Value, Business and Globalisation – Sketching a Critical Conceptual Framework ABSTRACT. Value is a basic concept in economics, ethics and sociology. Locke made labour the source of value, whereas Smith referred to an ideal exchange and Kant specified that commodities only have a market price, no intrinsic value. One can distinguish two modern concepts of value, an economic one trying to explain value in terms of utility, interest or preferences, and an ideal one considering values as ends in themselves. On this basis, Durkheim constructed his theory of value, which was developed by his followers Mauss and Bouglé and further by Bataille. Their line of thought makes it possible to develop a conceptual framework, which can be used to criticise neo-liberalism, big business and the effects of globalisation, while at the same time defending the moral value of business and giving an interpretation of the anti-globalisation protests. KEY WORDS: Bataille, Durkheim, economics, free market, globalisation, morality, social interaction, value The concept of value is central to many discussions in economy, philosophy and sociology. And to business ethics in particular the concept of value is of the utmost importance, being one of the conceptual nodes, which links ethics and economics. Asger Sørensen, Associate professor, Ph.D., mag.art. & B.A., Department of Management, Politics and Philosophy, Copenhagen Business School (CBS), Denmark. Magister in 1992 on a thesis about Georges Bataille. Ph.D. in 1999 on a thesis about philosophical ethics and moral sociology. Publications mainly in Danish about ethics, French positivism and sociological theory. Part of a group at CBS establishing a Center for Corporate Values and Responsibility (CCVR). Homepage: www.cbs.dk/staff/asger.sorensen/index.shtml. Asger Sørensen I would like to present some reflections on the concept of value inspired by a tradition in theoretical thinking, which normally do not receive that much attention, that is the French positivism of Émile Durkheim (1858–1917) and his followers. Durkheim both drew on French political and social philosophy (1892, 1893) and the German social sciences and economics of the late 19th century (Durkheim, 1887), the tradition which coined the term “national economics” in opposition to both classical political economy – including Karl Marx (1818–1883) – and the neoclassical mathematication of economy. Today, this line of thought is mostly ignored, not just by economics, but also by philosophy and sociology. Philosophy considers Durkheim as part of the sociological tradition (Rohls, 1991, pp. 396–397), and in sociology he is not considered scientific in a modern sense, but read as a classic (Luhmann, 1977, pp. 17, 27), a philosophical predecessor, more occupied with ethics than sociology proper (Gurvitch, 1963, II, p. 175). However, if we accept the general conclusions expressed by Amartya Sen – that economics is not only about maximising personal profits (EBEN, Valencia, Sept. 12th 2001) – this tradition offers a normative conceptual framework for reflecting further on these matters. With concepts taken from this tradition, I will argue that 1. we can understand that the market both presupposes and creates moral values, and not only economic value. So we can defend market economics and business in principle. 2. we can criticise the globalisation for expressing and reinforcing an ideology of Journal of Business Ethics 39: 161–167, 2002. © 2002 Kluwer Academic Publishers. Printed in the Netherlands. 162 Asger Sørensen the free market, which abstracts the idea of the market from its proper social context. It promotes economic value as the ideal value above all, interprets value then as personal preferences and then believes the law of demand and supply to be a natural law, valid for all times and places, for individuals, nations and the global economy. 3. we can defend business at a human level, but attack the effects of globalisation, the concentration of capital and the unlimited speculation. 4. we can attack neo-liberalism as socialist without falling in the trap of the central commissarial planning of the economy like yesterdays communist regimes and todays European Union. 5. we can defend the nation state without becoming national chauvinists. Because, what we defend is the humane size of the community in question, not the nation as such. 6. we can recognise morality as a strong human force, understand the societal function of morality and ethics and interpret what is happening in the world, especially around summits like the ones in Seattle, Davos, Praque, Gothenborg and Genova. The current political conflict is not – I will argue – a conflict between different sets of values, but reflects a clash between two different concepts of value, the ideal value, which is created by strong social interaction, and the economic value expressing social interaction reduced to almost nothing. Not just business ethics, but business in general should support the