Monday, April 23, 2007

Money and Power

Money is a symbol that represents the value of goods and services. The acceptance of any object as money involves the consent of both the individual user and the community.

Thus, all money has a psychological and a social as well as an economic dimension. As human consciousness has evolved, the nature and function of money has evolved too.

Power is broadly defined as "the capacity to bring about change." It takes many forms, comes from many places, and is measured in many ways.

Here is an answer that the social thinker Professor John Kenneth Galbraith gave during a discourse about these very complex emotions.

"There are two things that people pursue in life, not wholly unrelated.

One is money and the other is power. And we see this and take it for granted. The attraction of power we take for granted in politics, in your field, where people spend tens of thousands, hundreds of thousands, and now millions of dollars in order to have positions in Washington or Sacramento or wherever, where they have power.

But in economics, classical and neoclassical economics, that has no particular role. The thrust there is for pecuniary return, for money. And I have always felt, and still feel very strongly, that that denies in the economic world a very large part of the motivation.

People want to be head of General Motors, or General Electric, or General Mills, or another of the other, shall we say, "generals" -- they want those jobs certainly for the income that is returned. But the income is itself a measure of the prestige and power, authority, that goes with achieving those positions.

And so I have tried in some of my writing, how successfully I don't know, to bring power back into a role in economic motivation. I gave an address some years ago which has been quite widely reproduced, my presidential address of the American Economics Association, I called "Power and the Useful Economist." One is not useful in economics unless one brings the thrust for power into appreciation, consideration."

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