Money: The Unit of Caring

Steve Omo­hun­dro has sug­gested a folk the­o­rem to the effect that, within the in­te­rior of any ap­prox­i­mately ra­tio­nal, self-mod­ify­ing agent, the marginal benefit of in­vest­ing ad­di­tional re­sources in any­thing ought to be about equal. Or, to put it a bit more ex­actly, shift­ing a unit of re­source be­tween any two tasks should pro­duce no in­crease in ex­pected util­ity, rel­a­tive to the agent’s util­ity func­tion and its prob­a­bil­is­tic ex­pec­ta­tions about its own al­gorithms.

This re­source bal­ance prin­ci­ple im­plies that—over a very wide range of ap­prox­i­mately ra­tio­nal sys­tems, in­clud­ing even the in­te­rior of a self-mod­ify­ing mind—there will ex­ist some com­mon cur­rency of ex­pected utilons, by which ev­ery­thing worth do­ing can be mea­sured.

In our so­ciety, this com­mon cur­rency of ex­pected utilons is called “money”. It is the mea­sure of how much so­ciety cares about some­thing.

This is a bru­tal yet ob­vi­ous point, which many are mo­ti­vated to deny.

With this au­di­ence, I hope, I can sim­ply state it and move on. It’s not as if you thought “so­ciety” was in­tel­li­gent, benev­olent, and sane up un­til this point, right?

I say this to make a cer­tain point held in com­mon across many good causes. Any char­i­ta­ble in­sti­tu­tion you’ve ever had a kind word for, cer­tainly wishes you would ap­pre­ci­ate this point, whether or not they’ve ever said any­thing out loud. For I have listened to oth­ers in the non­profit world, and I know that I am not speak­ing only for my­self here...

Many peo­ple, when they see some­thing that they think is worth do­ing, would like to vol­un­teer a few hours of spare time, or maybe mail in a five-year-old lap­top and some canned goods, or walk in a march some­where, but at any rate, not spend money.

Believe me, I un­der­stand the feel­ing. Every time I spend money I feel like I’m los­ing hit points. That’s the prob­lem with hav­ing a unified quan­tity de­scribing your net worth: See­ing that num­ber go down is not a pleas­ant feel­ing, even though it has to fluc­tu­ate in the or­di­nary course of your ex­is­tence. There ought to be a fun-the­o­retic prin­ci­ple against it.

But, well...

There is this very, very old puz­zle/​ob­ser­va­tion in eco­nomics about the lawyer who spends an hour vol­un­teer­ing at the soup kitchen, in­stead of work­ing an ex­tra hour and donat­ing the money to hire some­one to work for five hours at the soup kitchen.

There’s this thing called “Ri­cardo’s Law of Com­par­a­tive Ad­van­tage”. There’s this idea called “pro­fes­sional spe­cial­iza­tion”. There’s this no­tion of “economies of scale”. There’s this con­cept of “gains from trade”. The whole rea­son why we have money is to re­al­ize the tremen­dous gains pos­si­ble from each of us do­ing what we do best.

This is what grownups do. This is what you do when you want some­thing to ac­tu­ally get done. You use money to em­ploy full-time spe­cial­ists.

Yes, peo­ple are some­times limited in their abil­ity to trade time for money (un­der­em­ployed), so that it is bet­ter for them if they can di­rectly donate that which they would usu­ally trade for money. If the soup kitchen needed a lawyer, and the lawyer donated a large con­tigu­ous high-pri­or­ity block of lawyer­ing, then that sort of vol­un­teer­ing makes sense—that’s the same spe­cial­ized ca­pa­bil­ity the lawyer or­di­nar­ily trades for money. But “vol­un­teer­ing” just one hour of le­gal work, con­stantly de­layed, spread across three weeks in ca­sual min­utes be­tween other jobs? This is not the way some­thing gets done when any­one ac­tu­ally cares about it, or to state it near-equiv­a­lently, when money is in­volved.

