Monday, December 17, 2012

Sandel and Value

A few months ago, I read What Money can’t Buy by Michael J Sandel. He is a good communicator and I have really enjoyed some of lectures on justice on TV. This book is worth reading, because it show western culture in a different light.

In this book, he argues that markets are valuable for organising productive activity, but his concerned that market are seeping into aspects of life, where they do not belong. He wants a debate about the role and reach of markets. He wants decisions about which goods should be bought and sold. The aim should be a market economy, not a market society.

The problem with this is that it is not clear who would make the decision about what can be bought and sold. I presume that he assumes that governments can do this, but this will not work. Decisions about what can be sold are made by the person who chooses to sell. Decisions about what will be bought are make the people doing the buying. Unless they are doing something immoral, it is hard to see how they can be prevented.

The examples that he give are interesting. I think they show how hollow western culture has become. The answer is not more laws, but better values and more virtue.

Sandel speaks about market values, and suggests that they corrupt some good things. He says that when some things are sold, their value is contaminated. The problem here is that he assumes a concept of objective value. He does not realise that values are subjective. This is a core principle of economics. Different people place different value on the same things. This is why trade is possible. A sale of a good takes place, because the person buying values it more than the person selling it.

The price at which a particular good is sold in a market does not tell us its value. It does not tell us how most people value it. It does not tell us what value the buyer and seller put on it. All we know is that the buyer valued it more than the price and the seller valued it less than the price. But we do not know by how much.

Human valuations are subjective. The only person who can express objective values is God, because he is the only one who is unchanging.

1 comment:

hedmanj said...

Well I was actually trying to contact you in regards to the comment I
composed. Can you responed that, rather; what are your thoughts on my

So you rub shoulders with any economists or finance/algebra
whizzes who are savvy to algorithmic/financial analysts processes, who
would be willing to discuss my suggestion of economic reform that
could prove to solve many financial sector ailments. A=L+SE is the
most basic and fundamental equation which the free-market capitalist
system is based. My suggested changes will not ruin innovation
creation. It would be empowering and bring hope for the future of all
mankind because it re-categorizes the current definition of Human
Resource capital by redefining the basic accounting equation's
definition of human labor not as a cost/liability but as a form of
equity or time/money. This would go side by side with the monetary
investor pool, the stockholders, as investment capital resources known
as Stockholder Equity. A=L+SE. When dividends pay out at the agreed
time then %'s are dispersed to the share holders and to the
"contractors" whom have agreed to contracts of various agreements
which determine the various weights and measures of what value is
invested in the time they contribute. Time is money and skill is an
investment. Short or long. This would allow for competition and could
prove to safety net those who hit glass ceilings, and work against
those who would suppress wages by being rewarded for cutting costs
such as the most expensive cost under the present formula-wages owed.

A(sset)=L(iability)+SE(stockholders equity). wages (human resource
capital) are considered a liability and thus by default must be
minimized to compete against a market system where the Corporate
personhood/banking sector does not act with moral compass in favor of
much of anything except profiting and seizing/maintaining control of
markets etc...So one major answer to the unrest is to redefine the
current definition of wages owed (L) and re-categorize it under the
shared SE portion of the accounting equation.

This would not be a redistribution of wealth which destroys freedom
and free-market capital system (stifling competition and innovation)
but it would tip the scale back to a more integrated/balance of power
and accountability, stabilize markets and transition the growing
numbers awakening more peaceably and on stronger foundations of
economic stability. There would be more unity and buy in because people
will be more motivated, demand and lack of buy in would allow for
business to fail and to succeed according to the masses, the producers
and the consumers. Those who are in the small 1% would staunchly
resist because how could they agree to giving up their hard earned
ever growing monopoly in the ubernationalcorps and global banking sectors.

I need to make algorithmic projections on the new accounting equation
by comparing traditional and then apply the new feature. Also to
project what effects it would have as it is phased in. Where it would
be best etc..etc...

Know any or can you suggest anyone who would dare think laterally
around this major major possibility to move out of our global fiscal
crisis with the curse of knowledge predicament that the IMF, Fed res,
etc...and the present day economists are stalled out in as any one can
see how desperate they are to just kick the can down the road until
the super crisis forces us to choose only one or two option which
aren't pretty.