Emulate Scrooge McDuck

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On October 3, 2009, I attended my 50th high school reunion. The 50th high school reunion is the last hurrah institutionally in the United States. No other final meeting will attract as many people from a person's generation. There is nothing like your 50th high school reunion to remind you that the clock is ticking.

The committee posted the photos of the known deceased. Some had been gone for 25 years. Others had been gone less than a year. But the reality was clear: the list would grow.

The men were all unrecognizable. So were most of the women. There were a few exceptions, however. Time had not run over all of us to the same degree. A couple of men looked more distinguished than at 18. I hated to see them.

The reunion committee supplied name tags with the senior year photos. These were reminders of time gone by. We could see the before-after contrast. The contrast was considerable, with only one exception — not mine. Grim.

It reminded me of my 25th reunion. I had on my tag. I was in an elevator. A young woman asked me what the meeting was. I told her. She asked what a 25th reunion was like. It came to me in a flash. "It's an exercise in comparative rot." She is now pushing 50.

At the hotel where I stayed the first night, another 50th reunion was scheduled. A friend of mine from the American Legion's Boys State program had been student body president at that school. I would have liked to walk over to see him, but he had died of heart disease several years earlier. He had been a great football player. That was a reminder, too. The clock is ticking.

At the Sunday brunch, I sat with three people. One I had known well; the other I had known fairly well; the third hardly at all.

One of them remarked that she had drawn up her bucket list. That term comes from a movie with Jack Nicholson and Morgan Freeman. Two men meet in a hospital. Both are terminally ill. They draw up a list of things to do before they die. They agree to do the things on the list together. It is better to share the events on the list.

My list has always been books written and educational materials produced. It is a long list. It will take good health and a functioning mind for me to do all of it. It will take at least a decade, I forecasted.

My role model is F. A. Hayek, the Nobel-Prize economist. I interviewed him in 1985 in Austria. He was 86. He had just finished the manuscript for his magnum opus: the capstone book of his career. It is a fine book: The Fatal Conceit.

Another example for me is Jacques Barzun's book, From Dawn to Decadence. It appeared in 2000. It footnoted articles that he had written in the late 1930s.

The grand old man of economics today is Ronald Coase. I once wrote an entire book against his famous theorem. He is still alive at 101. He is still writing.

One of the other people at the table at brunch was my old competitor in public speaking. She was a real challenge then. She got better over the years. She spent a career in education. Her husband of 40 years had developed a successful business. Then he died in 2003. Six months later, the business went under through no fault of hers. It was shut down by the authorities. Unbeknownst to her husband, there had been a crook inside the firm who had cheated the city and, indirectly, the U.S. government. She lost her retirement nest egg and spent three years paying lawyers. She now works in a small book store.

That, too, reminded me: procrastination kills. The unexpected can strike at any time.

At every 50th reunion, there are stories like these. The people at every table should pay attention to these stories.

The list of your deceased classmates is growing, year by year. You will be on it eventually. Get the high-priority items scratched off the list while you still can.

THE MISER

We are all told from an early age that the life of a miser is a wasted life. The miser spends every waking hour accumulating money. Yet he never seems to accomplish anything with his money. He simply accumulates it.

This is an inaccurate analysis, in so far as it applies to a free-market economy. In a free-market economy, a person can accumulate wealth only by serving customers. Nobody is going to give him all of that money just because he asks for it. Therefore, for as long as he is committed to the expansion of his net worth, he must serve customers faithfully. He must provide customers with products or services that they want to buy at the price that he is willing to accept.

To do this, he must maintain a competitive advantage against other sellers of similar goods and services. This forces him to innovate constantly. The customers are free to choose. They are also free to choose new tastes and desires. Therefore, the customer is exceedingly fickle. He keeps asking the seller: "What have you done for me lately?"

The miser, even though he is driven only by the desire to accumulate money, is a productive citizen in a free-market economy. He becomes a servant to customers, and customers find that they have a better lifestyle because of the commitment of the miser to accumulate ever greater wealth. The miser is obsessed with the accumulation of wealth, but in order to assuage his obsession, he must become obsessed with serving the demands of customers.

Think of what he has to do. He has to estimate what customers will be willing to pay for in the future. He must estimate competition from other sellers who will be actively seeking the money possessed by future customers. He must estimate the effects of government legislation on the markets in general, and his market in particular.

He must bear the uncertainty of all kinds of events that can take place between now and then. Somebody has to deal with these uncertainties, at least if future customers are going to be able to buy the goods and services they want at prices they are willing to pay. These problems do not take care of themselves.

So, what we are told about the miser is flawed. It may be correct with respect to the dangers associated with the obsession to accumulate wealth. There may be psychological disorders involved here that are a threat to the long-term mental stability of misers. But, with respect to the social function of misers, they can be highly productive people, and they are rewarded for their productivity by customers.

