The Subjectivity of Value

For some reason, the past few weeks have found me embroiled in more debates about value theory than I can remember in the past year. Accordingly, I figured I'd post something on the subject as a starting point for those debates, so that I don't have to repeat my entire view in every conversation.

The problems people seem to be wrestling with are twofold. First, people have been arguing that because value is subjective, we can't say anything about how much value something has except by saying how much someone values it. Second, people have been claiming that because there is no acceptable way to objectively measure utility, it is impossible to coherently make claims about utility which compare utility between one individual and another. I want to address both issues, but this post will only discuss the former; I'll deal with the latter another time [Update: here].

To begin, I want to make clear that I don't deny that utility is subjective. But what does it mean to say this? One uncontroversial, but relatively weak, way of interpreting this is to say that without people (or other valuers) to value things, nothing would have value. While this shouldn't offend anyone, it also doesn't tell us very much. It only means that value must be value to someone; the cake is not valuable, it is valuable to people. If there were a cake on a planet with nothing else on it, so that no sentient being would ever come across the cake or even know that it existed, it would seem odd to attribute any value to the cake.

But it's clear that this isn't what people mean when they say that value is subjective. It seems like what people are saying is that something becomes valuable because someone values it. George Reisman might seem to have embodied this sort of view when he said, "...the starting point both of goods-character and of the value of goods is within us--within human beings--and radiates outward from us to external things, establishing...goods-character and value..." It also might seem to have been present in Mises' thought, when he said, "Judgments of value are voluntaristic. They express feelings, tastes, or preferences of the individual who utters them. With regard to them there cannot be any question of truth and falsity. They are ultimate and not subject to any proof or evidence."

Mises continued, "What the theorem of the subjectivity of valuation means is that there is no standard available which would enable us to reject any ultimate judgment of value as wrong, false, or erroneous in the way we can reject an existential proposition as manifestly false. It is vain to argue about ultimate judgments of value as we argue about the truth or falsity of an existential proposition." It is on the back of statements like these that people argue that we are unable to posit value in anything apart from the value placed on it by some individual.

But this immediately leads to some problematic conclusions. For one, it means that if we cannot say that it would be good for the alcoholic to avoid taking another drink, or that the person in an abusive relationship would be better off leaving his partner, unless they believed that to be the case. If it is the nature of value that it does not exist except as it is placed on certain things by people, then it would be impossible to be mistaken about the value of something. Clearly the alcoholic values the drink, and the abused partner values his relationship, but there seems to be a sense in which we want to say that the alcoholic shouldn't value the drink, and the abused partner should leave.

The problem arises from the fact that we can talk about something's being "valuable" in two ways. One is positive: "I value X; X is valuable." The other is normative: "X would help me to achieve my ends; X is valuable." When my opponents talk about the subjectivity of value, they slip into the former kind of thinking. That is, they take the view that what is desired is the same as what is desirable. But it is my contention that what is desirable, in discussing the value of some object, is what ought to be desired, given the ends of the agent in question. So while I agree that ultimate ends can't be disputed (if you want to be a devout Christian, I can't tell you that you're wrong), I can dispute the means you choose for obtaining your ultimate ends.

This is played out in Mises' discussion when he says, "The characteristic mark of ultimate ends is that they depend entirely on each individual's personal and subjective judgment, which cannot be examined, measured, still less corrected by any other person. Each individual is the only and final arbiter in matters concerning his own satisfaction and happiness." He continues, "Means are judged and appreciated according to their ability to produce definite effects. While judgments of value are personal, subjective, and final, judgments about means are essentially inferences drawn from factual propositions concerning the power of the means in question to produce definite effects. About the power of a means to produce a definite effect there can be dissension and dispute between men. For the evaluation of ultimate ends there is no interpersonal standard available." Accepting this view of value, it seems clear that we can indeed make claims about how valuable something is as a means for achieving some end, even though we can't actually say that the end in question is valuable.

