What’s in a price?

Four years ago, I was thinking about leaving a chair in a room and considering whether it still existed as part of some epistemic discussions in Knowledge and Inquiry. As I’m studying the History and Philosophy of Economics this year, I’ll consider a different dimension to a simple object like a chair – its price. What does the price of an object really mean?

If you were to ask the Classics like Ricardo, a price reflects the amount of labour put into its production. The price of a chair is just a fraction of the price of the building because it takes a small fraction of the building’s labour to produce the chair. Consequently, the price is a reflection of supply and how difficult it is to produce the object.

If you were to ask Jevons, the price is a reflection of utility. The chair has a particular price not because it takes X amount of effort to produce it, but because it gives me X amount of pleasure. Jevons follows Bentham’s idea of utility in that it is associated with pleasures and pains associated with a human’s interaction with the commodity. Then, the price is a reflection of demand, corresponding to the marginal utility gained from the interaction with the object.

Walras, inspired by the Paris Stock Exchange, would argue that the price is merely a ratio relative to all other goods. In general equilibrium, an auctioneer can start at any random price and adjust the price up or down until the market clears. Consequently, the price of a chair is a ratio of its value relative to all other goods in the market. Marshall uses a similar concept in that price is merely a market-clearing mechanism between demand and supply (what most people learn in JC), but he uses partial equilibrium, so he does not consider the ratio relative to all other goods.

What does a price mean to neoclassical economists now? It is still a ratio, but it would be equal to the marginal rate of substitution between goods in equilibrium (i.e. it is equal to the ratio of marginal utilities). While the link between price and utility is similar to Jevons’ idea, it is notable that our modern conception of utility is different from its hedonistic background. Neoclassical economists now believe that utility is preference satisfaction: this means that I do not prefer X over Y because I am happier with X than with Y; my choosing X over Y is what it means for utility of X to be higher than utility of Y for me. When comparing relative utilities, we are essentially looking at points of indifference (which is another huge area of discussion altogether).

So, what is in a price? It is what the society at that time makes it out to be. While prices might be related to an object’s value (either for the supplier like Ricardo, or for the user like Jevons), it seems more plausible to treat it merely as a ratio for market trading. There’s more to be said about this, and perhaps I’ll come back to this topic after studying social ontology next term.

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I can do all things through him

I can do all things through him who gives me strength. (Philippians 4:13)

A friend quoted this verse recently, and I’ve been thinking about it as I’m rushing from place to place to do all the things that I planned to do. Paul wrote this line in the context of all the hardships that he has faced, and several commentaries interpret this verse as Paul saying that he is able to endure all his hardships because of Christ who strengthens him. As such, it need not be directly applicable to our busy lives. Nonetheless, there are two interpretations that I thought were interesting and applicable.

The first interpretation is somewhat similar to Paul’s meaning. I am able to do amazing things, not by my own effort, but because God strengthens me. This is a huge encouragement to live passionately for God, for we also know that nothing is impossible with God. The mechanism of this interpretation is that God provides strength to me, and I am able to act.

The second interpretation is that God is my strength-giver, and God is the one acting. The main difference is that the first interpretation is where God gets his will done through us; in this interpretation, we are able to do things through God. This should be clarified: I do not mean that we dictate what God should do, but that God is also an important actor in the entire mechanism. This is immensely humbling: God does not need us to get His will done, but we need God for things to be done. Thus, when there are many things on my heart that I feel needs to be done and I am unable to, this is a massive encouragement to trust God – we only have 24 hours in a day, but God is unlimited, so many of these things on my heart need not be done by me – God could very well empower someone else to accomplish these things. Thus, the mechanism of this interpretation is that there are things on my heart that I want to do and it is God who does these things.

Obviously, the first interpretation is the one that sticks, because the “gives me strength” clause hints at us needing God’s strength. This clause does not sit as well with the second interpretation as we do not necessarily need the strength to do things when God is the one truly acting. Nonetheless, what I wanted to highlight is that rather than simply accepting the first interpretation, it should be qualified by the fact that God is still a primary actor in the whole scheme. It is not just about us doing stuff; it is more about God doing stuff.

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yes no and wait in prayer

In many Bible studies and small group meetings, I’ve been told that God usually answers our prayers in three ways: (1) yes (2) no (3) wait. I did a quick google search to check the basis of this claim, and I’ve found some perspectives that suggest that God may also answer in a way that goes “I can’t year you” in this sense that we have been blocked by sin. There are also perspectives that go “it is always a Yes in Christ” (referring to Paul’s letter). However, my view on why these are not the only ways that God answers prayers runs much deeper than these perspectives – it depends fundamentally on the type of prayer.

