Former Bank of England governor Mark Carney’s BBC Radio 4 Reith Lectures have restimulated interest in the topic of ‘value’. For Carney, the first decades of a century of crisis have been characterised by a continuing commitment to abstract ‘subjective’ theories of value. These subjective approaches see value as relative, not absolute, resting in the eye of the beholder and expressed via the medium of market price. The mainstream adherence to such a view of value, Carney suggests, has contributed to everything from the 2008 financial crash, climate catastrophe, underinvestment in infrastructure and the undervaluing of health and social care exposed by the COVID-19 crisis. The solution, he argues, is to return to more concrete objective assessments of the real and true value of things.
It is certainly bracing to hear such a senior player in the world of finance make these criticisms of what has passed for economic common sense in the contemporary age. But, as I show in my new book, Value, it only tells half the story of how the world has unravelled in the years since the Great Recession. Whilst subjective theories of value undoubtedly contributed towards the 2008 crash by distorting incentives for markets and states alike, the reaction to the crisis has seen things swing the other way. Offering a persuasive alternative for activists and electorates suspicious of the seemingly abstract economy of global capitalism, objective theories of value that concretely root the worth of things in specific people, places and things have underpinned the populist insurgencies of the past five years.
As I show in my overview of theories of value through time, the politics of value have typically circulated around what Mariana Mazzucato calls the ‘production boundary’ separating out productive activities and people from those considered unproductive. This is a feature of the classical political economy of Adam Smith, David Ricardo and the Physiocrats, aswell as some adherents of traditional Marxism. Such approaches see value as a substance produced and possessed by certain classes and groups. Likewise, the politics of value have also centred on precisely where value lies, where it is created, and where it should be contained. In his magisterial More Heat Than Light, Philip Mirowski depicts how, amidst capitalism’s ascendency, the mercantilists debated whether value was produced and realised within national borders or between those borders as a result of trade, just as twentieth-century debates raged between socialists who saw value produced by workers in their workplaces and neoclassicals who saw value generated in markets through consumption.
Value argues that the national populist upheavals of recent years have been grounded in similar ‘objective’ theories that locate value as a ‘substance’ concretised and contained within national borders. Such an understanding of production and trade as a zero-sum game has guided Brexit on the right and ideas around ‘Lexit’ on the left, as well as Trump’s revanchist project of repatriating manufacturing and closing the trade gap with China in order to ‘make America great again’. At the same time, as scholars like Jan-Werner Muller have noted, the celebration of certain groups as more productive than others has been a recurring feature of populism on both left and right. Targeted at a succession of purportedly unproductive outsiders, this poses the hardworking national ‘people’ against a series of foes spanning global elites, bankers, migrants and the unemployed.
As I argued with Matt Bolton in Corbynism: A Critical Approach, this ‘austerity populism’ tells the real story of the period of upheaval following the 2008 crisis. It has driven a divisive, post-truth politics that has fragmented the international order and placed liberal democracy in peril. At its heart lay a series of claims informed not by the abstract and subjective theories of value that have constituted economic common sense for decades now, but rather a sentimental attachment to objective ‘substance’ theories of value as something rooted in concrete people, places and things.
Confronted by the subjective theories of value that Carney criticises and the objective theories of value implicitly espoused by the populists, the truth, as always, lies somewhere in between. Value is not solely subjective, nor solely objective, and abstraction cannot be escaped. Rather, as I argue in the book, value is an objectification of subjective activity and desire, an abstract form assumed by concrete human practice in which the latter is often hidden or unrecognisable to us – take, for instance, how the more important forms of work such as health and care services are often poorly remunerated, or how the way our work is measured conflicts with how we experience it.
As a form in which our subjective activity is objectified, value expresses not anything intrinsic to people, places and things, but rather the abstract relationship between them represented in money. Today, the politics tentatively emerging from the end of neoliberalism and populism’s declining appeal in the wake of the pandemic might be better matched to this middle route through the theory of value. Just as nationalist substantialism represented the death knell of neoliberal relativism with a return to the concrete, so too does the emerging technocratic return to the centre potentiate an escape from national populism less suspicious of the abstract. A restoration of global institutions and free trade resonates with the idea that value is not a zero-sum game where what is lost by one party is won elsewhere, but rather expresses the abstract relation between people, places and things enacted by means of exchange, and not anything concrete resting within them.
The ‘new normal’, however, cannot simply restore the status quo. The post-pandemic reconstruction of centrist technocracy may roll back the productivist populism of the period following the 2008 crisis, and will likely be less enthusiastic about the neoclassical economics that helped drive the crash. But whilst this might represent a shift in the politics of value, value’s compulsive power to determine how and what we prioritise in life will remain undiminished. Even as it misrepresents the world to us, ordering our lives against our wills, we depend upon value’s expansion and growth to live, work and subsist. This compels us to act against ourselves and others in support of a system constructed on our own exploitation, for justified fear of failure, economic collapse and the far worse alternatives that may lie in wait beyond it. What the current crisis demands, as Martin Hagglund writes in his recent instant classic This Life, is a ‘revaluation of value’ that contests, creates and institutionalises other ways of expressing our anxieties and priorities in the context of the finite lives on Earth we lead as human beings lacking any promise of eternal salvation.
I read Hagglund’s often moving treatise as the first wave of the pandemic forced human mortality front and centre of the public and political imagination. I had already finished writing Value, but the steps Hagglund recommends for the revaluation of value act as a salve for those who may find it hard to stomach the slightly pessimistic picture with which I end the book. The revaluation Hagglund proposes seeks to stimulate new objectifications of our subjective activity that, whilst inevitably abstract and alienated from our practical experience of the world, may mark an improvement on the forms through which our relations are mediated today. The pandemic and the ensuing health, social and economic crisis it sparked have already begun a revaluation of the value of forms of work that were previously underpaid and neglected, now newly revealed as central to society’s subsistence and reproduction. The struggle now is for our forms of value to accurately capture the new status of those workers classed as ‘essential’ in the crisis, spanning everything from retail to waste and elderly care to education. This is a political question, rather than purely economic one, and will require organisation and regulation.
For the time being at least, it is in all our interests to continue expanding and valorising economic value for the sake of our societies and selves. But, in the context of the current crisis, the status quo constitutes just the basis for the long process of rebuilding the subjective relationships that value expresses, remaking the notions of value that determine what we prioritise, and rethinking the objective forms in which that value appears. Rather than a reversion to the concrete and objective aspects of value against the abstract and subjective such as Carney seems to be suggesting, the struggle is to reconnect them so that the one more accurately reflects the other.
This piece was originally published at the Polity Books blog.
Frederick Harry Pitts is a Lecturer in Work, Employment, Organisation & Public Policy at the University of Bristol School of Management and co-editor of Futures of Work.