Saturday 23 September 2006

Pic of the day: ...there are things that are not bought by money, but by time, or attention, or touch, or humility...

The (non-)nature of money

When I was a kid, I thought of money as an object.  Each coin or bill was an object with a value of its own, and this was why we could exchange it for other stuff that had the same value.  And indeed, in the childhood of civilization itself, this was the case.  Coins started out as pieces of rare metals such as gold, silver or copper.  Because of their beauty and useful properties, they were highly sought after, and could be bartered almost everywhere.  Then with central government, the king and his men would control and stamp standard sized pieces of these metals with a seal of approval, and the implicit threat to punish those who faked them.  But of course, before long it were the kings themselves that debased the coin, to give themselves more purchasing power, and the gold standards never lasted even when tried again in the last century.

When I grew up, I started to see money as a tool.  Its form did not matter:  At this time I had gotten used to bank transfers, checks and other forms of symbolic money.  As part of my education I had been inside a bank and seen how they handled the money largely as abstract numbers, not actual objects.  I saw through the coins and notes: They had become transparent to my mind.  Instead I saw them as purchasing power, the ability to obtain objects and services.  Love of money, I thought, was not a love for the shiny coins that I had polished as a child (yes, I really did that, and they became very shiny) but rather a love for the material things, and services of this world.  Also in many people I saw the need for money as need for security:  To be sure that one was in control.  To have money meant to have the upper hand in civil life.

But another revelation has transfixed me.  (Walking revelation factory, go!)  I realized that money is neither mass nor energy, but measure.  Like ounces and pounds, centimeters and gallons, centigrades or volts, money is a way of assigning value to things.  This reinforces the view that love of money is the need to stay in control.  With money, we collectively agree (through a process of negotiation and often deception) on the relative values of all things.  This house is worth so much, this car is worth so much, this human life is worth so much, this marriage is worth so much.  No more, no less.  Except for the most mundane objects, we don't say so out loud, but in the end it follows from our choices.

Is this not so?  You may think I exaggerate.  But if I have the choice between working longer or spending time with you, do I not make a very accurate value choice?  Unfortunately some things are hard to measure and thus hard to boast of, no matter how desirable.  I have more friends than you, so I win!  No, my friends are better than yours!  My music beats your silence! Of tastes there can be no dispute, and so we tend to concentrate on those things that can be negotiated. In particular this is true in politics, which regulate things on a large scale. Here, personal opinions tend to drown out, and more and more the value system of economics is used as a basis for nearly all decisions. But also in our personal life, it is easy to stick with the obvious, the measurable.

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But if money is a unit of measure, how then can we "have" money? It is not like we have centimeters, or accumulate degrees Fahrenheit, or amass gallons... OK, we may actually amass gallons, but in that case they are gallons of something, like water or kerosene or wine. The genius of money is that is very general. It does not really matter whether we are talking about water or wine, as one can be exchanged into the other as if by a divine miracle... except the exchange rate is rather unequal in most cases! Because money measures value rather than mass or length or charge, it can be used on anything that has a negotiable value.

But in truth we do not build up dollars but rights. As I am fond of saying, for every right there is an obligation. The genius of money and the capitalist system is that rights can be transferred. So someone has an obligation to us, and it doesn't much matter who, as long as they are able to fulfill their obligation.

From before the dawn of civilization, parents have had an obligation to care for their small children; and conversely, grown children have an obligation to care for their elderly parents. This is so even today, but we are now able to transfer those obligations, using money. For this reason, almost all parents today hire others to care for their children at least some of the time. And even more do their children later transfer their obligation and let others care for their parents. In fact, we rarely do this individually anymore, but rather pay to the state or an insurance company, which will then distribute the obligation to others. Certainly there are still offspring who physically help their elderly parents, but this is now optional, an extra that adds to the wellbeing of the parent, rather than a necessity for life.

It is this way with all the things great and small that we can buy for money. Because we have worked for our employer, he has an obligation to compensate us. And because this compensation has been rendered abstract by measurement, it has also become incredibly flexible. The employer does not need to remember that one worker likes apples and another likes bananas. The right of the worker to get paid is materialized as apples or bananas at a time and place of your choosing. You can buy all your bananas now, or save some of them for hard times. If you change your mind and begin to prefer peaches instead, fine. It is none of the employer's concern. As long as the value is the same, you may eat mashed potatoes for breakfast, lunch, dinner and supper, and nobody cares.

The strength of money, then, is that it has developed into a generic measurement of value. But this is also its danger. For as money encompasses more and more, it becomes easy to forget that which can not be bought. It becomes invisible, or at least unimportant. But is this really so? You can buy time off to enjoy the sunrise, and a camera to take a picture of it, but the sunrise itself can not be owned, bought and sold. You can show your love and friendship using money, but the thing itself can not in truth be measured in such a way. Unfortunately this is sometimes attempted.

I have read that more marriages dissolve because of money troubles than sex troubles; not that I would know, of course, but I don't find it hard to believe. As money expands its power in our lives, as we use it to measure more and more things, our view of reality becomes more and more distorted. We stop seeing things that cannot be "cashed in". You would believe that the poor would be the most prone to this, since they would desperately need the money to survive. And in extreme cases this is indeed so. But even those who live in plenty are still tricked. I still suspect that this is a case of generalizing: Since eating when we are hungry makes us happy, eating when we are not hungry will make us deliriously, ecstatically happy. Obviously this is not the case, but even so people continue to try it in other parts of their lives. Traveling twice as far must be twice as good, right? And since there is no end to the things we can do, there is no end to the money we must "have".

Money, as you can see, is not the root of all evil. Greed is. Money is just a measure. But our tendency to measure all things with the same measure is a danger. For there are things that are not bought by money, but by time, or attention, or touch, or humility. And if you never buy these things, then you will always be poor, no matter how much money you can count to your name.