Physics of Poverty series by Dr. Tara Thiagarajan, Chairperson, Madura MicrofinanceIn my last post, I mused about who actually knows what something is worth? Beyond survival, ‘value’ is simply collective perception, a construct of our collective mind. So what do we mean when we talk of ‘value’? What is our mind ‘valuing’ and for what purpose? For an entrepreneur this is a fundamentally important question. On a very simple level you could claim to be creating value so long as someone sees it as valuable enough to pay money for it. However, there are people willing to pay money for all sorts of destructive things like drugs and cigarettes and exorbitant amounts of money for completely worthless things like crystal swans. Of course that is my value judgement I’m imposing on it. I have friends that would argue me down that the drugs help their creative process and the cigarette smoking calms them and helps them be more productive. And as for silly looking crystal swans – some people derive happiness from having them perched on a shelf in their house. However, on the other hand, if you ask a large room full of people to name products that are of fundamental value to society, they will disproportionately name a few – two wheelers, mobile phones and internet access are ones that come up frequently.
In this are clues to the factors that define a more intrinsic value. We all see fundamental value in anything that enhances our capability. And this is not trivial. It is ultimately capability for survival, the need for which is implicit in the definition of life. We don’t use these every day for our immediate survival but if we have fast access to information, communication and mobility, we are better positioned to survive a number of possible calamities and disasters, if and when they do occur. Progress is about enhancing our capability and making it better, faster, cheaper and therefore more accessible. But what about all the other stuff - the drugs, cigarettes and swans?
The other stuff is more tricky. The brain is capable of creating constructs that extend beyond the moment. So at any given time we are constantly making trade-offs of a ‘feeling’ of well being in the present for the promise of well being in the future. We all implicitly discount time differently and do so differently at different times. The more distressed we are, the more we might value the now over the future – the drug high or the cigarette calm. And as for the swan, there are those things that feed indirectly into our sense of well being – our position relative to others in society. An expensive crystal swan might sit on a shelf as a subtle and almost subconscious symbol of the prosperity of a household and therefore the marriage value of progeny. Or it may be a symbol of accession into a class of society that affords certain social privileges. These are extraordinarily relative value perceptions. No one would pay tens of thousands of rupees for a small crystal swan unless they had a complex set of associations tied to it that were formed from numerous interactions.
So while some things have more fundamental and universal value propositions, for most things, value has to be defined not just by product but by the who, why and when behind the value constructs. Who would ‘value’ it and under what circumstances and why?