In passing, I want to preempt an obvious objection. In practice, I (and I think most people) do tend to assume that individuals have certain ultimate ends, and that under this assumption, I can largely ignore the issue of the subjectivity of ends. For example, I don't tell the alcoholic, "If you desire the sort of life I find that most people do, you shouldn't have that drink." I simply say, "You shouldn't have that drink." If I were to discover that the alcoholic actually thought that his purpose on the Earth was to explore the effects of alcoholism, producing knowledge for himself and the rest of humanity in the process, then I couldn't criticize his choice of drinking in the same way. But recognizing this possibility doesn't preclude me from assuming that they alcoholic is making a poor decision (in the absence of evidence to the contrary). That I could be wrong because of a faulty assumption, doesn't prove that the position outlined here is wrong.

One thing that I should address, but I won't, is the issue of justice as it relates to value. It's fully possible that someone could do something which would actually produce the effect of promoting her ends, but we would still want to say that there's something wrong with it. Mises seemed to think that justice could be completely explained in utilitarian, contractarian terms, saying, "The ultimate yardstick of justice is conduciveness to the preservation of social cooperation. Conduct suited to preserve social cooperation is just, conduct detrimental to the preservation of society is unjust. There cannot be any question of organizing society according to the postulates of an arbitrary preconceived idea of justice. The problem is to organize society for the best possible realization of those ends which men want to attain social cooperation. Social utility is the only standard of justice. It is the sole guide of legislation." I completely disagree with this assertion, and I am supported in this by a considerable tradition in philosophy. But how this relates to the discussion of value is beyond the scope of this post. I think that what I've said so far is good enough for my purposes.

Asymmetry Between Positive and Negative Externalities

I want to discuss an asymmetry between positive and negative externalities which I think might be important when thinking about how to use the enforcement of justice to determine which actions should be permitted. Sometimes, we let individuals impose costs on others, provided compensation is payed, because their actions produce net social benefits. As Nozick writes in Anarchy, State, and Utopia, "The reason one sometimes would wish to allow boundary crossings with compensation...is presumably the great benefits of the act; it is worthwhile, ought to be done, and can pay its way." In its Climate Change 1995: Economic and Social Dimensions of Climate Change, the IPCC elaborates on this idea, explaining that if an action "...yields positive net benefits, then those made better off could compensate those made worse off with something extra left over. As long as the compensation is paid, the result is an unambiguous gain in welfare, without the necessity of weighing effects on different individuals."

It's worth pointing out that this is not entirely uncontroversial. Nozick writes, "...a system permitting boundary crossing, provided compensation is paid, embodies the use of persons as means; knowing they are being so used, and that their plans and expectations are liable to being thwarted arbitrarily, is a cost to people..." For this reason, Nozick suggests that "Any border-crossing act which permissibly may be done provided compensation is paid afterwards will be one to which prior consent is impossible or very costly to negotiate...But not vice versa." For our purposes, however, we will ignore this problem, and limit our discussion to only those compensated boundary crossings which are not problematic in this way.

So what's the asymmetry? It should be clear that the preceding discussion was directed only at negative externalities. That is, cases where I do something that results in costs being imposed on other people, where I haven't obtained their consent in advance. An entirely different framework applies to positive externalities: cases where, without being asked or promised anything, I do something which results in positive outcomes for other people.

Where we think of negative externalities as demanding of compensation, we generally don't think that we are entitled to payment for the positive outcomes we have generated for others as a result of positive externalities. So when we impose costs without consent, we owe compensation, but when we "impose" benefits without "consent," we are not entitled to payment. This is the asymmetry.

But on the surface, this doesn't seem to be problematic. If I unilaterally decided to do something which had positive consequences for you, then it doesn't seem like you suddenly take an obligation to compensate me for my trouble; I'm the one who decided to do the thing that I did, and presumably I would have decided to do it, even if you weren't around. On the other hand, if I unilaterally do something that has negative consequences for you, then I do take on an obligation to compensate you; you didn't decide for me to do what I did, and presumably you wouldn't have in the absence of compensation. The asymmetry seems simply to reflect the idea that we are not entitled to make people worse off without their consent in the execution of our plans.