While we say we do not think highly of misers, a lot of us grew up enjoying Scrooge McDuck comic books. Uncle Scrooge was a decent fellow, but there is no question that he was focused on the accumulation of wealth. We all remember the cartoon image of Scrooge sitting in his vault on top of a pile of gold coins, thoroughly enjoying himself. For a lot of people, the cartoon image of Scrooge McDuck on top of his gold coins was the only representation they had of the pre-1934 gold coin standard that prevailed in the United States.

Yet there is no question in my mind that there is something wrong with the miser. He accumulates wealth, supposedly for its own sake, and in doing so, he becomes the servant of wealth. In order to serve wealth, he must serve customers in a free-market economy. But, whether you analyze his situation from the point of view of his being in bondage to money or being in bondage to customers, there is no question that the miser is in bondage.

He accumulates wealth which will enable him to buy his way out of most problem situations. We usually think of somebody as being very wealthy who can solve these problems by writing a check. We know that he cannot solve all of his problems this way, but he can certainly solve a lot more problems than we can solve by writing a check. We would like to have the kind of wealth that he possesses as a safety net against all of life's negative events that can come upon us, and that we would like to be able to avoid, or at least buy our way out of.

This is the single most powerful argument in favor of the accumulation of money. Money is the most marketable commodity. Money is what everybody is after, and therefore everybody is willing to sell something in order to get his hands on it. It is not that every man has his price, but it is true that every man has a price for something that he owns, even though he may not have a price for everything he owns.

THE GREAT TRADE-OFF: TIME VS. MONEY

Because money is the most marketable commodity, we accumulate it in order to deal with those events that we cannot foresee with accuracy. These events may be positive or they may be negative. We may be given an opportunity to take advantage of something wonderful, or we may be given an opportunity to avoid something terrible. The point is, money is the asset that gives us the opportunity.

One of the signs of adulthood is that we recognize the inevitable trade-off between time and money. Ben Franklin put these words into the mouth of poor Richard: "A child thinks that 20 years and $20 can never be spent." Actually, he wrote that the child thinks the 20 years and 20 pounds can never be spent, but we no longer use pounds in the United States. The aphorism still holds up in England. His point was this: a child's time horizon is so short that he thinks that 20 years is a very long time. When he is 70, he no longer thinks this.

Sometime along the road to the final farewell, an individual is supposed to figure out that time is the only irreplaceable asset. He runs out of time, and money cannot buy him any more of it. This is common knowledge. But this common knowledge does not produce the same response in everyone who possesses this knowledge. The knowledge may be common, but the response is not.

When you are younger, you have time to recover from your mistakes. When you are younger, you do not have a lot of money. As you accumulate more money, you find that your ability to recover from mistakes is reduced. You have less time to recover from those mistakes. Therefore, you need more money. Remember, money is the most marketable commodity. It is the commodity that lets us buy our way out of mistakes. So, as time slips away, we need more money to help us recover from bad decisions.

Yet even here, we face the fact that the ultimate limitation does not have much to do with our decisions. The ultimate limitation is the fact that we will die. So, the accumulation of money has a built-in limitation. We can accumulate it to deal with bad events, but it does us no good in dealing with the ultimate bad event. We can buy our way out of a lot of problems, but we cannot buy our way out of death.

ON THE ROAD

In the year 2000, a 73-year-old singer named Ralph Stanley sang a song, "O Death." He sang it in a movie, O Brother, Where Art Thou? He had been singing songs as a bluegrass musician for half a century. He had never won a Grammy. With that song, without musical accomplishment, and with an old man's voice, he won his Grammy. I think that was fitting, and a few years later, I had the opportunity to tell him so face-to-face. At the tail end of his career, and at an age at which most men are retired, Stanley was still on the road, still performing, still making money, and still entertaining audiences. He was not sitting around waiting for death. In fact, he was entertaining even larger audiences, because of that song, which was not known as a bluegrass song, and which he sang a cappella.

I also think of Doc Watson and Earl Scruggs, who died this year. I was able to see both of them late in their careers, just as I had seen them half a century earlier. They were still on the road, still entertaining people, and still had basically the same skills they had had as young men. This is a tremendous advantage for any man. It is not available to every man, but when it is available, I think people should take advantage of it.

Ray Charles died four months before the release of the wonderful movie, Ray, which was a biography of his life. He was still performing until the end. I remember an interview with him a couple of years earlier. The interviewer asked him if he planned to retire. He answered the question in three memorable words: "And do what?"

STAYING ON THE JOB

The men who stayed on the road, entertaining people until the end, serve as examples for me. Staying at your work as long as you can keep producing something that others think is worth paying for, or at least spending time reading, is a great blessing.

