What are negative prices in the market? When you don’t want something and have to pay someone to take it. But why can’t you just “dispose” it somehow? Or “leave it there”? Maybe there are regulations in place. Or maybe there isn’t a place that you can and want to “leave it”
Carbon prices are negative prices; you need to pay someone to take it away. By creating regulations to prevent people from just “leaving it there (in the atmosphere)”, you push the cost of disposal to the polluters and set out the signals and momentum necessary to rewire the system.
Free market doesn’t emerge spontaneously; it requires regulation, boundaries and legal mechanisms to enforce rules, especially explicit ones. Implicit rules are also necessary to keep things together. Question is if we are willing to create a system intellectual property and enforce rights to spark innovation, why aren’t we doing so for climate change?
I wrote about finding talents; but what do you do after finding them? Do you leverage them? Do you beat them into conforming with the system and structures you’ve created? The use of talents is more important than finding them because you’re not going to keep them if you think that the transaction is just about remuneration in exchange for them applying their abilities to your problems.
Conditions need to be created to leverage on our talents better and that can come from remuneration but it also involves the structure of work, processes and the environment created by managers and prevailing cultures.
If you don’t have them, then finding talents might be a waste of time and resources.
What constitutes waste for you? Is it when you decide something is useless for you? Or when you throw out something? Where you dispose of them matters because it defines where it goes and it determines what happen to the materials or matter and if it is classified as waste. The overall psyche of our current populace is mostly driven by the out of sight, out of mind approach to waste.
We could change the very idea of waste so that there is better recognition of the value of the material. This helps reduce the waste and encourage reusing.
Or we can make it way easier to recycle. But recycling will have to be different from disposal. And the recycling activity needs to be valued differently.
Why is it that we are complaining about the shortfall of talents and then laying off people at the same time? What makes talents talented? What exactly is this all about? I thought about how we as humans have been trying to overcome our own constraints by using machines and automation but then strangely we subsequently have to justify how much better we are compared to machines.
Isn’t that a rather miserable existence?
What about this elusive group of talents that employers are looking for? What is being asked of them? And how much if it is possible? What makes talents hard to find and why are those attributes difficult to replicate, duplicate or scale?
Anyways is it not the very reason they are unscalable that makes them well sought after? Money may well attract talents but what fuels them? What keeps them going the way they do? Perhaps those are the more important questions for employers to ponder over rather than wondering where to find them.
Lululemon had a “We made too much” sale ongoing. It is nothing new. All fast fashion brands tend to make too much. Because the strategy for fast fashion and the culture we created is to push out the latest design into the market, make it as widely available as possible in the shortest time pricing with markups that makes construction contractor mouth water and then just deal with the leftovers later.
So how do they deal with leftovers? Sometimes they discount, which is not the most common approach because discounting damages their relationship with customers. Customers would begin to expect cheaper price later and most of them would learn to wait. That is bad for margins and future profit. So the fast fashion brands dump their clothes into other markets which don’t carry their first-to-market goods, and then eventually just dispose of the clothes.
Precious cotton and fabrics that can be used to clothe someone else goes to waste. The world is not better for it but certainly there are people made richer by this model. And so it goes on. The focus on sustainability within the fashion industry is just beginning and hopefully gets to a level when it can start snowballing properly.
So what is the alternative? How about slow fashion that focuses on classic, proven designs, that uses materials in a sustainable way? Where the cost is towards improving material traceability, better sourcing and exploration of newer, shorter supply chains? Instead of fattening corporate wallets and perpetuating the fast fashion culture?
There’s been loads of news of layoffs in tech and it coincided with huge investments made in Artificial Intelligence as well as the launch of a beta version of ChatGPT that somehow took the world by storm. The recency effect led people to think that the layoffs somehow might have something to do with the fact that AI might be taking away more jobs and so on.
For a long time, human labour have been relied upon to move good around, help with loading and unloading from transportation, stock-take and do records by hand. These jobs have gradually been replaced by machines though in rare instances, having a human do the job is still more efficient or effective. Switching human labour for machines is nothing new. And it has been a good thing because machines free up human to take on more challenging kinds of problems.
This is how the ratchet of progress takes place. We invest time and effort in developing machine solutions which would eventually be able to replace human effort. And once the solution is adopted across the board, there are so many people who are freed up to work on further solutions and the ball keeps rolling. From a fundamental perspective, the world is progressing and civilization advances.
It is strange that our economic system, the market system that we have lauded and embraced do not exactly work in the same way. It creates incentives and competition towards progress but the result is a lot of stress, anxiety, and pain when new solutions are adopted and manpower is freed up. This is because firms and businesses are not adapted in our system to focus on innovation for progress but simply innovation for profits. And when this is the case, unemployment is a logical approach towards the adoption of new solutions.