However, there are two implications of this asymmetry which might be worth noting. The first can be shown by the following illustration. Imagine that on Bill's roof, there is a machine which produces laser light shows on the bottoms of clouds at night. Bill lives in a large town, but most of the people don't really care one way or the other about the laser light shows; they're typically asleep when they're going on. A few people do enjoy the shows, but not to a huge degree. If put on the spot, they would probably pay a small sum to allow them to continue, but tracking these people down and collecting money from them would be relatively difficult, and they probably wouldn't respond to mass mailers, newspaper ads, or other public fund raising efforts.

On the other hand, Bill's laser machine generates a certain kind of green smoke which is not a health hazard in any way, but which tends to drift into Terry's yard and stain his house a particularly ugly color. The stain can be cleaned, but doing so is somewhat costly, and as Terry does not typically watch the laser light show, he is rightly irritated by Bill's behavior. Being a reasonable person, Terry takes Bill to court to demand that he either pay for his house to be cleaned periodically, or else stop putting on the show.

Now, perhaps the people who enjoy the show would be collectively willing to pay enough to completely cover the costs of cleaning Terry's house. But without their contributions, Bill would not be willing to pay this amount. What would end up happening is that Bill would put a stop to the show, and though they'd be disappointed, the people who enjoyed the show would likely not be motivated enough to get together and pay the amount necessary to get it going again.

Let's imagine that Bill knew who these people were. Even though he knows that they were benefiting from his show, the burden is on him to convince them to voluntarily contribute to getting the show going again. The effort necessary might be prohibitive. On the other hand, this burden does not seem to be on Terry; Bill has the obligation to compensate Terry for whatever costs are done to him. This illustration shows that if we say that one is obliged to compensate for negative external effects, but one is not entitled to payment for positive external effects, then the costs of organizing people would result in the cessation of an entire class of net beneficial effects.

Confronted with this possibility, we might shrug our shoulders and say, "That's a shame, but we're not particularly concerned." We might point to the fact that our alternatives are somewhat limited. We can try to calculate net benefits and then either fine or tax alleged beneficiaries in order to pay compensation to harmed parties, or else we can simply allow allegedly "net beneficial" acts to be undertaken without any compensation for the victims.

Both of these alternatives seem objectionable. As we said before, my decision to do something which benefits you doesn't seem to generate an obligation in you to pay me. And as Nozick writes, "Using...[someone] for the benefit of others, uses him and benefits the others. Nothing more. What happens is something is done to him for the sake of others. Talk of an overall social good covers this up...To use a person in this way does not sufficiently respect and take account of the fact that he is a separate person, that his is the only life he has. He does not get some overbalancing good for his sacrifice, and no one is entitled to force this upon him..."

We find ourselves in a situation where we are forced to choose the best of a set of evils. Nozick writes, "Because great transaction costs may make the fairest alternative impracticable, one may search for other alternatives...These alternatives will involve constant minor unfairness and classes of major ones." As far as "unfairnesses" go, the ones we face here seem rather minor.

[It has come to my attention that I'm an idiot and apparently can't tell the difference between the word "defendant" and "plaintiff." I apologize to anyone who may have been confused by the rest of this post.]

But this leads to the second implication of the asymmetry between positive and negative externalities, which I find significantly more troubling. This problem arises from an interesting fact about the way that rights are enforced. In his essay, "Science, Public Policy, and Global Warming: Rethinking the Market Liberal Position," Edwin Dolan writes, "Certain defenses are allowed against a charge of assault or trespass. Consent of the victim is one. Also, if no causal relationship can be shown between the action of the defendant and the offense to the victim, the tort is not proved. However, certain attempted defenses are not recognized as legally valid..." Of these, one is "A showing that the defendant gained benefits from the tort, the value of which exceeds the costs to the victim."

This means that an individual can perform an action which is beneficial to everyone, and still be required to compensate people for any individual negative effects resulting from the action. It is important to note that the issue is not whether it could be proven that the action produced beneficial consequences for the victim that were more significant than the costs imposed. Rather, even if this were proven, the boundary-crosser would still be required to pay the victim.

