Andy is a sociology major. He wants to do good. He cares about social justice and dreams of
finding a solution for societal problems, such as drug addiction and
homelessness.
For his birthday, one year, Andy
receives a lottery ticket as a gift. He
is hesitant, but politely accepts and finds, to his bewilderment, that it is a
winning ticket.
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| Well, what a surprise... |
Andy is now the not-so-proud
recipient of $50 million, compiled through crushed hopes and desperate
irresponsibility. His friends suggest
buying a Lamborghini and a beach house and his family recommends investing in
biotech, yet Andy knows that, in order to balance the scales of justice, he
must find a way to use this stroke of fortune to help those in need.
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| Tempting... |
He realizes, contrary to his
friends’ fantasies, that spending a limited sum of money on luxuries will
ultimately result in losing both his money and
his luxuries. Due to taxes,
insurance, and the inevitable amount of upkeep a mansion and a sports car would
require, it would take not only a gigantic but a continuous flow of income to
maintain such a lifestyle. Money is fluid, his parents tell him.
His parents’ advice is to find a
way for his money to make money: That
is, if he wants to keep his fortune, he must find a way to produce a fortune. With so much money, they say, it should be
easy enough to invest it in ways that will at least maintain his wealth for the
future. Andy is a thoughtful young man,
and this advice strikes him as practical, but ultimately self-serving. He decides to conjure up a plan to use the money
in a way that will benefit mankind, beyond himself, yet in a way that will last
like any wise investment.
He considers a few ideas that he
has entertained, in the past as only daydreams, yet now very much within his
reach:
He imagines that, were he simply to
give away his whole fortune to the poor and needy, it would flow away even more
quickly than if it were to be poured into a garage full of Lamborghinis; not
because the poor are principally irresponsible, but because money is gone once
it is spent. $50 million could feed an
entire country for a year, maybe five years, then it would be gone, and both he
and the poor would be back where they started.
Perhaps, he reasons, he could build
schools and start scholarships and fund free education. Perhaps, he reasons, he reasons too much,
because the schools he would build would be to empower their students. Knowledge indeed is power, and the investment
he would put into it would likely remain stable, but what kind of power is it? Education would improve lives by providing
skills which would increase chances of employment but, without the opportunity
for employment, skills are useless. He
himself is educated and were it not for the grim indifference of luck, he would
still be working a part-time job for which he is quite over-qualified. Education seemed like a noble cause at first,
but Andy would like to do more than create candidates for unemployment.
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| Model Employees |
If education empowers, but is
useless without opportunity, he must create opportunity, he thinks. But how does one do that? The needy are in need of a living; the poor
are poor not because there is want of charity, but because they cannot support themselves. Andy is convinced that the answer must be to
create jobs. This is a very difficult
problem and he is beginning to understand why nobody else has solved the issue
of poverty yet. To create employment
effectively, he must become an employer, he decides. To become an employer, he must secure a
labor-based income for his employees; to do that involves business and
production. The more Andy tries to
figure out how to help people, the more his thoughts become entwined in schemes
very far from his initial ideas.
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| Happy little workers, working happily... |
He does not want to believe that
creating a business is the surest way to help those in need. Businesses create value, but they do not
generate money. When a business makes a
profit, it is because it takes in more money than its products are worth: What is an income to one is an expenditure to
another. To create a business would only
add one more competitor to the market and might ultimately disadvantage as many
people as it would help.
This much is only speculation, Andy
realizes, but he discovers that, when it comes to business in general, some
things are certain. One is that the most
successful businesses merely supply
what is in high demand and that actually producing
those things are, in practice, secondary to making a profit from them. He also realizes that demand is not often the same as need: The things we need, like food and clothing,
are actually quite common and cheap, whereas the things we demand (i.e. want
and pay for) are usually more expensive and hence encourage much business to
supply. If business is the answer, then
in order to benefit those who cannot produce what they need, he must supply
what others demand, so that he can turn the needy unemployed into employed
demanders.
To Andy, this seems to be
counter-intuitive, and his suspicion is that it seems counter-intuitive because
it is counter-productive. Why would it
not be possible simply to let people produce what they need? Why could he not somehow turn the needy
directly into producers? Perhaps, he
thinks, he should figure out what it is exactly that people need. He does not think it fair to strive only for
the survival of the needy; he wants to encourage a decent quality of life for
them as well. There is certainly a
global spectrum of poverty, which ranges from starving expatriates to dispossessed
addicts, and even fifty million dollars will not be able to help them all. Andy begins to become depressed by
the thought of a sound fortune with nothing to spend it on. He decides that five of those dollars can go
towards a beer and he makes his way to the local pub.
Later at the pub, Andy beholds a
striking revelation as he leaves a fiver on the bar in exchange for his frosty
beverage. He had not even thought of the
transaction before he made it, but his new net worth has put transactions in a
new light for him; he himself has no way of getting anything, whatever the need
or demand, without paying for it. He
could buy virtually whatever he wants, but he still has to buy it. Why?
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| Socialism: "You work, we'll decide what you need." |
Andy goes for a long walk to mull
over this question. Certainly money
makes getting things very easy, so long as one has money, but this is a problem
for those who do not have money: The
things that one needs are almost always made for the specific purpose of selling
them. So, if one has no money, he cannot get what he needs. His last five-dollar purchase has made Andy
realize that not even he, with all of his money, can change the way this
works. Necessities cost money, which one
makes through employment. He thinks of
a type of employment in which employees are given necessities directly as
compensation, but this seems very disagreeable to him, almost like
slavery. Money creates a convenient
flexibility of purpose; the choice of what one buys is up to the one who buys
it and employers do not have to decide for their employees what they should or
should not have. Of course, employers
could not give their employees anything but money anyway, because whatever an
employer supplies or produces is usually not a necessity, as Andy has already
noticed. So, he figures that standard
employment works best as a money cycle:
Each business sells things to its customers and gives a share of the
money to its employees.
In this money cycle, though, each
kind of poverty finds its own kind of problem.
He could fly into some famine-stricken third-world village and hand out
hundred-dollar bills, but the money would be useless in a place where there is
nothing to buy. He could approach the
homeless in any industrialized city and hand out hundred-dollar bills, but they
would likely not spend that money wisely.
He could go to either place, address the people’s needs, and buy things
for them, but there are already organizations which do precisely that. It seems to become more clear to him, but
Andy feels that tapping into a money cycle is quite a roundabout way of
promoting social justice. After all his
thinking, he is convinced that people should be able to produce what they need,
even if the world is too complicated to let that happen now.
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| When beach houses don't seem like a problem... |
As far as what they need, he knows that rations and a tent do not lift a man
out of poverty. He now knows too,
however, that three square meals and an apartment do not make a man rich, and
neither does a Lamborghini and a beach house.
He knows which of these he would prefer to have, but fifty million
dollars have convinced him that the value of money is not relative (as he used
to think) but arbitrary. Money only goes
as far as those who want it; that is, it is only good for buying things, but what he buys and why he buys it is up to him and, then again, sometimes it is
not. He has no control over what his
money means, just as the poor have no control over what their lack of money
means. If he wants to liberate the poor
(and himself) he must liberate them from that which makes them poor; and it is
not money. It is the inability to
produce what they need: It is their
absolute dependence on others to supply them with what they need for a price which
others determine.
