Dan Ariely is an Israeli-American teacher at Duke University in North Carolina. I think he’s smart and very well educated. Based on his weekly column in the weekend edition of the Wall Street Journal he is often insightful and entertaining. However, his recent answer to the question of whether people’s salaries accurately reflect the value they provide to society, lacked wisdom.
He lamented the fact that many people create a lot of value and don’t get paid much, citing teachers as the best example. I am going to leave aside the obvious fact that most rabbis probably feel that rabbis are underpaid and a liberal arts graduate with a bad choice of majors probably feels intuitively that specialists in Byzantine frescoes are underpaid. I am leaving those aside as I leave aside the fact that Dan is a teacher because I am not that interested in the feelings of rabbis, liberal arts graduates or teachers. I am much more interested in their thoughts than I am in their feelings.
It was Dan’s closing sentence that revealed a lack of wisdom. Here it is:
“Maybe one day we will evolve as a society and base people’s salaries on their actual contribution to the common good.”
Let me acknowledge that it wouldn’t be hard to find examples of sentences that I wish I had not written amidst the millions of words I have written. I can even find sentences that I do not agree with, particularly those I wrote without Mrs. Lapin’s editorial assistance (blue pencil). I would enjoy an opportunity to discuss this with Dan Ariely.
However, assuming that Dan Ariely wants to stand by his comment, it lacks wisdom because he doesn’t explain which bureaucrat, in his utopian vision, would be charged with the responsibility of deciding who makes the biggest contribution to “the common good”. The beauty of money and the free market is that it democratizes that decision. It actually gives the vote to you and me. Yes, we get to decide who does most good and we get to reward that person with our money. In some Asian countries, some tutors are among the highest paid individuals, but they are paid by parents who choose them for their children out of many available choices.
Likewise, our desire for money incentivizes us to contribute to the common good in the best way we are able. We can investigate ways of contributing the most to the most people and thereby, through the magic of money, we can acquire all we need. Money also confers independence from government to the extent that anyone who serves the needs and desires of another citizen can earn the gratitude of that citizen in the form of money. The two parties to the transaction need not wait for government to either approve or evaluate the transaction; they themselves determine how much the exchange is worth to each.
This is why every time and in every place that government has tried to introduce price controls the result has been failure. In agriculture, for instance, to win the votes of farmers and their dependents, government imposes a much higher price on butter than the supply demand equilibrium would justify. The result is the notorious mountains of butter either destroyed or sent as “aid” to foreign countries thereby disrupting their agricultural supply chains. In housing, so-called ‘rent control’ set by government because there are far more renting voters than property owning voters, always results in a shortage of housing.
In the final analysis, the value of something can be established only by two people or two entities, the buyer and the seller. This is true for salaries, used cars, housing, and yes even medical care along with everything else. Money is what makes this possible.
Furthermore, money encourages wholesome person-to-person interaction. People don’t work for ‘society’ or for the ‘common good’; they work for an employer, a customer or a client. It makes no difference if ‘society’ or the ‘common good’ or their self-anointed spokesmen approve or disapprove of the transaction. And when people interact with people, they behave better than when they interact with institutions. Just think about how people care for a car lent to them by their neighbor versus how they treat their rental cars.
Money is able to play this remarkable role of lubricant for human interaction largely because like people, money is more spiritual than physical. It is a person’s uniqueness that energizes love, friendship, and yes, also transactions (because we choose those with whom we prefer to do business), and uniqueness is all due to the soul. If a beloved loses an arm or a leg, real love doesn’t change. But if a person loses their soul, friendships and love inevitably perish. Money is not discs of metal or strips of colored paper. These are merely abstract symbols of whatever I did for another child of God who happily gave me that currency in exchange.