I'm struggling to figure out what I think about this. I need some time to think; any thoughts or opinions would be very welcome.

Monetary Compensation for Future Generations

I've been talking a lot about whether or not we could have obligations to future people, and it occurred to me that I should say something about what it would mean for us to have those obligations, if we did have them. For example, let's say (as I discussed here) that it is wrong to act in such a way that a person comes into existence, upon whom the consequences of your actions will impose costs, but who will not have been provided with proper compensation for those costs. It should be obvious that one way to act permissibly would be to avoid that sort of action. But another way to act permissibly would be to provide compensation to the person your actions bring into existence.

What kind of compensation would this be? The obvious answer seems to be that we should leave them some amount of money which would sufficiently make up for the costs they'll have to endure as a result of our actions. But I wanted to point out an interesting feature of monetary compensation across time periods which might be significant to the way we think about the issue.

Let's say I harm you today, and give you money to compensate you for it. Basically, what I've done is give you power for directing the allocation of social resources which formerly belonged to me. As Hayek wrote in his essay, "The Use of Knowledge in Society," "...in a system where the knowledge of the relevant facts is dispersed among many people, prices can act to coordinate the separate actions of different people in the same way as subjective values help the individual to coordinate the parts of his plan." Providing someone with compensation has the effect of removing power to direct the market from one person, and giving it to another. It seems fair to say that this is exactly what we want to do when we make someone compensate someone else.

But something very different happens when someone leaves compensation for someone in the distant future. There are two steps in this process which occur at significantly different times. The first step is that someone loses their purchasing power. Influence on the market is lost by the compensating individual, and is essentially given to the rest of the actors in the economy. Basically, money is taken out of the economy, and therefore the rest of the money becomes more valuable: it gains more power for coordinating the market.

The second step is that in the future, an individual comes into existence and is given the money that had previously been taken out of the economy. This has the effect of increasing the money supply. Predictably, the rest of the money in the economy becomes less valuable. In other words, power for market coordination is transferred from the rest of the economy to the individual who is being compensated.

It should be clear that this is fundamentally different from monetary compensation which occurs instantaneously. But the significance of this difference might not be immediately apparent. Purchasing power is released into the economy in the first step, and then essentially recaptured in the second; it might seem like things ultimately balance out. But the problem comes into focus when we recognize that the economy is populated by different people when the purchasing power is released than it is when the purchasing power is recaptured.

Essentially the problem is this. When we compensate someone instantaneously, purchasing power is transferred directly from us to them. But when we compensate someone in the distant future, we transfer purchasing power from ourselves to the other members of our generation, and then in the future, purchasing power is transferred from the other members of the future person's generation to the future person. The purchasing power is not transferred directly from us to the person to whom we are obligated.

What does this mean? I'm not sure. I just thought it might be worth pointing out.

"Costs" vs. "Harms" and Rights in Light of the Non-Identity Problem

So I've been talking a lot about the implications of the Non-Identity Problem for the way we think about our obligations to future people, and I came up with the idea that perhaps we want to talk about "costs" to future people, as opposed to "harms," because the concept of harm doesn't seem to apply. In my most recent post on the subject, I created a thought experiment which (I hope) demonstrated that costs can be imposed on people in spite of the fact that these costs don't represent harms (I'll be referring to the thought experiment in this post, so you might want to have read it before continuing on here). I concluded that post wondering what ethical significance we could attribute to these costs, since they don't actually represent harms.

In an earlier post, I suggested that Sidney's de-pantsing couldn't possibly be a violation of any rights held by him:

...when we talk about an infringement of rights, we compare a certain outcome to a baseline. In a paradigm case, we might say that if I infringe your right not to be robbed by robbing you, I "move you away" from the baseline of you not being robbed, in the "direction" of you being robbed. And if I infringe your right to inherit an unspoiled Earth, I must be bringing it about that you do not inherit an unspoiled Earth. And indeed I do. But I can't coherently say that I "move you away" from a baseline of inheriting an unspoiled Earth. So instead I have to say that I simply place you in a situation in which you are not on the baseline.

