Why On Earth Did We Let Money Rule Our Earth?

Hi SCG,

I have been bumping into money related books, articles, blogs and videos recently a lot ; And you might agree with me, that with approaching  spending festive season of Christmas, availability of money in our wallets is gaining on its importance. Right? So, I have decided to share with some of those resources with you, which might get you thinking about concept of money, too.

[WARNING: this is one of the longest posts on #IS + ideas in it, might disturb your perception of the perfect world you thought, you live in. Read it at your own risk]  😉

I Was an Investment Banker Once

Let me start with a fact, that in the year of 2007, I was witnessing incredible financial and real estate boom in Dubai with my own eyes. I swear, it seemed to me like everyone became trader of stocks or buyer of properties. Then they were reselling them the next day for crazy profits. Commissions for sales people of real estates were mind blowing, especially when they have been getting commissions on the same apartment over and over again, which was only changing name of owner in a contract. Apart from witnessing all this craziness, in April that year I have joined big international bank which logo is umbrella (I believe you can guess its name) in Dubai and I became part of wealth management team for high net worth individuals, or simply said for clients loaded with money. In December, I was out of this business by my own choice, when I have resigned. Why?

After 7 Months, It Just Did Not Feel Right

Whole idea of investment banking just did not feel right to me. (especially knowing that my intuition rarely sabotage me). It seemed to me too fishy and not honest business at all. Getting clients signed for retirement plans and getting fat commissions from literally non-existing money (because client’s 1st payment was due only next month?!), attending fancy parties organized by big investment houses in the most posh spots of Dubai, getting trainings on pitching hedge funds and other investment products  in the fancy offices of just built Dubai International Financial Centre...etc.

When I have decided to quit, many the people told me: “You are crazy! Why are you giving up this luxurious life. Make money. Seize the opportunity.” I just could not, my inner voice simply did not allow me to carry on in this industry.

Was my gut feeling, right?

You can judge yourself.  You all know what financial crash has happened in 2008 and is still happening in other parts of the world (Greece, Ireland…)

What Is Future Of Money, Then?

Few weeks back, I was astonished by blog post Future Of Money Video; Now Where Do We Go From Here? written by futurist, design thinker and researcher from NYC – Venessa Miemis.

Guys, I really encourage you to watch Venessa’s video (bellow), which gives answers on: What are young adults thinking about money and value? How can we create new systems of wealth generation and abundance? What does the future hold for banks and other financial institutions in the wake of massive peer to peer exchange?

 

The Future of Money from KS12 on Vimeo.

What Can Do We Want From Banks?

Venessa stroked again in her next blog post, where she has reflected on what she really wants from banks. I have tweeted her post as the most sincere blog post I have read lately. Yes, it was that powerful! I totally agree with his Venessa’s statement:

“All I know about the way my bank works is that I deposit my money there, and then they take that money and go make money off of it. Where is that money going? Where is it being invested? Can I have control over how you use my money? Can I set a standard of where I allow you to invest my money, so I can be proud to say my money is being invested in green technology, or local initiatives, or ANYTHING that I care about? Or is it just being thrown around in a speculative market and making money off of itself, without generating actual value or wealth for the world? If so, that doesn’t make me proud. It makes me ashamed.”

Hmmm…I am ashamed too, the same way as I was ashamed when I was working in investment banking three years back.

So, What Is Real Value Of Money, Then?

Money was, is and most probable will be  just a black box not worth understanding for most of the people. (It is necessity, we cannot live without it, why should I question it?) I have purposely used future form in the previous sentence, because even Man from Mars (from the book Stranger In A Strange Land),  had troubles to grasp what money is;-) Martian Mike (or rather author Robert Heinlein) said about money:

“Money was in idea, as abstract as an Old One’s thoughts. The total structure of money dazzles me, the idea that an entire world could be reflected in one dynamic, completely interconnected, symbol structure.”

I too, find it pretty spooky, that worthiness of our lives can be expressed in numbers. We celebrate and envy rich people, we want to become one of them. I do wonder, why have we got fooled by this kind of “idols”? If in the core of our heart we will all say, that there are more important things in life to be grateful for than financial wealth, right?

What If Money Has No Value?