When firms and businesses cannot think broadly enough to embrace what is fundamentally beneficial to society and mankind, then individuals, talents and smart people like you and I, will have to develop the courage to step out and do the work that the world needs. Because in many ways, that is what makes us human. That’s what AI cannot replace.
Many years ago when I first thought about the study of Economics, there was the prevailing concern about oil reserves running out and the world running out of fuel. It was 2005 and the economist even had an issue where the cover page was showing the reflective colorful swirls of oil. The economists would argue that the world will never run out of oil because towards the last drop of oil left, the price of oil would be so high no one would want it. And perhaps many other alternative technologies which were not commercially viable would have become so before oil runs out.
Those were days when we technically already know about greenhouse effect and the global warming potential of carbon dioxide. And I was particularly fascinated with the recurring debates between the Malthusians (and neo-Malthusians) and the others weigh on the hope of technology (and possibly economics).
It is funny how more than 17 years later, I’m in a career to try and reduce (and eventually end) the dominance of oil. Not to promote an alternative technology, not to rail against the political power of oil but to create a future that we all want to step into. Because climate change is an existential danger for us all and the planet as we know it. And because I believe our current economic system can be superceded by one that works for the future and not the tradition notions of wealth and fortune.
Authentic Tea House, a brand under Coca Cola Singapore used to sell these cans of Chinese tea (unsweetened) that uses Da Hong Pao tea leaves from Wuyi mountain or so they claimed. Da Hong Pao is itself a very expensive variety of tea and this canned tea was very popular in Singapore for quite some time. My family and I were fans of it.
Recently they changed the tinge of the color of this product. It went from bright red packaging to a little bit darker red. And instead of saying ‘Da Hong Pao’, it was saying ‘Oolong’ though the subtitle still said it was brewed from Da Hong Pao leaves. The taste is distinctly different and I’m not sure if it was a change in formula that demanded that update in marketing and product design.
Either way, my family didn’t like it. And we wonder if it has to do with the cost or the limited supply of the Da Hong Pao tea leaves. It is sad that Coca Cola Singapore decided to introduce an inferior product to replace one that is so popular and widely consumed. But to a large extent, that is the story of industrialism, and also of the worker who have been doing a good job that was previously appreciated by the employer. Sooner or later there’s always a desire to standardise things, make it good enough but not so great that it becomes irreplaceable. But in the process, we lose something.
It was interesting to look at the copy and storytelling of this TWS’ piece sponsored by Ministry of Trade & Industry. The main message is around skills and jobs upgrading and the changing economic situation of a country that developed. I appreciated the empathy and recognising that the economic shifts do cause people to be left behind. But the idea of applying a one-size-fits-all solution to the broad economic shift seem simplistic to me.
The fact that the country embark on a kind of industrialism does not require all its people to do the same. When the UK was undergoing the industrial revolution, the French and Italians started forming artisan guilds and creating systems of artistic and craft authenticity verifications to protect and price their products better. When Frito-Lays or other big brands moved their potato chip making operations to developing countries, the developed European farms started making their own chips and marketing them at prices that are 4-5 times.
Sure, there is more technical components involved in the premium versions and probably more work went into the marketing, packaging and consumer experience. But this is precisely the sort of product development and market-growth thinking that Singaporeans need to move into the next stage of our development.
Manufacturing value-add and improvement in Singapore can be achieved by having more economic promotion, tax incentives and being able to gather a bunch of competent people able to participate in the production. That is because we are small and rely on MNCs investing in manufacturing capacity. And that MTI push for people to become cogs of such industrialism is based on this strategy. Yet as an individual, I don’t know how optimal this is. I find it simply makes us even more fragile and at the whims of the industrialism.
I’m not sure how worthwhile it is to develop stronger manufacturing base driven by our homegrown technologies and research. We do have that strategy in place and try to move in that direction as well. But we are stuck as second class folks in the game if we continue to encourage the majority to remain as cogs in that industrialism perpetuated by others.
For a government, it makes sense to periodically step back, figure out who and what the market is not serving that it should really be serving and create interventions to redirect the market.
This is why carbon regulations, carbon pricing and systems of disclosure is so important. And all of these entails the government and the people making a choice to take away that false liberty of choice that the market creates. This decision is driven by seeking to serve the people who otherwise would not be served by the market.
For example, in the case of people who are hard-to-insure. The market-based insurance approach makes things harder and harder for them as the companies are able to discriminate against them and pool only customers with better risk profiles.
The invisible hand is invisible but it is still guiding and directing. Better for us to articulate as a society how we want the market to serve us and get it to do just that.
