What is money all about?

Money is obviously important. It is a fundamental cornerstone of modern society. I, however, have never found it very interesting and it is not a strong motivator for me. I need money, like almost everyone does, and I like what money can do for me, but the stuff itself does not press my buttons. I have encountered various people, over the years, who are hugely driven by the thought of having more cash. They work phenomenal hours, take no vacation and build up enormous savings. Unfortunately, they have no time to raise a family with whom to share their wealth and have no time left to enjoy it themselves. Their only fun is counting their stash …

Money is really no fun until you spend it. This is why I support indirect taxation, like Sales Tax or VAT, which I would call Fun Tax, which would make it seem more friendly. As it is, when I get my pay check, a huge amount has already been removed as tax – this is hardly a motivator. I was also brought up to believe that it was good to save and that debt should be avoided. My tax system would encourage saving. Unfortunately, current low interest rates discourage saving and promote debt. Ho hum.

There is a fundamental question: what is money? It might be the coins and bills that we carry about – but they are arbitrary tokens, not gold as they might have been in the past. Money might be a computer record of someone’s wealth, but that is even more arbitrary and abstract. Ultimately, money is just a facility to enable us to defer choice.

In a simple society, bartering may be common. for example, if I did a day’s work for you, you might give me a cow or a couple of sheep and I might have to choose which to accept. Instead, you can give me $100 [or a string of beads or whatever passes for currency where you are] and I can decide whether to buy a cow or a pair of sheep [or something else] later.

Choice is seen as a good thing. But, as I have written about before and so have other authors, this basic goodness may be called into question. I feel that choice is a source of stress. So, we can express this using (pseudo)mathematics:

CHOICE = STRESS
MONEY = CHOICE
MONEY = STRESS

This implies that being rich is stressful, yet most of us strive to become rich. In my experience, rich people often do appear to be stressed. This is because, the more money that you have, the more control [and choices] you have in your life. This means that, when you encounter something outside of your control [weather, traffic, other people …], you experience greater stress than the rest of us, who are used to being pushed around by the Universe. Imagine being on an airplane and the captain announces that there will be a 1-hour delay to take-off. The loudest groan comes from the front of the plane.

Being rich is relative. Someone with more money than me is rich in my eyes. Anyone who has less than me would see me as rich. There are no real absolutes, except perhaps people with so much money that they could never spend it all and do not have to consider the cost of anything in normal life. Even these fiscally god-like beings find limitations. Bill Gates, for example, is attempting to solve a number of world problems [and I have 100% respect for what he’s doing and forgive him for creating Windows], but even he is challenged finding ways to spend money most effectively.

This past Tuesday was an important day for a number of people. It was the second working day of the year in the UK. By close of business on that day, the CEOs of most major companies had personally earned as much as the average UK worker will in the whole of 2016. I take slight comfort from earning a bit more than the average [thank you Mentor Graphics] and the CEOs will need to slave away for a whole week or so to out-earn my year’s pay. But I am not sure that this really makes me feel much better. Are these people really worth more than 100 times as much as regular employees? Do they really make a personal contribution to the bottom line of this magnitude? I leave these questions open …

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This article first appeared on the Siemens Digital Industries Software blog at https://blogs.sw.siemens.com/embedded-software/2016/01/07/what-is-money-all-about/