Tag: value

Fight the dragon

My cliff notes for “The value of a life“:

Putting a price on a life is important for saving lives in our economic world, but this is different from the value of a life.

This post tells the fable of a civilization of happy people living to ripe old ages, highly valuing life, who one day are visited by an evil dragon who collects an annual tax of gold for each citizen in proportion to their age. May old members of society die in the early years, taken by the dragon, until slowly the civilization gets better and better at meeting the tax.

[Spoiler: Reading the actual post is going to be way more entertaining than my cliff notes from here on.]

The dragon is an allegory for death. Even as the people accept their fate, they develop specialization and economics and never stop fighting it. Soon, they push back to only small, old group dying each year. But in the meantime they also value art — because it helps with morale and motivation, etc.

And, in this world, you can calculate the exact economic cost of saving a life. Which leads to a difficult conflict: It is true that we must treat a life as equivalent in value to some amount of some other commodity (like movie tickets). (If the economy is running efficiently, and thus people are buying movie tickets in proportion to their entertainment/motivational value, then if the people producing those files turned their attention instead to mining more gold to save more lives, the society’s net output of lives saved would actually drop!)

At the same time, the value of a human life is priceless, infinite, or at least far beyond compare of the value of watching  a few thousand movies. (The price equivalence between 1 life and 1 thousand movies is definitely not saying their value is equal; to think so is to forget the most important contextual fact driving all of this, which is that the village is plagued by a dragon: In fact, 1 life is worth more than 1 thousand movies, which is why watching those 1 thousand movies to help maximize lives saved through entertainment/motivation is actually a significant value-gain for this efficient economy.)

In our reality, things are similar. (Here, markets on the value of life are inefficient (millions to push back death in developed economies, thousands in poor economies), and frankly we don’t prioritize maximizing lifespans. We also don’t act rationally in myriad ways, and life is about quality as much or more than quantity. But, still.)

Compare a button that pays you $10 when pressed at the cost of a 1 in a million chance of killing someone, with the risks of, say, driving a car, which has a much higher risk of resulting in someone’s death, a price you pay anyway for the value of convenience of driving a care. Press that button and take that $10, and put it toward saving other lives; we come out ahead. This illustrates the value of actually putting a market cost on saving a life.

To repeat: Don’t confuse this cost with the intrinsic value of a life. The gap between the two is because we are plagued by death that we’ve yet to figure out how to stop. That gap is as much a tragedy as it is real.

That gap is a direct measure of the difference between the universe that is, and the universe that should be.

That price difference, the difference between a few thousand dollars and a few thousand suns, is a direct measure of how fucked up things are.

If it weren’t for the dragon coming for us all, we could afford to put a lot more into saving those relatively few lives that would be occasionally, not inevitably imperiled.

This whole piece is a “sermon” preaching pushing back death. Some work the dragon’s mines: work in health care. Some build weapons to fight the dragon: To try and eliminate biological death. Some of us work in the entertainment industry, helping making life worthwhile for the rest.

You can join. You can do the right thing even if you don’t feel care in the proportion. Care for yourself before you care for others; you can do more good that way. Drum up some fury, some resolve, some defiance, etc. — and leave your guilt and shame at home.

This post is part of the thread: Replacing Guilt Cliffs Notes – an ongoing story on this site. View the thread timeline for more context on this post.

To get rich quick is to steal

I have recently been pondering the idea of a person’s value.

Are people truly ‘equal’ in terms of their value to others? What makes a person valuable to society? How does society value a person? How is a person’s value made visible to others?

I believe that some inherent value exist in everyone. This is manifested through the empathy we experience for others, and the rights we codify into law. Let’s ignore the notion of inherent human value for now, though, because it is difficult for society to measure.

Let’s narrow our concept of value to just what’s easy: Transactional value. Value that can be quantified, with money.

By this simplistic view, capitalist economies clearly do value some people more than others: Those with great wealth. Exhibit A is their spending power. Exhibit B is their celebrity.

However, what makes a person valuable to society, and how society values the person, are not the same.

Ideally, society would most value the individuals who provide the greatest value to society. In practice, that is too difficult. Non-financial evaluations of a person have the major disadvantage of being less quantifiable. I am thinking here of such things as civic awards and recognitions, IQ tests, athletic achievements, social media followers, public opinion… These are measurements that don’t stack up easily for clear comparisons of peoples’ across-the-board value.

So, we let wealth be a proxy for value.

Consequently, many of us would like to be rich. We can rightly expect that if we can achieve wealth, society will treat us as more valuable. And, we think that will tell us that we are valuable.

This has been true of me.

But this is a trap.

Acquiring wealth is a very unreliable indicator for the value you have created. Sometimes a person becomes wealthy by stealing or transferring value to themselves, instead of creating it.

To illustrate that concretely, I need to better define ‘value’.

Let’s say I sell you a cup of coffee for $2. Let’s also say that you would’ve spent as much as $3.00 for that coffee, because you really wanted it.

Since I charged you $1.00 less than the coffee was worth to you, in a way I have created $1.00 of value for you.

(I’ve actually created more value for you than just that: You also have the inherent value of enjoying the cup of coffee. But, remember that we’re ignoring anything we can’t easily put a price tag on.)

The point is, you’ve received at least $1.00 of value for my efforts.

Meanwhile, the cup I sold you only cost me $0.25 cents to brew. Thus, I’ve also created $1.75 of value for myself, in the form of profit.

All told, that’s more than $2.75 of value I created, of which I kept $1.75.

This illustrates how when transacting business in a capitalist society, we generally don’t earn value without creating more value than we receive.

This non-zero-sum aspect of transactions motivates us to do business together. Everyone benefits.

The person who scales up this coffee business model enough to get rich doing it will be both valued by society (through their amassed wealth) and be valuable to society (through the value given to customers).

I realize that this is a simplistic example that you could poke holes in. For instance, you could argue that I’m carelessly conflating coffee customers with ‘society’. I am giving economists and capitalism the benefit of the doubt here, which perhaps they don’t deserve.

But if it holds true for the coffee capitalist, this model of value also works for those of us collecting a paycheck. Our employers pay us because they get even more benefit than we cost, i.e. we create value for them.

Note how the process of becoming wealthy through this value creation happens gradually over time.

Something different happens when someone gets rich (relatively) quickly.

Consider hedge fund trading, exorbitant corporate officer pay, government and corporate corruption, tax evasion, scams, cons, and Ponzi schemes.

From society’s viewpoint, getting rich through these kinds of methods can be viewed as a form of stealing. It skips value creation. Instead, it generates wealth through value transfer.

The person who would like to be valuable to society should avoid get-rich-quick methods. They should pay attention to the value they create for others, and ensure that it well exceeds the value ending up in their own bank account.