Not only is money spiritual but in the Lord’s language, Hebrew, the word DAMIM means both money and blood. This points to many similarities. We don’t speak of ‘a money’ or ‘a blood.’ Instead we say ‘do you have money?’ or ‘does the hospital have blood?’ We know that hemorrhages of both blood and money are bad. Both have to keep flowing to fulfill their purposes. Both blood and money carry nourishment to the furthest reaches of the organism whether a country or a body. If blood is cut off from an extremity like a toe, it will die. When a customer in Maine buys goods from a seller in the remote foothills of the Rockies, the entire country thrives.
Yes, phrases like ‘contribution to the common good’ sound lofty and noble but the oceans of blood shed by the innocent victims murdered by the twentieth century’s infatuation with the ‘common good’ cry out in opposition. Society works best when individuals deal directly with other individuals without the officious mediation of government in between. And that can only happen with the miracle of holy money.
Dear Rabbi, I have been listening to your podcasts and videos on Youtube. The meaning of money that you taught actually came as a revelation for me, that we do not have to feel guilty for making lots of money if it comes through our good and honorable service for God’s other children.
But certainly in some parts of the world, I believe there are imbalances? What one market consider important might not be considered important in another market – hence the value of the same service will be priced differently.
In Indonesia, there’s a saying for teachers: “Pahlawan tanpa tanda jasa,” which means “Heroes without a token of gratitude”. It is an honorary title for teachers for being a very important part of the society but generally are not rewarded/considered much. I guess that’s what keep them going (as do volunteers), no matter how low they are priced at, they are doing it out of care and love for the students/people they help. They might make more money elsewhere (i.e. more in-demand-jobs) but chose to continue as their service towards God’s other children despite of the market’s condition.
Greeting Rabbi Lapin and friends. I came across you post and loved it. Since then I always watch your videos and read your articles .
I think I really need a rabbi in my life to put me through the word of God. I am interested in learning more about Judaism .
I have always been fascinated about the Israelites and as a child longed to be part of them.
I love the story of Abraham because it is very inspiring and I love David because it teaches on how to worship .
I will be glad if I am taught Hebrew and if someone can teach me the Torah .
Thanks .
Yomi .
Rabbi Lapin, Susan, and friends, greetings!
Teachers! GICs! I could write many paragraphs…
Teachers in my state receive pensions…. until the day they die. They can retire sometimes as early as age 50, and in some districts are incentivized to defer some income in their early years of teaching for a greater reward after they are no longer working! This is a factor in their staying with a job that some feel doesn’t compensate them adequately. It’s disingenuous to say the pay is too low for their hard work if later on they will be paid for leisure, or to supplement the income from a second career.
Somehow it seems to me that paying them for the work they do while they are doing it, and letting them save and invest for retirement like the rest of us must do would be a sensible thing for the common good.
SP
Dear Susan–
It’s helpful for people starting their work careers to understand and remember that they don’t get what they think they deserve, they get what they successfully negotiate. When you have a strong and ruthless union working for you, you end up with a pretty attractive deal that draws far more people into teaching than are actually needed.
Cordially
RDL
Your article is right on the money! A great read indeed.
That was amazing.
Thank you Pete
Cordially
RDL
neweverymoment, Deb:
Thanks again, Rabbi (and “Blue-pencil” Susan) for appropriately drawing our attention to some vital principles. The back side of our dollar bill is a treasure trove of ancient wisdom, including both sides of our Great Seal and the words, “In God We Trust”. (Emmet Fox has a great essay titled “The Historical Destiny of the United States”, delivered as a lecture in 1932, and the last few pages of which deal directly with the Great Seal and the other aspects of “The Mystery of American Money”. The essay is included in “Alter Your Life”, and the editor comments: “Readers will note that the prophecy . . . [about] the reverse of the Great Seal . . . has since been fulfilled by the Government issuing a new dollar bill carrying both sides of the Seal.”
Thanks Deb–
Yes, I have taught on the US currency; why the $ sign is really a U superimposed upon an S (for the U.S.) why there are so many 13s on the $1 bills and much more.
