I had a minor revelation while reading through George Simmel’s The Philosophy of Money (*warning*: heavy reading).

You depend on other people in order to spend money.

This means, that money has no value outside a social system.

In a mature consumer oriented society it is usually taken for granted that

  • The customer is always right.
  • The customer is entitled to spend his money.

However, these are not necessarily true. One only needs to go as far as the price of a glass of water in a desert. It will likely be quite expensive in the first place—I remember back when I hiked (climbing would be an exaggeration) up Mt Fuji about a decade ago that the price of water sold at the way stations would increase in price the higher you got up because it all had to be carried up—but if I’m parched and dying of thirst, I might not sell at any price. Or to give a more realistic example. The guy next to you drops to the floor from a heart attack. He has $5000 to pay for the ambulance ride; however, it won’t be here for the next 30 minutes. Do you know CPR? (You can keep someone from going braindead for up to an hour this way.)

This leads to the interesting risk of what would happen if consumer culture would change. I may have a thousand bucks to wave around, but what if nobody will take it? What if nobody is willing to sell? What if there are no sellers?

I therefore think that despite how we’ve been trained by our culture that money is never the only answer. To wit, more money will never completely solve the problem of safety, convenience, and comfort.

I have actually observed that the more money one tends to have and the more one spends, the less resourceful one is. It makes sense.

When it comes to “financial independence” I think I’ve always focused more on the independence side than the financial side. In most cases, my answer is to “become more independent”, not “get more finances”. As a result, my need for the financial side has diminished. Consequently, I don’t worry too much about the finances as much as I worry about my independence. While money is fickle, independence is much harder to take away. Thus I urge you to reconsider “your money”. Is it truly and asset or does your relation to it actually create a “I’m so rich, I don’t need to know anything”-liability?

A quick measure of your independence is simply to stop transacting in money for a week. Just pretend nobody would take your money. How would you fare? Alternative scenario: Pretend that only a few people would take your money, say the government/landlord, the utility company, and the grocer. How would that work out? No need to run a real experiment, a thought experiment will suffice.

Such an experiment would reveal how many resources you have beyond money. This is actually your true wealth. I can give you a boat example. I race on two boats. One is almost exclusively coastal races. We’re never more than 30 minutes from shore. The other one is an ocean racer, where we’re sometimes hours from land. On the first boat, we carry almost no spares. If a shackle snaps, the sailing is over, we motor in and the boat yard fix it. On the second boat, spare parts are carried and solutions are improvised. The first boat is “financial” and the second boat is “independent”. The two different strategies are chosen because the inshore boat can leave the spare parts at the dock and thus reduce its weight and be faster. The offshore boat can’t risk this strategy.

Originally posted 2011-02-08 10:16:05.