The shape of the curve

Setting up the top and bottom ends of the value scale is necessary and can involve some fun and speculation. However, the important thing now is the shape of the value curve. It is important because it will be the tool that lets us consider whether we are being realistic about our scale of value.

Part of setting up this curve is simple; it involves things that everybody would agree about. We will consider the simple question "is this more important than that" and we are going to use the answers to rank stuff. More important stuff goes to the left, less important to the right. As a starting exercise we will consider the world rice crop for 2009 versus the number of visitors to Graceland in the same year. Even the greatest Elvis devotee would admit that the world rice crop is of more importance, so we can say that on our scale, rice is to the left of Graceland. How far apart they are does not matter yet. Now lets look at another crop. Peaches. And let's stay at the highest level of things for a minute. In terms of he concerns of the whole human race, rice is more important than peaches and peaches beat Elvis, so they go somewhere between rice and Graceland. So far, so good. But what if you are a peach farmer? For you, for this year, maybe peaches beat rice? Our personal ranking of things can differ from society's ranking. This is a simple fact, neither good nor bad. However, the extent to which personal rankings distort the global ranking or the local ranking may involve good and bad.

The ranking, some averaged-out ranking, will be the horizontal axis of our graph. The vertical axis will be value - with life itself having some very high value over on the left side and our nail advice having very low value over on the right. Today's food, medical care, sanitation will all be high and over to the left. Silly stuff will be low and on the right. But what of things in between? Where is the divide between important and unimportant things? is the curve gentle or does it plummet at some point? This is where my crazy ideas start to become useful.

Imagine for a moment that we had a wonderful society where everything necessary to sustain life was just there. Housing, food, medical care, transport - imagine that good old workers' paradise that never came into being. How might its inhabitants view the relative value of say today's dinner against the singing of a song? Might they not think that one dinner and one song have about the same value? Perhaps that one good piece of art was worth many dinners? That a fingernail technician should eat no matter how many or how few nails she or he had worked on that day? In that society then, the curve would be quite flat, regarding most things, most pursuits as having fairly similar value and a quite high value. That's the red curve on the diagram below.

Now the opposite. A world where everyone is close to starvation. Think of the situation in those desperate camps where dictators put their imagined enemies. It's another flat curve, but in this one just about everything has almost no value - the blue curve in my graph.

In the 20th century people tried to build societies that followed both of those curves. They all failed because they are inhuman and inhumane. The more stable societies, those that worked well enough the continue had curves like the green line. There was and is a sense of relative value of things and efforts in such a society, so that the engines of both greed and benevolence get a chance to operate.

Great fools think alike...

I've been called a clown, deliberately by a Japanese colleague who was trying to work out how I build teams. He told me it was a compliment on a technique I use. Dead right - the fat little kid who is too smart for his own good has to either find a way to lead or get thumped by the bullies. Thus, I can use "fool" as a compliment too. Just as I was preparing my last post, Beverley was good enough to direct me to an article in The Times. It is compulsory reading:

http://women.timesonline.co.uk/tol/life_and_style/women/the_way_we_live/article6053885.ece

Lots to think about there - but one thing is just amazing. We now know what it costs to tidy Estonia! We have a true cost. $500000 plus the efforts of some smart planners and a few hours of everyone in the country. What got cut out as having no value? Professional planning and administration.

I think I must offer a prize for the best rebuttal about the Estonian cleanup. This idea needs testing.

Dr. J

I can't see the value; can you see the value?

If we're going to play around with a scale of value, then we have to find the far end, where there is something that is totally lacking in value whatsoever. That's difficult to do, because we have to admit that art, having fun, even television has some value. We are human beings, not mechanisms and we devote huge effort to ephemera because we do value them. I also wanted the end-point to be something blatantly commercial, because in the end we are talking about commerce. It took a bit of a thin, but I think I have it.

