Money Matters

Money is a number. The language of numbers is mathematics.

The language of money in finance is the mathematics that a financier uses to calculate the cost charged to enterprise for the use of money aggregated by that financier and allocated to enterprises for their use, for a time, at a cost and on terms.

The cost of money charged to enterprise determines the qualifications of enterprise for that financing, the time and timing of that financing and the terms that must be met for the financing to continue.

Terms terminate a financing if not met.

So the terms of financing affect what business an enterprise does, and how that enterprise does business, making technology choices available to others through exchange for a price paid in money.

How business does business affects the way money is made to flow through the population of participants in the economy as a mutual aid society for sharing an abundance of technological solutions to the everyday problems of everyday people living our own best lives as best we can under the circumstances then prevailing, every day.

How money is made to flow through a population participating in a shared economy affects the cohesiveness of that population living together in society, ongoing into the future.

In this way, the mathematics of finance curates the future of society, predistributively, along three metrics of:

1. Suitability of the technology to the circumstances then prevailing, at the time;

2. Duration of the enterprise, and its social contract with popular choice, over time; and

3. Dignity in how the business does business, all the time.

“a technology that communities use to trade debts”

Micheal Mainelli

a legal instrument for effecting transactions between people who are separated by distances of time, place and social connection (“you don’t have to trust the person, if you can trust their money”)

the social energy for directing our individual insights and initiative towards some activities (where money can be made) and away from others (where there is no money to be made)

Money is the capacity to do work.

Work is how we make our worlds.

This story is always a little bit skewed.

Markets are always presented as a perfectly virtuous expression of our collective wisdom as the sum total of individual choices freely made by each of us, individually, each individually choosing according to our own personal and individual moral compass, in which no individual is ever forced to make a choice they do not freely choose to make.

Government, on the other hand, is always presented as vaguely sinister (even though it is a constitutional representative expression of our free choices, as voters at the ballot box, through electoral politics), an oppressive force that imposes a collective will as a constraint on personal freedom. The reasons why force is sometimes used in society to constrain freedom are never really explored, or even acknowledged as being worthy, not to mention necessary, to maintain social cohesion and a dignified quality of life.

This narrative does not allow space for exploring the function of government in righting the wrongs that sometimes occur in the markets, when bad actors act badly, and when institutions become corrupted in their exercise of authority untrue to their agency and purpose.

We need to teach ourselves to see this story as the special pleading for the special interests of those who control money in society today, who sell/tell this story to keep us from seeing the importance of money, and the illegitimacy of their control over money.

We need to teach ourselves to see the truth that people make choices in the markets by paying a price, and that prices are paid using money, so that those who control the money determine who can pay the price, and therefor who gets to make what choices.

If we want individuals to be free to make our own choices, for ourselves, then we need to institutions for controlling the flow of money that reliably flow money to individuals, fairly and equitably, and not concentrate control over the flow of money in the hands of a few, who use it to oppress the many.

The truth about markets that we are never allowed to acknowledge according to the prevailing story of our time is that money matters in the markets: if you have the money you can pay the price, which means you get to make the choice; if you do not have the money, you cannot make the choice. Instead, choices that affect you, personally and individually, will be made for you by others, without your consent, or participation: because they have the money, and you do not.

The much ballyhooed perfect freedom of the markets today is, in fact, a most imperfect unfairness, and oppression of those who do not have by those who do.

Because the markets are not shaped by people.

They are shaped by money.

Or, rather, they are shaped by people spending money to pay the price of making a choice.

Our freedom to choose is contained in our control over money.

If we control a lot of money, we have much freedom.

If we do not control much money, we do not have much freedom.

And when a few control a lot of money, and many do not control much money, the markets become arenas of oppression by those who have, lording it over those who do not.

This dominance of the few over the many is then justified with the trite assertion that we each are responsible for how much money we control: if we control a lot of money, that is a consequence of our superior merit, and personal morality; if we do not control much money, that also is a reflection of our own personal merit and morals.

This assertion is false on its face, and needs to be rejected utterly.

Money is a sociology of social choosing that is controlled by institutions of agency, authority and accountability that are created by design to operate according to legally specified codes of instruction for authenticity and integrity in their institutional exercises of their institutional authority/power true to their institutional agency/purpose/mission.

If the code gets corrupted, institutional authority gets exercised deviantly from institutional agency, spreading discord through society that manifests as the oppression of the many by the few.

Today, the code of money has become severely corrupted, and discord is spreading like an infection, around the planet.

We need to reboot the system of institutions that control the flow of money, to reset the code, and purge the corruption, before we can restore cohesion to society, and health to our partnership with the planet.

The first step in rebooting the system is taking an inventory of its parts, to discover what is there, that the story we are being sold/told is hiding from us.

Then, we have to look at how those parts are designed to work, correctly, so that we can then diagnose where and how they are currently working incorrectly.

Only then can we hit the reset button.

Let’s begin with an inventory of parts.

When we look at money we see a difference between the physicality of the thing we call money, and its functioning in society.

When money is made to flow through institutions of finance, it becomes infused with a logic and a language for talking about:

how money set aside by others, for a purpose, for a time, as savings for investment in financing for enterprise gets aggregated, and
how those aggregations get allocated as money made to flow into enterprise for its use in paying its cost in order to realize its price, for at time, at a cost, and on terms that inform how that business does business expressing its technology as choices made available to others to inform the economy that informs society that informs our future.

This gives us a new way of talking about the function of finance, generically, as the aggregation and allocation of money set aside as savings for investment in financing for enterprise.

This shows us that investment and financing are two words that reference the same transaction from two different points of interests – the obverse and the reverse of the same coin, if you will – where investment is the transaction viewed by the saver, and financing is that very same transaction viewed by the enterprise.

