Tools: Money, money, money…

Only when the last tree has been cut down
Only when the last fish has been caught
Only when the last stream has been poisoned
Only then will you discover
That money cannot be eaten…

[Cree Indian saying]

Ask anyone why they’re at work, and they’ll probably answer “To make money, of course!”. Most people would say the same about business, too: that companies are in business to make money. So it’s probably an odd notion, but perhaps a useful one, to point out that no-one ‘makes money’. At all. Ever. Because money doesn’t exist in the first place.


I’m not joking: money really is entirely imaginary. That’s well illustrated by British currency: each ten-pound note actually bears the words “I promise to pay the bearer on demand the sum of Ten Pounds”. And what will the Chief Cashier of the Bank of England pay you with, if you’re mad enough to demand that? Another ‘promise to pay’: perhaps two pretty-coloured bits of papery plastic with the words “I promise to pay the bearer on demand the sum of Five Pounds” written on them, but still nothing more than a promise. Which doesn’t make sense either: yet if you were to insist that they give you something other than yet another variation on the same kind of unfulfilled promise, they’ll probably suggest rather pointedly that you ask for help from those nice people in long white coats.

Which is odd, because – if you care to think about it – the only thing that’s really crazy is the concept of money.

Which is why most of us are very careful to not think about the craziness, and just carry on thinking that we’re ‘making money’ instead…

Let’s step back a bit. The problem – and the craziness – actually goes all the way back to our society’s supposed concept of ownership, but that’s another story. At this level, in this context, money is simply a standardised form of barter, a kind of intermediate record of the transfer of ownership which can be used in other barter transactions with others who agree on the supposed ‘value’ of the money. Or, to put it another way, money is the means by which we gain access to our society’s shared resources. (That’s what we actually mean when we say we’re “making money”: we’re working to gain access to what we probably think of as our ‘rightful share’ of those shared resources.) And it’s true that every society needs some means to manage the distribution of its resources. It’s just that money is fast becoming an impossibly inefficient way to do so – and in almost every possible way.

For a start, take a look at all those jobs that are exclusively or primarily concerned with money. There’s the ‘checkout chicks’ at the supermarket; then there’s the accountants, the bank, the insurance company, the investment company; the rent office, the rates office; the tax department; the welfare department; the accounts department and pay department in every company; ‘meter maids’, motor-vehicle licenses… The list goes on and on and on: in fact, something like one-third of all jobs are tied with collecting or distributing or checking and cross-checking money. And some of those cross-checks are seriously insane: “after extensive discussion about the details of your case, we have decided that you are entitled to a pension increase of $0.06 per fortnight”… we’re supposed to believe that this is the most efficient means of managing resources?

But it’s worse than just a waste of time. For example, if money is the means by which we share resources, how come those whose needs are least tend to get the most money, and those whose needs are greatest tend to get the least? Ignore for a moment any political arguments about rich and poor, or anything like that – though those arguments obviously relevant in a wider context – and instead look at the stereotypical balance between income and needs in any person’s life in this society, from birth to death:

  • infant: very high needs, no income
  • child: high needs, very low income
  • teenager: fairly high needs, very low income
  • young adult, leaving home: very high needs, low income
  • partner without children: low needs, medium to high shared income
  • partner with children: very high needs, much reduced income
  • partner with teenaged children: medium needs, increased income
  • partner, children left home: low needs, medium to high shared income
  • middle-aged, both partners working: low needs, high shared income
  • approaching retirement: low to medium needs, medium to high income
  • retired elderly: often steeply-increasing needs, often steeply-reducing income

In other words, in money-based economies there’s an almost perfect mismatch between monetary income and resource needs, for almost the entire life-cycle. We’re supposed to resolve this problem by the whole complicated system of savings and pensions and insurances and investments and so on: but’s it’s a problem that arises only because money is such a poor means by which to manage resources – and it’s a problem which leaves far too many options for misuse of resources, including money itself. The concept of money is just a tool: but instead of using it as a tool, our society is in increasing danger of being used by the tool, spending ever-increasing amounts of effort on maintaining the tool itself – which is not a good idea…

And it also becomes a real problem in terms of efficiency at work, because everyone is so much ‘wrong-footed’ by this system – constantly needing to think of ‘other-when’, of whether they need to save, or have enough savings – that they can’t pay much attention to herenow: which is where and when the work of business actually needs to be done.

All this is bad enough – or mad enough. But it gets really crazy when people make the mistake of thinking that money is a good way – or, worse, the only way – to measure value. There’s an old proverb that warns

A fool knows the price of everything, but knows the value of nothing.

And the same point is made in any study of quality in a business environment: quality can’t be measured anyway, but trying to measure it solely in monetary terms is definitely a waste of time.

So it’s a bit unfortunate that the dominant political philosophy of the past few decades is called ‘monetarism’ – a philosophy whose supposed ‘economic rationalism‘ is based on exactly that mistake… Trying to run every aspect of an economy, every interpersonal exchange, like a set of account-books – as a kind of ‘double-entry life-keeping’ – may seem ‘rational’ enough at first, but it just doesn’t work in practice. Life is just too weird – or wyrd – for that. To give just one example, how on earth would you pay back a bequest?

And no, I don’t know what the answer is. We could, in principle, replace every single monetary transaction with the simple phrase “What do you need?”: but I don’t think this society likely to find the courage to do so at anything more than the small scale where it happens already, between families and friends. In any case, the problems with money are only a symptom of something much deeper, right at the root of our society’s concepts of ownership, of control, even of time and existence. And there’s not much point in pushing for a ‘cashless society’ based on computerised credit, or even some kind of barter-based system like the LETS schemes: ultimately it’s the same ‘solution’ to the same deeper problem, and ultimately just as inadequate.

So there isn’t any easy answer to ‘money madness’ – certainly not in a business context, at any rate. But it might at least be useful to stop pretending that it works – stop pretending that it’s anything than a very poor ‘solution’ to a real and definitely complex problem. Watch closely, perhaps, at the ways in which you yourself get caught up in the same mistakes, at work and in your own life: mistaking price for value, for example, or insisting on ‘not a penny more, not a penny less’ without acknowledging the real cost in a wider context than simply that of money. It’s worth noting a comment by Henry Thoreau, that “The cost of a thing is the amount of what I call life which is required to be exchanged for it, immediately or in the long run”. In that sense, the word ‘possessions’ suddenly becomes somewhat double-edged; whilst the literal translation of ‘mortgage’ – ‘death-pledge’ – takes on a rather more ominous ring!

So just step back a bit from time to time: just watch the weird craziness of of our ‘normal’ money-based economy. Just observe what happens. And who knows, maybe you’ll be the one who comes up with an idea that actually works – a sane way, at last, of managing our society’s resources.

But… er… perhaps… er… don’t expect that it’ll make you rich?

There’s no obvious further reading on this: any suggestions? Other than a good collection of Far Side cartoon-books, perhaps?

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