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“Since 1988, members of Congress have had their pay…”

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MOANING MOGULS

“The past few years have been very good to Stephen Schwarzman, the chairman and C.E.O. of the Blackstone Group, the giant private-equity firm. His industry, which relies on borrowed money, has benefitted from low interest rates, and the stock-market boom has given his firm great opportunities to cash out investments. Schwarzman is now worth more than ten billion dollars. You wouldn’t think he’d have much to complain about. But, to hear him tell it, he’s beset by a meddlesome, tax-happy government and a whiny, envious populace. He recently grumbled that the U.S. middle class has taken to “blaming wealthy people” for its problems. Previously, he has said that it might be good to raise income taxes on the poor so they had “skin in the game,” and that proposals to repeal the carried-interest tax loophole—from which he personally benefits—were akin to the German invasion of Poland.

Schwarzman isn’t alone. In the past year, the venture capitalist Tom Perkins and Kenneth Langone, the co-founder of Home Depot, both compared populist attacks on the wealthy to the Nazis’ attacks on the Jews. All three eventually apologized, but the basic sentiment is surprisingly common. Although the Obama years have been boom times for America’s super-rich—recent work by the economists Emmanuel Saez and Thomas Piketty showed that ninety-five per cent of income gains in the first three years of the recovery went to the top one per cent—a lot of them believe that they’re a persecuted minority. As Mark Mizruchi, a sociologist at the University of Michigan and the author of a book called “The Fracturing of the American Corporate Elite,” told me, “These guys think, We’re the job creators, we keep the markets running, and yet the public doesn’t like us. How can that be?” Business leaders were upset at the criticism that followed the financial crisis and, for many of them, it’s an article of faith that people succeed or fail because that’s what they deserve. Schwarzman recently said that Americans “always like to blame somebody other than themselves for a failure.” If you believe that net worth is a reflection of merit, then any attempt to curb inequality looks unfair.

That’s not how it’s always been. A century ago, industrial magnates played a central role in the Progressive movement, working with unions, supporting workmen’s compensation laws and laws against child labor, and often pushing for more government regulation. This wasn’t altruism; as a classic analysis by the historian James Weinstein showed, the reforms were intended to co-opt public pressure and avert more radical measures. Still, they materially improved the lives of ordinary workers. And they sprang from a pragmatic belief that the robustness of capitalism as a whole depended on wide distribution of the fruits of the system.

Similar attitudes prevailed in the postwar era, as Mizruchi has documented. Corporate leaders formed an organization called the Committee for Economic Development, which played a central role in the forging of postwar consensus politics, accepting strong unions, bigger government, and the rise of the welfare state. “At the very top, corporate leaders were much more moderate and pragmatic, and, because that’s where national politics were, they were very influential,” Mizruchi said. Corporations supported policies that might have been costly in the short term in order to strengthen the system as a whole. The C.E.D. called for tax increases to pay for the Korean War and it supported some of L.B.J.’s Great Society. As Mizruchi put it, “They believed that in order to maintain their privileges, they had to insure that ordinary Americans were having their needs met.”

That all changed beginning in the seventies, when the business community, wrestling with shrinking profits and tougher foreign competition, lurched to the right. Today, there are no centrist business organizations with any real political clout, and the only business lobbies that matter in Washington are those pushing an agenda of lower taxes and less regulation. Corporate profits and C.E.O. salaries have in recent years reached record levels, but there’s no sign of a return to the corporate statesmanship of the past (the occasional outlier like Warren Buffett notwithstanding). And that’s one big reason that it’s become impossible for Washington to get things done, even on issues of bipartisan interest.

If today’s corporate kvetchers are more concerned with the state of their egos than with the state of the nation, it’s in part because their own fortunes aren’t tied to those of the nation the way they once were. In the postwar years, American companies depended largely on American consumers. Globalization has changed that—foreign sales account for almost half the revenue of the S&P 500—as has the rise of financial services (where the most important clients are the wealthy and other corporations). The well-being of the American middle class just doesn’t matter as much to companies’ bottom lines. And there’s another change. Early in the past century, there was a true socialist movement in the United States, and in the postwar years the Soviet Union seemed to offer the possibility of a meaningful alternative to capitalism. Small wonder that the tycoons of those days were so eager to channel populist agitation into reform. Today, by contrast, corporate chieftains have little to fear, other than mildly higher taxes and the complaints of people who have read Thomas Piketty. Moguls complain about their feelings because that’s all anyone can really threaten. 

ILLUSTRATION: CHRISTOPH NIEMANN”

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Your Lifestyle Has Already Been Designed (The Real Reason For The Forty-Hour Workweek)

 

By David Cain / raptitude.com

 

“Well I’m in the working world again. I’ve found myself a well-paying gig in the engineering industry, and life finally feels like it’s returning to normal after my nine months of traveling.

Because I had been living quite a different lifestyle while I was away, this sudden transition to 9-to-5 existence has exposed something about it that I overlooked before.

Since the moment I was offered the job, I’ve been markedly more careless with my money. Not stupid, just a little quick to pull out my wallet. As a small example, I’m buying expensive coffees again, even though they aren’t nearly as good as New Zealand’s exceptional flat whites, and I don’t get to savor the experience of drinking them on a sunny café patio. When I was away these purchases were less off-handed, and I enjoyed them more.

