Friday, February 08, 2008

Money as Metaphor

Those who feel that they have a good handle on reality often hate to hear that their perception of reality is shaped by their language. Yet this is often the case. For instance, we think about electricity in terms of current (amperage) and pressure (voltage) because it is too difficult to think directly in terms of electromagnetic fields. We think about the origin of the universe as an explosion - a very loud one, hence the term "Big Bang" - although no physicist can tell us just how loud it was in terms we can appreciate. Loud enough to pulverize your eardrums and shoot them clear out of the Solar system at relativistic speeds? Since you wouldn't be left standing around to enjoy such a noise, why call it a noise at all? Probably because "Big Bang" is the best we can do, being unable to directly imagine a universe erupting out of nothing, and need a linguistic handle by which to hold it. Metaphors allow us to take something that is too abstract and to make it visceral enough for us to comprehend.

A long time ago, money was quite visceral: bags and boxes of shiny metal coins, or bits of paper that you could take to a bank and exchange for shiny metal coins. The coins could be both weighed and counted. But with the advent of fiat money - paper money that is not directly redeemable for a fixed quantity of anything - we are left with just naked digits printed on scraps of paper. All that remains is the lingering metaphor of coinage. Unlike numbers that represent physical quantities, which are usually known only to a few decimal places, money still demands the arduous task of counting, summing up meaningless pennies. The people at the top, who have all the power, and who create money out of nothing by writing government IOU's, force the rest of us to keep track of every penny.

Somewhat more significant than these pennies are our own heads, which, in a democracy, are also supposed to be counted, by voting. Elections are conceived of as strict counting exercises, such as what you might have in a roll call. But since they are done for the benefit of those who lack power, to give them the illusion that they have some, the rules are more lax than with counting pennies. Glancing at the two columns of numbers from the incomplete recount after the New Hampshire primary elections (they are incomplete because the Kucinich campaign, which requested the recount, ran out of money), about half of the precincts miscounted their votes the first time, the second time, or (if I may conjecture) both. Later on, during the Florida primary, it was noticed that a certain precinct reported voter turn-out that was more than 100% of the registered voters for that precinct. Such things are generally not discussed, and, whenever they are brought up, someone always says that such minor variances are not statistically significant. Clearly, what we have here is a mixed metaphor: are we measuring the voters, or are we counting their votes? I am convinced that my vote is not statistically significant, so I don't vote. (I don't think my tax return is statistically significant either, so perhaps we should "measure" it as well, the same way we "measure" my vote.)

Although the powerful, who "coin" and dispense money for our use, demand that we account for every penny of it, many of the operative terms that relate to money treat it as if it were a liquid. The "flow" of money in and out of an organization is termed "cash flow" while the ability to convert assets to cash and vice versa is termed "liquidity." Those who have mortgages that are in excess of the value of the collateral are said to be "underwater," while organizations on the verge of bankruptcy often require a "bailout." There are some "fire" metaphors as well, such as the "burn rate" of funded start-up companies, as well as "blood" metaphors, such as the term "hemorrhaging money," applied to production delays of expensive legal battles. But liquid metaphors, from "float" to "slush fund" to "pool," are by far the most common.

It is therefore fair to ask, What sort of liquid might this be? Is this tap water, salt water, or bilge water? Or is it perhaps something more potent? Really, if money had the potency of tap water, few people would bother very much about it. And we certainly do bother about it: we may be well-clothed, well-fed, have adequate shelter, plenty of free time, good company and even some entertainment, but we would still want some spending money. There is nothing like a roll of bills in our pocket or a credit card in our handbag, because it can make people do things for us they otherwise would not do: serve us drinks, give us massages and pedicures, bring us shoes to try on, transport us to some place warm and sunny - the list is virtually endless. Money can give us a feeling of well-being and euphoria by allowing us to indulge our whims, or to escape.

A potent liquid that can fuel escapism and produce euphoria must be at least 80-proof, if not 100. I deduce that we are speaking of alcohol. Indeed, the nexus between money and alcohol is an obvious one. Many governments maintain monopolies on liquor, treating it as another coin of the realm, while others tax it heavily, relying on it for much of their revenue. For those at the bottom of the socioeconomic pecking order, money and liquor are largely the same: they might be willing to work for room and board, but would much prefer to be paid in money as well, in order to be able to go and get drunk. Moonshine is illegal, because it avoids taxation, and marijuana is illegal because poor people can grow it themselves and use it as a substitute for liquor, again, avoiding taxation, and possibly avoiding money altogether. Thus, the monopoly on liquor goes beyond liquor, and turns out to be a monopoly on all euphoria-inducing substances, including money itself.

A good metaphor should provide reasonable explanatory depth to the underlying phenomenon. The ability to think of electricity as a fluid turns out to be quite good, to a point, although capacitors act like springs rather than like water tanks, while alternating current in a water pipe has none of the advantages of its electromagnetic analogue. So, how far can we push the metaphor of money as liquor?

At the start we might have a traditional society, with a largely non-monetized economy, analogous to a healthy working individual, who makes a bit of spending money, and uses it to get drunk (i.e., consume) after work and on holidays. His liver (economy) is in fine shape, able to process all the alcohol with no ill effects (provide the consumer goods in exchange for money). Over time, his liquor consumption (spending) increases, and his capacity for work drops (outsourcing). He now borrows against everything he owns (equity cash-outs), his future earnings (consumer debt) and even the earnings of his unborn children (national debt) in order to continue drinking his fill every night.

Later, his liver becomes enlarged and diseased (bubble economy), is no longer capable of processing all this alcohol, generates back-pressure (commodity price spikes, energy shortages) and even causes black-outs (market crashes). He can work even less (layoffs), and becomes unable to service his debts (foreclosures, repossessions, defaults). No longer able to afford all the booze, he goes on the wagon (decrease in consumer confidence and spending), which gives him delirium tremens (recession, depression).

Now, delirium tremens is a serious, sometimes life-threatening medical condition that requires medical intervention (government stimulus package). The DT-sufferer can be a danger to himself and to others. By far the easiest way to help is to buy the bum a drink (tax rebate checks in the mail this May). If he is well enough to make it from his mailbox to the checks cashed place to the nearest bar, we can all breathe easier. Once he feels better, maybe he'll even buy us a round.

Seems like a good metaphor to me...


Wayne said...

Actually the Big Bang was silent. Noise is waves of vibration that travel through physical atoms. The big bang was all radiation energy in the beginning. Over time, the energy was converted to matter (according to E=mc^2). So there was no matter and thus no sound at the big bang. Matter formation came later. I'm not sure whether this makes your point or is somewhat tangential to it but thought you'd like to know.

Anonymous said...

I'd got with bilge water. Or as Atrios over at Eschaton calls our current housing/mortgage/investment/mortgage insurance crisis, the big $h!tpile.

Anonymous said...

Funny, adequate metaphor.

And thank jebus you didn't go into "substance abuse treatment" or "AA" as the possible cure!

What tripe:

Usually, all roads lead to "therapy" in this culture. there is no therapy for "kollaps."

Consists of... said...

Oh this is funny! I read it out loud to my husband.