lost.
2. Most of them are additions of money-amounts, which of course might not adequately express real value.
3. There is the problem of how the data is obtained. Some data is from money-flows, some from taxes, some from surveys of how people feel or believe. Even in affluent countries people report believing they are not well-off, because they compare themselves almost always with people more well-off than they are. (We see yet again the impact of our pistic functioning, what we believe, our mindset.)
4. There are also problems arising from their provenance. By and large (as RLDG participants pointed out [ze26]), while GDP is the main index used in wealthy, developed countries, the other indices have mostly emerged within less-developed countries, some to try to show progress towards development, some to give importance not qualities not considered in affluent nations. It is unlikely that affluent countries would switch to one of the others.
5. Perhaps a more fundamental problem is that the things that are counted or measured for some of the indices are meaningful as measures only in some types of nation and not others; for example child mortality before age 5 is less relevant in affluent nations. The key is meaning: what is meaningful? What we need, for common indicator to be agreed and used by all countries, is for it to express what is meaningful to all kinds of countries. Dooyeweerd's aspects fill that need. As one RLDG participant pointed out, aspects are better because they offer something more general, which can apply in principle to all nations without favouring any. With aspects we can probe such measures to find out precisely what is meaningful in them, why they are seen as important.
Can we just take some kind of average or total of all indices? No, because there is disharmony among the indices. Look at the following figure; it shows correlations among a number of indices "beyond GDP" [Figure 23 of [Beyond Growth 2023, page 94]].
Figure f5-indices. Correlation of various indices, showing how most correlate with each other but NOT with ecological footprint.
From Neves [2023].
Most wellbeing and human development indices correlate with each other well, at least overall, so that if a nation is high on one it will tend to be high on the others - except for Ecological Footpring, in which most will do worse. And vice versa. This is important. What it shows is that by using and being guided most of the indices offered to replace GDP, we will make the environmental and climate crises worse and, in the long term, cause even more damage to Global South nations. Many of those emerging from developing nations follow each other, but most of the wellbeing indices correlate negatively with ecological footprint, i.e. the better we are in these indices, the worse the damage to the planet and ecology . And perhaps vice versa.
What we need is an index that increases with every kind of Good and decreases with Evil or Harm. In Chapter 7, we suggest what this might look like. It measures Good separately from Harm in each aspect, and gives a quantitative value to each. We also examine GDP more closely - and find it not always as bad as many make out, and suggest how GDP can be redefined with aspects to fulfil the aspirations expressed in the other indices.
Summary: What exactly is wrong and right with price as a measure of value?
With Dooyeweerd we might understand prices and pricing more deeply. Price is a quantitative assessment of value agreed for exchange and usually agreed across a whole market - thus containing both quantitative and social components.
As all know, price does not truly reflect value, not even economic value [e.g. Town 2021]. It is even less a measure of other kinds of value. In the UK, people spend only 8% of their income on food. "Surely food is much more important than that, and we should be spending more of our income on it? Should not food prices go up?" That is a comment on how we value things. We might not agree with it, but it shows a different way of thinking, which we need to take seriously,
Ultimately, price is a result of multiple factors, including for instance "buyer behaviour. Buyer's taste and preference ... brand image, brand loyalty and benefit segmentation 'emotional motivation' ... perception, learning and attitudes creating psychological reactions to price... social and psychological factors ... physical guides (cues) ... buyer's emotions, preferences, and habits" [Chand] and "human characteristics and emotions, such as fear and greed, market tendencies and events so distantly related" [Town 2021]. What this points to is multi-aspectual human functioning, much of which might be dysfunctioning. In Economics 101, the price of a delivered good is taught as the sum of the prices of its raw materials, labour, storage, delivery, etc. (which brings in the physical, formative, spatial, kinematic aspects). But then we bring other factors in, each meaningful in a different aspect. Social aspect: prices are agreed - at all levels, from the individual transaction, to global commodity prices. Formative aspect: the amount of effort people put in (labour value, if measured as a proportion of their lives). Juridical aspect: Is it a just price, where each component's price is appropriate and reasonable or an unjust price, where some parties are oppressed or cheated (not excluding the natural world and future generations)? Ethical aspect: is it a greed price, where the seller is trying to make too much profit? It pricing motivated by fear, where sellers increase the price in order to protect themselves? Pistic aspect: The price people are willing to pay because of what they believe to be important. And so on. All these interact - which is why price in reality is complex. Even in an apparent just price, some of its components could be unjust or greed prices. The price people are willing to pay can be distorted by bullying (power imbalance) or lack of information: juridical and social, and lingual, aspects.
