In Defense Of Making Money

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2 years ago habryka4 mentioned he’d love to see a comment I made developed into an article, and I agreed and said I was planning on doing it next Monday… anyway, 2 years later on <some> Monday I finally found the time.

Money is abundant and meaningless.

There are good founders with few relationships able to raise upwards of half a million as the first investment in ideas that seem impossibly difficult to monetize. With decent connections, you can pocket upwards of 10 million to start a company that seems hot.

You can learn programming in 3-12 months and earn 6 figures with low taxes working remotely in a few years. You can make bank by doing the most niche and easy to learn of jobs as long as you know how to follow the market. You can probably make it even if you just follow your nose and invest in trends like crypto or high-throughput sequencing early on.

Earning much is easy for many people and it provides no direct meaning. The rich man that’s unable to find happiness because he doesn’t realize the goal of life is altruism/​nirvana/​love/​enjoying-the-moment/​god is beyond cliche.

Money is, to some extent, equivalent to power over others, but that power doesn’t scale if we look at the realm of all possible options:

If I don’t know how to efficiently turn power into a GDP increase, or money into a cure for cancer, then throwing more power/​money at the problem will not make much difference.

King Louis XV of France was one of the richest and most powerful people in the world. He died of smallpox in 1774, the same year that a dairy farmer successfully immunized his wife and children with cowpox. All that money and power could not buy the knowledge of a dairy farmer—the knowledge that cowpox could safely immunize against smallpox. There were thousands of humoral experts, faith healers, eastern spiritualists, and so forth who would claim to offer some protection against smallpox, and King Louis XV could not distinguish the real solution.

This in turn tempts many people, especially young people, to swear off the making of money as a valuable goal.

In itself, this can be fine if you smell your goals well enough from an early age. If you are certain that what you want is to hobo-backpack across the globe thrice, or have a quiet cliffside Mediterranean restaurant, or seek enlightenment … then yeah, you probably shouldn’t aim to make money.

But there’s also a typology of a person that is young, doesn’t have a clear set of “meanings” for their life in mind, yet chooses not to focus on money because it seems to be inherently meaningless.

I’d single out this: a type of person that feels like there are meaningful things to do, but they are unachievable. Things like settling on Mars or the Arctic, stopping violence, eliminating poverty, curing disease and death, eliminating “evil”, “solving” human biology, or physics, or finding a perfect system of metaphysics.

This results in a lot of intellectual meandering in the best-case scenario and in depressive behavior in the worst-case scenario. It leads anywhere from doing a bachelor’s in philosophy and a Ph.D. in a quantitative field, to being lethargic, and staying in bed watching Youtube(TikTok?) all day.

If you count yourself among such people, I want to try and persuade you that money might actually be a generator of meaning if pursued and thought about properly.

i—What Does Wealth Mean?

First, I think I need to get across the idea that wealth isn’t linear nor uni-dimensional.

It’s not worth joining the rat race when you make 50k this year, 55 the next, 100k ten years later. Because the difference between 50 and 100k is indeed very little.

But the difference between 100m and 100k isn’t, 100m would allow you to pursue projects that are far more interesting than whatever you are doing right now.

Nor is there a clear number for the “amount of money you need in order to achieve a paradigm shift”. For some people, having 200k worth of savings might be enough to shift their paradigm to “now I can live frugally off savings and dedicate my life to joining a deworming project in Africa”. Others might need 50m to shift their paradigm to “now I can lead the world into colonizing space and solving last-mile clean energy delivery issues”.

Wealth can result in a paradigm shift, both for people and companies. But if you read about people or companies that made an impact assisted by their assets, one thing of note is that the paradigm shift usually didn’t come until they realized they had the assets to pursue new “unimaginable” goals.

Finally, there’s the oft-repeated but true line: wealth is inflow minus outflow. Many people that we think of as rich are dirt poor once you account for taxes and monthly expenses. Money is useful when it opens up degrees of freedom in the socio-economic environment, it’s useless when spent on status goods and other zero-sum games (e.g. housing in large cities).

ii—Knowledge Without Money Is Often Called Insanity

Another common pitfall is trying to gain knowledge instead of money.

Yes, you could try spending your youth pursuing wealth, but, you say, why not spend it learning, putting a foundation on which to build your later works.

Let me start with a story about a fantastically talented programmer by the name of Terry Davis.

He built TempleOS:

developed it alone over the course of a decade after a series of manic episodes that he later described as a revelation from God.

TempleOS is a fully-fledged operating system, not just a kernel (e.g. Linux). On top of that Davis build games for it, an IDE, and even his own specification and compiler for a C dialect called HolyC. That’s not to mention drivers, a custom-made filesystem, and so on.

He did all of this, more or less, from scratch, and the thing ran on x86 architecture.

This is rather insane, for one man to build all of this alone, some of it while homeless and in between debilitating schizophrenic episodes (oh yeah, the guy was, by the way, rather insane).

Granted, part of this was dedication, but a lot of knowledge and intelligence was required to build it. It’s really hard to quantify how “good” he was, but I think everyone would agree it’s insane to think a person with his talent would not become a tenured CS professor at a good university or the head of engineering for a moderately famous project or the CTO of a successful software company.

