How does economic and business value correlate with human and societal values, if it does at all? If you ask some hardcore leftists, they’d argue that value (in the economic and business sense) is at odds with values (in the human and societal sense). Therefore, we need to impose those values on the economy. If we don’t, Adam Smith’s invisible hand would fail to deliver the desired outcomes. To achieve a human-centric economy, we need to force Smith’s hand.
The ordoliberal school of thought, which introduced the notion of a social market economy, agreed – but only to a certain point. It also emphasised the role of market competition. We shouldn’t confuse ordoliberalism with neoliberalism, but I’ll leave differentiating the two as an exercise for the reader. While discussing the role of regulation, we’ve briefly touched on the issue of how markets are created and governed. If and when markets fail, regulation is necessary.
But let’s get back to our initial question. Is it a market failure if and when (business) value and (societal) values aren’t completely aligned?
The answer depends on how we describe the relationship between economy and society. Are these totally independent entities or is the economy a subsystem of society? And in the latter case, how would society impose values on the economy which operates according to economic and business value? Just regulation? Or something more?
First and foremost, values are translated into value through buying decisions: voting with your wallet, better known as “consumer choice”. People tend to spend their money on things they value more than the money they give up in exchange.
We fail to align value and values
Our spending habits are possibly the hardest currency when it comes to our values. Indeed, there are numerous examples of how we fail to put our money where our mouth is. Ten years ago, the ethical consumer was still debunked as a myth. And as recently as early 2021, German discounter Lidl had to abandon higher meat prices that were intended to benefit farmers. Apparently, consumers weren’t willing to pay for animal wellbeing. Or at least, they were unwilling to pay more for the same product without improving inherent product quality.
Human beings are inventive, maintain social values, and learn. Most, if not all, thorny problems can only be solved by a combination of these different approaches. The links between human values and business value are more complex than simply financial. And technology has strengthened these links.
That’s why we see a huge trend towards purpose, value(s) and sustainability in business. It’s the consumer who sets the purpose and determines the value. This is a huge shift away from the industrial model of mass consumerism. It looks as if the digital revolution has turned things from head to toe. That’s what revolutions do. Power to the people!
But there’s a caveat, and that is down to the big value shift the digital revolution has caused. Value has been digitised. We happen to live in an attention economy, with human attention being the most scarce resource.
Voting with our attention
The things we value most are the things we spend our time and attention on. We’re voting with our attention, even more so than we do with our wallets. And we, both collectively and individually, fail to spend our time and attention on what’s really important. From a value perspective, we find ourselves at a crossroads where our values are at odds with the value that’s captured via our precious time and attention. We are trapped in ludic loops. Big Tech mass-manufactures, slices, packages and sells our attention to the highest bidder.
This is a classical problem of distraction. It’s a long-established one. We knew it in the olden days when values were summed up as “the True, the Good, and the Beautiful.” Today, distraction has become a serious problem of modern life. It’s exacerbated by the rise of distraction by design. The 20th-century consciousness industry (Bewusstseinsindustrie, a term coined by Hans Magnus Enzensberger) is a lukewarm breeze in comparison. Digital technology, especially through the smartphone, is much more pervasive than mass media was and could ever be.
And that leaves us with the same dialectic of liberation and restriction that Enzensberger diagnosed back in 1970. Digital technology is taking on increasing numbers of steering and control functions in society, while its technical structure is breaking through previous limitations. The massification of communication content, as well as the diversity of communication channels, undermines the possibilities of censorship. Since digital media makes information reproducible at will and widely accessible, it also breaks through social barriers:
“The new media are egalitarian by their structure.”
— (Enzensberger, Kursbuch 20/1970: 167)
Same game, new level
The digital revolution has brought both new degrees of freedom and new challenges to that very same freedom. As human beings, we’ve new and powerful means to strive towards fulfilling our values. But these same means can also turn against us and our values, simply for the sake of capturing economic and business value. Again, this is nothing new. Every new technology comes with the same ambivalence and ambiguity. It’s the same old game, only on a new level.
If we look at the stock market, the value Big Tech captures is pretty high. Wouldn’t it be great to align this with our human and societal values?