What we are saying is that aspectual separation of meaningful issues offers a foundation for rethinking price.
Market pricing or valuation, the price that people are willing to pay, might however have some validity insofar as it results from good functioning in all aspects of the people involved. The problem with market pricing is the "insofar". "People involved" - but those involved in unpaid activity (including many in the Global South) have no say but should have. "Good functioning" - but selfishness, greed, injustice and fashion-following (dysfunction in ethical, juridical and aesthetic aspects) distort markets. "All aspects" - not just the economic and social but for example the lingual (if information flows are impeded then market pricing is distorted), the ethical (trust), the pistic, and so on. Also,the true value of the biotic (ecological) is omitted from market pricing except by the artificial effort of people who care about it bringing it in.
If we are trust market pricing, then markets must work in a way that overcomes all of these kinds of problem. We return to this in Chapters 6 and 7.
Tactics: Until we can do so, sadly, we might need to resort to speaking the language of price. When trying to persuade politicians and other decision-makers to change their minds and tackle problems. As discussed for instance within the RLDG (e.g. 27th discussion), many politicians see things only in terms of money, often hiding behind "But what does it cost!" as an excuse to resist tackling real problems that do not interest them. So, either we 'talk their [money] language' or we try to get them to see things differently (which can take time and wisdom). If we talk their language, we can perhaps at least employ aspects to identify all the relevant factors and cost them all, especially Harmful impacts, as outlined in Chapter 7. Usually, when we do this, we might discover a stronger monetary case for doing Good, rather than resisting, than we expect.
From an economic perspective, is it not ridiculous that we put a high price on one resource that is almost unlimited, human labour, and a low price on resources like Cobolt or biodiverity, which are limited. The level of wages is normed by the juridical aspect, not the economic and mechanisms should be in place to ensure this.
Wages also have a lingual and juridical aspect. To be a true wage, the employee must have some say - at least the freedom to choose another employer. Therefore the pittance of money and subsistence given to slaves was not a true wage - and hence not a figure to be used in calculating reparations etc.
Summary: Dealing with a few known issues can indicate how the above ideas can bring fresh insight.
We will now apply that aspectual view of value directed towards Multi-aspectual Good to some issues in conventional or recent economics, in order to demonstrate how it might throw light thereon.
Summary: Instead of labelling impact of economic activity on other spheres of life anonymously as "externalities", and considering their value only as they impact the economy, we value them directly.
[section done]
How do we value so-called externalities? This was extensively discussed in the RLDG. Ignoring externalities is deeply problematic. It means that both the harm done by economic activity and the potential good are alike ignored in accounting, analysis, planning and policy-making. Many are concerned that things like climate change or increase in mental stress resulting from economic activity are ignored. This is a concern that motivates the SNA 2025 exercise, which is trying to bring wellbeing and sustainability, digitalization and globalisation into systems of national accounting.
The usual way is to calculate their impact on the economy as a monetary measure, but, as Chapter 4 emphasises, we need to take them more fully into account and assess their contribution to Multi-aspectual Good. We can value them according to the aspect(s) that make them meaningful, to value directly their functioning in these and other aspects, rather than reducing them to mere economic value.
This gives a way to bring in multiple kinds of externalities, insofar as they can be defined as (meaningful by) extra-economic aspects. That all aspects are equally meaningful and must all be considered in principle, moves so-called externalities into the very centre of economic activity.
