Money is a very interesting entity. In my mind, it’s one of the most amazing inventions in all of human history. Money is the embodiment of the abstract idea of value, allowing it to be stored over time and traded between completely incompatible media.
Money allows us to trade thoughts for housing, beauty for food, muscle power for music, and to do so minutes, months, or decades apart. That is a miracle.
You could lift a heavy box for someone else when you are 20 and then trade the value you provided them for a chicken salad that someone completely different will provide you to keep you from starving when you are 43. We could stand to be a bit more grateful that such a complex transaction is second nature to us.
To get money, you have to give out resources. For most of us, the resources we trade for money are our muscle power and brain power. Then we trade in our money for the resources we want to consume, like food and shelter.
There are three things we can do with money: we can spend it, we can save it, or we can invest it.
To spend money is to consume resources, to use them up so that they are useless (or less useful) when we are done.
To save money is to put the abstract notion of value aside in the present so that it can be traded for resources in the future.
To invest money is to buy resources with the intention of reshaping them into something that is more valuable when we are done. For instance, a pile of steel, aluminum, rubber and plastic is valuable. But a car made of that exact amount of material is way more valuable. An investment has the capacity to generate value out of thin air.
All this is to say that Elon Musk’s $44 billion was not spent. It was invested. Food and shelter and medicine are consumption items. If Elon Musk spent $44 billion on those things, that $44 billion ceases to exist. Whereas, having spent it on Twitter, Elon Musk could possibly turn it into $45 billion that can still be spent later.
There were people who owned Twitter before Musk who just got $44 billion in their collective pockets. Because it was invested rather than spent, that exact $44 billion could, in fact, still go to food and shelter and medicine.
Having said that, the US is incredibly wealthy. As a nation, we have generated so much more value than we have consumed. In fact, we gave $430 billion in charity in 2018, then another $450 billion in 2019, then a jaw-dropping $470 billion in 2020. We gave up $1.3 trillion of resources that we earned so that people we have never met could consume them just in the last couple of years. The world keeps getting better, more and more hungry people get to eat, more and more sick people get medicine, every single year. And those resources are available to consume because of people like Elon Musk out there making value out of thin air.
$44 billion of food and shelter and medicine would make a huge difference to many people. But let’s not pretend that the only options are saintlike generosity or selfish consumption.
