Growing up, if I asked my dad for anything –maybe passing me a spoon or giving me a ride to a friend’s house– before complying, he would often pose the question “What’s it worth to you?” To which I might groan and counter some absurd price such as ‘my undying respect for your generosity as a father.’ We usually had a deal.
It wasn’t until recently that I pondered how this paternal humor, if you want to call it that, has some pretty profound economic issues embedded in it. I’ve been thinking about them since reading Raj Patel’s The Value of Nothing before starting Peace Corps. It’s the kind of book that I was certain must have been published the day I read it, because otherwise why hasn’t everyone been discussing it the last few years?!??
One of the main takeaways is that prices in practice often don’t reflect the information that we assume they should. Instead of telling us how much it costs to make something, or how much value it provides to one who can use it, often prices are determined by what sellers predict buyers are willing to pay. The convoluted and unethical ramifications of such a flawed premise, and what to do from this point, are explored in the book. Please Read It.
These have been weird things to think about in a new context where currencies are converted and then beyond that there are different standards and “costs of living”. And also different cultural expectations around prices. Here’s a few strands of thought related to economics, money, and prices that have been rattling around my brain lately:
AN ACCIDENTAL EXPERT HAGGLER
Every morning when I wake up in my hut I untuck my mosquito net and step onto a small rectangular blue and tan rug that cushions the transition from cozy bed to cold mud floors.
It’s a small thing that makes this space feel homey and takes two moments framing every day to a new level. I accidentally bought it for half the asking price at an ag fair.
I had no idea what price to expect and figured I might as well ask. Then as I tried to excuse myself and explain that I didn’t have anywhere near that cash, the maker insisted it was alright and I should take it for whatever I had. Things got a bit awkward as I tried to say I appreciated it and leave, but I ended up with the rug and she ended up with all the cash I had.
To the untrained eye, this might have appeared to be masterful haggling. I can assure you it was not. From my dad I have acquired the habit of usually having juuust enough cash on hand, never more than enough. (Ask me another time what a ‘certificate of passage’ issued by Pennsylvania toll booths is.) But my mother is the one who’s favor-negotiating strategies included starting off with the offer, “I’ll pay you a million dollars to empty the dishwasher.” She once told me she confused a street musician in Budapest by intentionally counter-offering a higher price than he asked for his CD. She thought his music was so special and he was underselling. While she is a bit of a sucker for a BOGO deal, a barterer she is not. I got that from her.
Maybe I over think things, but I just have issues entering an interaction on the assumption that I am going to tell someone that what they’re offering me is worth less than they tell me it is. Especially if it’s something that person made.
I think it’s one thing to say ‘this is what I can afford to pay for this thing, and if it’s worth more than that, oh well.’ But to say ‘what is the least amount of money I can put out to get this person to give me this thing, even if I could afford more?’ That seems the backyard of exploitation. Our living allowances are modest, but in my experience they definitely cover needs when paying asking prices. Not all volunteers see things the same way though…
FOOD: PRICE versus VALUE versus COST versus WAGES
Anyway, I don’t barter. Ok, Well, only on accident. But I feel especially weird negotiating prices when it comes to food. Even in the US, food was my top priority and I would sometimes buy food that was a stretch for my budget for the sake of supporting the types of food producers I think are important to local communities and ecosystems. Here, I still don’t know how I want to feel about the fact that I can easily buy enough fruits and vegetables for a week for $1.10. On the one hand it makes it seem like these things are affordable for others. And on the other hand, I feel weird about valuing and feeling able to pay more and not doing so. And recognizing that farmers are not getting paid much for pretty valuable work (…then low incomes force all kinds of short-term thinking that can be problematic on lots of levels.)
Then again, at least in this case I know that whatever money I pay is going all to the farmer. If I were to pay a few dollars for some pieces of produce at a grocery store in the US, there could well be laborers in that chain that may be paid just as poorly as farmers in my community. There are many steps and people involved between growing the food and getting it in the grocery bag and it’s an issue for me that it’s generally not at all clear where that money goes.
Even when you’re paying premiums at a farmers’ market in the US or a local butchery, I can assure you that there are few small-scale producers that are making bank and taking advantage of you. They know that their prices are steeper than most people are used to and they set them as low as they can. These are generalizations based on the many producers I’ve talked to in the past few years. The best thing would be for you to learn as much as possible about all the practices of particular producers you have access to, and the constraints they are up against as well. Ask lots of questions, not from a place of suspicion, but from a desire to understand how things currently operate. And in the mean time trust me that we’ve come to have a food system that’s pretty dependent on exploitation in many directions.
When you look at processed foods things get messier still. I was drafting all this when I happened to listen to this episode of The Slow Melt, a podcast by the lovely Simran Sethi about everything to do with chocolate. In the episode, Simran talks with people about what happens for farmers when others are celebrating falling international cocoa prices. Spoiler alert: it’s not pretty. It also comes up in the episode that typically for every dollar consumers spend on chocolate, six cents goes back to the farmers.
