Money Is Bullshit

Photo by JP Valery on Unsplash

There comes a time in your life when you get high and have the following thought:

And then there comes a time in your life when you sober up and have the following, more correct thought:

And then there comes a time in your life when you read a post on Everything Is Bullshit and have the following, even more correct thought:

Money is not about stuff. Poverty is not about a lack of stuff. Greed is not about wanting stuff, inequality is not about unequal stuff, gifts are not about giving stuff, and capitalism is not about who owns the stuff that makes stuff.¹ 

Here’s a list of problems with the idea that money is just a proxy for stuff:

1. If someone buys you a fancy $200 meal, it is okay to have sex with them afterwards. But if someone gives you $200, it is illegal to have sex with them afterwards.

2. If you are attending a dinner party, it is okay give the host a $50 bottle of wine. But it is rude to give the host $50.

3. Wanting stuff—like a peloton or a trip to Japan—is okay. But wanting money is icky. That’s called “greed.”

4. People say money is the “root of all evil.” But nobody says cars, houses, and tables are the root of all evil. 

5. We’d rather give our friends better stuff than worse stuff. And yet, we’d rather give our friends “gift cards”—an objectively worse form of money—than money. 

6. Getting enough food makes you stop wanting food. Getting enough sleep makes you stop wanting sleep. But getting enough money does not make you stop wanting money. The desire never goes away. Even Jeff Bezos wants more money. 

7. When kids trade chocolate for skittles on Halloween, it doesn’t seem like either kid is necessarily made worse off. But when Hershey trades chocolate for money, we’re more inclined to see that as a win for Hershey (they made a profit) and a loss for the buyer. Money somehow makes things win-lose. 

8. Liberals think it’s unfair for CEOs to be paid millions of dollars a year—that’s too much stuff for a person to have. But they think it’s fair for Hollywood movie stars to be paid millions of dollars a year.

9. Conservatives think it’s unfair to get “free handouts” from the government—you shouldn’t get stuff for free. Yet they want the government to use taxpayer money to help “small working class towns in America’s heartland.”

10. In the 1950s and 60s, money didn’t seem to make people’s lives better: rich countries reported equal levels of life satisfaction as poor countries. Weird. Then in the 1970s and 80s, all of a sudden, richer countries started reporting greater life satisfaction than poorer countries. Why did having more stuff satisfy people in the 70s and 80s, but not the 50s and 60s?

11. We tend to think excess stuff should be redistributed based on need. The person with one roll of toilet paper is more in need than the person with 30 rolls of toilet paper. But when it comes to money, we seem to care more about nationality than need. Many Americans would rather give taxpayer money to poor Americans (who make ~$30 a day) than poor Burundians (who make ~$1.00 a day).

12. Stuff is absolute, but money is relative. When figuring out who needs food or heating, we focus on who’s hungry or shivering. But when figuring out who needs money—i.e. who is in “poverty”—we focus on who has relatively less than the people around them.

Now that we’ve laid out our puzzles, it’s time to solve them. Here’s my theory in a nutshell. I call it The Vibes Theory of Money:

Money is not about stuff. It’s about status and coldness. 

Money is about status

At the dawn of markets, a new status symbol emerged: currency. The people who had more gold, silver, or beads became more desirable as mates and allies. Everyone wanted to partner up with Mr. Moneybags and snub the paupers. But how did everyone know who was rich and who was poor? Conspicuous consumption. Rich people made it obvious they were rich by buying lots of shiny, expensive garbage that other people couldn’t afford.

Money is still a status symbol today, albeit a chimeric one. For some, expensive garbage is sexy; for others, it’s gross. Among progressive elites, for example, the “money status game” has collapsed, with everyone realizing that conspicuous consumption is selfish and “greedy” and uncool. The result is that elites now try to signal their wealth without signaling that they’re signaling their wealth. I know, it’s really weird. But let’s focus on the people for whom the “money status game” is more above-ground.

For these people, the number of dollars you own is like the number of medals you’ve won in archery, the number of heads you’ve claimed in battle, the number of turtles you’ve hunted in Melanesia, or the size of your yams in Pohnpei. Yes, yam size is a very big deal. Here’s my favorite passage from The Status Game, based on the reports of anthropologist William Bascom:

Men who brought yams to feasts hosted by the chiefs could win significant status… The owner of the largest yam at a feast would be publicly declared ‘Number One’ by his rivals and praised by the chief for his generosity. Bascom found the men of Pohnpei in a state of symbolic war as they all competed to be Number One. Each man would raise around fifty yams a year, purely for feasts, growing them in secret, remote, overgrown plots they’d creep out of bed at two in the morning to tend to, lining the pits with soil and fertilizer until dawn. A single yam could take ten years to grow, reach over four meters in length, weigh over ninety kilograms and require as many as twelve men to carry into the feast using a special stretcher on poles… A delicate system of etiquette bloomed into life around these yam wars… When a man is named Number One at a feast, ‘he must not act proudly or boast openly about his achievement. When others discuss the merits of his yam, he pretends not to listen.’”

