Most of us like complex matters to be reduced to something that we can readily understand, using analogies that we can relate to. A molecule with its atoms can be represented by little balls that you can see, a false representation, but from it you can visualize a picture of something you can’t see, so it’s a useful model.
Monetary evaluations are also models. Using them, we reduce almost any phenomenon to numbers – monetary numbers. Monetary models are special because money represents value to humans. Monetized penalties, rewards, status, or debt are all loaded with human emotion. Almost all modern human institutions – business, government, and other – run on monetary models. Success (profit), failure (loss), and wealth are all measured in money.
If in emotional thrall to monetary models, we may not notice that they are models, inherently flawed, like all other models. All are incomplete because it’s impossible to include everything. They may mislead without any intent to “cook the books.” They distract from deeper issues. Education “costs too much.” Health care “costs too much.” Does cost-too-much obscure fundamental questions?
We also like freebies, something for nothing. Some of them are government payments, like local economic incentives to attract businesses as employers. Whatever expense does not appear on my books is an “external cost.” Some are paid in cash by governments or other grant-giving entities. However, many benefits of nature require no cash investment. No meter on sunshine charges you a fee to enjoy it.
How to value nature is a question plaguing environmentalists. Should we assign monetary values to nature or to services that nature provides? A classic six-year old paper covers the issues. (A string of commentaries rounds out the perspectives.)
The entire world ecology has been assigned monetary values, usually double the total global GNP. “Natural capital” such as coral reefs have been assigned monetary values. Does any of this make sense? With no ecology, humans can’t survive using any economy because we utterly depend on nature. Vital symbiotic relationships are not captured by transactional values derived from markets, but does monetization help explain anything to humans?
Rifts in understanding of how the world works, or ought to work, run deep. Monetization reframes ecological issues into the ‘linear logic” of economics and business. (When I’ve done cost benefit analyses myself, factors not in the monetized model were troubling.)
People who regard nature as top priority consider effects on nature before doing any financial projections. Their mindsets are more like “deep ecology,” regarding ecology as “sacred,” something that we are obligated to safeguard. Our comfort is secondary, no matter how financially attractive that enhancing it might be. Compression Thinking is a bridge from monetized linear thinking and toward a mindset much more aware of the existential perils we are creating for ourselves.