I’m not talking about big, extravagant purchases. I’m talking about small-scale, casual, promiscuous spending on stuff that doesn’t really add a whole lot to my life. And I won’t actually get paid for another two weeks.

In hindsight I think I’ve always done this when I’ve been well-employed — spending happily during the “flush times.” Having spent nine months living a no-income backpacking lifestyle, I can’t help but be a little more aware of this phenomenon as it happens.

I suppose I do it because I feel I’ve regained a certain stature, now that I am again an amply-paid professional, which seems to entitle me to a certain level of wastefulness. There is a curious feeling of power you get when you drop a couple of twenties without a trace of critical thinking. It feels good to exercise that power of the dollar when you know it will “grow back” pretty quickly anyway.

What I’m doing isn’t unusual at all. Everyone else seems to do this. In fact, I think I’ve only returned to the normal consumer mentality after having spent some time away from it.

One of the most surprising discoveries I made during my trip was that I spent much less per month traveling foreign counties (including countries more expensive than Canada) than I did as a regular working joe back home. I had much more free time, I was visiting some of the most beautiful places in the world, I was meeting new people left and right, I was calm and peaceful and otherwise having an unforgettable time, and somehow it cost me much less than my humble 9-5 lifestyle here in one of Canada’s least expensive cities.

It seems I got much more for my dollar when I was traveling. Why?

A Culture of Unnecessaries

Here in the West, a lifestyle of unnecessary spending has been deliberately cultivated and nurtured in the public by big business. Companies in all kinds of industries have a huge stake in the public’s penchant to be careless with their money. They will seek to encourage the public’s habit of casual or non-essential spending whenever they can.

In the documentary The Corporation, a marketing psychologist discussed one of the methods she used to increase sales. Her staff carried out a study on what effect the nagging of children had on their parents’ likelihood of buying a toy for them. They found out that 20% to 40% of the purchases of their toys would not have occurred if the child didn’t nag its parents. One in four visits to theme parks would not have taken place. They used these studies to market their products directly to children, encouraging them to nag their parents to buy.

This marketing campaign alone represents many millions of dollars that were spent because of demand that was completely manufactured.

“You can manipulate consumers into wanting, and therefore buying, your products. It’s a game.” ~ Lucy Hughes, co-creator of “The Nag Factor”

This is only one small example of something that has been going on for a very long time. Big companies didn’t make their millions by earnestly promoting the virtues of their products, they made it by creating a culture of hundreds of millions of people that buy way more than they need and try to chase away dissatisfaction with money.

We buy stuff to cheer ourselves up, to keep up with the Joneses, to fulfill our childhood vision of what our adulthood would be like, to broadcast our status to the world, and for a lot of other psychological reasons that have very little to do with how useful the product really is. How much stuff is in your basement or garage that you haven’t used in the past year?

The real reason for the forty-hour workweek

The ultimate tool for corporations to sustain a culture of this sort is to develop the 40-hour workweek as the normal lifestyle. Under these working conditions people have to build a life in the evenings and on weekends. This arrangement makes us naturally more inclined to spend heavily on entertainment and conveniences because our free time is so scarce.

I’ve only been back at work for a few days, but already I’m noticing that the more wholesome activities are quickly dropping out of my life: walking, exercising, reading, meditating, and extra writing.

The one conspicuous similarity between these activities is that they cost little or no money, but they take time.

Suddenly I have a lot more money and a lot less time, which means I have a lot more in common with the typical working North American than I did a few months ago. While I was abroad I wouldn’t have thought twice about spending the day wandering through a national park or reading my book on the beach for a few hours. Now that kind of stuff feels like it’s out of the question. Doing either one would take most of one of my precious weekend days!

The last thing I want to do when I get home from work is exercise. It’s also the last thing I want to do after dinner or before bed or as soon as I wake, and that’s really all the time I have on a weekday.

This seems like a problem with a simple answer: work less so I’d have more free time. I’ve already proven to myself that I can live a fulfilling lifestyle with less than I make right now. Unfortunately, this is close to impossible in my industry, and most others. You work 40-plus hours or you work zero. My clients and contractors are all firmly entrenched in the standard-workday culture, so it isn’t practical to ask them not to ask anything of me after 1pm, even if I could convince my employer not to.

The eight-hour workday developed during the industrial revolution in Britain in the 19th century, as a respite for factory workers who were being exploited with 14- or 16-hour workdays.

As technologies and methods advanced, workers in all industries became able to produce much more value in a shorter amount of time. You’d think this would lead to shorter workdays.

But the 8-hour workday is too profitable for big business, not because of the amount of work people get done in eight hours (the average office worker gets less than three hours of actual work done in 8 hours) but because it makes for such a purchase-happy public. Keeping free time scarce means people pay a lot more for convenience, gratification, and any other relief they can buy. It keeps them watching television, and its commercials. It keeps them unambitious outside of work.

We’ve been led into a culture that has been engineered to leave us tired, hungry for indulgence, willing to pay a lot for convenience and entertainment, and most importantly, vaguely dissatisfied with our lives so that we continue wanting things we don’t have. We buy so much because it always seems like something is still missing.

