There is no big deal to know that value cannot be quantified, while the price, on the other hand, cannot be unquantified. That the value of any item being exchanged among humans can not be defined objectively was so nicely explained already by Ludwig von Mises, for example, in Socialism (which I have the pleasure of reading at the moment, year 2020). Value is an integral part of each economic calculation of each individual in literally every moment of any transaction and is, as such, 100% relational. Value is not static since the environment of each transaction changes with that same transaction and with all other transactions taking place on all levels, from cultural to physical.

Relativity is objective

Such a view was often attacked as if it were relativistic, as if supporting the “anything goes” philosophy of subjectivism. But such criticism could not be more wrong. The relationality of value rests on complete acceptance of objective reality outside, but at the same time on the fact that the mentioned objective reality changes all the time. It is not questionable that a stone falling has objective reality (it exists even if not perceived by any human). It is also not questionable that laws of motion and conservation of energy (and all other laws of nature) are objectively proven (at least for dimensions in which that stone exists). Still, the value of that same stone changes constantly. That same stone has a different value if used by a hunter for killing an animal or by the Princess of Monaco recognising in it a jewel. It also has a different price. But more about the price in terms of value later.

When Ludwig von Mises wrote his major treatises, the science of complexity was not as developed as it is today. Mechanisms of positive and negative feedback loops of nonlinear dynamics (mechanistic explanation of complexity) allow us to better understand what Charles Darwin or Von Mises took for granted. As much as humans in the tree of life have no higher value than amoebas, the value of any item put on the market changes not only with each user but also within one user over time. Value can never be fixed.

It is often repeated truth that it was the materialism of Marxism that was really subjectivist. When everything is fixed in advance, when there is no option for an individual to decide, to make a personal economic calculation, “objectivity” of that value rests entirely in the hands of a subject in power to decide for the whole community. The value is objectively defined for all by one subject, dictator, ideal figure of the working class, or deity. That is thus also the simplest description of totalitarianism.

Value and (personal) values

Before we jump to the relation between value and price, let us take a look at values as personal values. I have pointed out the peculiarity of the Slovenian language that has two words for what only “value” denotes in English many times so far. We do have “vrednota” for personal value and “vrednost” for a value that is on the market. Such differentiation allows us to ascribe positive feelings to “vrednota” while at the same time, we can despise “vrednost” as something bad that happens on the capitalist market only.

For this post, I would only like to refer to personal value as something that takes on and evolves. We evolve our values only through relations with other people, events, and objects, and we also change our values all the time through those same interactions. We perform our actions based on our values as much as our speech acts rest on them. Personal values are foundations of our personality, but at the same time, we know (or we should know) that our values change in relation just as a climate does, for instance.

Values are dynamic

This relational nature of values raises enormous problems for many. As a brand developer, I encounter clients who would like to get fixed brands all the time. They cannot accept that brands (as sacks of values) cannot but change all the time. At the moment that they do not change anymore, they are dead (out of exchange). Brands as complexes of nine categories of values (described by the Standard Branding Model) change not only in terms of the environment but also internally. Internal values can stay “the same”, but since they constantly change their relative value in relation to other internal values, they change even if they stay the same. More than they stay the same, the more they change the brand as a complex structure. That is why we say that we should stick to defined values as long as possible, since this consistency only allows us to make the brand flexible so it can readjust itself to changes in the environment.

Brand to trademark = value to price

After all that I have written so far, it should not be a surprise to see that value is in a similar relation to a price as a brand is to a trademark. Price is the value of a certain quantity for economic calculation (evaluation of risks and profits of each action on the market). A trademark is a petrified evaluation of any brand for a specific transaction in a specific place and at a specific moment.

The price might be complicated as much as a trademark, but they are not complex. For that reason, it is hard to understand how prices and trademarks are constructed. But when price and trademark are constructed, both are easy to handle.

On the other hand, values and brands are easy to understand, since they are complex entities that are understood with our whole being and not only by our rational mind. But for that same reason, it is so much more challenging to handle them. It is easy to understand brands and values only if one can step out of complicated rationality to the complex intentionality of life. I often explain this later as “kitchen logic”. Child “understands” it (better: he lives it). Although later education limits his powers to plain rationality, it is possible to upgrade this mechanistic view of reality with the help of systems thinking and complex logic that makes life different from inert nature.

Values and prices in reporting

How could so far explain the relation between value and price help us understand corporations and their reporting?

One can never get an absolute value of anything on the market. For that reason, “the value of this or that company” cannot be established in principle. One can also not evaluate the value of a company through financial annual reports. They can evaluate past price value at a particular moment (end of the fiscal year) transparently, but nothing more. Financial annual reports bring price value as a hypothetical fixed number for a specific moment in time. For the very next moment, that price is already different. But at least it is fixed, but we cannot say the same for the value of the company. Financial annual reports say nothing about the value of the company.

For that reason, various types of corporate social responsibility reports have been developed, including those by the Global Reporting Initiative (GRI). They emerged from the intuition that financial reports fail to evaluate the real value of the company. For that same reason, we are talking about various types of capital and not only money capital represented through various types of financial, material, or proprietorial goods. We do feel that capital figures represented by the money value of stock options do represent the only possible tool for exchange, but do not explain the real value. They offer a solid ground to speculate on the difference between the money price and the value of that company.

It is going to be fun to follow the Integrated Reporting Initiative, whose aim is precisely to construct a report that would put all values on the same level. But again, it should be clear by principle, that if that initiative succeeds, the result will not be the value, but “only” a more precise money-price evaluation of all capitals that co-construct the company value-chain.

The value of the customer

Let me conclude with the value of the customer, so often used in marketing. This value should explain how much each customer adds to the value of the company and at the same time, how much the company loses if such a customer is lost.

We are again talking about the money-price value of a customer and not about his value. The value of each customer for the company changes all the time, while the money price value stays relatively fixed. Although I have so far not worked on this issue seriously, I would say that the value of each customer is the total sum of all company assets divided by the number of customers, adjusted for the volume of sales to each customer. But let this assumption serve as a provocation only.

Such a conclusion also helps us solve a moral dilemma. No, we have no intention to reduce the value of humans to a monetary value. Humans do have to fix the money-price level each time they enter the labour market, for instance. But that has nothing to do with their value (vrednost) and even less with their internal values (vrednote). One does not need Christian Socialism or Marxism to solve this dilemma. Pure liberalism suffices. My tag for this is homonism.