The mastery of money

Our modern distractions: 5

Money is necessary. But it is a means, not an end. A writer and broadcaster expounds his doctrine of ?Enough?

BROWSING through the business section of my Sunday paper, I noted that a couple of our home-grown oil barons had each taken home more than ?4m in pay last year. And that?s just Britain. In the United States they would make ten times as much. What do they do with it all? I wondered. Why do they need it? And is it fair that they should get so much more than the people who work with them? Or people like doctors and teachers and the police who do equally valuable work? Then I caught myself speculating, what would I myself do with all that stuff? There was a touch of envy there, mixed with dreams of riches. We are few of us immune. Such a complicated thing it is, this money, I thought to myself, so necessary and yet so intrusive, distorting our values and priorities. Is it good or is it bad?

One thing is sure: we couldn?t live without it. Money really does make the world go round. Whether we are talking about a country town, a country or the world, the mechanism that provides us with work and food and fun ? the economy ? is no more than an elaborate arrangement of barter systems, with money as the oil that keeps it working. Come to think of it, if the barter currency really were oil, we might not be so keen to pile it up. Where would we keep 4m barrels of the stuff? Part of the genius behind the idea of money is its convenience. We can store it, measure it or nowadays move it with the click on a keyboard. Something like 30 times the national income of Britain flows through the City of London every day, and quite a few people earn their living by extracting tiny bits of it as it goes by. As many have discovered down the ages, it is often easier and more profitable to make money out of money than by actually producing something real. They used to call that usury. Now it?s termed trading in derivatives and it?s smart.

Yes, money is essential for life as we know it, but money also has acquired a life and a meaning of its own. For some, money on its own is a symbol of success. Those oil barons will almost certainly never get around to spending all that money. They don?t have the time and they may well not have the inclination to go out and buy houses, yachts or old paintings. Warren Buffet, the world?s second richest man after Bill Gates, lives simply, spends little. His wealth is just a measure of his business acumen. Others, whose wealth is not published in the papers, can use the money they make but do not need to buy some of those symbols of success.

For others again, money is often rightly termed compensation. I once invited the managers of an international investment bank and the head of a theatre company to describe their organisations to a conference of managers. Their products were obviously very different but the way the two organisations were structured and managed was remarkably similar, apart from the fact that the bankers were paid 20 times more than the actors. For the bankers, their work was a well-paid job, for the actors it was a calling. Lucky those whose calling is also richly rewarded financially, but for many money is the alternative to a vocation. It is not clear, then, who should envy whom. Is it better to be poor but doing what you believe in, or a rich prisoner in someone else?s organisation?

Most of us, however, don?t have that choice. We do what we do and a little more money would be nice, thank you. ?It?s the economy, stupid?, goes every politician?s mantra, in the belief that more money will make everyone happier. Except that it seems that it doesn?t. The research on happiness has a remarkable consistency across societies. It seems that where the average income in a society is under ?10,000 a year, then more money does result in more happiness, as recorded by answers to standard questionnaires. Above that level, however, more money does not increase the average levels of recorded happiness. We are talking averages here, across total populations, so we should probably more than double that figure to find the happiness threshold for the average salary earner, but the stark fact remains that above a certain level more money does not make us happier.

Economists, however, would point out that it is important that we should continue to believe that more does mean happier, because unless more people keep on spending more money our economies will not grow, there will be less to spend on public services and there will be less work and money for the poorer workers, including those in the developing world. It is, you might say, our social duty to spend more than we need to. Odd.

Such a complicated thing, then, is money. It is our livelihood, the way we pay for our bread and butter; it is the way we create work for other people; it is a product in its own right, in that you can make money out of money; it is a measure of success, whether you store it in a bank or spend it on unnecessary things; it is a consolation prize for missing out on your vocation; it can even be an excuse for not following that vocation, as when someone says, ?Once I have made a million I will be free to do what I really want to do.? No wonder we get confused. No wonder that so many make money the point of life rather than the means of life. It was not meant to be that way when it was first devised as the universal mechanism of exchange.

At a personal level, life would be simpler if we followed the doctrine of ?Enough?. This doctrine holds that unless and until we can define what ?enough? is for us in terms of money, we will never be truly free ? free, that is, to define our real purpose in life. We will, instead, be volunteer slaves to our employer or profession, subordinate to the priorities of others.

Settling for ?enough? does, however, mean that we have to do away with the other uses of money. It will no longer work as a symbol of success, or as a way of defining ourselves, or as an excuse or compensation for not getting on with our real life. We have to become open and honest about what we really value, about how we wish to define ourselves and how we want others to view us. Having tried it, I can vouch for the fact that the honesty it requires of one is refreshing, even if it surprises and disturbs some of our friends who hope that it is not the start of some sort of fashion.

Would that it were, I often feel. The world would be a more varied and honest place. But then I come up against the economists who worry about the demand curve that creates the supply that translates into jobs and taxes. My compromise is to urge the doctrine of ?enough? on those of us in the Third Age, those who have passed beyond the stages of career and family. That is because it gets easier to work out what is enough as one gets older, when there is less need to provide for the uncertainties of the future and while there is still time to do what we feel we are on this earth to do. At that stage, too, our drop in consumption and earnings will not be significant enough to impoverish the Third World. Our example might be one small strike against the tyranny of money in the modern world. It might give some hope to those who feel that there is no escape from that tyranny. It might even challenge the economists to find a way to break out from the often vicious circles that money creates.

Charles Handy has been an oil executive, an economist, a professor at the London Business School and the warden of St George?s House in Windsor Castle. His books include The Hungry Spirit and The Elephant and the Flea.