If the answers of yes, no and wait are jointly exhaustive of God’s responses to prayers, then it appears that we can only reasonably reverse-engineer two types of prayers. The first is that we ask God a yes/no question. The second is that we ask God to do something in our lives – help us get a First in the next exam, get a job, find a spouse, bring peace to the family, etc. If these are the only two types of prayers that we can possibly pray, we are deeply mistaken. In fact, there tends to be many prayers where yes no and wait cannot be answers.

The first type of prayer I can think of is thanksgiving and description. We should be praying to thank God and praise Him for who He is, and for what He has done. When we cite things that happen empirically to thank Him, or when we are telling Him about our lives and surrendering it, are we really expecting a response of “yes/ no/ wait”? Perhaps, the best response we can receive is to hear God say “I’m listening, and I’m pleased.”

Another type of prayer involves asking open ended questions. I might ask God, what job have you called me to? What should I write my dissertation on? How can I bless the people around me? Getting a yes/ no answer to these questions are just absurd. Instead, God molds circumstances to reveal the answer to these questions that we have.

There are definitely merits of the yes/ no/ wait perspective, in the sense that it reminds us that we should be patient for God to answer our requests. What I want to bring up is that (1) we should not think that these are God’s ONLY answers to prayers and (2) our prayers should go beyond requests – it can also include open ended questions and thanksgiving.

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No true meritocracy

A meritocracy is a society where power is allocated based on talent and ability (i.e. by merit), and people often get ahead in such societies when they perform better in objective measures such as examinations. As I’m thinking about people who are currently applying for jobs and internships, I’m more convinced that true meritocracy cannot exist as long as this world is still run by humans, and it is not a bad thing that we cannot have true meritocracy.

What would true meritocracy imply? If positions are given purely by merit, then the human resource (HR) manager should be indifferent between two candidates who produce the same test scores and hold the same existing qualifications. This indifference should be invariant to other factors that are considered irrelevant. Now, suppose that candidate A’s father is a close friend of the company’s CEO, while candidate B is a grocer’s daughter. True meritocracy implies that the HR manager should still be indifferent between A and B, but in reality, he is more likely to strictly prefer A to B. By selecting A, he would be pleasing his CEO, which would improve his promotion prospects, but the same cannot be said for B. As such, the argument put forth is that as long as social networks are in play, true meritocracy cannot exist.

One might be able to include networking and flexibility into the meritocratic model, but even this is limited. The ability to form networks is a signal of one’s ability, and such networks help to build one’s portfolio. Thus, back in the case above, an objective measure of A’s and B’s portfolio would show that A is more suitable than B for the job. (This, to some extent, explains why London graduates are more employable than Oxbridge graduates.) But there are at least two problems to this argument: (1) meritocracy is no longer robust to endowment effects i.e. A who has better endowment (in terms of his father’s networks) requires less talent and ability than B to be equally employable (2) ability to network is irrelevant to some jobs (like working in a laboratory alone), so factoring networking ability as another “merit” to distinguish candidates just leads to less efficiency than what a meritocratic society would desire.

As long as humans are still running this world, true meritocracy cannot happen. The above example can serve as an illustration of a more general argument: that humans have subjective preferences in selecting people in the position of power, and not all of their judgment can be premised on objective measures. On the contrary, if the world were run by robots who will run every candidate through an algorithm that matches the company’s needs, and all companies only use the robot’s results, then meritocracy will be possible.

That said, it is not necessarily bad that there is no true meritocracy. In a human society, humans do better by pleasing humans rather than be pleasing robots. Thus, although selection is subjective, and might be deemed unfair to those who have worked hard but just lacked networks, hiring A over B might be good for the company after all. Candidate A is better known, and a rational company would prefer this option: A offers a 70% chance of quality X and 30% chance of quality X-1; B offers a 50% chance of quality X and 50% chance of quality X-1 as a result of the networks. Furthermore, A satisfies more human preferences (no matter how subjective they are), so he would still be the better choice. With imperfect information and subjective preferences, hiring independent of true meritocracy can still be beneficial for the company.

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How to think like an economist

After dealing with economics for some time, I thought it would be useful to develop a simple model of how economists think. There are essentially three steps in generating economic knowledge: (1) observation (2) modelling (3) extension.

1. Observation
Economists look at social phenomena and aim to find some consistency in social behavior (even if economic agents do not consciously act in a particular way). This could be how market prices respond to money supply and income, or how people play rock-paper-scissors.