The idea of aspects allows finer-grain analysis too. For example, the components of Kate Raworth's "social foundation" may be understood in the following way:
To do full justice to Raworth's ideas requires more careful analysis, but this indicative analysis, based on immediate intuition, reveals how rich each of components are, meaningful in several aspects, and demonstrates a method to be used. Though full analysis might be challenging, because it involves taking account of myriad impacts in multiple aspects, it is not impossible. We already do something like this to fix market prices of various commodities, especially minerals. As discussed above, market pricing can sometimes express something of the value we find in various aspects, even though in a limited and biased manner. Might machine learning AI along with data mining be used in doing this?
Research project: Explore the benefits, limitations and dangers of using data mining and AI to assess values in all aspects, especially of externalities.
Using aspects can begin to answer the question of why each component was included. Notice how most elements are meaningful in more than one aspect, which is often the case [Note: Cipations]. It is also interesting that the order given by Raworth roughly follows that of the aspects and their inter-aspect dependency. In fact, for a full understanding, each one is meaningful in all aspects, for their operation but the ones mentioned are the main ones.
Counting the number of times each aspect appears there yields an initial overview of what is meaningful to Raworth as she constructed her model: what happened to interest her.
(That is a qualitative aspectual analysis, with small quantitative piece at the end. A more fully quantitative approach is examplified in §7-4.3 on Supply and Use Tables, Figure 7f-sut, which also separates Harm from Good.)
This (insofar as it does justice to the model) could be taken as the basis of a critical assessment. We can ask: 1. Why are certain aspects (social, formative, biotic and juridical) well-represented? And is it good for them to be? 2. Why are some aspects missing, such as the ethical, kinematic and spatial? Are they simply irrelevant, or have the been overlooked and thus should be added to the model? Do they suggest factors that should be added to the social floor, such as love, generosity, pervading attitude of society, and social mobility? Should land be added? Is it more important than intellectual urban elites recognise? 3. Why are some aspects under-represented (analytical, lingual, economic, aesthetic)? Is there a good reason for this, or should they be strengthened in the model?
Summary: To value only paid work brings many problems. Unpaid (household) activity has immense value, which should be brought into economics (theory and practice). Dooyeweerd's aspects can help us understand its diverse value.
All human functioning has real value, whether paid or unpaid, in that it can contribute towards Multi-aspectual Good. Therefore unpaid activity, such as goes on in households across the Earth, especially the Global South, should be brought into the centre of thinking and practising in economics. So should volunteering. So should repairing things and self-build. So should caring for someone at home. Too many elderly people are put in a home where nothing is expected of them; if we valued unpaid activity that contributes towards Multi-aspectual Good, then would that inspire many elderly to useful activity and greater dignity? Unpaid activity is something that people want and that even those with less income an afford. Often, unpaid work is higher quality in aspects that matter, such as love and care.
Variously, the value of unpaid household activity varies among nations, with is being estimated at 40% in Swiss [Schiess, U. and J. Schön-B¼hlmann 2004] and 63% Indian GDP [Budlender, 2008].
In the Global South, the proportion of unpaid good activity is much higher. Care is given without demanding, or even thinking about, pay. Even the so-called basics might be obtained without money. One RLDG participant was working in rural Uganda, and was told by a Ugandan,
"We don't need money. We grow our own food and build our own houses. All we need money for is school fees and hospital fees."
Yet growing their own food and building their own houses is economic activity that should be included in calculations of national economic activity such as GDP. Recognising the value of unpaid work in economic assessment would offer a better understanding of the real size of economic activity of the Global South, in which much of their economic activity is unpaid [Ferrant et al. 2014] - as well as in forgotten places in the Global North.
Example: People blocked hospitials in the UK in late 2022 because they needed help and care at home but too little paid care was available. Because family members have to work for money in order to pay for paid care. So they went to hospitals instead. We have assumed that care-needed can only be delivered by paying for it. But in fact, much care can be delivered without money, and is often more effective at that, being driven by love rather than pay or legal requirements.
Summary:
Both Adam Smith and Karl Marx deliberately looked away from unpaid activity (maybe for different reasons) and most subsequent economists have followed suit. There seems to be very little discussion of unpaid economic activity in academic economics, and much of that meagre discourse turns out to be tackling other issues that the academics believe to be more important.
