Commentary Archives - Page 2 of 8

Waste management complexities

Since starting my career in the environmental sector more than 10 years ago, I’ve been dealing with waste management issues. Frankly, the circular economy wasn’t spoken of yet. And in any case, a lot of the waste generated cannot be recycled. The fact is that we never even quite gone into the first ‘R’ of the three ‘R’s yet.

Singapore waste disposal figures — Total waste generated and disposed in Singapore (tonnes per annum), Source: NEA Statistics

The thing is, as the country’s population grew and economic activities multiplied, waste growth continued. There was probably a dip in terms of per capita waste generation, but the overall amount of waste we were disposing of grew even if the gross waste generation didn’t quite reach the ‘peak’ we had in 2017.

Our ability to manage this waste is important and it is largely because we’ve been able to get rid of them and maintain the cleanliness of our city, and not burden our businesses with the excessive waste that we have been able to keep up with our economic growth and remained an attractive destination for business, and economic activities. These are, of course, the positive externalities of having a robust waste management programme.

Yet waste is a complicated matter; the fact that waste management produces a positive externality doesn’t necessarily mean that we need to have more of it because that is usually based on the amount of waste that needs to be managed. On the other hand, when you subsidise the management activity, there is a risk that you’re undercharging the people generating the waste, which is the source of the problem in the first place. That brings us beyond the territories of your traditional economic externality analysis.

So, it becomes a political issue. And there’s even a question of willingness to pay, not in the traditional sense that people will not do it anymore. It is about how much you can keep charging the people without losing political support and risking losing votes. This is why public policy surrounding waste is complex, and you can’t leave it to a technocratic government to solve such a problem. You can employ some of the technocratic arguments to help you get some buy-in, but you’d likely need to deploy more tactics than that.

Analysing externalities

In public finance, there are multiple approaches to determining how to use the public budget. There will always be the standard expenditures that will have to be costed in, the overheads to cover the public service.

Then there are past liabilities that will need to be paid for. But then, each time, the government can make a decision whether those liabilities are still worth their while to continue financing.

After which, we determine the infrastructure and other investments essential for development of the society. When it comes to investing into infrastructure, the government will definitely need to meet needs, but they might have to ask themselves what kind of social benefits are generated in order to work out whether the price tag for fulfilling those needs make sense.

This is the realm of externalities. And the reason we care about that is because the free market would not. If private benefits exceed private costs, then the free market will find its own means of fulfilling those needs. When there are externalities, the government has to step in. From a business point of view, where there are negative externalities, it is a revenue-opportunity for the government. And where there are positive externalities, the ruling political party can get some political mileage out of it.

Such is the interaction across politics and economics that is worth a bit more attention.

Grasping mistakes

We are embarrassed about our mistakes. We need to get over them, and often, we do so by avoiding them. Please don’t talk about it or revisit the experience. That can be psychologically comforting. But are we doing justice to the cost that we bear for the mistakes?

I’ve written quite a fair bit in the past about the social or culture attitude towards mistakes, and I think a lot of the ideas are still worth exploring:

All of this is so that we can build and develop wisdom, where we know how to work within and navigate a dynamic environment. The problem with theoretical approaches and specific methodologies to achieving outcomes is that they assume that there is an ordered, stable environment within which we conduct our activities. Sometimes, that is just not exactly the case.

Feature or bug

The only time you have to say something is a feature, not a bug, is when it appears to be a flaw. The notion behind this idea is that there was an intention. That aspect of a software, or product design, or service experience was not supposed to be a flaw but an intentional part of the design. It assumes there was an intention, some objective being served.

The reason people might think it was a bug could be because:

They had different objectives from that of the way the product designer had imagined the objectives of their users to be
They were not the target audience of the product/service
They were forcefully making a product fit their needs
They did not know how to use the product – which could reflect badly on the UI design or the UI of whatever instructions needed
The product had a poor product-market fit
The product designers were giving excuses for themselves

There isn’t supposed to be a debate whether something is a feature or a bug. It should always be resolved by the one who had designed the product/service. If it was a result of something being overlooked, it is a bug, and pointing out that it could be a feature is just an excuse.

Who foots the bill?

You bought an expensive foie gras meal and paid for it but can’t finish it. So who foots the bill?

