As Brittany Hunter has described, language is a perfectly human example of spontaneous order. It is born out of chaos and necessity, and there is no central authority dictating terms. And English is unique among languages – it is comprised of words from dozens of other languages. According to the Oxford English dictionary there are about 500,000 words, more than double many other languages. And because there is no central authority controlling new words and definitions, like there are in other societies, it is the most expressive of all languages.

The Language of Central Authority

At least it was that way once. Over the last 50 years there have been significant changes in the acceptable use of certain terms in English. As Jordan Peterson has warned, “I’ve studied authoritarianism for a very long time – 40 years – and it’s started by people’s attempts to control the ideological and linguistic territory.”  Examples include the ideological monikers themselves – liberal (“liberated” from classical liberalism), and progressive. Both are used to rationalize envy, guilt, and authoritarian control: it’s your duty.

The mother of all personal needs, health care, is no longer the prevention and treatment of injuries and disease. It’s about who pays for it – a duty you owe, and are owed. Freedom used to mean the freedom to make mistakes, as economist Ludwig von Mises has taught. Now it means freedom from mistakes – a duty you are owed. And justice was the legitimate role of government in the defense of natural rights. Today’s media/education complex tells us it means whatever the identity group authoritarians tells us it means – a duty you owe, or are owed.

The point is that centralized control of the linguistic territory has metastasized to the most personal aspects of our lives.

The Language of Value

As Mises explains, economics is life. It’s about meanings and actions, which are driven by values. And values is another personal word – everyone has a unique set that changes with newly attained knowledge. And as is typical of English words, value can be used and understood in different ways.

According to the Oxford English dictionary, value has two uses that are fundamental to economics – the material or monetary worth of something, and the worth of something compared to the price paid or asked for it. And both definitions are central to the idea of voluntary human transactions – each participant receives something they value more than what they give up.

And that is also how value investing works. It balances an individual’s preference for spending now (high time preference), with having more to spend at a later date (low time preference). The decision to forgo consumption (i.e. to invest) is then implemented with a method that evaluates a stock based on its price, earnings, dividends, debt, and growth to calculate a company’s expected future value. If the stock’s share price is sufficiently below this intrinsic value, then it is a good long-term investment.

The most important element to this calculation is the price mechanism. It is built upon millions of inputs from individuals, each with their own unique values, who cannot possibly possess but a tiny fraction of the total knowledge of a company that the market possesses collectively. This is value creation through the wonders of spontaneous order.

Of Duty and Value Creation

In May of this year, the Certified Financial Analyst (CFA) Institute held its annual conference; its theme was Measure Up. In addition to learning new methods for measuring the intrinsic value of a company, conference attendee Michael Edesess claims there was another purpose for the Measure Up theme.

According to his review published in Advisor Perspectives, the CFA Institute conference included a major focus on environmental, social, and governance (ESG) reporting. He claims this is important because ESG reporting will transform value investing from a process of individual choice to a duty to deliver value to society as a whole.

The ESG principle is that financial reporting is not enough; the corporation has a responsibility to control it’s externalities. The financial industry can measure up by conveying capital to improve the future of humankind; in short, by creating value. Creating value requires something more realistically goal oriented than getting the best return on investment. Getting the best possible return on investment is a goal that may be teleologically impossible.

To the authoritarian, externalities can mean any consequence of business activity that violates their fluid definition of justice. In this world, the value a corporation delivers to its natural constituents – customers, employees, and owners – will be measured differently. And the new definition of value is gaining momentum as the “auditing of ESG reports has become a major activity of the Big Four accounting firms. College students majoring in fields with names including the words environment, sustainability, or social responsibility are at least as likely to get snapped up by accounting firms as any other firms.” The new linguistic territory.

The Teleological Ethics of Value and Virtue

Of course this is not really new. Socially responsible investing has been around for about 50 years. More recently it’s been called sustainable, green, ethical, and impact investing – more linguistic territory. It’s voluntary, and for many it serves their values, however tainted by collectivist orthodoxy they may be. Despite all of this, the CFA conference participants understood that the whole ESG reporting sideshow was merely an exercise in greenwashing.

To authoritarians, that’s OK, so long as capital is “invested” by the government for college tuition toward ESG auditing careers, and billions more are paid in ESG compliance costs by the private sector. Good intentions toward ill defined and unachievable goals are what really matter. And that is exactly what teleological ethics requires – the values to be achieved are the explanation for the means of achieving them. In this case, an investor’s personal fulfillment, or a corporation’s value proposition, is morally justified only if it serves this authoritarian vision for humankind. This is a categorical imperative – an end in itself. It is a philosophy that is diametrically opposed to the Age of Reason.

For the priests of the state, the concepts of liberal, health care, freedom, justice, and values are virtues only when defined as a selfless duty that is owed. And what about this word duty? Its definition hasn’t changed, it seems immutable. Let’s reclaim this linguistic territory – keep duty a matter personal choice, free of guilt, based an on individual’s values, and driven by reason.