WEBVTT NOTE 11. Does Money Taint Everything? 1 00:00:00.000 --> 00:00:07.000 Chapter 11. Does Money Taint Everything? May 8, 2008. 2 00:00:07.000 --> 00:00:13.000 Let's pull this sentence out of the civic pieties of our time and see what's wrong with it. 3 00:00:13.000 --> 00:00:20.000 We should all volunteer our time in charitable causes and give back to the community in a labor of love. 4 00:00:20.000 --> 00:00:29.000 We can't argue with the instruction here, or the sediment behind it. There is nothing wrong with giving and sacrifice. 5 00:00:29.000 --> 00:00:39.000 My argument is with the choice of language. It contains a word and three phrases, the common usage of which can be highly misleading. 6 00:00:39.000 --> 00:00:47.320 Voluntary. The word volunteer is used to describe a person who does things in service of others, 7 00:00:47.320 --> 00:00:53.280 and we all know the intent of the term. We speak of volunteering all the time. The United 8 00:00:53.280 --> 00:00:59.640 States has what is called the voluntary sector, which is supposed to refer mostly to non-profit 9 00:00:59.640 --> 00:01:06.120 organizations that elicit non-remunerative employment. But think of the literal meaning 10 00:01:06.120 --> 00:01:12.800 Making a voluntary or volition, the act of making a conscious and non-coerced choice 11 00:01:12.800 --> 00:01:15.040 to do something. 12 00:01:15.040 --> 00:01:21.160 The opposite is to be forced to do something, so prisoners are forced to sleep on mats, 13 00:01:21.160 --> 00:01:27.600 people in the army are forced to march here and there, or you and I can volunteer to sleep 14 00:01:27.600 --> 00:01:31.560 on a mat or to march here and there. 15 00:01:31.560 --> 00:01:37.280 It's true that people serving soup to the poor are not forced to be there. But in what 16 00:01:37.280 --> 00:01:45.480 sense does introducing wages or profits or money generally change the nature of choice? 17 00:01:45.480 --> 00:01:51.980 Are the paid administrators of homeless shelters any less volunteers? Not at all. They are 18 00:01:51.980 --> 00:01:58.680 making a conscious choice to serve the poor, just as the unpaid volunteers are making a 19 00:01:58.680 --> 00:02:05.000 A Conscious Choice to be there. They are all free to do something else. 20 00:02:05.000 --> 00:02:11.360 And let's expand this to the for-profit sector. No one who works in retail or software or 21 00:02:11.360 --> 00:02:16.920 any other industry in a free economy is being forced to do anything. They are all there 22 00:02:16.920 --> 00:02:23.480 by choice, a result of having evaluated a variety of options and chosen one option over 23 00:02:23.480 --> 00:02:26.600 for every other possible option. 24 00:02:26.600 --> 00:02:32.600 The opportunity foregone here is what might be called the cost of that choice. 25 00:02:32.600 --> 00:02:38.240 The doctor who administers medicine, the lawyer who writes a legal brief, the salesman who 26 00:02:38.240 --> 00:02:45.600 sells you a suit, the clerk who rings up the total, these are all volunteers. 27 00:02:45.600 --> 00:02:48.520 The investment banker is a volunteer. 28 00:02:48.520 --> 00:02:53.900 The introduction of money into exchanges, and all actions charitable and profitable, 29 00:02:53.900 --> 00:02:59.080 are exchanges, doesn't change anything about the nature of the action. 30 00:02:59.080 --> 00:03:03.780 It doesn't switch it from voluntary to forced. 31 00:03:03.780 --> 00:03:07.240 This is not merely a terminological dispute. 32 00:03:07.240 --> 00:03:14.020 There is an ideological import to the use of the term voluntary to describe non-remunerative 33 00:03:14.020 --> 00:03:16.200 activities. 34 00:03:16.200 --> 00:03:23.120 It evidences a bias against the cash economy, as if monetary exchange and profit is a tainted 35 00:03:23.120 --> 00:03:29.160 motive, whereas the removal of money makes an action pure and beyond reproach. 36 00:03:29.160 --> 00:03:32.160 This is completely wrong. 