Money and Wealth

International Money Pile in Cash and Coins

Warren Buffet, the mega-rich investor and darling of capitalists and aspiring rich everywhere, caused a minor uproar (online at least) this week when he published an Op-Ed in The New York Times entitled ‘Stop Coddling The Super Rich’, in which he made the argument for higher taxes for the rich (himself included).

Coming from such a respected capitalist it created a lot of buzz. I suspect this is mainly due to many people agreeing with the argument. This morning however I came across at least one piece of dissent. Michael Arrington of TechCrunch argued that calls by the ‘super-rich’ to tax the ‘rich’ is actually a cynical ploy to protect themselves.

The super rich love to talk about higher taxes on the rich because it’s a competitive barrier protecting them from competition. If the people making a lot of money today have to pay much higher taxes, they probably won’t ever accumulate enough wealth to be “super rich.”

To be honest, I’m not going to debate the ins and outs of that argument. What interests me is generally the concept of ‘wealth’. Arrington suggests the solution to the problem is a ‘wealth’ tax.

Buffett is just fine with big new taxes on the rich because those taxes never touch all the under-taxed wealth he’s accumulated over the decades

When Arrington says ‘wealth’ however, what he really means is money, or stocks. You can tax ‘money’, but you cannot tax ‘wealth’.

Of course, at this stage I am going to bring in the philosopher Alan Watts. Watts argued strongly that our concept of wealth was completely upside down. It starts with the confusion that ‘money’ is anything other than a concept or idea.

In “The Wisdom of Insecurity” he wrote:

What we have forgotten is that thoughts and words are conventions, and that it is fatal to take conventions too seriously. A convention is a social convenience, as for example, money. Money gets rid of the inconveniences of barter. But it is absurd to take money too seriously, to confuse it with real wealth, because it will do you no good to eat it or wear it for clothing. Money is more or less static, for gold, silver, strong paper, or a bank balance can “stay put” for a long time. But real wealth, such as food, is perishable. Thus a community may possess all the gold in the world, but if it does not farm its crops it will starve.

The argument Watts is making here is that ‘money’ is something that allows you to acquire wealth – but it is not wealth itself. Look at the recent volatility in the world economy. People who were ‘wealthy’ one day, were not the next. They didn’t lose anything tangible, they lost ‘money’ – or rather – their money lost value. Watts says money is ‘more or less’ static – you could argue this is not true, its value can fluctuate wildly. But as a concept it is static, whereas the reality it points to, actual material wealth most definitely is impermanent.

Watts addressed this in his 1969 essay “Wealth versus Money”, when he spoke of “the fundamental confusion between money and wealth”:

Remember the Great Depression of the Thirties? One day there was a flourishing consumer economy, with everyone on the up-and-up; and the next, unemployment, poverty, and bread lines. What happened? The physical resources of the country – the brain, brawn, and raw material – were in no way depleted, but there was a sudden absence of money, a so-called financial slump. Complex reasons for this kind of disaster can be elaborated at length by experts on banking and high finance who cannot see the forest for the trees.

But it was just as if someone had come to work on building a house and, on the morning of the Depression, the boss had said, “Sorry, baby, but we can’t build today. No inches.”

“Whaddya mean, no inches? We got wood. We got metal. We even got tape measures.”

“Yeah, but you don’t understand business. We been using too many inches and there’s just no more to go around.”

The problem is this confusion between wealth and money

What wasn’t understood then, and still isn’t really understood today, is that the reality of money is of the same type as the reality of centimeters, grams, hours, or lines of longitude. Money is a way measuring wealth but is not wealth in itself. A chest of gold coins or a fat wallet of bills is of no use whatsoever to a wrecked sailor alone on a raft. He needs real wealth, in the form of a fish rod, a compass, an outboard motor with gas, and a female companion.

On wealth itself:

True wealth is the sum of energy, technical intelligence, and raw materials. Gold itself is wealth only when used for practical purposes as filling teeth. As soon as it is used for money, kept locked in vaults or fortresses, it becomes useless for anything else.

So, when people talk about a ‘wealth-tax’, they don’t really understand wealth at all. This is not just simple semantics, it points to a general confusion we have between money and wealth – between symbols and reality. The end result is that people chase symbols, instead of trying to generate genuine wealth.

Arrington ends with:

We need to let people dream of getting disgustingly rich, and then let them go out there and do it. After that, we celebrate them so that more people get the idea of getting rich, too. It’s what makes Silicon Valley work. And everyone benefits, even the people who don’t end up rich.

