Paradox of Value

Adam Smith’s famous Paradox of Value theory, as illustrated (literally and figuratively) by the people at Ted Ed in this succinct video, is something that each of us has encountered at some point in our lives. It guides how we choose to spend our resources and time, beginning as early as elementary school—when we’re first challenged with optimizing the hours of the day, balancing schoolwork with play time or perhaps a sports team—and even influencing our career decisions, steering some of us towards endless hours in an engineering program or law school for the distant reward of a better salary upon graduation.

For better or for worse, the vast majority of the earth’s population lives in a market society, and the values of various essential commodities (water, wheat, energy, etc.) are sorted out in a relatively equitable way. That is not to say that there aren’t parts of the world where clean water is scarce and thus unfairly expensive, but by and large these essential items are priced at what the market has decided is a “fair value.” The system works. Mostly.

Unfortunately, the system, dependent as it is upon the buyer’s willingness to pay for a particular item at a particular time, is subject to various unpredictable factors, many of which can send the perceived value of an item skyrocketing, making it unaffordable to the vast majority of buyers. The oil crisis in the late 1970s is a good example of this, and worth noting here because of the incredibly enduring influence that crisis has had on international oil policies to this day, principally in terms of measures meant to prevent another crisis of that magnitude.

Video courtesy of Youtube

A crisis of another kind is looming, and it’s very unlikely that we’re prepared for the conditions of that crisis. I’m referring, of course, to the food shortage crisis, which is upon us for a number of reasons, including sustained global population growth, decreased agricultural land, and manmade environmental degradation. It is likely and probable that our ability to feed ourselves will fail at some point in the coming century, and there is very little our governments can do to address this inevitability.

The tenets of market capitalism suggest that the future value of food commodities should attract new food manufacturers to the production market, much in the same way that oil prospectors rushed to Texas and then Alaska. And existing food manufacturers should be exploring ways to increase production. Both of these things are happening, but they’re faced with the same fundamental hurdle that farmers have been facing since the dawn of agrarian civilization: there is a limit to the amount of food that can be “created” in a given space. Optimization is very, very important, and Permaculture’s ethos centers on the need to optimize the coordination of the different resources required to harvest food from the land, all with an eye towards a sustainable model of optimization. But there are limits.

It is unreasonable to imagine a world in which each of us restructures our life to focus on the need to provide ourselves and our families with basic sustenance. Beyond the obvious logistical barriers to such a drastic reorganization of life on this planet (not enough space, the training required, resource distribution, etc.), there’s the simple fact that humanity’s diversity of activity is a very good thing, and something that needs to continue. But this doesn’t need to be an all-or-nothing proposition. Somewhere in that in between space is room for more of us—many more of us, if we’re being honest—to adopt a more self-sustaining lifestyle based on the core ideas of Permaculture.

The ethical and ecological reasons for doing so have been discussed elsewhere, including on this site, and so I won’t go into them again here. Instead I want to focus on the inherent value in Permaculture, one that may not be so readily obvious. We saw a global economic collapse as recently as 2008, and are by most measures still recovering from that collapse. There is every reason to believe that another collapse will come in this generation, and that we might not be able to weather its impact as well. Which means the market will be turned on its head, and that essential food commodities will simultaneously become increasingly expensive while we as consumers will have less to spend on those expensive items. Wages will drop. Production will drop. But then demand will rise. And so on and so forth, in a nasty cycle that will leave many hungry, malnourished, and poorer all the same. One very obvious way to short-circuit this cycle is to become self-sufficient in terms of our nutritional needs.


Permaculture is key in this regard because a well-functioning Permaculture farm is itself self-sufficient, requiring very little in terms of outside resources. In many ways it’s the ideal solution to a food shortage crisis. It creates, for the individuals involved as well as the communities it serves and works with, commodities whose value will only increase over time. The costs to establish this self-sufficient model of value creation can seem prohibitive now, in the absence of an overt crisis, but because these systems take time to put into place, and because there’s a real possibility that many of us will lose our jobs and make the costs of the various components—solar panels, water tanks, chickens—even higher, in real and relative terms, it’s almost foolish not to prepare for the uncertainties of the future now, before it’s too late.

Paradox of Value 02


  1. Thank you for your succinct and timely reminder. Even though publishing “High Cost” in Permaculture is a bit like preaching to the choir, perhaps a few of us readers will be moved to share your article with friends and family who are not (yet) “perma-culturists”.
    (I am not comfortable with the term “permaculture”, and long for some other “tag”. Any suggestions?)

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