Have spent a lot of time talking about money, and I think for many there is the idea that money has its greatest benefit in helping societies allocate resources. After all, it lets us put a monetary amount on the value of something, but I have already spent some time talking about limited social trust and how people tend to use money for things they value LESS, which is not something only I noticed.
When searching on the web I came across a Wikipedia article on the paradox of value, which brings up water, which is great, as water is an important resource.
Not surprisingly in my country water is SO important, most people pay very little for it, though others pay more by buying bottled water.
In fact, water is so important that I suggest to you that the only reason people pay any money for it at all in the United States, is to limit overuse.
However, there has been corporate interest in the area, where water rights can be bought up in some communities, where conceivably people could be unable to pay the corporation for water down the line, so what would happen then? Well the government would step in of course and simply take the water rights back--without regard to money.
People can't live without water. And in fact if you take water from a person for only a day, he will be in distress. If you keep it away from him for over a week, he will die.
Even if he's a billionaire, what good is his money if no one will give him water? Like if he were kidnapped?
Yet water is one of the most important resources where money clearly is NOT good at allocating, and in fact, I think most resources in society are actually allocated on community needs.
More than most may realize I'm saying societies allocate most resources, especially important ones, by other means than money, and then may simply slap a monetary value on something after the fact, which can be entirely arbitrary. For instance, how much is a nuclear weapon actually worth? Or any medical cure? Or a college education?
Why? Because money is NOT a system for resource allocation as water demonstrates, but is a way of enumerating the value of a favor. It has limited utility, as it requires limited social trust. And in fact, when things get VERY important, people act without any regard whatsoever for money, as it is then irrelevant.
After all, paper money is just scraps of paper with stuff written on them. It is, in and of itself, utterly worthless. But it is a symbol of a favor which can have value. But very limited value in carefully socially circumscribed areas!
Resource allocations in society actually follow different rules, like how do you pay firefighters?
You can't pay them per fire put out, right? You can't give incentives for setting fires so that firefighters can get paid by putting them out.
If you ponder how a community figures out how it should pay people like firefighters, police officers, and political officeholders, it doesn't take long to realize that mainly you want to give them enough to live, support a family, and have a certain amount of social stature within the community.
Which means, of course, that people who want to get rich don't take such positions, though in corrupt societies, unfortunately, they may take such roles which is a CLEAR sign of corruption. So, someone becoming a police officer to get rich, may do it to take bribes from drug dealers. And a politician may get elected in order to parlay political favors for wealth from wealthy people or corporations.
People who are more community oriented, who treasure family, friends, and human beings working together for the good of all, are NOT going to be money motivated.
While people who are money motivated are unlikely to be any of those things, as their focus is on gathering favors from others.
For instance, it is cliche to talk about a man pursuing his fortune utterly ignoring wife, family, friends, community needs, etc. in his relentless pursuit of it. His focus is NOT on community.
Can a society operate without money? And the simple answer is, not if it's a big one, as money provides the important mechanism of limited social trust. It limits how much we need to trust people. And in so doing allows business as we know it in the modern world which has given so many in our world so much. Reality is that trust is a BIG DEAL. Being able to limit it, is the foundation of the modern monetary system.
Your community has to trust that firefighter. So you do as well, and if your house is on fire, you do not have the right to question his orders, as he tries to save your life and property. Which he may do at great risk to his own life and personal safety!
But that guy just out to make a buck? Need to trust him? Thankfully, not nearly as much.
James Harris
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Tuesday, April 7, 2015
Saturday, April 4, 2015
Wealth versus ruthless behavior
One of my favorites from last year was a post concerning Henry Ford. He is an icon of American business for good reason with good and bad elements to his story, but one thing that impressed me the most was the bravery and audacity he showed by more than doubling the salaries of his workers. Can you imagine today? What if your boss, if you have one, doubled YOUR salary?
And it was a fierce fight for him to get that done, though he controlled his company. There was a lot of opinion against, but thankfully he was brilliant enough to see the possible, and make it happen.
But what about the fierce rich? What about the cruel wealthy who ruthlessly fight to limit pay to their employees? And the reality is that we more often associate brutal, ruthlessness with the wealthy, even though there is plenty of evidence it's not the best way for them to gain greater wealth.
Surprised? I'm sure plenty of people believe all kinds of things not true about how you build a fortune, including ruthless back-stabbing, lying to your employees, regulators and anyone else. Avoiding paying taxes. Cutting salaries and endangering employees by not paying attention to safety. And many other ways of cheating that are often associated with wealthy people and corporations and every single one of those things is horrendous for actually making profit in the real world.
