August 2009 Welcome - Charles - Thoughts - Making money

"We wish him neither wit nor wealth - nor yet a rope to hang himself" is the only line I remember from a song I once tried to sing (before I was invited to leave the choir). The song* is old and the words have changed meaning somewhat. Wit then referred to mental skill, intellect, intelligence etc. and is best illustrated by its absence as in half-wit, meaning a fool or idiot. In a similar way, wealth has also shifted its meaning from well-being and health to money. This latter change in turn shows how we have come to link money and well-being, and has, incidentally, led many to believe that having money equates to well-being.

Making money, as opposed to earning it, has become a first-world ambition, a goal for both individual and corporate life. A pity really, since it is impossible. Fundamentally while money can be moved, acquired, discovered or recovered, it can not be made. It is in reality a conceptual value applied to material things or services but depends for its existence on those things or services. Without them, it does not exist. And things ultimately depend on the stuff around us or what we can reform that stuff to be. Coal is not produced, it is dug out of the ground. Food is basically grown or harvested, not made. Value can be added: coal delivered in a bag to you door is of more value than in a coal seam hundreds of metres underground. The additional value is the work someone has put into achieving what you want.

One trick of apparently making money is to gain something of value from what someone else has or is doing. Workers usually benefit employers more than themselves. We usually call the difference profit. Generally when a person or company gets richer, it is because someone else is getting poorer. Note these are comparative terms. Typically a worker will not get as rich as him employer, but may well get richer than his neighbour. If everyone in an enterprise gets the same, no one in the enterprise gets richer than anyone else. Another trick is to buy ownership of something, wait until that something's value appears to have increased and then sell the ownership again. Buying and selling shares in a company, is one example, where absolutely nothing of real value is added - no work, no material, nothing. Yet money seems to be made.

That money is simply an applied value rather than something with intrinsic worth is demonstrated clearly during stock-market crashes. Billions (of pounds, dollars, yen, whatever) can be instantly wiped off corporation valuations - far faster than anything material can be moved, or removed. Factories still exist, raw materials are still in place, fuel is still available, the workforces are still behaving as before, but... money has been lost. Where's it gone? Nowhere. Because it doesn't actually exist. It was connected with a perceived ability to "make money" which is suddenly not perceived anymore.

This disguising of removing resource from the less to the more powerful by calling it "making money" applies to individuals, to corporations and to nations. Surely it is time for people to wake up and realise that money isn't real, and making it is often robbery with more or less victims?

Since writing this "thought", I have found that I am not the only crazy guy in town. There are some wise ones who have studied money and its problems. Where I have tended to look on what might be called the overall confidence trick of the financial world, they look more at what actually happens in economic terms. Read how banks make fools of us (still available on the Wayback Machine), and why I am perhaps wrong in asserting that money can't be made.

Another website worth a look is The Money Reform Party where the arguments are calm and simple to understand.

Also find out why the old religions banned usury (lending anything at interest). Other pages on those websites are worth exploring as they have a lot more to say on the subject!

* The words of the song "Here's a Health unto His Majesty" can be found on the Mudcat folk song site.