Hm, yam size. Sounds a lot like “net worth,” doesn’t it? I’m inclined to say there is a “status symbol”-shaped hole in the human brain, and right now, in WEIRD cultures, money is filling it. 

Once we recognize this fact, many of the puzzles disappear. Why is “poverty” relative to the people around us and not absolute? Because “status” is relative to the people around us and not absolute. Why does money make things win-lose? Because status is win-lose. Why is the desire for money insatiable and never-ending? Because the desire for status is insatiable and never-ending. Why is “greed” icky? Because overt status-seeking is icky. Why did poverty make poor countries feel bad in the 70s and 80s but not the 50s and 60s? Because in between, TV became a thing, and poorer countries could see on TV that they were lower status than richer countries. Why do liberals and conservatives have such inconsistent beliefs about who deserves money? Because they’ve formed political alliances with different groups, and they want to raise the status of their allies—and lower the status of their rivals—which is basically what politics is all about. Why do we want to redistribute wealth to poor Americans instead of poor Burundians? Because we’re more interested in giving status to our political allies than stuff to the people who need it most. 

“But David,” you say, “I’m struggling to pay for basic necessities like a house, or clothes, or my children's college tuition. What does that have to do with status?”

Everything. Why is housing so expensive for you? Because you want to live in a high-status urban or suburban area where housing is scarce and expensive. If you didn’t care about status, you’d move somewhere cheaper with “crappier” schools and fewer chic restaurants and coffee shops, further away from your cool friends and high-status job, and closer to gross poor people who didn’t go to college. Clothes? Please. Your ancestors were ecstatic if they could afford three outfits. The only reason you need money for clothes is because you’re afraid of looking uncool by being seen wearing the same clothes in the same week—or, horrors, clothes that don’t flatter your figure or showcase your unique personality. College? It’s a status symbol. Most of what you learn in college you either forget or never use on the job. The main purpose of going to college is to flaunt your intelligence, work ethic, and rule-following ability to elite employers by jumping through arbitrary hoops and parroting useless bullshit.

I know, I’m starting to sound like an asshole—like I don’t care about your financial stress—like I’m a cold person. I’m genuinely sorry, but I had to put on a performance of coldness so I could segue into…

Money is about coldness

Most animals don’t really care about each other, except for maybe their mates and their kin. The biggest exception to this rule is humans. We truly care—or appear to care—about genetically unrelated people who are not having sex with us. How strange. Why did natural selection favor this trait?

One answer is reciprocity. You scratch my back; I’ll scratch yours. If the benefit of getting your back scratched outweighs the cost of scratching someone else’s, then reciprocal back-scratchers come out ahead in Darwinian terms, assuming they can exclude cheats and shirkers. This is known in evolutionary biology as reciprocal altruism. 

Unfortunately, there’s a problem here, and that is what’s known as the “banker’s paradox.” You see, banks only want to lend money to people who’ll be capable of repaying the debt. Who’s most capable of repaying debts? Rich people—the people who don’t really need loans. Who’s least capable of repaying debts? Poor people—the people who desperately need loans. So banks are incentivized to lend money to the people who need it least. 

The same problem applies to human reciprocity. If you’re in dire straits—you’re sick, injured, or ostracized—then you’re the least likely person to reciprocate my help. You might die, and then I’ll never get repaid. Or you might remain injured indefinitely, preventing you from doing favors for me in the future. Or you might remain a social pariah forever, and never be in a position to put in a good word for me in return. 

That is a huge problem! If you’re sick or injured or ostracized, you really need someone to help you. If you could figure out how to form a relationship with someone you can trust, who can prove they’re willing to help you unconditionally, even when it’s risky or costly for them to do so, you’d be at a major Darwinian advantage. So you need to figure out how to make yourself deeply valuable or irreplaceable to someone, independent of your ability to trade favors with them. How do you do that?

One way is to support your tribe. A fiercely loyal member of the tribe is a valuable asset to the other tribesman, because such a fierce loyalist acts in the tribe’s interests. Just as athletes want their teammates to be healthy and energetic, independent of reciprocity, tribesman want their fiercest allies to be healthy and energetic—and also high-status and alive. 

The same logic applies to other things we might have in common. If you and I hate the same bully or love the same leader, we’ll act in ways that hurt the bully or help the leader, independent of any favors we give each other. Our mere existence is mutually beneficial. Having stuff that’s not in common can also do the trick: if we each have special talents that the other one lacks, then we have another reason to keep each other alive and well: maintaining access to those irreplaceable talents. 