Much of the discourse seems to take the line that "Unpaid work should be paid for!" and is driven by concern about inequalities in pay. Apart from a few bits and pieces of information gleaned, that part of the discourse offers little to the understanding of unpaid economic activity because our presupposition is of the value of such activity regardless of pay. Our view is the opposite of this, that unpaid work should be valued for what it is rather than monetized. Much of the discourse is related is driven by concern about gender inequalities and the dignity of women. Ferrant et al. [2014] is one of those. It offers more to understanding unpaid activity because it treats it as of value in its own right. Some of the discourse is concerned mainly with highlighting the problem of ignoring unpaid activity, and consists mainly of empirical observations or studies of its prevalence, usually in terms of its wage- or price-equivalent. There is also some good discussion of practical ways of bringing unpaid work into national accounts, such as the SNA2025 exercise.
Sadly, such messages do not seem to be getting through to many politicians. After the Pandemic, the UK government tried to encourage the hospitality sector, to the detriment of home cooking and fun, which had blossomed during the Pandemic; one contributes to GDP and is encouraged; the other does not and is overlooked or derided. The home cooking boom helped local shops; reverting to the 'hospitality' sector helps town centres, especially in the more well-off areas. Which is more important?
We need a more audible discussion in affluent cultures about the importance and value of unpaid economic activity. For this to occur, we need deeper understanding of why it is of value, which requires understanding of the nature of unpaid economic activity. So this is what we will focus on here: how to understand it. How, for instance, should we respond to the Ugandan's statement above? Sadly, such ideas are often ignored or even (tacitly) derided as 'lesser'. We believe they should be accorded the respect due to all other ideas. And, then, how may we factor it right into the centre of economic theory and practice?
However, we must be aware of some dangers of doing this, such as that it might give the message that slavery is acceptable; we will find that separating out the issues by aspects can help, in that slavery is an evil in a different aspect. And, of course accountants will need to explore, develop and learn new ways of accounting, but this is made easier by asking "What is the meaningfulness / importance of making this change?" and working from there.
In absence of a good body of literature on the nature of the value of unpaid work, we will draw from everyday experience. (We argue this is necessary and valid in Chapter 3.) Proper research and theorizing needs to be carried out; this discussion might be a start.
Summary: Unpaid economic activity should be valued because it generates Good (or Harm) that needs to be taken into account, and also because it is often of higher quality than equivalent paid work.
Family love, support and caring are vital to the wellbeing of both society and even economy, yet they are not paid for. The paid economy is not mandatory nor normative, nor even the sum total of the economy. It is still perfectly valid for people:
None of this is inherently inferior to being provided by paid-for specialised labour. Indeed, as mentioned also elsewhere, it may be superior because done with care, love and commitment (the importance of attitude) can educate and pass on cultural ideas, expectations, aspirations and norms.
Without recognising the importance offered by all these aspects. unpaid activity becomes undervalued. This is unfair to home-makers, many of whom are women [Note: Mothers At Home Matter], and especially to so-called Less Developed Nations, where unpaid household activity is a higher proportion than in affluent cultures. It is also unfair to the many unemployed people who use their time productively e.g. in volunteering or caring [Note: Volunteering].
All these are usually invisible to what many call 'the economy', because they constitute unpaid activity, so they are ignored. To value use as labour may be one way to bring unpaid activity into 'the economy', by quantifying the value of household activity as productive (as for instance assigning market values of equivalent paid work [SNA2025]). While it does at least overcome Marx's and Smith's exclusion of unpaid household activity from their definitions of "productive", it might not be ideal because reducing all its complex meaningfulness to the quantitative-economic aspects grossly distorts and hides important information.
Unpaid activity is often of a higher quality in terms of taking account of multiple aspects, and more beneficial to Multi-aspectual Good.
Summary: The value of unpaid activity may be understood via Dooyeweerd's aspects, of which each is equally important.
Take the list of unpaid household activity drawn up for the United Nations discussions on redesigning the System of National Accounts, in their Guidance Note on Household Activity. In each, different aspects are primarily responsible for making them valuable, i.e. contributing to Multi-aspectual Good. The value of some is obviously in certain aspects:
The value of others is multi-aspectual:
For the final one, we may suggest three other unpaid household activities that should be considered, by asking ourselves "Which aspects are missing as primary aspects, and how might they manifest themselves in unpaid activity?":
All these have value and should be incorporated into the Economy. What an aspectual approach does is enable us to separate out distinct kinds of value and see where the value really lies.
