attachment breeds fear

February 10, 2020 5:11 AM

Money Is the Megaphone of Identity - "If you don't give money its purpose, it will end up defining yours."

It’s the greatest story humanity has ever subscribed to, so it will always be a central character in the theater of everyday life. What has changed isn’t money itself, but the way in which it colors the way I view the world.

Life is almost always a framing problem, and wealth is no exception to this. To say that money is complicated is a cliche worthy of a thousand eye rolls, but when it comes to our ongoing relationship with it, I find that it’s quite simple to explain and distill...

This is what I call The Money Spectrum, and it represents the wide variety of views we have about the almighty dollar/euro/whatever throughout our lives. Money can be a difficult thing to talk about because it invokes a blend of weird emotions, and this amorphous slushie of feelings can be hard to express through the crude tool of language...

[Definition #1] One’s ability to act freely, and

[Definition #2] One’s ability to influence the behavior of others.

When you first cross the border between Freedom and Power on the Money Spectrum, you are making a seamless transition into Definition #1. With an abundant Fulfillment Surplus on hand, you are pursuing the things you want to pursue, while limiting the attention you give to the continuous demands of money.

I call this initial territory power-over-the-self...

Understanding how you want to exercise your individual power is the key to navigating the next – and final – area of the spectrum: power-over-others.

“Power-over-others” sounds menacing, but remember, it simply refers to one’s ability to influence the behavior of others. The key question in this area is: how are you using money to direct the course of people’s lives?

[...]

Ironically, the end of the Money Spectrum can breed just as much fear as the Survival entrance into it. Having immense power can make someone just as fearful of losing their money as a person who needs it to survive another day.

also btw...

• Perry Mehrling Explains Why 'The Money View' Is Key To Understanding Financial Markets - "Even to this day, there are economists who don't understand money or don't think that money is an important aspect of the economy. They see the world as still operating essentially under a barter system, with money only there as a means of lubricating transactions. But this is precisely the opposite way you should be looking at things, according to this week's guest." (Odd Lots)

  The essential quality of money, is that it's a means of settlement, a means of payment of settling bills. Most of the economy is organized as an interlocking set of balance sheets[1] -- promises to pay -- and what you're promising to pay is money. So the settlement constraint is the essential constraint on the economy as a whole that keeps it sort of coherent -- that people are focusing their minds on how am I going to actually satisfy that promise.

• A Money View of Keynes, Keynesians, and Post-Keynesians - "The material origin of both of these analytical shifts, and of the blind spots they created for our attempts to think about money, appears to be the World War II experience of war finance, when the US government took control of the apparatus of money and credit and used it to reorient economic activity toward war production. Post-war economic debate can be understood as being concerned with how best to use this tremendous resource in peace time."
• Modern Monetary Theory: Cash-strapped governments a thing of the past? - "States with a currency of their own can never run out of money. That's a core thesis of the Modern Monetary Theory which spilled over to Europe from the US. German economist Dirk Ehnts elaborates on what it's all about."

In economics, you can usually witness cycles of 30 to 40 years for one theory to replace an old one. The current neoliberal theory has been in place since the 1970s or 1980s. It's become clear over the decades that we've encountered a number of myths partly resulting in today's problems — myths that finally need to be debunked.

Among those myths are the belief that the central bank is in full control of money supply and the belief that it's in full control of the inflation rate. We're seeing right now that this is not working.

And then there's the myth that the market regulates everything itself, meaning it only takes the state to withdraw to resolve any problems, or the myth that profit maximization should take precedence over the public purpose.

So, all of that needs reforming; and I do believe that we have the better arguments in this debate and that our ideas will prevail. Sure, it may take a bit of time and patience, but I don't think it will take ages for MMT to become widely accepted as the norm.

posted by kliuless (7 comments total)

or like tl;dr, where on the money spectrum are you? and what should we (the public, government, institutions, those with 'power-over-others') be doing to promote 'power-over-self' for everyone?
posted by kliuless at 5:38 AM on February 10, 2020 [4 favorites]

Among those myths are the belief that the central bank is in full control of money supply and the belief that it's in full control of the inflation rate. We're seeing right now that this is not working.

Mostly true, but a little misleading.

They are right that the central bank cannot be in full control of the money supply. Fractional reserve banking can mean the money multiplier can be orders of magnitude different from bank to bank or even day to day. The banks can distort the M1 and above.

The Central Bank could influence inflation in aggregate because more money chasing goods will lead to inflation. However, the question is whether the expansion of the money supply reaches the people who will be actually chasing goods. If the Fed is printing money hand over first but it's mostly being channeled into the 1%'s pocket through the Fed only dealing with capital, how does it reach the populace? Rich people don't contribute to inflation because they're already soaked in goods. They can't really spend any more on food because rich people still only need 2000 calories a day just like the rest of us. They're not competing with the same consumer goods and durable goods. If the Fed went out and just increased every bank account by $500 there would be immediate inflation.
posted by Your Childhood Pet Rock at 5:53 AM on February 10, 2020 [2 favorites]

I hate this self-help style of writing where they spend hundreds of words going back and forth on something before actually getting to their point. It feels like one of those talks motivational speakers give at business conferences except written down.
posted by backlikeclap at 7:04 AM on February 10, 2020 [17 favorites]

To make it more specific, here's an interactive explainer showing how much various daily expenses cost each of us, compared to what they cost some of our best known billionaires. (And here’s some suitable background music to listen to while you run your numbers.)
posted by PhineasGage at 7:56 AM on February 10, 2020 [3 favorites]

I couldn't finish this, i got half way through and just ... couldn't any more.
The opening paraagraph of

" There was an extended period of time in my twenties when I didn’t have a job. For most of us, that’s not a big deal. We have our whole lives ahead of us to work, so taking a few months off to “find yourself” can be completely justifiable."

It just set the tone (for me) so badly.

The writers life is already such a comfortable place that their philosophies around money felt alien to me. I didn't grow up thinking "taking a few months off to 'find yourself' can be completely justifiable.".. and I didn't meet anyone who thought like what until I was fortunate to attend University.
posted by Faintdreams at 8:41 AM on February 10, 2020 [3 favorites]

It fascinates me that people who spend so much time and energy thinking about money and its effect on individuals and societies can have such ambiguous ideas about what it actually is in the first place. I can’t think of another human creation that is so enduring yet so strongly resists categorisation
posted by Fiasco da Gama at 12:49 PM on February 10, 2020 [1 favorite]

yeah.. reading this, it seems like a lot of words for basically saying do what you love and live below your means and boom! you're "wealthy". I mean, didn't Charles Dickens tell us basically the same thing in David Copperfield?: Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery. The stuff about power over self, fulfillment surplus etc reminds me of the values orientation of the budgeting software YNAB (basically every dollar has a job that reflects first your obligations and then your priorities and overtime, building your savings in this values-based way, frees up mental overhead of worrying about money allowing you to make ever more conscious decisions about your goals and priorities as opposed to reactive or fear based decisions). The stuff about power over others has some questionable graphics that seem to indicate a greater number of non-rich people are parasites than the rich and I just don't know what to say about that. Still an interesting read tho.
posted by flamk at 11:30 PM on February 12, 2020