Money talks (but do we understand what it says?)

(featured image credit: Olivier Mabelly CC BY)

What the flood of financial support for the rebuilding of the Notre Dame (and the reactions to it) tells us about ourselves

Fires at famous landmarks understandably get a great deal of attention. But the dramatic images of the blaze at the Parisian Notre Dame cathedral seem to have touched many people in ways that other such disasters do not normally do. The only reported casualty was one of the 500 firefighters who was injured, so it was not the human toll, but the material damage to the building that was the reason for the extraordinary emotional reactions. This was evidenced by the speed with which money was being raised to finance the restoration of the stricken church. But this raised some questions too. How come?

While fire was still raging, some of France’s richest families were already pledging hundreds of millions of euros. It was hard not to notice how incongruent it all looked in a city that has, for many months, seen people in yellow vests calling for lower fuel prices and higher wages for the millions of citizens struggling to make ends meet. An old building catches fire, and within two days more than a billion euros (£860 million, $1.2 billion) is donated to fix it.

Something seems wrong with the priorities of these rich folk. They could have donated that money instead to the poor of France – hell, they could have given money to both and it would still not make a dent in their fortune. But they appear to care more about a pile of stones than about the wellbeing of their destitute compatriots. Come to think of it, what about the president who has pretty much been turning a blind eye to the protesters’ demands, but who was quick to put the resources of the state behind the rebuilding of the Notre Dame? Where do his priorities lie?

Priorities measured by money

If we can see the priorities of rich people in how they spend their money, then we should be able to draw a similar conclusion about society’s priorities, by the way in which local, regional or national authorities spend their money. In the UK, for example, public expenditure in 2017-18 on education was about £90 billion, while nearly £150 billion was spent on healthcare, and about £40 billion on defence. Does that mean that education is more than twice as important as defence, and healthcare 1.6 times as important as education? Of course not.

If it doesn’t make sense to derive the relative importance of a sector by the amount of money that is spent on it, does the allocation of expenditure tell us something else? We should at least expect the resources to be spent wisely, that is, not spend it on something relatively unimportant when there is still something more important that requires more money. For example, should the country be spending £40 billion on bombs and aircraft carriers, while there are people who need to go to food banks to feed their children?

bandstand

Trading a bandstand for a police car? (image via Twitter)

Even that is tricky. Say by some stroke of luck the government finds another £25,000 to spend. It could hire another primary school teacher with it, or an extra nurse, or it could raise unemployment benefit for 460,000 people out of work by £1.50 per month. Which of these options represents the best value for money? That is almost impossible to determine.

And we are not even talking about less critical expenditure like the upkeep of parks and amenities, or street lighting. At what point do you decide to fund the replacement of a police car with 150,000 miles on the clock instead of the restoration of the clapped-out bandstand?

Hard criticism

All this shows that criticizing how authorities spend money is harder than we may have thought. It’s easy to protest that more money needs to go to the National Health Service, or to free school meals for all children, but it’s less so to say where the money will need to be taken away.

What about our own expenditure? On a smaller scale, we see pretty much the same challenge. The average British household spends about a third of its income on housing – rent or mortgage, insurance, repairs, utilities and so on, about 15% on transportation, some 10% on food and 6% on eating and drinking out. But it would be meaningless to claim that a roof over our head is three times as important as food on our plate. And can we really conclude that the last, marginal pound spent on alcohol and tobacco (2.2% of our budget) provides us with more utility than the last pound devoted to education (1.5%)?

If we are critical of how the very rich, or indeed the state, spend money on (other) people, how well are we ourselves doing? The average British household spends about £3 (€3.5, $3.9) per week on charitable donations – just over 0.5% of their budget. Not particularly generous – and is that a fair amount? We spend about the same on cinema tickets, almost three times as much on alcoholic drinks, and eight times as much on clothes and shoes. We know we cannot say this means booze is three times more important than charity, but is the last pound in each category well spent?

wine

Shouldn’t we gift a malaria net instead? (image: Steve Buissininne/Pixabay)

Let’s take an example. Malaria is a deadly disease that kills a child every 45 seconds, according to Unicef. Malaria netting that protects nine families costs £19, so just over a pound per week would safeguard 27 families each year. That is the equivalent of a pint of beer per week. Where is that pound best spent? What does the way we spend our money say about our values?

When other people’s money talks, we are quick to hear what it tells us about their priorities. But when we listen to what our money says, we may find it tells us very much the same about ours. Does that mean we should give up everything that is pleasurable until we have contributed enough to save every last life on the planet? Of course not.

Wondering, every time we drink a glass of wine or go to the cinema, whether that money would not be better spent on a malaria net is unlikely to make us happier. The pursuit of happiness is a profound human aspiration, and we are entitled to make the choices that help us in this pursuit – whether it is drinking a glass of wine while there are people dying of malaria, or funding the rebuilding of the Notre Dame while many Parisian citizens get their family meals from food banks.

Our choices are open to challenge, of course – but before we undertake to challenge the choices of others, we should challenge our own.

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About koenfucius

Wisdom or koenfusion? Maybe the difference is not that big.
This entry was posted in Behavioural economics, Economics, Morality, politics, Psychology, Society and tagged . Bookmark the permalink.

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