Money, Economy and Maslow's Hierarchy

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While I was traveling to work this morning, I thought of Abraham's Maslow's hierarchy of needs for an individual and how the society as a whole could be impacted by that.

Once I reached the office and did my routine of checking mails and looking through new content in Internet, I was slightly surprised to find that someone just wrote about this recently. What does this tell? Perhaps, hundredth monkey effect. I'm digressing.

But though the broad strokes are similar, what I thought specifically is something different and the topic of this post.

Broadly, Abraham Maslow's hierarchy of needs says that human beings have certain needs at various levels in the order of physiological, safety, love/belonging, esteem, self-actualization. Many of us may not agree with the exact representations (particularly in upper levels of pyramid), but the underpinning of this hierarchy can't be ignored.

I have an observation. With the formation (and the eventual dominance) of money (which is a placeholder for value promised by a party you trust), it became easy for people to satisfy the needs at lower levels. Let me explain.

While bartering was the main source of fulfilling needs, people might not have known the value of product (whether products or services) that they needed. Hence, in all probability, they would have given more value than they got. (I agree this is subjective, since value in those days depended more on the utility than an artificial assignment as it is today. Still, it's possible that the buyer might have been exploited by the seller, if the seller was able to extract better value for himself by his smartness.) It is relatively tougher (though not impossible) for farmer who barters rice for a dhoti to figure out what quantity of rice could be bartered for a given number of dhotis. (Let's even leave out the quality issue here.) Unless there was a system of values maintained and controlled by government, bartering was based strictly on utility.

With the advent of money, the exchange of value mainly based on utility diminished. But a fixed rate (i.e. fixed by market) became the norm and it was easy for people to exchange information on values far more easily. This now makes it clear to people how much money (i.e. value) they need to satisfy their basic needs and hence strive to earn that much through producing/creating something or selling labour for money (also called "employment"! :)). 

But by the same measure, it has now become difficult for people to satisfy the needs at higher levels. Why? For the simple reason that needs at lower level are more concrete and as we go higher, they become more abstract. Obviously, it's difficult to put a value on an abstract thing.

During bartering days, every one had to be a seller. And most of the people would have naturally tended to sell lower level things (as they are concrete, hence easy to understand, produce and sell compared to the higher ones). Nevertheless, due to lack of information on exchange value, such lower level things should have remained "expensive" compared to higher level things. Simply put, it was simply hard to find something that fulfills higher level needs. So, people naturally tended to find ways (by cooperating with others, organizing competetions that were not for prize-value but for pride-value) in order to satisfy those needs. And hence arts would have flourished.

Now, with money being a clear placeholder of value, but higher level stuff remaining as abstract as they were earlier, people only tend to become more confused. Now that buyers have a clear place holder of value, they naturally think there should be a clear value for higher level stuff also. Because, money (information) not only enabled the buyer to easily spot value of lower things and keeps them confused on the higher things, the sellers of higher level stuff take advantage of this and sell their stuff for a high-fixed value money (i.e. not based on utility).

I arrive at a conclusion that as much as we try to "buy" stuff that's high in Maslow's hierarchy, it will remain elusive. So, "buying" that is not best way, but "finding" it is better!

If you're still here, kudos to you! :)