Econ 101: Value, Values, and Valuation
If citizens are nurtured to assume that others, whether governments or businesses, "create jobs," they will not engage in the difficult, character-forming work of creating value.
If you have followed the US presidential election this year, you know that there has been a strong emphasis on the importance of jobs and the economy. What is painfully absent from the public discussion is a robust discussion of value and the role that individuals and institutions in various social sectors play in creating unique value. We need to go back to Economics 101 to understand and pursue flourishing societies, and to recognize what elected officials can and cannot contribute to that end.
As an entrepreneur, my mission is to create value for my target market. I must provide sufficient value that my clientele is not only willing, but happy, to give me something of value—whether that is their attention, their money, or another form of capital. Value is the currency of every non-coercive cultural exchange, commercial and non-commercial, profit and non-profit. For example, this week I committed time to go and hear Amy Sherman lecture on vocational stewardship. Her lecture convinced me to purchase her book, Kingdom Calling. Amy created sufficient value first to secure my time and attention, and then to make a commercial transaction in selling a book, and finally to gain social capital by garnering a mention here.
Commerce, defined as voluntary value exchange, is a cultural constant from simple agrarian societies to the most complex capitalist societies. Thriving entities (farms, artisans, manufacturers, consultants, and so on) presently deliver unique value, and most can articulate it in a "unique value proposition" that is the core of any viable business plan. The leaders of such vibrant organizations are never content with past value created. They understand that every transaction—whether selling bread or microchips—hinges on the ability to create value now.
Value creation is defined and constrained by a hierarchy of values. The Charlottesville Investment Collaborative (CIC), a local microenterprise initiative, is an excellent case study. The board of CIC places a premium on value creation by those who are poor, refugees, and former prisoners in our community. They understand that jobs are the adjunct of value. Consequently, rather than running a "job placement program" they are creating value by enabling marginalized populations to create value and wealth. They are catalyzing and mentoring new businesses that are started, owned, and run by those who otherwise face enormous structural obstacles to starting new businesses.
All great organizations—not just social startups—have core values that are manifest in all they do. These convictions and commitments shape the ways they manage all of their relationships—with clients, vendors, employees, the community, and their local environment. The best leaders actively develop and adhere to solid core values that shape institutions for good. Will and Chris Haughey, who founded Tegu, a unique magnetic wooden toy company, could reduce their costs in many ways. They could use lower quality wood, get cheaper labour, or outsource production so that they don't know the details. They won't. They are committed to sustainable forestry, developing their employees in Honduras, and community development. Their core values are central to creating value for all of their stakeholders.
Businesses, think tanks, artists, non-profits, individuals, and even governments attract clients and investors based on the value that they create and the values that they embody. When a proprietor or manager is hiring a new employee, she appraises the candidate on the value that person might bring to the organization and makes an offer commensurate with the anticipated value. Likewise, when one business is considering acquiring another business, the central questions are valuation questions: How much value does this company create, and for whom? Are the company's core values commensurate with those of the acquiring company? Similarly, cities, states, and even nations attract denizens and their commerce by establishing rule of law, fostering social trust, and encouraging innovation—in short, by making it as just, safe, and easy as possible to create, exchange, and enjoy value.
Valuation is inseparable from the character and capacity of people—and particularly of leaders. Great investors put their money, time, and social capital into leaders who have well-ordered values and demonstrate brilliance in creating value. Wise investors understand that in a world of constant change, the adaptive capacity to create value is the touchstone of enduring communities, institutions, cities, and nations.
Capitalist, Consumerist Self-Justification?
I have argued that value is the currency of every non-coercive cultural exchange. Is this simply a whitewashed version of capitalist consumerism clothed in "value" language? Is economic utility implicitly the highest value, trumping all others? Absolutely not.
The most glaring demonstration that economic utility is not the highest value is human trafficking. Traffickers undeniably deliver a "service" that clients value and pay for. Trafficking unquestionably lines the pockets of those who do it. And it is manifestly evil.
Value is the currency, not the measure, of cultural exchange. In all cultural exchanges, both exploitive and redemptive, one party provides an artifact or service that another values sufficiently to make an exchange. This is precisely why the formation of virtue and the right ordering of values is of such importance, to which we must now turn.
Implications for Christians
The foregoing analysis of value is descriptive. It reflects the way that the Triune God has ordered the world whether or not a person recognizes his existence or his work of redemption. For those who have been reconciled to God in Christ and have thus been made bearers of his message and kingdom in this beautiful and broken world, creating value is even more important.
