Pricing social betterment part 2Posted: February 11, 2011
This piece is trying to exemplify part 1.
About a week ago I had a trying day I must admit. And worse, because of it, I noticed that I did not do as many nice things or acted as friendly and politely as I aim to be my normal standard. I did wish the shopkeeper a nice day, but on the other hand I shouted out in the car when a driver cut me off. I did not jump the cue at the baker when the opportunity presented itself. But I did not hold the door for the person behind me. And on and on. Now why was that? Truth be told, I was feeling sick, and had a long schedule. My energy reserves were simply running low. That got me thinking.
See in Denmark we have this term: “lidt overskud i hverdagen”. Roughly translated it means having some “surplus” in your everyday life that you use to pass around good vibes, help out, and spread joy. That got me thinking… See in order to share, you have to have surplus. Because doing good carries costs. That is because a good deed, even when you want nothing particular or directly phased in return, is nonetheless a transaction. In economics we know from stars like Hayek, Coase and Williamson that doing any voluntary transaction carries costs. So let’s look at transaction costs. Eggertson defines the allusive term (1990:14) ‘transaction costs are the costs that arises when individuals exchange ownership rights to economic assets and enforce their exclusive rights’. (Eggertson, T. (1990): Economic Behavior and Institutions. Cambridge University Press). So when you bake a cake for your roomie or even hold the door for someone, it cost you to do it. Not juat the raw material, but also the action itself. There are quite simply transaction costs to doing good, because there is transaction costs to life itself.
I will try to in future pieces here to talk about getting the necessary surplus in your daily life and how to most optimally distribute this into transactions that improves the world (I tried to write sentence this without sounding like a televangelist or selfhelp douche… I did not succeed I am afraid).
Have a nice day. I am happy you took the time to read this.