Customers don't exactly like shoddy products that fall apart as soon as they try to use them. Disgusted and angry workers don't exactly build the best things. Bad safety practices, well, can burn down entire buildings. And you can dream of beating people into doing what you want, but reality is people don't exactly respond well to it. Would you?
Fantasy is one thing. Actually running a business is another.
So why do people believe otherwise? Because I think there are plenty of businesses that engage in those behaviors and claim it's to make money.
Why do they make that claim?
While there are cases where bad business practices, or changing business climate can push people to cheat, I think usually it's because they like doing it.
That ruthless boss who is so hated by his staff that they dream of his death, probably enjoys inflicting pain on them--even if it hurts the company's performance.
That supervisor who humiliates and demeans employees, just likes to do it, even though it hurts company profits.
That person who cheats and cuts corners, may just be lazy, or even stupid, possibly in a position because of who he knows, or whose son he is, when he has no clue what he's doing.
And I could go on, and on.
People make excuses for bad behavior because it IS bad. Claiming it's a way to make money, even when it's not, is easy. Easy is appealing to some.
But the best in business can't afford the business consequences of stupid behavior.
Henry Ford went on to become even more fantastically rich, where doubling the salaries of his employees was just one part, but an important part of his success. Those around him who thought it would bankrupt him were just plain wrong. It helped do the opposite.
It's weird to consider: but if Henry Ford had listened to those people American history would have been drastically different, and he would probably never have become as rich as he did! They were counseling against the path to far greater wealth and stature on the world stage. Those who thought he was wrong to do it, even though also wealthy, were just not as good at business.
And thanks to his stubbornness he helped invent modern America.
Appropriately Henry Ford is given a lot of credit for the rise of the modern middle-class--around the globe.
Today with that group under siege by ruthless wealthy, who dedicated tremendous efforts to unraveling this country's economy, it's worth thinking back to how much has been undone.
Some wealthy will always be convinced that inhumane ruthless behavior is the key to success, but who ever said that being wealthy meant you were also smart? I sure wouldn't.
These people lost American lessons that go back to Henry Ford.
Ruthless people have made their way in business. I'm sure. But who gets to make America?
Thankfully, we're learning again that paying people what they are worth, or at least trying, is a lot smarter than ruthlessly trying to exploit them, as not only does that not best build profit, it breaks down the economic base of the United States of America.
We need a country that works for everyone. Lets everyone work best. And puts wealth in its proper place.
Our country does not limit how much you can make.
So no one in this country should limit this nation's potential.
James Harris
And it was a fierce fight for him to get that done, though he controlled his company. There was a lot of opinion against, but thankfully he was brilliant enough to see the possible, and make it happen.
But what about the fierce rich? What about the cruel wealthy who ruthlessly fight to limit pay to their employees? And the reality is that we more often associate brutal, ruthlessness with the wealthy, even though there is plenty of evidence it's not the best way for them to gain greater wealth.
Surprised? I'm sure plenty of people believe all kinds of things not true about how you build a fortune, including ruthless back-stabbing, lying to your employees, regulators and anyone else. Avoiding paying taxes. Cutting salaries and endangering employees by not paying attention to safety. And many other ways of cheating that are often associated with wealthy people and corporations and every single one of those things is horrendous for actually making profit in the real world.
Customers don't exactly like shoddy products that fall apart as soon as they try to use them. Disgusted and angry workers don't exactly build the best things. Bad safety practices, well, can burn down entire buildings. And you can dream of beating people into doing what you want, but reality is people don't exactly respond well to it. Would you?
Fantasy is one thing. Actually running a business is another.
So why do people believe otherwise? Because I think there are plenty of businesses that engage in those behaviors and claim it's to make money.
Why do they make that claim?
While there are cases where bad business practices, or changing business climate can push people to cheat, I think usually it's because they like doing it.
That ruthless boss who is so hated by his staff that they dream of his death, probably enjoys inflicting pain on them--even if it hurts the company's performance.
That supervisor who humiliates and demeans employees, just likes to do it, even though it hurts company profits.
That person who cheats and cuts corners, may just be lazy, or even stupid, possibly in a position because of who he knows, or whose son he is, when he has no clue what he's doing.
And I could go on, and on.
People make excuses for bad behavior because it IS bad. Claiming it's a way to make money, even when it's not, is easy. Easy is appealing to some.
But the best in business can't afford the business consequences of stupid behavior.
Henry Ford went on to become even more fantastically rich, where doubling the salaries of his employees was just one part, but an important part of his success. Those around him who thought it would bankrupt him were just plain wrong. It helped do the opposite.
