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The psychology of money

And the value of free.

Wouldn’t it be nice if “X” was free? Do you value things that are free? Really?

Price has long been an approximation for the value of something, but as Oscar Wilde pointed out, “People know the price of things and the value of nothing.”

Now, I’m not about to get all Morpheus on you and ask you “what is money? how do you define money?”, because who has the time and the want for that when inflation has pushed lettuces to $12 each.

There are a lot of things which money gives us and enable us to do. There is what it signals to others about our status, wealth, reputation and standing/success in society, but I’m thankful it is not the only metric and we need to be reminded that it is only a proxy. Which is what Marcus Aurelius was hinting towards by saying, “even in a palace it is possible to live well.” – your level of money doesn’t make you moral.

There are a lot of arguments being made for free this and that, examples which include medical care, housing, education…even psychologists. However, I will reiterate, do we really value things that are made available to us at zero expense? The answer seems obviously in favour of yes, right?

I recall when I was studying psychology, we were discussing the price of sessions that psychologists charge and how most people can’t afford it. People were suggesting it should be made free so more people would go, but research illustrated that those who were at least charged something e.g. $50 were more likely to stay the course of treatment and benefit from it than those whose sessions cost nothing. A couple of the major factors were that the patient felt they were receiving something of value by paying for it (rather than receiving it for free) and that there were consequences for not showing up (a loss of money for a no-show rather than zero penalty/ramifications for free sessions).

The question then becomes, do we have to charge at least something to get people to value it? As I alluded to early, there is an implied value for things embedded in the price. However, I’m not suggesting that this relationship is necessarily linear, sometimes it’s not even positive!

Capitalists like to think the free-market will provide the solutions through supply and demand economics with price-setting being an approximate value deemed by society for such good or service – and Governments just interfere and ruin this brilliant model. Obviously, I’m being a bit tongue in cheek here, but it isn’t as simple as this and we haven’t even started with the problem of big business-Government collusion.

So, what should we pay for and what should be free? A lot of these arguments come down to the question of WHO should do the paying. Is it the Government? Is it business? Is it the end-user? Some combination of the three?

Just bung it on credit, use after-pay, take out a loan…interest is not free and I don’t care what sofa lounge Gerry Harvey tries to sell me. We’re not Islamic so interest is charged, granted some will offer periods of interest free, but essentially know this: you’re just advancing future earnings…that is all. You are effectively robbing your future self at the cost of whatever interest rate percentage.

Laybys were actually much better financial sense for the customer, but businesses would lose sales whereas with credit cards/after-pay etc. businesses gain sales at the cost of consumer financial position and stability. Ah, working class memories. Elites be like what the hell is layby?

Just before we close for the day, it’s Friday after all, I’d like to talk about the Fraud Economy – not the one involving cybercriminals, accounting hacking and identity theft, no, because I love a bit of word play, the “fraud” economy I’m referring to is what do the people getting your money actually offer you? I would encourage you to ask this question in a number of places. Politicians is an obvious place, the media and journalists is another, even right down to the independent creators like me who you donate/subscribe to. I mean, do I deserve to be paid? Am I worth anything for my writing? Do you value it being free? Would you value it more if there was a price on it?

Money may not grow on trees, but, as the cover photo for this article symbolically represents, money can be utilised to help things grow…and in order to keep things free this must be done indirectly, and hopefully ALL can value from it.

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