37 00:03:32.160 --> 00:03:36.360 It's time we demystified the role of money in society. 38 00:03:36.360 --> 00:03:38.640 It serves a useful purpose. 39 00:03:38.640 --> 00:03:43.260 Under barter, goods and services are exchanged directly for each other. 40 00:03:43.260 --> 00:03:49.840 That works for primitive economies, but once complexities appear, barter has its limits. 41 00:03:49.840 --> 00:03:55.220 You can't exchange a cow for an egg or an auto plant for a hat, because these goods 42 00:03:55.220 --> 00:03:57.180 aren't divisible. 43 00:03:57.180 --> 00:04:03.660 You need money to serve as a proxy for goods and services to exchange later. 44 00:04:03.660 --> 00:04:09.260 Money also serves the vital function of permitting economic calculation, so you can know if exchanges 45 00:04:09.260 --> 00:04:16.620 are profitable, non-wasteful and productive, or yield losses, wasteful and non-productive. 46 00:04:16.620 --> 00:04:22.740 Thus is the institution of money not inherently corrupt or tainted. It is highly useful and 47 00:04:22.740 --> 00:04:29.580 necessary and arises merely in response to the desire of people to cooperate. 48 00:04:29.580 --> 00:04:35.220 Give Back to the Community Give back to the community is a phrase used 49 00:04:35.220 --> 00:04:40.300 is to implore people who have been successful in business to donate their time, talent and 50 00:04:40.300 --> 00:04:46.660 treasure to some cause besides their business. There is no arguing with the injunction to 51 00:04:46.660 --> 00:04:53.100 serve others, but there is a problem with the phrase, give back. It implies that people 52 00:04:53.100 --> 00:04:58.260 with money have taken something from others. But presuming that the business person has 53 00:04:58.260 --> 00:05:04.200 been successful through enterprise, their wealth comes not from taking, but from cooperating 54 00:05:04.200 --> 00:05:34.200 Let's see how this works. When you need milk in a hurry, you dash to the convenience store and pick up a carton. You put it on the counter and the clerk says what you owe. At that moment, there is a calculation made. The clerk determines that he, or the person who employs him, values $2.50 more than the milk. You, on the other hand, determine that you value the milk more than the $2.50 you have been asked to pay for. 55 00:05:34.200 --> 00:05:42.520 for it. You exchange, and voila! You are both better off as a result. You have done a service 56 00:05:42.520 --> 00:05:47.560 to the convenience store, and the convenience store has done a service for you. The store 57 00:05:47.560 --> 00:05:53.480 is richer in money and you are richer in goods. What do the two parties to the exchange owe 58 00:05:53.480 --> 00:05:59.920 each other afterwards? Nothing. What does justice demand? That they keep the bargain 59 00:05:59.920 --> 00:06:07.920 and Nothing Else. The milk can't be sour. The check can't bounce. Nothing else is required or asked. 60 00:06:09.040 --> 00:06:14.320 Now, if the store clerk is sick and needs help or the customer is poor and needs shelter, 61 00:06:14.960 --> 00:06:21.440 that's another matter. But what is asked in this case is completely unconnected from the results 62 00:06:21.440 --> 00:06:28.560 of the economic exchange. Expand this logic more broadly and we can see that it applies to all 63 00:06:28.560 --> 00:06:34.760 All people who make money, even vast amounts. Even the richest person, provided the riches 64 00:06:34.760 --> 00:06:41.520 come from mutually beneficial exchange, does not need to give anything back to the community, 65 00:06:41.520 --> 00:06:48.120 because this person took nothing out of the community. Indeed, the reverse is true. Enterprise 66 00:06:48.120 --> 00:06:54.080 gives to the community. Their owners take huge risks and front the money for investment, 67 00:06:54.080 --> 00:06:59.560 Precisely with the goal of serving others. Their riches are signs that they have achieved 68 00:06:59.560 --> 00:07:02.320 their aims. 69 00:07:02.320 --> 00:07:07.860 Labor of Love The phrase, labor of love, is used as a kind 70 00:07:07.860 --> 00:07:14.280 of euphemism for doing work without pay. It is an apt phrase if it means only that the 71 00:07:14.280 --> 00:07:21.160 person is so wild for his work that he is willing to do it even when there is no remuneration. 