When the Bible said, “love of money is the root of all evil,” it was focused on the ability of greed to tempt people away from their faith. But you don’t have to be religious to worry about the impact that money has on our minds.
As a true blue capitalist, I believe that money can be an incredible force for good. Using money as a medium of exchange has enabled mankind to build incredible material wealth, to the point where today’s poor live better than medieval royalty (at least in most developed nations). But that doesn’t prevent me from acknowledging that it has negatives as well as positives.
Stanford’s Jeffrey Pfeffer has been studying the effects of money, which differ based on origin:
“Money that comes from the work we do makes that money more important to us. “The money in that case is a signal of competence and worth, and that makes it addictive, because the more you have, the more you want,” he says.
Because companies generally reward good employee performance with money,
that money “becomes equivalent to the love of the organization,” says
Pfeffer, and it will never be enough because it is so strongly connected
to people’s feelings of self-esteem and self worth. “Companies should
try to find other ways to signal competence and worthiness to their
employees,” he says, such as helping them find purpose or meaning in the
work itself, rather than the compensation.”
It’s a sad irony that the money we earn through our hard work is more toxic than money we inherit or receive through investments. While I don’t ascribe some kind of moral superiority to labor over capital (I could hardly be a capitalist otherwise!) many politicians and policy makers do. Yet it is precisely that earned money which is the most addictive.
I’m torn because I hold two conflicting beliefs:
1) Money, as the primary tool of the invisible hand of the free market, is an incredible force for good, and ought to be distributed fairly (e.g. in accordance with value creation).
2) Money, as our collective obsession, is a dangerous drug that we have to learn to deprioritize in our emotional lives.
For me, the resolution is to recognize the value of money as a means, rather than an end. I view the money in my various accounts as a means of improving my life and the lives of my family, rather than as a worthwhile goal in itself. I value it inasmuch as it allows us to travel to visit family, or to pay for a gym membership.
(Note that when people actually are poor, nothing matters more; there is a huge difference between not being able to pay the rent and not being able to stay at the nicer hotel you prefer when you go skiing)
It’s not enough to claim that money doesn’t matter to you because “it’s just a way of keeping score.” Baskets are just a way of keeping score in a basketball game, but because they are all that matters when it comes to winning, they become your primary focus.
Take the emotion out of money; those feelings belong with the things money can do, not with a set of numbers that are meaningless in themselves. Only then can you escape the mental money trap.