It's weird to consider: but if Henry Ford had listened to those people American history would have been drastically different, and he would probably never have become as rich as he did! They were counseling against the path to far greater wealth and stature on the world stage. Those who thought he was wrong to do it, even though also wealthy, were just not as good at business.
And thanks to his stubbornness he helped invent modern America.
Appropriately Henry Ford is given a lot of credit for the rise of the modern middle-class--around the globe.
Today with that group under siege by ruthless wealthy, who dedicated tremendous efforts to unraveling this country's economy, it's worth thinking back to how much has been undone.
Some wealthy will always be convinced that inhumane ruthless behavior is the key to success, but who ever said that being wealthy meant you were also smart? I sure wouldn't.
These people lost American lessons that go back to Henry Ford.
Ruthless people have made their way in business. I'm sure. But who gets to make America?
Thankfully, we're learning again that paying people what they are worth, or at least trying, is a lot smarter than ruthlessly trying to exploit them, as not only does that not best build profit, it breaks down the economic base of the United States of America.
We need a country that works for everyone. Lets everyone work best. And puts wealth in its proper place.
Our country does not limit how much you can make.
So no one in this country should limit this nation's potential.
James Harris
Thursday, April 2, 2015
Money and limited social trust
Been pondering the subject of money for many reasons and realized recently that we tend to NOT use money for plenty of things where deep trust is important, like personal relationships, but find it most useful in areas where trust needs to be limited.
For example in many civilized countries you can meet a stranger, have them sign a written contract, give them some money, and expect that person to do very important things for you, without fear.
That trust in the situation is backed by the machinery of your society, which will work very hard to ensure that such transactions can take place, for the good of the society. You do need a business trust that the person will fulfill the contract--but it is a limited social trust.
In contrast if I meet a nice lady, and we fall in love, there is a deep trust. And there is no written contract in the world that can cover all the bases, so most people go with simple vows in a public wedding.
That trust is so deep that society expects a couple in love to care enough to die for each other if necessary, which is as deep a level of trust as you can get. It is then, unlimited trust. Pick the wrong person for unlimited trust and God help you. (Though it occurs to me should add, wealthy often rely on a prenuptial agreement as well.)
So money is most effective in areas where people need limited trust, and means you can do work for someone, say, in the state of Georgia, USA, and get a promise of value in return in the form of scraps of paper called money, which you can use just about anywhere in the world you might travel as long as US dollars can be exchanged for local currency or are accepted.
That is a HUGE thing which allows the world economy to function, as money allows people to trust each other, even complete strangers, in a way that is limited versus the potentially unlimited trust of members within your community.
So for instance firefighters are willing to give their lives in defense of their community as are soldiers, and we wouldn't even think of allowing that to depend on monetary reward! While the best people willing to do it, wouldn't either. So there is a deep social trust involved.
In contrast, we happily give money in limited social trust situation, where contracts of various kinds specify exactly where those limits might be! And in society there are written contracts and verbal ones, as well as socially understood ones, so for instance, if you go into a store, and make a purchase you don't have to sign a contract to have legal protections.
Why emphasize these basic points? Because the web has created seemingly muddled situations where people can do things of great importance to community, with very little or NO money in return.
And others get very wealthy, where it can seem very unfair.
However, consider that person who does things for others for the benefit of humanity, versus that guy who maybe becomes a billionaire looking out mostly for himself, whom would you rather be?
Different people may have different answers.
Better might be to be that billionaire who does things for others for the benefit of humanity, but really, how many do you think there are?
And how many billionaires can there be? But how many can do their best for the benefit of humanity?
Each of us can ask ourselves questions, and see how it shifts how we look at people in our world.
Like can you imagine if firefighters arrived at a burning house and started a bidding war for how much you'd be willing to pay before they put out the fire?
Or what if top US Army generals informed you that pay up, or defend yourself?
And what if--what if our military leaders were the wealthiest people in our society as they made you pay for what your life is worth before they would defend you?
Would you give control of nuclear weapons to such people?
I wouldn't. Bad enough anyone has such weapons, but think of how much worse things could be, if the people controlling them cared only about money, and God help you if you didn't pay them what your life was worth to you.
Seem like too much? Well those things are out there whether you like it or not, or think about it or not, and there are people who control them. It matters what kind of people they are.
Throughout human history I think MOST people have figured these kinds of things out on their own, after all, deep social trust has been around as long as humanity, while money is a recent invention. But lately I think there has been quite a bit of advertising pushing the notion that money is what truly matters. People with lots of money kind of have a lot of ability to push things on others you may have noticed.
But that's not necessarily a bad thing. We need modern society.
