A revaluing of value

What is it we really value?

For a moment earlier this year I thought I saw it. I thought I saw neighbours shopping for each other, volunteers rolling up their sleeves and delivering food for those shielding or unexpectedly jobless. I thought I saw families stood on doorsteps banging pots and clapping for key workers. I overheard excited conversations about tackling the climate emergency and racial inequality and I got square eyes from so many Zoom quizzes. I thought I saw us, through the heat of the crisis, reveal our true selves and what we really care about. Our public services, our communities, our families, each other. But as the nights drew in this vision receded, and the memory became foggier.

So what is it we really value? I’ve been thinking about this a lot this year. How to reconcile a more humane, social, community-oriented way of life with economic prosperity. Or whether the two are irreconcilable, spare another crisis? Whether the price of everything is that, ultimately, we value nothing?

So I ask myself, why does this shit keep happening? We can’t keep dismissing these negative impacts as just ‘externalities’, costs which aren’t reflected in market prices and just affect third parties. We are those third parties! Businesses must start taking more responsibility for the impacts they produce, both positive and negative.

The thing is, we’ve known this for ageeessss. We already know that the exchange of goods and services can have wider impacts beyond the narrow interests of buyers and sellers. Adam Smith was writing about it in the 1700s! But still this imbalance and shirking of responsibility persists. For example, pollution affects us all, but for too many businesses they still see it as a negative externality where the social costs of action are not reflected in prices and so are not fully borne by the person taking it. Markets can’t give a value to these external costs and benefits if they aren’t part of an exchange. So they don’t.

To quote Oscar Wilde, they know the price of everything and the value of nothing.

Nordhaus DICE model 2.0

The materials to build a new economy already exist, but from the way politicians and the media talk, you wouldn’t know. They talk about building fighter jets and roads as if it’s 1945 again. It isn’t.

Social economy organisations show there is a better way of doing business. As SEUK argue, if these organisations primarily populated the economy, we could expect 4 million more people being paid the real Living Wage; over 1 million more women leading businesses; 400,000 more businesses led by BAME people. Plus, we would have over £118 billion of additional profits reinvested back into improving society and protecting the planet every single year. A far cry from the extractive form of capitalism so exposed during the coronavirus pandemic.

I believe that the social economy offers a better way to internalise externalities. For example, social enterprises are able to take on more of the costs of both the positive and negative externalities they create. In terms of positive externalities, the cost of social impact delivery may be taken from the operating margin — it may or may not be possible to pass these increased costs onto the customer. Or creative businesses, which provide products and services where the social need and the market need are aligned, so selling the product or service generates both social return and revenues.

This new type of value — which is more human-centered — represents a new frontier for expansion and exploration. More businesses and organisations trying to produce more positive externalities, and either reducing or internalising negative externalities.

We already have enough examples and working models to “build the elements of the new system molecularly within the old”, as Paul Mason says. Cooperatives and social enterprises set up with a responsibility to worry more about the externalities of their trading activity are more successful, growing faster, more innovative, and paying more tax, as well as delivering for people and planet. But we have to stop seeing them as quaint little projects. They work and need promoting via regulation and vast investment. If not now, then when? For example, as Dan Gregory has previously argued, can we show how tax and spend and regulatory environments could be more intelligently constructed in order to create a more co-operative relationship between the state and the market, working with business to incentivize the reduction of negative externalities?

In 2021, I truly hope so.

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