If you’re thinking of money simply as stacks of printed paper or figures on a ledger, you’re missing the tremendous virtue that your creativity, productivity and investments make possible.
Money is a measure of value, and it allows us to exchange differing assessments of value between one another. Value is simply a way of saying that something matters to us – that it has value to us. When I exchange something I have that you value for something you have that I value, we’ve each gotten more of what matters to us than we had before.
With each trade, what matters to everyone involved becomes more abundant. To the point where, today, the abundance we all enjoy would be nothing short of miraculous to our ancestors.
Of course, what matters to some people are things that are harmful, dangerous or even detestable. But that’s not a function of money or the process of exchange; that’s an expression of what matters to those people. In the great complexity of humanity, there is plenty of rotten along with the good.
But on balance, and to a great degree, money and trade have served to grow our virtue. We’ve become much better people as a result – less violent, but more curious, compassionate, empathetic, generous and orders of magnitude more effective at creating what matters to us all.
Without understanding this, we end up thinking of money as stacks of printed paper, like I said before. In which case it doesn’t really matter whether we earn that money by working diligently and conscientiously at our job or creating beautiful new solutions to serious problems on the one hand… or robbing a bank, winning the lotto or getting a cool stimulus check from the government on the other.
Without understanding what money and trade make possible in terms of what matters most to each of us in our own way – and in terms of what we’ve been able to create as a culture and a species as a result – money can be seen in purely self-absorbed and amoral terms. Think “Greed is good,” “The love of money is the root of all evil,” “Show me the money!”
Quality Over Quantity
The truth is that money and the trade that it facilitates create a tremendous incentive for innovation. Innovation and trade have brought out the very best in humanity and made possible the miraculous expansion of wealth, opportunity and improvement in human life that we enjoy today.
When we think of money as simply the accumulation of capital, we’re really missing the point and the essential dynamic of money.
It’s kind of like thinking of relationships as an accumulation of friends. Having thousands of “friends” on social media means very little in terms of actual human flourishing. The great value of a relationship is in the sharing, to a degree, of each other’s internal worlds, the sense of visibility and connection, and the genuine caring for one another’s well-being.
There’s a physical, emotional and psychological need for such a connection. Human connection improves our immune function, increases our heart rate variability, and moves us into a healthier part of our nervous system and away from the protective system of fight or flight. Good relationships create meaning and deep satisfaction.
A wealth of relationships is not a matter of the accumulation of friends – though that can feel nice in itself. It’s a matter of the quality of those relationships and the deepening of intimacy over time.
So, too, wealth is not simply the accumulation of capital, which as I’ve noted could be accomplished through theft or gambling or luck. It’s the creation of ideas, problem-solving and cooperation that actually generate more wealth.
Therefore, the accumulation of capital is an effect – not a cause – of innovation and wealth.
Money is what facilitates this.
When we invest, we’re enabling the creation of ideas, products, services and solutions; and this is what has improved and continues to improve mankind’s condition. We’re adding the money that we have earned to the dynamic processes that have brought most of humanity out of dire poverty and toward a better world.
The flourish of innovation and trade that created the Industrial Revolution – and enabled the miraculous improvements we’ve seen ever since – was a function of acknowledging and celebrating the practice of exchange and the ability of regular people to make a living through solving other people’s problems.
Money is a catalyst for a dynamic, creative and expansive world. Understanding its function can change our personal relationship with money and investing for the better. Just as culturally, this understanding among enough people has changed the world immeasurably for the better.