Medium Maximization: The Money Trap
We quite often find ourselves daydreaming and wandering in the future, worrying about what is there to come. Sometimes we find ourselves trapped in the past, feeling regret or self-loathing. What is almost always left out is the present, right now, today.
We forget about our active presence in the moment and instead choose to be distracted by the past that is already gone or the future that is yet to come.
I love this quote from the book “The Power of Now” by Eckhart Tolle, about the value of the present:
“As soon as you honor the present moment, all unhappiness and struggle dissolve, and life begins to flow with joy and ease. When you act out the present-moment awareness, whatever you do becomes imbued with a sense of quality, care, and love — even the most simple action.”
Happiness
We all want to be happy, but barely a few of us can define what happiness really is. Now think about it, what makes you happy? If your answer is fame, wealth, power, attractiveness or anything that falls into that category, please keep reading.
I would like to refer to the “Genie” study conducted by Raj Raghunathan, from his book “If You’re So Smart, Why Aren’t You Happy?”
Imagine that a Genie appears in front of you and grants you three wishes. Don’t limit yourself to anything because Genie has the power to grant you any wish you make. What are your three wishes?
Let’s pause for a moment and think about your three wishes. By the way, we all know the smarty-pants answer of “I would wish for unlimited number of wishes”, that’s not going to work here. (I mean, seriously…?)
Dr. Raghunathan addressed the Genie question to many people and what he found out was indeed spectacular. Their wish list usually reads something like, a lot of money, fame, power, respect and successful relationships, etc.
In fact, only a few people asked Genie for “Happiness”.
Why do you think is it that people would wish for a lot of money for instance but not happiness. Don’t you think they want the money to feel happy? If happiness is the end product, why not wishing for that in the first place?
Medium Maximization
In a paper published by The University of Chicago — Booth School of Business, a clever experiment was conducted on the effects of introducing mediums (means) as rewards for tasks.
In general, a medium is something that has no intrinsic value but it can be traded for another desired outcome. An effort may lead to a medium that in turn, may lead to an outcome.
A group of participants were told that they could choose to engage in either a short or a long task in return for a reward. If they chose the short task, they received one pound of Snickers bars. On the other hand, if they chose the long task, they were given the option of one pound of Snickers or Almond Joy bars. The outcome of the study showed that people usually went for the shorter task.
The researchers moved on twisting the plot a little bit for the second experiment. This time, a “medium” was introduced. Participants were told that engaging in the short task would give them 60 points, that they can later use to procure one pound of Snickers bars, whereas engaging in the long task would give them 100 points, that they can get either one pound of Snickers or Almond Joy bars with.
The participants in both experiments preferred Snickers bar but shockingly, when a medium was introduced, their preference changed; They favored the long task…!
Why? Because the medium distracted them from what they ultimately wanted (which is the enjoyment of the candy) and made them focus on maximizing the medium (points) instead.
Money As Medium
Now think about what these findings imply for the most common medium — money. The studies suggest that people can get so caught up in chasing money that they forget all about why they wanted the money in the first place.
Money is considered to be a medium because it is worthless, but it can be traded for a desired good. Since money has no value itself, one may think that we should logically be encouraged by the outcome — that is what we can trade money for — but that’s not true.
The reason is that usually the outcome, let’s say happiness, is not obvious. You can’t define it, measure it, value or touch it. In other words, happiness is too abstract. Meanwhile, mediums like money are quantitative and concrete. We humans have the tendency to prefer the immediate outcomes so as a result we get preoccupied by maximizing the medium (money) to create an illusion of getting closer to the outcome (happiness).
Now back to the Genie question; Why would the majority of people wish for wealth, fame or power instead of happiness? Because those are all the mediums, things that we believe if we have them, they are going to make us ultimately happy. In fact, we are naively distracted by working for and maximizing what is in between us and our true happiness.
Wealth is evidently not the good we are seeking; it is merely useful and for the sake of something else. — Aristotle
If you read it this far, here as usual, I’m going to leave some recommendations on the topic. I hope you’ll enjoy them:
I love the speech “What If Money Was No Object?” by Alan Watts on the matter of money.
I also recommend watching The Time You Have (In JellyBeans) video for some food for thought on life and the value of each day.