Is this morally the same sort of thing? If the critical element of a rights infringement is that I bring it about that you aren't on the baseline, then my action might qualify as one. But we have to acknowledge that your rights are not to "remaining on the baseline" or "not being moved away from the baseline." They're purely to "being on the baseline," even though you couldn't possibly have been there. We would have to say that the "movement away" from the baseline is not an essential part of the equation. But honestly, I think it is.

In his boldly titled essay, "The Non-Identity Problem," James Woodward disagrees. He discusses the choice of an energy policy which will cause a nuclear catastrophe in the future, and writes, "...the sort of analysis I have been exploring explains the wrongfulness of the choice of the nuclear policy by focusing on the difference between the situation of the nuclear people under the choice of the nuclear policy (when they are killed, injured, etc.) and an (unattainable) baseline situation in which the nuclear people exist and these violations of their rights do not occur. This difference represents a loss which, arguably, one can coherently think of as happening to the nuclear people."

It's almost amusing how similar Woodward's point is to what I've been saying. Really, there is only one major difference between our thinking. Woodward thinks that these events which represent departures from an abstract baseline represent violations of rights, where I do not. Why does Woodward think that this is the case? He writes, "Presumably what the nuclear people will complain about is the fact that many of their number have been killed, injured, poisoned, and so forth. Presumably they will not say, "We recognize that nothing wrong has been done to us. What awakens our indignation is rather that even better off people would have been produced if the alternative energy policy had been chosen."" And I agree. Just as Sidney would complain about having had his pants pulled down, and that the problem with Vlad's actions seems to be tied to the costly event that Sidney will be put through, it does seem that what's wrong with the nuclear policy is that it brings it about that people are killed, injured, poisoned, etc.

But remember that we have assumed as a precondition that all of these people had lives that were worth living. A reasonably strong case could seemingly be made that while these people would complain about these things, and think that they were wronged, their anger would be irrational. By saying that their rights had been violated, they would need to say that their existence violated their rights. And as long as they didn't wish that they had never been born (or as long as it didn't actually "harm" them to be born), we might say that their complaints represent a desire to have their cake and eat it to. Accordingly, I find myself unconvinced by Woodward's point.

It seems to me that a better place to start would be with a statement like, "It is wrong to act in such a way that a person comes into existence, upon whom the consequences of your actions will impose costs, but who will not have been provided with proper compensation for those costs." In my thought experiment, costs were imposed upon Sidney by Vlad's actions, and he was not provided with any form of compensation. In the same way, the nuclear people are not compensated for the damage done to them by the nuclear catastrophe. Accordingly, this principle would say that Vlad acted badly, and the policymakers acted badly, which I think reflects our intuitions about the situations. Further, it would capture an intuition, which Woodward and I share, that if we provided proper compensation to future people for costs our actions impose on them, then our overall actions would be acceptable.

There's another important factor which is dealt with by this principle, which was touched on by Steve Vanderheiden in his essay, "Conservation, Foresight, and the Future Generations Problem." Even if, as I have discussed, we think that Sidney and the nuclear people do not have their rights violated by the actions of the people in the past, we don't think that Sidney or the nuclear people would look back on those actions with approval. We might imagine Sidney saying, "Sure, I wouldn't trade the opportunity to live for not getting my pants pulled down. But still, Vlad was wrong to launch the rocket; he never should have done it. It's true that if he had acted rightly, I wouldn't exist. But I can accept that without wishing that I had never been born."

I think I'm happy with this, so I'll stop here.

Does Intrinsic Value in Nonconscious Objects Create Problems for Property Rights?

So I wrote earlier about the idea of nonconscious objects having intrinsic value, and I was wondering about the implications of what I said for our normal conceptions regarding property rights. Basically, I argued that some objects, like the Grand Canyon or Niagara Falls, have the inherent capacity to inspire significant reactions in people. Accordingly, it seems fair to say that they have some kind of intrinsic value, and that therefore it is somehow wrong to destroy them wastefully; that is, it doesn't take proper account of this value to "destroy" them without good reason for doing so.

