Tag Archives: Bankers

The Difference between What You Get and What You Earn

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In economic theory, it is claimed that if a market would function perfectly, people would get for their products and services whatever it is they contribute in terms of value. And the same goes the other way: people would pay whatever they find a product or service worthy of. But when you take a look at the real world markets, and all the actors in these real world markets, this principle doesn’t seem to hold. Not at all.

I want to show this by giving one example. That of the banker, and the hacker.

A banker invents all kinds of ingenious derivative constructs, futures and other financial products in order to make money. The more complex the better. For if a product is complex, the layman doesn’t understand it. And if the layman doesn’t understand it, it is easy to lure him into what might seem to be an attractive deal, but which in fact is nothing but a ticking time bomb.

It is generally acknowledged that bankers, and especially the bankers referred to above, are at least partially responsible for the credit crisis we have experienced. It is safe to say that a lot of wealth has been lost during the crisis; people lost their homes, their jobs, and governments had to step in to save the day. In other words: these bankers have, at least over the last couple of years, made a negative contribution to the overall utility of society.

Why then do they get paid so much? Why then do they get a high positive utility for acting in a manner that ultimately decreases society’s utility? Although I am not interested in explaining this phenomenon in this post, one explanation could be that it seems like the bankers contribute a lot of happiness, because they (can) create a lot of money, and – in our capitalist society – money equals happiness. Hence the bankers create a lot of happiness.

Luckily, there are also people who do the exact opposite: they don’t get paid anything while making lots of people happy. They are the modern day equivalent of Robin Hood. An example would be the people contributing content to Wikipedia. But also the people behind Popcorn Time; a digital platform at which you can stream pretty much any movie, and all for free. These people make very many people happy – an exception would be the film distributors of course – but don’t get paid anything. Even though, in contract to the banker, their net contribution to society’s utility is positive.

Although we don’t pay the Wikipedia guys and Popcorn Time geeks in terms of money, we can pay them in terms of a currency that is even more valuable: gratefulness and respect. Something the bankers cannot count on. Because after all: there is a difference between what you get, and what you earn.

But what do you think?

What Makes Someone Intelligent?

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Who is more intelligent: (1) a construction worker voting for a progressive, responsible and tolerant party or (2) a mathematical whizkid working at a bank and voting for a party whose main goal it is to get rid of minorities? In other words: what is it that makes someone intelligent? Is it how good he is in calculating the inverse matrix of a particular order? Or is it how thoughtful he is about our community and whether or not he contributes to how we as a society might become a more loving/productive institution?

I recently had a discussion with a friend of mine who I believe belongs far more to category (2) than (1). He spoke to me about his discontent with pretty much every Moroccan around; including the ones he had never actually met. He considered it to be a good idea to send each and every Moroccan back to his country of origin.

In the same week I had a discussion with my uncle. My uncle is a very nice man – just like my friend by the way – and belongs far more to category (1) than (2). And although my uncle admitted to be rather slow in absorbing/processing information – reading, calculating etc. – he also told me the following: ‘Rob, you are free to do everything in life that you want to do. Truly. But please, promise me one thing: never ever vote for those discriminating parties. Ever. Will you?’

I ask you again: who is more intelligent?

Before we might be able to answer this question, we first have to explicate the notion of intelligence. I believe that someone’s intelligence ultimately comes down to his actions. Someone’s actions are, after all, the only objective criterium we have for judging what goes on in his mind. The fact that a friend of you might say, ‘I could have easily passed that English test if I hadn’t just started studying last night’ shows to me that – apparently – this person is not very intelligent. A truly intelligent person would have known better, right? And it is for the same reason that someone who is good in mathematics or physics, or any other discipline we usually associate with intelligence, is not necessarily intelligent. Look at the banking sector, I would say. Have those mathematical ‘geniuses‘ been acting very intelligently lately?

You could of course argue that I am mistaken the concept of intelligence for the concept of wisdom, where intelligence might be about the ‘processing power’ of one’s brain while wisdom might be about the reasonableness of one’s decisions. I would reply by saying that even the processing power of one’s brain can in the end only be judged by the manner in which the person acts. That is the only objective criterium we have for making any claims about that person’s intelligence. No matter how many areas of one’s brain turn yellow/green/red in a f-MRI scan, we are still unable to know the true processing power of the person’s brain. Maybe the person’s brain is just very inefficient, using a lot of brainpower for very little output. That is why the only true test of intelligence consists not of what one’s brain does, but what one does with his brain.

But what do you think?