If you finish it and get sick as a result? Is the doctor’s fee part of your foie gras bill?

If you don’t finish, and it goes into a food waste heap that requires public subsidy to manage and clean up, are the taxpayers footing your bill?

Would knowing all that change your decision to buy that foie gras meal?

What if you knew the future path of your choices? Who would you allow to foot the bill? How far ahead would you care about the consequences of your actions?

This is a story about externalities, cost and consequences. Who should care? Who should we care for? How much should we care? No one teaches us all these? We have to work them out and make decisions.

The corporation

The faceless corporate had been painted as the enemy of man in popular culture and broader artistic endeavour. The idea is haunting. Some kind of machinery driving its machinations through its cogs and gears to achieve some broad vague goal that sounds appealing in concept but nefarious in practice.

Of course, the reality is that it is not just the corporate that can behave and seem this way. There is the bureacracy that is a manifestation if a “government” or even a non-profit. There is also loose organisations centered on single-dimensional stuff (hobbies, interest groups, certain kind of political activism, etc).

The point is this idea of a “corporate” or some kind of machinery is anti-thetical to being human. Why would that be so? Here’s the tricky part.

We are all complex and multi-dimensional that in creating singular objectives or goals and trying to relentlessly pursue them reduces us to something less than human. And those “big entities” essentially embody this limited dimensionality compared to what life really is. Same goes with money, when we make everything in business about that. We reduce richness with riches. What a shame.

We don’t have to be anti-corporate. But we probably would do better to understand why its reach should not be all-extending.

Promoting into oblivion

One of the big struggles of corporate is that when you have clearly defined roles where there are job titles, managers, and the ‘managed’, there is this false sense that you get promoted because you’ve proven yourself. Now, you start being required to work with entirely new skills, and you no longer have to use that much of what you were good at.

The tricky bit often in management is that the corporates are not sufficiently focused on training and bringing you up to the level required because mass training is easier to justify than just training a handful of people. Moreover, in many organisations, being in management has a lot more to do with handling internal politics and jostling for resources than to do with getting the real work done. Politics is of course important because that enables the delivery team to be able to deliver but if you just got promoted from being the best performer in the delivery team, you’re almost completely oblivious to what this new management role really is about! Not to mention growing the skills overnight to be able to do the new job well.

Some organisations, like the military that operate based on the old British aristocratic style tries to overcome this problem by having two classes within the service. The commissioned officer and the non-comissioned officer tracks are ways in which you focus one group on the ‘leadership’ (really, it is more management) skills. In contrast, the other group are more focused on ‘operations’ (or what is deemed more as ‘follower’ type) tasks. Of course, reality is a lot more complex than that but this form of organisation, while crude, aligns expectations and allows the specialists to focus on the frontline nitty gritty and have the ‘leaders’ focus on the big picture elements. Over time, though the commissioned officers have ever been trained in the basics, they lose their ability to really keep up with the changes on the ground to be able to command at high level.

Yet that form of organisation is probably not ideal as it can be a bit elitist and does not incentivise people to perform in ways that allows them to utilise their potential well. It boxes people into neat categories that serves the organisation more than the individual, and at some point, a lot of people would give up on the system as they find themselves uninterested in being thumbed down as second-class citizens, or being forced only to do the big ‘leading’ kind of stuff.

The market presents a new way of organising people, and as our markets develop, I’d expect a lot more small tiny firms to exists and serve large swathe of people when technology enables them to.

Solving the right problems

One of the greatest challenges confronting our modern world is the sense that when there is a solution for something, the idea that we didn’t apply it indicates a lack of responsibility or some kind of mistake on the part of a human. The fact a surgeon could have healed someone but failed to puts the blame on the surgeon even when the chance of success is probabilistic. Of course, some things require a lot of resources to achieve even when they are feasible, so that doesn’t mean that the feasibility of a solution isn’t the only parameter to determine whether it should be applied or not.

Yet somehow at the back of our minds, if we didn’t apply it, that seem to imply we did not try hard enough or do our best. The issue is that with limited resources, you probably can’t ‘do your best’ in everything. There’s only this much you can give. This applies even to the government, whether it is taken from the budget perspective or the use of manpower.

