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Wed, 03 Jan 2018:

Money is just misplaced effort.

Most of my waking hours are spent working on things which are not part of my long term goals in life. There is a implied social contract that if I turn my hours into money, there's some way to use it to accomplish those goals much more efficiently than if I worked on the goals on my own in those hours.

I've been thinking about where all I misplace my efforts, but for extremely good reasons.

Some of these are collective efforts - things that only works at scale, like having plumbing, cell phones or traveling over paved roads. Others are purely about an experience encountering a small time period, where I wouldn't learn enough about caring for a new born in the period in which the child remains a new born. Though in some cases, it is entirely unclear where that line is - buying fresh vegetables and cooking them is only a tiny shade more independent than sitting down to eat them at a restaurant. Whether I fix a leaky tap or change a tire, those seem a bit more relevant to my life, but that is certainly at a balance of interdependence - if it takes someone two days to show up to fix either, I'd better know the basics at least.

There are other factors as well - there are skills which I do have, which do not help me towards my direct goals at all. I can sit and reason through probabilities & causalities. This is not a general talent, but something which has been nurtured into life by constant practice. I spend my days debugging badly structured code that already works well enough to keep. Arguably, in a world where that is of little value, I might not be doing this, but that is besides the point.

Sitting and thinking is an activity I can transmute into food, shelter and clothing - without knowing how to grow, build or weave. Getting better at thinking clearly is obviously helping me live better, but there's a certain emptiness is striving to be better at something that is indirectly linked to your life with a giant lag.

Money is necessary to this process, because I don't really interact with a fixed number of people. The people who benefit from my bit-twiddling aren't the same people who will give me food - money is an exchange of value, but one which is meaningful only because of the transaction.

The only true purpose of money is to be spent in return for someone else misplacing their efforts to my benefit. And to spread that across time - to be able to utilize your future effort today by borrowing or to plan for a period of time when you might be incapable of significant effort.

Adam Smith said it much more clearly about the pinmakers, but sometimes you want to do more than just make pins cheaper every year?

The reason I had to write this down is because I'm getting unmotivated about working on these misplaced non-goals in my life, which I have to do just so that I could meet the actual goals, through this long chain of people who are also here for the same reason.

The most pitiful among men is he who turns his dreams into silver and gold.
                -- Khalil Gibran

posted at: 01:39 | path: /observations | permalink | Tags: , ,

Tue, 05 Aug 2008:

Money is what money does.

Living in the suburbs with an economic major for a dad, I was subjected to long drives filled with words like Price, Cost, Wealth and Money. Slightly different, shadow images of the same thing - Value. Transactions, hoards and transformations there-of. But this system of Value, has no absolutes - it's a general theory of economic relativity. The essential backbone of which is the equation of effort to value and in some essence has been as revolutionary to me as Einstein's has been to 19th century physics.

$$$: Money is worth what it buys you. The only reason it exists is because other people accept it and provide you services/goods. That'd be why it is infact called currency, because that is the most important property for money. But the exchange of money look like a zero-sum game - you gain only as much as I give. But transactions of value have to be a non-zero sum game. For a stable economic system, the buyer & seller should both go home with more than what they started with.

!Zero: The nonzero sum aspect of trade, is what set that juggernaut rolling in the first place. But to acquire more value than the other gives up, requires for an inequity of value in exchange of money. What I give up in return for money is more valuable to the person paying for it than what she pays for it. And thus the ship sails into the next port.

The Pin: The pin maker is a skilled man. All day long, he makes pins. It would take you an entire day's work to make a pin. He makes ten pins a day. If he demanded half-a-day's worth to make a pin for you, would you pay? I assume you would, after cribbing a lot about the rising cost of living, how they don't make them like they used to and how your children no longer behave. But you'd pay, take the pin & spend the rest of the day doing something fun.

And here's where the inequity of effort and value kick in. It is an equation, for sure, but one of the multipliers in it is skill at a task. The price you pay is fair for something if it takes more effort to do it yourself - DIY solutions excepted. The foundation is laid for the segregation of society into guilds, based on skill & strata based on the multiplier of effort to value. Productivity is no longer a measure of effort, but a combination of various other things.

The world we see around us is the effect of such a run-away economic chain reaction - where all's fair in the price war. There's nothing you'd buy at a loss, whether you profit in fluid currency is another matter altogether. You're built to be a winner at the game of value, but transmuting it into gold is another skill altogether. But you still got what you paid for.

On the other hand, there's probably one born every minute, who hasn't.

PS: this entry initially was penned in my notebook, when people protested about Apple dropping the iPhone price

The use of money is all the advantage there is to having money.
                -- B. Franklin

posted at: 09:12 | path: /observations | permalink | Tags: , ,