Taken together, you have a simple alternative to trading: the price of anything that affirms shared values is infinite, the price of anything else is zero or negative when the alternative is to debase or reverse a value.
Saint-saint transactions are not uncomputable though. You can order priceless values from greatest to smallest. You can do some simple, low-precision math with the infinities of pricelessness. Lives are priceless, but it is only acceptable for a mother to give her life to save a young child, not the other way around. Often, one infinity is devalued in proportion to how corrupted it seems relative to another infinity of the same kind. So the adult life has been more corrupted by base trader considerations of adult circumstances. Therefore it must be sacrificed for the child’s life.
In general, the innocent are more priceless than the corrupt, the pure more priceless than the impure, the lofty more priceless than the base, the natural more priceless than the artificial. Some examples are harder to analyze. Soldiers giving their lives for their country are often viewed as superior, purer people giving their lives to protect inferior, more corrupt people.
To resolve this paradox, we agree to pretend that soldiers fight directly for the proclaimed values of a nation, rather than the lived values of its actual people. This is why soldiers’ families in movies are always archetypal, sometimes even cartoonish, models of perfect virtue. They are never the messed-up rolling train-wrecks that are the families of most real people. In theory, we are supposed to honor the lives of the fallen by striving harder to be worthy of their sacrifice. That of course means living more truly by the values they died for.
Excerpt from a fascinating post on the economics of priceless transactions. As the author notes, the rise of the internet has put a spotlight on the economics of free, but what of the opposite end of the spectrum?
Three things come to mind. One is that I recall my mother never split any bills when going out to meals with friends and family. Someone always picked up the tab only after a theatrical fight between Asian adults for the check when it landed on the table after a meal, almost a ceremony of sorts. It resembled some notion of what the author terms a saint-saint transaction with a price attached but treated as an afterthought. More important than the equitable division of the tab was affirming the friendship. Since the continuation of the relationship likely meant more meals in the future, the favor would be returned at the next meal in a the next stroke of a lifelong financial volley.
I picked up on this tradition, and after college, once I had enough income to start eating out on a more regular basis, I tried to carry it on when eating out with others. This worked well with some folks who shared that tradition, but I found the vast majority of Americans were more accustomed to splitting the check. This often led to a semi-awkward impedance mismatch after meals.
The second thing that comes to mind is that our online selves are often closer to idealized constructions of our identity than to our actual selves. This, to me, leads to the exhausting cycle of outrage on Twitter and other social networks. In 140 characters, we must express absolute outrage at every moral transgression from any public figures. After all, we live in an age where our online self, our construction of it, often reaches more people than our real selves. This makes our virtual identity critical, and after all, the cost of moral indignation online comes with little cost. Online, we are all saints.
Third is the internal struggle many NFL fans are caught up in right now. On the one hand, football fans love the sport, the cultural touchstone that is the secular religion of NFL Sunday. It is nearly impossible to dispute, however, the gladiatorial destruction the sport wreaks on its participants' bodies and minds. And, thanks to the elevator security footage of Ray Rice knocking his wife out cold with a vicious left hook, all the multitude of domestic violence cases over the years involving NFL players suddenly took on a tangible nature that's not as easy for fans of the sport to ignore.
What makes fans uncomfortable is that even if they elevate their love of the sport to an intangible and priceless stature, perhaps as some touchstone of American spirit, or some cultural bond between generations, they know that in a comparison of priceless values, the health and lives of players and the safety of their spouses and children must rank higher. It's not sacrifice if you aren't letting go of something you genuinely love.
I also loved this bit from the post:
When traders, rather than saints, control the narrative, the narrative logic is baser-than-thou. This is the logic of status-leveling humor rather than the logic of status-preserving solemnity. To understand why, consider the classic joke about prostitution:
Man: will you sleep with me for $1 million?
Woman: Okay
Man: will you sleep with me for $5?
Woman: WHAT! What kind of woman do you take me for?
Man: we’ve already established what kind of woman you are. Now we’re just haggling over the price.
In this joke, the initial offer of $1 million is actually fake-out code for “priceless.” The joke relies on treating it as an actual negotiable number later, instead of sticking to the fiction that it is a symbolic infinity. The trader here has an ulterior motive: exposing the hypocrisy of the woman’s position, thereby up-ending the presumed status relationship at the start.
The reason jokes like this work is that priceless actually is a number less than infinity in many practical situations. For something to be priceless, it is only necessary for it to be priced at a point where it can be compared with something else that is priceless.
In the prostitution example, an offer of $1 million is (if you’ll pardon the joke) big enough to be considered fuck-you money. This has a very specific valuation in the priceless economy: it is the price of liberty for the rest of your life. The woman is willing to do for $1 million what she is not willing to do for $5. Not because she has a rational pricing model in mind, but because at $1 million, she is wrestling with a high-minded internal values conflict (liberty versus purity). At $5, she’s thinking about paying for a sandwich. The joke works because it disrupts the original fiction that purity ought to be the more priceless value of the two. Indecent Proposal works as a tragedy for the opposite reason: the original fiction is ambiguous and the ending affirms values in the “right” order (watch the movie to understand why and at what cost).
This is why earnest discussions in the startup world about what your “number” might be, are deluded. Liberty means different things to different people. For some, it is a dollar and a mindset shift away. Others remain trapped even with hundreds of millions of dollars.
And, for those of you who come here just for technology related stories, an excerpt that veers closer:
Marketing represents a net return on investment if the irrationality it induces, via movement of the transaction into saintly regimes, increases margins sufficiently. You could measure the irrationality of a market (or equivalently, the hierarchical rationality of a reputation economy) by the amount spent on marketing, particularly in a saintly mode. A marketing-dominates-sales company is one that has carved out a defensible position: a regime behind a fixed boundary where a favorable values economy of pricelessness prevails.
This is what positioning means: drawing a boundary around a set of values that your customers will accept, that put you on top in most transactions.
As Exhibit A, I give you Apple during the reign of Steve Jobs at the top of the Apple reputation economy. That Apple at the time was primarily a reputation economy, and only secondarily a computing hardware market, is clear from the fact that there is a clear hierarchy in its market, with users at the bottom, genius-bar reps one level up, and an invisible secret church in the background with Jobs at the top. Now that he’s gone, the fate of the company depends on the ability of Tim Cook to play St. Peter well.
