Value Schemas

Keeping Account of Value and Values


The 11 percent uptick of the U.S. equity market yesterday is explained with a schema that accounts for the value gained in terms of preserving the expected normative values associated with the interpretation of profit and loss. The recent devaluation of assets then appears less as a zero-sum gain of possible retributed value.

The strong uptick fits a technical schema, a bear market bounce, for example, that safely describes the volatility as a natural occurrence of corrected valuation. The most significant determinant, however, is the over-accumulation of capital that is arbiting, commanding, valuations instead of free-market economics.

Yes, it is a function of supply and demand, but an over-supply of capital in the hands of just a few market players that oversold the market shares to buy them back yesterday with a capital gain at both ends of the margin with little benefit to anyone else. Big noney flow out, big money flow in accounts for the volatility and the valuations. It is the determinant least talked about because it is the source of power (the determinant) that if changed, if deconsolidated, changes the balance of power.

The real determinant that accounts for value is not a part of the normative schema except to regard its change as a moral hazard (a normative cognitive value) that disrupts the "natural" order and stability of the power structure (a predictive empirical value of ensuring the status quo ante).

Like Obama says, McCain describes bottom-up growth as socialism (a conservative schema) when it is really economic opportunity, simple, direct (not trickled down with complex financial derivatives), with value easily accounted for both in means and ends.


We all think with concepts that are schematized into categories and hierarchies to decsribe and explain, if not to predict, what we perceive to be reality.

Plato is often described as the first psychologist because he describes a world of ideas, concepts, and a schema for perfecting the state he called "The Republic." His description of the individual and the state is more an accurate description of the cognitive process than an ideal state, but the relationship he describes is timelessly useful and fundamental to our understanding of the cognitive process when we make an account of value.

Much of what we concern ourselves with to be accounted for in relation to the state is an economic value. What am I worth? What is the value of my assets and why? Who must sacrifice for the good of the state and why?

The answer to these questions are built into a schema of what value is, conceptualized and operationalized into categories and hierarchies of value classification. The cognitive process of accounting for the value gives the process of creating that value a legitimacy that is the essence of both economic and political power and the way it is structured, or schematized, into a cognitive understanding, or accountability, of it and what is to be expected of it.

The legitimacy of power based on the schema creates an expected value on the outcome. When that value is violated, the failed expectation becomes a value that must be managed to preserve the legitimate value of the schema and the loss of value that was expected. That requires a cognitive process, a story, a narrative, that describes and explains the missing value, and accounts for it in the world of ideas while it is absent in the real, material world.

Reconciling the two values is to manage the retributive value inherent to any economic system. It can be rationalized, put off and accumulated, or it can be paid.

The process of creating economic value, storing it and sharing it in a political-economic process of accumulation and distribution is as much a cognitive process of schematic accounting of the value in abstraction as the reality of its conspicuous consumption and a demonstration of class and an expected hierarchy of power to support it.

Where once war was primarily the means of distributing accumulated value (the capital), a cycle of war and peace, we now monetize the value into complex abstractions that are "ideal" for schematic cognitive control of the accounted value.

We find ourselves in an evolved system of creating and storing value, and a schema to account for it, with a failing expectation and an accumulated retributive value that is evermore demanded to be paid in the real world. A good part of the means to manage the demand for payment of the value is to micro manage it into micro schemas of seemingly unpredictable, random events that cannot account for value gained or lost, like the volatility of equity markets.

Any economidt will tell you that not much changes day to day to account for a ten percent or more intraday swing in the equities market. It just seems to happen with a panoply of schemas offered to explain it that tends to keep our expectation of the value to be retributed safely in the world of ideas.

Notice how the Obama campaign went from "change we can believe in" to "change we need." The change reflects the reality of an extreme failure of expectation, an accurate accounting of the missing value, an expected retributing of that value without endlessly searching for it within the boundless domain of the ideal world whether it be socialism, capitalism, or any other prototypical "ism."

A clear, unadorned accounting of value is being demanded with an "ism" that is not prototypically confined to, and lost in, the world of ideas, but to be categorically identified and accurately attributed in the real world of what is righteously expected. That is the a-prototypical alternative of pragmatism. Not what fits the prototypical schema of class consciousness, but the practicality of what righteously works to create and distribute wealth, value, with an accountability fully verified by the reality of our expectations.