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From stock exchanges to value markets and value exchanges?

Human Values Stock Exchange: Investing in shares in a value market of (Part #8)

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(As above, the possible equivalent with respect to human values is indicated in italics)

The so-called capital market is the market for securities (thus also known as the securities market), where companies and government can raise long-term funds. The stock market and the bond market are parts of the capital market. A distinction is made within the capital market between the primary market where new issues are distributed to investors, and the secondary market, where existing securities are traded. Note that an Alternative Investments Market (AIM) has been created as a sub-market of the London Stock Exchange, to allow smaller companies to float shares with a more flexible regulatory system.

In the case of human values, the notion of "capital" is perhaps best understood through terms such as "moral capital", "ethical capital", "spiritual capital", "emotional capital", or "intellectual capital". Fundamentally, as in the financial case, it is a question of the credibility on which confidence is built to enable the establishment of sustainable relationships (for whatever period viable transactions are required). The challenge of "raising capital" is thus one of raising confidence through various forms of presentation and promotion that provide a sense of security. The process of "talking it up" is as meaningful in the financial markets as it is with respect to the promotion of other forms of credibility -- for example in the motivation of soldiers going into battle. The distinction in the values case between stocks and bonds has been made earlier. But clearly a distinction can also be made between a "primary market" through which new values are offered and a "secondary market" through which existing values are appreciated or depreciated.

The capital market can be contrasted with other financial markets through which various forms of economic value are exchanged::

  • the money market which deals in short term liquid assets. It is the financial market for short-term borrowing and lending, typically up to thirteen months. This contrasts with the capital market for longer-term funds. The points to a possible contrast in the values case between short-term values and longer-term values -- especially how they are called upon in practice. A distinction can indeed be made between short-term value-based thinking and that based on more en during values.

  • the foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is by far the largest market. The human value equivalent is especially interesting since it points to the daily need for transactions across the interface between the different sets of values typical of different "cultures" (exemplified by languages, ethnic groups, age and gender, disciplines, etc). In particular it highlights the challenge of "convertible" and "non-convertible" value currencies -- which are the bane of many communication processes. But also of great interest is the manner transactions can be handled where a much appreciated value within one culture has little (or no) value in another culture (or vice versa).

  • the commodity market for which trading facilities are provided through so-called commodity exchanges specializing in future contracts on commodities

  • the derivatives market deals in derivative contracts typically traded on a futures exchange (also termed a futures and options exchange, rather than a derivatives exchange) which is managed by a corporation or mutual organization (see checklist). This form of exchange developed from commodity exchanges through the addition of other products such as short term interest rates or bonds. In addition to futures contracts, they now include trading on options, options on futures, and other varieties. The method of trading is called exchange trading, as opposed to over-the-counter (OTC) trading. The term derivatives may lead to confusion, as most derivatives are traded OTC, and most derivatives, such as swaps are rarely exchange traded. This points to an interesting way of framing reflection on future value-based "contracts" -- especially future relationships (where emphasis may be placed on "options") between groups, and notably between individuals. In the case of religious values, there is of course a case for examining the performance of a portfolio of values, such as "heaven" or "hell", as an ultimate understanding of "futures" .

  • the insurance market. In the case of values, this facility raises the question of how to insure against value-related risks

Stock exchanges (see checklist) tend to have the following characteristics:

  • Access to capital: An exchange provides access to capital and facilitates securities dealing through speedy and innovative trading platforms and services. As framed in the case of human values, the credibility of a value is achieved through various contexts that can be understood as analogous to a stock exchange. Groups, especially international organizations (cf Yearbook of International Organizations), can be understood as performing exactly this function of collectively determining the worth of values in relation to each other. Some organizations of this kind are actually set up as exchanges (or federations of exchanges), as for example:
    • International Petroleum Exchange
    • World Federation of Exchanges
    • Union of Arab Stock Exchanges
    • Asian and Oceanian Stock Exchanges Federation
    • Asian Regional Exchange for New Alternatives
    • European Commodities Exchange
    • Global Exchange for Social Investment
    Ironically the trading room of stock exchanges is not too different architecturally from the plenary conference room of such bodies -- where values are debated and prioritized through a voting process (possibly even an electronic one). Of course, as with electronic stock market trading, increasingly values may be said to be traded virtually through electronic fora and the like. More generally it may be said that, in the case of values, the role of a stock exchange is performed in part by the role of the media in changing appreciation of a value -- but possibly only to the same degree as it constitutes an extension of the financial stock exchange, namely without obviating the need for contexts in which values can effectively be traded. It is possible however that electronic fora and blogs may dramatically modify this in the case of human value trading.

  • Market stabilization : As an organization, an exchange ensures an orderly marketplace (whether physical or virtual) for trading shares, where investors (represented by stock brokers) may buy and sell shares in a wide range of companies. In the case of human values, many international bodies would argue that an important reason for their creation is to be stabilize the set of values that are the core of their membership. Their regular meetings offer an orderly environment for this process although increasingly aspects of that process are handled through virtual conferences hosted by the organizations.

  • Listing requirements: A given company will usually list its shares in only one exchange by meeting and maintaining the listing requirements of that particular stock exchange. An analogous situation may exist in the relationship between an international organization and its members. Many organizations have (often stringent) criteria for membership. Some organizations may even oppose adherence of a member to another body and may limit the number of members from a single country

  • Inter-market quotation: Through an inter-market quotation system, stocks listed on one exchange may also be bought or sold on several other exchanges, including relatively new internet-only exchanges. This is done to broaden their investor base. It is typical of many values that they are the subject of debate in many different national, regional and international fora. Whilst particular values may be differently appreciated in each, the valuation made may well be communicated between such contexts -- effectively an "inter-market" system of quotation which may indeed be accelerated through electronic fora.

  • Pricing discrepancies between exchanges: Although it makes sense for some companies to raise capital by offering stock on more than one exchange, with electronic trading, there is little opportunity for private investors to make profit on pricing discrepancies between one stock exchange and another. As such, arbitrage opportunities disappear almost immediately due to the efficient nature of the market. Clearly in the case of human values, where there is no unique value currency (or equivalent to the dollar), values will be differently appreciated in different contexts. These discrepancies may well be exploited.

In the human values case, it would appear that there is a strong argument for exploring how the many nonprofit organizations and their conferences effectively function as "value exchanges" -- whether at the local, national, regional or international level, and whether they are (inter)governmental or nongovernmental. As with stock markets, such bodies are the contexts in which:

  • new values are "issued" with an associated promotional process, amplified by media involvement
  • values are appreciated or depreciated (to the point of rejection) relative to each other, through a trading process by which they are prioritized
  • value brokers are recognized, accredited or discredited

Assemblies of religious bodies may also be understood in this light, and especially when convened for inter-faith dialogue. In this respect there is considerable irony to the fact that the centennial of the Parliament of the World's Religions (Chicago, 1993), with its core Assembly of Religious and Spiritual Leaders, was held in the former Chicago Stock Exchange (cf Learnings for the Future of Inter-Faith Dialogue: Questions arising from the Parliament of the World's Religions, 1993)

Concern has frequently been expressed by the principal religions that individuals are increasingly faced with what amounts to a "religious supermarket" amongst which people are effectively encouraged to feel free to choose -- selecting aspects of one religion and matching them with features of another. What is selected in this way might however be considered to include "values" -- as respectively promoted by each religion. Further exploration is required to determine whether this "supermarket" could be better understood as the religious segment of a "values market" from which individuals build up a "portfolio" of values according to their investment strategy and preferences. This framing could offer a way of looking at the traditional long-term religious strategies of acquiring "merit" in anticipation of a desired "afterlife".

It is appropriate to note that the expression "psychological stock exchange" has been used by Jean Baudrillard (The Melodrama of Difference, 2006) as a feature of modernity.

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