How to Make Tons of Money and Lose All of Your Value
Whether it’s Jeff Bezos, Elon Musk, or Nancy Pelosi, the media and public can’t seem to get enough of people with tons of money, no matter how ill-gotten. There are countless books, articles, and podcasts explaining how to make more money than you’re currently making. Follow these steps and be successful, as long as one’s definition of success is financial gain. This success via financial gain is based on an assumption that money has intrinsic value, therefore the more money one has, the more valuable someone is considered.
Money’s assumed value has eroded in recent years. Cryptocurrency showed that money is largely an abstract agreement about what’s valuable —i.e. it’s not something connected to usable capital like commodities and assets. Bitcoin didn’t exist prior to 2009, yet now has a $385 billion market cap. Related, inflation showed that normal money (aka “fiat currency) is just as abstract and intangible. In the last two years alone, the Federal Reserve injected about $2 trillion into the American currency pool — about 80 percent of the total U.S. money in circulation — much of which was underwritten by hastily issued real estate and corporate bonds of dubious value. The Fed’s infusion of new money reduced the value of existing dollars since they were now part of a much larger economic pool. Today, it’s impossible to appreciate the value of a dollar because the debt economy changes that value depending on what a select population of rich people decide the value should be.
I’ve recently been exploring other blockchain tools, as proponents suggest they have the potential to create currencies (coins/money) with stable values free from central bank manipulation and connected with specific things (NFTs) and communities (DAOs). But most (all?) blockchain mechanisms suffer from the same issues as fiat currency: the coins are representations of value versus valuable things, and therefore just as subject to value distortion. This abstracted value has already tanked bitcoin’s value. And while one can purchase a jpeg NFT connected to a fractional value of a real piece of art, one could also buy or barter for a piece of tangible art and have the thing itself. One could get a stake in a “regenerative” DAO that finances environmentally-focused initiatives…or go out and plant trees without feeding an environmentally ruinous infrastructure of energy-hogging server farms.
From Symbolic Value to Self-Evident Value
I moved to a farm last week. The farm’s community and I have a direct value exchange: my labor is exchanged for a place to stay and food to eat. This value exchange requires no symbolic currency, third parties, or technological mediation to understand. The value each party brings is self-evident.
My move had much to do with orienting my life to truly valuable stuff, namely shelter, community, and food. Historically, agriculture was the main way humans exchanged value and it undergirded the majority of preindustrial economies. In 1840, 70 percent of Americans worked in agriculture. When the U.S. economy was primarily agricultural, food was more expensive and represented a much larger portion of a household’s expenses. In 1929, 20.6 percent of household disposable income in the U.S. went to food versus 5.48 percent in 2014. Similar food cost reductions across the globe made today’s global population of 8 billion possible (up from 1.5 billion in 1900).
The Industrial Revolution transferred much of agriculture’s manual labor to mechanized equipment like tractors and threshers. With more food being produced with fewer people, food became cheaper and enabled populations to grow. New technology also shifted erstwhile agricultural workforces into manufacturing. With advanced technology and more people to work in factories, businesses invented new product markets and profit streams: radios, cars, dishwashers, hula hoops, etc. Today, less than 2 percent of the American workforce is agricultural. The advent of cheap oceanic freight sent most American manufacturing to whichever country had the cheapest labor and fewest environmental and worker safeguards.
Today, most work in America creates little tangible value. In terms of jobs, growing, manufacturing, and teaching have been replaced by selling, trading, and servicing. Economic distribution has been similarly skewed towards non-value generating industries. In 2020, financial services made up 22.3 percent of the U.S. GDP, business services (lawyers, accountants, business administration) were 12.8 percent, and government (politicians and bureaucrats) was 12.6 percent — almost 50 percent of the GDP to industries that make nothing by themselves, and which are generally responsible for creating more work for those in lesser economic stations at home and abroad. By contrast, public school spending was 3.1 percent of the American GDP in 2020, and agriculture — the industry that makes stuff that keeps humans alive — was .8 percent.
This leads back to money and value, which, for many, have morphed into the same things. Many view the ability to pay for bread as having the same value as bread, the ability to pay for status symbols as the same value as earned status. But cash and Mercedes, much less tokenized jpegs, aren’t valuable things — they’re symbols of value whose worth is constantly shifting depending on the agreement of the day (which can be zero or less). If this statement sounds questionable, imagine having unlimited cash but no bread or Mercedes; with only symbolic representations of value, not valuable stuff itself, there’s just hunger and insecurity.
A Return to Value
Prior to industrialization, economic markets, and therefore workforces, were devoted to stuff people needed to survive: food growers and makers, clothing and shoe makers, carpenters, teachers, soldiers, and sex workers. A tiny portion of the population were non-laborers, primarily teachers, artists, clerics, and landholders. Today’s economy, on the other hand, brims with non-labor workers: derivative traders, social media managers, nonprofit workers, software developers, personal shoppers,etc.
As financial markets and supply chains collapse in coming months and years, people will once again learn the distinction between symbolic value and self-evident value. More specifically, global warming will — and already is — make industrial agriculture increasingly unpredictable and low yield due to unstable climate patterns; all of this will cause food shortages, starvation, and death on a massive scale. Heat and flooding in some areas, and heat, drought, and fire in others will make densely populated areas like Florida, Arizona, Bangladesh and many, many others uninhabitable. Elevated seas will drown the world’s most active ports, shutting down industrial geotrade and making manufacturing cost-prohibitive for an increasingly impoverished, famished global population. In this hot, wet, fiery, and drought-ridden world, people will start caring far more about food, water, shelter, and social connections than money, electronics, status-symbol housing and cars, and Instagram likes. Don’t say you weren’t warned.