First, the gospel of the kingdom is not only reconciliation with God, it is the reordering of our loves. Jesus says, "The kingdom of heaven is like treasure hidden in a field, which a man found and covered up. Then in his joy he goes and sells all that he has and buys that field" (Matthew 13:44). The good news of the kingdom reorders our loves (our values) with these words: "You shall love the Lord your God with all your heart, soul, mind and strength, and you shall love your neighbour as yourself," and "Seek first His kingdom and righteousness."
Second, our King entrusts us with resources and sends us into the world of value exchanges to display his worth. This is perhaps most explicit in the parable of the talents (Matthew 25:14-30). A master entrusts three servants with his wealth. Two put their master's money to work and thereby create value and wealth, doubling what was entrusted to them. The master commends them both: "Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master." The one who, from fear, buries what was entrusted to him in a field and does not engage in this cultural exchange is cast out into outer darkness. If we would enter our master's joy, we must boldly enter the risky world of value creation and exchange in a way that declares the supremacy of our King.
In a world disfigured by idolatry and normed by consumerism, how can we hope to create value that embodies God's purposes? We create value not merely by providing what consumers want, but by doing good, by acting in ways that reflect God's redemptive purposes. Our work is a visible display of God's work in restoring our disfigured humanity to dignity, renewing our wise stewardship of the earth, reconciling us to one another, and supremely reconciling us to God. Among those who assume that "the consumer is always right" and that economic utility is the measure of value, we embody a new reality.
For those who have found the treasure in the field, and enter unflinchingly into the world to "put to work" what is entrusted to them for the good of their neighbours and the glory of God, problems and crises are opportunities to do good and create value. So they solve problems and create value in ways that restrain evil, restore peace, and displace oppression—and in so doing create foretastes of the Kingdom of God. The International Justice Mission doesn't just show mercy to the oppressed; it creatively restrains evil by ensuring that public justice systems effectively perform their role to protect the poor. Grace Period, a Pittsburg-based non-profit displaces oppression by offering a compelling alternative to payday lenders that breaks oppressive cycles of usury. May their tribes increase!
Creating value in ways that create foretastes of the Kingdom is predicated on the reordering of our loves. Apart from grace, we are remarkably poor judges of what is good. Our first parents chose to taste the fruit rather than obey their loving Creator, and we are no better. We live in a world wracked by sin, and we ourselves are disfigured by our disordered loves. How can we hope to create value, reflect beauty, do good, restrain evil, and displace oppression in this broken world when our own loves are so often disordered? By grace alone.
How do we grow in grace and cultivate virtue? Like the servants entrusted with the two and five talents, we act. Our Spirit-dependent, faith-full action involves creating compelling value for our non-Christian neighbours in all spheres of life from plumbing to fine art. It entails working shoulder-to-shoulder with non-Christian friends and neighbours to solve trenchant problems and create value. It includes raising our children as resident aliens in this world who practice public virtue not merely by behaving morally, but by reflecting the face of their Father in doing good. I am increasingly convinced that this growth in grace will involve incubating gospel enterprise by creating space (likely in our homes) and investing resources in wise, courageous visionaries who have the grace to start redemptive enterprises in every sector of our shared life.
As we act, we freely confess our disordered values (idolatries), and engage in active repentance. This is where our children, parents, colleagues, friends, clients, vendors, investors, employees, supervisors, and neighbours see the pearl of great price. They witness an imputed virtue that sets us as free from the tyranny of achievement as from the despair of guilt and shame.
As Christians engaged in creating value and cultivating virtue, we recognize that candidates for office must create social value by establishing justice, commending virtue, cultivating social trust, and encouraging innovation. Paradoxically, government has simultaneously tremendous power and limited influence. If citizens are nurtured to assume that others, whether governments or businesses, "create jobs"—rather than recognizing that jobs are the adjunct of value creation, which is the responsibility of every member of a community—they will not engage in the difficult, character-forming work of creating value. Furthermore, without virtuous communities to remind us that an economy is properly measured not by the goods it produces but by the good it does, we may run headlong into ruin. Lesslie Newbigin unmasks the idolatry of growth for its own sake when he writes, "Growth is for the sake of growth and is not determined by any overarching social purpose. And that, of course, is an exact account of the phenomenon which, when it occurs in the human body, is called cancer." In the face of this chilling diagnosis, we dare not bury in the field what was entrusted to us. Our future hope compels us to create value—full foretastes of the Kingdom now, that we may hear the voice of our Lord, "Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master!"