Can Values Be Measured?

That depends on what we mean by “measurement”. They cannot be measured the way we measure physical object – length, weight, etc. But they certainly can be ranked.

Ayn Rand, in Introduction to Objectivist Epistemology, calls this “teleological measurement”. We rank values according to their relation to a goal or an end. So, for example, food, clothing and shelter have to be highly valued, since they are necessary for the mere preservation of life. Friendship, a happy marriage and a rewarding career are valued because they enhance our life and well-being. (You can think of other examples yourself.) But they cannot be measured with ordinal numbers; they have to be measured by cardinal numbers You can say that one value is more valuable than another, but you cannot express that numerically.

I came to think about this when reading Eugen von Böhm-Bawerk’s Basic Principles of Economic Value. He writes:

… let us imagine a small boy who wants to buy fruit with a small coin in his possession. He can buy either one apple or six plums. Of course, he will compare the eating pleasures afforded by both kinds of fruit. To make his decision, it is not enough to know that he prefers apples over plums. He must decide with numerical precision whether the enjoyment of one apple exceeds the enjoyment of six or fewer plums. To approach the situation from a different angle, let us consider two boys, one with the apple and the other with the plums. The latter would like to acquire the apple and, therefore, offers his plums in exchange. After deliberating on his eating pleasures, the former rejects four, five, and six plums for his apple. But he begins to waver when seven plums are offered, and finally makes the exchange at a price of eight. Doesn’t his trade reveal a numerically conclusion that the pleasure of one apple exceeds that of a plum at least seven times but less than eight times?

I laughed when I read this – not because there is anything wrong with it but because it is ingenious. (Böhm-Bawerk is often ingenious!)

Well, in this case there is a possibility to numerically fix values and to do it by ordinal numbers. But it cannot be as exact as when we measure length or weight. It is an approximation, although within strict limits; in this example between seven and eight. It hardly applies to the values I mentioned in the beginning. Actually, it applies only to values that are exchanged, i.e. economic values. (Friends and spouses are not bought and sold!)

It does apply when it comes to budgeting our money – choosing what food or clothes to buy or what house or apartment to live in. Here we do reason the way the boy in Böhm-Bawerk’s example reasons, weighing for and against and arriving at a price we can afford for whatever alternative suits us best.

And there may be other implications that I haven’t been able to figure out yet. So take this post only as a stray observation!

(See also Ayn Rand and Böhm-Bawerk on Value.)

Ayn Rand and Böhm-Bawerk on Value

I am currently reading Eugen von Böhm-Bawerk’s Basic Principles of Economic Value (first published in German in 1886), and I was struck by how close his thinking on “value” is to Ayn Rand’s thinking.

To recapitulate: Ayn Rand claimed that value is neither “intrinsic” nor “subjective”; a value does not reside in an object as apart from the valuing subject; neither does it reside only in the subject as apart from the object valued; it denotes a relationship between the valuing subject and the object that is valued. In her own words:

There are, in essence, three schools of thought on the nature of the good: the intrinsic, the subjective, and the objective. The intrinsic theory holds that the good is inherent in certain things or actions as such, regardless of their context and consequences, regardless of any benefit or injury they may cause to the actors and subjects involved. […] The subjective theory holds that the good bears no relation to the facts of reality, that it is the product of a man’s consciousness, created by his feelings, desires, “intuitions,” or whims, and that it is merely an “arbitrary postulate” or an “emotional commitment”. […] The objective theory holds that the good is neither an attribute of “things in themselves” nor of man’s emotional states, but an evaluation of the facts of reality by man’s consciousness according to a rational standard of value. […] The objective theory holds that the good is an aspect of reality in relation to man – and that is must be discovered, not invented, by man. Fundamental to an objective theory of values is the question: Of value to whom and for what? (Capitalism: The Unknown Ideal, p. 21f in the paperback edition.)

And here is what Böhm-Bawerk has to say on the same subject:

[E]conomic value is neither an objective quality inherent in goods, nor is it a purely subjective phenomenon that resides in the inner self of man. Instead, it is a particular relationship between an individual and an object. If I call this concept “subjective value”, I do not mean to deny the existence of objective factors. (P. 15.)

The only thing that might be misleading or confusing here is that Böhm-Bawerk talks about “an objective quality inherent in goods”, for something that Ayn Rand calls intrinsic. But this is merely a semantic difference, not a difference in substance.

I should mention that I had some quotes from this book, even from the same chapter, in my essay Objectivism versus “Austrian” Economics on Value; but I completely missed this paragraph. I guess I owe Böhm-Bawerk a belated apology for having missed this important and very true point.

Böhm-Bawerk died in 1914, when Ayn Rand was only 9 years old; had he read the quote from Ayn Rand above, I think he would have grasped the point and agreed with her.