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You can't put a price on beauty of nature
By Greg Cusack |
February 9, 2010, Tuesday
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MR Wang Yong,
I have just returned from town where I enjoyed lunch with my good friend, Lowell Carlson, who is the editor of our local weekly newspaper, The Bellevue (Iowa) Herald-Leader.
I had previously forwarded to him both your editorial on capitalism ("Capitalist Seeds of Its Own Collapse") published on January 30, and my response, which you published on February 4.
We launched into a discussion of capitalism as we have seen it played out in our own country, as well as better ways to both assess and control its more harmful aspects. My friend Mr Carlson reminded me of the old phrase, "knowing the price of everything, and the value of nothing."
Unrestrained capitalism is like that: humans have "production costs." Open land and flowing waters have higher use as potentially developed real estate, and those not directly involved in some form of commercial pursuit are a "cost drag."
The clear difficulty here is that some things which may have a high "price" may have negligible "value," for example, advertising designed to persuade persons to purchase that which they do not need (even that which before they had never thought of "desiring").
True cost
The key here is using different criteria - and being clear about it - when addressing things like goods and services, education, waterways, fertile fields, and so on. Differentiating among true product or enterprise costs is very important, for much of America's history has seen "true" or "ultimate" costs disguised or even not factored into a product's or processes' cost. It can be done, though, if we distinguish among different things inherent in the production of goods or services:
1. Input costs. These are the fairly obvious ones, using agriculture as an example, which includes the price of chemicals, seed, and fuel.
2. Production costs. Such factors as labor costs, and the long-term amortization of the equipment used in planting and harvesting.
3. Societal/environmental costs. These are the important ones which are often not factored in, so that the ultimate true cost of a product or service seems both "lower" and "more acceptable" than it might otherwise. Examples related to farming include:
a. How much fossil fuel is used? What is its impact on global warming? On the US dependence on foreign supplied oil?
b. How much fertilizer is used? What is its effect on the nutritional value of the soil? On the water table?
c. How many antibiotics, growth stimulators, and other chemicals are used in the "production" of farm animals? What are the consequences for human and other life-form health?
Fertile soil
At our lunch, Mr Carlson and I talked about the "wealth" of Jackson County, which is where Bellevue is located. (Iowa has 99 counties, a relic from the days when the bulk of its population lived in widely dispersed, mostly rural areas.)
Jackson County is sparsely populated; we have about 660 square miles of land on which 20,000 people live. (Comparing our population density with that of Shanghai is a staggering thought.)
Having said that, however, it is one of the more dollar-poor counties outside of the southernmost tier of counties lying north of the Iowa-Missouri border. People here live modestly, their incomes are modest, and most still have jobs related directly or indirectly to agriculture and the services upon which it depends.
Mr Carlson pointed out, however, that we enjoy one of the most scenic parts of Iowa, with our fertile, rolling soil, our bluffs of exposed, ancient rock, and the many streams and, of course, the Mississippi River on our eastern border.
This represents "true wealth," he contended, pointing out that some environmental economists have, in northern Canada, produced a value assessment of portions of Canada which attempt to measure "true wealth." Such an assessment could be of great use to both the United States and, I would think, China, for it would help to counter-balance those who see "value" as synonymous with "price."
Here is a practical example from our own area to illustrate the current problem and why we need such an alternative value system: If you look at the Google map site I sent you which shows the village of Bellevue lying next to a meandering river, you will see green stretches of land everywhere.
Much of that beautiful land is currently farmland, but great swaths of it lying near the river are also great hills affording magnificent views of the surrounding farmland and the river. Wealthy persons are beginning to "discover" Bellevue; they come to town, buy up such scenic overlooks, and build what we call McMansions there. This, of course, often means the destruction of mature trees and erosion that carves out the hillsides.
As long as they can "pay" the "assessed value" of that land, they can do it. And the "assessed value" represents what the county assessor thinks the sales price of that land is likely to be. But what about the value cost to the county and the city of losing that scenic portion of land?
People feel sorrow at this process, but also feel powerless to stop it because we have no in-place counter value structure that represents the loss to the larger society. I hope these thoughts have been of some interest and potential use to you.
Had we developed such many years ago, much of America would look and function differently (and, in my mind, for the better). Perhaps China still has time.
