Taking Money Out of the Equation

(I’m currently reading Michael Sandel’s “What Money Can’t Buy: The Moral Limits of Markets”. I highly recommend that book to you – it is really helping me see the patterns by which the ethics of economics are eroding and ‘crowding out’ non-market ways of thinking and living.)

Here’s a quick anecdote to tell you where I’m coming from.

I went with my girlfriend, Maanavi for her haircut the other day, and it became unnecessarily awkward. The stylist asked her if she’d like him to wash her hair first, and she refused, saying she’d rather wash them herself later. I don’t know what the motivation was, but the stylist insisted, several times, that she get them washed. She refused each time, increasingly irritated. Finally, when he too was annoyed, but had realized she wasn’t to be reasoned with, he started cutting her hair. But by this time the experience of the haircut had already been corroded by this unpleasant exchange.

Both parties had two categories of reasons for their opposing views. One is the monetary reason, and the other is non-monetary. Because the parlour charges extra for the hair wash, Maanavi had to think twice about it; for the same reason, the stylist was obliged to push for the hair wash as a ‘product’ he was selling to her. While she was thinking about whether or not it was worth it, he was trying to convince her that it was.As for the non-monetary aspect, one can infer that the stylist probably wanted his customer to get the best haircut possible, and washing her hair would guarantee that. For Maanavi, the refusal came perhaps from the fact that she needs to keep moisture away from her ears – some health issue.

But the key is, because there was an additional cost for the hair wash, it somehow devalued the whole experience. And most importantly, it devalued the ‘product’ the hair salon was selling. I realized that what the parlour is selling isn’t really a haircut, or a hairwash, or hair coloring. In fact, they are selling something more holistic – their value proposition to their customers is that they will help them look good. Whether that requires a wash, a cut, or red streaks is less important than the overall effect of looking good.

Yet, a good hairstyle is not the ‘product’ on their list. They’ve divided the act of styling into it’s many component parts, perhaps in an attempt to make the experience more efficient, or more profitable, or both. Effectively, and in the long run, I’m sure this variety in the products they offer would lead to higher profits and a more diverse clientele. But none of these clients are being allowed to have a discussion with the knowledgeable, even skilful stylist about the real question – their hairstyle. What is effectively happening is that while people come for this style or that – that is, to make an aesthetic decision, they are forced to make a financial decision instead.

Allow me now to propose an alternative model.

What happens if we take the economics out of the equation? Say the salon owner looks through all the various services that are now specialized and all together make for a good haircut. Say he values them all separately, and using some past statistics and an implicit understanding of his customers, he finds a weighted average cost for any given customer. Say that that cost is $50.

Now, instead of having to pay for individual separate components of the cut, the stylist starts to charge a flat $50 fee for a good hair cut. As long as you pay $50, you are entitled to as long as you need at the salon, and the stylist will use all the tools at his disposal to get you the exact look you want.

The emotional and professional plus points should be obvious. The customers will begin to think now only about the style they want, and think about it in great detail… And when they come to the parlour, they will be sure that that is exactly the look they will receive. Without the cost implication, this becomes an easy decision to make. One can imagine better haircuts all round, or at least more adventurous experimentation.

For the stylist, the professional freedom would be immense. Assuming the $50 per customer is enough to pay for his salary, and he is comfortable in that salary, he will be free to focus instead on his skill level and how accurately he can deliver the look a customer wants.

What’s more interesting to understand is that in this model the key assumption is that the stylist is happy to live a comfortable life at a certain, steady level of economic prosperity. At this level, the professional has decided that all their needs are met, and he is therefore able to pursue higher goals like professional excellence, ethical practice, a family life that is rich and rewarding, etc. There is a lot of research and content that suggests that this non-economic environment is in fact the sometimes better suited to produce great, productive results.

I’m aware of course of the practical hurdles that such a system would entail. What if everyone starts to just avail of every single available service? What if the stylist doesn’t get adequate number of customers during the month and starves? Can it work if only one parlour follows this principle while all others don’t? In other words, how do we implement this system universally?

I don’t have these answers, to be honest. I’m still thinking about it – which is why this is a blog post and not a book. But I think the key is to start rethinking how we structure society in the first place. For instance, basic service providers could be attached to specific communities that they serve – say the immediate neighbourhood for a beauty parlour. And these ‘regular patrons’ mutually agree to pay for this stylist’s upkeep and monthly salary, as long as the stylist promises to continue providing the services, and constantly improving them. This kind of model is already being experimented with, for instance, in the world of online videos via the website Subbable – people who like and use certain youtubers’ videos are voluntarily paying for them every month; and it seems to be working for at least some of the video makers. The point is simple: it will take imagination and reconfiguration at a basic level, but it can be done if we feel it is necessary and will help in the long run.

In the current system of professions tied to markets, the ultimate reward for providing a higher value of good is a higher price tag. But the question we have to ask is – is that truly the best way to value our skills, and the merit it produces for society? Is money the only currency we have at our disposal? What other means do we have with which we can value and reward certain kinds of activities? My theory is that if we take money out of the equation, we will end up creating space for a consistently higher quality of work, from professionals who will be motivated instead by the intrinsic value of their work rather than the extrinsic monetary reward. At the same time, we will find new patterns of creating value emerge that are not tied to money at all – activities that are currently impossible to undergo because of the all-pervasive need to ‘make a living’.

In an alternative universe, the basic economic needs are met by a bare minimum amount of work; and most professionals are content with slightly higher than the subsistence level of money needed. Anything beyond that can be seen as an actual hindrance to working well. How often have we come up with a great solution to solve a real world problem, for instance, but dropped the idea because we can’t find a way to ‘monetize’ it? The point I’m making is that the need to monetize isn’t a divinely ordained law – we’ve imposed this criterion on ourselves, and there could be other ways to create a perfectly high-functioning society.

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5 thoughts on “Taking Money Out of the Equation

    1. Thanks for reading and responding Apoorv! I’ve read through your blog post and most of the Venus Project’s website. Superb stuff dude, thanks for linking me to it!

  1. An exceptional essay, truly revolutionary!

    I really like the idea on offer here, as it seems to be an alluring way of implementing a standard minimum yet livable wage through the private sector.

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