It occurred to me, though, that this account might seem to be at odds with our normal ideas about property rights. I figured it might be worth writing briefly about whether this is the case. I'll bring up two issues here, discussing neither in much depth (it's Friday, dammit). The first is whether the existence of intrinsic value in nonconscious entities could imply that we don't fully own our property. The second is whether intrinsic value creates problems for our ideas about just appropriation.

So why would intrinsic value have any bearing on whether or not we fully own our property? Well, the issue arises from the claim that it's wrong to destroy something with intrinsic value in the absence of a good reason for doing so. Does this mean that we could be entitled to stop someone from destroying something on her own property if she owned it? If so, this would clearly have significant implications for the way we think about our relationship with our property.

I think that we would have to start by pointing out that if someone were going to wastefully destroy an object with significant intrinsic value, she could probably sell it to someone else, or a group of people, who would clearly value it more than her. In his essay, "Liberty, Markets, and Environmental Values: A Hayekian Defense of Free-Market Environmentalism," Mark Pennington wrote, "...a case surely can be made that it is precisely for the ends that people value most highly that they should be required to make a personal sacrifice, including perhaps a material sacrifice." I think this makes some sense.

And if the object's owners were prepared to forgo such payment in order to see the object destroyed, then it seems clear that we would want to say that she had a reasonably strong interest in destroying the object, and that this could very well constitute the kind of "good reason" which would make legitimate the destruction of an intrinsically valuable object.

But what if transactions costs prevented the person from selling the object? Perhaps the object was extremely valuable, but it would simply be unfeasible to coordinate a trade? Would the owner be doing something wrong to destroy it? It seems that in this case, we would need to come up with a relatively good reason for overriding the property rights of the owner; if she rightfully owned the object, then we would generally want to say that the ownership rights included the right to destroy the object. This seems most obvious if we say that the owner created the intrinsic value in an object. Given that the value was "put into" the object by the owner, it seems that she would have every right to destroy that value.

However, I think that this intuition becomes slightly less clear if we suppose that the intrinsic value was a natural feature of the object. I don't think that this unclarity reflects that we don't believe that property rights should be respected. Rather, I think it is a consequence of an inadequate understanding the second issue that I wanted to touch on, which asks what kinds of things we can justly appropriate, and what that appropriation entails.

If you somehow come to own the Grand Canyon, and then you decide that you want to destroy it (for no good reason), I think that other people would be right to object. But this is not because you shouldn't have a right to do what you want with your property. I think it's more because people would object to the idea of you could justly be said to own something like the Grand Canyon. It just seems like something that a person couldn't fairly appropriate for themselves.

And I think that on some level, that sounds right. Objects with significant natural intrinsic value do seem to belong to all of us; it simply wouldn't be right for someone to declare himself the exclusive owner, with the right to destroy the object if he chose. But if we take to its logical end, then we not only restrict the appropriation of the Grand Canyon and Niagara Falls, but also the appropriation of a beautiful forest or scenic beach front.

I think that there is some intuitive strength to the idea that individuals should not be able to simply take such natural wonders for themselves, excluding others from accessing them. This idea seems grounded in the notion of Pareto improvement. In Anarchy, State, and Utopia, Nozick writes, "It will be implausible to view improving an object as giving full ownership to it, oif the stock of unowned objects that might be improved is limited. For an object's coming under one person's ownership changes the situation of all others. Whereas previously they were at liberty...to use the object, they now no longer are." While this is a problem for all acts of appropriation, it seems especially significant when we are able to say that without any human improvement, an object naturally has the capacity to inspire strong positive reactions in people. Why should one person be allowed to appropriate all the benefits from these natural objects for themselves?

But it's not as if privatization can't be Pareto improving. I don't want to say more about this just now, because I haven't thought it out enough. But I want to appeal to the idea that human stewardship can augment the intrinsic value in natural objects, and make them more accessible and beneficial to the people who would have enjoyed them in their natural state. For example, creating hiking trails and camping areas on a beautiful mountain can enable more people to enjoy their beauty. However, I want to take into account some important objections raised by G. A. Cohen, which I'll get into some other time. For now, I'm just going to leave this as an unfinished project.