Fable
Water meters and water prices
Old Zheng opened a water station supplying three nearby villages. He set a rule: charge by the amount pumped, three wen per barrel. A water meter was installed at the pumping point, and accounts were settled by reading the meter at the end of the month. For the first half year everything went smoothly. The villagers paid monthly, and the books were clear. Old Zheng then assumed that installing a meter and setting a price were the same thing.
When the summer drought came, the east village's water use soared while the west village still only watered its vegetable plots. The water meter accurately recorded how much each household drew, but it did not answer whether tiered pricing should apply, whether disaster-relief water should get a discount, or whether pumping at night should cost more. The meter only measures what happened; the price determines how to charge and how to guide behavior.
Old Zheng's first fix was to make the water meter more precise: it could record by time period, by outlet, and by use. The accountant could indeed see more clearly, but the villagers still complained. Some felt firefighting water should not be the same price, and some said large households hoarded water at low prices, squeezing out small households.
Only then did Old Zheng separate the two issues. Metering must be honest, stable, and verifiable—you cannot measure by the barrel today and by the ladle tomorrow. Pricing must choose the billing unit, tiers, caps, discounts, and exceptions, and explain why it is charged that way.
Later the water station kept the same set of water meters but set different prices for different scenarios: daily water by volume, emergency water with a cap, ultra-high consumption entering a high-price tier, and discounts during low-demand nighttime hours. All prices depended on the water meter, but the water meter itself did not determine the commercial rules.
The villagers finally had fewer disputes. Old Zheng no longer treated meter reading as pricing. Without reliable metering, prices become distorted; with metering but no pricing, the water station still wouldn't know how to charge, control volume, and allocate costs.
The water station also once encountered a faulty meter. The reading jumped high, and if the price simply followed it, villagers would be overcharged. Old Zheng therefore ruled that metering must have verification, re-reading and dispute handling; pricing must have public rules and cannot be changed offhand on the day of meter reading.
Years later, a neighboring village came to learn from experience. Old Zheng sent only two things: a set of reliable water meters and a price catalog. He reminded them that water meters solve trust, and price catalogs solve commercial choices. Mixing the two into one term will eventually lead to losses in charging, costs, and behavior guidance. Later, every time Old Zheng changed prices, he first confirmed that the water meters still recorded by the same applicable definitions and criteria, then notified villagers how the new price would be calculated. If metering is chaotic, no one trusts the bill; if pricing is vague, no one understands why they pay.