Wealth, Riches and Value

Often we hear the rhetoric "jobs create wealth". I think the rhetoric is slightly misguided. I believe it is the worker doing the job that creates the wealth. The riches from the wealth are often disproportionately collected by corporations (i.e. profits) and governments (i.e. taxes). The value of such a system is clearly high for corporations and governments, but low for workers. However, if the alternative for the worker is worse, then the worker is likely to continue with the value proposition until something better comes along. This reasoning focuses almost solely on the money rewards involved in the ‘employment value proposition’. Perhaps in a later post, I will explore value that is not directly related to or measured by money. Today, I will explore the value of money.

Money is a slightly confusing entity to me. What is money? It is numbers on a screen, small sheets of paper, metal disks, but all of these supposedly represent a promise. Money, printed by central banks and governments, is a very useful tool that helps to facilitate trade. Money is a tradable entity because it is valued by many people. If people begin valuing money less, then its use as a trade facilitator will erode. Inflation is one measure of such erosion. Another kind of erosion, one that we are presently experiencing, is having more people dismissing the value of money. People simply do not try to keep it – witness the debt crisis of governments and the personal debt loads. Imagine a world in which one person owned all the money. How strange it would be for the other roughly 7 billion people to care about the numbers on the screen, the paper sheets or the metal disks at all. It is like the child in the playground that won’t share their toys – soon they have no friends to play with. Many of us still cling to the notion that we are lost without money; I disagree. However, money is a very useful tool and an invention that is one of the most impressive in human history. I think we need to recognize that money is not something that should be able to be hoarded for long periods of time without significant consequences to the hoarder. How very anti-capitalist.

Have you ever been to the grocery store and when you get to the checkout and see the cost felt something like "oh my goodness I can’t believe how expensive this is!"? What a strange feeling to have when you presumably have the money for the sole purpose of trading the money for the things that you actually want and now when the transaction occurs, you feel badly – you almost seem to value the money more than the things you actually want. In other words, it is like the promise is more important that the fulfilment of the promise. I can’t take credit for this notion – I believe it was Alan Watts who put forward this idea, but I might be wrong about the particular philosopher who put this idea forward.

I do believe that the promise is very important, but I wonder why it has to be embedded in money. The fulfilment of the promise is obviously more important ultimately, but just think about this for a minute. When you buy something, you are passing your promise on (e.g. someone else is getting the money – or promise in return for the goods or services you just obtained). So, you do some work for someone, get a promise from them to ‘repay’ you for that work in the form of money, then you go spend your promise and someone else gets the promise. The promise never dies, it keeps going and going and going and going. This is what is important to me about money – the fact that we must never forget that when we give our money to someone, it is not just a number on a screen or a piece of paper that we are giving away, but a promise. Right now, the only promise is the one from the central bank or the government that prints the money. The government is purportedly the entity that represents us all and hence, the promises printed by the governments (and to a lesser extent by the central banks) is therefor an act that purportedly comes from us and the giving of that promise to someone else is an act of faith that there will always be a promise to be kept by ourselves. In other words, spending money is promising that you will repay the debt that you exacted by relying on others’ work to generate the goods and/or services that you obtained. If you hoard the money, then you in effect remove promises from the system, leaving those that made the promises in the first place with nothing to do, grinding them to a halt. Money hoarders help to dissociate people from society.

One might argue that if the promise is hoarded, the person is still free to make other promises and continue in the absence of fulfilling the first promises made, which unfulfilled promises are the result of not being asked to fulfil them. I think this is unfair and leads to a wage slave type system. Firstly, holding one’s promise over them for eternity is a kind of cruel torture if the holding of the promise is such that the promise is never asked to be fulfilled yet it is still lorded over them. Secondly, and more practically, it is unfair to expect someone to make more promises then they can keep. If a person holds on to a promise too long and the promise cannot be repaid because the promisor is too busy, then the promisor becomes a sort of indebted servant constantly trying to make good on their promises. During good times, the promise could have easily been repaid, but now, during hard times, when everyone calls in the promises at one time, there is not enough time to repay all of the promises. Insert a banking system here – that is the present day "solution" for this, but I will rant about banks another day.

I think money, in some form at least, is a promise made by us and the promise is not to repay with more money, but rather a promise to generate wealth that has a value that cannot be measured by money or riches. The sort of wealth I am thinking of is that wealth which helps our community, helps other people and in so doing helps yourself.  If we can understand this and embrace it, then I think the value of money can be raised again. However, if we continue to see the money only as a means for obtaining other things and therefor hoard it for a rainy day, then I think ultimately the value of money will erode until us average humans lose faith in the promise of money.