To the ex­tent that in­di­vi­d­u­als fail to grasp this prin­ci­ple on a gut level, they may think that the use of money is some­how op­tional in the pur­suit of things that merely seem morally de­sir­able—as op­posed to tasks like feed­ing our­selves, whose de­sir­a­bil­ity seems to be treated oddly differ­ently. This fac­tor may be suffi­cient by it­self to pre­vent us from pur­su­ing our col­lec­tive com­mon in­ter­est in groups larger than 40 peo­ple.

Economies of trade and pro­fes­sional spe­cial­iza­tion are not just vaguely good yet un­nat­u­ral-sound­ing ideas, they are the only way that any­thing ever gets done in this world. Money is not pieces of pa­per, it is the com­mon cur­rency of car­ing.

Hence the old say­ing: “Money makes the world go ’round, love barely keeps it from blow­ing up.”

Now, we do have the prob­lem of akra­sia—of not be­ing able to do what we’ve de­cided to do—which is a part of the art of ra­tio­nal­ity that I hope some­one else will de­velop; I spe­cial­ize more in the im­pos­si­ble ques­tions busi­ness. And yes, spend­ing money is more painful than vol­un­teer­ing, be­cause you can see the bank ac­count num­ber go down, whereas the re­main­ing hours of our span are not visi­bly num­bered. But when it comes time to feed your­self, do you think, “Hm, maybe I should try rais­ing my own cat­tle, that’s less painful than spend­ing money on beef?” Not ev­ery­thing can get done with­out in­vok­ing Ri­cardo’s Law; and on the other end of that trade are peo­ple who feel just the same pain at the thought of hav­ing less money.

It does seem to me off­hand that there ought to be things doable to diminish the pain of los­ing hit points, and to in­crease the felt strength of the con­nec­tion from donat­ing money to “I did a good thing!” Some of that I am try­ing to ac­com­plish right now, by em­pha­siz­ing the true na­ture and power of money; and by in­veigh­ing against the poi­sonous meme say­ing that some­one who gives mere money must not care enough to get per­son­ally in­volved. This is a mere re­flec­tion of a mind that doesn’t un­der­stand the post-hunter-gath­erer con­cept of a mar­ket econ­omy. The act of donat­ing money is not the mo­men­tary act of writ­ing the check, it is the act of ev­ery hour you spent to earn the money to write that check—just as though you worked at the char­ity it­self in your pro­fes­sional ca­pac­ity, at max­i­mum, grownup effi­ciency.

If the lawyer needs to work an hour at the soup kitchen to keep him­self mo­ti­vated and re­mind him­self why he’s do­ing what he’s do­ing, that’s fine. But he should also be donat­ing some of the hours he worked at the office, be­cause that is the power of pro­fes­sional spe­cial­iza­tion and it is how grownups re­ally get things done. One might con­sider the check as buy­ing the right to vol­un­teer at the soup kitchen, or val­i­dat­ing the time spent at the soup kitchen. I may post more about this later.

To a first ap­prox­i­ma­tion, money is the unit of car­ing up to a pos­i­tive scalar fac­tor—the unit of rel­a­tive car­ing. Some peo­ple are fru­gal and spend less money on ev­ery­thing; but if you would, in fact, spend $5 on a bur­rito, then what­ever you will not spend $5 on, you care about less than you care about the bur­rito. If you don’t spend two months salary on a di­a­mond ring, it doesn’t mean you don’t love your Sig­nifi­cant Other. (“De Beers: It’s Just A Rock.”) But con­versely, if you’re always re­luc­tant to spend any money on your SO, and yet seem to have no emo­tional prob­lems with spend­ing $1000 on a flat-screen TV, then yes, this does say some­thing about your rel­a­tive val­ues.

Yes, fru­gal­ity is a virtue. Yes, spend­ing money hurts. But in the end, if you are never will­ing to spend any units of car­ing, it means you don’t care.