Morality Of Money and The Money Question

Pete wrote a good piece in criticism to Zeitgeist Addendum’s proposal for a resource-based economy, and the movie’s own critique of the failings of the current fiat monetary system.

See that article here. An interesting portion on morality of money:

No system is ever moral (or immoral) – only people are. Our current fiat monetary system is based on a governmental controlled banking cartel but it is not certainly the only option available (see e.g. free banking and Free Choice of Currencies). It is far stretched leap to state that no system will work because our current one is at fault. Money is only a tool, an objective means to ends, in itself it is a neutral carrier like energy that can be utilised to constructive or destructive purposes. (see Francisco’s Money Speech)

To which I offerred my own comments (also viewable in the above article), specifically this portion:

On the morality of money, I do agree that money is a means, not the ends–but there is also the self-perpetuating nature of the system based on money. There may be options/alternatives to the fiat system, but by its design the fiat monetary system rewards itself and agents who propagate it–to the extent that there are really no options at all as those who may propose alternatives can be penalized by those who hold sway over majority of the capital in the current system.

Say, the producer of Zeitgeist, in his proposal for the Venus idea, will never go far, if he himself isn’t funded well enough to continue the lobby against the fiat system. It’s an oxymoron to suggest alternatives when these alternatives have to be borne out of the existing system.

Just this evening I was disussing with my brother, who is finishing his medical school this year, and earlier a colleague Ricky (also a collaborator on this blog) about what I call The Money Question. It isn’t really a straightforward question per se, but to capture the essence: it is the thought that in life, most things seem to move in one direction, while money moves in another.

To further elucidate: those of us who have graduated from school all have probably similar assumptions about money: that it is a means to an end, money serves as a medium of exchange, you take care of your life and your pursuits and money will naturally follow. The capitalistic free market model underpins these assumptions–as money is the chief motivator, incentive, and reward to capitalistic agents–and the reason money works well is because it represents everything else that man may want to desire, insofar as money can be exchanged for them.

So given that, sometimes I wonder why we also have euphemisms such as “money can’t buy happiness” or “love of money is root of evil”. Along with this, over time we are witness to how capitalism has facilitated the concentration of wealth to few hands–and not primarily as rewards for effort and behaviour (aka “The Invisible Hand”) but also partly due to the self-perpetuating nature of money. Another euphemism: “money begets money”.

The defects of the fiat system explained by Pete in his article aside, one thing also turns the money game on its head: and it is that the assumption that capitalism rewards the best agents–those who are most efficient and effective in producing goods and services–is only partly true. It ignores the more obvious fact which gets magnified over a period of time: capitalism rewards those who already have money.

Say a businessman who builds the best software company for its time becomes a billionaire because of his genius at building a revolutionary product. Under the idealized capitalism, if someone builds a better softward company: that could be a threat to the existing market leader, since money will now find better places to gather.

The reality is that in such a scenario, the likely result is the billionaire will simply end up buying out the more efficient guy–absorb the technology–and retain market leadership. The success is no longer borne out of being the best agent but simply the wealthiest one. For the up-and-coming software company owner, the allure of cashing out large and early is often just too much compared to the potential stress and sweat of nurturing what is otherwise a more superior product into the market.

This is just one of many questions why I am coming to the conclusion that the rules of money and the rules of living are no longer in correspondence. I can be the best person, with best ideals and principles, hardworking, and socially acceptable–and yet not be sufficiently rewarded monetarily for this. The opposite can happen: become a filthy rich man despised by everyone and everything. Gray areas obviously exist, and the situations are heavily laden with value judgements on my part, but these only serve to reinforce my sentiments about the current system.

Unlike Zeitgeist, I have no alternatives at present. I have to think about this deeply–and hard coming from a system that I have trusted with my life, probably more consciously and deliberately compared to most (being in former careers: a stockbroker, commercial bank officer, credit risk manager, and financial analyst among others).

Dammit no one ever told me about this back in school.