What we teach about earning, borrowing, making money

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It is not easy to be entirely rational in the midst of a deliberate promotion of fear and gloom about a new virus “variant” by various media needing something to make headlines out of, all of them starting with: “It is possible that…” and “It could be that…” “Perhaps will be worse…or" or “It is probable that.”

People, unable to do actual research themselves, and having learned not to trust what politicians say, are indeed frightened and with reason. Most recent studies show that with this new variant, as its energy is focused on spreading faster, not stronger, the symptoms are weaker. But that will not make scary headlines.

And we still have to wait and see, as we have been for two years.

I listened with fascination to a group of young adults online recently, probing the life options they face in an uncertain world (well, hasn’t it always been?) with few job offers looming, commenting on what their elders and those proposing to be their betters were laying before them. They were wondering if there was any future at all.

One young woman explained the path her father had recommended: “Join the Public Service, like my brother George did. Then no matter what happens, you can never be fired. You will always have money to spend.

"Look at the pandemic. When people like me in tourism were laid off because government ordered lockdowns...we only got paid for a couple of months. Then our employer, with no customers coming in (we knew he couldn’t pay us any longer), closed.

"Your Uncle George, however, whose job was to serve the public, still got paid, but didn’t have to turn up to work, as there was no work to do, really.

"Why, if they took our jobs away, didn’t government have to pay us, too?”

There was no answer to what was, after all, a rhetorical question.

One young man who was completing a degree in economics asked if the government was going bankrupt. When you are short on money, he explained, the first thing his mother taught him was never to borrow money for “recurrent expenditure”…you know: food, rent, electricity, transport.

That woman taught the first and most fundamental lesson on economics from one of the wisest money handlers I ever encountered. She could stretch a dollar a mile. You can borrow for capital expenditure, she had explained, to build a market stall or buy a van from which you can sell goods or agricultural products, or a mortgage to buy a house or a business: they are better than money in the bank.

But never borrow money to spend on something that will not earn enough to pay back in a reasonable time (she said three months) what you borrowed.

They don’t teach you that in university, he said. They learn about “acceptable limits of quantitative easing” (also known as printing money, which is only legal when governments do it. Do not try this at home).

There they learned government borrowed money from the IMF and from banks to pay salaries and pensions. Not to earn income for the treasury in return, but to pay salaries to a public service even it admits is over-staffed, which results in debt rising year after year. Your mother would be horrified.

Lesson number two was, you must always, always put aside ten per cent as savings every month before spending any on yourself or your family, even if you have to work a double shift or get a weekend job.

Saving is how you get enough to buy another van someday or build another stall; that is how you build a business. That is how the Syrian immigrants started: as pedlars walking rural roads to build up their small businesses into large ones, selling anything – doubles, market goods, fabric lengths, scissors.

Now they are envied and angrily called “the one per cent” by those who menacingly believe themselves entitled to a “fair share” of what others have worked for. There are still people starting out that way. They are called “entrepreneurs.”

There is a famous black professor of economics in the US, Dr Thomas Soverall, who has asked questions Trinis find uncomfortable, including, “What part of a ‘fair share’ of what someone else has worked for do you feel you are entitled to?” and his sour observation: “I have never understood why it is called ‘greed’ to want to keep the money you have earned for yourself, but it is not called ‘greed’ to want money other people have earned, and to consider that you are entitled to it.”

My companion at the Zoom seminar smiled. A generation ago, he noted, when you got to be 18 you were expected to leave your parents’ home and fend for yourself.

It followed what was regarded as a law of nature. All members of the animal kingdom (which humans are by birth and genetics), when becoming an adult member of their tribe or species, were on their own. Get a job, find somewhere to live and start a family of your own, or study on weeknights and weekends for your degree, if that is your goal (and you can borrow for that, his mother said, as a potential income-earning asset).

“Ah, yes!” he remarked, not without some self-satisfied pride, “I remember it well!”

There were exceptions, of course. If your parents were dead, disabled or unable to support your siblings, upon maturity you were expected to step up and help support the family. So many did that, and in this post-lockdown era are once again doing it by 11 or 12 years of age.

So you were accepted as an adult and treated with respect – not on the basis of just age. You had to earn respect, unlike in certain organisations, where people like Uncle George get no-fault increases every few years as a “right.”

It is not education or talent that achieve success, Uncle George. Without hard work, neither gets you to the top. There may be luck, but the harder you work, the luckier you get. Ask any successful entrepreneur.

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"What we teach about earning, borrowing, making money"

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