I just finished reading Douglas Adams’ posthumous book, _The Salmon of Doubt_, and I kept remembering this phrase, early in _The Hitchhiker’s Guide to the Galaxy_:
“This planet has — or rather had — a problem, which was this: most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movements of small green pieces of paper, which is odd because on the whole it wasn’t the small green pieces of paper that were unhappy.” (Adams, “Prologue”, _Hitchhiker’s_, 1).
This reminded me that money is a myth, a noble lie, of society. Looking at a dollar bill, it says, on one side, “In God We Trust,” and, on the other side in teeny tiny print “This note is legal tender for all debts, public and private”. Money exists as a common form of exchange to bridge that negative gap between buyer and seller.
But “buyer” and “seller” only exist in a society where people have decided to devote their talents and natural abilities to one form of work instead of being a jack-of-all-trades and try to supply *all* of their individual wants by themselves. In other words, we’re not self-sufficient hermits, making our own clothes, making our own house, and catching and growing our own food.
We devote our working lives producing one kind of product and/or service and *trust* that other people out there will produce a product and/or service that we need but don’t have the time nor the talent to produce on our own because we *trust* that those people will want the surplus of what we produce because they have needs, too. To quote the Scottish Enlightenment philosopher Adam Smith, in his _Wealth of Nations_:
“But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them” (Ch.2, 118), and “being able to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he may have occasion for, encourages every man to apply himself to a particular occupation, and to cultivate and bring to perfection whatever talent or genius he may possess for that particular species of business” (Ch. 2, 120).
What I like about Smith’s explanation is that:
1) a human being’s first love is himself or herself, and there’s nothing wrong with that — afterall, if we don’t love ourselves to make sure that we don’t *die*, then how can we be there to take care of other people? and
2) if one works in a large society such that one does a specific job long enough, over time one will produce a surplus because one can’t consume his or her own products fast enough, and his neighbor will have the same problem, but with a different kind of product. The solution: exchange each other’s surplus products.
In small societies, one can do that with simple bartering. But the larger the societies, the more specialized the workers tend to be, and so simple bartering gets to be horribly complicated. The solution: an agreed upon middleman, called “money,” which doesn’t have real value on its own. Instead, people (including the public people called “government”) give meaning to money, trusting that these small pieces of paper will stand for the surplus bread or surplus shoes or surplus textbooks that he or she has made and wants to trade.
Money is just a medium of exchange between buyer and seller. “Wealth” is “all goods that have a monetary or exchange value” (Random House College Dictionary). Money can only come into existence because of the lag in exchange (and that lag of exchange from the buyer’s point of view is “debt”) of surplus goods between buyer and seller.
Wealth, logically speaking, can only exist in 1) the surplus of goods (products and/or services) and 2) the trust that what we produce in surplus somebody will want to buy and, likewise, the trust that what our neighbor produces will be something that we want to buy.
Surplus of goods and trust in the market of exchange are what builds wealth, and that surplus and trust comes from us. Once we forget that the power to build wealth comes from the work of our talent and genuis, from our brains and our bodies, and that it’s our *trust* in our own power to build wealth that keeps the whole thing going, then we become those miserable folk that Douglas Adams was talking about, wondering why we’re working so hard for “small green pieces of paper” and going nowhere.
Okay, folks — have a happy Independence Day!