Cordially
RDL
Aaahhhhh! Dear Rabbi; your understanding comes with much peace. I would encourage you to write Mr. Airely, if you have not already. It’s clear to me that God in His infinite wisdom has already decided what each will get according to OUR ABILITY to produce a return. In this, we are the same. But how we differ is what each chooses to give, trade, sell, buy, etc., in order to create the return [ultimately] for Him. I don’t want government to try and decide my value and worth towards their “common good”. They might discard me! Lol! For example, in their unjust estimation, I have not done one thing to cure cancer. But works they cannot see is I have encouraged others in their healing process; given to support those in their healing journey; and found ways to avoid the disease and teach others. All done with the use of Holy Money.
Yes, indeed dear Teena–
the beauty of holy money is that earning it proves you have served another of God’s children.
Cordially
RDL
Rabi am I correct in this line of thinking?
I have come to realize that money is a debt owed to the worker for their time and talent spent. And because the worker only has a certain amount of time allotted to them in life , the debt owed for his or her work represents a part of their life that has been spent that can never be gotten back and so the worker is owed an amount of money in payment for that part of their life that was spent. Then the worker can use that payment to purchase another workers investment of their life in order to have what ever he needs or wants. Therefore when someone steals from another or refuses to pay for services he has taken advantage of , the thief is actually robbing that person of part of their life. So not paying back a debt owed or welshing on payment for services rendered is actually similar to murder.
Correct, Bill,
And of course the new approach in American criminal jurisprudence that property crimes are not so serious is quite wrong. Your reasoning holds here too explaining that when you steal something from someone you are really stealing the days of their life that they invested in working to be able to purchase that thing you stole. Though it disturbs us a bit, the truth is that using deadly force to protect your property is indeed quite justified. Furthermore, societies that are really strict about property don’t have much property crime or much assault or murder. (Singapore for instance) While societies foolishly lenient on property crime suffer high rates of both property crime and also physical assault and murder.
Cordially
RDL
“He lamented the fact that many people create a lot of value and don’t get paid much, citing teachers as the best example.”
Imagine an institution where the better performing people are not rewarded properly and the mediocre performing people are not punished properly. This might happen where salary is heavily based on years of service, like in schools. What happens as we move through time? Gradually, over many years the better performing people leave and the mediocre people remain. Eventually, the mediocre people rise to the top and take over.
Teachers gamed the system but the system fought back. Maybe there is a reason everyone is not valued as much as they should be.
On the contrary, Matt,
Everyone is valued exactly where they should be. That’s the miracle of markets and money. If you are being paid less than you feel you’re worth, quit and go to where they’ll pay you more.
Cordially
RDL
Seen this coming a mile away.
Wow – Such wisdom. Ive been following you Rabbi and I must say my relationship with God and how I see money has transformed. The idea now that I seek the children of God whom I can serve has seen my financial status improve drastically.
Thank you Sibusiso-
That is really so gratifying to hear.
Cordially
RDL
Hi Rabbi, so does it mean that underpaid teachers are an implication of excessive supply of teachers/free education in general (in a supply vs demand context) ? Or probably, the society where teachers are underpaid thinks that they don’t value education provided by good teachers as worthy to pay the price (perception of value) ?
Dear Teddy–
Teachers are not underpaid. You know how I know? Because almost no teachers quit their jobs and go work where they could indeed get paid more. Furthermore, they must be getting very well paid since there is a constant and lavish flow of new teachers entering the profession.
Cordially
RDL
Just the other day while walking around the neighborhood, I observed the garbage collecting truck making its way through the street. The driver collecting each garbage bin from both sides of the street. Sometimes he maneuvered the truck to do it, sometimes he had to come out the truck to do some adjustments. It was a very hot day and I doubt the truck was air conditioned. I can imagine how hard and yet tedious it must be for that driver to perform that routine throughout the city. A sweaty dirty smelly job that is so undervalued and yet it has to be done for sanitary reasons. When trying to factor in salaries based on actual contribution to the common good, I wondering what Mr. Ariely would say about garbage collection.
