What if Money Was No Object?

Money_closeupThis article was originally published at ValuesandCapitalism.com on January 10, 2013.

“What would you like to do if money was no object?”

This is the question asked in a trending Youtube video narrated by the late philosopher Alan Watts. It encourages young people to live and dream as if money didn’t matter—as if money was no object.

Inspiring, to say the least. The notion of dreaming and living without regard for financial reality can open the imagination to entire worlds that money had rendered unrealistic.

But profound narrative, dizzying imagery and hypnotic music aside, this video reveals an attitude about money that is hostile to economic prosperity and, more importantly, living a moral life. For despite what Alan Watts, Hollywood and Occupy Wall Street might say, money is a vitally important feature of the social world that we simply cannot do without, and using it is a moral issue.

First, money is simply a medium of exchange, and recognizing its usefulness is a good practice.

Whereas some activists might cite money as the root of evil and social injustice, that is simply not true. As every student learns in Economics 101, money is purchasing power. It represents the ability to acquire material ends. Those who most efficiently supply the needs of their fellow human beings will earn the most money.

For example, consider money’s origins. In the ancient world, barter trade was man’s primary means of exchange. If John wanted apples but produced only oranges, he traded oranges for apples. If, however, no one with apples wanted his oranges, he was out of luck. But instead of simply going without, John would trade his oranges for something the apple-growers wanted—like grapes—and then trade those grapes for apples.

After a while, others caught on to this means of barter, and different media of exchange arose. All members of John’s society began to accept gold coins in exchange for their goods, knowing that these coins could then be exchanged for anything. Gold became money.

Money, then, is both a media of exchange and a means of calculation. It allows individuals to acquire things they want and to more precisely determine the value of their goods and services.

In that light, why ignore money? Why pretend like money doesn’t exist when choosing a career? Yes, money restricts options and makes some dreams impossible. But without money, there would be very few dreams whatsoever.

While pursuing a life in which money doesn’t matter may be exciting, it is a total fantasy.

Second, God has much to say about money, and none of it involves pretending it doesn’t exist.

Both the Old and New Testaments are littered with hundreds of verses about money. Common to all of these verses is the idea that the creation and use of money is a moral exercise. Whether it is God’s command to “use honest scales and honest weights” (Leviticus 19:36), His rejection of “diverse weights” and “false balances” (Proverbs 20:23) or his lament that Israel’s “silver has become dross” (Isaiah 1:22), it is clear that money is significant to God’s law and human life.

One particularly revealing issue is debt. Unfortunately, debt is all-too-common among American young people. According to the Federal Reserve, 37 million young people have outstanding student loans. What is not so common, however, is seriousness about making debt payments. According to arecent uSamp survey, the vast majority of those who have not paid off their student loans want those loans forgiven. While those answering the survey may never consider the ethical issues involved, repaying debt is a moral imperative.

In Romans 13, Paul writes that Christians should “Owe nothing to anyone—except for your obligation to love one another.” David writes in Psalm 37,”The wicked borrows and does not repay.” In short, the importance of repaying loans cannot be more explicit. If one contracts to borrow money from another, that contract should be upheld. Defaulters should be penalized.

Undeniably, money matters to God. Debts should be repaid. Budgets should be kept. Forced loan forgiveness and dishonest inflation should be rejected and condemned. These are moral imperatives. To live as if “money was no object” is a dereliction of moral duty.

Finally, while living as if money doesn’t matter may be exciting, such a life is available only to those with money to spare.

Try telling a single mother of two that money doesn’t matter—that her career path shouldn’t be determined her ability to provide for her family. Or consider an unemployed graduate with no means to finance his college debt payments. For them, of course, money matters.

But perhaps the absence of want is why today’s young people are so repulsed by money. Generation Y is the most materially blessed generation in recorded history. When it’s a given that there will be food on the table every day of the year, it is easy to forget the importance of money as a necessary means to sustain life and cultivate a healthy society. But that doesn’t change the fact that money is important.

Like it or not, money is dinner. Money is education. Money is life-saving medical technology. Of course, there are more important things in the world than being rich. But the existence of money is an unavoidable feature of social life that everyone should consider—especially when making career decisions.

For further reading on this issue, see my article Where Money Meets Morality.

Read the article at ValuesandCapitalism.com.

Where Money Meets Morality

If there’s one political issue that puts America to sleep, it’s monetary policy.

Yes, most will concede that monetary policy is important. But the fact is, between all the M1s, M3s, CPIs, PPMs, and Vt=(nT/M)s, the average person gets lost in what appears to be a hopelessly complex system of regulation and statistical modeling.

This is regrettable, considering the profound influence money has on our well-being. Even more unfortunate is the fact that many otherwise well-informed citizens “defer to the experts” for practicality’s sake, believing that educated monetary officials cannot possibly propose a policy that is counterproductive, let alone immoral.

But monetary policy is no less vulnerable to moral abuse than is any other political issue. Indeed, monetary policy undergirds a huge part of human life, affects every other political decision, and has a deeply moral component that should concern any informed observer.

For example, the Old Testament—sacred to three of the world’s major religions—contains commands regarding money that are essentially ignored by modern-day policymakers, liberal or conservative. Granted, many of these commands rest on implicit assumptions, but they are obvious assumptions nonetheless.

When God commands his people to use “honest scales and honest weights” (Leviticus 19:36), laments that Israel’s “silver has become dross” (Isaiah 1:22), and is said to consider “diverse weights” and “false balances” an abomination (Proverbs 20:23), it becomes easy to understand money as an area of human commerce with which God’s law is concerned.

This is because in ancient times, inflating the currency did not involve complex procedures like “quantitative easing” or extending credit on fractional reserve. Rather, inflation was achieved by coin-clipping or other deceptive measures designed to make phony coins appear to be real. This is aptly called “counterfeiting” today, and is not considered morally justifiable.

But while most Americans today recognize that counterfeiting is dishonest, many do not hold monetary officials responsible when they take a roundabout approach to doing the same thing. When the Federal Reserve adds a few zeros to the end of its balance sheet in order to buy Treasury bonds, they create money out of thin air. This money was not earned—it was simply contrived into existence.

Certainly some will disagree. This sort of monetary expansion, they will say, is necessary during economic recessions. I’ll leave that argument to another day. But the conflict remains: How can one defend “just weights and measures” while advancing a policy that would have the money supply altered—distorting its true value—by majority vote?

But religious concerns aside, monetary inflation harms people—especially the very poor and those on a fixed income. Unfortunately, most people who are being cheated by inflation probably don’t know it, believing instead that policymakers would not inflate the currency if it were not good for their constituents.

But when the government increases the money supply, every dollar you have is suddenly worth a little bit less. All that money you have been saving up over the past ten years is not worth as much as it was when you started to put it away. Saving becomes slower and more difficult.

Yes, wages will eventually adjust to account for the devalued dollar. But this takes time—a lot more time than it does for grocers to change the label on their loaves of bread or bottles of milk. And for those on a fixed income, wage increases are very rare indeed.

Needless to say, inflation equals a sort of theft by those who use the newly created money to serve their own ends, for their new purchasing power is earned at the expense of everyone else.

It should be obvious now that monetary policy is something that should concern those who profess an allegiance to a higher moral code, and especially to those who claim belief in the Judeo-Christian God. The issue is far from black-and-white, but caution—not apathy—should be our approach to this important issue.

Read the article at ValuesandCapitalism.com.