Funded Abundance

We all need to eat. To eat, we need money. To get money, we need to be paid. One of the fundamental parts of getting paid is the container. The shape and form that holds what it is you offer. 

Without constraints, an offer is a gift. That is because we don’t get paid based on the stable, known, countable, intrinsic value of what we do. We get paid based on supply and demand. We get paid based on scarcity. If something is incredibly valuable AND plentiful, it will have a low price – water, oxygen, love. 

It is possible to free yourself from the constraints of what makes money. If something/someone else makes money for you. You can be born rich. You can marry into money. You can surround yourself with rich generous friends. You can be born in the right country. You can have significant natural skills that set you apart. 

Otherwise, you just need to listen deeply to the signals given by price. What are people paying for? In what containers? How do you develop the skills and knowledge in those containers? It sounds cold, and in some ways it is. 

You start where you are, and you work to release yourself from constraints that don’t work for you. Chipping away with small, achievable goals that add up. Gradually building capacity for abundance funded by scarcity.

Shape and Form

Moving with Grace

It’s not all about you. Part of letting go of anxiety is not feeling like you are being judged in each and every moment. Where your waves of worry are about real problems, rather than perceptions of you. 

When you decide to start paying attention beyond the boundary of yourself, and connect to more, it is a bit of an existential crisis with no clear answer. At least worrying about yourself has very skin and bone constraints! 

Philosophers like William MacAskill and Peter Singer look at effective altruism in a world where we have to think about constraints. Resources aren’t abundant. Opportunities aren’t abundant. Scarcity is real, and scarcity puts up prices and creates walls. Abundance is free and open. 

What is a reasonable amount to consume? How should we think about other people who don’t have enough? Capital provides a foundation and starting point that changes the game. If you stop living hand-to-mouth, and you build up capacity to think long term. 

Moving from day-to-day, to week-to-week, to month-to-month, to year-to-year, to the point where your short-term decisions are connected and constructive. Where you can absorb difficult times, learn from them, and respond in an empowered way. 

Where you move through life with an additional level of grace not available to those who are being flung around by the elements.

moving through and with the elements

Real Value

Find value in the abundant that is neither contained nor containable. Find value in things that are difficult to monetise. When you want to be paid, provide solutions that are easy to monetise. 

To put a price on something, you need shape and form. To see value, you need to look beyond superficial structure. To see what others don't. To price, you need to simplify into a clear ask and offer. To see value, you need to relax into complexity that may exist beyond words and pictures. 

To make money, you need to listen to the signals of the market, be adjustable, and move with the problems as they arise and are solved. As the situation changes, the useful containers change. Real value is more consistent and dependable than the temporary containers we use. 

We create space for real value by getting spending under control. Carefully choosing the containers we are prepared to pay for. Building internal spending discipline is fundamental to being able to handle the waves of money anxiety. That anxiety comes from placing our value in external containers that are not of our choosing or creation.

Artist: Alex Rennie

Enough to go Around

If you tie your identity and incentives to your job and pay, the stress and shocks of money will drive your anxiety. Hunter-Gatherers may have also lived hand-to-mouth, but that is a false analogy because they were living off the land (a form of capital which produced opportunity). They had the option of moving in tough times. We live in containers which restrict our movement (countries, job qualifications) and do not all have the option of a menu of skills which provide almost certain payback if mastered (hunting and gathering). 

Modern hand-to-mouth living means spending all you earn, without the option of earning more if that is not enough. When there is more than enough, simply consuming it. Adjusting spending up if income rises. The trick is to slowly separate from that. To see value in things that are abundant, and put your money to work solving scarcity. “Democratic Goods” are things where there is sufficient supply that everyone who wants it, can have it... at a reasonable price. 

Price surges when there is not enough to go around. Price surges when we borrow to buy at a price we can’t afford... because there is not enough to go around. If you can find and see value in things where there is sustainably enough to go around, you can detach from the relentless stresses and violent shocks of scarcity. 

Gathering Honey

Obstacles and Barriers

Formal studies are not solely about skills and knowledge. We live in a world where that is largely available for free. I heard about email and the internet for the first time as a 14-year-old from my Maths teacher who had visited the United States. Information flow was starting to burst. 