Western economies, particularly that of the United States, have been built in a very calculated manner on gratification, addiction, and unnecessary spending. We spend to cheer ourselves up, to reward ourselves, to celebrate, to fix problems, to elevate our status, and to alleviate boredom.

Can you imagine what would happen if all of America stopped buying so much unnecessary fluff that doesn’t add a lot of lasting value to our lives?

The economy would collapse and never recover.

All of America’s well-publicized problems, including obesity, depression, pollution and corruption are what it costs to create and sustain a trillion-dollar economy. For the economy to be “healthy”, America has to remain unhealthy. Healthy, happy people don’t feel like they need much they don’t already have, and that means they don’t buy a lot of junk, don’t need to be entertained as much, and they don’t end up watching a lot of commercials.

The culture of the eight-hour workday is big business’ most powerful tool for keeping people in this same dissatisfied state where the answer to every problem is to buy something.

You may have heard of Parkinson’s Law. It is often used in reference to time usage: the more time you’ve been given to do something, the more time it will take you to do it. It’s amazing how much you can get done in twenty minutes if twenty minutes is all you have. But if you have all afternoon, it would probably take way longer.

Most of us treat our money this way. The more we make, the more we spend. It’s not that we suddenlyneed to buy more just because we make more, only that we can, so we do. In fact, it’s quite difficult for us to avoid increasing our standard of living (or at least our rate of spending) every time we get a raise.

I don’t think it’s necessary to shun the whole ugly system and go live in the woods, pretending to be a deaf-mute, as Holden Caulfield often fantasized. But we could certainly do well to understand what big commerce really wants us to be. They’ve been working for decades to create millions of ideal consumers, and they have succeeded. Unless you’re a real anomaly, your lifestyle has already been designed.

The perfect customer is dissatisfied but hopeful, uninterested in serious personal development, highly habituated to the television, working full-time, earning a fair amount, indulging during their free time, and somehow just getting by.

Is this you?

Two weeks ago I would have said hell no, that’s not me, but if all my weeks were like this one has been, that might be wishful thinking.

Photo by joelogon

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June 25, 2014 · 5:11 pm

Alan Watts on Money vs. Wealth

I started by quoting sections of the article and then halfway through I realized I was quoting every other paragraph, so here’s the whole article:

 

“by 

“The moral challenge and the grim problem we face is that the life of affluence and pleasure requires exact discipline and high imagination.”

“What would you do if money was no object?”pioneering British philosopher Alan Watts, who popularized Zen teachings in the West, asked inone of his most memorable lectures. And yet, despite our best efforts not to worry about it, money is an object — so much so that it renders the question all the more urgent and pressing today, in our age of growing corporate greed coupled with increasing income inequality. Watts revisits the issue in greater depth in an essay titled “Wealth Versus Money,” found in the altogether fantastic 1970 anthology Does It Matter? Essays on Man’s Relation to Materiality(public library) — a poignant exploration of our tendency to confuse money with wealth, a manifestation of our more general inclination to mistake symbol for reality, which Watts considers “the peculiar and perhaps fatal fallacy of civilization.”

Watts writes:

Civilization, comprising all the achievements of art and science, technology and industry, is the result of man’s invention and manipulation of symbols — of words, letters, numbers, formulas and concepts, and of such social institutions as universally accepted clocks and rulers, scales and timetables, schedules and laws. By these means, we measure, predict, and control the behavior of the human and natural worlds — and with such startling apparent success that the trick goes to our heads. All too easily, we confuse the world as we symbolize it with the world as it is.

 

Alan Watts, early 1970s (Image courtesy of Everett Collection)

 

Among our most toxic symbol-as-reality tricks springs from the concept, use, and pursuit of money:

Money is a way of measuring wealth but is not wealth in itself. A chest of gold coins or a fat wallet of bills is of no use whatsoever to a wrecked sailor alone on a raft. He needs real wealth, in the form of a fishing rod, a compass, an outboard motor with gas, and a female companion. But this ingrained and archaic confusion of money with wealth is now the main reason we are not going ahead full tilt with the development of our technological genius for the production of more than adequate food, clothing, housing, and utilities for every person on earth.

Watts goes on to make a prediction — idealistic at the time, bittersweetly naive in retrospect — that “if we get our heads straight about money,” by the year 2000 “no one will pay taxes, no one will carry cash, utilities will be free, and everyone will carry a general credit card.” It’s worth noting that while some of it came true, and some might soon as we shift away from traditional currency, we have simply replaced one monetary currency with another, rather than evolving to embody Watts’s vision of redefining wealth altogether. He returns to the vital distinction:

Money is a measure of wealth, and we invent money as we invent the Fahrenheit scale of temperature or the avoirdupois measure of weight… By contrast with money, true wealth is the sum of energy, technical intelligence, and raw materials.