Chris Guillebeau nicely said in his first book (I trust there are more to come) The Art Of Non-Conformity, that:

By itself, money has no value:The value is produced only when we exchange money for other things.”

And this exchange for “other things”  is certainly not taking place in the most of the transactions in the financial sector! Derivatives, which no one except PhDs in mathematics can understand, credit defaults swaps (trading with debts!?yeah, buying and selling someone else’s debts), hedge funds, etc.  All of that, is a virtual game of numbers, not underlined by anything tangible. And I find it to be pretty lame, “wealth” not worth of admiring, I would say…

How Could We Get Fooled That Much?

John C. Bogle – founder of the most respected Vanguard Mutual Fund Group has an answer for it in his book Enough:True Measures of Money, Business and Life:

“Fund business has turned from stewardship to salesmanship, from managing assets to gathering assets. We have become largely a marketing industry, engaging in furious orgy of product proliferation.”

Whoa! And those are words of one of the founders of mutual fund industry…

We Too Are Responsible For Financial Crisis

John Lanchester described financial sector’s direct ownership of capitalism in his book Whoops!: Why Everyone Owes Everyone and No One Can Pay as:

“Great fortunes began to be made by employees, doing nothing other than their jobs – jobs which, in case of bankers, involve taking on risks, usually with other people’s borrowed money.”

Yes, that is why I have said, that we personally are responsible, too. We were borrowers, consumers, always needing more money to buy more stuff , to get bigger houses, nicer flats…We were irresponsible and we did not know how to have enough. We got fooled by marketing campaigns (easy loans) and peer pressure (oh, my everyone is having a mortgage I too need to sign 30 years “enslavement”), which encouraged our borrowing appetite, to acquire much more than we could afford and sadly much more than we truly needed for happy and meaningful life.

It Is Time To Be Truly Socially Worthy

As I always, say; If we don’t like something, we must change ourselves and lead by example. Changes have never happened from up, masses from “the bottom” should show the direction, where we want to take our future to. Are you up to it? I am.

Thanks to Cory Doctrow for blog post:  Much of what investment bankers do is socially worthless! ,thanks for pointing out thoughtful article in The New Yorker: What Good Is Wall Street?, I totally agree with sad fact, that:

“For years the most profitable industry in America has been one that doesn’t design, build, or sell a single tangible thing.”

Let’s learn from our mistakes and let’s encourage need for a paradigm shift in what should banks and financial industry should be for. What role should banks play in our lives and how can we together collaborate on meaningful investment activities, which will help to make our world a better place…

We Have Reached A Point, When It Is Time For Radical Paradigm Shift About Money, Banking and Way Of Living…

Financial institutions proudly belong to service industry, so I believe that they are aware of its meaning, which means to provide a service and that they are aware that they exist, because of the real hard earned cash deposits of its “ordinary” clients. But sadly they are often acting like it is the other way around…

I believe there are more and more bold people (like Venessa, Chris, John Bogle, John Lanchester etc.) around the globe, who will have the guts to stand up and speak about what is really going on with our monetary driven world.

I did my bit by composing this shipment.

SCG,

how do you perceive value of financial institutions in our lives? What would you like your bank to do for you? How could you help your bank to build trust among each other again? Have you ever experienced a transactions or business deals based on exchange other means than money? What if money and currencies as such will collapse and will have no value at all? Will you still be happy with choices you have made in your life?

I cannot wait, when you will “pay” us  a visit in the comment section.

😉

i.


Advertisements

Comments

  1. Wow! Simply wonderful compilation of thoughts!
    Every economy/management student shoud read this to get different perspective.
    And thank you for relevant links!

    • Hi Michal!
      Thanks for liking this shipment!
      (Honestly, it took me 7 hours to put it all together + months of collecting of inspiration + 3 years of reflection on my feelings from being a “banker”)
      😉
      Please spread the word to your circles of economy/management students, then!
      😉

  2. Well done, Ivana
    I work in money as the owner of a bookkeeping company helping small business owners understand the way money moves through their business. This is a subject that is fascinating to me. I haven’t read the books you have, I have focused more on macro economic books. I have added yours to my list. Thank you!

    Way back in the beginning, status was measured by health and by art. If your tribe members were healthy and had time to decorate your useful items, you were ‘rich’.

