Each case shows how the concrete actions of a group of citizens can prompt us to reflect on what is needed for a just and sustainable economic system. In one case, activists raised questions about the responsibilities of business, in the second about the significance of local economies, and in the third about the contributions of the public sector. Through these movements, Jane L. Collins maps a set of cultural conversations about the types of investments and activities that contribute to the health of the economy. Compelling and persuasive, The Politics of Value offers a new framework for viewing economic value, one grounded in thoughtful assessment of the social division of labor and the relationship of the state and the market to civil society.
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The Politics of Value
Three Movements to Change How We Think about the Economy
By Jane L. Collins
The University of Chicago PressCopyright © 2017 The University of Chicago
All rights reserved.
The head of the local association of manufacturers was adamant: "If you want to create wealth, you've got to mine it, make it, or grow it. If you aren't making something, you're not creating wealth, you're just shuffling money around." When the skeptical interviewer pointed to the significance of services in the state's economy, he countered, "I guess I do include tourism. You could also throw in health care. If you look at total revenue, health care would actually be number two. I don't think of it that way though. [Health care] is not a wealth creator, it's a wealth redistributor."
Given that the service sector accounts for about 80 percent of the US economy and includes not just the extremely important health care industry but also such booming sectors as telecommunications and finance, the business leader's statement was somewhat puzzling. Clearly these activities involve vast flows of resources and form part of gross domestic product (GDP), the official measure of national accounts. They employ millions of people, provide essential services, and stimulate demand in other sectors. To argue that they do not "create wealth" seems counterintuitive. Of course the businessman's assessment was not universally shared. Presented with this quotation, a public school teacher quipped, "And so under that philosophy, plastic dog shit is more valuable than running a snowplow?" These individuals held fundamentally different views about what makes the economy work, creates social benefit, and is worthy of acknowledgment and remuneration.
This book maps a set of cultural conversations about the kinds of investments and activities that contribute to the health and vitality of the economy — in essence, about what creates economic value. It presents and analyzes three cases where citizens have acted to motivate reflection on what is needed to create a just, sustainable, and well-functioning economic system. In one of these cases activists raise questions about the responsibilities of business, in a second, about the significance of local economy, and in a third, about the contributions of the public sector. This is not a story about the formulations of professional economists, except as these circulate through popular culture; it is concerned with vernacular discourses and practices — the ways people conceptualize and enact their understandings of the economy and its workings in daily life.
At first glance it seems that "value" is more or less a closed topic, because in recent years market frameworks have come to dominate most discussions of the economy. There appears to be widespread agreement about what economic value means and how to measure it. GDP growth, profitability, and share price are some of the accepted metrics of economic health, and unrestrained markets and fiscal responsibility are the ways to get there. The New York Times reports that opponents of Medicaid expansion in Louisiana say that increased coverage for 300,000 uninsured citizens would be too expensive. Citing increased costs, U.S. News and World Report asks, "Is a College Degree Still Worth It?" Stories like these suggest that questions about what contributes to the growth and stability of the economy have been put to rest by the inexorable logic of market transactions and cost-benefit calculations.
But sometimes the "settled principles" of market value become unsettled. Events unfold in a way that opens space for public discussion of big questions: Do corporations have responsibilities to workers and communities, or should they simply pursue the bottom line? Can we rely on global markets to circulate goods and services in ways that enrich local economies? Does the public sector contribute to the health of the economy, or does it waste scarce resources? In the wake of the financial meltdown of 2008, as in other periods of economic crisis, people began to enunciate alternative understandings of what makes the economy work. Sometimes their views were based on deeply held ideological commitments; sometimes they reflected a nostalgic embrace of the economic arrangements of the past; and in some instances they represented an innovative new position. This book explores three social movements whose "revaluation projects" challenge the notion that the market is the sole arbiter of value — and offer alternatives.
Three Revaluation Projects
Case 1. Value and Corporate Responsibility: Benefit Corporations
The financial crisis of 2008 brought new scrutiny to US business. Some observers saw the crash as resulting from three decades of growth in, and deregulation of, the financial sector. These interlocked trends had allowed and encouraged Wall Street bankers and financial executives to create risky new investment instruments and to forgo traditional forms of capitalization. For nonfinancial corporations, the need to compete with these investment "opportunities" helped drive a shift from multifaceted economic goals to a single-minded focus on share price as the measure of success.
