On value, continued

I have the simplest tastes. I am always satisfied with the best.

Oscar Wilde (attributed)

In last week’s post we distinguished value from price, but having determined what it isn’t we haven’t said what it actually is. In this essay I want to have a crack at doing that.

The word value is prominent in economic discourse but also outside it. We speak of values in the plural when we wish to discuss an ethical position. There is also the expression value judgement to denote a subjective opinion. (I am old enough to remember the Senate confirmation hearings for General Alexander Haig when he was to be appointed US Secretary of State, and he used that phrase liberally in order to weasel out of giving a straight answer.) So what exactly is this thing?

There is undoubtedly a subjective component to it. Economists refer to money we spend on what we want rather than what we need as discretionary spending; one can think of this as an indicator of what people value, at least in the category of things that money can buy. What interests me here, however, are the things it can’t.

On Planet Economics, human beings are rational actors who exclusively pursue their own interests. I don’t know about you, but I’ve never met anyone remotely like that, nor would I wish to. Actual human beings are almost never rational; even when we think we are, most of the time we’re actually justifying our choices after the fact. Rationalisers we certainly are, but rational? Would Las Vegas even exist on Planet Economics?

Advertisers know this, of course. There are very rarely compelling reasons to buy Brand X rather than Brand Y of almost any consumer good. If Brand X is consistently better than Brand Y then usually Brand Y will simply go away, because while people aren’t rational they aren’t idiots either. So the advertisers hired to make you buy Brand X will try to make you like it on non-rational grounds. Buying Brand X will make you cool and sexy and irresistible to the opposite sex. (Personally I have never been attracted to anyone on the basis of what phone they have, and if someone were attracted to me on that basis I would run a mile, but that could just be me.)

There are a few exceptions where some sort of vague gesture in the direction of rational argument is attempted, usually around products that have some medical aspect to them. Often these take the form of surveys. When you look at the sample sizes given in the small print – and I assume it must be a legal requirement to provide these, because I’m sure the advertisers would rather not – they are always pathetically small. If you take enough samples of a few tens of people, you will eventually be able to find one where 79% of them like whatever it is that you’re pushing.

There was an old ad campaign I remember from my childhood which demonstrated this perfectly. These days they’ve learned to be a bit more subtle. It was so long ago that it was a TV advertising campaign for cigarettes, which has been illegal since 1965 in the UK. I’m quoting from memory, but the ad was really just some pictures of moderately cool and sexy-looking people going about their lives with a voice-over that went somewhat as follows:


People like you.

People like you are changing.

People like you are changing to Players Number 6.

Disclaimer: I am not endorsing this product and I don’t think they still make them anyway.

Now I wouldn’t have been their target market at that age, but this must have been plastered all over the TV for me to have remembered it, ahem, many years later. The 1960s was self-consciously a decade of change, so it made sense for the advertisers to latch onto that. It worked, too: Players Number 6 was the best-selling brand of fag well into the 1970s.

What we’re also being sold here – and many, many advertisers and persuaders in general play this game – is that it is better to belong to the majority, or (as in this case) the group that will be the majority soon. This is a value most of us share, at least to some extent, and it is of course straight out of the social primate playbook. And also it has many practical advantages, which is why we follow it.

Some of us, though, imagine we are immune to this. We are outsiders, romantics, rebels. Advertisers have this covered too. I have never understood how consuming a mass-produced good can be a statement of one’s individuality, but you’ll find this claim being made – not, of course, so starkly.

Remember the Apple Mac commercial that riffed on Nineteen Eighty-Four? (It’s here if you need to refresh your memory.) The idea was that buying their mass-produced thing would mark you out as a special, non-conformist freedom fighter. So many people have now bought their mass-produced things that having an Apple product is now a mark of conformity. Nor is this an unintended irony: Apple paid for that that advert precisely in order that this should be so, because they have made an awful lot of money out of it, and continue to do so.

There’s an alternative, of course, which may appeal more to your values, although you won’t find it being suggested by advertisers, politicians, or anyone else; apart from occasional statements by the Pope, who enjoys pretty good job security. If you really want to be a radical outsider in industrial society, you’ll try to avoid buying mass-produced consumer goods altogether.

This is practically impossible to do for everything in our society, particularly when it comes to things like underwear where buying second-hand isn’t an appealing option for many. Your discretionary spending will get you a lot less if you choose not to take advantage of the “fact” that it is cheaper to buy something made in China and shipped half-way around the world than it is to buy the equivalent product from a local small-scale maker, assuming you can even find one. But the choice is there to be made, at least some of the time.

I have already suggested in my essay on food that there are practical advantages to be had if you can eat fresh locally-produced food purchased directly from the producer. A point I didn’t make there is that every pound/dollar/euro you give to that producer is a pound/euro/dollar that isn’t going to Big Ag or to the supermarkets. Ultimately this is the only kind of activism that such entities will pay attention to.

Consider also joining a local trading scheme such as LETS (this is a UK-specific site, but similar things no doubt exist elsewhere). This is the ultimate decoupling of price from value, because no money changes hands at all. Instead, you have a local credit economy – there’s more on the theory behind it here and here if you’re interested. My brother once got himself a second-hand car via his local LETS, so it’s quite a serious proposition.

All this does have the disadvantage of moving you out of the dominant majority group, as things stand today. But as things stand tomorrow, I suspect it will become more attractive to more people, and may indeed end up as a necessity. Your call, of course, but remember you read it here first.

Comments are welcome, but I do pre-moderate them to make sure they comply with the house rules.

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