I started with fingernails. Walk along any King Street in Canada or go to any mall and you will see places that offer fake fingernails and, of late, airbrushed pictures drawn on your nails. That has to be getting close to the end of real value and even of ephemeral value. But it is still not quite far enough. One step further - paid advice about what picture to have spray-painted on your fingernails. There you have it. Dr. John's gnomon of total lack of value. I expect the National Federation of Nail Art Advice Professionals to come after me with torches and pitchforks.No matter. as they tie me to the stake I will still proclaim that they have no value.

I've posed it as a joke. Jokes are useful; done right they make it possible to discuss topics that are emotionally dangerous. Inside that joke there is a strong statement though. Many of us may be doing things and receiving rewards for things that have little of no value. My point, the important point, is that our society has chosen to reward so many low-value pursuits so highly. We have distorted the value metric and now we are paying for it. The easy spending on a huge flat-screen TV is now balanced by worry that the unemployment benefits are low and we must now be careful about what we spend on food. Suddenly we are in that part of the supermarket where produce is marked down because its expiry date is tomorrow.


Dr. J

So what does have value? Life.

I've learned a lot doing science; for example, we often talk about a material as being the mixture of two end-members. What you get if you mix eggs and milk is a good example. At one end you have pure egg. Add a bit of milk and you might get English-style scrambled eggs (after cooking of course - work with me here). At the other end, take a pint of milk. It is pure milk. Whisk in an egg and you have egg-nog, more or less. OK this is crude, but as a first pass at working out where and what value is, it serves. We can look around for something that is all pure value and then for something that has no value at all. Most everything will fall between these limits. It will be an interesting thought experiment.

What has absolute value? It must be something we need - and need in an absolute sense. We know what a human being needs and it is not much. Two thousand calories a day, enough shelter to survive whatever the weather is, rudimentary sanitation. Enough exercise, but not exhaustion. It is a pretty short list and would make for a marginal life, but that is the entire point. To speak of anything above the absolute minimum to sustain life as a need is to diminish our regard for the fundamentals. If you are facing starvation, then one day's worth of food has great value - perhaps as much value as a human life. Like it or not, that's the basic premise of our culture - that people would rather eat than starve and so will exchange their efforts for food in the ratio of one day's work for one day's food. You doubt me? Go read Engels. Look at the television. Read the newspapers. There are people starving all over the world because nobody sees their output as being worth a day's food. In the cities of the west, we do not see it happen, not out in the open on our smooth streets, but think for a minute of the stories of malnourished or neglected children in housing projects. It is not that far away. Go to another country, a poor country and the real meaning of the word "need" will be very obvious.

By now you are thinking I must be crazy. Maybe. But I can't see any error in the logic above. The things we need have absolute life-size value. That's a good place to start. Next - what can we find that is common and really has very little true value? It has to be something that nobody in possession of the facts would spend money on but also something that sells in huge volume. Have a guess?

Dr. J.

Could this be a manifesto

"Nothing ain't worth nothing." Times are tough if I can find both truth and solace in a country song.

Our problem is, we have all accepted that nothing was worth something in the last few years. We can hardly be faulted for doing so, our neighbours, friends, elders and betters have accepted it and proclaimed it too. Pity it was a falsehood. The fact is that worth, value, resides in things. Tangible things that we can use or experience. Value does not lie in guessing what a tangible thing might be worth some day or in trading such guesses. But that's what we have built our great market-driven industries on since about 1970 - guesses of value.

The structure is crumbling - and taking with it the stored up hopes and work of billions of people. Not millions, billions. Now that's an idea worth a manifesto!

Hector Ruiz of AMD believes that coming out of this recession there will be a flight to value in the semiconductor business. I hope and I believe that he is under-estimating what is happening. It is not a flight but a homecoming and it is happening in all businesses and in the way we choose to live.

In this blog I will try to present some ideas, mostly half-formed ideas, about how we can use this recession to make life much better. Crazy ideas as far as many people are concerned, I am sure. I don't really care though - because I think I might be on to something.

The first crazy idea then : many of the concepts that business has foisted on us are about as real as phlogiston, the lumeniferous aether, the tooth fairy or the jaberwock. Or manifest destiny for that matter.

Dr. J


the song? "Me & Bobby McGee" - written by Kris Kristofferson