Wednesday, September 12, 2007

The nature of money and evil

Years ago people often said that ‘money (or the pursuit of it) is the root of all evil’. You don’t hear that so much these days. Some would argue its because we are more materialistic, or is it because we are just more enlightened? I think its just a practical way of living, but to give it some ethical justification its worth considering ‘what is the root of money?’
Money is a means of exchange that facilitates trade. Before we had money people had to barter for the things they wanted – causing a mismatch of wants. The divisibility, the portability and universally acceptance of money overcomes this constraint. Some would argue that had driven us to want to much, and in the race to achieve, we have lost sight of the ultimate value. So should we blame the bank or the manager of the money?
Money is a value traded for other value. Trade is inherently selfish since your prime concern is the satisfaction of personal wants – you offer a ‘value for value’. Of course you don’t mind if others benefit from trade, and trade would not proceed if they didn’t, but that does not change the fact that the trade is motivated by self-interest. This was Adam Smith’s conception of the ‘invisible hand’
Money is an inanimate object so it carries no moral significance – just as other inanimate objects like guns are not evil – they are merely tools that can be used by good or bad people.
I am currently reading a very good book – ‘Master Your Money Type’ by Jordan E. Goodman which highlights the psychology underpinning our attitudes to money. And the anti-materialism of religion and socialists grumbling about the ‘evils of money’ is highlighted as a reason for people developing destructive spending patterns. Consider the entrenched Catholicism of the Philippines where financial literacy is at a low point. People are generally self-indulgent and make little provision for the future. Its no surprise that they are poor. Might those attitudes towards money arise from the Catholic sentiments towards money – as the only Catholic countries that seem to buck the trend are Ireland and Chile. Well I would argue that attitudes to money are just one manifestation of it. But you cant argue people are all Catholic….everyone is a compromise because religion is such an anti-life set of values. Basically its about living a set of values divorced from your nature.
We all get it eventually – just some are more cynical about it – which is a matter of personal integrity. It is only in recent years that some Catholic countries have become more practical? Even the Philippines is changing. Reading from the Philippines’ Business Week Sept 7-8th 2007, Reverend Antonio Cecilio Pascual saids ‘Money per se is not evil’…that it ‘is actually our attitude with regard to money and the accumulation of material things that makes money evil’. Well I am not a religious man, but I can agree with that. Your attitude to anything (including money) is a moral judgement. All human action is based on a moral premise. The implication of this statement is that our motives are more critical than the goal.
The problem with religion is that it broadly offers no such guidance. Religion would have us believe selfishness and judging others is evil, and faith offers no value since it is merely acceptance without evidence, confidence or any sense of reality. If there were any sense of reality, you would be less virtuous. But neither am I in favour of a self-indulgent or fear-motivated attitude to money that places subjective values above the reality of human nature.
Rev Pascual perhaps lacks an understanding of philosophy because he makes no case for what types of motives are morally wrong and which are right, but that’s ok, the book above might fill in the gaps. He saids: “Education and knowledge nowadays are sought to outsmart, outpace, ‘out-knowledge’ one another so that one can be ‘successful’ as soon as possible and become rich as soon as possible” – the implication is of course that competition drives people to sin, so people loose a sense of prospective. I would argue that it’s a lack of their ability to think which develops as a response to collectivist philosophies like religion that call on humans to sacrifice their minds and values to the service of others and God. Why else would people try to impress others but because of a value system that places above self. That’s why they loose their sense of reality. Critical thinking is the gatekeeping mechanism that prevents contradictions from entering your mind. That is the basis of egoism and sound thinking, but that’s what religion poses is a threat. But really a true egoist does not define their value in terms of others standards – the superficial values of ‘non-self’ that the Reverend is concerned about.
He also says “How many parents actually try to seek good education for their children will actually become social workers and help a lot of poor people? To actually raise our kids so that they can help those in need?”. I did not think it was the parents role to decide what career a child should pursue, but you might ask why a great many clergy see imposing values on others as moral. Well since ‘fear’ is offered as a value in religion, so manipulation is a practical consequence. The sordid sex crimes in western orphanages being a case in point. But according to religion, these clergy are ‘only human’.
Next point: “Money is sinful….when it becomes an end in itself, when it is no longer just a means”. I would suggest that there is an always an end, and just the Reverend has failed to identify it. Any action is motivated by some thinking. In this instance I would suggest money serves the ‘means’ of impressing others, looking ‘successful’ in other people’s eyes. The paradox is of course is that religious undermines people’s mental efficacy, and thus makes them more beholden to what others think, and thus less likely to manage monetary matters effectively. It doesn’t help that ‘money is evil’.
Next point: “A lot of people become rich because they do not care about other people”…they ‘resort to sins to further accumulate money & power”. I don’t think money does isolate people – in fact successful people are usually very attentive to client/customer needs. Sometimes its superficial, and perceptions have primacy over real service, but surely religion which subjugates facts will only elevate this thinking. Look at the Philippines. Walk into any store and you get the empty expressions of respect like ‘Good morning Sir” that is intended to make you feel like a king, but ask them a question and you will have to repeat yourself 3 times…its not a dialect problem – they don’t listen to other Filipinos either. They treat the office or store as a playroom. It’s a testimony to their sense of reality – which is overwhelming social and not purposeful.