    Money came on the scene to facilitate trading. If I wanted your rabbit skins and you didn’t want my fish, we couldn’t trade. People began to recognize other items as having an easily tradeable value. These were usually small, rare and often beautiful items such as amber, shells, salt, beads etc.

    Money still has it’s uses as a way to easily trade for the goods and services we need. As you pointed out, Ivana, one of the big problems comes when the money itself is considered to have value. When people or institutions trade paper or currency entire countries can be effected – Mexico ( a few decades ago, but it was big), Iceland, Ireland. This isn’t just about people not adding value to society – as you so rightly pointed out.

    The other problem is when we make decisions designed to change the numbers and not change the circumstance. For instance, if I decide my Accounts Receivable is too high – too many people owe me too much money – I can write off some of those debts. That’s not solving my problem, just making it disappear.

    Another example is when Governments decide that there are too many people living in poverty so they lower the poverty line. Like magic, there are less people living in poverty! That doesn’t help the hungry kids or make any changes in life circumstances for those families.

    Don’t get me started on corporations that can sue – and win – against a town that has voted to not take on the corporation’s waste or to give up their water resources.

    I agree with you, it’s time we take back the human and humane decision-making criteria. Thank you for this well researched and thoughtful post.

    • Hi Frances!

      What a wonderful comment. Thank you!
      When you have mentioned bookkeeping, there was a joke in the book Whoops, which said:
      two accountants are talking : “Whats 2+2?” and other replies: “What do you want it to be?”;-) so, it is very creative game of numbers.
      And as Anish nicely said in his comment bellow:”mathematical engineering to fraud”
      Oh, my you have provided us with excellent examples of how problems can be “solved” by just adjusting few numbers in the system…and indeed, it has no real impact on anything.
      Frances,
      “I see you” as in movie Avatar and I am glad there are more & more of us, seeing what is going on and not liking it!
      Awesome.
      HUG
      i.

  3. I – thanks for very thought provoking post. I do admit that the down turn has triggered lots of thought around money. I would reccomend “The Ascent of Money” by Niall Ferguson, from a historical perspective.
    Currently the concept of money has no intrinsic value, there are at times promises from various entities with power that they would back a piece of paper. In reality only small fraction of the “money” exists this way. The “money” is financial world is mathematical magic, it never really exists. The best qoute i have heard on this compares sophisticated mathematical (fiancial)engineering to fraud.
    To give us an example of how difficult it is for someone to nitpick highly sophiticated mathemagic ( read proof), lets take the case of proof for Fermat’s last theorm. There are very few people in the wide world who really understand it. Bugs when found in proof was hard to fix, not that there are not people not smart enough, there is large amount of expertise needed ( in this case number theory) and energy needed to go through it. So now we have a case where, the models are secret and no body really knows. The answer to that question is your guess as good as mine.
    BTW I should put all this in context when people who really understand this “magic” play the , these include Merton (of Black Shoules model )and the gang at LTCM (would reccomend “When Genius failed”). They had to be rescused, so imagine the plight of mere mortals at this game.
    The unfortunate “collateral ” damage to these experiments are the likes of you and me. We the average citizens of the world pay the price for select few, and unfortunately what we call “tragedy of commons” occur, the collective pays the price for the bad things done. So they have no incentive to get things done right.
    Money has no direct relationship to development or social well being of humans. I do come from a state in India which has low per capita income but has high indices on both development and socail well being ( an anomaly)…

    • Whoa, Anish!
      what a blog post like comment you have left us!
      Thank you.
      I must admit that you have really deep understanding of what is going on, even from theoretical – mathematical point of you.
      I will do some research on the names and other facts you have incorporated in your comment.
      Thank you again!

  4. Jean-Baptiste Collinet says:

    Brilliant work.

    I can hardly imagine how much time, research, thought, sweat and maybe tears it took to ship such a massive piece of art!

    I badly need to put this in front of the “old-model” moguls. I know few of them…Unfortunately!

    Everything I could have written has been written already (I can hear from my window people shopping for Xmas with money they don’t even have, for things they don’t need. The epitome of the status quo!) so I may just suggest you to pay close attention to money in the Music industry.

    It’s beyond the wildest insanity you can imagine.

