SMUG MONEY: why you don’t have to be bad to make money

Written by Rebecca O'Connor on 3rd Dec 2015

We’ve all got a bit of a psychological problem. It is, crudely, this: if you want to make a lot of money, you have to be ruthless; if you want to do good, you have to give up on any idea of champagne, holidays, private schools for your kids, Gaggia, Chloe and Range Rovers. Good people just don’t drive Range Rovers.

The idea that money is bad dates back a long way – and if you’ll forgive us the religious references, to the bible, in fact, in which Jesus states that it is harder for a rich man to enter heaven than for a camel to pass through the eye of a needle, or something a bit like that.

There are other biblical examples of this idea, which has permeated osmotically through the ages and is now lodged deep in our collective subconscious.

Money is bad, money is bad, money is bad, etc etc. But that’s not quite it. Even in the bible – it’s in the book of Timothy that it states “the LOVE of money is the root of all evil”. And that’s an important distinction that we have failed to grasp. And this failure to grasp the distinction between being driven solely by money and merely having some as a reasonable and just reward, has, I would argue, got a lot to answer for.

An awareness of these negative associations with money has meant that consciously or not, people often make a choice in life: to pursue money knowingly and in spite of what such a pursuit might do to our moral fibres or not to pursue only money and to accept a life that might be materially less enriching, but is morally intact.

For a lot of people, such a choice would be a fine thing. We can’t all choose what we do after all. Sometimes we have to work for people we don’t like, in industries that might not always act in the best interests of society or the planet, and we have to do this because jobs don’t grow on trees and if we’ve got one at all, we should be bloody grateful. Most of us aren’t pursuing money not because we’ve made a moral choice not to, but because the choice to do so isn’t available to us. We are keeping our heads above water and treating ourselves occasionally. And that’s it.

But those that do have the choice over their occupation or the industry they choose to enter may still believe that to make money, with all of its association with being corrupt and ruthless, requires some kind of spiritual and moral detachment. They might therefore choose means of making money that reflect this deep-rooted (mis)conception. So you get one of two outcomes. Either the City Boy, the Gordon Gecko archetype, a character that embodies (albeit in a very eighties way) bad money; the man corrupted by wealth and power, who knows it and doesn’t care.

Or you get the rich man, who acquired riches in nefarious ways but still retains a conscience, and so either offsets the ill-gotten gains or constructs a narrative of denial: “Yes I was an investment banker flogging subprime mortgage books, but everyone was doing it, we didn’t know it was wrong. And I give £500 to Save the Children every year” for example. And that narrative of  denial might be valid, who are we to say. Whether valid or not, there was most likely a point at which moral scrutiny became detached, deliberately or otherwise, from the individual’s choice of livelihood.


And yet, despite the associations with richness and badness, we all recognise in ourselves a desire to have more. A desire to always want a bit more for this or that. Once we are past the point of having what we need to survive, it’s all a relative thing, and yet wanting slips into needing imperceptibly and before we know it, having more money, for ourselves and in comparison with our neighbours, becomes a preoccupation. It happens to the best of us. In fact it probably happens to all of us at one point or another, or at various points every single day. Blimey, my head does the “want-can’t have, want-can’t have” dance at least 20 times a day. Usually when looking at furniture websites. It’s innate. An instinctive survival mechanism that’s just got a bit confused in the modern world of iPads and underfloor heating.

Am I a bad person then? Well, it might make me feel as though I am. Wanting is bad, my mum used to say, and I find myself saying to my kids too.

But we can’t help it. Wanting doesn’t make me bad, just normal. And this is why we have to change fundamentally the way we think about money. All money is is a means of exchange, a store of value, a unit of account and a standard for deferred payment. That’s it. Purely functional.

It’s ok to want more of it, as long as you aren’t rolling up all your morals and dumping them in a dark corner in order to get it. And you really don’t have to – it’s a false dichotomy. Enter “enlightened self-interest”. Google it. It is really interesting. It’s the “philosophy in ethics which states that persons who act to further the interests of others (or the interests of the group or groups to which they belong), ultimately serve their own self-interest.”

Thinking that making money is bad is a kind of failure of imagination. But it’s also a failure of communication. There is a framework out there for doing good things with your money without self-sacrifice. Recognising the demand for it, Barclays Wealth wrote a big paper on it.

We can get ourselves out of the unimaginative mindset by investing in renewable energy (Abundance, Ethex, Energy4All), lending to social enterprises (Deki, Buzzbnk, Charity Bank), choosing a sustainable pension fund or ISA (Triodos, Charity Bank, Alliance Trust, Standard Life, Aviva) and banking with building societies instead of banks. We’ve got money all wrong. We don’t have to give up our own wants or needs to do good. It’s not charity, it’s profit. But to someone else’s benefit, not detriment.  And over the long-term, rather than the short-term.

Systemically, some changes are required to help this shift from bad money to good. Like highest to lowest salary ratios in the workplace, so the CEO’s pay is never more than a certain % above that of the lowest paid worker; the enforced consideration of ESG (Environmental, Social, Governance) factors in investment decision-making; bi-annual or annual company reporting (to discourage short-term profit prioritisation) and the pricing of externalities (such as carbon-pricing, currently under discussion at COP21).

There’s a whole bunch of people thinking about how to change what money does and how, to make it a force for good in the world rather than the destruction it currently reeks: the New Economics Foundation, the Finance Innovation Lab, Positive Money and Move Your Money, to name a few.

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