My perspective on why money is so useful

Few years ago really started thinking more about money at least partly because was puzzled by big corporations at that time trying to figure out how to make any. And it may seem distant but was not long ago when companies like YouTube, Facebook and Twitter were really being challenged by people asking, but how will you ever make money?

And came up with my own opinions about money, which I concluded is simply an abstraction for a favor. And that money is best used between strangers for things of least importance. For instance, if someone is dying of thirst you wouldn't charge them for a drink of water, if you're a decent human being.

Of course my opinions of where money works best and what it is, might not be agreed upon by others, but establishes the basis for where I will continue from here in this post. And I've talked a LOT more on the details in other posts on more than one blog.

Some may have a distaste for money, but then how do you solve the return a favor to a stranger problem? Like say you're hungry and visiting a community, what if people in such situations tended to knock on doors until they found someone willing to give them a snack? And with that snack, how would you repay the favor to the kind homeowner?

In some imaginary idealized world, one might imagine such a thing to be routine, and people might readily give food like snacks at any decent hour to complete strangers asking for it knowing they would do the same.

In our world even a very decent person, who gets a favor from a stranger, can struggle to pay that favor back, or even forward, without, yup, money.

And the simple solution in our world? Go to a store for your snack. Pay for it with money. Favor to you of the food and having it readily available is easily returned by you in the form of money. Cash or credit maybe.

One of the things I've seen in my opinion with people who DO want the idealized world is that they often underestimate the value they bring to the table with their own efforts. So for instance, maybe that person thinks a simple thank you is always enough. Or maybe a pat on the back. Or maybe they will draw you a pretty picture!

Often some of the most vocal people in decrying money are people who don't seem to think too long and hard how they should return favors for the efforts of others.

If not money, what WILL you give in return for a favor to you from a stranger? A smile?

I think there ARE people in this world who don't really think they should give anything back, except maybe a smile or thank you, for even extraordinary efforts on their behalf from others. Yup. There are such people I believe. I think to their credit some see the entire world as just a giant community and that as members of a community such things should just be given to them. So to them I guess, no one is a stranger? Everyone is just a member of their community who should help them?

A basic reality though is that you may be quite willing to return a favor to a stranger, who helps you, and it is a Big Deal how that is done. You don't even know that person well. How do you know they want what you have to offer?

Well, if it's cash, it's easy, right?

If you are a store owner, that stranger can yes, smile, as he hands over the money for his snacks, walks out the door and goes on his way. Everybody wins in the transaction.

Well, as long as they're healthy...um, not going there! You want it. I'm not going to get on your case for buying your snacks.


James Harris

Valuing knowledge and money

To me money was a big enough issue that I sat down and pondered it until I could come up with my own theory of money. If you click on the link and read you'll soon notice the post includes lots of disclaimers! Money is such a big deal, but for me figuring it out was a practical necessity. I was having trouble figuring out things related to money, didn't see anything out there that explained it well enough for me, so I sat down and figured it out on my own.

The gist of it is relating money to favors by asserting it abstracts and enumerates the value of a favor. So like you can ask a friend for a cup of coffee at his house. Maybe later you give him a snack at yours, returning the favor which most people kind of do with a vague sense of who is up or down with favors. Or you go to a coffee shop and you just pay a certain amount for the favor of someone making you a cup of coffee. That person does you a service. Money allows us to price out favors so strangers can do them for us, and we don't have to worry about some other form of reciprocation.

If you have a friend who doesn't return favors, or rarely does that can bring up social friction. Turns out that people can get a vague sense that they're not getting value for their money which in the big wide world is about information: who has it and who doesn't.

My favorite example goes back over a decade when I decided to build a pc for myself to save money. Got the case, motherboard and other items, put it together but needed an operating system. Went to a local computer store--not a big chain--told the guy at the counter what I was doing and asked him for MS DOS as I needed an operating system. He did me a huge favor and instead suggested I use DR DOS. I was like, huh? What's that?

And it was before the emergence of Microsoft Windows 3.1 which gives you the timeline and the guy at the sales desk informed me it could run all the programs I wanted to run with MS DOS but was MUCH cheaper.

So I bought it. Built my pc and got it running just fine and found he was right, and it suited my needs, but notice that I paid less for my operating system, and I've pondered that ever since. And I've remained fascinated with operating systems, including promoting the idea of a Browser Operating System which I designated the BOS.

I now firmly believe that most people have NO IDEA what their operating system costs them in a modern computing device, even when it's free, which it is with Android. That price tends to be buried into the full price of the device.

You need to be an insider or curious in this area to understand where that little bit of info--consider it's just a number that could be listed with the price of a computer--has taken the entire world.

For a while I decided that the much vaunted American consumers were stupid, but then I realized: they were simply not given the information.

With my own theory of money I can now explain everything related to money around the globe. I can even explain the wage gap where people are howling about the top 1% making so much more, and yup, it's about information. I've concluded many American workers have no clue how much they should be paid.

The web is helping though. Even though companies fight so vigorously against that information spreading.

Ever wonder what is the best explanation for why companies don't want employees to share what their salary is?

Now you know. It's so they can keep salaries lower.

Duh. What else could it have been?


James Harris

About Quants

Link above goes to: The New York Times

Quote from the source:

SCIENCE
They Tried to Outsmart Wall Street
By DENNIS OVERBYE
Published: March 10, 2009
“Quants” try to use physics to untangle the messiest of human activities — making money.

Hard to categorize: Is it really economics? Really science? Not sure.