72 00:07:21.160 --> 00:07:27.020 But the phrase is also laden with the implication that if you are getting paid, it is not a 73 00:07:27.020 --> 00:07:30.000 labor of love. 74 00:07:30.000 --> 00:07:34.200 Surely the most successful employees are those who love their work. 75 00:07:34.200 --> 00:07:39.860 That they receive salaries or wages in return for services offered only serves as a sign 76 00:07:39.860 --> 00:07:44.800 and a symbol of the value that the business owner attaches to that work. 77 00:07:44.800 --> 00:07:51.080 They are cooperating to their mutual satisfaction, which one might say is a form of showing love. 78 00:07:51.080 --> 00:07:59.080 In that way, all labor in a free market is a labor of love. Both parties are giving and receiving. 79 00:07:59.080 --> 00:08:08.080 Another unfortunate way to use this phrase is to imply that if you refuse to work without wages, you are not showing love. 80 00:08:08.080 --> 00:08:16.080 It is an undeniable fact that the use of time means the use of the most valuable resource we own. 81 00:08:16.080 --> 00:08:21.300 If a worker gives up a day that he could otherwise use earning wages, he might be forgoing a 82 00:08:21.300 --> 00:08:24.180 few hundred dollars of income. 83 00:08:24.180 --> 00:08:27.120 This lost income is the cost. 84 00:08:27.120 --> 00:08:31.980 It is what he pays in order to pursue a labor of love. 85 00:08:31.980 --> 00:08:34.960 So he is not merely forgoing income. 86 00:08:34.960 --> 00:08:39.640 There is a sense in which he is contributing to what otherwise would have been his income 87 00:08:39.640 --> 00:08:42.940 to the cause he is serving instead. 88 00:08:42.940 --> 00:08:47.780 What if that money was meant to buy groceries or medicine for his children? 89 00:08:47.780 --> 00:08:54.740 In this case, doing a labor of love instead would be a cruel act. 90 00:08:54.740 --> 00:08:58.380 It is even true of the wealthy business person. 91 00:08:58.380 --> 00:09:04.580 What if staying at work, even earning money, is the best way to serve the community? 92 00:09:04.580 --> 00:09:09.580 What if that person is a pharmacist or a doctor or a website worker who is helping to provide 93 00:09:09.580 --> 00:09:23.140 Labor for wages is just as much a contribution to society as working somewhere else for free. 94 00:09:23.140 --> 00:09:28.060 What if a person is responsible for the well-being of thousands of employees? 95 00:09:28.060 --> 00:09:32.020 Is it not an act of love to stay on the job? 96 00:09:32.020 --> 00:09:37.140 There is no point in claiming that love is involved only when donating your time at no 97 00:09:37.140 --> 00:09:49.400 Again, this is not just about terminology. It is about the assumptions many people bring 98 00:09:49.400 --> 00:09:55.580 to the subject of economics as it affects ethics. People often take it for granted that 99 00:09:55.580 --> 00:10:02.700 the cash nexus is incompatible with clean living. We gain a clearer understanding of 100 00:10:02.700 --> 00:10:20.820 Yes, we should volunteer in charitable causes and give to the community in labours of love. 101 00:10:20.820 --> 00:10:24.260 This may not mean serving soup in a homeless shelter. 102 00:10:24.260 --> 00:10:29.260 Indeed, it might mean pulling down a large salary as an investment banker for commercial 103 00:10:29.260 --> 00:10:31.780 real estate ventures. 104 00:10:31.780 --> 00:10:37.140 Once we understand that the market economy is not incompatible with social justice, but 105 00:10:37.140 --> 00:10:43.860 is rather a form in which authentic social justice is realized in the real world, we 106 00:10:43.860 --> 00:10:46.740 will be more careful with the language we use.