(The author was a member of the Iowa state House of Representatives. He also served in the Iowa executive branch. He retired in 2004.)
I have just returned from town where I enjoyed lunch with my good friend, Lowell Carlson, who is the editor of our local weekly newspaper, The Bellevue (Iowa) Herald-Leader.
I had previously forwarded to him both your editorial on capitalism ("Capitalist Seeds of Its Own Collapse") published on January 30, and my response, which you published on February 4.
We launched into a discussion of capitalism as we have seen it played out in our own country, as well as better ways to both assess and control its more harmful aspects. My friend Mr Carlson reminded me of the old phrase, "knowing the price of everything, and the value of nothing."
Unrestrained capitalism is like that: humans have "production costs." Open land and flowing waters have higher use as potentially developed real estate, and those not directly involved in some form of commercial pursuit are a "cost drag."
The clear difficulty here is that some things which may have a high "price" may have negligible "value," for example, advertising designed to persuade persons to purchase that which they do not need (even that which before they had never thought of "desiring").
True cost
The key here is using different criteria - and being clear about it - when addressing things like goods and services, education, waterways, fertile fields, and so on. Differentiating among true product or enterprise costs is very important, for much of America's history has seen "true" or "ultimate" costs disguised or even not factored into a product's or processes' cost. It can be done, though, if we distinguish among different things inherent in the production of goods or services:
1. Input costs. These are the fairly obvious ones, using agriculture as an example, which includes the price of chemicals, seed, and fuel.
2. Production costs. Such factors as labor costs, and the long-term amortization of the equipment used in planting and harvesting.
3. Societal/environmental costs. These are the important ones which are often not factored in, so that the ultimate true cost of a product or service seems both "lower" and "more acceptable" than it might otherwise. Examples related to farming include:
a. How much fossil fuel is used? What is its impact on global warming? On the US dependence on foreign supplied oil?
b. How much fertilizer is used? What is its effect on the nutritional value of the soil? On the water table?
c. How many antibiotics, growth stimulators, and other chemicals are used in the "production" of farm animals? What are the consequences for human and other life-form health?
Fertile soil
At our lunch, Mr Carlson and I talked about the "wealth" of Jackson County, which is where Bellevue is located. (Iowa has 99 counties, a relic from the days when the bulk of its population lived in widely dispersed, mostly rural areas.)
Jackson County is sparsely populated; we have about 660 square miles of land on which 20,000 people live. (Comparing our population density with that of Shanghai is a staggering thought.)
Having said that, however, it is one of the more dollar-poor counties outside of the southernmost tier of counties lying north of the Iowa-Missouri border. People here live modestly, their incomes are modest, and most still have jobs related directly or indirectly to agriculture and the services upon which it depends.
Mr Carlson pointed out, however, that we enjoy one of the most scenic parts of Iowa, with our fertile, rolling soil, our bluffs of exposed, ancient rock, and the many streams and, of course, the Mississippi River on our eastern border.
This represents "true wealth," he contended, pointing out that some environmental economists have, in northern Canada, produced a value assessment of portions of Canada which attempt to measure "true wealth." Such an assessment could be of great use to both the United States and, I would think, China, for it would help to counter-balance those who see "value" as synonymous with "price."
Here is a practical example from our own area to illustrate the current problem and why we need such an alternative value system: If you look at the Google map site I sent you which shows the village of Bellevue lying next to a meandering river, you will see green stretches of land everywhere.
Much of that beautiful land is currently farmland, but great swaths of it lying near the river are also great hills affording magnificent views of the surrounding farmland and the river. Wealthy persons are beginning to "discover" Bellevue; they come to town, buy up such scenic overlooks, and build what we call McMansions there. This, of course, often means the destruction of mature trees and erosion that carves out the hillsides.
As long as they can "pay" the "assessed value" of that land, they can do it. And the "assessed value" represents what the county assessor thinks the sales price of that land is likely to be. But what about the value cost to the county and the city of losing that scenic portion of land?
People feel sorrow at this process, but also feel powerless to stop it because we have no in-place counter value structure that represents the loss to the larger society. I hope these thoughts have been of some interest and potential use to you.
Had we developed such many years ago, much of America would look and function differently (and, in my mind, for the better). Perhaps China still has time.
(The author was a member of the Iowa state House of Representatives. He also served in the Iowa executive branch. He retired in 2004.)
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