popular protests against globalisation. The unregulated flow of capital and commodities tends to accumulate economic values in big multinational corporations; this process destroys the moral values, which are necessary for the free market and the value creation in small scale business. The values accumulated by big business are a threat to values in general. I. Economics Economics is often today seen as a technical discipline about generating value as a means to realise various ends. The scale of violence entertained by the authorities against the antiglobalisation protests, however, indicates that something more is at stake. Protecting the leaders of the current economic system with barricades (Gothenborg), agent provocateurs (Barcelona) and guns (Genova) indicates either a cynic protection of interests and privileges, or that the economic system is not just seen as generating money as means but is also bestowed with an end-value in itself. In classical economy, value is a function of labour. This idea was originally conceived of by the father of liberalism, John Locke (1632–1704). The intrinsic value of nature, he says, is almost none; what makes the greatest part of value is labour. Labour transforms nature to useful things, things to be enjoyed, and that create value (1698, II: § 40–43). However, Locke notes, most things useful to human beings are of short duration, and man’s capacity of labour is also limited. Together that puts a limit to how much things and land it is meaningful to gather, and thereby, a limit to social inequality. But: Gold and silver have long duration, and that makes accumulation possible, even though as materials they are “little useful in the life of man”; their value rest exclusively on the common consent of men (§ 50). Social inequality rests therefore, according to Locke, on the tacit consent of the value of silver and gold, that is, money. Adam Smith (1723–1790) makes the distinction between value in use and value in exchange explicit, using the famous example of the usevalue of water and the exchange value of diamonds (1776, Book 1, Ch. 4). However, where Locke considers use-value the real value and a result of labour, Smith defines labour as the “real measure of the exchangeable value”. This exchange value determines the “the real price” or “the natural price” in a “universal” way, “at all times, and at all places”. Labour determines the real exchange-value, but, like for Locke, this “market price” is not real. The market price is Value, Business and Globalisation only nominal and not a function of the ideal value (Ch. 5). Immanuel Kant’s (1724–1804) conception of value is based on the same premises: What is valuable is, what can be enjoyed and used by man, although he does not mention the role of labour in the creation of value. Kant makes a distinction between “direct value” of various natural and artificial goods and the value of money as only “indirect”. Kant considers money a commodity that represents all commodities, which must imply that commodities in general – as commodities – only have indirect value; the price of a commodity is simply the public verdict about the indirect value of the commodity in question, that is, the market price (1798, § 31, A 122–126). Neo-classical economy intends to do away with all kinds of idealism and politics in economics, trying to make economics a scientific discipline modelled after the positivist conception of physics. First, the conception of use value is modified by the idea of diminishing marginal utility of the last acquired object. This substitution of use value, “total utility” by relative utility is followed by a redefinition of utility, which solves the paradox of diamonds and water conceptually; if something is in demand, it is useful (Samuelson, 1976, pp. 433–438). That makes use value irrelevant in economical discussions, and since the exchange value is determined only by demand and supply, the exchange value is the same as the market-price. This development makes the distinction between price and value irrelevant to economics, and in this century the concept of value has been replaced by the twin concepts of price and utility. So economists in the western world – political leaders and businessmen alike – have been raised theoretically only to ignore other kinds of value than the value which can be expressed by the market price. In short, exchange value is price and use value is demand. II. Values today So value is not much of a subject in economic theory today. But in philosophy, one can distinguish between two typical conceptions of value. 