All 4 entries tagged Money
December 24, 2009
Amongst other things, Mandelson wants University Degrees to be more directed to contributing to the economy. It is, of course, perfectly reasonable for there to be a public debate about how publicly-funded Universities contribute to the public good. Nevertheless, three questions immediately occur:
1) How is 'economy' to be defined?
2) How does the economy of a state fit in with the overall well-being of the state?
3) How is contribution to the economy to be assessed, and by whom? Can it always be quantitatively measured? (The answer to this will naturally depend on how one answers 1) above.)
If it turns out that these three questions have not been fully thought through, then I would recommend a little Plato ...
In Plato's Republic, a dialogue in which the character of Socrates outlines what he claims is the development of an ideally just state from scratch, money is introduced fairly early on (in 371b in Book 2) to facilitate the exchange of basic goods and services. If each human has to produce everything required to satisfy even their basic material needs, life would be almost impossibly hard: we would each have to produce not only our own food, shelter and clothing, but also all the tools needed to produce these things, and even the tools to make the tools. So it makes sense to specialise in different trades and exchange the products, and money is the best means of facilitating this exchange. The function of money is thus to make life easier and provide us with more leisure. It is invented by humans as an efficient means of satisfying certain basic needs.
The trouble, as Plato sees it, is that human psychology makes it very difficult to keep money as the efficient, labour-saving tool that it was designed to be. This is for three main reasons:
a) Our appetites are essentially unlimited - they do not just aim to satisfy our basic physical needs but want more and more goods and goodies - so our appetite for money will also be unlimited.
b) This would be bad enough, but it's made worse by the fact that the things that our appetites desire are often in limited supply - so conflict can break out in the struggle to obtain them. At Republic 373e we are told that the origin of war is the same as that of most evil - greed. And in another dialogue, Phaedo, the message is even blunter: 'all wars are made to get money' (66c). And we may lose these wars and struggles; they may end up depriving us of the very thing they were designed to obtain in the first place - money. This seems to be one of the warnings embedded in the Atlantis legend at the end of Plato's Critias.
c) In Plato's psychology, the desires for e.g. food and drink and the desire for the money needed to obtain them all belong to the same appetitive 'part' of the psyche. But we can quickly start desiring money for its own sake (particularly as money so often has symbolic value, as we have already seen in Parts 1 and 2 of 'Ethics and Money'), and not just as a means to satisfy other desires, and this desire to hang on to our money and gloat over it can prevent us from buying the things that would satisfy those other desires. So there are often internal contradictions in our desire for money.
Fortunately, Plato also holds that in the ideally just psyche this internally contradictory and essentially insatiable appetitive part, bent on goods in short supply, is to be ruled by another part - a rational part which has its own rational desires for truth and reality. Our desire for and pursuit of money should fit in with a bigger picture of the good life based on reason.
This is not, however, the view of one of the founding fathers of modern capitalism, Adam Smith, who holds that humans are ruled by appetitive desire and seek their own individual appetitive gain (though he does admittedly believe that if trade and markets are managed properly, the pursuit of private goals can have public benefit). David Hume, too, argues that reason is and ought only to be the slave of the passions. Modern rational choice theory can look as if it is based on the same assumptions.
So; the question we have to ask ourselves is: how many kinds of desire do humans possess, and how many of these can be served by money? It is not until we know what we think about this that we - or Mandelson - can answer questions 1) and 2) above.
December 13, 2009
The first thing to do when considering the role of money in our life is to work out how much we need to pay the basic bills;, the second is to work out how much we want (in a number of philosophical systems, of course (such as that of Epicurus), the goal is to match our wants to our basic needs; we'll come back to this). But these two tasks are complicated by the fact that in our culture money is not just a means of purchasing goods and services, but also possesses considerable symbolic value.
So a key question is: when I want to buy something, what is it that I ultimately want to obtain? For example, I may want to buy a bicycle because I want to get fitter, or to reduce my carbon footprint (or both). I may want to buy my niece an expensive present because I think it will make her happy, or because I want her to love me (or both). I may want to invest in gold because I think it will provide me with financial security in turbulent times, or because the investment will make me feel that I am successful (or both). I may want to buy a sports car because I would love the physical sensation of driving it, or because I want others to admire or envy me, or because I think it will make me seem more attractive (or all of the above!).
The next question, therefore, is: how important are these ultimate aims to me?
Then: if they really are important, is money the only, or the best, means of achieving them? For example: if my aim is to make my niece happy and/or to strengthen her love for me, could these aims be better achieved by giving her some of my time rather than an expensive present?