She was also the one who told me about Actuarial Science. Even though the world is connecting, money is still made in containers with barriers. The way we build the structure is partly through formal education. I broke some of my barriers (the country we are born in) after school by going overseas for the first time. I went to the United Kingdom for two gap years, working as a teaching assistant on a work-travel visa. 

When I came back, I picked something with barriers. I knew there were people who paid people who passed these exams. Jobs that wanted these qualifications. Limited people with those qualifications. I looked at the shop. I saw what the expensive products were. I looked at the cost to put those on the shelf. I went and did the thing that was most tolerably difficult (challenging barriers) with the highest gap between price and cost. Based on my existing set of scarce skills and knowledge. 

That is not the same for everyone. Which is why it paid well. Scarcity pays. Understanding money is partly about understanding and overcoming your obstacles and barriers.

Map of Internet Connections

Cut the Fat

Price is not value. Daniel Kahneman points out that while we might be intuitive grammarians, with our ears bristling when someone butchers our mother tongue, even those with years of training in statistics are not “intuitive statisticians”. Some truths require slow deliberate thinking rather than rules of thumb. Truths like there are no gods of investing. Investors who will agree “price is not value” will fall foul of this too when talking about “their value”. Everyone likes to believe they are the one that adds the value. That can’t be replaced. That other people can be cut out of the value chain, because other people are the fat. A high price is not an indication of value. It is more likely (1) scarcity, or (2) barriers to entry. An obstacle to creative destruction is that we all need to eat. We all need to get paid. We all need a source of wealth. The only way anyone will be prepared to be made redundant is if we believe we are included in the future that exists on the other side. Money is made by solving problems for decision makers. One of our problems, is that (without capital) we need problems. 

Are you the fat?

 

Counted and Contained

One of the most important lessons in the world of money is that “Price is not Value”.

We half wish that it was, because of a love for scorecards and a way of measuring progress. If you can measure something, you can control it. People partly love big salaries because it is a conspicuous sign that you are making it in the world. Unfortunately, all a big salary means is that there is an undersupply of the thing that you are providing. Or there are significant barriers to entry. Or there is a lack of transparency. There is a container that creates the ability to earn more, but it is not value. There are lots of valuable things that are abundant. A high price is just an indication of scarcity.

Not everything that counts can be counted and contained. Not all good ideas are good business ideas. Not all good business ideas are good ideas.

Artist: Alex Rennie

Wildly Constrained

“Rewilding is about letting nature take care of itself, enabling natural processes to shape land and sea, repair damaged ecosystems and restore degraded landscapes. Through rewilding, wildlife’s natural rhythms create wilder, more biodiverse habits” (rewildingeurope.com). Rewilding is David Attenborough’s call to arms in his witness statement, “A Life on our Planet”. He points out that “a species can only thrive when everything around it thrives too.” I don’t buy into Abundance culture. I can’t, having been born in Apartheid South Africa. The world has constraints. We have to solve the dual problem that we are consuming too much, and yet masses of us are living in poverty. In “Stubborn Attachments”, Tyler Cowen talks about Maximum Sustainable Growth. We need to grow our way out of poverty, while rethinking growth. Rethinking consumption. Rethinking how we impose ourselves on the world. And getting wilder.

Abundance in Constraint

The median (half have less) disposable income for UK households (2.4 people) is £29,400. After reading William MacAskill and Peter Singer who study Effective Altruism, I decided it was worth aiming to live off an income of less than £2,000 a month. Aiming for less seems very counterintuitive in a bigger-better-more world. If you believe in abundance, then it also seems unnecessary. Why self-impose constraint? I don’t believe resources are abundant, and grapple with conspicuous consumption in a world with structural apartheid. Poverty is still very real, and mostly apportioned by our compounded historic prejudices. Sustainability is also clearly a pressing issue. I am all for Maximum Sustainable Growth, but how we co-ordinate means we can’t think in isolation. 1s and 0s (digital pleasures) and walks are abundant. Big houses, cars, and plane trips clearly aren’t. I do believe in win-win growth. Someone rising up doesn’t have to be a threat, but how we count, what we count, and where/if we grow does need reflection. You can still lean into true abundance within empowering constraints.

