“Whilst the idea of ‘valuing’ nature sounds positive, this approach makes the grave mistake of confusing value with price.”

Can you run that by me again? The value of something is what someone is willing to pay for it. What other possible source of valuation can there be?

Even if you want to say “value of ecosystem services” or something like that, then it’s just the same at one remove. The value of those services is what people are willing to pay for them.

@ 1 Tim

“Can you run that by me again? The value of something is what someone is willing to pay for it. What other possible source of valuation can there be?”

Human value. So in fairness the OP should have said “…conflating human value with economic value”.

If I have no money, and enjoy the landscape around my house, the fact that I cannot buy the landscape does not mean it is worthless to me; I will still be upset if it is devastated by some disaster or another.

“Human value. ”

But, but, this is what the economists try to measure. When we try to provide the value of a life we don’t say that you can buy someone’s life for £x. Rather, by observation of what people do, the risks they’re willing to take for £y, we can calculate that the value of a statisitical life is £x.

We try to do exactly the same for landscapes, for parks, for trees and forests and all the rest. Such calculations always, byut always, include amenity values
(ie, the pleasure that peeps get from looking at a green and pleasant land etc).

‘Value’ can be economic or ethical and cultural. I value freedom – but I don’t put a price on it. I value life – and I don’t put a price on that. And I value the environment in the same way.

Economic ‘value’ is a standard set based on rates of exchange. A second hand car might be worth the same as a 3-D TV or £1,000 in cash – the value based on a rate of exchange agreed voluntarily between the seller and the buyer.

The ethical or cultural ‘value’ of land to it’s indigenous population is not something that can be weighed economically against the economic ‘value’ that land offers those willing to take it from them at gunpoint.

That would be an equivication on the word ‘value’.

Good grief, so I can now legitimately accuse Tim Worstall(t?) of “knowing the value of nothing but the price of everything”.

“‘Value’ can be economic or ethical and cultural. I value freedom – but I don’t put a price on it. I value life – and I don’t put a price on that. And I value the environment in the same way. ”

I’m sorry, but this is just nonsense. I don’t think you understand what the economist is doing here.

You value freedom. Would you die to preserve or gain it? That’s a price. Would you not risk death to gain or defend it? That’s a price also.

Of course people value life. Their own lives. People regularly risk them for other things they value more too. Smokers for example. Excessive drinkers. That risk of a shortened life for the momentary pleasure is a price.

An economist, when saying that, for example, a life is worth $5 million (around the actual US value) is not saying that someone would specifically sell their life for that sum. But by looking at what people do (specifically, the extra wages accepted for heightened risks) that appears to be the value that people put on said lives.

And this is a price.

I think people get rather carried away with “price”. Trying to insist that a value and a price are not the same thing. The economist is, by the very way he’s calculating it, stating that two are, by definition, the same thing.

@ 3 Tim

“But, but, this is what the economists try to measure. When we try to provide the value of a life we don’t say that you can buy someone’s life for £x. Rather, by observation of what people do, the risks they’re willing to take for £y, we can calculate that the value of a statisitical life is £x.

We try to do exactly the same for landscapes, for parks, for trees and forests and all the rest. Such calculations always, byut always, include amenity values
(ie, the pleasure that peeps get from looking at a green and pleasant land etc).”

All true, but that doesn’t add up to “the human value of something is what you can sell it for”. Depending on the system, the local authority could sell the nice landscape outside my house for a song, because they didn’t give a shit about my opinion.

Your valuation requires the desires of the rich to be more valuable than those of the poor (because they can spend more to realize those desires). Which is perfectly true in terms of economic value, but not in terms of human value. Nor is it a system we want to encourage for its own sake.

You need to check you facts.
“Take, for example, the case in Uganda where 22,000 people were evicted from their land at gunpoint in 2011 to allow UK firm New Forests Company to plant trees for carbon credits.”

first of all, this case has been proven by auditors from the FSC and from the Ugandan government to involve roughly 5000 people, rather than the 22,000 consistently referred to by Oxfam and their unscrutinising followers.. next, the land was not ‘theirs’. Ever been to Uganda? well I have and i understand that the Ugandan government demarcated 504 central forest reserves back in the 1930′s for the purposes of forestry, conservation and wildlife reserves..kind of like protected forests in Europe–the point: you are not allowed to live or cultivate on them. The land is protected for the people by the government. It did not belong to people using it. Evictions were carried out by the government of Uganda, through the National Forestry Authority, which is entitled to do so when people trespass on government protected land. This has been confirmed by the NFA in countless letters and is widely understood in Uganda. again, a good idea to look beyond Oxfam’s sad and poorly researched report. Finally, the company in question doesn’t grow trees to sell carbon credits–in fact, it has never sold a single credit nor has it been certified to do so. The company grows trees in order to feed the national and east african market for energy and timber products. This is also done throughout Europe…we all need timber products and someone needs to produce them, no? Good luck in being a more discerning reader in the future.

I’m sorry, but this is just nonsense. I don’t think you understand what the economist is doing here.

And I think that you, looking at this through economist’s eyes, are unable to distinguish between different value systems, such of those of the market, and those ethical and cultural system of values, neither of which is commensurate with the other.

You value freedom. Would you die to preserve or gain it? That’s a price. Would you not risk death to gain or defend it? That’s a price also.

Its not an economic price unless you are holding me hostage. Did you study economics at the Somali Pirate School of Libertarianism?

I think people get rather carried away with “price”. Trying to insist that a value and a price are not the same thing. The economist is, by the very way he’s calculating it, stating that two are, by definition, the same thing.

