Tuesday, August 07, 2018

Bottled Water

Value and Price are not the same thing. Value is what something is worth to you. It is complicated, personal, irrational, dynamic and precious. Price is simply a clearing mechanism. That price seems to connect to value, is because (1) on average, (2) across all our choices, and (3) when things work, markets don't do an awful job. If two people exchange something, and both are happy, it doesn't matter if the price was 'wrong'. Ideally, it is wrong in the right direction for both parties. They both feel they have paid less than what the thing is worth to them.

Water is a great example. It is obviously valuable. Yet, in modern society with good infrastructure, it is almost free. From the tap. If you want Bottled Water, you pay for the story someone weaves to tell you why it is special. 'Ah, but this water comes from the Enchanted Spring of the Botchupikuchi People. It is carried on the backs of Sacred Priests in ancient hand-woven baskets for 12 days. Never 11. Never 13. There are only 93 bottles produced every year. If you freeze this water in this special device that produces cold stars (I know it looks like the stuff outside, but it isn't), it will give you long life.'

Writing has become like water. There are so many people out there producing high-quality pieces, who don't need money, that it has become very difficult to make money from. That doesn't mean it isn't valuable. To make money, you have to spin/monetise an additional story.

Child Care is like water. It costs a lot to get someone else to do it for you. To bottle it. But ideally, it is free, and done by parents, family and friends. Free doesn't mean worthless. It means there isn't a market for it.

Law, Medicine, Mental Health, Education, Relationships, and Community Building are all valuable activities where the side-effects of involving money are very difficult to control or manage. That doesn't mean we don't take our medicine when we have to. It would just be great if there was a better way.

I am passionate about people building Buffers and Engines because I would like to be in a world where more people are able to focus on the things they value. I would like to be in a world where a Universal Basic Income meant that everyone could afford the basics of survival. Where everyone had water to drink. 

Don't confuse Price and Value. As Warren Buffett says, 'Price is what you pay, Value is what you get'.

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