Quaker Plain VI: Money — The Wealth Didn’t Go Anywhere
by Dr. Bruce Arnold
[This is the first of, I think, two posts on money and finances. Both will be short, but have something important to say that I rarely see elsewhere. They will not seem terribly Quakerly; I won’t be using typical Quakerese because I’m not addressing issues that are specific to the Society of Friends. And so some of my Quaker readership may not find them as interesting as the posts, for instance, on plain dress. This is just a guess, and I would like to be wrong, for these posts are of as much importance, and directly relevant to the heart of plainness, as any others I’ve posted. Which is why I’m giving them the “Quaker Plain” topical title that has prefaced all the other posts in this series.]
Since late 2007, the world has struggled with a vast, deep and long recession. Somehow, it seems as though there is less to go around. For those who lost jobs or homes, that is accurate to a point. That point will be discussed further down. For many of us in industrialized countries, the “less to go around” is a matter of perception. Perhaps even of hypnotism. We’ve been sold a bill of goods.
Let’s understand one thing: the media — all media, not just the “mainstream media” which my conservative friends like to decry — have self-interest as their primary concern. For large media outlets, of no matter what stripe, the principal purpose is not to publish the news but to make money for the stock-holders. I’m sure not the first one to notice this; my oldest brother’s first journalism professor said that, if I have the story straight, on the first day of class. For the kind of micro-media, like this blog, which the Internet has made more powerful and ubiquitous than ever before, the self-interest lies in self-expression. I wouldn’t do this if I didn’t want to share what is on my mind, and I expect that is true of micro-media in general. If I have some influence in some small way, I’m glad, but I have no inflated ideas along that line.
And what does this have to do with money, or the recession? Well, in order to sell newspapers, to use the old-fashioned phrase, they have to publish stories with drama and human interest. Doom and gloom are big sellers. “If it bleeds, it leads.” Not much incentive for advertisers to buy ads if no one reads your copy.
They can’t just totally make up stories, though. (Okay, tabloids do, and the New York Times on occasion.) There has to be some kernel of truth. Most of the drama comes in how you spin it. So, there was a huge bubble in the real estate market, for instance, in which properties were way over-valued and mortgages lent to people who were way over-risky, and when that bubble popped it had ripple effects — tidal wave effects perhaps — which eventually had an impact on all sectors of the economy. That really happened. The rest, however, is spin. Much of the “disaster” took place because people started acting like a disaster had taken place. Any clear observer of the stock market, to give only one example, knows that psychology has an enormous impact on the stock market. When people get scared, values go down. The companies themselves didn’t change; the perception changed.
This applies to the economy as a whole. Strong emotional reactions such as fear or anger have impacts on our behavior, including our buying/saving/investing choices, and that adds up to real effects on the macro economy.
But the wealth didn’t go anywhere, only the faith in it did.
Wealth is not money. Money is just a marker. An important marker, to be sure; I’ll address that in the next post. But money is not wealth. Wealth is found in three things: natural resources, such as minerals and oil and arable land and water; the infrastructure, the tools we use to do things with natural resources, from the factory to the railroad to the carpenter’s hammer; and most importantly, in the creativity, intelligence, and hard work of people. That’s it. That is what real wealth is composed of. Lack of any of the three produces conditions which are more conducive to poverty than to wealth, although an abundance of two can overcome a deficiency in one. Look at Japan and its relative lack of natural resources; they more than make up for that in their brilliant application of the second two.
Let’s take this understanding of wealth, then, and apply it to the current recession. What receded? As the title of this post says, the wealth didn’t go anywhere. When stocks drop and real estate values plunge, it doesn’t mean that the land is worth less or the factory is suddenly unable to produce. Something else has happened. And, while I am no economist and cannot describe the intermediate financial steps by which this plays out, what has changed in the main is faith. Faith in the system. Faith that needs will be met, that there will be enough to go around.
Faith that was misplaced in the first place. Because if your faith is in money you are in real trouble already, even when you have a lot of it. If your faith is in wealth, you are a little better off but not much. If your faith is in a loving and caring Higher Power, you are much more likely to make the kinds of choices that will get you and others through this situation. I emphasize “and others” because selfless service is an important facet of the kind of faith I mean. So much of our economic life is done in hope of reward. I like getting paychecks. But the things we do for each other, without seeking any payback, are immensely important in life as it is lived (not as it is reported in the media), and do not show up in any economic measurement because they fly below the radar.
Let me say that I am addressing the situation as it pertains to industrialized countries here. In the non-developed world, or whatever we are calling it these days (do we still say Third World?), the conditions of political and economic domination by both internal and external forces are such that much of this does not apply. The part on faith does, though. I wish I could be more explicit about that, because it is remarkably important, but I just don’t have enough information to do a credible job. If you look for it, the information is out there.