Money doesn’t disappear, it just changes hands

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 by L. G. William Chapman, B.A., LL.B.

The adage that “Money doesn’t disappear, it just changes hands” hardly passes for scholarly economic theory but it nonetheless captures the universal truths of perpetuity and transformation. All my life has been misspent trying to secure the sometimes harried edges of my existence to impart the appearance at least of stability and control. But in spite of my best efforts I keep hurtling towards new realities, apparently in the throes of swapping today’s vernacular for tomorrow’s unknown. Granted there is some design in the process though I cannot for a moment pretend to see the future any more clearly than any other.

In the past several years the entire world has been reminded in the bluntest of terms of the mercurial value of money. As someone who has been involved with real estate, the very foundation of our legal system from its crucible in England as far back as the 12th century, I am keenly aware of the gymnastics which attend this seemingly immutable commodity. For example, from a banker’s point of view it matters not that one sells money for a return of ten cents on the dollar or double that capital amount for half the return. I readily recall the days when the cost of borrowing $100,000 was as much as 18% per annum. A loan of that amount would then secure a passably impressive chunk of real estate. Of course today most people would scoff at such a price for the same property, but you can easily see the distinction without a difference when the capital cost escalates to $300,000 and the rate of interest on the loan drops to 6%.

There are some who would hold that current values are a complete fiction, that it is only the base-line standard of one’s earlier life which maintains anything approaching the true value of money. I am reminded of that jibe in the Indiana Jones movie “Raiders of the Lost Ark” wherein the evil archeologist commented to Jones that if one simply buries an article for a thousand years then unearths it its value is exponentially higher. As with real estate the question of value is not the issue. There are people who buy automobiles and real estate and ignore them completely in the expectation of profit down the road. What is required to perfect or nurture the value of the product is the effluxion of time. In the same way as life moves from birth to death, the mysteries and values of today are ultimately altered and exchanged for another experience.

This is starting to sound reminiscent of the first law of thermodynamics that matter can neither be created nor destroyed. This in turn leads to the corollary expounded by the early Greek philosophers that “Nothing comes from nothing” so that what exists now has always existed since no new matter can come into existence where there was none before. There is the further principle that “Nothing can pass away into nothing”. As arcane is all this might sound it is little more than the statement of a principle of conservation. A further principle of conservation was stated by Epicurus (341–270 BCE) who, describing the nature of the universe, wrote that "the totality of things was always such as it is now, and always will be". Suddenly we’re approaching something curiously resembling religious catechism though admittedly with a non-creationist bent. The final leap is toward universal natural laws: It is not possible to create matter out of nothing and hence the sum total of matter in the universe remains the same.

This unfortunately leads to a rather uninspiring conclusion that there is little anyone of us can do to enlarge upon life’s experience. However this ignores the very vital element of the theory, namely that things change even though they do not disappear. Embracing change is what it’s all about. Even if one is inclined to the immutable features of life – whether family, loved one, profession or things – it is hopeless to resist the revolution and alteration which is in our very bones. If ever there were a passport to change, this is it!