Money, money, money

I was listening to the radio this morning. (Radio Four's breakfast show, in case you're interested.) A chap on it was talking about the cost of the war in Iraq. (You are, no doubt, wondering if he was referring to the war of 1535, or that of 1632. As it happens, he was talking about the most recent one. It's still ongoing, as a matter of fact.)

Ah, the human cost, you sigh, and add a sage nod for gravitas. Yes, the deaths of servicemen and the suffering and daily violence ...

But, as it happened, he was initially talking about only the financial cost. Of course, it is a matter for debate whether expenditure on this scale can ever have purely economic effects. And ineluctably, such a debate would rapidly lead to a discussion of whether 'purely economic effects' of such a magnitude exist. If they do, what would they mean?

For example, is national expenditure that requires a one per cent tax rise deemed to have only economic costs, and no others? Of course not. Although these knock-on consequences might take years, it is arguable that they would include lower economic growth and less prosperity. So that, if one were a person who might, hypothetically, lose one's job as a consequence of this, the ultimate results would be so vast that they would no longer be viewed as 'purely economic'.

And, of course, this is but another way of coming to the point that the radio-chappie was sort-of making. Money, in sufficiently large quantities, can solve almost any problem. And certainly, money, in the quantities in which it has been spent on the war in Iraq, should be able to accomplish almost any societal problem which may lie within the scope of government action.

These arguments crop up all over the place. (In the following examples, the figures I'll use come from reputable-looking websites, mostly the NY Times and the UN. They may still be wring, but hopefully not by, say, a factor of ten! Also, by one billion, I'll mean 10^9, since the British usage seems to have been abandoned even by the British.)

It would cost about $3 billion dollars to provide AIDS-medicine to everyone in Africa. (I assume that this means: everyone who needs it. But no matter.)

The most common figure that one hears for the cost of the war is $3000 billion dollars. If we assume that this is direct expenditure, and doesn't count secondary costs, then it means the amount needed for African AIDS medicines is being spent every couple of days. Supplying clean drinking water to everyone on the planet would cost about $5 billion, so it's similar to the AIDS figure. Either way, in theory, a one-week ceasefire would save enough money to pay for both.

Often, when huge figures are thrown around in newspapers, the papers will come up with some image to communicate how much money is being discussed. Things like: "If this money were converted into ten pound notes and placed in a pile, it would reach the moon", or "if that money were placed in fifty pound notes and crammed into suitcases, we would have to use twenty million suitcases". (The last one sounds ridiculous, but I've actually seen something very much like it.)

Recently, H.M. Government were 'forced' to buy a bank at a cost of, probably, about 200 billion pounds. The papers, sensibly for once, converted this into a figure of 4 thousand pounds per taxpayer. This was an improvement, but it actually stirred people because they felt that four thousand pounds was their personal loss. It still failed to communicate the size of the original figure clearly.

Here's the rub. Money is power, and nothing is so much like power as money is. It's even scalable: Very little money is very little power, and a gigantic amount of money is a gigantic amount of power. To an average person, one million cars might not be one million times as useful as one car (what does that even mean?); but a million dollars are a million times as useful as one dollar.

Of course, this is pretty much circular; and since it's unclear what any of the previous ideas mean to me, I won't elaborate.

The only way to measure the value of money is to think of what the power that it represents can achieve. We do this all the time: we have consumer price indices to track the changing value of our money, we have currency exchange rates, based, in the final analysis, on the relative purchasing power of the currencies.

But the most enormous amounts of money discussed in the world today are spent by governments. And government spending is constrained by political will. Is there anyone who really believes that five stealth bombers are worth as much as the universal provision of drinking water? (Especially since the value of stealth bombers is not scalable: ten of them are not twice as good as five.)

And yet this situation is explained by the fact that political will can be mustered for certain expenditures, and not for others.

I'm going to tail off here. I have more to say, but so, I feel, should anyone sensible.