Letter to the Fellows: Money - Good or Bad?

My nephew recently asked me, "Tante… is money good or bad?"?He didn't go further to ask whether capitalism is good or bad, but I've been hearing that question more and more from younger generations and up-and-coming investors. And the feedback is decidedly negative.?

In fact, many in this next generation have grown up with the view that we live in a society where capitalism is an extractive economic system—one that has mortgaged their futures to pay for the consumption and production patterns of those that came before. While we may not be able to deny this, we can say that, notwithstanding its shortcomings, capitalism remains the best system the world has ever known for creating prosperity and achieving human flourishing.

That said, there are issues.?Big ones.?

So, in response to my nephew, I began by explaining that money is neither good nor bad, but simply a tool—a vehicle for transactions, a store of value, a unit of account, the element underlying all economic activity in the world.?

Unexpressive and seemingly unconvinced, my nephew stared blankly back at me with a look that said, "Boooring!?So…is it good or bad?!"

I decided to take a different tack:"Bachcha, think of money as an instrument that when used for good, enables freedom; but when used thoughtlessly or even dangerously, undermines freedom, and then it becomes bad.?

I went on to tell him about Franklin Delano Roosevelt's "Four Freedoms." During his second inaugural address, FDR spoke of the freedom of speech, the freedom of worship, the freedom from fear, and the freedom from want.?

If money and capitalism can enhance these four freedoms, then there is no greater force for good in our world. And it's our responsibility to ensure they do!

From Strength to Strength,?

Erika Karp, Executive Director, Aspen Institute Finance Leaders Fellowship