What are prices for? II

Can prices make the world better? Perhaps one could argue that it already did! Yet for the first in history, putting a price on something free could very well allow us to step into a future that’s remarkably better than the status quo. And that’s the price on carbon.

For the longest time; perhaps for far too long, emitting carbon dioxide is free. To be fair, when we breath out, we emit carbon dioxide. But that is through the food, grown during our lifetimes. One may argue of course that cows belching and the dairy industry creates a lot more greenhouse gas emissions in the form of methane as well.

Brushing food industry aside, let’s ask ourselves how a carbon price makes the difference. By charging industries for burning fossil fuel and emitting carbon dioxide through whatever industrial processes, we are saying that the release of carbon dioxide into the atmosphere when it should rightly be stored in minerals and in the ground as oil, gas and coal is harmful to the world. We are saying that people ought to pay a price for releasing the carbon dioxide in the air and causing climate change.

The issue is that we all live in a single atmosphere but the carbon price is different everywhere and we allow people in their own countries to somehow set this price or a regime to manage this price. And then we call it a carbon tax. Or in other places, we put a trading system around it and the traded price becomes the carbon price. There are times when prices work better when they are different in different places. But perhaps not this time. The fact carbon is free or much less costly in one place but not another is just going to encourage more gaming of the system.

The world needs to set a price, and really align on it. There is nowhere in the world where it is cheaper to emit carbon in terms of the environmental and climate costs.

What are prices for?

The cynic knows the price of everything and the value of nothing

Oscar Wilde

I don’t think this is the first time I’m putting up this quote. But I’m just wondering today. What are prices for? Why are there prices for things? What does a price mean? If anything at all?

Prices are signals from the perspective of economics. The level that clears the market; where demand matches supply. A high price or low price doesn’t really mean much. It’s unclear if the prices reflects costs of production because there can be market power driving margins. Besides, when storage costs are expensive, a producer might be keen to sell excess supply at lower than production costs.

But prices drives behaviours; they create some kind of incentive to produce, to trade, to buy, and sell. It is some kind of benchmark against which we evaluate our preferences. Because we’d try to figure out if something was ‘worth the price’. And so the market moves; and people try to justify prices with attributes, features, emotional storytelling. And prices in turn drives those stories, emotional expression and comparisons.

What do you do with slack?

I recently spoke to a financial advisor. Not an independent one, just from a firm who was not tied to a single insurer. The idea is getting the best deal, the most competitive deal. This is a marketing business, about serving clients, reaching people. That’s a shame because financial planning should be about brains and not how much you like someone.

But maybe I’m ahead of myself because if brains mean to be able to optimise very well, lowering premiums as a share of overall risk cover, or increasing cover while keeping to the same levels of premium, then it’s not always that good. We need slack in the system. People who might be idling at any one time you sample the workspace. You need to ensure there is breathing space, chattering space, ideation space.

We pay for slack all the time; do you use up all your mobile data and telephone call minutes every month? Do you boil only enough water for a single pot of tea each time? Slack is not a bad thing and over-optimisation creates risks. Perhaps the risk is small but there is always a trade off to be made.

Dancing with controversy

Some people want to start a conversation putting people on defence – often using controversy. Why did you name your child after an unsavoury character in history? Are you really making your guest wash their feet before entering your house? Why does your company logo look like it is plagiarized from this other firm?

First, why do they do that? It could be a power play; or just banter done poorly. Often you can’t really tell their intention. In fact, you are not responsible for their intention, only themselves. While you might want to read into their intentions and craft some kind of story to set your mind away from the mystery, you never really know. So better to choose a story that favours you and your intended response.

Second, how should you respond? Now this part is on you. Regardless of the other party’s intention, you now have to be concerned about your own intention and the message you are trying to project. Returning it with banter or trying to laugh it off may work – but does it reflect your identity? Maybe you want to be gracious and simply acknowledge your feelings towards it. “That was hurtful, let’s move on to more productive topics.” or “From the sound of your question you’ve an axe to grind; I’d appreciate if you help me get away from that axe”. Just putting it out in the open, gently calling out what the other party is doing can be very powerful.

Finally, don’t dwell on it. Move on and direct your energies and enthusiasm towards something else. Controversy is such because people are unable to look beyond disagreements or to boil it down more to the fundamentals. They are such also because of the distractions around the topics which makes people less willing to confront the issue at hand.

Tyranny of rush

I had accepted a project with the understanding the timeline would be four weeks but then because of the client’s management schedule they decided they need the deliverables in two weeks. That was impossibly rushed and so we tried to keep the scope leaner and push ourselves to deliver. It wasn’t a good experience and I found the quality control difficult through the process even when I wanted to give my best. The result was huge amount of stress, pressure on everyone and potentially bottled resentments.

Urgency is a weird thing, it grabs you by the neck and forces you to do this and that without much thought at the risk of being choked. It causes great discomfort and as much as it is a good motivator of action, it doesn’t always allow actions to be directed thoughtfully. It is very much a tyrant and one who forces everyone to bow down to its will.

