Market value and human value: Time to take it personally

Matthew Yglesias highlights a “Twitter rant” by a certain “KStreetHipster,” who eloquently raises a distinction between the need for things to be done and the availability of jobs to do them. “Lots of work exists. There are endless things in need of improvement. But jobs, those are far more scarce. A competitive resource,” KStreetHipster writes.[1] Yglesias understands KStreetHipster to be raising the issue of public or social goods,[2] those things needed by society, but which, as Friedrich Hayek recognized, the profit motive cannot support,[3] but that misrepresents KStreetHipster, who also wrote, “Look around. Work exists everywhere. There are schools to improve & bridges to repair. Roads to pave, and records to convert to electronic.”[4] Sure, many of those tasks are public goods, but not all of them.

We can extend this further. The Housing and Urban Development Agency (HUD) estimates that in January 2013, over 600,000 people were homeless.[5] In 2010, the Census Bureau estimates that there were over eighteen million vacant homes.[6] That math is pretty simple: If we forgive the discrepancy in dates, there are, or were, something like 30 vacant homes for every homeless person, not even allowing for homeless families or couples who could or would share homes. Utah, by the way, figured out that it would be more cost-effective to give homes to the homeless than to leave them on the streets.[7]

Unless we posit that all homeless people want to be homeless, that’s a market failure. The market is failing to match up supply and demand for housing. Matching up supply and demand is, by the way, the very thing that Hayek believes that ‘socialist’ central planning can’t do.[8] And what we’re seeing is that the private sector can’t solve the problem either, even though three categories of the real estate industry, including “Lessors of Real Estate,” “Offices of Real Estate Agents and Brokers,” and “Activities Related to Real Estate,” are among the fifteen most profitable industries.[9]

It’s also a failure of money, which is supposed to facilitate the exchange of goods and services. People can’t get jobs or they can’t get jobs that pay a living wage, so they can’t afford rent.[10] As I figure it, there are over 21 million people who either who would be employed if we were employing people at the rate we were at the peak of the dot-com boom or who are now working part-time jobs because they can’t find full-time work.

But money has become more important than human need. And money reduces all value to market or exchange value. Which is to say, according to the market, some people aren’t worth what it costs them to live. Actually, a lot of people: “Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives.”[11]

Meanwhile, some other people live very, very extravagantly. And Warren Buffett thinks the rich deserve their wealth.[12] But can we really say that CEOs are worth anything like 300 times the ordinary worker?[13] Really? Does he really believe that all those Wall Street fraudsters have made all our lives better and deserve their money?

What’s more, we know that such extreme inequality is the inherent tendency of any economic system of exchange, because it privileges whomever has the greater ability to say no, and thus enables them to magnify their advantage by holding out for a ‘better deal.’[14] I might need a place to sleep tonight, but Warren Buffett, whose company, Berkshire-Hathaway, presumably has some connection to that Berkshire-Hathaway real estate office that opened recently in downtown Sebastopol, isn’t worried. I can’t find a job and if I can’t afford to pay his rent, he can rent to somebody else. Or maybe he just rents to somebody else because he doesn’t like the fact I’m unemployed. Somehow, I came to be infinitely replaceable and, somehow, Buffett came not to be.

Which is to say, on the market, I’m worthless. But Buffett is worth an estimated $68.6 billion.[15]

Now, if that makes sense to you, yes, I’m taking it personally. And I can think of something like eighty percent of the population that should take it personally as well.[16]

  1. [1]KStreetHipster [pseud.], quoted in Matthew Yglesias, “America’s biggest economic dilemma: private affluence amid public squalor,” Vox, June 8, 2015, http://www.vox.com/2015/6/8/8742803/private-affluence-public-squalor
  2. [2]Matthew Yglesias, “America’s biggest economic dilemma: private affluence amid public squalor,” Vox, June 8, 2015, http://www.vox.com/2015/6/8/8742803/private-affluence-public-squalor
  3. [3]F. A. Hayek, The Collected Works of F. A. Hayek, ed. Bruce Caldwell, vol. 2, The Road to Serfdom: Text and Documents; The Definitive Edition (1944; repr., Chicago: University of Chicago, 2007).
  4. [4]KStreetHipster [pseud.], quoted in Matthew Yglesias, “America’s biggest economic dilemma: private affluence amid public squalor,” Vox, June 8, 2015, http://www.vox.com/2015/6/8/8742803/private-affluence-public-squalor
  5. [5]Meghan Henry, Dr. Alvaro Cortes, and Sean Morris, “The 2013 Annual Homeless Assessment Report (AHAR) to Congress,” Part 1, U.S. Department of Housing and Urban Development (2013), https://www.hudexchange.info/resources/documents/ahar-2013-part1.pdf
  6. [6]U.S. Census Bureau, “Table 982. Total Housing Inventory for the United States: 1990 to 2010,” (2012), http://www.census.gov/compendia/statab/2012/tables/12s0982.xls
  7. [7]David Weigel, “Republican State Gives Free Houses to Moochers, Cuts Homelessness by 74 Percent,” Slate, December 20, 2013, http://www.slate.com/blogs/weigel/2013/12/20/republican_state_gives_free_houses_to_moochers_cuts_homelessness_by_74_percent.html
  8. [8]F. A. Hayek, The Collected Works of F. A. Hayek, ed. Bruce Caldwell, vol. 2, The Road to Serfdom: Text and Documents; The Definitive Edition (1944; repr., Chicago: University of Chicago, 2007).
  9. [9]Sageworks, “The 15 Most Profitable Industries,” August 6, 2014, https://fortunedotcom.files.wordpress.com/2014/08/data_release_08062014.pdf
  10. [10]Theresa Riley, “Making the Rent on Minimum Wage,” Bill Moyers Journal, April 2, 2012, http://billmoyers.com/2012/04/02/making-the-rent-on-minimum-wage/
  11. [11]Associated Press, “80 percent of U.S. adults face near-poverty, unemployment, survey finds,” CBS News, July 28, 2013, http://www.cbsnews.com/8301-201_162-57595861/80-percent-of-u.s-adults-face-near-poverty-unemployment-survey-finds/
  12. [12]Alexander Ward, “Warren Buffett thinks the poor should stop blaming inequality on the rich,” Independent, May 23, 2015, http://www.independent.co.uk/news/people/warren-buffett-thinks-that-the-poor-need-to-stop-blaming-inequality-on-the-rich-10271780.html
  13. [13]Economic Policy Institute, “The Top 10 Charts of 2014,” December 18, 2014, http://www.epi.org/publication/the-top-10-charts-of-2014/
  14. [14]George Kent, Ending Hunger Worldwide (Boulder, CO: Paradigm, 2011); Max Weber, “Class, Status, Party,” in Social Theory: The Multicultural and Classic Readings, ed. Charles Lemert, 4th ed. (Boulder, CO: Westview, 2010), 119-129.
  15. [15]Forbes, “Warren Buffett,” June 8, 2015, http://www.forbes.com/profile/warren-buffett/
  16. [16]Associated Press, “80 percent of U.S. adults face near-poverty, unemployment, survey finds,” CBS News, July 28, 2013, http://www.cbsnews.com/8301-201_162-57595861/80-percent-of-u.s-adults-face-near-poverty-unemployment-survey-finds/

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.