Apr 18, 2022Liked by Josh Sidman

This is something I think about often and I choose to invest in my personal skill sets as well as add physical tools to my arsenal to increase my longevity. These "investments" set me and my work apart from others in the field to increase the value of my time and work....I'm still waiting on the pay off of this 20+year investment, but I know that these risks are independent of financial systems, if the world totally falls apart, my tools and skill will still be of great value....

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Hi Josh! Do you think saving money as money or buying virtual monetary products like stocks or bonds is immoral? Shouldn't we rather try to reform the monetary system instead of putting the burden on single decision of individuals? I indeed feel it is a kind of moral failure to not spend the money you earn through work, because then systemically other individuals won't be able to sell THEIR work to me and there will necessarily be unemployment. At the same time, I think the problem should really be solved on a larger level. What do you think?

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First, it is important to distinguish between accumulating MONEY and accumulating WEALTH. They are not the same thing, even though we have been taught to think that they are. Accumulating wealth is fine. Investing in stocks helps the economy, creates jobs, etc. Whereas hoarding money prevents others from being able to provide for themselves and their families.

Your thought about failure to spend being harmful to others is absolutely right. In fact, it's worth noting that in a barter economy selling without buying is a logical impossibility, because they are part of the same act. What would selling without buying even look like in a barter economy? It is only the introduction of money that makes such a thing possible. Money separates buying and selling into two separate acts. But the need for balance and reciprocity doesn't disappear. Obviously it's impossible for everyone to sell and no one to buy.

Here's a passage from The Economics of John Maynard Keynes that expands upon the point:

"Most people are so accustomed to viewing saving from their own individual point of view that it is difficult for them to think of saving from the social or community point of view. Saving is to most people putting money in the bank, or into securities, or into the mattress or an old sock. It is only by an act of conscious intellectual effort that we think far enough into the economic process of society to realize that saving is a two-sided affair. Attempts to save, which are successful so far as the individual is concerned since he adds to his individual wealth, may be self-defeating and even positively harmful so far as society at large is concerned. We plan to save for society as well as for ourselves, but in the absence of cooperation from entrepreneurs we do not assist society even when we attain our personal objectives. Putting part of a monthly salary into a savings account means only that an individual has not spent all his income. The effect of not-spending as such is to reduce the demand for consumption below what it would have been if the money which is saved had been spent. In the absence of some entrepreneur's action to invest, an act of individual saving will prove abortive for the community. It will merely reduce effective demand for consumption without any compensating increase in the demand for investment. The decrease in effective demand for consumption reduces employment and income. One of the important lessons of The General Theory is that spending rather than individual saving is the essential condition of production and prosperity in an exchange economy where one man's spending is another man's income."

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