Often I found it hard to get out of this tyranny once it grabs me. Mentally, it captures even my time of rest and attempts to go through natural recovery. Physically, it prevents me from engaging in other activities which takes me away from its will but would soothe my body. I wonder how we can respect urgency less especially in societies that are already fast-paced and relentless.

Because if we don’t break its hold, it will eventually break us.


At some point in my teens I loved observing the world, so much that I don’t like to ‘participate’ in the world. I enjoyed being by myself and thinking through narratives about what is happening – in those moments I think I’d lose myself and be completely unaware of my own presence in this world.

I wonder what that did for my ability to make friends but I was by and large comfortable by myself. Some like to believe I overthink but frankly, the self-talk I have tend to affect me hardly. In fact, I think the people who tend to fill up silence, who always need people around them are the ones who tend to overthink.

They overthink when they are on their own and prefer to shut it out by having their minds engaged in something else. They prefer to listen to others so that they drown out the voices in their heads which are from themselves. Or maybe this is all just me overthinking? How about you?

Enjoying Boredom

What do you do when you don’t have anything on? Do you drift into thinking about work and try to make yourself “productive”? Only to subsequently think you spent too much time on work?

Or do you fill that time by scrolling through social media and going through motions of curiosity, envy, judging, outrage, and so on? Then on reflection think that you spend too much time on social media?

We have trained ourselves to default to some really poisonous habits when we feel bored. And we get upset over ourselves after that. Changing that default is so important. And it starting with awareness of that boredom default, helps.

Measurement & Growth

If you can’t measure it, you can’t improve it.

Peter Drucker

This resonates with us in business and in personal life, lots of productivity experts have been looking at it. And what we’ve been doing is trying to figure out ways to measure just about everything. But does it mean whatever that cannot be measured, cannot be improved?

Yet at the same time, we know measurement and improvement is distinctly different; efforts invested in measurement cannot translate to improvement by itself. The measurement is in essence just a state of awareness that can really be achieve with varying degrees of precision.

What that means is that many aspects of growth is going to be moving because of things other than measurement. It will have to do with our habits, thoughts, behavioral patterns. How do you improve confidence, or trust, or responsibility? These are all non-measureable yet we know when these things are improving. Is it because we have some kind of barometer inside us to make that measure but no scale to synchronise towards?

How do we respond to that then? We make sure we are aware. Our awareness is our measurement; and that is why self-awareness is so important. And being able to observe yourself: your thought process, your behaviours, is such an important ability. Awareness, is that first step to growth.

Opportunity Cost

The concept of opportunity cost is probably not so well appreciated even though it is extremely simple. But the manner by which we tell the story of opportunity cost might have to change in order for us to appreciate this powerful concept.

We traditionally understand opportunity cost to be the sacrifice of the next best alternative in whatever choices made. The best example is the way you spend your time; when you choose to spend your time going through facebook or your instagram feed, the opportunity cost is the work you could have done, or the presence you could give to your family. Likewise, money spent on consumption cannot be saved.

Time and money is scarce. But when we tell our story about opportunity cost, we tend to focus on the cost in terms of what is scarce. Sure, it is the limited time and money (as a proxy for resources one has) that results in the existence of opportunity costs, but what we are truly sacrificing is the “opportunity”.

So it is important that we begin to think about the cost of one thing or another not so much in the form of time and money but what that time or money would be used otherwise. Because without the “opportunity”, the cost has very little meaning.

Spectrum of intelligence

I was having a conversation with a middle aged man. He was in his late forties and having been a salaryman all his life, he was happy and satisfied with his work. He thought about some of those who went farther and higher in the organisation and said ‘they were really good’. I interpreted that to mean ‘they had what it takes’. I responded to say, ‘it’s also a lifestyle choice’.

The society has its way of determing what constitutes merit. And it’s often a mad rush in those dimensions in order to prove you’re up to par. Whether it is certificates, points, grades, licenses, we are all sucked into some of these common denominators of comparison. We want to find out the rules of the game everyone is playing and then play to win it. And be ‘really good’ – and if others win, we consider them ‘really good’, implying also that they are ‘better than us’ (though only in that single, narrow dimension).

The greatest gift as a parent that you can give to a child is to show them – that despite the education syste, despite what the society and people around you keep trying to tell you about studying hard, getting good grades, gaining CCA points, being able to rattle off lists of achievements, that there is a spectrum of different intelligence. And you may be intelligent in some form, others may be intelligent in other forms. There is no single overall type of intelligence. In a PR firm, intelligent may be about EQ, language skills; whereas in academia, intelligent may be about intellectual rigour. The context matter and of course in the context of school, there is certain definition of merit but that is not the definitive kind of merit in life.

The next great gift to your child is to encourage them to get out of basing solely on the paper chase, and find a domain of intelligence that allows them to flex their potential more than any others. Cultivate and develop that, and keep at it even as they try to meet the basic standards on other areas. Then they will come to appreciate others’ as ‘really good in such-and-such’, ‘better than me in so-and-so’.