Posts tagged " Dan Ariely "

Holy Money

August 27th, 2019 Posted by Thought Tools 31 comments

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.

For more on this topic, check out our financial resources HERE.

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