Vietnam Streets by Fabian Irsara.
Some theories in economics argue that having more things in life means greater fulfillment and happiness. The basic idea about acquiring more goods is that having more options is much better than have fewer options, or in other terms, having many choices is much better than having fewer choices. Which boils down to the question, does having more things (or goods) under your roof, better, even if you don’t make use of all these things.
Economics is the study of the allocation of resources, which means economists study how goods and services are put into good use. In the case that we are talking right now, we are trying to analyze whether acquiring lots of staff is a better choice compared to owning goods based on function. When we talk about functionality, we mean to say that you are acquiring a product based on its use rather than its ornament, marketing, endorsement, brand, and price. Thus, the term function is synonymous with usefulness, quality, specification, standard, and features. For example, if you decide to buy a bicycle so that you can display it into your house, rather than use it, then you are not buying based on functionality.
Buying based on functionality is rooted in the idea that you are buying a product to add functionality or productivity to your life so that you can achieve your greatest potential (so that you can do more things). In other words, if you buy a product (or service) based on its function, then the product should enhance your life. Going back to bicycle example, during the days without a bicycle, you walk to your office from home for about 30 minutes, but after buying a bicycle, your travel time was cut to 15 minutes (as a result you have added 15 minutes to your coffee break); this is a good example of buying a product that enhances functionality. You should note that this example is subjective, I only use the example to convey added functionality for some people, other people might prefer to walk than to use bicycles and in that sense buying a bicycle has no added function.
You might ask, so what is the point of discussing functionality? I will answer this question with another question. Would you buy a product if it will not enhance your productivity? Would you buy a product if it has no added benefit or use in your life? A Nobel laureate in economics, Amartya Sen (1998 Economics Nobel Prize Winner), argued that what matters is not the things that the person has – or the feeling these provide – but what a person is, or can be, and does or can do with the things he posses. Sen argued that what matters for well-being (human development) is not the characteristics of the product consumed, but what use the consumer can and does make of the product (source: Economic Development, Todaro and Smith).
Here is another example, let say you want to buy a laptop for business use – for email, internet, Excel, Word, and PowerPoint use only. You bought a P50,000 (1,000 USD) laptop; in the office you have a business partner who owns a P30,000 (600 USD) laptop, at end of the day, both of you were able to accomplish your task, with the help of office applications (Word, Excel, PowerPoint), using your own respective laptop. The 50k laptop might have more processing capability than a 30k laptop, but because you are only using a basic application such as Microsoft Office, your laptop has more unused processing power, while your partner’s 30k laptop is fully utilizing the processing power it has. The bottom line is that, even if you bought a 50k laptop, you may not be better off than your partner who uses a 30k laptop. In the lens of functionality, the additional 20k you paid in your laptop (30k + 20k = 50k) should have produced additional productivity, but in this case, your 50k laptop produces the same result as 30k laptop.
Another good example of buying goods based on functionality is a person who has one car and another person who has two cars; at the end of the day, both of these guys will reach their destination using only one car at a time. And at the end of the day, both of these guys are better-off since both achieve their function (driving their car to reach their destination) even if the first guy has only one car.
In this era of more choices, we have to rethink how we buy products and services; may we learn the difference between function and price. That is, not all pricey products are functional, and not all functional products are pricey.
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