j_doyne_farmer's picture
Professor of Mathematics, Oxford University; Director, Complexity Economics, Institute for New Economic Thinking, Oxford Martin School; Co-founder, Prediction Company
What is value?


Oscar Wilde once said that "A fool is someone who knows the price of everything and the value of nothing". Economists have struggled with this question for several centuries and have largely given up - most modern economists tacitly assert that price and value are the same thing, except for possible "externalities" that prevent the market system from functioning correctly. But many of us still believe that the value of a good poem or a comforting word may not be fully reflected in its price, and that value to society and GDP are only weakly correlated.

The question behind this question is whether there is an objective basis for saying that one thing is more valuable than another. In the world of esthetics is inevitably subjective. But perhaps this is not as manifest in other domains. For example, in engineering is it possible to say that one design is inherently better than another? This is closely related to the long standing and much debated question of evolutionary progress. Is there a sense in which we can clearly say that organisms tend to evolve toward better designs, when taken over sufficiently long domains in time and space? When we compare the non-living world of four billion years ago to the rich biosphere of the present, the comparison seems obvious to some of us. But this is hotly contested by others, who point to the lack of a objective criteria for quality of design.

I think that, with functionality as the arbitrator, a mathematical framework for distinguishing good and bad designs may be an achievable goal. This has scientific importants for engineering and economics, and profound implications for philosophy, relgion, and even politics. In the postmodern world objectivity is out of fashion. Perhaps it is time for reality to make a comeback.