In fact, each of the unpaid activities above is more complex, and the RLDG carried out a fuller aspectual analysis of them, in RLDG response to SNA 2025. Here, as an example, is a fuller comment on Childcare.
"Unpaid childcare captures the time provided by care givers in the direct care of children." Care has the ethical aspect as its primary, but in the case of children there is usually a strong social aspect of relationship and a biotic aspect too when the children are the offspring of the carers. "This can range from helping with homework [lingual, formative] to feeding [biotic, aesthetic], washing [physical, biotic] or dressing children [aesthetic]."
We might also add: play [aesthetic], maintain justice among siblings [juridical], love [ethical], and affirming their worth [pistic]. The special value these four aspects brings in childcare is to help form the character of the child from an early age and, indirectly, their future potential in economy and society.
It might also be no coincidence that all four are post-economic aspects, so that they impinge on and impact, and should guide and regulate, the economic activity and decisions. Using purely economic rationality and laws on their own misses the importance of these aspects (as the SNA recognises was their error in their 2008 exercise). Whereas casting such issues in purely economic terms might encourage national treasuries and account to adopt them and thereby widen their view somewhat, might it ultimately be self-defeating, because we have not truly taken account of the full reality that is the household, nation, global level and the individual too?
The SNA 2025 exercise proposes to bring in unpaid household activity via the mechanism of market prices, to bring it into the money-measurement system initially. But we need a more accurate approach.
The question that challenges such a multi-aspectual view is "How do we bring all these into economics theory or practice?" There are two parts to an answer to this. One concerns assessment of value, which was discussed above. The other is discussed in Chapter 6, to consider the multi-aspectual functioning that is unpaid activity, examining how each aspectual functioning contributes to Multi-aspectual Good. All such functionings are important (of value) for the wellbeing of both society, planet and the economy. Explicit recognition of such aspects can be used to draw out issues that are often hidden or remain tangled together.
Sadly, in non-democratic countries, rulers are unlikely to voluntarily give compensation or reparations, unless they are religious and of a generous attitude. Even more sadly, in democratic countries the selfish populous will not allow their governments to do this either - unless perhaps religious revival has swept through and made the majority of people less selfish (see Chapter 3).
How do we calculate reparations for historical wrongs like slavery? The financial value of just reparations for slavery, due to the British state, have been estimated at 18 trillion Pounds Sterling [Bazelon et al. 2023]. Whether that figure is valid or not (some say it is an underestimate, quantification is always distorting, and it does not seem to include the benefits that countries had from the British Empire) it says something of the huge damage the British Empire did - and other empires probably did worse. Whether people now should 'pay' for sins of those long dead is a valid question. However, all such questions presuppose monetization.
From our perspective, as set out in Chapter 3, we would take a different approach, two-pronged. First we call for repentance, as discussed in Chapter 3 and Chapter 6, a heart attitude that says "We were wrong, and have gained unjust benefit from that wrong, which we enjoy today." This says nothing about what action should be taken, but it says something about the approach we should have in thinking about and discussing that action. Second, we need to work out in some detail all the functionings and repercussions of all types actors and situations, both positive and negative, which may be accomplished using multi-aspectual analysis, similar to that set out in Chapter 7 to reduce Harmful economic activity. This will assist conversations about this (such as called for by the Samoa Communique [CHOGM 2024]. Then, though much reparative action is likely to financial, calculated as recommended in this chapter, much will be non-financial, such as rebuilding true dignity (pistic functioning). But underlying all these conversations must be a repentant attitude and mindset, not a self-protective one.
Summary: The value of capital and labour can be clarified by understanding direct and indirect contributions to Good in each aspect.
[Note: Much of this is tentative is still being thought out and in need of critical refinement.]
In most economies today, some human functioning is devoted to specialised labour that generates goods and services for use by others ("consumers") and capital accumulates. For example, some are skilled in making furniture, which the rest of us accumulate and use in life.