Alas, he was most certainly insane, writing racist aggressive dribble on forums, unable to work or properly communicate with people, unable to fend for himself in the world, or at least be agreeable enough to live with the support of others.

This is a very extreme failure mode, but it shows that one can gather knowledge, very real and practical knowledge, while still utterly failing at integrating it or themselves into society as a whole.

As it stands, TempleOS is the software equivalent of outsider art, immensely impressive yet utterly useless. It’s a shame really, because who knows what someone like Davis could have done had he joined forces with other people to build.

Similarly, people doing various “blind Inuit pottery making success gender gap Ph.D.” style learning think they are acquiring knowledge, but I assume most of my readers would agree they aren’t. Or at least that they are acquiring knowledge of little consequence, which will not help them live more happily or affect positive change, or really any change, upon the world.

The problem is that it’s really hard to know if the knowledge you are acquiring is in any way “correct”, and often enough the only way to validate that is through other people.

This is not to say “other people say you’re doing things right” is a sufficient condition, I think many would agree with me in saying there are collective forms of insanity around the world that serve to focus thought on fictive matters (think qanon, homeopathic medicine, churches).

Even so, how are you to tell that other people think the knowledge you are gathering is valuable and valid? Rather easy, sell your knowledge to others’ benefit.

Money is a very objective measure, everyone wants it. Most need it. Everyone, to some extent, won’t give up theirs or print more of it very easily. It’s also instant. Given 10 minutes I can tell you +/​-1% how much liquidity I have access at this very moment. That number will then be honored by millions of businesses and thousands of banks across the world who will give me services, goods, precious metals, stakes in businesses, and government bonds in exchange for it. I can’t have any such validation with “pure” knowledge.

A 1-1 knowledge-money mapping is harmful because some form of knowledge might suffer “long tails”, or step functions, where you need to get past a threshold before people will actually pay you to disperse or use it. If you demand that everything you learn pays dividends in a few weeks, you’ll end up with a very odd understanding of the world.

But some knowledge has to pay some dividends at some point, otherwise, you might just be stumbling into your own little hole of insanity. Conceptualizing the world in a way that produces nothing and seems inherently flawed to everyone else.

iii—Money Is Hard To Fake

Fine, you say, but knowledge can pay other forms of dividends. Is it not better to use knowledge in order to craft yourself a stoic mind inside an adonisiac body? To reach the peaks of athletic performance? The depths of meditative joy? The highs of child-like curiosity?

Well… yes. The end goal of knowledge should be that. I’d rather my broker steal everything from me than spend a year drinking, overeating junk, dumping political propaganda on my brain, and letting my muscle atrophy.

But the problem with “personal” goals is that they are, to some extent, easy to fake. You can lie about “progress” in your social life, fitness, or state of mind. You can shamelessly switch goalposts at the subconscious level and alter your self-perception without even noticing.

Some of this can be fixed by “quantified self” methods, using external devices, but even those suffer from goodhearting.

Money is by far one of the hardest objectives to lie to yourself about. There’s a reason all companies that succeed use profits as their ultimate KPI, and that’s not necessarily a will to maximize instantaneous profits at all costs.

Indeed, this might be the reason most people don’t like to judge their achievements proportional to their wealth or income, because it might pain a picture less glamorous than the ideal they are trying to achieve, but those achievements are usually translatable to self-control or agency of some sort, so is it not reasonable to try and cash out on 20% of that? Just to make sure you’re heading in the correct direction.


So money can be a decent indicator for heading in a positive direction, even if impressive, and a guardrail for insanity. It’s not linear but rather a complex function that factors in your goals, ability to self-evaluate, inflow, outflow, and liquid wealth.

But its transient properties also make it ideal for changing goals.

After all, money is never a burden (status goods and spending are, of course, but not liquid wealth), and can be used to acquire the help of others on whatever projects you want.

Sure, thinking that you want to be a doctor until your mid-30s then realizing you were meant to be a recluse yogi is worst than giving in to your calling in your early 30s. But you know what’s worst? Being a self-thought nihilist until your late 30s. At least the doctor has the capital to settle his affairs, get a jungle house in Burma and start his yogic journey.

More traditionally, we have goal changes around things like the city we live in, the amount of leisure we require, travel, kids, marriage, housing, healthcare, drugs we consume, the company we keep, and so on. These goal changes may be irrational, but so are all preferences, ultimately, and fulfilling them still pays hedonic dividends with a bit of care.

In that sense, liquidity helps us account not only for our current set of preferences, which might be fulfillable with little to no money but for a wide set of future possible preferences which may require it and form independently of us having it.

Of course, the other branch of this dichotomy is preferences forming because of having money, which in some cases may be a good thing (e.g. realizing you’ve got enough to fulfill a hard and ethical project) but in most cases will be harmful desires for status good and transitory highs.

Alas, I’m happy taking responsibility over optionality, even if freedom comes with the possibility of undertaking a wrong action. I wager you might feel the same.