Outside Market Value

In an entry made earlier this year, when I wrote about lavender sticks, I criticized the determining of economic statistics in the following way, "The mere fact that lavender grows is, in and of itself, a blessing. We should be grateful, not only to our fellow man, but also to insects and to the earth. If people living in the city derive more pleasure out of the decorations and ornaments created by manufacturing it (lavender) than going to the movies, the fact that this value is not reflected in business statistics means that there is something very wrong with our present-day economics." I'm expressing my dissatisfaction that the places where lavender grows do not include the personal ornaments and household items that are made in their economic statistics. In the course of explaining this, I went a little too far when I said, "There's something wrong with (the field of) economics today."

I've heard that, in the field of economics, they are currently trying very hard to give ecosystems a numeric value. For example, in the August 9th edition of Science, Robert Costanza, a professor of ecological economics at the University of Vermont, and his team revealed the results of their study on how converting the habitat of plants and animals into agricultural and commercial land not only destroys the environment, but also ends up being a financial loss. This is apparently the result of researching 300 development projects throughout the world.

This team calculated the dollar value of various benefits that the abundant natural environment gives us such as climate regulation, soil formation, nutrient cycling, and the harvest of wild species for food, fuel, fibers, and pharmaceuticals and called it "ecosystem services." They then compared this to the value of the crops harvested from the farmland and/or the lumber from the trees cut down from the forest. In so doing, the difference in cost of preserving large tracts of wild nature and converting it into farm or commercial land would be an overall benefit of "at least 100:1." In other words, the more development that takes place, the more humankind loses.

In 1997, Dr. Costanza and his team estimated the "annual value" of undeveloped wild lands as "$38 trillion." Based on this humankind suffers an annual "loss" of $250 billion. This figure includes any income generated from the development. We are inclined to look only at things that we can see, and so in past economics this "nearsightedness" led to concentrating, not on natural capital, but only on "market" tendencies. However, Dr. Costanza tells us that "we have found that much of what is important to us is outside market value." We must take better care of these things "outside market value."

"Outside market value" might sound complicated, but, put simply, it means "things money can't buy." For example, making lavender sticks yourself is an experience money cannot buy. You may be able to buy lavender sticks at a store somewhere, but making them with your own hands is something no one else can do. This is a tremendous difference from buying them at a store. In the same vein, there's a big difference between making your own firewood and buying it at a store. The same also applies to making your own lunch and buying it at a convenience store. I think there's a tremendously invaluable difference between "doing yourself" and "buying things."

Somehow or other, we think of these things as being "too much trouble" and paying for something someone else has made. That is throwing away a "very valuable something". Why do we do that? A lot has to do with the "time" involved. However, the time gained is often wasted or else spent on "work" to gain even more time. If we continue to do this, we'll end up just "spinning our wheels", something I'd definitely like to avoid in life.

- MT