Considering the question of the national debt — “a roundabout piece of semantic obscurantism” — Watts argues that we go into debt, as individuals and as nations, precisely because we confuse money with wealth, the worst symptom of which is war:

No one goes into debt except in emergency; and therefore, prosperity depends on maintaining the perpetual emergency of war. We are reduced, then, to the suicidal expedient of inventing wars when, instead, we could simply have invented money — provided that the amount invented was always proportionate to the real wealth being produced…

If we shift from the gold standard to the wealth standard, prices must stay more or less where they are at the time of the shift and — miraculously — everyone will discover that he has enough or more than enough to wear, eat, drink, and otherwise survive with affluence and merriment.

 

Illustration from ‘How People Earn and Use Money,’ 1968. Click image for details.

 

And yet, Watts recognizes, there is enormous cultural resistance to such an awareness, one reinforced by our material monoculture:

It is not going to be at all easy to explain this to the world at large, because mankind has existed for perhaps one million years with relative material scarcity, and it is now roughly a mere one hundred years since the beginning of the industrial revolution. As it was once very difficult to persuade people that the earth is round and that it is in orbit around the sun, or to make it clear that the universe exists in a curved space-time continuum, it may be just as hard to get it through to “common sense” that the virtues of making and saving money are obsolete.

Understanding the distinction between money and wealth, Watts argues, would help us realize that “there are limits to the real wealth that any individual can consume” — that we can’t really “drive four cars at once, live simultaneously in six homes, take three tours at the same time, or devour twelve roasts of beef at one meal.” Acknowledging the semi-serious facetiousness of this picture, he writes:

I am trying to make the deadly serious point that, as of today, an economic utopia is not wishful thinking but, in some substantial degree, the necessary alternative to self-destruction.

The moral challenge and the grim problem we face is that the life of affluence and pleasure requires exact discipline and high imagination.

 

Illustration from ‘How People Earn and Use Money,’ 1968. Click image for details.

 

Reflecting on how easily we become habituated to comfort, affluence, and pleasure, Watts echoes Bertrand Russell’s lament — “What will be the good of the conquest of leisure and health, if no one remembers how to use them?” — and notes:

Affluent people in the United States have seldom shown much imagination in cultivating the arts of pleasure.

He paints an alternative picture for cultivating the art of leisure in its proper form — an idea glimmers of which we begin to see in the groundswell of today’s maker culture:

A leisure economy will provide opportunity to develop the frustrated craftsman, painter, sculptor, poet, composer, yachtsman, explorer, or potter that is in us all — if only we could earn a living that way. Certainly, there will be a plethora of bad and indifferent productions from so many unleashed amateurs, but the general long-term effect should be a tremendous enrichment of the quality and variety of fine art, music, food, furniture, clothing, gardens, and even homes — created largely on a do-it-yourself basis.

And yet what prevents us from truly cultivating such an economy is a fundamental disconnect. He admonishes:

Here’s the nub of the problem. We cannot proceed with a fully productive technology if it must inevitably Los Angelesize the whole earth, poison the elements, destroy all wildlife, and sicken the bloodstream with the promiscuous use of antibiotics and insecticides. Yet this will be the certain result of the technological enterprise conducted in the hostile spirit of a conquest of nature with the main object of making money.

 

Illustration from ‘How People Earn and Use Money,’ 1968. Click image for details.

 

While this problem has been tragically exacerbated since Watts’s day, it’s worth remembering that our choices — our individual, everyday choices — matter. But equally important, Watts points out, are the choices made by those who hold power in the world, both commercial and political. Noting that “many corporations — and even more so their shareholders — are unbelievably blind to their own material interests,” Watts writes:

It is an oversimplification to say that this is the result of business valuing profit rather than product, for no one should be expected to do business without the incentive of profit. The actual trouble is that profit is identified entirely with money, as distinct from the real profit of living with dignity and elegance in beautiful surroundings…

To try to correct this irresponsibility by passing laws (e.g., against absentee ownership) would be wide of the point, for most of the law has as little relation to life as money to wealth. On the contrary, problems of this kind are aggravated rather than solved by the paperwork of politics and law. What is necessary is at once simpler and more difficult: only that financiers, bankers, and stockholders must turn themselves into real people and ask themselves exactly what they want out of life — in the realization that this strictly practical and hard–nosed question might lead to far more delightful styles of living than those they now pursue. Quite simply and literally, they must come to their senses — for their own personal profit and pleasure.

What it takes to return to our senses, Watts argues, is to reconsider our illusion of the separate ego and acknowledge our interconnectedness with the world in all its material and metaphysical manifestations:

Coming to our senses must, above all, be the experience of our own existence as living organisms rather than “personalities,” like characters in a play or a novel acting out some artificial plot in which the persons are simply masks for a conflict of abstract ideas or principles. Man as an organism is to the world outside like a whirlpool is to a river: man and world are a single natural process, but we are behaving as if we were invaders and plunderers in a foreign territory. For when the individual is defined and felt as the separate personality or ego, he remains unaware that his actual body is a dancing pattern of energy that simply does not happen by itself. It happens only in concert with myriads of other patterns — called animals, plants, insects, bacteria, minerals, liquids, and gases. The definition of a person and the normal feeling of “I” do not effectively include these relationships. You say, “I came into this world.” You didn’t; you came out of it, as a branch from a tree.