That’s right Lisa,
And how would he handle the conflict if we could only afford to give a raise to teachers or sanitation engineers? Who’d decide? The way we are now solving this problem is with the miracle of holy money. The city decides how much it wishes to offer for sanitation work. People either apply or they don’t. If they don’t, city raises the bid until they have applicants. Simple.
Cordially
RDL
My dear Rabbi,
When it comes to revealing the truth about money, nobody does it better than you.
Thank you for sharing your ancient Jewish wisdom!
Thank you very much Peter,
Cordially
RDL
Very well explained, God’s perfect order of things always works best. He designed it, and when we pray for wisdom, like Solomon we can be blessed with the right understanding. We just need to go through the DOOR, obeying Acts 2:38 and let the journey grow with the flow of Jesus Living water.
Thanks Ron
However, his recent answer to the question of whether people’s salaries accurately reflect the value they provide to society, lacked wisdom.
In consideration of the harm done by so many “teachers” in our GICs and some of our Churches should a review of their salaries be undertaken? The mechanism for this review would be fascinating!
Nowadays, dear Dorothy,
teachers’ salaries are mostly negotiated at gunpoint by teachers’ unions.
A review would be all but impossible. Gosh, we can’t even get independent review of teaching effectiveness.
Cordially
RDL
Hi Rabbi, I enjoyed this Thought Tools article, and tend to agree with your points. As a Christian, however, I believe man is generally sinful and must exert effort to abstain from bad behavior. Isn’t this why we need laws created by a community or group of people? Without some sort of structure, unscrupulous individuals will misuse money or use it for less-than-high purposes. For example, a prostitute and her client may both feel the exchange of money for, um, service is a win-win, but to me that doesn’t seem to be a laudable use of holy money. Based on Judeo-Christian principles, the common good would be to make that transaction illegal. My libertarian friends will, of course, heartily disagree, but I guess that’s why I’m not a libertarian! I’m interested on your thoughts on this, thanks!
Dear Chris–
As usual through the decades of our friendship, every interaction with you is thoughtful. The point I am trying to lay out is that in the face of today’s conventional wisdom that the choice of how to use money is dangerous in the hands of individuals. It is far better that they hand their money over to government who will spend it for socially constructive projects. I am saying, no, it is an instrument of human individual independence. Does this mean every individual will use it constructively and wisely? No, of course not as your illustration aptly demonstrates. However, guns, lawnmowers, and the power of speech are all things that can help or harm. So is money. But I would still rather the ‘client’ has the freedom to use his money even for immoral purposes than that government in the name of legislating morality confiscates that freedom from us all. There are so many ways to misuse the power of money. Selling pornography, selling drugs, trading people, are all ways in which money can be abused. However, none of this invalidates money as a wonderful and miraculous gift of God. As to whether prostitution ought to be illegal, that is a decision. My faith makes it illegal which I think is enough for me. I worry about assigning more power to government. Is prostitution a bigger social evil than adultery? Do we really want government criminalizing adultery? Perhaps we are better off remembering our Founders stipulation that our Constitution and our form of government are suitable only for religiously moral people. So I agree with you that obviously visiting a brothel is not a great use of money, but seducing an impressionable young woman with no transfer of money is hardly more noble. Perhaps all these matters are best left to our own religious conscience. Interested in your further thoughts on this too!
Cordially
Your friend,
RDL
Thank you for your response, I appreciate it! I consider myself a conservative who leans libertarian. I’m thinking you just might be a libertarian who leans conservative… Of course you’re right; without a moral conscience no system will work for long. This is what concerns me, I feel America is losing its moral footing and consequently there will be hell to pay. Thanks for working so hard to prevent that from happening!