    • Hey JB,

      what a sincere blast of thoughts!
      Thank you so much for seeing sweat behind this post and I am glad that you liked it.
      It is brilliant that we are somehow awakening from this consumption orgy, we have lived in last decades.
      I believe that time of artists will come (soon or later)!

  5. Great post! This kind of radical call of questionining what is ‘real and true” is so needed for innovation and moving us forward. Much of what we think is true is really a cognitive illusion or at least an over-attachment….and money’s traditional constructs need to be shaken up severely…..and you are doing that!!! Keep up the great writing….

    Kevin J. Fleming, Ph.D.
    Founder
    Grey Matters International, Inc.
    http://www.kevinflemingphd.com
    kevin@kevinflemingphd.com

    • Hey Doc!
      So, so glad to see your 1st comment here on Inspiring Shipments!
      Thank you!
      Indeed, things need to be questioned and shaken.
      I will keep on writing and you keep on coming back and share your wisdom with us = Super Cool Gang.
      😉

  6. beautiful dear.. what a collection. and what a topic…
    i love what Vanessa is doing with the future of money.. kids everywhere are talking about shifting values – if you let them… if you listen.

    we nag about tech being a waste of time, when the whole shift is about people and relationships. we have so much to learn from what the youth are doing with tech. they are taking back the natural organic way to learn/do/be.

    i would add the work of Lisa Gansky and The Mesh. i think it’s a very practical, realistic way for people who are doubting/afraid/whatever that with no money they will be desolate.

    my last post on all this.. notice Jodhbir’s comment… my kids in the lab echo that daily as well. http://monkblogs.blogspot.com/2010/11/finding-job.html

    love what you are doing. love you dear.

    • Oh Monika!

      brilliant comment!;-)
      Yay, it is such a joy to ship for such wonderful artists!
      Mesh book is on my desk right now, and I will read it next month for sure!
      😉
      Going on your post right now!
      😉
      Let’s make change happen! We can, we will, we are doing it…

  7. Great post, because it makes you think, and travel within…

    The creation works on the principle of energy exchange, there is always a balance.
    The invention of money as a tool, while convenient for exchange, also made it possible to create illusory wealth, with no real exchange in value, causing energy imbalance… As with any tool, it is the intent or application that is good or evil, not the tool itself.

    The key is to develop our inner vision to connect with the richness within us.
    This allows us to manifest richness in the material world as well..

    Cheers, Amit

    • Namaste Amit!
      Welcome to SCG and thanks for your 1st comment.

      I will second, your opinion about misusing tools and inventions by us, people.
      The thing which bothers me, is: “when we will learn?” History repeats over and over and we are go round and round in this pointless circle.

      But, I believe, that more and more people want to get out from this rat race and that we will be able to cause little shift of the course of our future.
      😉

  8. Oliver Janzen says:

    Hi IS,

    thanx 4 inspiration!

    I had an interesting chat with the Chief Strategist of the IT Subsidiary of a large german private bank. He exlained to me that money is kind of insane, since all money is lended / boroughed … and interest rates grow exponentially while our small planet does not grow anymore! There will be a time when the total amount of goods will not be able to compete with the increase in money caused by interests…. Secondly he made me aware, that in 2008 there we almost a point of “no more cash in Germany” and most of the bankers started to bunker food!!! He reported about xls-sheets “What you need to survive x weeks after the money system completely crashed” …yes, again bankers.

    Anyway, most interesting: there is a video on Youtube “Goldschmied Fabian” – unfortunately in german – that explains how this system was developed and where the root causes and errors are. Easy explanation, even kids will understand … if the kids understand the german language. Do you speak german? A little?

    If not … here´s the exercise: pls find out if the following video (and the other parts of it) are available in english, too!

    Link: http://www.youtube.com/watch?v=70VPBU11U-E

    Best,
    Oliver

Trackbacks

  1. […] This post was mentioned on Twitter by Michael Vrijhoef, Ivana Sendecka. Ivana Sendecka said: shipped: NEW on #IS http://bit.ly/gd65qO Thanks to @VenessaMiemis @chrisguillebeau @BoingBoing @NewYorker for inspiration;-) […]

  2. […] of the question, which bothered me quite a lot and which made me to write the longest post on #IS: why on Earth did we let money to rule our Earth? ever. John Lanchester explains in very human language, why did we reach stage of […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s