What can we do to steer progress in the right direction?
There is an underlying problem with markets: they are limited by human psyche. What does it mean? Essentially that the pricing ability for a particular asset, is bounded by the collective ability to grasp long term consequences. The problem is that because we are animals, most of the times we feel pressure only for things close to us both in space and time. If we assume this to always be true we can list the most evident examples where this tendency brings failure:
It is understandable how things like [quantitative easing] might look like an effective solution in times of crisis, but plotted on a longer than human-life timeline, things might look different, when chickens have come home to roost, inflation hits, and the weaker parts of society take the hit the most. The problem is that by the time the effect is felt (why did this thing doubled in price?), the catalyst (a.k.a. big monetary injection) has passed the news, and the population, drowning in their everyday affairs (I can't be late for work or I'll get fired, I can't get fired, especially now, that bills and taxes have become so prohibitive), does not respond as it should; Causes and effects are edulcorated (which year-span caused the crisis? 1980? 1990? 2000?), targeting the issue becomes an unsurmountable coordination problem, as more imminent issues closer to the space-time of society take precedence (we need to fix unemployment now, the economy later...).
When I buy a shovel, I have a price in mind, that is made of the parts that compose the shovel. The handle and the tip. Prices tend to include extraction costs applied to the cost of raw materials, then we find build costs, storage costs, transportation costs, service costs. We cut the pricing here, (ignoring taxes). Rarely disposal costs, pollution costs... are priced in.
How does something modifies society? There are products like smartphones that permanently change the shape of society and generations to come, yet factoring such costs is not a thing. Every tool that we make changes our way of living, and circularly the path that progress takes in its quest to improve our life [1].
There is a common trend here, things that are hard to quantify are left unquantified. This goes against the saying something is better than nothing. Leaving things unquantified is almost the same as denying that they exist, when we follow this pattern for a prolonged amount of time, we eventually forget, right until the problem is too big to ignore (the rug in our home formed a somewhat mountainous shape!). Pricing things, even wrongly is better than freeloading, because we need to be constantly reminded that problems exist.
| [1] | or simply fill them, to escape the ever-incumbent voidness of human existence |