Emerging in the 1970s and growing in influence over the next three decades, "shareholder value doctrine" suggests that managers should run companies for the sole purpose of increasing their stock price and returning profits to investors. Those who support this concept cite Milton Friedman's adage that the "sole responsibility of business is to make profit." Over the course of the 1980s and 1990s, corporate boards began to construe the "duty of care" and "duty of loyalty" that corporate charters require of managers to mean that they were legally bound to maximize profit and return it to shareholders — any other approach would be considered malfeasance. There were dissenting voices, of course, mainly in academic departments and law schools. But some dissent took more tangible forms as well. In 2010 the state of Maryland passed the first law to charter a "benefit corporation" whose board is not only allowed but required to consider — in addition to share price — how the firm's actions affect employees, customers, the community, and the environment. By 2016, thirty-one states had instituted such statutes.
Promoters of benefit corporations wanted to replace a market-based assessment of business success built on a single metric with more complex, multivalent systems for judging a firm's performance. Groups in civil society — from labor unions to environmentalists — advocated these new metrics as part of a different approach to corporate governance. The benefit corporation's new framing of corporate responsibility raised questions about where corporate profits come from — whether only capital and entrepreneurship contribute to earnings or whether workers, natural endowments, and place-based infrastructure play a role. Activists asked what role corporations play in a broader societal division of labor, what responsibilities they have to their multiple stakeholders, and what government could and should require of corporations in return for chartering them, providing infrastructure, and giving them rights. Chapter 3 of this book tells the multisited story of how individuals and groups involved in the benefit corporation movement mobilized new understandings of economic value.
Case 2. Value and Place: Slow Money
As the US economy sagged after the 2008 crisis, facing slow employment growth, declining labor market participation, low consumer confidence, and increased poverty rates in many parts of the country, citizens began to intensify experiments with various forms of "alternative economy." One of these projects — a nonprofit network known as Slow Money — focused on revitalizing local food economies through face-to-face investment. Nationwide in scope but with some of its most vibrant centers in Vermont, Maine, Texas, the Pacific Northwest, and Wisconsin, the movement called for "bringing money back down to earth," arguing that the economy had become "too fast," companies too big, and finance too complex. Slow Money's principles urged radical shifts in how people invest, how they consume, and how economic resources circulate through communities.
What distinguished Slow Money from other experiments in "local economy" was the attention it gave to alternative forms of investment and economic coordination rather than more familiar face-to-face forms of grassroots production and trade such as community-supported agriculture, cooperatives, and farmers' markets. Beginning in 2008, a loosely affiliated network of local groups spread across the United States, launching investment clubs and Slow Money funds. These groups negotiated with local officials to obtain public debt financing for local projects and for public bonds to buy farmland. They encouraged farmers, buyers, and processors to ramp up alternative supply chains, and they experimented with land trusts and conservancies. The Slow Money movement consciously sought to deepen and intensify local economic connections, building what economists call backward and forward linkages. It provided space for investors and business owners to incorporate "externalities" into economic decision making in order to value resources and labor, goods and services, at what activists perceived as their "true cost."
Slow Money's projects offer the opportunity to observe civil society groups taking the lead in creating new economic relationships based on an alternative system of valuation. It shows participants grappling with questions such as How do "places" contribute to economic growth? How is globalization eroding place-based assets? What kinds of value do social articulation and "embeddedness" create? Chapter 4 describes how concepts of economic value shape their efforts.
Case 3. Value and the Public Sector
In the spring of 2011, elected officials in the state of Wisconsin rescinded most collective bargaining rights for public sector workers and cut the state budget in ways that reduced public services. In the noisy months of protest and civic argument that followed, conservatives justified these actions by arguing that public employees "do not produce anything" and are a net drain on the public purse. Some media reports referred to public workers as the new "welfare queens." State workers and their supporters responded that they produced engineers, doctors, healthy children, roads, bridges, garbage collection, and clean drinking water. They argued that the services they provided made everyone healthier, better educated, safer, and more productive. Throughout 2011, as a dozen other states passed laws similar to Wisconsin's, this contest was replicated in statehouses, public meetings, and coffeehouses around the country. Legislators and the public argued over whether state workers were overpaid relative to their contribution to society and whether they deserved their relatively generous pensions, health benefits, and union rights.
These questions about public workers thrust into view the long-standing question of the proper role of the state in supporting the economy. If the era from the 1930s to the 1960s saw an unprecedented expansion of government's role, from the 1970s onward the voices of small-government conservatives gained sway in politics and policy. Proponents of the political rationality known as neoliberalism advocated cuts to government programs, both to reduce taxes and to open new spaces for private investment. On a philosophical level, they argued that large government was corrosive of liberty. On a practical level, they argued that deficits and debt had reached crisis proportions and that the only feasible response was to slash budgets. Rejecting Keynesian concepts about government spending as countercyclical stimulus and New Deal precepts about government investment in the economy, they called for a new era of austerity.
