conceptions of value

Brayden

When the New York Times Book Review asked a group of writers and critics to decide the best American novel in the past 25 years, Toni Morrison’s Beloved came out on top. The runners up were Philip Roth’s American Pastoral, Don Delillo’s Underworld, John Updike’s Rabbit Angstrom novels, and my personal favorite, Cormac McCarthy’s Blood Meridian. The list is impressive. What struck me as I read the list, however, was the incomparability of insiders’ favorites with those books that frequent the top of the NY Times bestseller list. Sure, some of these books spent some time on the bestseller list, but books by the likes of Stephen King and John Grisham drastically outsell the critics’ choices. In fact, Amazon ranks Beloved as only #569. Why does much of the public not seem to get what the critics and Morrison’s fellow authors seem to get about Beloved?

The contrast makes evident that different estimations of value exist in society. Literary insiders would never think to use a metric like the Amazon sales rank to judge the value of a book. But executives at a publishing house might see this as their first and most important indicator. Clearly, the two don’t match up, which is why we often see businesses in the world of arts, music, and literature make decisions that offend the very producers of the works that they distribute. The case of Wilco leaving their record company so that they could make the album they desired is a classic example of this (as shown in the documentary I’m Trying to Break Your Heart). Wilco chose between two different valued ends. The record company wanted a record that would sell to the band’s core, niche audience, while Wilco wanted to experiment and combine different genres of music to create a record that would have artistic value that could not be measured by sales.

And this leads me to the point of this post. Value is a sorely undertheorized concept and this prevents our ability to talk about it in meaningful, analytical ways. Of course, I say this in order to introduce a great article that attempts to shed some light on the topic. Joel Podolny and Marya Hill-Popper published “Hedonic and transcendent conceptions of value” in Industrial and Corporate Change in 2004. In the paper they discuss two distinct ways of valuing things. Hedonic value is based in the ability to make comparisons between objects using a common metric. Transcendent value, on the other hand, involves judgments of worth based on a holistic assessment of the object. According to the latter conception, products cannot be compared to one another because they inherently cannot be broken down into smaller, commensurable components. Something has value because of what it is, irrespective of its relation to other objects.

Most sociological research on markets focuses on the hedonic qualities of valuation. Ezra Zuckerman’s important research, for example, demonstrates that value is grounded in comparisons between things of the same category. When something can’t be categorized in a coherent fashion, it becomes more difficult to value it. But clearly there are markets where transcendent value dominates. The art market, as discussed in the Podolny and Hill-Popper paper, is one such market. The inherent value of art objects depends on their ability to elude comparability and standardization. It is for this reason that it becomes so difficult to talk about qualities of art that may be measured and compared across different forms. The two conceptions become important when thinking about the motivations that underlie people’s work. What is often framed as irrational, may simply be the application of different conceptions of value. Artists, for example, would be thought lacking integrity if they began a work of art attempting to apply certain features they knew could generate a higher bidding price. They pursue art, for art’s sake.

The business world, on the other hand, is firmly grounded in hedonic value. Efforts to discuss the worthiness of a particular strategy begin and end with the bottom line – estimated by using a series of careful and reproducible calculations that communicate value. An inability to make something commensurable may damage the worthiness of a project. This is one of the major problems facing organizations that try to do good for good’s sake. Why should we expect or want a corporation to pursue societal goals that do nothing to maximize shareholder value? This question is often posed by critics of corporate social responsibility. These critics have essentially turned a corporate goal that has transcendent value into a question of hedonic value. They can turn the tables like this because that is the logic of business.  Businesses are held accountable by rigorous and highly codified accounting standards.  This turning of the table has also, incidentally, pushed CSR scholars to do more intensive research on the link between CSR and financial outcomes. These researchers want to demonstrate empirically that you can operationalize social goals using a hedonic conception of value.

Once you can make something inherently worthy, like CSR, commensurable and subject to calculation, has the value essentially changed? If you can compare an organization’s goals and outcomes, once valued for their own sake, using a common metric, will the nature of judgment of that action change also? These are important questions facing organizations and scholars interested in CSR. As I’ve pointed out before, to make CSR work to corporation’s advantage, you have to believe in it. But once you can measure CSR, belief may no longer be enough.