If people are driven by the dream of accumulating money, they will be chasing a rainbow. Because as The Great Depression, or indeed The Great Recession has shown us, money is an idea, a concept. It is not real. Of course it is an important idea and a useful one, but because we have mistaken it for reality, we have gotten ourself in a lot of trouble. We no longer make ‘things’, we make ‘money’. But ‘money’ will not feed you or keep you warm. People should be driven by a desire to build great things and to be rewarded by an enriching life. Or to have life enriched because you make those things. Because all the money in the world is worthless if your life is not worth living.


Affluent people […] have seldom shown much imagination in cultivating the arts of pleasure. The business suited exectuive looks more like a minister or an undertaker than a man of wealth and is, furthermore, wearing one of the most uncomfortable forms of clothing ever invented for the male.

The result is a destructive drive to generate profits for profits sake. And before you accuse Watts of being an unrealistic leftie hippy:

It is an over simplification to say that this is the result of business valuing profit rather than product, for no one should be expected to do business without the incentive of profit. The actual trouble is that profit is identified entirely with money, as distinct from the real profit of living with dignity and elegance in beautiful surroundings.

This is in marked contrast to dreaming of ‘getting disgustingly rich’ precisely because it focuses on the things that matter. What use is money if you cannot enjoy anything real?

There is a whole lot more to digest in Watts’ “Money and Wealth” which I may come back to in further posts.

With our thoughts we make the world

A while ago my friend Fiona linked to this transcript of a great talk by John Holloway entitled “Change the World without Taking Power”. (He also has a book of the same name, that I have yet to read.) As I read through it, I was struck by how much it reminded me of a chapter in one of Alan Watts’ most famous works “The Book On The Taboo Against Knowing Who You Are”. Both seemed to weave a similar narrative about how we go about changing the world. In light of the Arab Spring and the Spanish Revolution, it is particularly relevent.

In a chapter entitled “So What?”, Watts having spent the majority of the book arguing (in what is really the central tenant of all of his work) that we are not a separate entity cut off from the Universe, ponders what this means practically. With this knowledge, he asks – So What? What do we with that? How do we change the world?

Watts makes the claim that modern man-

Hoaxed into the illusion of being an independent, responsible source of actions, he cannot understand why what he does never comes up to what he should do, for a society which has defined him as separate cannot persuade him to behave as if he really belonged. Thus he feels chronic guilt and makes the most heroic efforts to placate his conscience.

He continues:

From these efforts come social services, hospitals, peace movements, foreign-aid programs, free education, and the whole philosophy of the welfare state. Yet we are bedeviled by the fact that the more these heroic and admirable enterprises succeed, the more they provoke new and increasingly horrendous problems.

So, despite our best efforts to change the world through political will and effort, we seem to ultimately fail. The world still has horrific poverty, inequality, wars and so on.

Holloway makes a similar point as he opens his speech:

If you look at the experience of the last century, if you look at the experience of revolutionary governments in Russia, in China, in Cuba – but Cuba is a more complicated case – or if you look at the experience of reformist governments, of governments, which have got to power through elections, then I think universally it is a terrific disappointment, a terrific disillusionment.

In no case has a left-wing government been able to implement the sort of changes that the people who struggled for its victory wanted. In all cases what has resulted is the reproduction of power relations, perhaps a change in power relations, but the reproduction of power relations which exclude people, which reproduce material injustices, which reproduce a society that is not self-determining.

So, both men offer similar bleak assessments of left/liberal attempts to fix the world through overt, political effort. And intriguingly, they offer solutions that although are very different in some respects, are also based on almost the exact same foundation.

Watts contends:

It is hard for compulsive activists to see that the vast social and economic problems of the world cannot be settled by mere effort and technique.

Holloway is more specific, and frames it in more political language

Changing the world without taking power means what it says it means, namely that we have to change the world, that is clear. And that we have to do it in a way that we must not think of the struggle to change the world as being a struggle that is focused on the state and on taking state power.

But both men are suggesting that the notion of a traditional struggle is the cause of this failure.


The startling truth is that our best efforts for civil rights, international peace, population control, conservation of natural resources, and assistance to the starving of the earth—urgent as they are—will destroy rather than help if made in the present spirit.

The problem with the ‘present spirit’ as both Watts and Holloway see it, is that we have become fragmented and separate, or we have become made to feel fragmented. We do not see the interdependent relationship we have with our fellow man and our environment, and this separation leads to our present problems. Watts frames this problem in terms of Hindu and Buddhist philosophy, whilst Holloway uses a socialist framework. But both seem to suggest the same thing.

Watts speaks of the ego-trick, that hoax that we are separate from the Universe.

