Economics, Money and Life

Andrew Atkin:

You would think that money was like any other unit of value. That is, it should respond to the supply to demand function. Meaning, the more money you have the less it should be worth to you, per unit. So the difference in personal value between earning $90,000 pa and $60,000 pa should be small compared to the difference between earning $60,000 and $30,000.

In terms of material living standards that is true. Money is indeed worth less the more you have. In turn the more money you have, the more the other aspects of your life should be worth to you in relative terms. In theory, with greater wealth your focus on more spare time and better human company etc, should grow as a natural priority. Yet curiously, countless people do not think or respond like that. Often the more money they get, the more they want, and the more they give themselves to the pursuit of it.

The question is why? Psychological needs amplify a purely rational relationship to earning money. Such as the need to have what others have to avoid feeling as though you're missing out; or the need to use money to display status. But again these variables have nothing to do with the raw material value of money - they just amplify our drive to obtain it. 

Curiously, when you look at the fact that the per-unit value of money should shrink in the wealthy world, as it is ever-more abundant, social control might then become difficult. How do you pay people off to do what you want them to do, when they hardly even care for the extra money you're offering? Maybe this is why our society puts so much pressure on the young to 'be all they can be', which boils down to threatening to make them feel inadequate if they don't climb to their personal peak in the commercial world...

Are we instinctively fighting against people making otherwise materialistically rational decisions that we don't want them to make, because it's in our interest to amplify the tax-take? You can wonder. Societies always pressure people to live up to characteristics that they need and/or want. It's written in the abstract value systems.

There's another powerful variable western society has introduced, that works to make people want to work harder than it's worth. And that is anti-discrimination laws...

As money in the wealthy world becomes more of societal game, as opposed to a raw material needs game, then the most potent thing you can do to make people "wage slaves" is negatively regulate their social environment in response to their wealth. In western society today, if you don't make enough money you might be forced to live amongst the underclass, because you are not then allowed to build a new residential development that outright blocks undesirable people. In our world, you need to live in a somewhat rich neighborhood to avoid the underclass.

In short, we have made money a prerequisite for being part of a given social class. I do not believe this is an intrinsically natural phenomena. It comes from the need to specifically use money to discriminate.

However, I believe this could soon come to an interesting end (see video below). With the development of low-cost large-scale private communities, based anywhere in the world, where most people can work online, and most critically where people can form exclusive communities by choosing each other via online interviews (think, Tinder for groups) and not on the basis of money, then the heart of the modern status game could turn on its head.

The result could be that your social world is more determined by who you are, as opposed to how much money you earn. This could lead to an implosion in the need to make more money than you would otherwise want, leading to a better rationalisation of life choices, and ultimately of course a higher real standard of living.  

Indeed, it's interesting that in richer societies we see a greater gender-separation in work-life choices, as compared to poorer societies. Women in rich societies tend to choose lower-paying 'feminine' careers ahead of higher-paying male-dominated careers, because they would rather do the work that they enjoy doing when they no longer have to worry about basic survival. Again, I believe we could see a radical amplification of that basic trend--for both men and women--as people's lives become less dominated by material needs and, so importantly, as more opportunity to directly regulate their social environments without wealth becomes hopefully manifest, so they are in turn free to live a more materialistically rational life.