Friday, September 07, 2007

The philosophy of ketchism

I have a confession to make...I am sooo tight with money. I would rather wait 1 day in a queue or transferring planes rather than spend $200 on myself....but in defence when it comes to girlfriends...I'm just slightly better. I'm tempted to call this philosophy 'ketchism' after my ex-Japanese girlfriend called me 'ketchi' = Japanese for 'tight'. I was tempted to make this my philosophy, but really, on reflection, it has deeper roots than that. It has more to do with my sense of life, or sense of struggle. Afterall life was meant to be easy right? Well it hasn't been. Why else would a mining analyst, who should be earning $150K a year and living in Sydney, end up living in the Philippines on his savings. Well ok those career doors are closing to me, but the good news is that other doors are opening...yeh ok, there isn't much money in it, but the savings are great.
You might wonder where this sense of struggle comes from. Well I think its been entrenched in me for a long time. For a starters its well-known in the Philippines that Australians are tight with money. I can understand that...the origins of Australia were based on struggle, there was endless droughts so colonial Australia had alot of difficulty establishing an independent food supply. We had to depend on stockpiles or Mother England. And for a century more we very much looked to the English Empire...we looked to England to protect us, and then the USA. It took several decades before we became financially independent, not until we discovered gold and nothing else mattered :). But exploration is a risky business too, so little surprise that most of the money to finance activity had to come from England. Even today Australian mining companies are listing in England because Australians have an aversion to risk - now they have a problem investing in foreign lands. The English have no such aversion. So even today the sense of scarcity, tragedy and self-doubt persists in the Australian psyche. The anti-intellectualism of the nation is an extension of that on an epistemological level (PS: I dare say you wont hear that word from another Australian).

Contrast Australia with the USA where crops readily grew since water was plentiful. Americans are big on 'the grand symbolic' gesture. Whereas an Australian would be saying 'Whats the bloody big deal' or 'Why all the fuss?'. The other big element was my aspirational family upbringing which placed am emphasis on savings & I was always living for the future....and investing the proceeds. As a result since leaving school I have worked about 8 years (as an employee) and done little else productive for the balance of 8 years. I've spent most of that time investing and trading with my savings...was doing ok until my current GF dragged my attention off the markets. Written alot, not never put my mind to publishing. Its not that I dont like some sense I'm always working...I could even show you a picture of me working, but in ernest I just couldn't stand working for 'dicks in finance'. So what was a critical analyst to do...but as he is trained to I analysed and came to the conclusion that these 'dicks in finance' were not going to let me get ahead because I was good at what I do...and made them feel inadequate. Of course I'd prefer to invest millions and get fat commissions where I deserve them, but I'm tired of looking for it. When you meet more than a dozen 'dicks in finance' you start to see the pattern.
Now when I watch people and I observe how they think, I recognise that they approach life with a sense of 'tightness' or 'generosity', and I mean this not just with respect for money, but with respect to their broader value judgements as well. Well having grown up in Australia you might not be surprised to find out that no one ever showed any appreciation or recognition for what I did. Now I read the 'self improvement' books and they say you should praise 5x more than you criticise. I frankly reject this approach. I think this is what creates 'finance and other dicks' because they are unable to accept criticism. Thats one aspect...the other is a deluded (subjective) sense of reality. Thats what creates economic bubbles, and yes you can attribute those to financiers as well. These people actually think they are good because they appear successful to others, they work with Merril Lynch or something. They inflate market outlooks because thats what they profit from. They dont get generous bonuses unless the market little wonder the market is geared to expansion. If you are critical of the market outlook, you are a pariah, and quickly marginalised. But the other aspect is just how easy it is to make money when everything just keeps going up. You no longer have to be analytical, you just have to be a salesman. You have to sell it. That was another issue...I'd have thought people want to know the arguments for and against an investment. But thats not how 'dicks in finance' work. They write to convince irrespective of the merits because they get paid for raising money...and few people make money in falling markets as falling markets undermines confidence. Well this builds all manner of false economies which is beyond the scope of this post.

So I am a great believer in a balance of criticism and praise when and if they are deserved. But I've come to realise that few people truly have a sense of objective reality. They only hear criticism. There have been times I have made a statement 8-10x and its not been heard, but they will readily hear the bad news. I suspect when 'markets are climbing the wall of worry' breaking out of a downtrend, its the same thing.
Now the amazing thing about the Philippines is that people here are very generally very good at praising others, but they have their fair share of criticism as well. Now you might think that these people are surely great listeners, but paradoxically they are the worst. I used to think it was because they didn't get my accent, but thats not it. When I observe Filipinos talking to other Filipinos, they dont listen at all. So this drew my attention to flaws in the Filipino culture too. People here lack a sense of purpose, lack a sense of organised structure or discipline, they blow as the breeze takes them. Those that are more aspirational go overseas, and Christian guilt if not close family compell them to send half their savings home.
So that still leaves me still trying to find out where I belong...but I do love that I can buy an apartment here sooo cheap. Living here is not as cheap, but its not bad. Yep...I'm that tight.
PS: Refer to 'Tools for Life' for how to apply the Principles of Ketchism to your life.