Money get back
I’m all right Jack
Keep your hands off my stack

Money, it’s a hit
Don’t give me that
Do goody good bullshit




A few days ago the Rabbit clan went out for dim sum with six members of my husband’s family. After we’d all stuffed ourselves with dumplings and sticky rice, it was time to settle up. I suggested the other members of the party throw in some cash while my husband paid the bill with his credit card. You’ve all done it that way, right? I’m not from another planet? Nevertheless, everyone at the table looked at me in bewilderment. “What is this ‘cash’ you speak of?” my brother-in-law cheekily asked.


Personally, I generally keep some cash on me, but rarely have any coins. I used to carry the exact number of coins I would need to pay for my daily mocha. It was a good way to keep the pennies from accumulating. But it only works if you go to the same coffee shop every day so you know what the price will be, and I like to spread the love around. Lately I’ve been carrying exactly 38 cents—the salad I get for lunch most days comes to $4.38.


Will we reach the point where no one uses cash for anything, ever? And if we do, is the money still real? Not only will we not have a gold standard, we won’t even have a paper standard. We all trade imaginary digital money while participating in the group delusion that it has value.


Recently I’ve been studying a bit about economics. I learned that we all make choices that maximize our utility within the constraints we have. Utility is a cumbersome way of saying something like “happiness and need satisfaction.” Investopedia defines utility as “the advantage or fulfillment a person receives from consuming a good or service.” Maximizing utility is rarely straightforward. Any given choice may have some advantage (cheesecake is delicious) and some disadvantage (cheesecake makes you fat). Utility is subject to change. Years ago I found out that a Cinnabon contains 32 grams of fat. I have not eaten one since. That piece of knowledge sucked all the utility right out of those fabulously gooey things. For me. Your utility may vary.


This is a critical point. Utility is different for everyone and subject to all sorts of constraints. In some cases, someone else’s needs may get in the way of your utility. That’s a pretty good definition of parenting, don’t you think? On the other hand, we derive utility from being good parents, so whatever sacrifices we make, we still come out ahead.


Economists assume that people are rational actors and make choices that maximize their own utility. That doesn’t necessarily mean they are greedy. Utility doesn’t equal money and possessions, though those things may play a role. In politics, we are all suspicious of the utility motives of others. I spent some time today reading the editorials and comments on the right-wing National Review Online. As you might expect, there was much gnashing of teeth over the recent election. I learned that conservative people think that liberal people are selfishly maximizing their own utility while creating negative externalities (consequences) for others. Which of course is exactly what liberal people think about conservative people. Also, both sides think the other side is stupid and/or operating with inadequate information.


What if we let go of all that and assumed instead that everyone has a modicum of intelligence, everyone has information, everyone acts to maximize their utility within their given constraints, and everyone derives some utility from making the world a better place? What if we also decided not to trivialize the concerns that other people have and instead made an honest effort to grapple with them? Examples in both directions: Having the ability to control one’s reproduction is not unimportant when compared with economic issues. It IS an economic issue. And onerous tax burdens that affect a small business’s ability to hire or even survive are not just the grumbling complaints of multi-billionaires.


My proposal: Engage seriously with someone else’s reality. If we can all agree that the electronic coinage we trade these days has real meaning and value, perhaps we can find other pieces of ground to share.









15 thoughts on “MONEY

  1. Great post – worth the wait since the last one.  It’s kind of fascinating that in an age where we all share our thoughts and opinions in real time on public internet forums, it is still so difficult to access the realities of others.

  2. @turningreen – It increased my utility to post today.   I think in some ways, massive public forums make communication harder. Back in the old print days, only well-written, carefully screened material was offered up for public consumption. Now that any yahoo with a computer can publish an incoherent screed, every yahoo does. 

  3. yeahhhhhhhhhhh……… If only people were capable of doing that. Maybe this is an explanation for why they can’t: for some people, maximizing utility means being left alone to do whatever they want as much as possible. For other people, maximizing utility means making the world conform to their ideals for everyone, as much as possible.Cinnabon is not gluten-free.An unrelated statement: wow, have I been barking up the wrong utility trees until recently. šŸ˜€

  4. @Roadkill_Spatula – Nor are we as stupid as they would like us to be. Or perhaps we are all hopelessly blinded by our biases.@turningreen – You rarely scree. @plantinthewindow – It is. One wants to help them understand why their reality is false, but this never works.@ordinarybutloud – It’s even worse than that. Everyone wants to be left alone about some things and make everyone else conform about other things. And we can’t agree which things should be which. Glad you’ve found your tree!

  5. I never EVER have cash.  I want to, but it just never happens.  I’m one of those people who swipes my card for $1.50 cup of coffee (obviously not Starbucks, where nothing costs $1.50).Anyway, back to pondering the very well-presented larger economic points you posted here…  

  6. @transvestite_rabbit – “Everyone wants to be left alone about some things and make everyone else conform about other things. And we can’t agree which things should be which.” You are so exactly right. (How often do you hear that from me, I wonder?)I rarely carry cash. It’s too dangerous, as far as I’m concerned, because to me cash is like found money. If my bank is no longer tracking where I’m spending it, it must be free. Therefore, I can do whatever I want with it! That is not sustainable. I’ve been to a hundred (or 20) budgeting seminars where they tell you to pay in cash whenever possible, take cash out for your budgeted monthly expenses and keep it in envelopes and when your envelope is empty, you can’t spend any more on that thing, etc.–and I know people who swear by it, but it would never work for our family because not only do I have the attitude that I have toward cash, but my husband also has the same attitude I have. I don’t know why we would have this attitude, since I’m certainly old enough to remember the days when you either paid cash or wrote a check and that was that. I mean, I conducted financial transactions as an adult that way; I don’t merely remember that it was once so. I guess I just embraced the new way of doing things because I embrace convenience. And frankly, I never get out my debit card or credit card without thinking about how real that money is. Cash, on the other hand–effectively no longer real to me. In Japan they still use cash for most things. But we don’t live there.

  7. People are totally not rational actors, are they? In economics or in any other area, “rational” seems to be in the eye of the beholder. Case in point, recent election. North Dakota votes to extend smoking ban (tobacco), while several other states vote to legalize the maryjane variety! What a country!

  8. @madhousewife – I always thought that envelope thing was stupid and retro. And I’m old. Imagine how stupid and retro it sounds to the youngsters. @prairiecowboy – Indeed, rational is in the eye of the beholder. You maximize your own utility, whether those seem like good choices to someone else or not. I live in one of those maryjane-legalizing states. The authorities have already dropped all of the pending cases against pot users. I can’t really see how the whole thing is going to play out, though, since it directly conflicts with federal law.

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