Living in New York makes me realize the dominance of money. I don't mean a fancy car or big house, but human dignity and access to fresh air. Here are some other thoughts on how money is transforming the society.
1. Money and knowledge
We all know that knowledge is power, but we also start to realize that knowledge is getting more and more expensive. In order to have meaningful impact in the world, we need to understand the system. However, the system has become so complex that it takes at least a master degree to comprehend it. But given the rising cost of education, if your parents are not rich, you will be hundred of thousands of dollars in debt when you get your degree. In other word, by the time you have the knowledge, you have lost your freedom; by the time you have the power to chance the system for better, you are already subject to the system. To pay off your student loan, you probably have to take the highest paying job you can get, which means you are more likely to work for Goldman Sachs instead of Securities and Exchange Commission, and more like to work for BP and not for EPA.
Sometimes, I have to marvel at the design of the system: by the time you understand how the prison works, you are already a prisoner yourself. This is achieved simply by raising the cost of education.
2. Money and Human Capital
The reward structure of our society is very biased. With the same intelligence and work ethic, you can get much richer in finance industry than anywhere else. That's why so many of our smartest students are going into finance. It would be less unfortunate if these smart young people are creating social value as they make themselves rich, but more often than not, the finance industry is just making the rich richer at the cost of making the poor poorer. This widening wealth gap is still a smaller cost compared to the opportunity cost of losing our best young people to the unproductive industry. These young people could have been brilliant engineers who invent new energy storage system, or artists who produce breathtaking pieces. The society is suffering a huge human capital lost due to the biased reward structure.
Why is there such a bias? The answer might be specialization. A car mechanics specializes in fixing cars. The finance industry specializes in dealing with money, a commodity that happen to be the medium of exchange. When a car mechanics practices his expertise, he creates value for other people by fixing their car. But when the finance industry practice their expertise, they creates more chaos than they create value, but they are rewarded handsomely for the chaos they created.
3. Money and Government
The government is broke. It has no money and too much debt, but it still has to pay the bill for Wall Street's mess. What's the consequences?
First, the government has to roll back its social service, especially education and health care, which further worsens the position of the middle class and the poor.
Second, the government will lose its best people to the private sector. There has already been a brain drain in New York, where judges leave court to go back to private employers because the government can't compete with the private sector to pay the lawyers. How can you expect someone with a annual salary of $50,000 to regulate the financial innovation coming out of someone whose salary is seven digits?
Third, there will be increasing moral hazard between the financial industry and the government. On one hand, the politicians are funded by Wall Street and big corporations. On the other hand, the powerful private companies are too big to fail, so they are certain that the government will bail them out if they mess up. So why not take on more risk?
Our government might soon become a government of the money, by the money and for the money.
4. Money and Globalization
Locke in his Second Treatise said, "Thus, in the beginning, all the world was America, and more so than that is now; for no such thing as money was anywhere known. Find out something that hath the use and value of money amongst his neighbors, you shall see the same man will begin presently to enlarge his possessions. "
Money never sleeps. Once money is born, it will expand till its own demise. Globalization is exactly propelled by the logic of money. It transform the whole world and make all societies a subject of its own logic. China and India, formerly isolated, are now embracing the money logic more eagerly than anyone else.