Valuing time

As one grows older, one comes to value time more. It’s maybe the busier lifestyle from the commitments accumulated over a longer life, or perhaps becoming more cognisant that time is running out somehow. Time is an interesting object interwined with ones’ life and ability so much that when we consider how we can value it, the whole concept of valuation falls apart pretty quickly.

One person’s time is different from the other depending on how the time is used and what sort of talent underlies the time of that person in question. The opportunity cost of time is also really subjective and hard to determine; because the actual point in time and the place or context determine the alternatives possible.

Is productivity and trying to not “waste” time by trying to produce more output really about valuing time more? Or is it a greater mark of respect for the time we have when we actually use it for much-needed leisure? Is time only well spent when it generates economic fruits?

These questions are important because our society and the pressure of our culture around us constantly presses a particular view on these things upon us. We can be more conscious about how we can better value and approach our time and the way we spend it.

Imagining futures

Do you imagine a future you want to be in? Then what do you do? Do you take steps towards it?

Or do you imagine a future you don’t want to be in; and then try to take steps to prevent it?

The second approach means you have to be driven by fear. It’s more tiring than being motivated by possibilities. So it’s important to take your pick how you want to envision futures and move towards it.

Demand response to the future

The market system likes to pretend the consumer is king and producers are just responding to market demand. It is usually an excuse to avoid the responsibility of building a better future. The market system constantly tries to get ahead by shaping demand, through advertising and influencers. The whole system of exchange of influence and money takes place within the market context and that’s enough to refute the claim that consumers reign sovereign.

And that means consumers needs to be more conscious of what stories they are taking in. And more than being passive receivers of goods and services, consumers have more chance than ever to shape them. Demand is usually decentralised but it can respond to so many things beyond price signals. The problem with our economic view of the market is that we only try to capture market power in the form of price-setting and ability to substitute (even this is not so well considered despite the crazy mathematical gymnastics required).

Sustainability cannot depend on corporates championing causes and trying to come up with new products and services. Consumers need to and can respond by requesting to reuse their bottles, avoiding products with too much packaging, reducing gifting of everyday items with expensive packaging.

The easiest criteria to default towards is convenience and costs but we can also think in terms of alignment of values and cost to the future. If we are able to adapt our demand to these dimensions, we can co-create a future we want to be part of.

Market for talents

Are talents born? How would you know a baby is going to be a star violinist, or a top notch computer programmer? How would these kids first be incentivised to try things out to begin with? It’s more likely that there’s a market for the particular talent which the kid was exposed to and hence got started, and found himself or herself being able to do it well and hence the resources around him/her was attracted to support the development.

The market for talent is vital to encourage and develop talents. It is the presence of the market that allows people to aspire towards being a ‘successful X’ – be it a musician, or a chef, or mathematician. Kids don’t just wake up one day, look at a long path into the forest and say they want to work towards being a cross country runner.

Singapore have been able to nurture and attract talents essentially by drawing proven talents from elsewhere into the market and then celebrating them. The value of doing this can be powerful if resources are poured into directing the nurture of local talents concurrently. Careful thinking about this market and its design is important so that structures can be put in place to ensure this is a virtuous circle. Those identified as talents should be able to support others who are trying to develop themselves. Pay-it-forward type of mentorship should be encouraged.

And those who have benefited personally and individually can pool resources to nurture the next generation. It’s akin to successful lawyers or bankers giving back to their alma mater to start scholarships that support new lawyers and bankers.

Economics that enables change

When Leon Walras set out to made economics a science, he sought to describe the workings of the market using mathematics and even captured the mechanics of its dynamism – the notion that the system is just trying to head towards equilibrium. But the problem with real markets is that the prices never clears the market. Equilibrium is never reached.

If the Walrasian equilibria were reached, there’d be no goods on the shelves of any shops. All the goods would already immediate be in the hands of those who are willing and able to pay for it. And no one would really have the opportunity to master any jobs or pick up any skills reliably because they’ll always be switching jobs and jumping back and forth different production curves in order to optimise the market. Time was a missing ingredient in those equations of economics.

So the equilibria-seeking economics was useful as a way to describe and think about markets to some extent. But for the problems we are dealing with today, we need a new set of economics and approaches that enables us to move the world forward. This is already available as part of development economics and the new institutional economics – we’ve had decades of experiences thinking about laws, competition, market organisations and design in order to guide ourselves all towards the outcomes that can improve the world. It’s probably time for the basic foundations of economics to be about incentives and behaviours rather than demand and supply.

Bureacracy solution

Did you know that bureaucracy is a solution to disorganisation and disorder? Hierarchy introduced some degree of check and balance that enable things to move in an orderly fashion where discretion at various levels would have created sheer chaos. Industrialism is built on finding good-enough practices to be put into a standard operating procedure and with simple enough indicator for the average person to check if instructions were being followed and things were moving normally.

