Value and Cost are Human Measures

ENL is intended to be part of a revolutionary transformation that replaces capitalist logic for guiding purposes, reverses overshoot, and strives for sustainable well-being.

The critical requirement for such a framework is conceptual coherence in order to drive this revolution forward. In this context, value and cost cannot be extended to nature.

Over the past several decades, as concern about the environment has grown, the concepts of value and cost have increasingly been applied to ecosystems and natural resources. The motivation for doing so is obvious: if the environment has monetary value, and if its destruction incurs monetary cost, then the natural world will be taken into account when economic decisions are made.

This idea underlies much of ecological economics and “natural capitalism".1

It is certainly true that the application of value and cost to nature can be effective as a short-term, reform-oriented response to environmental degradation. This approach uses capitalism’s own measurement standard, money, to modify the system’s operations and to decrease its ecological impact.

However, although human beings are integrated with the natural world in many respects, from the economic perspective we fall into sharply different categories. Human beings constitute the end of economic activities, whereas nature establishes the constraints on those activities. People can make autonomous choices; nature cannot. People can share experiences and awareness with their fellow human beings; we cannot do so with nature.

Because of these fundamental differences, it is impossible to apply the concepts of value and cost to both humankind and nature in a meaningful way.

The problem is encapsulated by an important concept in economic thought: commensurability. This is the idea that phenomena can be measured by the same yardstick, and thus quantitatively compared, only if they are qualitatively the same, or at least very similar.

Considered economically, people and nature are qualitatively different, and trying to apply the same economic yardstick to both creates insurmountable difficulties. Damage to humankind is incommensurable with damage to nature. Similar comments apply to value.

Another factor that comes into play regarding value and cost is that the terms are often used loosely in daily life, and it is easy to transfer these informal meanings into economic thought. To put it simplistically: "value" is usually associated with something good, and "cost" with something bad. Nature is good, so it must have value; destroying nature is bad, so this must be a cost.

It should be obvious that terms and ideas used in everyday conversation cannot automatically be applied to a formal conceptual framework such as ENL.

There is also a surprisingly frequent confusion between the singular "value" and the plural "values". The latter term refers to a set of ethical or social commitments, and has little to do with "value" in the economic sense.

<prev linear thread next>

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-NonCommercial-NoDerivs 3.0 License