Financial Fiction

In the midst of the brouhaha around Elon Musk's offer to buy Twitter, I saw one comment that said, "for that amount, he could give $1,000,000 to each of the 330,000,000 people in the US, and still have 9 billion left over". Now, this person is clearly math-challenged (what are four zeros, give or take, between friends?), but the statement got me to thinking. 

At first I was all for it. I mean, if a $2000 stimulus payment was enough to help people through the pandemic, a cool mil in each person's pocket would... irreversibly upend our entire financial system, expose for once and for all the fiction that money equates to value, and cause complete and utter chaos. Wait. That's not where I wanted to go with that. But, it's true.

Our economic system only works if some of the people have to work. Without a money-carrot to hold out in front of people, how would you be able to convince anyone to do our essential but thankless jobs? Restaurant servers, shelf stockers, strawberry harvesters, garbage picker-uppers - I know if I were in their shoes, I'd have my notice turned in about three microseconds after the money landed in my account.

The money would change the common denominator in our calculations of wealth. Narrowing my focus to the current housing bubble - a year ago the house down the street rented for $2000/month. The tenant is moving out at the end of the month, and the owner put it up for rent at $3000/month - and had it rented within the day. Now, if everyone and their brother had access to a million dollars, what would that do to the rent? The number of available housing units vs the number of people seeking dwellings doesn't change in this equation, nor does the instinct to extract maximum value from one's investments. I'm pretty sure, in this case, the rent would skyrocket to account for the new minimum bank account balances in very short order. 

The value of money is a fiction, but a useful one. Take apples. I like apples, but have no wish to get my next one by taking a seed from one of the apples in the fridge, planting it in the back yard, and hoping I'm still around and able to pick apples when the tree gets large enough to bear fruit. (Yes, the first glaring assumption here is that the seeds of the apple in my house are viable. That's a topic for another time.) But if I have a dollar, I know I can take my dollar to the store and buy an apple. We've all agreed to pay the people who have the land and the climate and the oomph to successfully nurture apples a dollar each for their priceless harvest. What's the true value of the apple? That depends. How hungry am I?

Money only works because we all believe in it. It has value only because you and I agree that it does.

Here's hoping we keep believing. Life has been interesting enough these past few years without adding total societal breakdown to the mix.