By Kevin Butts, Hank Pin, Carissa Smith, Interns, Columban Center for Advocacy and Outreach
There are great lessons to be taken from the late-2000s financial crisis. We face for the first time in many years the ugly truths of income inequality, unjust economic policies, and reckless spending. We see now the fragility of living in excess and the stupidity of myopic, short-term spending. Now, almost five years after the bubble burst, is as good a time as any to reevaluate two concepts once seen as synonymous and pose the question: What is wealth? What is money?
This question will undoubtedly seem odd to many. Is wealth, after all, not simply the sum of one’s financial assets? In reality, the matter is far more complicated. Wealth, first off, is a vague and subjective term, not necessarily tied to finances at all. Second, even assuming the economic worldview of wealth as money, it is clear that money can never be a perfect representation of wealth due to its fluidity and volatility.
The Different Concepts of Wealth
Beginning with the nature of wealth, we see that the term is inherently subject to a diverse array of opinions. The economist’s wealth, for example, is the material benefits of labor. Adam Smith’s The Wealth of Nations defines wealth as “the annual produce of the land and labour of the society.” Marxism defines wealth through the labor theory of value, namely that a commodity’s value is determined by the amount of labor put into it, and that wealth is created by exploiting the surplus labor of the workers. In day-to-day economics, wealth is simply the total value of one’s assets.
The economists, however, do not have the only say on the nature of wealth. For some, a sound environment is the greatest possible material wealth. Many interpretations of wealth stray entirely from the material realm, assuming the form of intangible concepts like fame, community, or spirituality. The definitions of as subjective an idea as wealth are, in fact, limitless. With this in mind, we see that equating money synonymously with wealth is a woefully small-minded and dangerous mis-pairing.
What, Then, Is Money?
In the simplest terms, money is a medium of exchange, a unit of account, and a store of value. But what gives money, a simple piece of metal or paper, these qualities? By themselves, these pieces of paper and metal have little intrinsic value: a castaway on a deserted island with $1 million in a briefcase has, in fact, nothing more than a case filled with dry, painted leaves that will probably end up kindling his fires. What gives money value is government regulation and social acceptance. The value of money is additionally subject to fluctuation based on money supply and financial policies. In other words, a currency’s value varies through no fault of its own but rather through external (usually governmental) interference. Its value being one-dimensional, deriving from society and government, money cannot be correctly equated with the infinitely variegated concept of wealth.
The Problem with Money
As explained previously, dollar bills and coins are by themselves inert, lifeless objects, devoid of any value save what value we — society and government — impose onto them. Similarly, the illness humanity suffers due to money is not of its doing but of ours. Much of our world has become engrossed in the all-consuming quest of moneymaking, a significant part of which seems to be purely for the sake of appearing rich. As Yes! Magazine’s similarly themed and titled “Money Versus Wealth” reports, “[T]he biggest profits are going to those who deal in pure finance. For 1996, the shareholders of the seven largest US money center banks reaped an average total return of 44 percent. Mutual funds specializing in finance averaged a 26.5 percent return, besting all other industry categories by a wide margin. Funds specializing in much-touted technology stocks came in a poor second at 21 percent.”
Moreover, many countries and economists now use Gross Domestic Product (GDP) as a measure of economic growth. However, GDP is nothing more than the sum of all products and services bought and sold. Public expenditures on crime, or natural disaster relief, actually register as “growth” on the GDP scale. A country concerned with giving the impression of a robust economy may therefore easily sacrifice long-term development for a showy but meaningless and detrimental increase in GDP. Said monetization has similarly pervaded our nation’s social fabric. Yes! Magazine describes the progressive abandon of non-paying home- and community-building jobs in favor of paid positions, noting the consequent neglect given to home and hearth. “Community service,” it says, “becomes the work of public employees – to the extent there is public money to pay them. As the social capital of caring relations is depleted, family and community life fall into disarray.”
Finding True Wealth
True wealth, as we have said, may or may not be material. In our lamentably consumerist society we find ourselves increasingly driven to accumulate money, to supply our incessant and ever-growing demand.
We should not, however, confuse this mindless, soulless consumption with wealth.
A better understanding of wealth would be that it lies in community, in our relationships with others, both on Earth and in Heaven. All of the world’s major religions realize this, that self-fulfillment can’t be found in even the largest paychecks or most extravagant bonuses, but lies rather in our internal spiritual satisfaction as loving, social beings.
Jesus had this idea when he exhorted us not to “store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal,” but rather to “store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also” (Matthew 6:19-21). True wealth is not material, and in fact is often antithetical to the material.
This opposition is the crux of one of the most drastic transformations in English literature, when Ebeneezer Scrooge amends his brutally materialistic ways after a ghostly tour of the forsaken joys and misery of his past, present and future. The next day, Christmas, “He went to church, and walked about the streets, and watched the people hurrying to and fro, and patted children on the head, and questioned beggars, and looked down into the kitchens of houses, and up to the windows, and found that everything could yield him pleasure. He had never dreamed that any walk—that anything—could give him so much happiness.” A Christmas Carol is thus a powerful testament to the discrepancy, even dichotomy, between money and true wealth.
With ample proof these days of the damage done by money and consumerism to both our physical lives and eternal human souls, is it not high time that we sever the false and abusive relationship between money and wealth, and seek out wealth where it truly lies?