…the difficulty of understanding the organism/environment polarity is psychological. The history and the geographical distribution of the myth are uncertain, but for several thousand years we have been obsessed with a false humility—on the one hand, putting ourselves down as mere “creatures” who came into this world by the whim of God or the fluke of blind forces, and on the other, conceiving ourselves as separate personal egos fighting to control the physical world. We have lacked the real humility of recognizing that we are members of the biosphere, the “harmony of contained conflicts” in which we cannot exist at all without the cooperation of plants, insects, fish, cattle, and bacteria. In the same measure, we have lacked the proper self-respect of recognizing that I, the individual organism, am a structure of such fabulous ingenuity that it calls the whole universe into being.

Holloway also sees this misunderstanding:

It is very difficult for me to imagine a doing which would not be dependent on the doing of other people. It is clear that our doing here at the moment depends on the doing of hundreds or thousands of people who created the technology we are using, who created the concepts we are using, etc. Our power to do is always a social power, is always a collective power, our doing is always part of the social flow of doing. If we think of our power to do as a part of a social flow of doing – it is clear there are no clear divisions between the doing of one person and the doing of another. One flows into another. What one person has done, becomes the precondition of the doing of others. But in a way in which there are no clear distinctions, no clear identities, there are no clear dividing lines.

We are not independent entities, what we do effects the Universe around us. The problem has been we don’t see this.

So what do we do? Here the men differ on the details, but at the same time, offer a similar core idea. We must change how we look at ourselves and our place in the world.


If, then, after understanding, at least in theory, that the ego-trick is a hoax and that, beneath everything, “I” and “universe” are one, you ask, “So what? What is the next step, the practical application?”—I will answer that the absolutely vital thing is to consolidate your understanding, to become capable of enjoyment, of living in the present, and of the discipline which this involves. […] Without this, all social concern will be muddlesome meddling, and all work for the future will be planned disaster.


The revolution I have in mind has to be thought of as a question rather than an answer. On the one hand it is clear that we need some basic transformation of society, on the other hand it is clear that the way that we have tried over the last century to transform society through the state has failed. So that leaves us with the conclusion that we have to try it in some other way. We can’t just give up the idea of revolution. […] I think it is important to think that revolution is a question rather than an answer, because the revolutionary process in itself has to be understood as a process of asking, as a process of moving out, not of telling peoples what the answers are, but actually as a process of involving people in a movement of self-determination.

Again, whilst both men could be said to be worlds apart in one respect, both identify a core problem. And both solutions require us to reconsider who we are and our relationship with the world.

For Watts this is realising the hoax of the ego, of becoming fully aware of our interdependence and totality with the Universe. For Holloway this is seeing our interdependence with society. Different levels of magnification, maybe.

I would highly recommend reading both pieces. (A PDF of Watts book is available here) There are other similarities that I find running through both their work. Towards the end of his talk, Holloway says:

Capitalism exists not because we created it in the 19th century or in the 18th century or whenever. Capitalism exists today only because we created it today. If we don’t create it tomorrow, then it won’t exist. It appears to have an independent duration, but in fact that is not true. In fact capital depends from one day to the next on our creation of capital. If tomorrow we all stay in bed, then capitalism will cease to exist. If we don’t go and create it then it won’t exist any more.

This also reinforces Watts idea of ‘living in the present’ as being the solution to our problem. Capitalism appears to have an independent duration, but in fact that is not true. This is similar to the notion of impermanence in Buddhism – that we think that things have a permanent existence from moment to moment, but in fact we create them in each moment. To see just this moment, would be to break the illusion.

In a talk entitled “From Time To Eternity” Watts also talks of how we create these systems which then trap up, like time and money:

People think money has to come from somewhere, like hydro-electric power or lumber or iron, and it doesn’t. Money is something we invent, like inches.

So you remember the Great Depression when there was a slump? And what did we have a slump of? Money. There was no less wealth, no less energy, no less raw materials then there were before, but its like you came to build a house one day and they said ‘Sorry, you can’t build this house today, no inches’.

(Interestingly, Holloway also talks of our modern misconceptions of time, something Watts liked to talk of often)


When I first read “So What?” I found it very empowering. Although it seems to start out quite cynical and hopeless, Watts, like the Buddha, offers a method of liberation. We can transform our relationship with the world by seeing that relationship for what it is. By realising our place as part of a continuum with our environment we can begin to lose the antagonism between ‘us’ and ‘it’. Between ‘us’ and ‘them’. We can also see how we imagine things to have an independent existence, when in fact they don’t. We create them from moment to moment. And if we create them, that also means we can cease to create them. Of course, this is much easier said than done.

Slavoj Zizek has criticized Western Buddhism for allowing its participants to live in and benefit from global Capitalism whilst also maintaining a distance from it.

