Tuesday, March 27, 2012

The Psychology of Money

What, actually, is money and why does it appear to be so important to us? These are important questions that need to be answered if we are to understand the almost universal attitude to money and the acquisition and preservation there-of.

Firstly let me establish a basic fact that money, as in paper, even coins has NO intrinsic value. By this I mean that money is not “love”, or “food” or “happiness” or anything of real value to anyone. Money, in whatever form it is presented is in essence a token, a means of exchange – and can be considered as an abstraction – something that represents a “value”. As presented money is basically a piece of paper, or a coin and nothing more. The values that we place on the coins or the paper tokens are entirely a human construct and will vary according to needs and desires.

Most people would think that they would be very “happy” if they won a million dollars in a lottery, or acquired plenty of it by some other (legal) means. But their happiness only arises because, unconsciously, they know that all their immediate desires can be satisfied. This is what makes them “happy” – the (generally unconscious) knowledge that they can have, acquire or buy, whatever they want (of course within reason). Their desires are then satisfied.

So to make it absolutely clear – it is NOT money that makes people “happy” it is the removal of desire that brings on the feeling of happiness. To put it another way happiness is having no desires and possessing money may (repeat may) give the illusion of happiness. But anyone can still be happy without money. Certainly there is no need to win millions to be happy. In fact a great deal of money brings its own legion of problems – for instance personal safety, security for the possessions acquired with the money, lack of privacy because of fame (or notoriety) and such like that comes with a great deal of money.

Also, the trouble with desires is that they are never satisfied for long. Desires seem to regenerate very quickly and may often change their form. Desire (for money) often changes into greed – enough is never considered enough – the desire for money seems never to be satisfied. More (or greed) is considered good. The real problem with this, with greed, is that those so affected seem to lose all sense of proportion, lose all sense of propriety and all sense of compassion and empathy; people, individuals are considered as means to an end (more money) and are to be used for this purpose and are thus expendable; when people, individuals are no longer useful (for making money) they are discarded. The personal cost of such actions; the emotional pain caused does not enter into the calculations of any one driven by greed. This may be symptomatic of an underlying psychological problem.

Basically therefore there can be no such thing as a “psychology” of money. It is more about the psychology of the people who earn or somehow acquire the money and what the money is needed for – and today money is almost an essential part of our lives. Instead of the idea of barter, or swapping one item for another of similar “value”, we bring in a “middle” element; something that is easy to understand and quantify – a token – money. But it is still a poor substitute for the real thing - happiness, health and fulfillment in life.