The Paradox of Walden
July 17, 2012
Yesterday, watching Paul Kingsnorth and Tim Worstall spar on Twitter over the price of milk, I was struck by two notions. Firstly, it’s fun to watch people who are wrong for different reasons argue. Secondly, the reasons for their disagreement are so fundamental that such a debate is pointless; there’s insufficient common ground for any kind of resolution to be reached.
Tim is a neoliberal, while Paul fancies himself as some kind of neo-Thoreau. Tim describes neoliberalism using the following:
“[Neoliberalism] does rather assume that individuals maximise, to the best of their ability and knowledge, their utility. But as any fule kno, utility and profit are not the same thing. Utility leaves room for feeling better about contributing to the care of others for example, something that profit doesn’t.”
This is actually an astonishingly weak claim; all it’s saying is that individuals aim to achieve their goals, whatever they may be, and however short-term they are. I can maximise my utility by buying either a full-fat meaty burrito this lunchtime, or a healthy snack consisting entirely of fruit, depending on my preferences and objectives. As such, it’s so tautological as to be almost entirely uninteresting: claiming that ‘people aim to achieve their aims’ is not going to set the intellectual world on fire.
The interesting claim is the second half of neoliberalism: ‘and markets are frequently the best way of enabling people to maximise their utility’. Tim might contrast this with an alternative, which is getting the Government to decide how best you maximise your utility. Certainly, it seems clear that you have a better understanding of your preferences than a far away civil servant in Whitehall, and that being able to decide which product or service that will be better at meeting your needs can be a preference in itself.
However, there is a problem with this approach, and it relates to the idea of untradeable goods. In deference to Paul’s position, let us consider this in the context of Thoreau’s Walden, accounted one of the greatest American novels and a forbear of modern environmentalism. Walden is a pond near Concord in Massachusetts by which Thoreau spent two years of his life in an effort to develop his understanding, intellect and spirituality through the tenets of the contemporary philosophy of transcendentalism.
Transcendentalism holds that society and its institutions corrupts the purity of Man, and that a true community can only be derived from self-reliant and independent individuals. In Walden, Thoreau goes a little beyond this to discuss the role of nature and wilderness in the introspection necessary to cultivate the spiritually self-reliant individual.
The self-reliant man creates the goods he needs to maximise his utility himself, and his utility is maximised because he created them himself. The utility provided by these goods is therefore not wholly intrinsic, but rather their extrinsic quality of being untraded.
It is this value – that a good being untraded provides maximum utility – that presents a problem for neoliberalism. If a good has utility because it is untraded, then this form of utility cannot be maximised by a preference expressed in a market. Thoreau expresses the price of the components of his hut at Walden in dollars, in order to demonstrate how cheaply it is possible to live a fulfilling life, but the actual cost of the hut should include the labour he spent creating it. If Thoreau were to buy such a hut on the open market, it would have a value, but because the utility of the hut to Thoreau is given by it being his own creation, the two are incommensurable. The paradox is that the market value of the hut is simultaneously zero and infinite: zero, because it is not offered for sale, and infinite, because no amount of money would persuade Thoreau to part with it.
This value presents a problem to neoliberalism because any dispute over a good to which some ascribe utility as a result of its non-traded status must necessarily be solved by politics. That is to say, when some members of a society ascribe value to a good as a result of it not participating in a market, the resolution of a dispute over its use can only be carried out within an agreed political framework, as the alternative is violence. If trade or negotiation is impossible, then the only way of resolving a problem is through force, whether in person or via the Government. Therefore, the Government must have a role to play in determining how we maximise our utility if such disputes cannot be resolved within a community. Moreover, if you ascribe value on the basis of goods being non-traded, it is preferable to have Government resolve disputes than leave it to the market.
It is worth noting that the wisdom of ascribing value as a result of a good’s non-traded status is not considered, I merely observe than there are people who do so. Paul’s attribution of non-tradeable extrinsic value to small-scale ‘uneconomic’ dairy farmers is something about which Tim will never be able to persuade him. I therefore suggest that both gentlemen resolve this issue in an appropriate fashion, with duelling pistols at dawn.