Read the OP again:

Take, for example, the case in Uganda where 22,000 people were evicted from their land at gunpoint in 2011 to allow UK firm New Forests Company to plant trees for carbon credits.

The Ugandan government are making a deal there, based on economic values they share with the New Forest Company.

The previous landowners aren’t active participants in this deal: they are forced out at gunpoint. There’s no element of exchange there, no shared system of values between the previous landowners on those who have taken their land by force – unless you think that having their lives spared is compensation for having their land seized.

The Ugandan government and the New Forest Company both get what they want from based on what they believe is a fair financial price – the standard by which value is measured within an economic value system.

If the landowners had been offered an economic price they considered acceptable this would have been a case of shared values but since they were not the beneficiaries of any exchange the cost to them, in terms of ethical and cultural price, is not measurable against the one-dimensional value system of economics.

Value is not the same as price. Only idiots think it is. (Sorry Tim.W – you are one such idiot it seems).

What does this mean? Imperfect knowledge (economics 1.02)

Imperfect knowledge results in a situation where the demand and suply intersect at a position below the maximum utility that can be derived (classically illustrated by education).

What does this mean? Unchargeable goods (Economics 1.02)

Where a utility can not be charged for in a practical way – (classically illustrated with street policing) – and where doing so would allow for free-riding to an extent that undermines the ability of pricing to maximise utility (classically illustrated with policing) – alternatives to market derived price is required to ensure that utility is not lost to society.

Given that the impact on utility of environmental damage is not well known, and that the ability to prevent freeloading were a price charged for environtmental integrity, it is safe to say the following…

…Anyone who thinks that the value of this good/service is well approximated by the price some one may pay for it – is an idiot.

…Anyone who thinks that the value of this good/service is well approximated by the price some one may pay for it – is an idiot.

Or a cynic, according to Oscar Wilde’s definition as someone who knows the price of everything and the value of nothing

Spot on shatterface.

“And I think that you, looking at this through economist’s eyes, are unable to distinguish between different value systems, such of those of the market, and those ethical and cultural system of values, neither of which is commensurate with the other.”

Dear Lord, don’t you understand these two simple points?

1) They are the values that people place on things. Thus they are commensurable. Because they are all values that people place upon things.

2) But this “different value systems” is exactly what the economist (please note, the economist, not the accountant) is trying to measure. You want to try measuring the value that people put on the village green? Great, so, you look around for some proxy for that value that people do place upon it. Are houses more valuable right by it? Are houses more valuable in a village with a village green than in one where there’s a Tesco’s in its place? What changed with such values when the common land was enclosed? Or when the Lord of the Manor (ie, rich git who bought the land in the village out of plundering the citizenry through banking) put that village green into a trust paying a peppercorn rent for 999 years?

This is exactly what the economist is trying to measure: the value people place on something by whatever their valuation system is: straight financial, cultural, religious, whatever. That’s why the proxies are used, to try and discern the valuation, not by asking everyone to cough up a tenner to have or to not have whatever it is.

As I say above, this is one of the things that really does piss me off: that people keep criticising such valuations on these “not commensurable” and “Yeah, but that’s just financial” grounds when the whole damn point of the exercise is to try and capture those other, non-financial valuation systems.

How the fuck do you think we calculate the damages from climate change, as in the Stern Review? How do you think we calculate the benefits and costs of HS2?

You’re whining about the fact that we already include what you want included!

The £ bit is just so that we can do sums.

And really, we can and do apply these techniques to cultural matters. As an example (I’m sure someone has done this but I don’t know who) we could measure the value that Jews put on keeping kosher. No, not by seeing how much we have to bribe someone to eat pork. But by observing in what circumstances a Jew is willing to eat pork.

We’d end up with a result where there are some who value keeping kosher more highly than life itself (it has happened, historically, that some groups of Jews have chosen death rather than eating pork). Others don’t mind so much, others again wouldn’t eat pork, would go hungry, but are happy enough to eat food from a kitchen in which pork has been prepared (not kosher at all).

As I say, we only reduce all of this to £ so we can do sums. But what we’re clearly measuring is the cultural/religious value that people put on keeping kosher.

As I say, it pisses me off that you, usually quite intelligent guys as you are, see fit to critique the technique when you quite clearly don’t understand what it is actually doing.

marginforerror. You’ve just described public goods and externalities. I’m the right wing bastard who agrees that we should indeed deal with public goods and externalities precisely because markets unadorned don’t deal with them, recall?

Carbon taxes, congestion charges, subsidies to education, government financing of public health, I’m right with all of those things for exactly the reasons you mention: public goods and externalities.

It’s even possible that I’ve managed to get to economics 201, 202, you know?

Tim

It is – but you seem to be arguing that it is practical in this context to quantify the value of something about which we (a) have very little knowledge (and certainly not close to perfect knowledge) and (b) have no means of restricting access to the value of that something.

While I fully appreciate you are not equating price only with money – you seem to be asserting that a price (in whatever form it takes) can be established for the value of something that is unquantifiable.

In effect, it is the imperfect knowledge here that is crucial.

Of course the tension over Clegg’s involvement in this may be somewhat heightened by his attempt to sell of Britain’s forests last year. That has nothing to do with the futility of adding up a lot of unknown numbers.

The population is growing.
Some green belt land is thus “under threat” of development.
On precisely what basis, other than the “economist” approach, do you propose to proceed?

On what basis should drugs be approved by NICE if you don’t believe a value can be put on an additional year of life?