This framing lets us see that the function of finance is to mediate the tensions between our needs, as Savers, relative to our Investments and the needs of Enterprise relative to its Financings.

This invites reflection on how it is that we, as individuals, use money to shape our own personal and private worlds in which we each live our own best lives, as best we can, under the circumstances then prevailing, out of the public world of social choices that we all make together, through enterprise for the exchange of an abundance of technologies, out of the world of Nature into which we each and all are born

This reflection shows us that we each use money to:

learn about how the world about us, both the natural world and our human worlds, work, and how we can take those worlds about us as we find them, and change them to work more a way we choose to make them, through technology as practical knowledge of the world and how it works in various specific way;
earn money through participation in enterprise, where “earn” is used as broadly as possible to encompass any activity that results in our gaining control over money (even if that activity involves nothing more than being born to parents who have control over money and who pass that control to us, through laws of inheritance – a topic much to be explored in the use case of wealth inequality and its impact of social cohesion)
spend money to pay the price to acquire surplus of technology from enteprise, that we desire to use in shaping our own personal and private worlds in which our world works more the way we choose to make it;
save money we earn but do not spend, to spend later; and
invest our savings for diverse purposes, that include:
- caring for our own;
- caring for others;
- contributing to the public fisc for paying the costs of public health, public safety and social cohesion through shared wellbeing;
- safekeeping (physically and accounting for credits and debits) and future transacting;
- idiosyncratically and opportunistically putting money to work making more money; and
- programmatically providing certainty against certain of life’s future financial uncertainties.

This also invites reflection on Enterprise, looking beyond the prevailing popular legal form of the corporation, to see the physicality of how it is that business actually does business.

Physically, an enterprise can be seen as:

a social configuration of Knowledge + Networks + Routines
for converting cost-for-value into value-for-price
by doing the work of constructing a surplus of expressions of technology,
as practical knowledge of how the world about us works in some specific way, put into action changing the way that world works, in that specific way, to make it work more a way we choose to make it, in some specific way
in abundance for sharing with others
in exchange for a price paid in money or other value.

This way of seeing Enterprise as a social configuration for doing physical work lets us see how it is that Enterprise needs money to pay its costs before it can realize its price.

When Enterprise needs money, Finance provides it.

This let’s us see Finance as an institution of agency, authority and accountability for aggregating money set aside by others, as savings for investment in financing for enterprise, and allocating those aggregations as money made to flow into Enterprise for its use in paying its costs in order to realize it price, for a time, at a cost and on terms that inform how the business does business of expressing its technology as choices for others that informs the economy that informs society that informs our future.

This is a most important function in society, that must be done correctly, if the people are to live well together, and apart.

Understanding how Finance functions correctly begins by considering the different reasons that people set money aside as savings for investment in financing for enterprise, and matching reasons with a logic of financing that fits.

This gives us our inventory of six different kinds of savings matched to six different logical forms of finance:

Private Money set aside to provide for our own, aggregated through Family & Friends and allocated as patronage for IMPACT (where Impact is whatever the family and its friends choose as good for the family, and its friends);
Civic Money set aside to provide for others, aggregated through Church & Philanthropy and allocated as grants for MISSION;
Public Money contributed to the public fisc, for public health, public safety and social cohesion, aggregate through Taxing & Spending, and allocated as subsidies for POLICY;
Working Money set aside for safekeeping and future transacting, aggregated through Banking & Insurance, and allocated through monetization of PROPERTY;
Mad Money, set aside to put money to work making more money, opportunistically and idiosyncratically, aggregated through Exchanges & Funds and allocated through securitization for speculation on SCALE; and
Fiduciary Money set aside to programmatically provide certainty against certain on life’s future financial uncertainties, aggregated through Pensions & Endowments, and allocated through negotiation for SUFFICIENCY.

This way of seeing Finance also gives us a more complete way of understanding how we, as individuals, contribute to, and form a critical component of the economy, as learners, earners, spenders, savers and investors to make our own personal and private world in which we each live, personally and private, out of the shared, public world that we make together, through enterprise for the exchange of technologies, out of the world of Nature into which we each and all are born.

This allows us to articulate a more expansive sociology of social choosing than the confusing-because-incomplete Great Markets v Government Regulation Debate, brought to us by Neoliberalism, that includes both Civil Society and Finance as institutions of agency, authority and accountability, alongside Enterprise and Politics, within a new social narrative of being human in society, through economy, using money on a planetary scale in the 21st Century and beyond, in an artificial world of technology solutions that we make for ourselves in which to live, out of the world of Nature into which we each and all are born as

a mutual aid society for sharing an abundance of technology solutions to the everyday problems of everyday people living our own best lives as best we can under the circumstances then prevailing, every day
through networks of enterprise and exchange
using money as a legal instrument for effecting transactions between people who are separated by distances of time, place and social connection, that is also the social energy that directs our individual insights and initiative towards some activities, and away from others
to construct, and episodically de-construct to reconstruct, a safe and dignified house for humanity
within built environments of Urban, Rural, Curated and Left-Alone environments
along the creative edge of a constantly changing and adaptively evolving Human partnership with Nature, and each other,
choosing new beginnings from time to time, to better fit the changing circumstances of the chaining times
through inquiry for insight and new learning that can inform innovation
making new choices more popular as better fit to the circumstances then prevailing
while letting previously popular choices fade into history as a good fit to the circumstances prevailing at an earlier time
driving the flourish and fade of the social contract between enterprise and popular choice
that is the true pulse-beat of our prosperity, and the real story of our human history
normatively, through Civil Society
predistributively, through Finance
distributively, through Enterprise, snd
redistributively, through Politics, Policy, Law and Government