Money Money Money

I’ve been working hard for the past few months on building up contacts and qualifications for my environmental building consultancy. It’s been an interesting time, and it got me thinking about money, and the way in which it affects our society. Most people like to succeed, and for their successes to be recognised by their peers. Very successful people are presumably more concerned with this than others. Outside of small groups of people looking to succeed in niche areas (for example peer respect amongst mountaineers or other amateur sportspeople), this recognition of success is almost always provided through money – the more successful you are, the more society rewards you with wealth. This wealth has a double effect on you – not only do you gain the recognition from your peers (you must be successful because you have money), but you are able to do more of the things that you’ve always wanted to but could never previously afford. In other words it’s an extremely strong motivator.

As someone who likes to see himself as being not very materialistic I was amused to find myself getting excited while waiting to hear about whether or not I had won a large contract. No doubt some of this excitement was due to the challenge of taking on such a big piece of work, but I was also excited because of the positive impact it would have on my bank balance. Now if I’m working in an area that I feel is doing something worthwhile in the world, this isn’t such a bad thing – if the business is making money that means it is being successful, and the more successful it can be the more of a positive impact it can have in the world. In this case the incentive provided by money is a very good thing. The problem is that much of the economic activity in the world is providing goods and services that, while useful to those involved, leave the world as a whole worse off. In many cases people are being very strongly incentivised to deplete and pollute the global ecosystem upon which the whole economy depends. This is because the economy is full of market failures – incidences in which the producer of a good or service is failing to pay the full cost of the activity. In his eponymous report on the economics of climate change, Nicholas Stern called climate change “The biggest market failure the world has ever seen”.

As environmentalists we should recognise the extreme power of money in influencing the way people act, and instead of demonising it, seek to reshape the rules of the economy so that the incentives are pushing in the right direction.