163 A. The liberal-empiricist conception of value as empirical use value held by Locke and which has been closely connected to the development of economics and held by many philosophers and sociologists of the western world. This concept reduces value to personal interest, utility, preferences, desire, emotions, feeling etc. B. The liberal-idealist conception of value as something ideal, worthy of attention in itself, which was developed out of the concepts of use value held by philosophers like Smith, Kant and Marx. This duality was the point of departure for Durkheim almost a century ago, and it is – I think – equally valid today, at least as a promising alternative approach to understand the concept of value. The ideal conception played an important part in philosophy especially in the first third of the 20th century both for neo-kantians like the sociologist Max Weber (1922, §§ 2–4), the phenomenological critic Max Scheler (1926) and the father of analytical ethics, G. E. Moore (1922). Today, it is not that common in academic circles, but in the public and in theology it is still a widely held conception of value. III. Creative collectivity Durkheim takes off by criticising the conception of value based on empirical use value. Value is ascribed to something enjoyable and useful for the individual. But: Value is something, which transcends my personal preferences, something ideal and objective, which I cannot control (1911, pp. 118–119). Which things are bestowed with value might be more or less accidental, but when first values have been created, individuals cannot change them at will – and that holds for not only what is considered ideal values, but also for the most unstable exchange values. So values express something more than just personal interest, preferences and utility. However, to understand value in terms of collective utility – as in utilitarianism and welfareeconomics – is no solution, since it cannot account for the value ascribed to luxury and 164 Asger Sørensen symbols (Durkheim, 1911, pp. 124–125). The paradox of water and diamonds is a perfect example. As mentioned, this paradox was solved conceptually by the neo-classics by redefining use value as in demand. Durkheim and his followers however ignores this solution, letting diamonds keep a value in themselves, which is not just a function, neither of the marginal utility nor of the dynamics of the market. In the concept of National economy, one of Durkheims pupils Celestin Bouglé (1870–1940) finds an economic conception of value, which is not reducible to individual interest. A nation – or more general, a collective – has other interests than individuals, like for instance maintaining the natural resources and creating institutions for the good of everybody. But what is more, as Durkheim already showed – and Sen mentions – the economy of the liberal market presupposes a moral and legal framework that recognises the value of contracts, justice and fairness (Durkheim, 1893, pp. 225–239; Sørensen, 1999a, pp. 292–293), and this is exactly what the collective provides. The concept of value as understood by neoclassical economics and homo oeconomicus is not sufficient. It makes economics the theory of maximising individual profits, which, as Bouglé notes, makes theft the most rational economic action. Stealing maximises the profit and minimises the cost (1922, p. 103). And the reason this consequence is not drawn in economic theory, is precisely because economic value is not the only value recognised by economics. Without the recognition of these values, liberal economy would be ruled by the law of the jungle, resembling the state of nature as described by Thomas Hobbes (1588–1679). Having done with empirical use value and utility, Durkheim develops a sociological interpretation of the idealistic conception of value. Values are ideal and objective in relation to each individual, because they are of collective and neither individual nor metaphysical origin (1911, p. 132). The interactions of individual human beings create something exterior to themselves, which then attains a relative independence of every individual. All these products of collective activity are equally real, although some are material like buildings and coins, whereas others are immaterial, like morality and religion. According to Durkheim, a value is such an immaterial product of the collective mind (1911, pp. 136–139). This explains the objectivity of values without supposing anything like Smith’s extra-terrestial metaphysics; still we need an explanation of the ideality of values, the normative force, with which values meet us as individuals. This Durkheim explains with the variation in the intensity of collective interaction. Ideal values are created by the euphoria of crowds, where the participants forget themselves and let their individualities be fused with the crowd. Living as a human being, Durkheim states, is acting, and action is expenditure, that is, giving (1911, pp. 133–136). Values are created by collectively giving yourself up to exactly the collectivity, which then is represented symbolically in the values. Value then is neither a direct function of utility – be that individual or collective – nor a function of exchange on a market. Value is not created by labour, but by collective activities where the economic rationality is spending, not accumulating. Bouglé tries to strengthen