Value capture is a utilitarian fantasy

We often talk about individuals or institutions capturing the value that they create. Value capture is important for incentivizing and funding research. However, it feels like conversations about value capture can shift from an instrumental goal in service of encouraging more innovation to a intrinsic goal - that people should be justly rewarded for the value that they create. I want to argue that from a practical perspective, value capture as an intrinsic goal is a chimera and point out the downsides of treating value capture as an intrinsic instead of instrumental goal.

Value capture as an intrinsic goal requires that you (or at least a market) can put a price on everything, and that just isn’t true. Norman Borlaug arguably saved millions of lives. What is the value of those lives? The people who benefitted most from golden rice were some of the poorest people in the world, so their contribution to GDP is negligible. And yet, we agree that their lives have value (if you disagree, we disagree at such a fundamental level that this is not meant for you.) What is the value of knowledge about how the universe started, or the weird blob-fish that live at the bottom of the ocean? One could make an argument that perhaps in the far future our studies of the Big Bang will lead to warp drives, or the blob fish will lead to a cure for aging. I can’t shake the belief that this knowledge is valuable even without contributing one cent to GDP and there is no mechanism to find the accurate “dollar equivalent.” Markets are amazing, but they require certain conditions to work and it’s not clear that those conditions can be met for all valuable things. More markets is not the solution to everything. ::This argument feels weak::

Belief that value capture is an intrinsic goal leads to a couple of counterproductive places. It leads to a focus on value capture mechanisms without consideration to whether those mechanisms are the most effective way to encourage valuable behavior. Perhaps this is a fallacious ’slippery slope’ argument, but it feels like viewing value capture as an intrinsic good can also lead to the attitude that if someone or something is unable to capture value, it must not have been valuable in the first place.

Related

Web URL for this note

Comment on this note