We have a problem! Our attitude towards money affects how we act in profound ways. The problem is the variations in our attitude does more to divide us and make it difficult for us to work together to solve the major issues that confront us. People think about money as a manifestation of their perceived lifestyle. Even more profound, it affects how we think about ourselves, our feeling of self-worth. It defines us. Not totally but to a significant degree. In addition there is a moral component to our attitude towards money. Charity is a selfless act, which comes easier to some people more than others. Our charity towards others says a lot about our character. However, we are losing our sense of charity because of the divisiveness. This is so dangerous!
In earlier articles you can see that very large issues were explored and discussed. In thinking about the totally of how to address these and other issues it dawned on me that it’s difficult to discuss these issues with others because we have different personal value systems. Maybe we need to acknowledge that we come from a different place and try to accept and respect other peoples’ value systems before we try to solve major issues that confront us. In an attempt to understand the impact on money on our value system the following perspective is humbly presented.
Individual Value Money may best be explained as a value. We individually place our own value on money in addition to others doing it for us. When we choose to buy one thing rather than something else, we are making a value judgment. Ok, to illustrate: A merchant marks the price on an item for sale. Immediately after seeing that price our brains go into hyper drive either consciously or subconsciously. Do we need it, want it or just like to have it? Is this a reasonable price? Can I afford it? There may be many other questions being posed. Regardless, the set of questions and the internal answers vary widely between people. Just as relevant, is the priority each person puts on each question relative to the other ones being asked before they make the decision to purchase the item. So in the end the merchant’s decision of value came from primarily the cost to them, other overhead costs they need to recoup and then amount they think they can extract from the customer. Merchants are also acutely aware of the time value of money these days. How long will it take to sell this item? It may get damaged, spoil or become unfashionable. Also, faster sales means higher cash flow and even more sales.
So the dance begins between merchants and customers. The merchant places a value on the each item they sell and the customer perceives a value to them. More so than any other time in history, consumers have the ability to compare prices. The one take-away that most people should have is that they can get the same item for significantly less money if they do a bit of research. Consumers may not have access to the actual cost to the merchant but that is irrelevant, they only care about the cost to them and if they can get the “same or better” item cheaper. Some of the power, in negotiations, has been transferred back to the consumer.
Value has another dimension to it – Quality. Some things may perform better, wear longer, have longer shelf life, taste better, look better or solve more problems. We may even be willing to pay more for items of higher quality. Convenience and the time it takes to find the right items may also play into the time we take to do research and how fast we may actually want the item. The decision making process about spending money is complex, changes person to person and depends on circumstances.
Money can be thought of as a method of exchange. Goods and services are valued and exchanged for either other goods or services or some form of currency to be used at a later time. As illustrated, we can accept what others say an item is worth and can buy it; negotiate a different price; or decide not to buy the item at all. Saving money is placing value on the future over the present. So, multiple attitudes about money form a personal “monetary value system” for us. It is a way for us to exert personal power.
Collective Value Another perspective is the individual viewpoint vs. the collective one. Republicans in the U.S. would generally be advocates for individual responsibility while Democrats would emphasize greater social consciousness and responsibility. It’s almost funny how different people from fairly similar environmental experiences adopt such different attitudes. The divide between these two political dogmas seems to be wider than ever. Not because they are, rather because the political leaders want them to be that way. At this point it is a “them vs us” mentality. Fundamentality, the chances of solving major problems has a much better chance of success if people work together finding common ground than finding more things to divide us. If you do not believe that, then you are wasting your time reading any of my articles.
The political situation in the U.S. is dangerous. Let me explain in the context of the subject we have been discussing. The vast majority of people who do not have enough money to survive or will not as they reach retirement age will have no choice about personal responsibility. The country is already in too much debt; has too much unfunded liabilities; too much foreign debt; and when interest rates go up the problem will multiply – it is almost impossible to think about how compromised we are as a country. It will be too late. There will not be more money for social spending and most likely the programs will need to be cut. The divide between rich in poor can only get larger. In most cases the current middle class will get sequenced, probably with more of the middle class ending in poverty.
The wealthy group (the “haves”), are already alienated from the “have-nots”. So much money has been thrown away and wasted that they are divorcing themselves from feeling that they should give more to a system that does not act responsibly or they are plain greedy. Regardless, the concentration of wealth has become obscene and with it political power is getting extremely concentrated in the U.S. and around the world. What message does it send to a rational person when you don’t have enough to eat and someone else has so much they could not spend it in their lifetime?
Rich people can control communications and more importantly the message. The sad reality is that people when they hear something often enough then they believe almost anything. We have been lied to about the reasons for war and millions of people have been killed and their lives ruined due to the fabrications of power. The message is plain. If the U.S. can go into Iraq without consequence, so can Russia go into the Crimea/Ukraine and China into the disputed Pacific Islands? These are the results of concentrated power. This will be the excuse for building and buying more military might. The consequence is fewer resources for the masses and more suffering overall. This is what we are up against!
Working Towards a Solution In the business world, success is measured by profitability, growth and sustainability, together. In order for all three factors to be achieved the attitude and goals of individual employees must align with the corporate goals. The executives must also be adept at defining what strategy will achieve those same success factors. At this point there is not a clear statement of what are the goals of this country but let me suggest that growth and sustainability are two that everyone could accept. It cannot be one at the exclusion of the other.
It is typical that multiple factors must be used to define success. To say that profitability is the only metric of success would lead a corporation to never invest in capital expansion. This would quickly lead to going out of business due to the fact it would lose its customer base if they could not reliably supply product when needed. The best path is to balance the goals and match them to the potential for expansion of the market. In essence balancing multiple factors to achieve a functional design is an engineering challenge. Extreme positions, at best, only lead to short term solutions. Here is an example. A car can be designed for great performance but it might only have a range of 10 miles. To satisfy both goals a large gas tank would be required and some performance would be sacrificed to get greater miles per gallon. This is an example of a trade-off but while also balancing goals.
It may be difficult with how pervasive commercials and the media are in our lives. But I have to hold out hope that we can adopt a better, more sustainable attitude about money. Let’s equate money to happiness in an inverse way. Recently a video made a compelling argument for wealth being defined as “How much you give.” as opposed to “How much you have.” Yes, you can buy another trinket, a thing-a-my-blob, a babble or new gizmo. That same money could change a person’s life; buy life-saving medicine; provide opportunity for a job; provide a life changing experience to a child. Which has more value? There are obvious differences in how money can be used, thereby in its inherent value.
Attitude is so important. Charitable organizations have to be accountable also. We cannot afford to lose faith in these organizations. Unfortunately the real world is that, charitable organizations have become fronts for the greed of individuals and in other cases, a front for terrorist organizations. The sad truth is we must be careful in who we give money. Faith and accountability must be balanced goals. If anyone asks you to just have faith, it’s not enough. Hold them accountable also, always.
The engineering principle would be to build confidence that we are good stewards of our own money as well as others. When we feel it is well spent then it is more reasonable to ask for more when needed, not before. We all must show personal responsibility in both the short and long term. At the same time we should encourage hard work and innovation but not to the extent where wealth and power get overly concentrated. There cannot be a privileged elite class. It’s enough that wealthier people can buy more and nicer things without giving them a free pass on laws that apply to everyone else.
In closing, the metric for success for each of us (individually and collectively) is a balanced approach with multiple shared goals – growth, sustainability, accountability and responsibility. Do not let the pundits, commentators, news people, politicians or commercials divide us. We need each other more than ever.