Grappa-Ling With Mark Carney (1)

I've been reading Mark Carney's book Value(s). It seems a reasonable read given his new place in Canadian political affairs. It's a serious book by a serious thinker, which I must say is a refreshing change in a landscape dominated by demagogues. Will I support everything he says? No. But the thinking here is well worth engaging.

Here (I say after having read a chapter and a half) is the core argument: value is based on values. 

He sets this up with an argument offered by Pope Francis:

Our meal will be accompanied by wine. Now, wine is many things. It has a bouquet, colour and richness of taste that all complement the food. It has alcohol that can enliven the mind. Wine enriches all our senses. At the end of our feast, we will have grappa. Grappa is one thing: alcohol. Grappa is wine distilled.

Humanity is many things – passionate, curious, rational, altruistic, creative, self-interested. But the market is one thing: self-interested. The market is humanity distilled. And then he challenged us: Your job is to turn the grappa back into wine, to turn the market back into humanity. This isn’t theology. This is reality. This is the truth.

Now I like this sentiment for many reasons. For one thing, it sets his values - and mine, and apparently Pope Francis's - apart from the sort of fundamentalism that reduces everything worthy in humanity to a single calculation based on self-interest. A lot follows from that.

And in particular, this calculation pushes back against a dominant contemporary theory of value: that value is based on price. This is important because it means that price isn't based on value, it is a relative and fluctuating measure based on willingness to pay, as determined by the (value-free) free market. A lot follows from this.

For example, in my own world, we have to choose between which research projects we pursue and which we don't, since we have limited time and resources. Where I work, the dominant metric has sometimes been whether there is a private sector company willing to pay for the work. Without commercial partners, the work will not proceed. This one fact has delayed my own work on personal learning environments by decades, because there's no market demand for a free product that makes access to education free.

But if values determine value, what are those values? Carney takes a stab at it in the first chapter:

The experience of the three crises suggests that the common values and beliefs that underpin a successful economy are:

• dynamism to help create solutions and channel human creativity;
• resilience to make it easier to bounce back from shocks while protecting the most vulnerable in society;
• sustainability with long-term perspectives that align incentives across generations;
• fairness, particularly in markets to sustain their legitimacy;
• responsibility so that individuals feel accountable for their actions;
• solidarity whereby citizens recognise their obligations to each other and share a sense of community and society; and
• humility to recognise the limits of our knowledge, understanding and power so that we act as custodians seeking to improve the common good. 

Now if I were to select a set of basic values that underpin everything I do, these wouldn't be the values I would choose. That doesn't make them bad values, by any means, and a politician could do a lot worse than this (examples aren't hard to find). But I don't really think this set of values suits the purpose to which they're being applied.

To my mind, there are two (not necessarily conflicting) sets of values at work that we need to consider: first, those describing the mechanisms that will underpin a successful society (and not just a successful economy, though Carney sometimes conflates the two); and second, those describing the purpose or reason we want a successful society in the first place.

Carney's list blends the two. We see measures that make the economy (society) work better, such as fairness, responsibility and solidarity; and we see measures that speak to the purpose of an economy (society): creativity, protecting the vulnerable, improving the common good.

Moreover, when looking at those that describe the purpose of an economy (society), Carney is focused almost exclusively on a broader social purpose. Not that there's anything wrong with that, but I don't think we begin with a social purpose; rather, a social purpose (just as a social knowledge) emerges from the very real concrete practical day-to-day purposes of individuals.

I think Carney knows this, if we are to judge by his account of Adam Smith in the next chapter. Here's an except from his summary:

The central concept that links all of Smith’s works is the idea that continuous exchange forms part of all human interactions. This is not just the exchange of goods and services in markets, of meanings in language and of regard and esteem in the formation of moral and social norms. Humans are social animals who form themselves in action and interaction with each other across all spheres of their existence. 

Smith’s goal in writing The Theory of Moral Sentiments was to explain the source of humankind’s ability to form moral judgements, given that people begin life with no moral sentiments. He believed that we form our norms (values) as a matter of social psychology by wishing ‘to love and to be lovely’ – that is, to be well thought of or well regarded. 

Smith proposed a theory of ‘mutual sympathy’, in which the act of observing others and seeing the judgements they form makes people see how others perceive their behaviour (and therefore become more aware of themselves). The feedback we receive from perceiving (or imagining) others’ judgements creates an incentive to achieve ‘mutual sympathy of sentiments’ that leads people to develop habits, and then principles, of behaviour which come to constitute their conscience.

This long excerpt is necessary because it runs so contrary to contemporary caricature's of Smith as a market fundamentalist believing in only in the 'invisible hand' as a source of value and values. There's far more to it, and as I argue in Ethics, Analytics and the Duty of Care, it is this concrete, practical and day-to-day moral sentiment that defined what is right, good and valuable in our own lives. It is only after we have run any proposal through this filter than we can speak of value as being emergent from the marketplace.

I have a lot more to read from Carney's 508 page volume, but I think we're off to a good start.