To stay on the job merely for the accumulation of wealth seems to be the incarnation of foolishness. If you are accumulating wealth in order to deal with the crises of life, the older you get, the less rational this is. The great crisis of life cannot be dealt with effectively with the money accumulated over a lifetime. As the old line goes after the funeral: "How much did he leave behind?" And the answer: "All of it."

When a person serves customers or nonpaying free riders of various kinds, he is performing the highly useful service to individuals and to the community at large. He is contributing to the advancement of humanity. He is extending the kingdom of whichever god he serves. But if the god that he serves is simply a pile of money, he is serving a god that is both fickle and uncaring.

This is why parents warn their children about the foolishness of becoming a miser. He is focused on the accumulation of wealth, but he is not equally focused on the larger issues of life. The end is foolish, but the means are not only legitimate, they are mandatory for the survival of civilization. Service to others is basic, but when a person serves the success indicator of money rather than the success indicator of lives benefitted, he has moved from the office of servant of men to the office of servant of things. This is always an act of foolishness.

As I grow older, I am increasingly aware of the ticking of the clock. Fortunately, I first heard it ticking a few days after I turned 17. So, I have always heard it in the background, but I hear it more loudly today. The relevance of this is the completion of my work. I have less time to do this. I am therefore always trading off time against money.

BUYING LIFESTYLE

Because of this trade-off, I am constantly aware of the fact that I am buying lifestyle. The sooner that somebody comes to grips with the fact that what he is really buying is lifestyle, the sooner he will begin to allocate both his time and his money more effectively.

If a person's lifestyle is defined by the accumulation of money, then he can be a miser in good conscience. If all he wants to do is imitate Scrooge McDuck, customers stand ready to enable him to achieve his goal, just so long as he helps them achieve their goals. But the customer is more likely to be self-consciously buying lifestyle than the miser is.

The miser helps the customer buy the lifestyle he wants, and the customer helps the miser buy the lifestyle he wants. But, when we look at the two kinds of lifestyle, most people conclude that the customer has greater wisdom than the miser. The customer is getting something for his money. The miser is giving up something for is money. The miser is giving up time. If all he enjoys is the accumulation of money, he can still be a servant to customers. But the customers shake their heads in disbelief, amazed that anybody could be that shortsighted.

I suggest that anyone who is wealthy enough to begin to shift from satisfying paying customers to satisfying nonpaying customers is coming to grips with the reality of death.

LEGACY

A person who looks beyond the grave, and who asks how he can leave a legacy to those who survive them should also conclude that merely providing money for his heirs or others is a shortsighted legacy indeed. The money will help them achieve their goals, but he should not be giving money away to people whose goals are inconsistent with his. He is subsidizing that which he does not believe in by accumulating wealth today. This is an unwise decision. Much of the Book of Ecclesiastes deals with this unwise decision. I have written a commentary on this book.

If a person's lifestyle corresponds to the legacy he wishes to leave, he is in an ideal situation. If he sees that his legacy will be a benefit to those survivors who pursue his view of life, he can more easily bring himself to continue to sacrifice time and maybe money on behalf of those survivors and his way of life. But if his lifestyle is inconsistent with the legacy he hopes will survive, he suffers from ethical schizophrenia. He is operating at cross purposes.

If a person accumulates wealth all of his life in order to spend is last decade or two in leisure, he had better be very sure what kind of leisure it is that delights him most. If he wears himself out, so that he cannot continue to enjoy, he has made a catastrophic lifetime decision. He should have accumulated less wealth in his early years in order to spend more time in his lifestyle of choice. The sooner a man grows up, the sooner his lifestyle choices will be consistent over time.

The trouble with this outlook is simple: maybe the leisure activities he selected in his youth were self-destructive. Maybe what he really wanted to do was eat, drink, and be merry, for tomorrow he might die. Now he finds himself old and infirm, not having died, and unable to pursue the dreams of his youth.

This is why it is important for a young man to assess the trade-offs between time and money. If there are things that he really wants to do, but he can do effectively only when he is young, he is going to have to spend time and money that could be used in the pursuit of a lifestyle suitable to old age. He had better prefer a lifestyle that is consistent with the legacy he wants to leave behind.

Tom T. Hall summarized this in his song about a young man who wanted to be a poet, who met a grizzled old cowboy. The young man asked him the secret of life. The old man was precise:

"Faster horses, younger women, older whiskey, more money."

You must do better than this.

CONCLUSION

The bucket list helps you with setting priorities. This is why it is an important exercise.

It helps you to get a handle on costs. There are always costs: time and money.

It also helps you assess your legacy. What do you want it to be?

Is what you are doing now consistent with it?

Make your bucket list. See what it tells you about you.

Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible.

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