What is money? We use it every day, so we must understand how it works... or do we? Perhaps our familiarity keeps us from appreciating just how strange money actually is - and how it uses us.
What is a dollar bill? A piece of paper. You can't eat it, ride in it, or sleep on it. The same is true of digits in bank accounts. In and of itself, money is literally worthless, in effect nothing. Yet money is also the most valuable thing in the world, because we have collectively decided to make it so. It is our socially agreed, and legally enforced, symbol of value. The anthropologist Weston LaBarre called it a psychosis that has become normal, "an institutionalized dream that everyone is having at once." A dream that sometimes turns into a nightmare.
The danger is that psychologically means and ends are reversed, so that the means becomes the goal. As Schopenhauer put it, money is abstract happiness, so someone who is no longer capable of concrete happiness sets his whole heart on money. Remember Midas and his golden touch? That profound myth is even more significant today, because our world is so much more monetarized than that of classical Greece. Money ends up becoming "frozen desire" - not desire for anything in particular, but desire in general. Money symbolizes the possibility of acquiring anything we want, and since the satisfaction of all desire is how we usually think of happiness, money comes to symbolize the possibility of acquiring happiness. This way of thinking is often unconscious, but it's no less compulsive for that.
Nowadays, of course, Midas is socially acceptable - in fact, there is at least a bit of Midas in most of us. Living in a world that emphasizes instant convertibility tends to de-emphasize our senses, in favor of the magical numbers in bank accounts, or the symbolic value of our expensive possessions. Instead of appreciating fully the sensuous qualities of a glass of wine, we are more conscious of how much it costs and what that implies about us as sophisticated wine-drinkers.
Today money serves at least four functions for us. Because it is so indispensable as the medium of exchange, it has also evolved into our storehouse of value. Once wealth was measured in cows, granaries, and servants and children, but the advantage of gold and silver--now paper bills and bank accounts--is that they are imperishable, at least in principle. Gold doesn't even tarnish. It is, in effect, immortal. This is quite attractive in a world haunted by impermanence and death.
Capitalism added an addictive little twist, which we take for granted today but which was suspicious, not to say immoral, to many people in the past. Capitalism is, of course, an economy based on capital -- money that is used to make more money. This encouraged an economic dynamism that has been quite extraordinary. The downside is always re-investing whatever you get to get even more, the assumption being that you can never have too much.
Psychologically this tends to become: you can never have enough. If, as the Duchess of Windsor said, one can never be too thin or too wealthy, it means that one is always too fat and too poor. And of course she's wrong: one can be too thin and one can also be too rich, if it's the result of being obsessed with never having enough. That is a very important factor in aggravating the increasing inequality that threatens to destroy our society. How many meals a day can you eat? How many cars do you need to get around? But capital can always be used to accumulate more capital. Where are you on the Forbes 500 list?
Why do we fall into such obsessions? The anatta "not-self" teaching of Buddhism implies a special perspective on our hang-ups with money. The sense of self is a construct composed of mostly habitual ways of thinking, feeling, acting, reacting, remembering, planning, intending, and so forth. These are processes, not things, which means that the self they compose is inherently insecure: there's nothing substantial there that could be secured. So our sense of self is haunted by a sense of lack: I experience the empty hole at the core of my being as the feeling that something is wrong with me, or something is missing in my life. Usually, however, I don't understand the source of that feeling. Instead, I project it outward and become obsessed with projects that I believe can make me feel more "real" - such as acquiring piles of money, and all the goodies they can buy.
This points to the fourth function of money: it has become our most important reality symbol, the best way to try to secure one's identity, to cope with the gnawing intuition that we do not really exist. Suspecting that our sense of self is groundless, we used to visit temples and churches to ground ourselves in a relationship with the Divine. Now we open savings accounts and invest in the stock market to ground ourselves economically.
Needless to say, there is a karmic rebound. The more we value money, the more we find it used--and the more we use it ourselves--to evaluate us. We end up being manipulated by the symbol we take so seriously. In this sense, the problem is not that we are too materialistic but that we are not materialistic enough, because we are preoccupied with the symbolism of money. We are infatuated less with the actual things that money can buy than with their power and status--not so much with the comfort and power of an expensive car as with what owning a Maserati sports car says about me. Women buy $10,000 handbags not despite the fact that they are so expensive but because they are so expensive: "I'm the kind of person who owns a Louis Vuitton."
The basic difficulty with that kind of conspicuous consumption is that we are trying to resolve a spiritual problem--the "emptiness" at the core of one's being--by grasping at something outside ourselves, which can never confer the sense of reality we crave. We work hard to acquire a big bank account and all the things that society teaches us will make us happy, and then we cannot understand why they do not resolve our sense that something is lacking. Is the reason that we don't have enough yet?
Another way to make this point is that money too is not a thing but a process. Perhaps it's best understood as an energy that is not really mine or yours. Those who understand that it is a socially-constructed symbol can use it wisely and compassionately. Those who use it to become more real end up being used by it, their alienated sense of self clutching a blank check -- a promissory note that can never be cashed.