The recourse to Taoism or Buddhism offers a way out of this predicament that definitely works better than the desperate escape into old traditions. Instead of trying to cope with the accelerating rhythm of techno-logical progress and social changes, one should rather renounce the very endeavor to retain control over what goes on, rejecting it as the expression of the modern logic of domination. One should, instead, “let oneself go,” drift along, while retaining an inner distance and indifference toward the mad dance of accelerated process.

This could be said to apply to Watts’ ideas, but I would disagree. Watts argues that you cannot change society until you recognise your own true nature. He does not say we should not attempt to build a more equal society; just that we cannot do so until we fully understand the nature of our place in the world.

What attracts me to these ideas is not that it allows me to placidly sit by and watch society crumble, but that it offers a way to try and change things which is different that what has gone before and failed. As both Watts and Holloway acknowledge, previous attempts at a revolutionary upheaval of the world have not worked.

"Smash Capitalism" - Student protests - Parliament Square, London 2010

Like many people I see how society is going and I want to change it, but at the same time I am put off by groups proclaiming their desire to SMASH CAPITALISM. To destroy it, like it is, as Holloway says, “this great big monster that exists”. That kind of imagery seems as destructive and pointless as that which is seeks to destroy. Both Watts and Holloway warn that if we are not careful, our attempts to change the world will simply reinforce the system. The key is to see how we create these systems – and that which we create today we can chose not to create tomorrow.

The philosophers have only interpreted the world, in various ways. The point, however, is to change it.

Karl Marx

We are what we think.
All that we are arises with our thoughts.
With our thoughts we make the world.

The Buddha

“The model which is broken should not be repaired”

Last night, Michael D Higgins, TD for Galway West and Labour Party President delivered what is likely to be his last speech in the Dail after 25 years in that Chamber, and 42 years of public office. It doesn’t disappoint. The speech is nominally about the Finance Bill being passed, but takes in a lot more amounting to a summation of Higgin’s political beliefs. It’s a shame he’s stepping down, but I really hope he gets elected as our next President. How many other TDs are we likely to see in our life times that can reference things that Slavoj Zizek personally told them?

We need to go back and recover the promise of a real republic that would be built on citizenship and that would reject as outrageous in a republic the kind of radical individualism epitomised in that ugly statement of Michael McDowell’s that inequality is needed for the stability of society. It ranks with the mad Margaret Thatcher view that there is no such thing as society. It stands there as such a notion. People should have seen immediately how incongruous it was to speak like this with the language of radical individualism.

The full text is here, and the video is below.

My lord, we need a lot more Michael D. Higgins in this country.

Let the ruling classes tremble

With dramatic language evoking the opening lines of The Communist Manifesto, the Sunday Independent abandoned all objectivity when reporting on recent voter polls from Ireland suggesting a possible coalition between the Labour Party and Sinn Fein.

THE spectre of a Labour and Sinn Fein-led government, with the support of independent socialist TDs, is now uncomfortably close to reality, according to the latest analysis of voting intentions.

Now, no one is in any doubt of the Sunday Independent’s position in relation to leftist politics (They were the cheer leaders of the property bubble), but surely this is a bit loaded for a front page article?

It does make me laugh to think of the staff at the Sindo terrified that a bunch of bearded Commies are coming to take over the country.

Frankly, I think its exactly the kind of thing we need. I mean look at Hugo Chavez, he just blamed capitalism for flooding. If we could get a leader that would blame capitalism for our economy would be a start.

Wake Up! [A Blog post in Three Acts]

Act One:

From The Irish Times:

THE PUBLICATION of the National Recovery Plan has coincided with a dawning of political reality across the political spectrum. Whatever manoeuvring takes place over the next two weeks, the budget, however unpalatable it is, will be passed by the Dáil on December 7th because the country has no other option.

From The

THE DEPARTMENT OF Finance has acknowledged that EU/IMF has power to seek changes to the four-year plan during negotiations.

Act Two:

From ‘The Shock Doctrine’ by Naomi Klein and Alfonso Cuaron

“Friedman understood that just as prisoners are softened up for interrogation by the shock of their capture; massive disasters could serve to soften us up for his radical free market crusade. He advised politicians that immediately after a crisis they should push through all the painful policies at once, before people could regain their footing. He called this method ‘Economic Shock Treatment'”

Alan Watts:

At anytime the world is full of threats, mostly from other people. And there are monsters. There are all sorts of things that scare you, but beyond every monster is death. Dissolution is the end of it all.

And by and large the art of government is to fill that void beyond death with threats of a rather unspecified nature, so that we can rule people by saying if you don’t do as I tell you, i’ll kill you. Or you’ll kill yourself. And so long as we can be scared of that, and so long as we can be made to think of death as a bad thing we can be ruled.

Act Three:

John Legend & The Roots cover The Arcade Fire’s “Wake Up”