Money Matters

The hope of the following words is to bring some common sense to the strange times in which we find ourselves, ask some straightforward questions, and encourage dialogue about where we are heading and why.

Lately we have seen governments putting unprecedented amounts of money into banks. It was not so long ago that we were hearing that relatively paltry sums in comparison were not available for new hospitals, better schools, decent housing or affordable transport. If these types of companies are at the core of capitalist society, surely they should take the rough with the smooth. If some go under, that’s the way it goes. As long as proper guarantees are in place for people’s savings, would we really miss a few banks?

When a bank does go under though, people’s savings disappear, but not their mortgage debt. This is suspect at best. If a ‘normal’ company goes under, everything disappears: debts, assets, jobs. Why are banks a special case?

Another form of saving is pensions. Many people contribute to a pension in the hope of having a decent quality of life in retirement. So we go without through our working lives to save up all this money, so there is a big nest egg at the end of it. But when we die, it disappears. Shouldn’t there be a way that lets us live from the interest on this sum as a pension, and then our families, rather than the bank, could have the pot when we have gone?

Each generation has a lot more money than the previous, in terms of the actual amount in your pocket (rather than buying power). If you go out for the evening, you may take somewhere in the region of £100, whereas in 1960 the same amount was an annual salary. (You can insert $, £, € as you please – it’s really all the same these days.)

If a house could have been bought for £2000 in the 1960s, but a similar house would now cost in the region of £250,000, then money has devalued 125 times. Similarly for salaries, an average annual salary of £200 in 1960, and a typical annual salary now being around £25,000, again devalued by 125 times.

This broadly tallies with the general consensus of money devaluing by 10 times every 30 years or so through the twentieth century. So if money is devaluing so much, why is the situation usually portrayed that we are better off than the previous generation, and them before that? It seems to be the other way around. If money is in some kind of semi-controlled tail-spin, is the idea of currency itself living on borrowed time?

Whenever economists raise the idea of introducing more money into circulation during economic hard times, as it has been recently, it is usually considered a dangerous move; a short term solution. But we have seen that each generation has more money than the previous, so there is more money around, albeit much devalued. So there must exist a rate by which governments dictate the amount of money in circulation is increased, as a general ongoing thing. Who sets that rate, and why is it never mentioned?

The notion of a bank having a sale, seems odd, and confirms it as a commodity, rather than a service. Without wishing to be too naïve, it should remain, be considered, and be structured and operated, as a service.

Profit has become the sole focus of achievement. This leads to a distortion in our consideration. Instead of operating a business to provide a useful service, and make a reasonable living off that for you and your family – a system of trade that has been working fine for thousands of years - when profits are down we are told it has been a bad year. But if there are profits at all, that means that the salaries have been paid, rent, bills, inward investment to improve the company, all covered. Does not that constitute an achievement. By divorcing profit from running a business, we are shifting our focus away from the really important stuff – how we live our lives, and the means to achieve that.

Pursuing solely profit means we forget about the implications of how that profit is generated. We are witnessing its effects: destabilizing economies and currencies. This has real effects on people’s lives: loss of jobs, loss of homes, loss of hope of supporting ourselves and our families to a reasonable level of quality of life. If some people wish to play at investors, shouldn’t it be in a controlled environment, where the effects cannot seep out into the real world?

Basics of subsistence should be protected from profiteering. Nobody denies anyone a reasonable profit, but when the gap between reasonable and unreasonable becomes the sole focus of conducting business, we have descended to a place where we have lost respect for our fellow citizens; local, regional, national and global. Food, local transport, bank services, and utilities are all the necessities of our lives.

I do not want to spend hours comparing rates, searching for better deals, getting calls at all times of the day and night offering me cheaper this, that and the other. We get drawn into a small level of difference, but it is expanded by marketeers to seem like a whole world of difference. For example, unless you are talking about substantial sums of money, like a mortgage, a couple of fractions of difference on the interest rate you get on your savings, or a slightly cheaper insurance quote (that does not make me jump for joy), is not going to have a significant effect on your life. Put a value on your time, it is that that we are short of.

We seem to chase the idea of having more money, almost as a goal in itself, rather than thinking what we actually want it for. Money must remain a means to an end.

We are being drawn away from the things that really matter. Take your kids to the park, meet some friends for lunch, make love to your partner, read a book (and no, not a self help, make more money, live to be 300 years old book. A novel, for pleasure, to learn about something interesting).

Perhaps these sobering times can remind us to think about the quality of our lives; the things, people and ideas that we want to be part of that life.


Yours awaiting condescending platitudes from those we are supposed to trust,
but hoping for something more intelligent,

The Ingenu

‘Disclaimer’
This article is written with no specialist knowledge whatsoever; it’s just drawn from what is going on around us. Take a look for yourself.

It is not advice. If you want to sue me, great. You can have all my debt.