So… to set prices or not to set prices… I haven’t decided yet actually… still thinking… but while I do thought I might look at some of the benefits of having a price on things.
- The first benefit is that price helps to create efficient utilization of resources. Basically it balances supply and demand. If there is a lot of something and not many people that want it, then the law of supply and demand operating through pricing would mean that the price would be low. It wouldn’t be a good idea for additional resources to be put into making more of whatever this good or service is because there isn’t really a need for it, it would be better to put those additional resources into something else – which people would do because the low price will not allow them to cover their costs or to be profitable while making more of these goods or services.
If on the other hand there is only a little of a good or service available and lots of people want it, this would suggest that the price of this thing will be high, because buyers will compete to have some of this limited supply. So it would be good to put additional resources into this thing as there is not enough of it to meet the demand, and because the price is high producing more of it will cover the costs required and be profitable.
So overall – prices can help to direct people to put their efforts and resources into things that people want and to not put those efforts and resources into things that people don’t want.
- On a psychological level price acts as an indicator of value, so things with a high price are perceived as valuable and of high quality (because of the scarcity that must be associated with something of high price), and things with a low price are perceived as of low value and low quality (because of the excess there must be of something with a low price).
The combination of these two factors leads to more complex interactions though… which are prone to manipulation.
One excellent example is diamonds… diamonds are not that rare. But because of the strong market dominance of a few key players, the supply for sale is controlled and only a very small quantity is available for purchase at any one time. Combined with clever marketing which has spanned across generations, this leads to a perception of high value, and people are willing to pay extraordinary amounts of money for what essentially a small hunk of carbon with mainly ornamental value and little intrinsic worth. Interestingly in the market of industrial tools, where diamonds have a more true intrinsic value because of their hardness and usefulness in producing cutting and polishing products – small diamond pieces are not so valuable, because if their price got too high the market would switch to other cheaper alternatives. The market is not concerned about the image and marketing of the tools, just whether they do the job efficiently or not.
Another example would be clean air and water. Clean air and water is free. Isn’t that wonderful. You don’t have to pay anything for it… But because of this unfortunately a lot of the air and the water on this planet has been allowed to be polluted. Because there has been such an abundance of clean air and water in the past, we haven’t valued it enough to put the necessary controls in place to protect it, and we are gradually losing it. Slowing it is becoming more scarce… at the point where we start to HAVE to pay significant prices for it I think we will suddenly start to value it more highly and to put the resources necessary into cleaning up our waterways and atmosphere. Ok… so that example is a bit simplistic, because some people DO value clean air and clean water highly, but the actions of others have been outside of their control, but the example is largely accurate if we look at it as a society wide thing. And on an individual level, how many people take full advantage of the clean air and water available to them, breathe deeply and freely in a natural environment? explore and swim in rivers, lakes and oceans regularly? Or do they not get around to it because it is ‘free’?
Application to Give Freely Receive Freely
So how does this apply to my work and GFRF? Well Qigong (moving, breathing, becoming aware of your energy) is essentially free. Anyone can do it anytime without any special equipment, and yet it is intrinsically valuable – it can make a huge difference to people’s health and wellbeing, physically, psychologically, and energetically. In that way it is a bit like clean air and water. So my aim has been to give this free gift to people, so they can discover qigong for themselves. But producing and maintaining the instructional materials, whether they be online or in person, is not free. It requires a great deal of time and effort and direct financial cost, and I have basic needs like eating and transportation and having somewhere to live that need to met in order for me to provide this instruction. There is only so much of me to go around, as such I am a bit like diamonds – a restricted, limited resource, which I find stretched a bit thin as I want to spread qigong so widely.
There are some people that discover this wonderful precious gift of qigong, and truly appreciate it and make the most of it. They have wonderful experiences and it transforms their health and their lives. They recognize that while it is free, there is cost in making it available and a limited resource behind it (me) that needs to be supported for it to continue to be available. So they do their bit to contribute to the upkeep of this by making donations etc.
There are other people who discover this gift of qigong, and the start with enthusiasm… but they have a hard time continuing. They fail to make it a priority – because it is free. It is easy for them to put it aside, because they have other things to do, maybe things that cost them money, so they do those things instead because even if they are not consciously aware of it they put a higher value on those other things because they have paid for them. So they end up not gaining the true value of this wonderful free thing – because they fail to value it themselves by not supporting it financially or with other resources.
And the last group of people. People who see this thing of value, and are intrigued, but can’t quite figure it out, because how can something so valuable be free. They look at it with suspicion because surely if this was truly valuable it would have a high price on it… so therefore it must not be valuable because it has no price on it. Much like clean air and water, or some little chunks of carbon. Not really valuable at all….
So there is intrinsic value… but the perceived value is entirely in the eye of the beholder.
I think that the best outcomes come from people judging value for themselves. Learning to identify and seek out intrinsic value, regardless of price set on it. In this way they become immune to the manipulations of marketing and control. But for so, so many people in this situation they simply fail to identify the intrinsic value. They let a large part of their perception of value be shaped by the pricing mechanism which is all too often used manipulatively.
In so many ways setting a price is manipulative – to do it well means to both control supply to create suitable scarcity, and to manipulate perception by ‘telling’ people what something is worth through the price level set. It is less than ideal…
So what should I do?
There are two aspects of why I would want to set a price. One is that I simply need to be able to cover my costs and meet my own basic needs. I could set prices in such a way that I only provide my services if my costs are met in doing so – which makes a lot of sense in many ways. The challenge is if you want to be able to provide to those who cannot afford the cost… people who may need the service even more than those who can afford to pay a suitable price.
The other is to set perceptions of value, to help people understand the value inside qigong by ‘making’ them pay a suitable price to access it. This can help people to be attracted to it in the first place, and help them to stay committed to it as they have ‘invested’ in it, and by staying committed they are more likely to receive its value. The issue of perception also applies to those who can’t afford a high price actually. They are more likely to seek something out that they perceive to be of high value, than something that is given to them freely.
It is a bit like the old saying. ‘You can lead a horse to water, but you can’t make it drink’, however put a high enough price tag on the water and you can help the horse to want to drink, because if it has a high price then it must be worthwhile…, the horse won’t want to miss out on this expensive treat…
Or clean water… leave it in a stream in the wilderness and not that many people are interested. Put it in a bottle with a fancy label and sell it at a high price and everyone has to have it… (and you can bet the company making money from selling that water puts the required resources in to keep that stream clean too).
So to set a price is manipulation of a sort. Its not living to my highest ideals to put a price on my qigong in this way. But is it possibly ‘good’ manipulation? Is there such a thing? Is it a bit like telling a child that those veges on their spoon are actually an aeroplane to help them to eat them? :D. Does helping more people to discover and receive the benefits of qigong through price setting in this way make it a good thing to manipulate in this way?
I think possibly it does.
I still haven’t decided……….
I realise that if you haven’t followed this blog much you might be thinking, what is all the fuss about? Why not just go ahead and set prices on what I offer? Well it has been a long journey. 4 ½ years experimenting with and working on GFRF. It really feels good to me to work in this way. I think the potential benefits from operating in this way are massive for everyone… I have written a bit about some of the potential societal benefits elsewhere in this blog. Unfortunately I haven’t written nearly as much as I would like to, but the potential improvements in efficiency, innovation and overall wellbeing are huge. So it is very appealing to keep trying, even if I’m not very successful at it, as how do you make progress towards something if you don’t at least try? But I also need to be a bit practical – I still need to live. I guess at heart I am an idealist… but I recognize the need for realism sometimes.