It all comes full circle as we begin to see that this notion of the artificial ego is at the root of our mistaking money for wealth and symbol for reality:

The greatest illusion of the abstract ego is that it can do anything to bring about radical improvement either in itself or in the world. This is as impossible, physically, as trying to lift yourself off the floor by your own bootstraps. Furthermore, the ego is (like money) a concept, a symbol, even a delusion — not a biological process or physical reality.

Does It Matter? Essays on Man’s Relation to Materiality is a wonderful and soul-expanding read in its entirety. Complement it with Watts on happiness and how to live with presenceour media gluttony, and how the ego keeps us from becoming who we really are.”

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June 6, 2014 · 4:53 pm

Yes, summer job paid tuition back in ’81, but then we got cheap

By Danny Westneat

Seattle Times staff columnist

Originally published June 22, 2013 at 7:28 PM | Page modified June 24, 2013 at 11:15 AM

“People tell me you used to be able to work one job, the entire summer, and cover your entire education. I’m not sure how long ago that was — I have a hard time believing it. — Stephan Yhann, 21, current UW student

Put down your smartphones, kids, and gather around Uncle Danny. I’m here to tell you a little something about these yarns from the days of yore, these tales so tall and preposterous.

What’s most amazing about them is: They’re true! You really could work a summer job and pay for your education.

I saw it myself. And I’m only 48 years old!

OK, I say “only,” as if 48 isn’t all that old. Which, let’s be blunt, it is. But it’s not like I’m reaching back to the 1930s here. Just the ’80s. Depressing, maybe, but hardly the Depression.

Yet in the early 1980s, when I was about to head off to college, I worked jobs at Kentucky Fried Chicken and later at a rubber-parts factory, where I got paid $3 and $6 an hour. With no skills whatever, I made $120 to $240 a week.

Sounds like beer money only. But here’s the part that will really freak out you kids today: a year of tuition and fees at the University of Washington in, say, 1981, was $687. It was similar for other public colleges around the nation.

That’s not a misprint. There’s no missing digit. Even a crappy job like slinging chicken at KFC could pay for that year’s UW tuition, and most of next year’s, too.

Today? At $10 an hour you’d have to work 1,250 hours to cover the UW’s $12,500 tuition (more, once you take out taxes). In a 12-week summer, that’s more than 100 hours a week.

What really made me feel ancient is that the 1981 UW student guide shows the Med school charged only $1,029 a year back then. Today: $28,040!

Now, I didn’t go to the UW. But I’m going down Husky memory lane because last week The Seattle Times featured a crop of harried UW students looking rueful and broke. The story said skeptical state legislators often say how “they worked their way through college. And then they ask: Why don’t students do that today?”

Of all our delusions, we old farts cling to this bootstrap one the most. We worked our way up on sweat and chicken grease, we say. Can’t this generation? What’s wrong with them?

What’s wrong is that after we got ours, we cut it off for them.

The reason a summer at KFC could pay for a year of UW med school in 1981 isn’t that we were so hardworking and industrious. It’s that taxpayers back then picked up 90 percent of the tab. We weren’t Horatio Algers. We were socialists.

Today, the public picks up only 30 percent of UW tuition, and dropping.

How we milked the public university system in this state and then starved it will go down as the great badge of shame of my generation and the one before mine, the baby boomers. Affordable college made us. Once made, we wouldn’t pay even a two-cent per can soda-pop tax to give that same gift to anybody else.

So, kids, the unbelievable tales of yore are true. Except the part about rugged individualism — that is baloney. Due to the allure of this myth, however, you’ll get no help from us. You’re on your own.

You can have a lecture on the virtues of hard work, though. No charge.

Danny Westneat’s column appears Wednesday and Sunday. Reach him at 206-464-2086 or dwestneat@seattletimes.com”

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July 11, 2013 · 3:30 pm

How to Worry Less About Money | Brain Pickings

http://www.brainpickings.org/index.php/2013/05/13/how-to-worry-less-about-money/

by 

“What Goethe can teach us about cultivating a healthy relationship with our finances.

The question of how people spend and earn money has been a cultural obsession since the dawn of economic history, but the psychology behind it is sometimes surprising and often riddled with various anxieties. In How to Worry Less about Money (public library) — another great installment in The School of Life’s heartening series reclaiming the traditional self-help genre as intelligent, non-self-helpy, yet immensely helpful guides to modern living, which previously gave us Philippa Perry’s How to Stay Sane, Alain de Botton’s How to Think More About Sex, and Roman Krznaric’s How to Find Fulfilling Work — Melbourne Business School philosopher-in-residenceJohn Armstrong guides us to arriving at our own “big views about money and its role in life,” transcending the narrow and often oppressive conceptions of our monoculture.

He begins with a crucial distinction, the heart of which echoes James Gordon Gilkey’s 1934 advice on how not to worry. Armstrong writes:

This book is about worries. It’s not about money troubles. There’s a crucial difference.

Troubles are urgent. They ask for direct action. … By contrast, worries often say more about the worrier than about the world.

[…]

So, addressing money worries should be quite different from dealing with money troubles. To address our worries we have to give attention to the pattern of thinking (ideology) and to the scheme of values (culture) as these are played out in our won individual, private existences.

