How do we value the natural world? Is it possible to put a financial value on the things that, traditionally, we have taken for granted?
The latest research in environmental economics says that we can. But how? To understand, we need to take a deep dive into the philosophy of money: What is money? How does it operate? What relationship does it bear to the natural world?
I don’t offer an answer in this post. Rather, I aim to get clear on exactly what the issues are.
To begin: what is money?
Money provides many functions. It serves as a medium of exchange‘; it makes financial transactions easier to perform. It stores value; meaning our wealth doesn’t deteriorate with the natural decay of physical goods. It serves as a means of unilateral payment; meaning it allows a multitude of services to act as value-generators for a single purpose (eg. taxation).
However, above all of these other functions, money acts as a measure of value: money is used to judge what the worth of a particular object or action is. This function of money makes it mysterious and multifaceted: it allows for a unified calculation of actual and potential costs and benefits (1).
However, this evaluative function allows us to easily lose sight of that fact that the values described by money are ultimately human-generated. Money does not define the value of an object or action: money is the means we use to describe the value of an object or action.
So, what value does money ultimately describe?
Traditional capitalist discourse defines money’s value as its ability to make more money; to reproduce. This is reflected in the market share of the financial services industry, the quintessential money reproduction industry. Global financial services hold a market value of $22.5 trillion – almost double that of construction, the second largest industry (2).
However, the simple fact is that humans cannot live on money. Money, stripped of its ability to acquire other objects and actions, holds an absolute value of zero. It cannot sustain human life.
Consequently, it the value of money is generated by the human need for certain objects and actions that we need to live. The more needs we have, the more money we need.
We now reach the paradox between money and nature.
Nature is essential for sustaining human life. We are, at base, natural creatures: we need food, water, shelter, and connections to be alive and well. These objects and actions in the world hold essential value – to lose them is to lose our lives, the ultimate source of value. Yet, all of these objects and actions are natural. They exist free of charge.
Money cannot provide these things for us. Yet, we live in a world that mines the very necessities for human life to turn a profit – a profit that derives value from the things we destroy to create it.
This is a vicious, downwards spiral into oblivion.
Can we reconcile these premises? If we continue to trade off the natural world for profit, we will end up living in a world devoid of meaning – in the same state as Frogstar World B from Douglas Adams’ The Restaurant at the End of the Universe (3). Yet, the proposal to end our fundamental pursuit of profit seems ludicrous, at least initially.
Profit drives the pursuit of better technologies. It coerces industry to cut inefficiency; it incentivises entrepreneurship and explore new markets. Profit is the ultimate motivator: the pursuit of more stuff for less effort. It is the world’s hedonic treadmill; only it is a treadmill that, in theory, moves humanity forwards – little by little.
Can profit exist, without the destruction of the natural?
The treadmill is killing us. It may move our species towards an efficient goal, but it’s setting fire to itself in the process.
Partha Dasgupta (4) and Robert Costanza (5), progenitors of the ecosystem services model for national environmental policymaking, argue that environmental policies can be assessed in financial terms using landscape simulation modelling and shadow pricing. These financially measurable options can then be compared against other policy decisions, with the best decision emergent through the financial analysis – providing an easy and apolitical cost-benefit analysis.
Whether this approach works will depend on whether the geographical tools themselves provide accurate policy predictions, and whether the financial costs represent genuine reflections of the values present in the natural and human geographies being altered.
It also, at base, depends on whether the policymakers care enough about the natural world to invest in its safekeeping. The environment is an investment that pays off slowly: can we restrain ourselves from exploiting it for immediate gain?
(1): Ingham, G. The Nature of Money, 2004, Polity Press ltd.
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