Indeed, many take this so much for granted that they presuppose this as the whole economy, and too often treat unspecialised economies, where people make their own goods for their own use, as in subsistence farming, as inferior, 'primitive' or 'backward', as deficient so that it should be replaced. We disagree. There is no fundamental reason why it should be so denigrated; specialization is not normative, not something that 'ought' to occur. Much rural living is of this kind and should not be so readily overlooked as it often is in today's economic practice and theory.
We do not presuppose that specialisation is a norm, but merely a fact, and try to understand it - and, as a result, can allow subsistence farming to regain the dignity it deserves, and can properly account for unpaid activity (see above). [Note: Dooyeweerd on Specialisation]
So we ask, What is the value of labour? Of goods, services? How do we account for it? What is it that gives capital its value?
Our overall answer is that the value of labour, capital, goods and services lies primarily in their indirect contribution to Multi-aspectual Good, and that this is potential value that is only actualized when people use the goods, services or capital produced by labour in their functioning that contributes to Multi-aspectual Good. This is partly expressed in the conventional distinction between labour-value and use-value, but we set it on a different foundation.
Summary: Capital gains its value from its potential to enable people to contribute to Multi-aspectual Good.
We take capital to be a store of resource (in the widest sense, including machinery, etc.). The value of capital is indirect, lying not in itself but in its potential to be used to resource human functioning that contributes to Multi-aspectual Good (and not Harm). Capital has potential value, actualized when it is actually used to resource our contributing to Good. It makes more Good functioning possible than otherwise would happen. Depletion of capital reduces the possibility of Good functioning.
Because it is potential value, capital inherently implies responsibility to use it for Good and not Harmful or Useless purposes. Sadly, this responsibility is often ignored, and much capital is used for greedy, self-indulgent or idolatrous purposes. This, perhaps, speaks into debates for and against Capitalism, but we do not join those debates here.
The idea of capital as store of resource with potential value is often applied metaphorically as social capital, environmental capital, ethical capital, etc. Approximately, each kind of capital makes possible Good functioning in the aspect in which it is meaningful. (Some of these capitals involve more than one aspect; e.g. social capital is primarily of social aspect but also includes ethical aspect of goodwill.) As with economic capital, when it is depleted, less Good functioning of that kind is possible. There is a difference, however. Social, environmental and ethical capital are Good in themselves whereas economic capital is Good only indirectly, by resourcing Good functioning: latent Good. It is economic capital that is relevant in this section.
Summary: The value of labour is of two types, both of which are important. The main one being indirect, in that labour produces goods and services that others use in functioning that contributes to Multi-aspectual Good. Labour also contributes directly from its own multi-aspectual functioning.
The value of labour is more complicated. The main value of labour and capital are indirect and potential, located in the goods and services that others employ in their functioning that contributes to Multi-aspectual Good. This may be depicted as in Figure f5-luog.
Figure f5-luog. Labour and Use contributing to Multi-aspectual Good.
(Click of picture for full size)
Materials can be raw, recycled or goods and services produced by labour, such as wooden planks produced for building and furniture-making that, being used in making things, can contribute to Multi-aspectual Good. Adam Smith used the example of pins that help people sew clothes.) Dooyeweerd called these "semi-manufctured products" and recognised them as ontically different from fully-manufactured products. Whereas the fully manufactured product expresses its main meaningfulness (such as kinematic for a car, pistic-lingual for a hymn book, aesthetic for a painting) this is still latent in semi-manufactured products, only emerging when used to produce the final product (e.g. bolts and metal sheets for cars, paper for the hymn book, paint for the painting). Until then their meaningfulness is primarily that of forming something else: formative aspect. Such semi-manufactured products are represented by the arrow cycling back from goods/services to materials. Might infrastructure also be viewed thus?