While modern money-advice tends to fall into two main categories — how to get more money and how to get by on less — Armstrong points out that this bespeaks our culture’s fixation on troubles rather than worries. He writes:

This is a problem because the theme of money is so deep and pervasive in our lives. One’s relationship with money is lifelong, it colors one’s sense of identity, it shapes one’s attitude to other people, it connects and splits generations; money is the arena in which greed and generosity are played out, in which wisdom is exercised and folly committed. Freedom, desire, power, status, work, possession: these huge ideas that rule life are enacted, almost always, in and around money.

He draws an analogy from the philosophy of teaching, which distinguishes between training and education:

Training teaches how to carry out a specific task more efficiently and reliably. Education, on the other hand, opens and enriches a person’s mind. To train a person, you need know nothing about who they really are, or what they love, or why. Education reaches out to embrace the whole person. Historically, we have treated money as a matter of training, rather than education in its wider and more dignified sense.

Indianapolis Newsboys buying brass checks in a newspaper office, 1908

The U.S. National Archives, public domain

 

Underpinning our money worries, Armstrong argues, are four main questions that have far less to do with our financial standing than with psychoemotional and social factors — questions about why money is important to us, how much money we need to achieve what’s important to us, what the best way to acquire that money is, and what our economic responsibilities to others are in the course of acquiring and using that money. We’ll never overcome our money worries, he argues, unless we first recognize those underlying questions:

Our worries — when it comes to money — are about psychology as much as economics, the soul as much as the bank balance.

Key among Armstrong’s strategies for alleviating such worries is developing a good relationship with money, which parallels human-to-human dynamics:

One thing that’s characteristic of a good relationship is this: you get more accurate at assigning responsibility. When things go wrong you can see how much is your fault and how much is the fault of the other person. And the same holds when things go well. You know that part of it is your doing and part depends on the contribution of your partner.

This model applies to money. When things go well or badly, it’s partly about what you bring to the situation and partly about what money brings. What money brings is a certain level of spending power.

What you bring to this relationship includes imagination, values, emotions, attitudes, ambitious, fears, and memories. So the relationship is absolutely not just a matter of pure economic facts of how much you get and how much you spend.

In discussing research indicating that more money, after a certain threshold, doesn’t mean more happiness, Armstrong offers a necessary definition of happiness:

When we talk about happiness, what do we have in mind? Probably a mixture of buoyancy and serenity; you feel elated but safe.

The relationship money has to these attributes, he argues, is “real but diminishing.” While money can buy the accoutrements of buoyancy — chocolate, weekend getaways, expensive shoes — many people feel unhappy despite having these. His explanation, echoing the philosophy of Alan Watts, leads to the obvious conclusion:

Money can purchase the symbols but not the causes of serenity and buoyancy. In a straightforward way we must agree that money cannot buy happiness.

Market scene, 1922

The Field Museum Library, public domain

 

Since Armstrong’s main argument is premised on the idea that our culture is geared toward addressing troubles rather than amplifying well-being, which parallels the disconnect that Martin Seligman observed in the field of psychology when he founded the positive psychology movement, it comes as no surprise that Armstrong’s key construct in solving the conundrum mirrors Seligman’s philosophy of flourishing over “happiness.” Indeed, Armstrong argues that while serenity and buoyancy are appealing, they fall short of reflecting what people really want out of life:

Most people realize that they really need to do things for other people. There is a deep fear that one’s life will be lived in vain — without making a contribution, or a benign difference, to the lives of others.

[…]

Flourishing means getting on with the things that are important for you to do, exercising your capacities, actively trying to “realize” what you care about and bring it into life. But these activities involve anxiety, fear of failure and setbacks, as well as a sense of satisfaction, occasional triumphs and moments of excitement.

And yet this is in no way a motion to flatten the full dimensionality of the human experience:

A good life is still a life. It must involve a full share of suffering, loneliness, disappointment and coming to terms with one’s own mortality and the deaths of those one loves. To live a life that is good as a life involves all this.

While the things money can secure — like power, influence, and access to resources — may not be shortcuts to serenity and buoyancy, Armstrong argues, they are inextricably linked to flourishing by enabling you to pursue the things that are important to you and, in the process, to contribute to the lives of others. Here, the relationship between amount of money and potential for flourishing doesn’t flatline the way it does in a more narrow conception of happiness:

Armstrong’s key point, however, is that while this correlation of growth might be directly proportional, money isn’t a cause of flourishing but an ingredient in it, a mere resource with which to build the life we want, catalyzed by virtue:

Money brings about good consequences — helps us live valuable lives — only when joined with “virtues.” Virtues are good abilities of mind and character.

Reminiscent of Ben-Franklian virtues like temperance, frugality, and moderation is another essential skill in alleviating our money worries — the ability to distinguish between wants and needs. The need-desire distinction, Armstrong suggests, is useful in warding off mere desires, like the longing for the latest shiny gadget, even if it’s of little utilitarian value, or that sleek new bike, even if the old one works perfectly fine.

If we want to be wise about money we should resist the impulse to follow our desires and concentrate instead on getting what we need.

Need is deeper — bound up with the serious narrative of one’s life. “Do I need this”? is a way of asking: how important is this thing, how central is it to my becoming a good version of myself; what is it actually for in my life? This interrogation is designed to distinguish needs from mere wants. And that’s a good distinction to make.

