Much of the debate about the relationship between capitalism and democracy, economics and ethics, individual and community overlooks a very important element: values and their role in our lives.
Values are mistaken for interests. In politics or business, we are interested in making money or acquiring power. As consumers we try to maximize utility—simply put, pleasure. But acquiring money, power, things or experiences are not aims and interests, not expressions of our values. Justice, fairness, equality of opportunity and freedom are the values on which society, above all a healthy society, is built.
At the beginning of the last century, sociologists Max Weber and Georg Simmel highlighted how reasoning and money, as the sole means of exchanging goods and services, serve economic interests, yet undermine what we truly value. Money and the economic exchanges it facilitates make possible the limited and hyperspecialized professional roles that characterize our workplaces and consumption norms. But the higher productivity that a money exchange based economy enables, comes at the enormous cost of a narrow perspective on the world and weak social cohesion.
In order to foster individual autonomy, meant as the ability to choose social roles on the basis of moral, organizational and cultural values, rather than the other way around, we must create a market for values.
If individuals and organizations traded experiences of the benefits in reputational, economic and social terms (for instance, higher market shares, better image) of values such as social justice and environmentalism, and if a list of possible indicators proved compliance with each of those values, we could change our social roles. We could change how we produce and even profit from new means of economic and social engagement.
There are no shortage of common values to promote and pursue, many of which can take place in our towns and communities. As regards climate change, for example, this could include establishing or expanding ‘green belts’ to facilitate carbon capture. Local contributions to social justice might include aims to reduce income inequality (as measured by Gini coefficients), facilitated by company policies to reduce wage dispersion alongside donations to charities to support those unable to work.
But how does that differ from well-intentioned policies of the past or still present? The key is measured exchange of values, albeit measures which are not monetary.
For example, meaningful contributions to improve social or ecological balance would be listed in documents exchanged through a centralized platform. Importantly, it is not just transparency that matters, but rather the market exchange of those contributions.
If each documented contribution to social values was exchangeable not with money but with other experiences and with goods and services, then an individual or a company or a local community would be incentivized to contribute to the common good in return for an item of equal or greater value. In essence, what emerges is a barter system for values.
When we use money to purchase a product, the values that led us to this purchase are not transferred to the seller. The money we exchange is devoid of social value and is merely a means of payment, or a way to postpone consumption until a future date. The increase in the seller’s bank account does not enhance or challenge her worldviews, but rather confirms the legitimacy of the status quo.
In contrast, bartering social contributions, which explicitly reflect values, would make it possible to transfer, indeed share, a moral, organizational or cultural value between both sides of the transaction.
Since each of these experiences would have a monetary equivalent, reflecting the ‘unit of account’ purpose of money, and since supply and demand would determine economic value, it would be possible for society to reach a shared judgment about the relative importance of social values and how they change over time. This is precisely what a society requires to become a community, meaning a collective reality that acknowledges individuality as freedom to choose an identity dealing with ends, rather than with means. However, this assessment of the relative importance of values would be a prerogative of markets, not a function of the State or an infringement of individual freedoms.
The price of each social contribution, defined either in barter or monetary terms, would be proportional to its supply (the number of experiences listed in the document) and community demand (of all the experiences referred to that value). And the initial price of the experiences referred to a value may be determined on the basis of the average cost of complying with the relevant indicators. Hence, the economic incentive to participate in the market for values would reside in the possibility of transferring a social service at a price higher than its production or purchase price. That price, or social value, would therefore rest on two factors: the innovation of and supply of social contributions and the societal demand for them.
Why are barter markets for values better than some of the alternatives, for instance environmental, social and governance (ESG) investing?
To be sure, values have a prominent role in ESG investing. However, the ESG framework may simply push companies to narrowly adhere to ESG criteria in order to lower their cost of capital, rather than genuinely adopt the values that ought to underpin corporate responsibility. Accordingly, ESG may prove insufficient to improve corporate environmental and social practice. Moreover, ESG investing does not eliminate the fundamental ambiguity of the role of money in our economies and societies.
Distinguishing value and values from money is essential if we are to advance the existential need to incorporate sustainable outcomes into our social and environmental interactions. Markets are instrumental for creating incentives to increase and improve the provision of socially and environmentally desirable products and services. But for those markets to be truly effective, they must involve the transference of the underlying values. Money – introduced when societies were guided by a common beliefs system, fundamentally of a religious nature – is the wrong medium of exchange. What is required, instead, are barter exchanges.
Which brings us to the final point. The innovations of technologies, which facilitate networks of information exchange (without the exchange of money) offer a glimpse into how the barter of values is increasingly possible. Swapping messages, photos and experiences – second nature to any millennial – is the stepping-stone to the money-less exchange of values, which is critical to the aspiration of more sustainable human and ecological outcomes.