2. Modelling
This takes up the bulk of the economists time. Some axioms and definitions are used to set the parameter of the problem in order to simplify or abstract from reality. These axioms could be a more general form of the observation, or some other intuitive behavior. From these axioms, economists deductively (mathematically) derive particular theorems, propositions, and models.

3. Extension
Economists typically bifurcate at this point: the empirical economists will follow the lead of scientists in testing the predictions of the model against further observations or historical records; the theoretical economists will look at further implications of the axioms beyond the case that it is meant to apply. In the empirical view, if the model does not fit the prediction well, they go back to the modelling stage to find another model. In the theoretical view, models in principle are not falsifiable, but somehow adds to the realm of social mathematics, and gives us one more step to advance it.

Thus, I’ve presented my model of how I observe economists behave. Perhaps, this can be extended to most fields of knowledge as well, where looking at the significance of their theories and propositions can stimulate further research. That’s how research continues in an endless cycle.

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Tips for moving from classical to improvisation on piano

I’m not a very good pianist myself, much less one who improvises, but I suppose I could functionally play the keyboard to accompany a band or singer. Transiting from classical playing where all the notes, rhythms and dynamics are written out to a chord sheet seemed rather daunting, but it was something I eventually got used to. More recently, as I was asking more people to play the keyboard for worship, I found myself giving similar tips to them as they moved from classical playing to improvisation. Thus, I thought it would be quite nice to write out the top 10 tips (in no particular order) that I’d give anyone who is moving from classical piano playing to improvisation.

1. Play less
The most virtuosic classical pianists are typically those who play too much. They somehow feel a need to press all the notes in a G chord across all 7 octaves simultaneously from the beginning of a song. I’d usually advise playing less, since having less material to begin with gives more space for the music to build up in texture, dynamics and range in the chorus. Having simple chords mid-range and silence at points do have their value in creating a particular tone for the verse.

2. Consider the register
Playing in the mid-range gives a stable and comfortable backdrop. Moving up one octave (even with the same notes and rhythm) would give the music a distinctly more ethereal feel. Moving down one octave increases the intensity of the bass note, which can complement other instruments well.

3. Fill at the end of the line
In classical playing, the piano typically plays the melodic line, and there is a temptation to do that in songs as well, but playing the melody while the singer is singing the same thing might be rather distracting. However, playing a counter-melody at the end of the line (where the vocal line holds a long note) can have a propelling effect for the music that leads into the following line.

4. Listen to the recording
As far was worship music goes, we are essentially doing a cover of an existing song. Listening to the original recording to find out where the rifts/ runs for the piano are, and the rhythm they used can be a good starting point on how the chords should be figured.

5. Use inversions and extensions to move less
Chord sheets are generally notated for the guitar to facilitate finger movement. If we were to use the same chord progression for the piano, the bass line might jump too much. For instance, we might observe “G D Em” on the chord sheet. On the piano, I would usually play “G D/F# Em7”. This allows the bass line to move by step, and it allows me to hold the note D in the right hard to avoid too much movement. Moving less would be helpful when the music is in a static area.

6. Broken or block chords
When I first started, I liked to play in broken chords, as it ensured a constant quaver rhythm. It also has a flowing feel. However, block chords can be useful to keep a standard 4/4 rhythm. More interesting rhythmic patterns are also more easily figured using block chords, especially if it were used to imitate the guitar strumming patterns.

7. Building tension
There are many ways to build tension, especially if we started soft in mid-range. Expanding the range of notes helps and moving the bass line down can increase intensity. Intensity is also generated from increasing the note frequency – this could come from runs in the right hand, or through reiterated/ tremolo figures in the left.

8. Think about the tone colour
Typically, playing the “piano” for worship implies playing on the keyboard, which should come with a synthesiser. The synthesiser is quite different from the piano, as different modes would have different tone colours for the notes, which is complemented by different forms of attack, sustain, and decay of sound. By listening to these tones, you might find that the effects can fit certain musical settings better than the piano, and the way they work can be quite different. For example, the string pads can be used for a meditative/ ethereal musical setting. And quite unlike the piano, the sound gets more intense when one moves up by an octave as the pads become sharp and shrill (in contrast to the piano which gets less intense when moving up as the sound becomes lighter).

9. There is no wrong note
It is obvious that a note is wrong in classical playing when the note produced does not follow the score. However, in improvisation, even the weirdest note can be resolved into something that makes sense.

10. Listen to others
Especially in the early stages of improvising, one learns most from experience. Listening to how recordings play the keyboard helps to give ideas. Listening to the singer and the guitar (and other instruments) will also help to inform how the keyboard can complement what they do, rather than detract from them.

Hope this is helpful!

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What constitutes a better job?