But it is important to see that this is not the same as the “modest versus grand” distinction. Our needs are not always for the smaller, lesser, cheaper thing.

The ultimate purpose of purchases, he argues, is to help us flourish. His strategy for mastering the needs/wants balance thus rests on not conflating this dichotomy with familiar ones like basic/refined (“a distinction about the level of complexity of an object”) or cheap/luxurious (“a distinction to do with price and demand”). Instead, he recommends a seemingly counter-intuitive approach — to consider our needs first, without taking price into account.

But, ultimately, Armstrong points out that the things most essential to our flourishing — despite what our monoculture might dictate — are often unrelated to material goods:

The crucial developmental step in the economic lives of individuals and societies is their ability to cross from the pursuit of middle-order goods to higher-order goods. Sometimes we need to lessen our attachment to the middle needs like status and glamor in order to concentrate on higher things. This doesn’t take more money; it takes more independence of mind.

Still, the material and the spiritual are inextricably linked:

There are quite profound reasons why we should care simultaneously about having and doing. Both are connected to flourishing.

What we do with our lives is obviously central to who we are. What we expend our mental energy on, what we put our emotional resources into, where we deploy courage or daring or prudence or commitment: these are major parts of existence and are inevitably much connected with work and earning money. And we need these parts of existence in order to find proper application in activities that deserve our best efforts. We don’t’ want to reserve our central capacities for the margins and weekends of life.

Despite certain cultural stereotypes, Armstrong points out that, precisely because of these parallel forces, doing well and doing good don’t have to be mutually exclusive, and there could in fact exist a straight positive correlation between intrinsic worth and extrinsic, material reward:

At an individual level, one is trying to find a way of making this happen in one’s own life. But because intrinsic worth isn not just what is good for me, but what is actually good, this is a public service as well. It’s not greedy to want to make quite a lot of money — if you want to make it as a reward for doing things that are genuinely good for other people.

In considering yet another essential difference — that between price and value — Armstrong makes a key distinction, which most of us intuit but can rarely articulate with such eloquence:

Price is a public matter — a negotiation between supply and demand. A thing’s price is set in competition. So the price of a car is determined by how much some people want it, how much they are willing to pay, and how ready the manufacturer is to sell. It’s a public activity: lots of people are involved in the process, but your voice is almost never important in setting the price.

Value, on the other hand, is a personal, ethical and aesthetic judgment — assigned finally by individuals, and founded on their perceptiveness, wisdom and character.

Armstrong finds a certain artfulness to the issue of managing our money-worries:

Ultimately, one is cultivating an art — one of the minor political arts, the art of domestic finance. By saying that it is an art, one is getting at the idea that there are multiple motives and rewards, which are integrated. There is anaesthetic or order — a physical beauty that is connected to neatness and clarity — like the beauty of the periodic table, or the elegance of a mathematical equation, or the rightness of a note in a sonata. It is a classical beauty.

In a chapter considering the problems of the rich, who are able to use money to fulfill their desires, Armstrong writes, with a wince and a wink at the “hedonic treadmill”:

Money does not liberate people in the way that we assume it must.

[…]

There is a very imperfect relationship between desire and flourishing. Desire aims at pleasure. Whereas the achievement of a good life depends upon the good we create. And the opportunity to follow whatever desire one might happen to have is the enemy of the effort, concentration, devotion, patience and self-sacrifice that are necessary if we are to achieve worthwhile ends.

Armstrong goes on to outline a number of practical strategies for improving our relationship with money and thus mastering our worries, concluding with a wonderful anecdote of a man who epitomized that relationship at its healthiest:Goethe.

‘The civilized ideal: elegance and devotion to work.’

Jonathan Joseph Schmeller, Goethe in His Study Dictating to His Secretary John, 1831

 

From his many writings about his own experiences, we know that he was determined to get well paid for his work. He came from a well-off background but sought independence. He switched careers, from law to government adviser so as to be able to earn more (which made sense then; today the trajectory might be in the opposite direction. He coped with serious setbacks. His first novel was extremely popular but he made no money from it because of inadequate copyright laws. Later, he negotiated better contracts. He was very competent in financial matters and kept meticulous records of his income and expenditure. He liked what money could buy — including … a stylish house-coat (his study has no heating). But for all this, money and money worries did not dominate his inner life. He wrote with astonishing sensitivity about love and beauty. He was completely realistic and pragmatic when it came to money but this did not lead him to neglect the worth of exploring bigger, more important concepts in life.

Complement How to Worry Less about Money with The School of Life’s How to Find Fulfilling Work and How to Stay Sane.

Quoted text excerpted from How to Worry Less about Money by John Armstrong. Copyright © 2012 by The School of Life.”

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The Unluckiest Generation: What Will Become of Millennials?

 APR 26 2013, 11:31 AM ET

AP

“The nearly 3.7 million American babies born in 1982 weren’t special, except to their families. But in the eyes of demographers, they were categorically different from the 3.6 million Americans born in 1981. They were the first members of a new club: Generation Y.

