Cost Effectiveness

I don’t know if I should class this as a language discussion or a systems thinking discussion, but in the understanding that true solutions come from broad thinking, let’s call it both and more.

I’ve run across two discussions in the past week that I found striking regarding the understanding of “cost-effective”. The first was someone on Facebook who was trying to decide if he wanted to purchase community bonds sold by his municipality, and wanted to know if the purported return was comparable to other bond purchases. The second was a discussion about hybrid and fully electric vehicles and the person I was talking with said they didn’t choose the hybrid Civic, instead choosing the all-wheel gas Subaru, because the hybrid was just not cost-effective.

I applaud these folks for engaging in discussions of technology and financial structures that are innovative and not fully yet in the norm of consideration. Yet it disheartens me that they choose to judge these innovative opportunities, opportunities that also engage in social and environmental aspects of life, using the limited traditional thought process that defines cost-effective solely on short-term financial return for the purchaser only. This is the state of the transition, right now. Some are early adopters and some are going to always lag. The middle ground wants the proof of concept in place. In these two discussions, those involved have taken the first step by being aware of potential beyond the “norm”, and now we need to get them to stride the path to triple bottom line, to purchasing that engages in positive social outcomes and stewardship of resources while it meets personal needs and goals.

I may alienate people, here, but I need to say it. We have to stop being selfish in our decisions. I don’t care if it’s your money to do with what you want; We are truly all in this together, and personal decisions must include the broader effects of that personal choice. This is not a call to sacrifice your own goals and needs. It is a call for greater awareness and for accommodation of the fact that we share everything, despite our history of “rugged individualism” that compels us to often act otherwise. Basically, factor others into the equation so you can meet your needs while respecting the needs of others. More effort, better return.

If we make the discussion solely about money in, money out, the discussion, and therefore the possibilities, are limited.

Regarding the community bonds. They may have a lower yield than bonds on the street or some other investment in a series of Fortune 500 socks. Maybe we need to think of them as war bonds – there was a time when the USA united in buying war bonds because we knew if we didn’t support the war effort in WWII that we were ALL at risk. We knew even that it was more at stake than just the USA, that’s how broad our thinking used to be. We knew we were part of the whole world. We are part of the whole world. Community bonds do much more in addition to giving the investor a cash return. They keep money local, they likely invest in community and social-focused programs and infrastructure that affects you and your neighbors directly. They are the epitome of taking interest and giving input into your life, purposefully, and can even help to retain more community control local, instead of depending on state or federal investments. But these benefits require personal investment in your community bonds. Do they yield a good return? Yup, you bet-cha.

Regarding the cost-effectiveness of purchasing a hybrid over a gas-only car, this is more about being honest about the inputs for the choice than about the choice being affected by limited thinking. I know there are a lot of other factors inherent in the purchase of a new car. Likely the decision was not ultimately about the cost and life-cost alone but also about personal definitions of need, appearance, usability, performance, travel patterns, disposable income, burden of 5-year loans, maybe even fear of battery wear, snow load in the NE mountain areas, etc. So, with all that in play, let’s not label the decision as one about cost effectiveness.

If we do want to talk using the terms of cost and return, we need to broaden the definitions of cost and of return to include the heretofore items called “externalities”. Let’s focus on the purchase of a car, which is a significant process, and one that most USA citizens engage in at some point (though that is slowly changing). The externalities that should affect our choices include the inputs such as where was the car built, what are the labor practices, what is the manufacturer’s waste to product ratio, how far does this need to be shipped, what is the true mpg and is that from clean sources or not (check emissions, not just mpg), how long is the car going to perform and what do they do with it when its use is over (what are the reuse to waste ratios), what kind of toxins am I exposing myself to in using this car, what are the safety ratings. And even before purchasing the car we need to ask things like how big a car do I need, do I need this car for just me or for more than me consistently, can I rent when I need a tow-hitch a few times a year and buy a smaller or more efficient vehicle, are there car-share options in my community, can I carpool to work or take the bus, do I need a car at all.

I’m not saying beat yourself up, but taking a moment to ask these things is very important in understanding how your life works, how it could work better for you, and how you should purchase knowing what is possible. If we make the discussion solely about money in, money out, the discussion, and therefore the possibilities, are limited.

Here’s to limitless possibilities.

Jodi

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