Bureaucracies were not built to retain or use talents – they were built to ensure continued, smooth operations and to maintain status quo. They worked in a world which changed slowly. And they created broad based benefits as it enabled the average person to get a good job, progress through the ranks and be considered to have done well in life.

So not all bureaucracies are bad or made to cause trouble. The difficulty comes when there’s a need to change. As the system is built to hang on to status quo, it becomes hard to change or shift with new needs. And then it becomes strained. Not only so, in order to meet changing needs, additional work-around and often more bureaucracies were created.

The future we want to step into is not one that’s void of bureaucracies but one where breathing spaces are built into bureaucracy to enable changes and where the rationale of rules must hold within the new context or those rules can be ignored. After all, it is often more important to understand contexts than to understand rules.

Coping with change

Daniel Kahneman proposed the prospect theory which essentially relates to our views towards risk-taking. What was originally showing up in terms of financial decisions begins to be recognised in other situations as well. In general, when dealing with change, we face some difficulty recognising something new is better when we haven’t yet experience the full benefit and may resist it even if it’s better than status quo because the lost of status quo feels much more painful for us.

For some reason, I think improvements in living standards have made us less capable of grappling with loss. Smaller things in life seem to become such a big deal that earlier generations would not have understood why they afflict us so badly. In some sense, modernity and the physical comforts of life are starting to make us even more fragile mentally. And we have come to be more and more reliant on not just certainty but somehow having almost all of our expectations fulfilled.

And that is to say even if things do not move along with expectations, there is a sense of loss which is felt. What is operating today is growing to be a pandemic of mental issues and I believe it is not just about re-tuning our expectations but coming back to embrace human-ness, struggles, failure and tragedy as integral parts of life. We are better because of these challenges and not worst off. We better start recognising that.

No smoking II

I wrote about smoking as an example of great cultural and behavioural change even when capitalist incentives were against the trend. There was a time of course when businesses were happy to produce cigarettes and tobacco and many things helped to conspire to remove it from most of our daily lives. That included government action (taxes, regulations for labeling, import restrictions, etc.), companies (benefiting non-smokers, rewarding them more), society (stigmatisation of smoking, some degree of marginalising smokers) and the market (some enlightened investors are choosing not to put their capital in such companies that damages lives)

It takes everyone to work on it, and they only do a small part. But it works, and can bring about broad, sweeping changes which seemed tiny in retrospect.

The truth is, industries are smoking, our power plants are smoking, agriculture industry is smoking. Why are we not taxing them, stigmatising them and rewarding the non-smokers more? Yes I’m talking about carbon dioxide emissions. We need to be able to track, monitor and release details about behaviours and get companies to act. It’s time for “No Smoking 2.0”.

No smoking

Cultural and behavioural change can happen. Think about smoking, how it was stigmatised, especially when the non-smokers are affected by the smokers. People used to be able to endure others, and thought it normal to smoke indoors. But then gradually, rules changed and then smokers became marginalised. It switched from the default where smokers think they have every right to be puffing around to the extent they feel apologetic about smoking.

Research and studies demonstrating the harm to bodies helps. Not just the impact on the single individual taking the action, but also on those around him. It seemed very significant even though it can be just one individual himself. But it took decades to try and work on this problem. It took excise taxes and more of it. In Singapore there were ‘yellow box’ areas where you can smoke in various places.

It took somewhat coordinated efforts within a country, alongside corporate decisions, to take on smoking. Companies started realising that smokers were taking smoke breaks that on aggregate meant they spent less time working. Whether they were more productive in the hours they did work, I’m not sure. But there are even companies giving non-smoker extra days off to appreciate them for not smoking. Healthier employees also make for better work.

We can create culture and behavioural change even when there are big capitalist incentives not to. Tobacco companies do very well financially; and they have a ‘sticky’ product; in fact, it is so price inelastic that taxes on it can be very high and governments generate revenues without technically causing too much deadweight loss due to this lack of elasticity (in other words, quantity consumed is not distorted much by the tax).

Smoking has given us a great example of this change.

Half baked solution

Who eat half-baked cookies? Probably someone who have never tasted a cookie; or maybe someone who prefers cookie dough, or don’t know what you were trying to bake. Yes when you don’t know what you’re trying to bake, then something half-baked works just as well as one that is properly baked.

Likewise, there are plenty of half-baked solutions lying around and even implemented by those who have no clue what is the problem they are trying to solve.

We often overlook the importance of specifying a problem well before getting our hands dirty to solve it. Being biased to action isn’t always good when one does not have strong thinking. Of course, if there’s a system of trial and error that continuously test different solutions to find one that works, that’s okay. The challenge is in not knowing what problem one is trying to solve; or attempting to design a solution that tries to solve multiple problems.

Then there’s no proper test for the solution at all, no success indicators that allows the solution to past the usefulness test.

So if a government comes up with a scheme and it is not used; or an incentive programme which no one in the market qualifies, what just happened? Did the problem that it was designed to solve not actually exist? Or is the solution half-baked?