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Value

Why do people act the way that they do? People do things because they value one end result more than other possible end results1. People do things because they value the end result of the action more than the cost of the of doing the action. People do things because performing an action over time causes the end result. Out of those three things you can't have one without another. You can't expect to achieve an end result without performing an action, you won't perform an action if you don't value the end result more than the cost, and you must choose one end result instead of any other end results in a given moment. A short form of this concept could look something like this:

  • End Result > any other End Result
  • Cost < End Result
  • Action / Time = End Result

So what is this actually mean? Well it means that we can use these principals to figure out how to provide the best things for other people whether it be serving others or a international corporate company this is the value equation.

Out of all the possible things that someone can do in a day, or in a lifetime, a person prioritizes one thing over another2. If someone tries to do more than one thing at a time what ends up happening is the person rapidly shifts between doing thing one and thing two. A person's values or principles are the most important things to a person whether they actually realize them or not. One person may value helping other people over themselves. Another person may value being more rich than their neighbors than the time that they spend to become more rich than their neighbors. One person may value being alone then being part of a community or vice versa. The decision that we make every time that we perform an action be because another decision. Say Alice is feeling hungry so Alice made some bread. The action of making bread had the end result of Alice not feeling hungry. But why did Alice decide to make bread? Because she valued not being hungry over the other things that she could have done. Why did she value not being hungry? Biologically it's because humans require food to perform actions, or personally Alice just likes making bread. Or maybe Alice was making bread so that she could have the energy socialize with her friends whether she realized it or not. Understanding the reason why people prioritize doing one thing over another is a essential part of helping them. If you don't understand what someone wants it's a lot harder to give it to them. A good explanation of this concept is described in this clip by Jordan Peterson:

Whenever someone performs an action, there is a cost to that action. When Bob goes to the store in his car, Bob has to pay the use of the car, the time that it takes to go to the store, and the money he spends to get his groceries. Bob must value the end result, the groceries, over the cost of getting them. If he didn't value the end result over the cost, he wouldn't do it. The valuation of the end result that Bob makes before going to the store and while going to the store is dependent on what Bob values. Bob probably the values living over dying so he buys food. Bob values having a car over having to use other transportation. If the cost of something is too high, the person will not go to the effort to achieve the end result3. The cost of something can be measured in many ways. The cost of something can be the time, money, social, spiritual, or other costs that a person values. The cost paid is less than the effect at the time of doing the action. In retrospect the cost paid may be greater or less than the end result, but during the action the perceived cost is less than the perceived benefit. If doing things that have a cost, and we can have the end result then there would be no point in acting. There'd be no point in doing anything because we could have everything at no cost. Without the end result there's no point in exerting cost. There must always be a cost and there must always be an end result or else we wouldn't be humans. Another good series of thoughts on cost (or pain) and how it relates to value is described here:

To achieve an end result, thing one might be very effective, thing two might not be super effective, and things three might be useless. In this world, people first expect that when x happens, y is the result4. Without this, causality, the world wouldn't be understandable5. The more informed someone is on what a given thing can do, the more accurate a decision they can make whether they can you use that thing for what they want. When someone promises thing one and delivers thing two instead, this is called a scam. Whenever we get scammed we feel like value was taken away from us. This is because value actually was. In the value equation, the expectation that a cause will result in an effect is critical. This is well explained again by Jordan Peterson here:

So what's the end result of this text? I came across this when trying to understand what to optimize for in life that can be applicable to anyone anywhere and under any circumstances. The end result that one attempts to achieve is up to the person who is performing the actions. What that person values maybe different from another, and that's okay. What we should optimize for is the end results that we think are the most important. We should use things that result in the least cost for the most benefit to achieve those goals. And then we actually do them: we should perform the actions to make it so that the cause results in the effect. We should optimize for achieving the most important end result for the least amount of cost through our actions. It's as simple as that. Sometimes helping other people to achieve their goals can help us achieve our goals. It's not always the case, but with a shared end result, or a goal, groups of people can achieve wonderful or sometimes terrible things.

What is value? Value is the end result that we prioritize, the means, and the action we use to get there.

References

Mises, Ludwig von. “Chapter 7 Section 1.” Human Action: A Treatise on Economics, Ludwig Von Mises Institute, 1998, p. 120. Mises, Ludwig von. “Chapter 4 Section 2.” Human Action: A Treatise on Economics, Ludwig Von Mises Institute, 1998, pp. 94–95. Mises, Ludwig von. “Chapter 4 Section 4.” Human Action: A Treatise on Economics, Ludwig Von Mises Institute, 1998, p. 97. Mises, Ludwig von. “Chapter 1 Section 5.” Human Action: A Treatise on Economics, Ludwig Von Mises Institute, 1998, p. 22.

Notes

  1. "The assignment of orders of rank through valuation is done only in acting and through acting. How great the portions are to which a single order of rank is assigned depends on the individual and unique conditions under which man acts in every case. Action does not deal with physical or metaphysical units which it values in an abstract academic way; it is always faced with alternatives between which it chooses" (Mises et al. Chapter 7 Section 1 120). ↩

  2. "Acting man chooses between various opportunities offered for choice. He prefers one alternative to others. It is customary to say that acting man has a scale of wants or values in his mind when he arranges his actions. On the basis of such a scale he satisfies what is of higher value, i.e., his more urgent wants, and leaves unsatisfied what is of lower value, i.e., what is a less urgent want" (Mises Chapter 4 Section 2 94-95). ↩

  3. "Action is an attempt to substitute a more satisfactory state of affairs for a less satisfactory one. We call such a willfully induced alteration an exchange. A less desirable condition is bartered for a more desirable. What gratifies less is abandoned in order to attain something that pleases more. That which is abandoned is called the price paid for the attainment of the end sought. The value of the price paid is called costs. Costs are equal to the value attached to the satisfaction which one must forego in order to attain the end aimed at" (Mises Chapter 4 Section 4 97). I would argue here that if action is all about exchanging a less satisfactory state for a more satisfactory state, then the costs at the time of action in addition to the less satisfactory state are less than a more satisfactory state. ↩

  4. "Man is in a position to act because he has the ability to discover causal relations which determine change and becoming in the universe... Where man does not see any causal relation, he cannot act. This statement is not reversible. Even when he knows the causal relation involved, man cannot act if he is not in a position to influence the cause" (Mises Chapter 1 Section 5 22). ↩

  5. "In a world without causality and regularity of phenomena there would be no field for human reasoning and human action. Such a world would be a chaos in which man would be at a loss to find any orientation and guidance. Man is not even capable of imagining the conditions of such a chaotic universe" (Mises Chapter 1 Section 5 22). ↩

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