When value doesn’t have a price
by Lukas Fuchs, a first-year PhD student at the UCL Institute for Innovation and Public Purpose
Many things have great value to us, but lack a market price. Friendship is one such thing, clean air another one. A friend cares for you, challenges you and helps you through difficult times. Clean air is better for your health than polluted air. How could you doubt that they have great value? And yet you cannot go into a shop and buy a friendship. You can get an air-conditioner for your house. But an afternoon with fresh, clean air in the local park is not up for sale.
Measuring a market price is easy. Usually, it is publicly displayed and is expressed in a straightforward, unambiguous number that applies to all buyers equally. Measuring the value of an object is more difficult. It seems that value does not only depend on an object, but also on its purpose and how we decide to best achieve this purpose. Comparing the value of two goods might not be as easy as comparing their prices. However, that does not mean that value is not incredibly important. We make judgments about it when we go shopping, receive gifts or give an online review saying that a product is “good value for money”.
The British Library
The challenge to understand value motivates the series ‘Rethinking Public Value and Public Purpose in the 21st century’, which was launched with a joint discussion by Prof Mariana Mazzucato (Director of IIPP) and Roly Keating (Chief Executive of the British Library). Mazzucato’s recently published book ‘The Value of Everything’ emphasises that ‘value’, a hotly debated concept in philosophy and economics until the end of the 19th century, is ignored by contemporary economists. This lack of understanding constitutes a problem for public institutions. Their contributions to society are intended to have value, but no market price (Mazzucato says “the term public value doesn’t really exist in economics” ). Everybody can walk into the British Library and access its rich collection of books, digital media and working spaces without paying money. The revenue that the British Library generates can only be a poor guide as to its contribution to society. Yet taxpayers’ money is used to maintain its service and to cover its costs. Without a clear understanding of the value (not the revenue) that this institution generates, it is difficult to justify the costs.
Public Purpose
The value of something is determined by how well it serves a purpose. Thus, we will want to determine the value generated by a public institution by how well it serves a public purpose, which is to be identified by public deliberation. The public purpose relevant for the British Library seems to be the advancement of knowledge for the general public. This notion of public purpose as a goal of a public institution can give identity and a direction. Roly Keating gave insights into his experience with drafting mission statements for the BBC and the British Library. Public Purpose also links the efforts of those institutions with the philosophical question about the right direction for the state. Indeed, the extent to which public institutions can aim at a higher goal and thus generate public value was already acknowledged by Aristotle. In the opening of his ‘Politics’ he defines the state as that community which ‘aims at good in a greater degree than any other, and at the highest good’.
Aristotle defines the state as that community which ‘aims at good in a greater degree than any other, and at the highest good’
These questions — about the good society, the role of the state and the nature of citizen participation — need to be addressed by economists, city planners, architects, artists, philosophers, civil servants and policy makers. I am convinced that this lecture series, located at a great dwell of public value, will incite thinking about their answers.
Lukas Fuchs is a first-year PhD student at the UCL Institute for Innovation and Public Purpose, specialising in the philosophy of public value and public purpose.
Rethinking Public Value and Public Purpose in 21st Century Capitalism is a series of events delivered in partnership between the UCL Institute for Innovation (IIPP) and the British Library. All events are free and can be booked here.
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