Our jobs take up a large part of our lives and students in university are in a season of their lives where they search for jobs and consider what makes a better job. After talking to many of my peers, there seem to be several characteristics of a good job: money, prestige, and satisfaction. But if we were to examine each area carefully, they appear to be lacking in some way. Instead, I believe that these worldly measures of what makes a better job are a shadow of what really matters – ability, passion, and need.

Money is an obvious characteristic of a good job – a good job should pay well. In the economics faculty, as people are desperately applying for top internships and weighing their options, it appears that a better offer is one that pays more, and not many people question this assumption. Surely, when someone has a huge house by the beach, or becomes a millionaire, we would deem that person to have succeeded in life. But is money sufficient to motivate someone? People in financial sectors easily leave after a few years of making a lot of money. People with high ability also need not choose jobs that pay a lot – Hawking comes to mind, since I just read about his PhD thesis being released to the public. Brilliant minds may not choose jobs that pay most – perhaps, they are motivated by something else like prestige.

Prestige is what people tend to associate with a job. This seems to be a good account of what makes a good job that would attract people of the highest ability. There are many civil service scholars in Cambridge who would be paid just a fraction of what they would have been able to earn in the private sector. The same could be said of brilliant academics who live in mathematics rather than finance. Such lower pay could be more than compensated by the fact that the world views them as people of high ability – they would eventually be able to publish ideas to influence the world, or take up top positions in the civil service to influence people’s lives. Arguably, people can live their whole lives for prestige, and work very hard for it, but if the approval of other people is what truly makes us happy, it seems that our happiness is just too temporal and transient. Furthermore, the higher one gets in the bureaucratic ladder, the more criticism that person tends to face, and being disliked at your job is something that most people wouldn’t associate with a “good” job.

Job satisfaction is one characteristic that seems more plausible, and I’ve used this to justify my career choices too. If satisfaction is what motivates a better job (whatever this means to an individual), then our happiness is no longer contingent on others. This is how leaders tend to motivate those under them: it would be amazing if we could find meaning in what we do – teachers teach knowing they are molding the future generation; civil servants work knowing that the policies they implement will help people tremendously; church workers preach knowing that the gospel will be spread, and all these things can give us joy. However, if we think that a job is good only for the satisfaction that it brings, then it seems like we are living our lives only for our own pleasure, and putting our brains in a vat with an experience machine seems no different. There is something more to a “better” job than these.

Instead of money, ability is a better characteristic of a good job. A job is better for you when your ability is better suited to it. People tend to truly enjoy doing what they are good at, and they tend to do better at what they are good at. If one were to force herself into finance even though she might not have the aptitude for it, she could just end up doing badly, and the monetary incentive would only be transient. But if she does something that she is good at, it would be far easier to rise up the ranks quickly, and the money associated with the job would follow. Thus, it is the ability that matters.

Instead of satisfaction, think about passion. One can be “satisfied” with her job without being passionate about it – it would be nice to have 9 to 5 jobs with a good work life balance, and I need not actually care about what I am doing in the job. Passion is closely related to satisfaction in the sense that both are what you want to do, even without the incentives of money and prestige. However, passion happens when there is a strong cause that you are very interested in and are willing to champion regardless of the odds placed against it. Chasing this dream is what really brings joy in the job. This also helps to qualify ability: if I were good at math, but I don’t enjoy math, I would still be miserable being a mathematician. But if I am good at it and I am passionate about it, doing a job allows me to succeed and find joy. At this point, our idea of a quality job is still rather self-centered, so I believe the last factor is the most important.

Consider the world’s need. Both prestige and need concern our relation to the rest of the world. Rather than choose a job where the world recognises you and gives you credit, wouldn’t it be far more meaningful to choose a job that changes the world for the better? Great people in history are remembered often not for how brilliant they are, or how passionate they are about causes, but are remembered because they made a difference to the world, which stemmed from their ability and their passion. Similarly, if one is quantitatively capable and has a passion for finance, his going into the financial world and competing with all the other interns would just give him money and prestige, and he would just be one of the many nameless faces that have “made it” in life. But if that same person were to give all these up to go to a developing country to teach mathematics for instance, he is actually filling a deep need that the world has, stemming out of the same ability (and possible passion), and that’s how the school’s founder is remembered. Can we really say that the latter job is worse than the former?

Thus, I really hope that we can go beyond the way the world thinks about jobs in terms of money, prestige, and satisfaction, but look to what really matters. I hope that we can all find one day find the place where our greatest strength (ability) intersects our greatest passion, that addresses the world’s greatest need, fulfilling what we were made to do on this earth.

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