Chapter 5 tells the story of the conflict over whether and how the public sector contributes to the economy as this debate unfolded during the 2011 Wisconsin protests and their aftermath. It explores the ways individuals and groups grappled with questions such as How does the state support economic growth? How should government contribute to the well-being of citizens? What are the politics of budget cutting and austerity? It describes how groups opposing the loss of bargaining rights for state workers and cuts to state services in the 2011 budget tried to reframe the issue to make the public sector's contribution to economic growth visible. The protests over changes in public sector work differ from the other two cases in being a defensive movement — an attempt to hold on to an existing set of social arrangements — rather than a proactive attempt to construct a new set of valuation practices. But like the other projects, they contested a simple market framework for assessing the utility of a realm of human activity and offered an alternative, and contestatory, vision of what matters for the economy.
What We Talk about When We Talk about Value
"Value" is a word with innumerable meanings. In common speech, people tend to use it interchangeably with the broader term values — often as a synonym for worldview or cultural system. "Values" can encompass attributions of importance or worth based on rubrics ranging from philosophical to utilitarian, religious to aesthetic. It can signify what individuals, or society as a whole, "like," or "prefer," or what they hold to be in their "interests." In the words of anthropologist Daniel Miller, in this sense the term is ubiquitous, "used by more or less everyone at more or less any time."
Economic value is not the same as value in this broader sense but refers to the way individuals and groups assess what contributes to the growth and health of the economy. This is always a discursive move, but it is a discourse about social life and materiality. To say something has economic value is to claim that it matters for the continuity of our way of life. In contrast, to say it embodies our "values" is to place it in the realm of the intangible and immeasurable. The movements described in this book all claim that our contemporary accounting practices fail to register activities they deem essential for social life and that this failure has material consequences. Their "revaluation projects" seek to remedy this failure, calling for the acknowledgment and measurement (and sometimes even pricing) of goods and services that fall outside the formal rubric of the economy.
This call for acknowledgment may sound familiar, since it echoes other revaluation projects past and present. It is, for example, the gist of the long-standing feminist argument about housework and the unwaged labor of caring for children, the elderly, and the ill. To a striking degree in contemporary capitalist economies, this work remains unpaid, unmeasured, and thus largely invisible to policy and to all the official frameworks that assess economic transactions. Such a call for acknowledgment also goes to the heart of environmentalists' concerns about negative externalities — the unintended consequences of economic activities such as air and water pollution, depletion of resources, and climate change. When these consequences are not measured, priced, or taken into account in some other way, they are likely to be absent from public deliberations. For many environmentalists, making these effects visible is about finding a way to measure and value unpriced "assets" such as clean water and air, hydrologic cycles, soil fertility, and resource endowments. A third example of a conflict over acknowledgment is the way contemporary capitalist economies assume abstract buyers and sellers interacting in an equally abstract market. From the market's perspective, it does not matter whether economic arrangements are local or global, or whether interactions are single-stranded or dense and complex, despite the huge consequences for producers and consumers and their communities, who often respond by calls for market protection or subsidies. This blindness to the social embeddedness and location of market transactions is another significant "omission" from neoclassical or neoliberal economic frameworks. All the processes that render certain kinds of economic contributions invisible are linked to power, and all have racial, class, and gender dimensions. At critical moments, these kinds of "forgetting" become sites of struggle as advocates seek to forge new vocabularies and practices that take unperceived contributions into account.
As these examples suggest, contests over value have material, social, and discursive dimensions. They are discursive in that they involve a struggle for recognition. But that struggle occurs within — and sometimes seeks to change — a societal division of labor. As economist Massimo De Angelis has written, "Value does not spring out of individuals isolated from the rest of society" but "articulates" the individual body to the social body. This is because a society's valuation practices "recognize" and assign worth to each individual's contributions (or fail to do so). They provide the framework for deciding what kinds of work will be done and how it will be organized, for managing relations among elements of the economic system, and for distributing the social product. As anthropologist David Graeber has argued, value is thus integral to the way societies reproduce themselves and change, guiding our collective efforts to make and remake our institutions.
Excerpted from The Politics of Value by Jane L. Collins. Copyright © 2017 The University of Chicago. Excerpted by permission of The University of Chicago Press.
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Table of ContentsAcknowledgments
Chapter 1. Introduction
Chapter 2. Value and the Social Division of Labor
Chapter 3. Benefit Corporations: Reimagining Corporate Responsibility
Chapter 4. Slow Money: The Value of Place
Chapter 5. Value and the Public Sector
Chapter 6. Conclusion: Comparing the Three Revaluation Projects