September 19, 1997

Ira Pilgrim


Money makes the world go round.

Old saying

Back in the days when all clothes were hand made, a man went to the tailor to get fitted for a suit. After he had picked out the material he wanted, the tailor said that the suit would take 10 yards of material, at so much a yard etc. The customer said that the tailor in the next block had said that the suit required 8 yards, not 10; "How do you account for the discrepancy?" he asked. The tailor said "It's simple: I have two sons and the tailor in the next block has only one son."

When I was younger, it seemed to me to be sort-of dishonest to buy something for $5 and to sell it for $50. I have since come to realize that the situation is much more complex and often involves much more than meets the eye.

In the good old days, when someone wanted to buy something, he went to the local store. The merchant had some fixed expenses such as what he had to pay for the article, rent or the cost of the building and its maintenance, whatever he chose to charge for his time, effort and whatever he put into the business. Usually, though, what he charged depended on what his closest competitor charged. The name of the game is that the merchant tries to get the most that he can for his merchandise, while the customer tried to get it as cheaply as possible. This principle has been formalized in the law of supply and demand.

While shopping for some socks and shorts at a shopping mall, it occurred to me how much more complex and expensive things have become over the years. Obviously those opulent buildings and their maintenance have to be paid for, as well as the sales-people, the ones who stock the shelves and make the elaborate displays, the people who make and dress the manikins, those who make and sell the computers. I shudder a bit at the thought of what all of that must add to the actual cost of a one dollar item, not to mention profit.

Yet this whole complex business is what keeps people employed; and it is the employed people who, in turn, buy those highly priced things that are sold in the shopping malls.

I was brought up during the great depression and my parents had to get the most out of every dollar that they had. As a result, I learned to bargain shop, something that few of my children learned to do. In some parts of the world people bargain as a sport. It is a score to buy something at the lowest price possible.

A new expression has come into being: "discretionary income." After you have taken care of your fixed expenses such as rent or house payments, food, clothing, utilities, education and transportation, what is left over is money that you can save, or spend on what you want, rather than on what you need. In the days when I was raising my family, discretionary money went for an occasional dinner in a low priced restaurant or an occasional evening out without the kids. Vacations didn't cost much more than every day living, since we went to a campground and hiked and fished.

There is a wide range of ways that people spend their money. At one end is the person who doesn't have enough to feed himself and his family adequately, no matter how hard he squeezes a nickel. At the other end are people who have so much money that they couldn't spend it all if they wanted to. Most of us are somewhere in between and most are satisfied if we have a fairly reliable car, don't have to think twice about eating out when we want to, and can afford to buy strawberries out of season. There is little real difference in life style between the person who drives a three year old Toyota and someone who drives a new Mercedes. A person can be as healthy or healthier if he eats at home or at Sizzler than someone who eats hundred dollar dinners at gourmet restaurants. A millionaire can't really buy any better health care than does the person with a good medical insurance plan.

So, while money does make the world go round, there are limits to what it can buy in terms of useful things. I doubt that a person who owns an original van Gogh is made any happier by it than the person who hangs the kids drawings on the refrigerator.

As in most things, there is an optimum size for everything including income and assets. A person is well off if he can afford to do many of the things that he wants to do, eats well, has a comfortable home and has something put away for rainy days.

Some people are never satisfied and never seem to accumulate enough. It is a disease of sorts, like bulemia. Since such a person doesn't know that he has a disease, it's usually incurable. The other disease is poverty. As Tevye said, in Fiddler on the Roof, "It's no sin to be poor; but it's no great honor either."

It has been pointed out that being poor wasn't a big problem during the great depression, because most people were in the same boat. In the previous century, no one had central heating, so no one missed it. The automobile wasn't missed either.

Nowadays we see on TV how the rich and famous live and we can compare our lives to theirs. One of the nice things about where I live is that the contrast between the rich and poor isn't nearly as obvious as it is in the cities.

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