“Money is a very useful method of accounting… Money represents wealth in rather the same way that the menu represents the dinner.” ~ Alan watts
Money is a magnificent thing, but it is not the point. Money should serve as a means to an end, and not the end itself. Unfortunately, we have come as a culture to fetishize money and consumption, instead of value creation and production. The financial world also seems to have fallen into this trap, and a large portion of the supposed value of today’s companies is made up of Fugazi money which has been printed or loaned into thin air.
The Fugazi valuations of large corporations are taken at face value, and the (until now) ever steady upwards rise of equities prices has been fueled by the cow-like passive investing of the retail investment crowd. Underlying securities level analysis is rarely done, and most financial analysts will laugh you out of their skyscraper if you so much as suggest that the market is overvalued. Growth is presumed to be infinite while, in reality, true wealth and value creation is becoming more rare.
Unfortunately, our consumption culture has served to exacerbate this arrangement. Because production on the individual and small business level is economically and often societally discouraged, large corporations are free to pour a percentage of their profits into “innovation”, a process which usually results in some incremental improvement of an already unnecessarily advanced consumer item like televisions or smartphones. Instead of truly groundbreaking achievements in science, technology, art, literature and so on, our economy has come to value gradual, incremental improvement of consumer technologies that do little but fuel the lives of larval consumption of the modern-day consumer class. But can we change this?
Wealth has been accounted for with different types of money throughout history, whether seashells or dollars. There is a disconnect in today’s world, and we have missed the forest for the trees — money, as a method of accounting, is marvelous — but money is not wealth itself. This misperception has been spoon-fed into the mouths of the public through an outdated and inadequate education system. The average worker in most western societies is at most concerned about pension planning, retirement funds, health insurance, tax write-offs and so on. The incentive to create value on an individual basis is mostly absent.
Though this predicament is dire for those who are caught in the wage-slave trap, there are pathways out of it. The internet offers immense opportunity for valuing and promoting individual expression. The ability of individuals to create value by expressing new thoughts and ideas, making art and building products has never been greater. How can we let this wave wash through the rest of society, and how can we replace our dinosaurian financial system with a modern, value-driven and value-focused one? These are big questions, and there is much to ponder. Let’s think it over.
Be well.
~ Hugo Davenport