Japan in Their Own Words (JITOW)/日本からの意見

Monetary Value a Useless Measure for Environment and Culture
ONO Goro / Professor, Saitama University

March 24, 2005
A corporate takeover bid recently in the news has led some western media to report that the Japanese are beginning to realize that western-style competitive capitalism does not work for Japan.

Such commentary is totally misguided. Globalization resulting from the rise of non-Western developing countries and the "enhancement of the individual" brought on by the Internet have created the need for an interface, or common values, that enable mutual understanding. At the same time, they require the coexistence of different value systems. The existing unilateral model of a "western-style competitive society" may not "work" for Japan, but neither does it work for the world at large, including western society itself.

Since economics and technology took precedence in exchanges between nations and peoples, economic value and numerical value – and monetary value in particular, have been given priority as a common value system. This is especially pronounced in America, a multiethnic nation. While individuals may vary on the degree of its importance, monetary value is often used in America as a common value system shared by all that ensures the unity of the nation. The general tendency of emphasizing monetary value has been accelerated by America's rise to leadership in the modern world.

However, just as numerical values are limited in their application to various phenomena, monetary values are also limited in their application to a certain part of our economic activity. Furthermore, such economic activity represents only a part of human cultural activity, and such human activity represents only a fraction of the ecosystem or natural environment. In symbolic terms, this can be shown as: [natural environment (ecosystem)⊇human society (culture) ⊇economy⊇monetary economy].

In simpler terms, human happiness and progress cannot be attained through increases in monetary value and numerical value alone. This does not necessarily mean we should return to the stone age. Values are only meaningful when there is a subject who evaluates them, or a value system against which they are evaluated.

Current economic theories are preconditioned on monetary value. It is therefore clear that today's economics cannot possibly be applied to culture or environmental issues.

Nevertheless, in part because discussion slanted toward numerical or monetary value tends to prevail in modern society, we are now applying economics to environmental issues and culture, without even an attempt by economists to overcome the boundaries of monetary economics. Not only is this plainly impossible, but it also has the effect of creating an illusion. In reality, environment and culture are irreversible and cannot be recovered once destroyed, and ecosystems and cultural systems exist as indivisible whole systems. However, applying economics to environment and culture creates the illusion that they are recoverable or divisible.

It is certainly inconceivable to contemplate environmental conservation or cultural enhancement without scientific numerical values or economics. In some cases, it may be more effective to let technology or market mechanisms take over. Even so, that is a separate issue from dealing with environment and culture -- which are basically irreversible -- by describing them in terms of numerical values or discussing them in terms of modern economics. In fact, it is dangerous to do so, because mathematical formulas and money offer such functions as expressing irreversible phenomena as reversible, making what is indivisible divisible, and treating events without additivity (the property of increasing by addition) with additivity.

For example, we can bake bread from flour, but cannot produce the original flour from that bread, though we can produce breadcrumbs. However, by including money into the equation, we can sell the bread to buy more flour and express this as a cycle consisting of "flour⇒bread⇒flour," instead of "flour⇒bread⇒breadcrumb." Similarly, an inheritance in the form of an expensive car will lose its value if its parts were divided among relatives, but give the car monetary value, and each relative will be able to receive their share in the form of money. Money has contributed greatly to the formation of modern economic theory, by offering not only its traditional functions as a means of exchange, measure of value and means of wealth accumulation, but also by restructuring complicated market mechanisms into elaborate mathematical equations.

I should also add that modern economic theory cannot be applied to "negative values." For example, glass in its original form of silica and soda ash is neither useful nor harmful to mankind. However, when they are heated to produce glass, they become not only useful but once broken into pieces may even become dangerous, thus giving rise to a "negative" value.

Yet modern economics evaluates such a case in terms of a "disposal cost" and gives it a "positive" value. In other words, while a negative value of "cost" may arise at a micro level, it increases GDP at the macro level of the national economy. For example, destruction of the natural environment in urban areas has caused people to travel long distances in search for natural beauty. While this may be a negative development at the individual level, it expands the economy at the macro level by raising revenues in the tourism industry. This shows that in some cases, an inverse correlation exists between economic value and non-economic value. Even destructive acts such as war are dealt with in terms of greater consumption at the macro level that contributes to increasing GDP.

In economics, we call this a "fallacy of composition (evaluation at the micro level does not add up and match the evaluation at the macro level)." And there are abundant examples, as in the case of SO2 (sulfur dioxide), which does little harm when diluted across a wide area, but causes pollution when concentrated in a narrow area. From this standpoint, it is quite clear that we should exercise greater care from a more scientific viewpoint when dealing with such ideas as trading emissions of greenhouse gases, which was adopted under the leadership of certain economists.

We may need to deal with environment and culture from an economic perspective. However, we must not do so based on the current economics of money, but instead on a new economics that transcends monetary economics.

The writer is Professor of economic policy at Saitama University.
The English-Speaking Union of Japan

小野 五郎 / 埼玉大学教授

2005年 3月 24日











(筆者は埼玉大学教授 経済政策)
一般社団法人 日本英語交流連盟

English Speaking Union of Japan > Japan in Their Own Words (JITOW) > Monetary Value a Useless Measure for Environment and Culture