In Context

I don’t’ write Blank Cheques. Every decision has trade-offs. Having been born into Apartheid South Africa, I don’t subscribe to the philosophy of abundance. Scarcity is real. This means you can want something, but still not get it, because the price is too high. Everything, has a price that is too high. That doesn’t mean you don’t value “the thing”. That you don’t see the value. That you don’t have the desire. In isolation, every story can be incredibly powerful. But to understand something you have to understand the constraints. You have to understand the context. You have to mitigate for unintended consequences. No single decision stands alone. Unless it is literally the only thing that matters to you.

Scarcity and Abundance

Life preparation was very gendered in the bubble I grew up in. One example of this was that Mathematics was compulsory in High School for boys, but not for girls. I lived in a Patriarchal society where men ruled outside the home, and women ruled inside. Feminism was rising (at a lag), but it was very much focused on Choice for women. No pressure (different pressure). What would you like to do (you should probably do this)? Let’s chip away at the obvious obstacles (well, do our best). Girls doing Boys’ things is serious. Boys doing Girls’ things is funny. Implicitly acknowledging a hierarchy of where we place value. For Boys, choices were squashed and pragmatism was promoted. How are you going to put food on the table? Put childish choices aside. Man up. The horrible truth of the world is that if you follow what you love, it is often harder to monetise. In part, because a fundamental of love is abundance, and a fundamental of money-making is scarcity. In a gendered world, it was women who focused on love, and men who financed it.

Unwinding Scarcity

More than Enough

Intrinsic Value is the idea that something has an internal worth separate from the price. Price is a communication tool. A crude number that triggers exchange where for one person the value is more (buyer), and for one person the value is less (seller). Value doesn’t need to be quantified unless it needs to be communicated. To be reduced to a number. To be managed. I like the idea of Democratic Goods. A high price is a better indication of scarcity than value. Like a pressure cooker, not enough to go around pushes the price up. If there is more than enough for everyone, the price is likely to be lower. Value sits separately, and doesn’t care about things like success, respect, hierarchy and peacocks. A good rule of thumb for not paying a scarcity premium is asking whether everyone has access to this thing? Can everyone afford it? Buy Democratic Goods. Sell Conspicuous Consumption.

That, is a Bat

In Dutch and German, an Employee is “werknemer” and “arbeitnehmer”. A work taker. One of my pet peeves is when managers tell employees to “think like an owner”. It is like Nagel’s paper “What is it like to be a bat?”. You either are a bat, or you aren’t. You either are an owner, or you aren’t. If you are a work taker, you are paid for the work you are doing. If you are an owner, you have a share in the problem being solved. A rule of thumb for if something is a good business idea is “does it scale?”. Taking work doesn’t scale. Ownership does. We have limited time, energy, knowledge and skills. Capital has no such limits. Work gets a salary. A salary is a price. In a healthy economy prices come down and Capital grows. The way you become an owner, without needing permission, is by squeezing a gap between what you earn for taking work and what you spend. Then get your money a job. That, is thinking like an owner. That, is being an owner.

Informed Consent

Nothing kills an activist like work deadlines, a mortgage, and school fees. Markets work best when there is full transparency, understanding, and the intent to build a relationship. Most importantly, markets work best when there is informed consent and no regret. When sellers are not manipulative, and buyers are fully aware of the trade-offs they are making. The number one rule of wealth creation is “Never be a forced buyer or seller”. The word No is the foundation of freedom, even if we are defined by what we say Yes to. As our responsibilities grow, our fixed expenses ratchet up (because of a world where success is defined by more). Each Yes and No becomes embodied rather than a conscious choice. Ironically, it becomes harder to get a gap between income and expenses with each increase (if you expand to fill the space). We can often learn significantly more about controlling our expenses by looking at those with less than us. Those who peddle Abundance may miss the wealth creation skills of those who defeat Scarcity every day.

Be careful your expenses don't ratchet up