essays
Reflections on Money
by Kianga Daverington
September 1, 2020
This essay, written by Kianga Daverington of Daverington PLLC , was originally published in January 2020. The piece as been condensed for clarity.
Money is not a physical object like a coin, a bar of gold or a dollar bill. Money is at its core, a technology. It is a human invention designed to solve a specific set of human problems. Consider money, perhaps, in a new way. Think of money as a system for capturing time.
Time is the one thing we each have that is absolutely finite. We are born, we die, and the dash in between is all the time we have.
Think of production. We can usually produce more of some good by adding people to a task (also known as “WORK”). But we are still constrained by time. Whatever we produce is still limited by the amount of humans that can be organized to go into that production. Each of us possesses a limited amount of time available to us individually, so we need to convince or coerce others to add their time to ours if we want to achieve more than we can alone.
Out of this imperative, nations are born.
The most important quality of any particular form of money is how well it preserves the value of time over time. Can you buy the same amount of stuff or more in the future than you can buy today? If yes, congratulations - your money is accumulating time for you and future generations while you relax on the beach. If it takes more and more of a unit of money to buy the same amount of time in the future, well then I’m sorry, but that unit of money is getting weaker and weaker. It’s losing value or said another way – it’s losing purchasing power. The longer you hold it, the less it buys.
In a way, by purchasing goods and services, you are purchasing time. Every product and every service requires time to make and time to deliver - your time and/or someone else’s. The price therefore reflects the collective value of all the time put in. Money is a way we exchange time and move it around from where it is valued less to where it is valued more.
This is where prosperity comes from. It comes out of how well a society, collectively and each person, spends its time. How much time is spent creating and making? How much time is spent consuming? If we make more than we consume, we have something left over called wealth. If we consume more than we make, we are left with debt. You can’t consume what you don’t have, unless someone extends credit. Where does this “credit” come from? Basically –it’s made up.
Too much credit or debt eventually collapses and everyone is mixed up in the collapse.
If we understand that a unit of money represents a unit of time, and we understand time is limited, then a unit in a system of money with unlimited supply cannot have any value. This is the problem we are facing today with the world’s money supply. The supply of money in the world is increasing exponentially as central banks create money by giving loans to national governments, which is where our money comes from.
Our entire world financial system is a powder keg of debt.
National currencies today are known as fiat money, a currency without intrinsic value that has been given its power to be used as money by a government that says it is money by regulation. Wikipedia says, “Fiat money does not have use value, and has value only because a government maintains its value, or because parties engaging in exchange agree on its value.” Well said, Wiki.
A government’s job of maintaining the value of its national money boils down to a confidence game. On what basis do the people who use that government’s money believe it has value?
What happens to the money and those who hold it when the foundation of that belief begins to crumble?
essays
There Will Always Be New Challenges
by LTG Mark Hertling
April 19, 2018
During what would be my last year in Command of US Army, Europe, I welcomed a group of West Point cadets who were in Germany for Cadet Troop Leader Training (CTLT). There was reverie for me in preparing for this session, as I remembered the anxiety I had four decades earlier in traveling to Germany for this same summer training. But I guess there was also a bit of jealousy when I met these young, strapping and fresh-faced cadets: they were at the beginning of their careers getting ready to dive into the waters, I was at the end of my career preparing to leave the Army I had come to love. What was supposed to be a 30-minute greeting to outline how they would be viewed by their units evolved into a 90-minute energized discussion about the state of the army in Europe, the wars in Iraq and Afghanistan, the profession of arms and the character required of soldiers.
I found out later that two of the cadets had talked about this informal discussion with the Superintendent upon their return and asked him if I could be part of their ring weekend celebration as the guest speaker. The Supe was a friend of mine, so he called and relayed the message. I jumped at the opportunity…and then realized I would have to write a speech.
It had been a while since I had received my class ring, so I tried to remember what my ring banquet speaker had said. Not only couldn’t I remember the subject, I couldn’t remember the speaker. It had to have been some old general, but how old? In 1974, when our class received our rings, I figured the general talking to us would have had to have graduated in the 1940s! Holy smokes, was I that old to this class? The general talking to us likely fought in World War II, or at least Korea and possibly Vietnam.
In the summer of 1975 after I graduated, none of us were sent to the war that was waging when we entered the Academy. Instead, most of us were sent to Europe where about a quarter of our active Army was serving at the time. We patrolled borders, checked general defensive positions, and qualified on tank tables at muddy Grafenwoehr. We prepared for the Soviet hordes to cross, though they never did. Instead, over the 20 years after our graduation our classmates jumped into Grenada, fought in Panama – Panama! – and then many of us deployed after the end of the Cold War from the forests of Germany to the sands of Saudi Arabia. Then, for those who stayed longer, there was Bosnia, Kosovo, and two long fights against insurgents and terrorists that continue to this day.
When we received our rings, none of us would have expected what we would be asked to do. The “unknowns” are what define our profession of arms in defense of a nation and our Constitution. Preparing for the unexpected is what we are obliquely asked to do.
If you’re interested, this was the theme of my remarks on that ring weekend. Preparing for the unexpected. But right before I was introduced, I looked down at the West Point class ring that I rarely wear and realized the only “knowns” we can hang onto are our mission, our values and our ethics. No matter the time, the place, the duty assignment, or the conflict, those three things defined in our leadership manual as elements of character remain our touchstone. When we commit ourselves to the professional ethic and the institutional values of service to nation, we are all required to continuously refine our character under increasingly trying circumstances. While we may be tempted at times when confronted by issues large and small, as members of the profession of arms we must never allow our character to be tarnished.
Humankind has not seen the end of conflict, so there will always be unique battlefield trials and contests for the soldier. But there are few challenges as difficult as continuously refining your character, constantly inculcating your values, and perpetually living your ethos.
There will always be new challenges…