this conception of value by reconstructing the history of value as a process of both centrifugal differentiation and centripetal unification. From a primitive concept of value, which includes economic, moral, religious and aesthetic aspects we get the split between economic and non-economic values. Still he insists on the fundamental unity of economic and non-economic values (1922, pp. 92–96); and this unity is demonstrated by Durkheim’s nephew, Marcel Mauss (1872–1950) in his analysis of donation. In every kind of economic exchange, other values are not just presupposed, but also created; the market was newer – and is newer – just a matter of individual material interests. The free market and homo economicus are just abstractions serving ideological purposes (Mauss 1923–1924, pp. 272–275; Sørensen, 2001a, pp. 78–79). Value, Business and Globalisation IV. Accumulation and expenditure Georges Bataille (1897–1962), a rather unorthodox reader of Mauss, made a dialectical approach to the study of the opposing aspects of value, without trying to reconcile the apparent contradiction. He refuses to do away with the oppositions between the individual and the collective and between accumulation and consumption. Both contradictions are equally real in the life of human beings in a society and both are dialectical contradictions, united as contraries where none can be understood without the other, both being determined by their opposites (Sørensen, 1994, p. 191). On this basis, Bataille developed the concept of general economics in contrast to the political economy, which he calls restricted. Political economy is preconditioned by the twin premises of natural scarcity and homo economicus. Both these premises are wrong and ideological. Nature is full of resources and man wants to give, not just to acquire (Bataille, 1949, pp. 28–33; Sørensen, 2001b, p. 244). Political economy creates a system of false beliefs, which legitimise solely acting to maximise personal profits. This approach makes it possible to describe the social life of human beings as a historic process, always oscillating between two equally necessary but impossible ideal types (Bataille, 1954, p. 377): The individual only accumulating – the Calvinist workaholic (1949, p. 119) – and the collective only consuming – in orgies, revolutions or wars (1954, p. 277). An individual only consuming is an exception, like the king or the artist (1954, p. 248); the collectivity only accumulating is equally extreme, like the Sovjet Union in the twenties and thirties (1949, p. 157). Consummation makes accumulation valuable as a means; but only the individual or collective expenditure without any apparent economic advantage can be valuable as an end. Economic values, money, are only potential or – in Kant’s words – indirect values, representing the power to spend, to create values. The ideal values pursued in life all represent expenditure, whereas the so-called economic values represent accumulation; there is no historic or transcendent goal beyond these in life and no way to recon- 165 cile them (Bataille, 1954, p. 322; Sørensen, 1999b, pp. 206–207). But nature is rich and fertile, and human beings have a capacity to work and multiply, which by far exceeds the need to gather food and reproduce the population (Bataille, 1949, pp. 42–43). History shows that societies have employed this energy to accumulate material wealth. Bataille is able, however, to give a few historic examples on societies, which for a period of time have maintained an equilibrium of the two processes, and this shows the falseness of the two aforementioned premises, scarceness of natural resources and society necessarily preoccupied with accumulation. The best example is Tibet before the Chinese take-over, where an enormous proportion of the men – up to 25% (1949, p. 104) – lived in celibacy and without contributing to the materiel wealth at all, the whole system sustained by ideal values, which legitimised the religious expenditure. V. Towards a creative period Today on a world wide scale, there is probably relatively more unproductive people than in ancient Tibet, some poor and some very rich, becoming richer every day. The world is still rich, but the wealth is unequally distributed, and the proposed ideology is clearly not sustainable anymore. A traditional ethical analysis could interpret the current political conflict as a conflict of values, say between freedom and equality. What I have proposed is to think in terms of different concepts of value, not just different values. The first conception understands values exclusively economically, while at the same time interpreting economics as the free pursuit of individual profits and accumulation. The second conception understands values as a more general concept of what is considered valuable in itself by the collective, that is, not only what is profitable to individuals. In a Durkheimian perspective, the fight against globalisation could be taken as the beginning