And for a small country with a lean government like Singapore, solving for the ‘which problem’ to tackle is perhaps increasingly important as there will always be some fringe issues that you can deal with to make yourself look as though you’re doing your job when you’re not making any progress. The recent cigar dish case seems like one of those situation where it is probably not significant enough to escalate to higher (or more mature) decision-makers while seeming to have that easy solution of ‘order them to remove it’. We have a limited attention span available for our public servants, especially those handling frontline issues.

AI Roadmap

Everything that has become a norm in our lives went through some hype cycle. So in essence people may overblow its usefulness and think these things are going to change the world but then it doesn’t change the world overnight so things comes crashing down for a while before it goes on to slowly change the world. The internet is probably the best example. In the 90s people were sure that the internet was going to change everything, and so it went through a bit of a hype. So did computers in the 80s. But after the hype, things crashed, and then life went on except it got changed bit by bit, steadily and surely.

Generative AI is itself going through a bit of that; we are all sure things are going to turn out great. Of course, some doomsayers will be warning the world of the problems and calamity it would bring – just as Socrates thought writing was a poor form of communication and would also bring about the decline in memory of men. I think it is probably necessary to create more safeguards for AI and allow the governance to evolve with its development.

I think Gen AI will be helping to augment the capabilities of human workers for a really long time before they come to ‘replace’ workers so to speak. Yes of course you could use some kind of AI technology to help you even have a conversation at the call center, but it’s not going to be able to handle 100% of the queries, you will eventually still have a human in place. Consultants for example, who might have been spending time copy-pasting or doing data entry type of work might lose their jobs but then there will still be someone senior who needs to intervene.

The real economic challenge for us is how are we going to let Gen AI do the so-called low-level jobs while maintaining a pathway for us to train more junior workers into capable senior workers. Sure there is the grunt work that has to be done but traditionally, the juniors learn the ropes by doing those work. If they are going to be performed by Gen AI, then how on earth are they going to be able to get the chance to learn?

There is still substantial job opportunities which are slightly underpaid but cannot be replaced by Gen AI. These work are underpaid either because of systematic biases in the economic systems or as a function of labour market rigidities. They include the care-giving, pastoral guidance type of roles, as well as all of the cases where it is important to have a human example who can model moral character and other crucial human attributes. No kid is going to see the politeness of a Gen AI figure or speech bot and say he or she wants to be courteous because they are a role model for the kid.

To me, those problems will need to be gradually resolved before we would allow AI to play a bigger part in the lives of people. Part of the way some of these problems are resolved is actually through mutual cancellation with the demographic transition challenge. Economies that are mature and have severely ageing population will need to rely on AI for many things. Improving labour mobility globally should slow down the need for that but it is inevitable for these markets who have the resources to play the early adopters’ role.

Non-profit organisations

We can organise our economy in very different ways, and even as the free market and the idea of capitalism reign, there can be different extents to which goods and services are produced and supplied to the end consumers. The non-profit organisation can serve as a way to coordinate activity that delivers real economic results in the form of goods and services.

I think we have overlooked the ability of such a form of economic organisation to do more for the world. The advantage of a non-profit that it explicitly pursues resources specifically for a cause. It doesn’t mean it will squander resources inefficiently, but the stated purpose of it, is to generate the impact or advance towards the mission. Ironically, some of the more profitable companies in the world can tend to make claims that are similar to non-profit in terms of the contribution it brings to society.

And since non-profits often have to deliver results in exchange for funding, or to unlock pre-committed funding, they will learn to optimise their budget and utilise resources optimised to deliver some of the results or at least provide inputs to the causes they are trying to champion. The funding portion of non-profits may be different but the way it should be ran operationally is probably not so different from a typical company, with the exception it may not be able to use the usual incentives for its staff (in those circles, they sometimes call it a passion tax).

Yet perhaps more forms of organisations should be acting as non-profits. For example, banks should potentially operate without profits, with the key objective of optimising risks in the system while providing access to credit for organisations and people. In fact, I think that all financial institutions, even those providing payment solutions probably should have limitations placed on their profits because ultimately, it is the real economy that they are trying to drive and allowing them to extract too much from the real economy can hinder the more fundamental process of capital allocation – which is what we are already seeing. Everyone needs to contribute to the real economy and finance in particular, has become the tail wagging the dog, in name of the pursuit of profit. That is a shame.