There’s also an interesting positive feedback loop: the more valuable you become to me, the more valuable I become to you. Why? Because having a person around who cares about my wellbeing, independent of any favors I might give them, is really good for my fitness. I want that person to survive and thrive. What’s good for them is good for me. And if that’s true, then what’s good for me is good for them, according to the same logic. 

And here’s the point. If my wife, fellow tribesman, or close friend is in dire straits, then their ability to reciprocate doesn’t matter. Their interests are intertwined with my own—they’re irreplaceable to me—so I ought to help them. And if I refused to help them, out of suspicion that they might fail to repay me, then I would be a cold person—a bad husband, a bad tribe member, a bad friend. 

The evolutionary psychologists Leda Cosmides and John Tooby put it best in one of my favorite academic papers on the evolution of altruism:

“Explicit contingent exchange and turn-taking reciprocation are the forms of altruism that exist when trust is low and friendship is weak or absent... The injection of explicit contingent exchange into existing friendships (e.g., buying a friend’s car) is experienced as awkward… Those of us who live in modern market economies engage in explicit contingent exchanges—often with strangers—at an evolutionarily unprecedented rate. We would argue that the widespread alienation many feel with modern commercial society is the result of… how shallowly we are engaged with others.” 

Once we recognize all this, more puzzles disappear. Why do we bring wine and not money to dinner parties? Because giving the host money implies “explicit contingent exchange” and signals you’re not the host’s friend. The wine, on the other hand, is interpreted as a gift or an accessory to the meal, which means you’re a friend. Why do we give people gift cards but not money? Because we’re lazy and want to avoid thinking about the gift, but we also don’t want to give cash and signal “explicit contingent exchange,” so we settle on gift cards as the laziest kind of non-frigid gift. Why do we see kids trading candy as good for both kids but Hershey selling candy as good for them and bad for you? Because kids who trade candy are usually friends, but Hershey is a cold, “greedy” profit-seeker who doesn’t truly care about you—so you must have got suckered. Why is it okay to have sex after enjoying a fancy meal but not after receiving a handful of cash? Because the person who buys you a fancy meal is warmly showing they care about you, whereas the person who hands you cash is coldly showing you’re a commodity. And hostility to people who have “casual” sex outside the context of warm, committed relationships—i.e., “promiscuous” people—lies at the heart of social conservatism (1, 2, 3).

The root of all evil

So if money is a signal of status and coldness, then money is not going to have positive vibes for us, is it? No, when we think of status-seeking, we think of selfishness, narcissism, and pettiness. When we think of coldness, we think of cruelty, dehumanization, and manipulation. No wonder we think money is the root of all evil! It’s a combination of the two ickiest things in the world. And no wonder we’re so eager to show we hate capitalism. We want to show that we’re warm people who don’t care about status (which, of course, boosts our status). And no wonder libertarians—the people who like capitalism—seem so selfish and heartless. It’s like they’re wearing T-shirts that say “I’m a cold, competitive asshole.”

Speaking of libertarians, I think the main reason they’ve failed to convince anyone of their icky-sounding philosophy is that when they say “money,” they mean “stuff,” but when progressives say “money,” they mean “symbols of status and coldness.” 

For example, when progressives say, “Let’s raise the minimum wage,” what they mean is, “Let’s raise the status of poor people,” but libertarians hear: “Let’s stupidly force poor people to demand more stuff in exchange for their labor, thereby making them less employable.” When progressives say, “Economic inequality in America is terrible,” what they mean is, “The fact that some Americans [i.e. my political enemies] get way more respect than other Americans [i.e., my political allies] is terrible,” but libertarians hear “The fact that some Americans have an unfathomable amount of stuff, while other Americans have a merely fantastic amount of stuff, by global and historical standards, is terrible.” When progressives say, “Capitalism is exploitative,” what they mean is, “Cold, amoral status competition is exploitative,” but libertarians hear, “People voluntarily trading stuff is exploitative.” Maybe if libertarians and progressives defined “money” the same way, they would stop talking past each other. Or maybe the goal is to talk past each other, because if they talked to each other, they would feel troubled. 

Money, money, money. We want it—that’s what we want. But it can’t buy us love. But it can buy us an engagement ring, which somehow proves our love. It’s the root of all evil but also a status symbol, but also something icky and secretive, but also something our political allies (but not Burundians) deserve more of. Money is weird and twisted and bullshitty, just like status, just like our complicated relationships, and just like the human condition. 

1. I mean this in the Hansonian sense of “politics is not about policy” or “school is not about learning.” The more nuanced way of putting it is: when it comes to money and related concepts (e.g., poverty, greed, inequality, capitalism), there are hidden motives at play that have more to do with status and signaling than with material goods or services and their utilitarian functions. This doesn’t mean that money is never about stuff. Hidden motives often exist alongside official motives; it’s just that we exaggerate the importance of the official motive and conceal the presence of the hidden motive. It’s that exaggeration and concealment that I’m calling bullshit on—not the economics of prices or inflation or anything like that.