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The paradox of life

20th February 2015

By: Riaan de Lange

  

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When I was conceptualising this column, I thought of writing about my customs and excise duty (inclusive of tax and levy) expectations for the 2015 Budget, to be delivered by Finance Minister Nhlanhla Nene on February 25. The timing would have allowed you to read the column just before Nene’s speech, but I thought that by then you might well have grown tired of the paradoxical views offered by various self-proclaimed subject matter experts.

At the time of writing, I was introducing first-year economics students to the diamond-water paradox. Just to be clear, a paradox is a statement that apparently contradicts itself and yet might be true. The explanation of the diamond-water paradox is wrongly considered to have been explained by the father of economics, Adam Smith, in his definitive work, An Inquiry into the Nature and Causes of the Wealth of Nations, published on March 11, 1776. Would you believe that the diamond-water paradox was actually first explained by Galileo Galilei (1564 to 1642), best known as an astronomer, mathematician and physicist?

In essence, the paradox enquires why the price of diamonds, a luxury, or nonessential, product, is higher than that of water, an essential element of life. The explanation offered by Smith in his definite work is that of ‘value’ – to be more precise, ‘value in use’ and ‘value in exchange’. Smith explains: “The things which have the greatest value in use have frequently little or no value in exchange; on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarcely anything; scarcely anything can be had in exchange for it. A diamond, on the contrary, has scarcely any use value; but a very great quantity of other goods may frequently be had in exchange for it.”

I initially thought of using this column to explain the paradox in great detail, but then thought about the existence of others, the top 10, if you will. If there was such a thing as a list of the top 10 paradox, the list would at best be highly subjective. In my search, I came across an article by Natalie Umansky, ‘Paradoxes: 10 Paradoxes that Will Totally Surprise You’.

Although you might argue that most logical paradoxes are known to be invalid arguments, they are still valuable in promoting critical thinking. I trust that the following would provide you with food for thought.

  1. The Paradox of Value: Why is water cheaper than diamonds, since humans need water, not diamonds, to survive?
  2. The Grandfather Paradox: What if you travel in time and kill your grandfather before he meets your grandmother?
  3. Theseus Paradox: When you have replaced all the parts of a ship, is it still the same ship?
  4. Galileo’s Paradox: Although not all numbers are square numbers, there are no more numbers than square numbers.
  5. The Paradox of Saving: If everyone tries to save during a recession, aggregate demand will fall and the population’s total savings will be lower.
  6. The Pinocchio Paradox: What if Pinocchio said, “My nose grows now”?
  7. The Barber’s Paradox: In a village where the barber shaves everyone who does not shave himself, who shaves the barber?
  8. Birthday Paradox: The probability that, in a set of randomly chosen people, some pair of them will have the same birthday. 9
  9. The Paradox of the Chicken or the Egg: Which came first, the chicken or the egg?
  10. The Paradox of the Missing Square Puzzle: Why does a square appear for no reason? Look at the picture below and see if you are able to offer an explanation.

If you are interested in the explanation, view ‘Missing Square Puzzle Solution’ on YouTube or type in https://www.youtube.com/watch?v=ExUV3GOTDqE in your browser.

Helical Springs Tariff
On February 6, the South African Revenue Service (Sars) informed of the substitution of tariff subheading 7320.20 through the insertion of tariff subheadings 7320.20.10 and 7320.20.90, which serve to increase the ‘general’ rate of customs duty on certain helical springs from 5% ad valorem to 10% ad valorem. Tariff subheading 7320.20.10 applies to a wire diameter of more than 1.32 mm but not exceeding 2.43 mm, of which the ‘General’ rate of customs duty is 30% ad valorem. Tariff subheading 7320.20.90 is applicable to ‘Other’, of which the ‘General’ rate of customs duty is 5% ad valorem.

Wire Products Tariff
Sars informed on February 6 of the substitution of tariff headings 7313.00, 7314.31 and 7314.41 to increase the ‘general’ rate of customs duty on certain wire products from 5% ad valorem to 15% ad valorem. Tariff subheading 7313.00 reads: “Barbed wire of iron or steel; twisted hoop or single flat wire, barbed or not, and loosely twisted double wire, of a kind used for fencing, of iron or steel.” Tariff subheading 7314.31 reads: “Plated or coated with zinc”, and tariff subheading 7314.41 reads: “Plated or coated with zinc.”

Coated Fine Paper Tariff
Sars informed on February 6 of the substitution of tariff subheadings 4810.13.20, 4810.13.90, 4810.14.10, 4810.19.90 and 4810.29.90 to reduce the ‘general’ rate of customs duty on coated fine paper from 5% ad valorem to free (0%).

Upholstered Furniture Tariff
The creation of two rebate items – Rebate Item 320.01/5407.73, for woven fabrics, containing 85% or more by mass of synthetic filaments, of yarns of different colours for use in the manufacture of upholstered furniture, and Rebate Item 320.01/5515.1, for woven fabrics of polyester staple fibres, (excluding that of mixed mainly or solely with wool or fine animal hair) for use in the manufacture of upholstered furniture, has been proposed. Comment is due by February 27.

Electricity Supply Meters Tariff
The creation of a rebate item for goods of any description (excluding mounted or populated circuit boards) for the manufacture of prepayment electricity supply meters has been proposed. Comments on the proposal are due by February 27.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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