The Values of Economy

in LeoFinance3 months ago

A colleague and I were talking about the value of "what we do" as an organization in terms of adding to society. In my opinion, it isn't overly directly valuable, but it does facilitate improvements in processes of organizations that do add value, like in hospitals for instance. But, it is also not useful to look at any job's value without thinking about the environmental conditions as a whole.

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When everything is going "well" in society, we tend to look to extend our leisure time, spending more on feeling value, rather than practical survival value. We spend more energy on wants. When things are going badly however, we look to consolidate our activities down to the needs, wasting less. The same happens for jobs and roles and when times are tight, we will pare down where effort is put. In general though, to get to the point that we cut away all the wants, it has to get pretty bad indeed.

Let's face it though, most of what any of us do, isn't vital to the survival of the species and if anything, is more likely to put the survival of the species at risk. The most highly rewarded industries, tend not o be the ones that make us better. And as we act on incentive, we go to where the rewards are, which is why the finance industry has such good mathematicians who code financial products, because they can make more there than working on something "silly" like clean energy production.

The way we have built an economic system is pretty clever, as it allows us to trade dissimilar goods with each other globally, without having to know each other or blur interpret the value too much. It allows the market to decide to a high degree what is valuable, with wealth going to those who supply what the market demands.

However, where I believe we royally screwed up, is in the activities we demand, and therefore reward. Profit is made on good times demand, not on what brings us actual wellbeing. When the apocalypse arrives, no one is going to be taking a selfie each day to put on their social media feed in the hope of attracting add revenue. And the "apocalypse" gets more likely because of the economic practice of profit at any cost, rather than profit for wellbeing.

Economics is obviously about trade, swapping one thing for another. However, what we are swapping matters, as does what we get in return. Money just represents some arbitrary value, but what we get for it could be the difference between life and death. Give a cold, hungry person 2000 dollars, and the first thing they buy, isn't going to be an iPhone 15. Need drives demand, which makes a mockery of what we feel we actually need in this life, because the most valuable companies and roles in the world, aren't necessarily the ones providing us a significantly better quality of life.

In terms of the economy, we tend to equate wealth to health, where if a country is wealthy, the people are relatively well off, but this is not the case. This is especially true once we break down the distribution of wealth across a population, and a distribution of health across the same population. While there are $100M homes in Beverly Hills, there are drug-addled suburbs and parts of city spread across the entire US. Over 106,699 overdose deaths in 2021 - which doesn't paint a pretty picture for the health of the nation.

The US is not a global exception, it is a global leader.

It is a capitalist leader, but capitalism itself isn't the problem, if there are checks and balances in place that keep it working for us, not against us. However, the way we have set up the system is that we look to create wealth through extraction from health, rather than addition to it. Again, this isn't normally a direct line, but through the supply chain, we can see how optimization for profit will impact on human wellbeing.

In some industries, we can see a direct line, like in the Pharmaceutical industry, which is more interested in treatment than cure. If it is more profitable to keep people on the hook than solving the problem, they will. Tobacco industry is similar again, where there is pretty much undeniable evidence that it is far more harmful than the value it delivers, but money talks. Which is why the plan in New Zealand to end smoking by stopping people born after 2008 from buying cigarettes, was recently scrapped - because *in the words of the finance minister, the government needs the tax money.

Good job tobacco lobbyists.

But, this is a "free market" in the sense that people are free to manipulate it however they are able, and those with the power to do so, do. Piece by piece, influencing factors are aligned to increase profits through extractive measures, offering increasingly less in return. It is a shrinkflation of value, where we are paying more, getting less, and wondering what is wrong with the economy.

But, the economy is not a thing really, it is just a representation of our behaviors, where we can see where we put value, where we don't, and where there is a misalignment between our needs and wants, as well as our own belief systems about what is important to us. We want health, but create wealth for those who don't offer us health in their business models. If we rewarded wellbeing generation, instead of convenience generation, we would all be better off, but also maybe, a little more manual in our daily behavior.

