Consider Money as a Formal Language
If you want to see what a person values, see where they spend their money.
When you give someone money, you are speaking in a mathematical language about what you value.
A million bucks is not an easy thing to come by. People don’t hand out a million bucks for nothing. If someone says “I am very grateful to you, so here is a million dollars” — you can feel fairly confident that they aren’t just bullshitting you.
Why is that?
Just like english or other vernaculars, the “language of money” has a grammar, which is to say it has rules for which expressions are valid. The chief rule is this: You cannot give the same money twice — when you make a statement about what you value, you are losing some ability to speak further about what you value.
Unlike english, or other vernaculars — these rules are strictly enforced. You can tell a person “Hey, you really helped me out, thank you” — even if you don’t mean it. You are unlikely to give them a million dollars as thanks, unless you really mean it.
The Money Language is one of the few ways we have of speaking about our emotions in public.
The economy is like a giant, public conversation about what people value. Commerce is a discussion about the things we care about.
When you build a product people value, people talk to you about the product. They say “I value this!” when they give you money. That money gives you the ability to talk more about what you’d like.
An investor says “I hope people will value this, and think there’s a chance that they might.” The investor gives the company some money, which gives the company the ability to speak about what it values — employees, desks, office space, snacks in the break room and maybe eventually a 401k plan.
An IPO gives the public a chance to speak about the company as well — I hope this company will grow, and I think it will.
When someone sells shares of a stock, they are saying “I value the cash more than the shares.” When someone buys shares of a stock, they are saying “I value the shares more than the cash.”
The Money Language helps us both handle and alleviate scarcity.
There are lots of things people value, and not enough of them for everyone to have everything they value. Scarcity is a fact. Money is the language by which we collectively decide who gets what. People use money to exchange things they value less for things they value more.
We also use money to alleviate scarcity — to incentivize people to create value. You have more ability to speak about your needs and what you value when you’ve done that more for others.
You can’t spend money you don’t have. This means, if you want to spend money, you need to earn some first. Some people earn money by working, some people earn it by being born a child of someone else with money, and some people earn money by owning capital. People earn money all kinds of ways — and as long as they get it without using violence or force, they earn it by providing value — but only if you provide value to someone else who has money and gives it to you.
If someone else hasn’t said publicly “I value what you’ve done”, then you can’t speak publicly about what you value.
I think this is a problem in our modern society. I think it’s one that’s easily fixed: give everybody a basic income.
A basic income gives everyone a voice in the economy.
Many people have proposed a ‘basic income’ program, which would give every person a fixed amount of money on a regular basis, without conditions or limitations.
In the terms of The Money Language, a basic income changes the rules slightly, to say “you can speak publicly about what you value, and people will listen, even if nobody else has spoken up for you before.”
The rule that says “You lose money when you spend it” — that rule stays in place. The difference is that with a basic income, everyone gets some ability to speak, regardless of whether they have been spoken to.
In the current rules of the money game, to have your needs considered by society, you have to first show society that you’ve considered society’s needs. You can’t use the Money Language to speak about what you want unless someone else first says “They gave me something I wanted.”
Why is this necessary? Well, you may have noticed the economy has been in some trouble recently. Global Trade volumes are down. Many corporations are sitting on huge piles of cash, but they aren’t investing or building new products.
Why is that?
“Cash Hoarding” isn’t the Problem.
A basic income will fix the economy.
Much has been made lately of wealth inequality. A lot of people think a problem with the economy is that wealthy people are sitting on huge piles of cash, and they suggest we come up with taxes or other penalties to get them to spend it.
And here we have a problem — because when we see money as speech, compelled speech loses its meaning. If you look at what actually happens when we raise taxes, companies and the wealthy spend their money on ways to protect their money.
In other words, they say “I value me holding onto my money” — and so the economy provides more goods and services to help wealthy people and corporations hold onto their money.
A lot of modern economists think that people holding on to large amounts of savings is a problem — that money could be invested or spent to grow the economy, but it’s not.
I think the economists make an error which is easy to see when we consider money as a language: When a person saves money and doesn’t spend it, they are still making a statement. The statement means, roughly:
“I don’t know what I could do with this right now. I can’t think of anything I can do with this to get me more of it.”
The idea that we’d be better off if big companies were spending more money is like saying “Big corporations and wealthy people need more input into the economy.”
Yes, I think the economy is in trouble right now. No, I don’t think giving more voice to the wealthy or big corporations will fix the problem — especially if the speech is compelled through threat of force.
Cash Hoarding is the symptom, not the problem.
People are spending less money than they used to — global trade volumes are down.
From the perspective of the Money Language, this means people are speaking less frequently about what they value. This isn’t because people want less than they used to — it’s because of that rule which says you can only speak about what you value after someone has said you’ve given them what they valued.
The economy is messed up because most people can’t spend any more money, since most people have none to spend.
Consumer debt is at an all time high, and it continually grows every year. Debt is a way of speaking before you’re spoken to, but it just puts you under the obligation to continue speaking in the future, until you’ve paid your balance off.
If we give every person in the world a basic income, people will always have money to spend, and thus we won’t run into a situation where most people have no money and are struggling, and then a small number of people have a ton of money, and can’t find a way to make more because everybody with unmet needs is strapped for cash.
What about inflation?
Giving someone a dollar is a way of saying you value something they’ve done or will do. When the rule is “you can’t speak unless someone speaks about you,” the number of dollars stays constant.
When you’re allowed to make some number of statements per year, regardless of whether you’ve been spoken about — it’s the same as being able to spend some amount of money per year, without having someone else give it to you.
If we had a basic income that taxed some folks and then used that money to spread it among others, we’d still be preserving the total number of dollars. We would also add in a bunch more statements of the form “I value not being taxed”, and “I value representatives who prevent me from being taxed” and “I value this congressman having dinner at a fancy restaurant with this other highly paid man” — which we have enough of already, thank you very much.
If we just added to the monetary base — increasing the total number of dollars each day — we don’t add in a bunch of those extra statements that aren’t really helping or serving human needs.
If the economy is a discussion about what people need, I think “I’d like to shelter my fortune from being taxed heavily” is getting much more airtime than “I have no place to live and I can’t work because my mind is broken from the fucked up things I saw while I was in the army.”
A basic income ensures everyone has a voice in the public conversation we call “the economy.”
Yes, there would be some inflation — but it’s not as if prices everywhere would skyrocket. We’d probably see higher prices for food, housing, shelter, and things everyone needs but many folks can’t afford. That’s fine — it means companies and people who produce those goods and provide those services would make more money.
In other words, the economy would shift to serve the needs of human beings — which is what this is all supposed to be about — rather than serving the needs of only human beings who have capital and are willing to spend it.
There Are Many Implications Here
Remember, the language of money is supposed to be helping people both handle and alleviate scarcity — but if all it does is let a person speak about their needs, once a person’s needs are totally met, they have a lot less reason to provide value.
Many people who invest in index funds aren’t saying “I really value this balance of stocks” — they are saying, “I want to spend this later” — but we have no way of disambiguating the two. The public conversation becomes messy when a statement that could have many different meanings. Did someone else sell those shares because they desperately needed cash? Or because they think the stock is actually overpriced?
I think there’s a whole area of human experience we have yet to explore — the use of formal languages in society — and seeing money through this lens is just one way to get started thinking in this space.