WATER: THE VALUE OF RIGHTS?
My cohort’s group chat was in a tizzy recently when one person asked for advice on what to do when someone had asked her to pay for water at her borehole pump. It turned into a heated debate over whether she was being hoodwinked, and the acceptability of being asked to pay for water here versus in the US.
In his book, Patel uses the example of water to illustrate that if we were really thinking of value, water would never be free. But if we are to reorient towards a use-value- and/or production-cost- based price system, perhaps we’d have to exclude a few things? Maybe it would be necessary to decide that some things, such as water, are both so precious and so necessary to life that we must keep them separate from the logic of value-prices, lest anyone be excluded financially. Or, at least people should have access to enough for a person’s basic needs free of charge. In other words, an interpretation of a right that doesn’t involve having to purchase. I’m not sure in that case what happens if/when we have actual scarcity–situations where there isn’t enough safe water for everyone’s needs? But as far as I know that’s not currently the case, generally speaking. (Want some basics on the state of water access and the history of water as a human right in international law?)
I got all flustered the other day thinking about how the city council of Minneapolis passed a $15 minimum wage. That’s great, and we definitely need more places in the US raising the minimum wages. (By the way if you’re concerned about some of the commonly believed downsides of raising minimum wages then check out this article from Evonomics about what’s wrong with dominant economics theory. The article touches on how these flawed theories apply to minimum wage debates. And if you don’t know Evonomics, I highly recommend you poke around. It’s one of my favorite websites.)
But my gut feeling was that it’s messed up that someone might work for an hour here in Zambia and earn cents. Shouldn’t the time of an ‘unskilled’ human being be valued equally everywhere?
I knew that I was probably oversimplifying things so I asked my big brother. As I suspected, he was practically waiting for someone to ask. He helpfully complicated my view of things, and said this:
Amartya Sen says that whenever someone starts talking about equality, it’s important to ask, ‘Equality of what?’
Equality of money is, I think, one of the more meaningless things to try and equalize.
MONEY, MILLET, MARKETS
Good point, bro. What do people want money for anyway? When I ask people in the village, the biggest reason is for school fees. People arent necessarily attached to the idea of cash but actually just want education opportunities for their kids. I suppose money does eventually have a habit of making people want more stuff, but for now many people’s priorities are things that are generally considered basic needs.
Alright let’s say what we really want is education. Well for now we need at least a bit of money to get it, SO. One goal of the project I’m in is increasing “income generating activities.” Thus, my mind often finds familiar grooves of evaluating potential crops and projects based on if we can find people to pay money for them. Assuming first that things must be profitable to be worthwhile is a pernicious thought pattern–an important one to unlearn. Wangari Maathai, the leader of a pretty kick-butt social movement in Kenya, writes in Replenishing the Earth, “It’s …the valuing of resources for what they can buy, not what they do, that has created so many of the deep ecological wounds visible across the world (p. 43).” I think one could argue that several sociological wounds are inflicted as well. Many useful things end up being excluded based on somewhat arbitrary external economic factors.
Let’s take millet, for example. It’s a grain with a number of benefits when compared to corn, which is the go-to crop here. For example it needs less water and in short it’s more nutritious. According to farmers in my area it’s also more delicious. It sells for a much higher price than corn, but the government doesn’t buy it. So some might grow a modest amount of millet, consume some and give some to friends. But, given our location people generally can’t actually sell whatever excess they have. So, it’s more secure for people to just focus on growing corn because, you know, there’s a market for it. You can’t blame them. (This year though the price of corn has crashed and farmers are losing money selling it based on input costs, but what else can you do at this point?)
So how do we find new markets and money to support things that have ecological and social benefits? For whatever reason, when I ask this question while thinking about working with farmers in a tropical context I often end up asking how best to harness cash from tourists and export markets, in one way or another. But is that relationship necessary? When I look around it’s pretty impressive the true value that is being generated within the village. This value is in some ways invisible because it is never converted into cash. But when I inquire if it’s possible to find something in the village, whether it’s millet, bricks, sesame paste, or basketwork, much of the time someone is able to produce it. They often don’t reach their full potential for supplying these things to their community because no one can pay money for it. People are able to make pretty much everything they need right here so why can’t they financially access things like education? At the end of the day it seems there is a huge disconnect between people’s labor+skills+generated value and the kinds of opportunities they are granted.
DO ME A FAVOR
So, world, basically I have a favor to ask: that we work on questioning our values and economic assumptions, and sorting all these messes out. It won’t be easy, but could we please try to think of creative ways to support the production and exchange of all the awesome stuff people are able to supply for their communities within systems that value healthy ecosystems and ensure access to constantly-improving-quality of basic things like education and healthcare? You may well take a page out of my dad’s book and ask, “what’s it worth to you?” And I’ll say “My faith in humanity.” And no, this is not a joke.