Modern societies can push things that I say are about limited social trust as that is required for them to function, so they need you to plunk down your hard earned cash and buy something. That helps fuel the vastness of modern human enterprise which has done so much for so many. But there must be a balance. Most of us also treasure deep trust, and the unlimited nature that can make it terrifying, but without it...well go back to that part about firefighters.
We are so very lucky to have people who will put their lives on the line for us and yes they should be well paid, but money is not the reason.
Whether you accept it or not, I'm certain that deep social trust will define how well your life is lived, while limited social trust through the invention of money, helps your society to function, but will never guarantee you the best that life has to offer.
So yeah, sorry, but you can produce something of tremendous value to VAST numbers of human beings who will thank your commitment to community, and not pay you anything at all, as it's not about money then.
The most important things in life are about our humanity.
James Harris
For example in many civilized countries you can meet a stranger, have them sign a written contract, give them some money, and expect that person to do very important things for you, without fear.
That trust in the situation is backed by the machinery of your society, which will work very hard to ensure that such transactions can take place, for the good of the society. You do need a business trust that the person will fulfill the contract--but it is a limited social trust.
In contrast if I meet a nice lady, and we fall in love, there is a deep trust. And there is no written contract in the world that can cover all the bases, so most people go with simple vows in a public wedding.
That trust is so deep that society expects a couple in love to care enough to die for each other if necessary, which is as deep a level of trust as you can get. It is then, unlimited trust. Pick the wrong person for unlimited trust and God help you. (Though it occurs to me should add, wealthy often rely on a prenuptial agreement as well.)
So money is most effective in areas where people need limited trust, and means you can do work for someone, say, in the state of Georgia, USA, and get a promise of value in return in the form of scraps of paper called money, which you can use just about anywhere in the world you might travel as long as US dollars can be exchanged for local currency or are accepted.
That is a HUGE thing which allows the world economy to function, as money allows people to trust each other, even complete strangers, in a way that is limited versus the potentially unlimited trust of members within your community.
So for instance firefighters are willing to give their lives in defense of their community as are soldiers, and we wouldn't even think of allowing that to depend on monetary reward! While the best people willing to do it, wouldn't either. So there is a deep social trust involved.
In contrast, we happily give money in limited social trust situation, where contracts of various kinds specify exactly where those limits might be! And in society there are written contracts and verbal ones, as well as socially understood ones, so for instance, if you go into a store, and make a purchase you don't have to sign a contract to have legal protections.
Why emphasize these basic points? Because the web has created seemingly muddled situations where people can do things of great importance to community, with very little or NO money in return.
And others get very wealthy, where it can seem very unfair.
However, consider that person who does things for others for the benefit of humanity, versus that guy who maybe becomes a billionaire looking out mostly for himself, whom would you rather be?
Different people may have different answers.
Better might be to be that billionaire who does things for others for the benefit of humanity, but really, how many do you think there are?
And how many billionaires can there be? But how many can do their best for the benefit of humanity?
Each of us can ask ourselves questions, and see how it shifts how we look at people in our world.
Like can you imagine if firefighters arrived at a burning house and started a bidding war for how much you'd be willing to pay before they put out the fire?
Or what if top US Army generals informed you that pay up, or defend yourself?
And what if--what if our military leaders were the wealthiest people in our society as they made you pay for what your life is worth before they would defend you?
Would you give control of nuclear weapons to such people?
I wouldn't. Bad enough anyone has such weapons, but think of how much worse things could be, if the people controlling them cared only about money, and God help you if you didn't pay them what your life was worth to you.
Seem like too much? Well those things are out there whether you like it or not, or think about it or not, and there are people who control them. It matters what kind of people they are.
Throughout human history I think MOST people have figured these kinds of things out on their own, after all, deep social trust has been around as long as humanity, while money is a recent invention. But lately I think there has been quite a bit of advertising pushing the notion that money is what truly matters. People with lots of money kind of have a lot of ability to push things on others you may have noticed.
But that's not necessarily a bad thing. We need modern society.
Modern societies can push things that I say are about limited social trust as that is required for them to function, so they need you to plunk down your hard earned cash and buy something. That helps fuel the vastness of modern human enterprise which has done so much for so many. But there must be a balance. Most of us also treasure deep trust, and the unlimited nature that can make it terrifying, but without it...well go back to that part about firefighters.
We are so very lucky to have people who will put their lives on the line for us and yes they should be well paid, but money is not the reason.
Whether you accept it or not, I'm certain that deep social trust will define how well your life is lived, while limited social trust through the invention of money, helps your society to function, but will never guarantee you the best that life has to offer.
So yeah, sorry, but you can produce something of tremendous value to VAST numbers of human beings who will thank your commitment to community, and not pay you anything at all, as it's not about money then.
The most important things in life are about our humanity.
James Harris
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