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bourgeois-dignityIf you’re thinking of money as simply stacks of printed paper, or figures on a ledger, you’re missing the tremendous virtue that your creativity, productivity, and investments make possible.

Money is a measure of value, and it allows us to exchange differing assessments of value between one another. Value is simply a way of saying that something matters to us – that we value it. When I exchange something I have that you value for something you have that I value, we’ve each gotten more of what matters to us than we had before.

That’s how wealth is created.

With each trade, what matters to everyone involved becomes more abundant. To the point where, today, the abundance we all enjoy would be nothing short of miraculous to our ancestors.

Of course what matters to some people are things that are harmful, dangerous, or even detestable. But that’s not a function of money or the process of exchange, that’s an expression of what matters to those people. In the great complexity of humanity, there is plenty of rotten along with the good.

But on balance, and to a great degree, money and trade have served to grow our virtue. We’ve become much better people on the whole as a result of it – less violent, more curious, compassionate and empathetic, more generous, and orders of magnitude more effective at creating what matters to us all.

Without understanding this, we end up thinking of money as simply stacks of printed paper, or figures on a ledger. In which case it doesn’t really matter whether we earn that money by working diligently and conscientiously at our job or creating beautiful new solutions to serious problems on the one hand; or robbing a bank, winning the lotto, or getting a cool stimulus check from the government on the other.

Without understanding what money and trade make possible in terms of what matters most to each of us in our own way, and in terms of what we’ve been able to create as a culture and a species as a result, then money can be seen in purely self-absorbed and amoral terms – “greed is good,” “The love of money is the root of all evil,” “Show me the money!”

We can see it in views of two of the greatest thinkers in human history:

Plato, via Socrates, in The Republic: “…the more men value money-making, the less they value virtue.”

Aristotle: Retail trade that is “justly to be censured, because the gain in which it results is not natural made, but is made at the expense of other men.”

How can such brilliant thinkers have missed such an essential quality of trade? The same way many brilliant people have over the millennia.

The truth is that money and the trade that it facilitates, creates a tremendous incentive for innovation. Innovation and trade have brought out the very best in humanity, and made possible the miraculous expansion of wealth, opportunity, and improvement in human life that we enjoy today.

When we think of money as stacks of paper, simply the accumulation of capital, we’re really missing the point, and the essential dynamic of money.

It’s kind of like thinking of relationships as an accumulation of friends. Having thousands of “friends” on social media means very little in terms of actual human flourishing. The great value of a relationship is in the sharing, to a degree, of each other’s internal worlds, the sense of visibility and connection, and the genuine caring for one another’s well-being.

There’s a physical, emotional, and psychological need for such connection: human connection improves our immune function, increases our heart rate variability, and brings us into a healthier part of our nervous system, and away from the protective system of fight or flight. Good relationships create meaning and deep satisfaction.

A wealth of relationships is not a matter of the accumulation of friends, though that can feel nice in itself; it’s a matter of the quality of those relationships, and the deepening of intimacy over time.

So too, wealth is not simply the accumulation of capital, which, as I’ve noted, could be accomplished through theft or gambling or luck. It’s the creation of ideas, problem solving, and cooperation that actually generates more and more wealth.

So the accumulation of capital is an effect, not a cause, of innovation and wealth.

Money is what facilitates this.

When we invest, we’re enabling the creation of ideas, products, services, and solutions; and this is what has improved, and continues to improve, mankind’s condition. We’re adding the money that we have earned to the dynamic processes that have brought most of humanity out of dire poverty, and toward a better world.

This is a supremely moral and ethical good, as Dierdre McCloskey has shown in her fantastic trilogy, Bourgeois Virtues, Bourgeois Dignity, and Bourgeois Equality.

The flourishing of innovation and trade that created the Industrial Revolution and the miraculous improvements ever since, have been a function of acknowledging and celebrating the practice of trade, and the ability of regular people to make a living of seeing an opportunity to make more money through solving other people’s problems.

Money is a catalyst for a dynamic, creative, and expansive world. Understanding its function can change our personal relationship with money and investing for the better, just as culturally this understanding among enough people has changed the world immeasurably for the better.


PS: My new course, Mastering Emotions, Moods and Reactions can help you with this part of your life in much greater detail, with deep understanding and practical skills for mastering these systems and living well. You can get it now with a deep discount, for $99, if you use this code: LB99.


Joel F. Wade, Ph.D., is the author of The Virtue of Happiness,  Mastering Happiness, his new course, Mastering Emotions, Moods and Reactions, A Master’s Course in Happiness, and The Mastering Happiness Podcast. He is a marriage and family therapist and life coach who works with people around the world via phone and video. You can get a FREE Learning Optimism E-Course if you sign up at his website,