For me, this is an interesting discussion to consider, because while at a micro level we might understand it, we have to also extrapolate it out to the macro level too, because that affects us as individuals. We can't rely on governments or corporations to make legislative changes to improve our wellbeing, because they are only interested in one side of the trade - the monetary side - which sees money as an indicator of wealth. But, they are only looking at the amount of money, not where it is spent and what value it actually brings to us as a society.

It is a free market system.
We are free to build, or destroy ourselves.

Profit isn't the problem - how we capture it likely is.

Taraz
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Lobbyists are the worst aren't they? As you say, it must be the same way in other countries, but I've always been annoyed at how much power they have in the US. Wouldn't it be nice to see a crypto lobby force the government to push through smart well written policies instead of just dragging their feet?

An interesting thing happened in Germany the other day. The government was taken to court and lost based on their failure to meet environment policy promises.

Perhaps government policy should be written on smart contracts with accountability built in.

That would be an interesting change! I think the whole possibility of DAC's and blockchain has a lot of merit as far as governance goes. Vechain has some interesting stuff in the works as far as carbon credits and blockchain. Perhaps Germany will be forced to adopt it.

I believe that at some point, we are going to force transparency and accountability, but it isn't going to happen unless we demand it and fight for it.

It is hard to do things that benefit the community or the world, when it costs you a great deal.

For example, I would love to use an electric vehicle, instead of the 2009 gasoline car I am using now. But I currently don't have the money for this (I am waiting for the next crypto moon!)

On the other hand, when it does not cost too much, I have no problem.

Example: In our apartment, we have a gas-powered fireplace. The gas used is free for us to use: the strata is paying for it. Two years ago, we decided to no longer use this fireplace, because it produces carbon dioxide. We just use electric radiators and set the temperature to 20 degrees Celsius.

On the other hand, when it does not cost too much, I have no problem.

I have been trying to imagine a world where energy was clean and very cheap. This would take out the need to reduce energy consumption, so designers could innovate a lot. However, rather than energy constraints, it would be pollution constraints that drove them. I wonder what a car or plane might be like if it had to be zero emission, but it had all the energy it wanted?

It is hard to do things that benefit the community or the world, when it costs you a great deal.

It definitely isn't easy to do the right thing. Especially these days, where there is not even a social reward for doing so. We raise victims on pedestals, not saviours.

I wonder what a car or plane might be like if it had to be zero emission, but it had all the energy it wanted?

The modified DeLorean car with the Mr. Fusion Home Energy Reactor in Return to the Future. 😃

I think those who work at finance sector directly add value to both society and economy.

They add money. Where that money comes from and where it goes might not be as valuable.

Honestly when someone gives $2000 to a cold, hungry person he will try to meet his basic needs first. The same amount of money is a luxury to some and a necessity to others.

Exactly. It always depends on the needs of the moment. However, with a line of credit, we seem to be willing to put ourselves in debt at the cost of future needs, to have the iphone.

Yep, many of us are in the fortunate position of being free to make most of our own choices and to consider the impact of these on both ourselves and society, though, of course, most of the time we're focused on simply getting by and find it hard to give up time to such considerations.

We all have a micro view of the world, even though as a group, we impact at the macro level. And we are all impacted by the macro conditions. No man is an island indeed.

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You covered a lot of things with this post and I agree that it is a very interesting discussion. There are a lot of things at work in the economy and everyone has their own agendas. Governments tend to do what the rich dictate since they helped get a lot of those politicians in power. Regular citizens like us are already at a disadvantage, and going with the flow might be our best bet.

Regular citizens like us are already at a disadvantage, and going with the flow might be our best bet.

I am not sure going with the flow will work. I see it as just a slow crush, where eventually we are pushed so low, there is nothing left of us.

It's definitely a free market and I agree that people are incentivized to not solve the problems. Whether it be politicians or companies, they can earn money/votes from keeping the issues alive. It's a tough world.

Imagine what the world would look like if for the next decade, we were somehow compelled to work to make it better.

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The truth is that things are really hard and that is why I am always thankful because I am still able to spend money and take care of some of my needs
Some people see $1 as luxury here and it is nothing to people like us

There is a lot of opportunity available here - but it isn't a charity.

There's an excellent chance that we're just intrinsically terrible; and the market is just a reflection and amplification of that terribleness :)