of one of those creative periods of human history, where intensified human interactions carry 166 Asger Sørensen people out of themselves and recreate the disinterested, collective values and – in the end – reform or revolution directed against individual accumulation of economic values. In the crowds and during the heated discussions, ideal values are recreated, values, which have the double aspect of being both imperative and desirable to those involved in the process. As Durkheim explains, when ideal values are most intensively experienced, they substitute reality and people actually believe that paradise can be realised on earth (1911, p. 134). Examples of these periods are the reformation, the renaissance, the French revolution, and the revolutionary periods of 19th and 20th century, the last being the revolutions, which made the Sovjet Union and the eastern bloc fall apart. The euphoria of the breakdown of communist systems might be seen as bestowing ideal value at the basis of the ideology of the free market, the human rights and the freedom to pursue personal profit, i.e. economic value. Durkheim does not recommend revolutions, quite the opposite (Adorno, 1967, p. 249; Sørensen, 1998, p. 79). What he wanted was to reconcile the social contradictions expressed in the contradictions of the concept of value. But by monopolising and reducing the concept of value, liberal economy and politics create an ideology, which encourages human beings to evaluate their actions only in terms of personal advantage. That has in itself been provoking to both socialists and conservatives since the French revolution; but in the current economical situation the effects of this ideology are not only provoking, they are actually life-threatening. VI. Fight globalisation The economic system and the ideology reinforce each other mutually in a process, where the change of the material condition legitimises sharpening the ideology and the sharpened ideology legitimises attempts to change the material situation. The liberal politics liberate ideologically the economic decision making from moral values. Thus informed, economic behaviour makes market dynamics more pure, consid- ering as values only economic value – that is, profit – optimising exploitation and ignoring social inequality, liberating personal and institutional greed, gradually legitimising the rational economical ideal of theft. Crime is an individual reaction to a social problem. However, when these problems were addressed politically by the anti-globalisation movement, it was met with a more violent reaction from the police than most criminals experience. But why all the violence initiated on behalf of our democratic system? Are the political leaders in bad faith and afraid of being exposed as legitimising big scale theft? Or are they in good faith, and fight for their ideal values? I don’t know. But I do know that the violence did not begin at the summits; the first stroke was made by a political system, which promotes an ideology that makes economic value the only value, while at the same time making this value slip through the hands of the majority of the world population, leaving as its trace only a worn-out body, forced to sell itself to be exploited the next day, if possible at all. Globalisation creates inequality, civil unrest, criminality and terror (Montes, 1999). The existence of global corporations shows the ideology of the free exchange at a free market to be a lie. Big-business and the ideology conceiving the law of supply and demand as a natural law undermine the general faith in the moral values of the concrete market and of private property, and thereby the general conditions of private enterprise. Small-scale business can be both sustainable and socially responsible; as Mauss shows, the local market creates both economic and noneconomic values. Business should support the anti-globalisation movement and fight the ideology that makes money the only value. As John Locke told us: Recognising money as values is the condition of accumulation and inequality, and brought to an extreme this will ruin business as such. Value, Business and Globalisation References Adorno, Theodor W.: 1967, ‘Einleitung zu Emile Durkheim Soziologie und Philosophie’, in Adorno: Gesammelte Schriften, Bd. 8 (Suhrkamp, Frankfurt a.M., 1972), pp. 243–279. Bataille, Georges: 1949, La part maudite in Bataille: Oeuvres complètes, t. VII (Gallimard, Paris, 1976), pp. 17–179. Bataille, Georges: 1954, La Souveraineté in Bataille: Oeuvres complètes, t. VIII (Gallimard, Paris, 1976), pp. 243–456. Bouglé, Celestin: 1922, Leçon de sociologie sur l’évolution des valeurs (Arman Collin, Paris). Durkheim, Émile: 1887, ‘La science positive de la morale en Allemagne’, Revue philosophique 12, 33–58, 113–142, 275–284. 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Department of Management, Politics and Philosophy, Copenhagen Business School, Blågårdsgade 23B, DK-2200 Copenhagen N, Denmark E-mail: ass.lpf@cbs.dk