Value(s): Building a Better World for All

by Mark Carney

Value extraction can be thought of as the product of ‘moving around existing resources and outputs and gaining disproportionately from the resulting trade’.5 ‘Rent’ is the return to this activity, and it has been at best viewed as unearned income or, at worst, theft.

The paradox is that effective market functioning requires other sentiments, such as trust, fairness and integrity. Whatever its broader merits, if it is allowed to dominate, subjective value theory could sow the seeds of its demise by turning moral sentiments into market sentiments.

There has been a drift in fiscal policy, in a whole range of countries, towards individuals rather than public goods and towards the short term or the next electoral cycle rather than the long term. For instance, in the 1960s 75% of the US budget went into public goods of one form or another – infrastructure, schools, hospitals, transport and so on. And 25% went in some form of benefits to individuals. Today it’s exactly the other way around – 75% to individuals, and 25% on public goods. That is inherently short term. It sometimes solves immediate problems – but it doesn’t lead to a better long-term future and it doesn’t lead to optimism. If you don’t invest in public goods, and people can’t see that you’re investing for the long term, then it’s very hard to get a more optimistic society. You get a society where people are constantly concerned about ‘how much do I get compared to someone else’.