If I still really feel that a) my ultimate aim is important and that b) spending money on this particular product or service is the only, or the best, means of obtaining it, then I finally need to ask myself whether, even so, buying the product or service would in fact satisfy my need or want? Is this particular need or want (for love, say, or a sense of security, or the admiration of others) insatiable or satiable? If it seems to be the first, is it really insatiable, or does it just appear that way to me because I am conceiving it in the wrong way, or because I have been trying to satisfy it by the wrong means?
If the need or desire really is genuinely insatiable, would I perhaps be better off trying to rid myself of it entirely rather than trying to obtain more and more money in a fruitless bid to satisfy it? Or could I perhaps learn to accept that some needs and desires are intrinsically insatiable, and decide only to try to accomodate them to a certain degree but no more?
Next time we'll look at some of the things Plato has to say on these issues.
November 27, 2009
Firstly, there is certainly no tension between ethics and money, if ethics is interpreted as involving questions about how to live and what sort of person to be. In a money-based economy, we all need enough money to satisfy basic needs if we are to survive; we probably also need enough money to satisfy some non-basic desires as well, if we are not simply to survive but to lead a good life. Working out what these basic needs are may well be an area of dispute; deciding which non-basic desires merit satisfying assuredly will (we'll be coming back to this). So we all need either to make money, or to obtain it by some other means. And the ways in which we make or obtain money themselves are part of how we live and who we are, and may be done in ways which increase or decrease our own overall well-being and/or which increase or decrease the well-being of others.
But we do not just have to make or otherwise obtain money in order to satisfy at least some of our needs and desires. We also have to spend it (or use the products which others have bought for us), and the way we spend money is also an ethical issue. How was the product produced or made? What are the working conditions of those involved in its production? What is the environmental impact of its production, transport, marketing, use and disposal? Should we buy from local sources? What is going to be the overall impact of the product on our happiness or the happiness of others? How are we going to find the time to work these things out when we are rushing round the supermarket before picking up our children from school?!
For almost all of us, the making and spending of money will also involve a current bank account, and most of us will also need to borrow from and save in banks and building societies at various stages of our life. Some of us will also choose to invest e.g. in shares or gilts or property. So there will also be ethical considerations connected with the terms on which we save, borrow or invest, and the nature of the bank or company with which we are dealing.
So, on the one hand, money undoubtedly plays a key role in our ethical life, and given this, it is strange how little time most of us spend thinking about how best to earn, spend, save, borrow and invest it, in ways that will increase our well-being and perhaps the well-being of others too. It is also strange how comparatively little attention is given to such matters in most schools (though there are some commendable exceptions, and the situation is slowly changing for the better). Given this lack of attention to the bigger picture of how money fits in to the good life, it is perhaps not surprising how many unintentional anomalies there are in our thinking and practice e.g someone may say that they think money does not buy happiness and that being wealthy can be dangerous, yet exhaust themselves trying to make money to leave to their children, or they may say that they think investing in shares is wrong without bearing in mind that the banks they use or companies they buy from are doing exactly that. Nor is it surprising how many rows couples have about money (some of which, of course, are caused by events which are out of their control, but some could be avoided with more discussion and planning).
On the other hand, most of us (as I suggested last week) only want money because we think it can further other ends, yet spend a huge proportion of our waking lives trying to make the stuff that we (mostly) only want because of something else ... And we may further feel trapped in jobs that we hate, and end up feeling intense resentment and frustration.
So our current relation with money in the west is confused and conflicted. Next week we'll look at whether we can start to clarify the situation (using Plato for some help), and whether we can take any steps to make money work for us, rather than the other way round.
November 20, 2009
Here are a couple of questions for our new topic, on ethics and money. As with all my Friday Questions (and Friday Responses in subsequent weeks), they are primarily aimed at those who have no or very little experience of philosophy, though of course I welcome comments from all, including those with some philosophical training. But their chief role is to form part of the work I am doing as Senior Fellow in the Public Understanding of Philosophy, and I want absolutely everyone to feel that they can take part in the debate.
Questions: Is there a necessary tension between ethical and economic considerations? And what is the role of money (whether making it, investing it or spending it) in the good life?
Here is (part of) the problem. Most of us are not primarily motivated by money, but only want money for other ends e.g the well-being of our children. Usually we are aware of this (though sometimes we may be so busy or stressed that we lose sight of the bigger picture). And yet most of us spend an enormous amount of our lives trying to make the money that we only value because we think it can buy us things that we value more.
Is there any solution to this apparent absurdity?
Some of my thoughts on these questions in my response next Friday, plus some further questions to enable you to clarify your own responses.