This so-called millennial cohort, the largest generation in American history, landed in the cradle during an awful recession, learned to walk during the Reagan recovery, came of age in the booming 1990s, and entered the labor market after the Sept. 11 attacks and before the Great Recession, the two tragedies of the early 21st century. They’ve survived an eventful few decades.

Yet nothing in those vertiginous 30 years could have prepared them for the economic sledgehammer that followed the collapse of the housing market in 2007-08. And the aftereffects, economists fear, may dog them for the rest of their working lives.

Generation Y is the most educated in American history, but its education came at a price. Average debt for graduates of public universities doubled between 1996 and 2006. Students chose to take it on because they expected to find a job that paid it off; instead, they found themselves stranded in the worst economy in 80 years. Young people who skipped college altogether have faced something worse: depressed wages in a global economy that finds it easier than ever to replace jobs with technology or to move them overseas.

Finding a good job as a young adult has always been a game of chance. But more and more, the rules have changed: Heads, you lose; tails, you’re disqualified. The unemployment rate for young people scraped 18 percent in 2010, and in the past five years, real wages have fallen for millennials–and only for millennials.

Adulthood, Deferred
It costs a lot to be a grown-up. It means more than saying “please” or holding doors for the elderly, although those are nice to do. It also means moving out of your parents’ home, renting a place of your own, paying for food and clothes, buying a car, getting married, having children, buying a house–all the trappings and expenses of a middle-class life.

These life stages drive a consumer economy. “Housing IS the Business Cycle” is the memorably brief title of a 2007 study by University of California (Los Angeles) economist Edward E. Leamer showing that the housing market both presages recessions and bolsters recoveries. A generation that buys new homes is a generation that pushes the economy forward.

But millennials have responded with a collective “No, thanks.” Or at least “Not yet.” More than one in five Americans ages 18-34 told Pew Research Center pollsters last year that they’ve postponed having a baby “because of the bad economy.” The same proportion said they were holding off marriage until the economy recovered. More than a third of 25- to 29-year-olds had moved back in with their parents. Millennials have been scorned as perma-children, forever postponing adulthood, or labeled with that most un-American of character flaws: helplessness.

Infographic

The case for pessimism is depressingly easy to make. Even after the economy recovers, the penalty for graduating into a recession may still apply to young people’s wages. When Lisa Kahn, an economist at Yale, studied how the 1981-82 recession affected the lifetime earnings of young workers who graduated during the 1980s, she found that for every percentage-point increase in total unemployment, the starting incomes of new graduates slipped by as much as 7 percent. Two decades later, because of their bad timing, these graduates had taken a $100,000 hit to their cumulative earnings.

If this pattern applies to millennials, the consequences will be grim for an economy that relies on big-ticket items such as houses and cars. Half of a typical family’s spending goes to transportation and housing. But Americans ages 21-34 bought only 27 percent of the new vehicles sold in the United States in 2010, compared with 38 percent in 1985; from 2008 to ’11, only half as many young Americans as a decade earlier acquired their first mortgage. Having been rejected by the economy, millennials are in turn rejecting cars and houses–the pillars of the modern consumer economy.

Life Gets Better (and Cheaper)
Still, do millennials really count as the unluckiest generation since World War II? It’s true that wages haven’t grown this slowly in decades, and globalization and technology have held down wages for millions of young workers to an unprecedented extent.

But in some ways, millennials are also the luckiest.

For one thing, they’re living in an age of affordable abundance. Food has never been cheaper as a share of the typical American family budget. The price of apparel is also falling relative to wages. The Internet, while no substitute for gainful employment, has made many things cheaper that used to take extra income to buy–communication, notably, including private information-sharing and professional collaboration. It has made casual retail cheaper (and more convenient). It has also made mass entertainment cheaper, especially music and amateur videos. These commodities have grown cheaper, in part, by replacing and lowering the cost of human work.

That we live in a golden era of cheap essentials and entertainment might register as cold statistical comfort for the millions of unemployed millennials who watch their dreams fade with every passing year. This group can hope for another mitigating factor: time. The U.S. economy is expected to continue its recovery–unemployment falling, wages rising, debts slowly getting repaid, life going on as it did before 2008. In an economy that is now creating 200,000 private-sector jobs a month, the total debt held by young adults has shrunk to its lowest level in 15 years.

Even if millennials haven’t read about these trends, they seem to feel them in their bones. The Pew study that found twentysomethings moving back home also reported that nine in 10 millennials said they already earn (or have) enough money, or expect to in the future. If optimism has any currency, the millennials may well outgrow their miserable circumstances and bequeath to their own children a more prosperous nation than their parents left for them. They’re the best-educated generation in American history, moving into their prime working years while home prices remain fairly cheap. Is that so unlucky?

Still, their timing couldn’t be unluckier. The past 30 years have seen enduring income stagnation capped by an economic collapse. Average household wealth nearly doubled between 1983 and 2010, the Urban Institute recently found, but younger generations shouldn’t expect the same. They already lag their parents in wealth (by 7 percent) at the equivalent age, and “now, stagnant wages, diminishing job opportunities, and lost home values may be merging to paint a vastly different future for Gen X and Gen Y,” Eugene Steuerle and three coauthors concluded. “Despite their relative youth, they may not be able to make up the lost ground.””

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