The arrow from labour to Multi-aspectual Good expresses a direct contribution that labour can also make to Multi-aspectual Good. This is because labour itself is multi-aspectual human functioning that itself can contribute directly. In economic theory, it may be treated like use-value. An obvious example of this is that the labourer is paid, which allows them to obtain food to keep themselves alive (biotic good). A less-obvious but by no means less-important example is that that workers gain pleasure and self-esteem (aesthetic and pistic Good) from doing a good, skilled piece of work (formative functioning) [Note: Marxist view]. (x From a religious perspective we might add that some treat their work as worship, or a space of time in which they can serve others, two more contributions. x)
Aspects of this direct contribution of labour to Multi-aspectual Good are shown in Table t5-labv, which shows examples of contribution in each aspect (read through it at this point).
IG "pix/t5-labv.iff" -w4.43 -h4 -ra
We can use such an aspectual analysis of direct and indirect Good and Harm (different in each situation) in discussions around labour, wages, duties and compensation.
It is a mistake of much economics to either ignore one or the other or to conflate them, as Marx mostly did, as well as turning a blind eye to several aspects. Both direct and indirect contributions and anti-contributions must be considered distinctly, in all aspects, yet linked. Another common mistake that is made, discussed in Chapter 7, is to assume that either direct or indirect contributions are only Good; we must take Harm (anti-value) into account too, which detracts from Multi-aspectual Good. Example: Tobacco production does indirect Harm, but some direct Good in keeping its workers alive - though that is too often an used as an excuse and the workers could remain alive by other means. Example: Pollution from production is a direct biotic Harm, as are the climate change emissions from too much flying to business meetings. This understanding offers a systematic clarity to discussions about issues like "Xxx sector needs to be protected in order to generate jobs". This will be discussed more in Chapter 6 on functioning and Chapter 7 on Good, Harmful and Useless economic activity.
One discussion where this approach might help is on whether Harmful sectors sectors of the economy, like tobacco and fossil fuels, should be shrunk. Those who resist shrinking often point to the benefit of the jobs they bring. Advocates of shrinking them can be rather insensitive to such concerns, resulting in backlash. Such debate are, at root, about contributions to Multi-aspectual Overall Good, and the above separation into direct and indirect contributions, and separating out aspects of such contributions, might make the debate more fruitful.
Summary: Productivity is variously (mis)understood, and so misleads us. An aspectual understanding can avoid this.
How may we understand productivity? Productivity measures measure how much output is obtained compared with input resources. The input resource might be land, minerals, money, the functioning that is labour, or other things. Quantified, it is often measured as dollar-equivalent output per hectare, per tonne, per dollar or per hour respectively.
In aspectual terms, it is thus meaningful almost purely in the economic aspect - "almost" because it also has some connotations from the formative aspect of skill, effort and achievment, and frequently drives to increase productivity involve up-skilling and motivation to work harder. "Unproductive" sometimes carries a subconscious assumption of laziness or derision at lower skills - though often unfairly. Productivity is good insofar as it conserves resources, enabling more output for less input, thus acting more frugally - the very norm of the economic aspect.
But in multi-aspectual reality the picture is not that simple, and there are several problems with the very idea of productivity, which an aspectual approach might overcome.
1. Attempts to increase productivity purely by monetary investment and skilling often fail, because real productivity is multi-aspectual. This is recognised weakly in the idea of multifactor productivity, which takes other aspects into account, such as management style (pistic, ethical), organisational structures (social), information blockages (lingual), health (biotic, psychical) enjoyment of work (aesthetic), and employee motivation (pistic). Viewed through a purely economic lens, such factors are a waste of money, a cost, and rather than an investment (the ethical aspect of self-giving).
2. When we increase productivity we often encourage consumption and end up consuming and wasting more resources - which is what Keynes failed to understand in his famous Grandchildren paper. A form of the Jevons Paradox. As one RLDG colleague put it,
"If productivity allows you to create a lot more stuff, then you are consuming a lot more input. Which is actually unsustainable within a finite world." [RLDG 28]
This paradox occurs because of functioning in a different aspect, usually that of greed (ethical dysfunction).
So the Good that productivity can be must always be seen in relation to, and embedded among, other aspects of life, as argued in Chapter 4.
3. Moreover, for some goods and especially services productivity is meaningless, such in a string quartet playing Beethoven, where the number of players is the same as 100 years ago [Baumol & Bowen 1965]. Conventionally, in sectors where productivity increases then wages increase, but Baumol & Bowen found that wages increase even in sectors without productivity increases, but their goods and services then tend to get more expensive over time while more productive sectors find them getting cheaper. Over the past 20 years or so, services have tended to get more expensive, especially hospital services the cost of which has increased 220%, while the cost of electronic goods has decreased a lot, by 95% in the case of televisions! See Figure f5-price.changes.
Figure f5-price.changes. How prices have risen 1998-2020 in various sectors. (full size)
Used with permission from HowMuch.net, a financial literary website.
In presenting this, HowMuch.net [2022] remarks,
"The economy is rigged. ... It turns out that the most important things in life keep getting more and more expensive, while the things that don't really matter keep getting cheaper."
This is alarming, a clear view that the economy is wrongly structured. So we need to understand why and in what ways - which we will discuss in Chapters 6, 7 and 8. The standard explanation for why hospital and other costs have risen so much, viewed solely from the economic aspect, is that labour is competed for so, to ensure labour stays in the sectors where productivity has not risen, wages must rise there as much as they rise in the sectors where they have risen. But why have hospital prices increased prices more than others? Might it be greed of the drug and medical technology companies, or of the medical experts? Might it be increasing amounts of burocracy? Might it be the increasing tendency in affluent cultures to go to the hospital for more and more things that are less and less serious? Whatever the various reasons, most of them are meaningful in aspects other than the economic. And many of them are anti-value rather than value.
4. A further problem with measnuring, and aiming to increase, productivity in the way we do is that it ignore unpaid activity - such as bringing up children and all the activity that incurs, compared with a paid child-minder - and the conventional mother often does it to a much higher quality.
5. Attempts to increase productivity measured solely by money generated by hours worked (the workload sheet) is often counterproductive. Increasing workload makes employees cut corners in order to get all their assigned work completed, which reduces its quality (juridical problem) and sometimes results in the employer having to pay compensation later on for shoddy products or services. It also generates hostility (pistic aspect), with the same result. (These two also discussed in RLDG 28.)
6. Finally, productivity as money generated by hours worked becomes a meaningless mochery, because the finance industry generates huge amounts of money per hour purely from speculative deals etc. which does not at all contribute to Overall Good in any aspect. In the England, for example, the productivity of London is 26% above the national average while that of the East Midlands is 16% below the average - two thirds that of London - solely because of the meaningless money-making of the London finance industry. Politicians take these figures and, often with the subconscious assumption of laziness, pump yet more money into London and deprive the East Midland, a vicious circle leading to gross injustice and division in society over the longer term.
The clear message from all of this is that productivity should be redefined as
Productivity =
contribution to Multi-aspectual Overall Good
per unit input in all aspects.
In Chapter 7 we discuss such a way of calculating such things, geared to GDP.
See main Rethinking GDP for full discussion, of which this is a brief summary.
Problem with GDP and Current Discourse About It:
Our Response:
We have discussed a number of issues using this approach. That is not to pronounce final wisdom thereon, but merely to indicate and demonstrate how the approach may be applied. Many other issues that would benefit from similar treatment are left to readers. We have indicated several avenues of research that need to be opened up.
Much concerning value is related to human functioning in the various aspects, and of harm as well as good. In order to understand these adequately, they are discussed in the next Chapters, 6 and 7.
This is a chapter of the Foundation for Rethinking Economics.
Date Created: 27 December 2022 from xnr2.
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5-5.7 GDP
Summary: Adherence to GDP has caused many problems but it is not GDP itself that is the problem, but how it has been used and the attitude we have to it.
5-6. Conclusions
Many economists are calling for economic value to reflect the wide range of what are called human values. Dooyeweerd's idea of aspects, as spheres of law as well as meaningfulness offers a basis for doing this: each aspect defines a distinct kind of value, of which the economic is one among many. So it should be able to express other kinds of value according to the various inter-aspect relationships, and two ways have been presented for doing this. True economic value is not monetary nor need it necessarily contribute to 'the economy' but is the potential contribute a thing makes in various aspects to Multi-aspectual Overall Good, viewed and respected as a resource. We have discussed ways of assessing value across the aspects.