Money is a powerful drug; it is psychologically stimulating. It motivates and invigorates people. But it also stresses them out. It can be the cause of great joy or great woe. It is pervasive. Yet it is also resides underground, within the undulating ocean of the unconscious, to be left unappreciated or unacknowledged. Money is hated and condemned, and at the same time cherished and celebrated.
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Many people see money as outright evil, as the catalyst of unending greed. It has thus assumed this suspicious shape over time and has been molded into a taboo topic. It has been considered so devilish that it spurred Ayn Rand to eloquently rise to its defense. In Atlas Shrugged, through the voice of Francisco D’ANconia, she said,
“Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?”
Ayn Rand was onto something. Money cannot be considered evil. It is only a tool, resource, or object — a medium of exchange. Yet it has suffered a tumultuous history. Many constantly express ambivalent feelings toward it. But why is it considered taboo? Why is it hated and smeared as evil? Do studies buttress these claims? If money does cause angst and suffering, can Bitcoin change the way people think about it? Maybe Bitcoin can create new ways for people to relate to money. However, the field of neuroeconomics is in its infancy. Almost no studies have been conducted on the psychosocial dynamics of Bitcoin. In the past, neuroeconomics has focused on investment decision making, but understanding mental and emotional reactions to various forms of money can also be of great significance.
The Pauper Effect
Western cultures altogether shun discussions of money. It is taboo. People in these cultures do not believe it is polite to divulge specifics about finance. They do not even chat with their children about it, as we shall see. Research suggests that economic inequality contributes to these negative views of money, and wealthy people are likewise painted as evil scrooges who do not give a damn about the poor. This is the consensus attitude. It betrays an underlying hatred of finance.
However, it is true that wealth can corrupt a person. It would be unfair to say that money corrupts only the wealthy, though. Even poor people suffer the psychological pitfalls of money. They deal with negative stereotypes of their own. I refer to the aforementioned views as the pauper effect. The pauper effect suggests that the mere idea of being poor reflects a bias toward money and wealth.
Psychological Research on Money
Studies that examine how parents relay monetary information to their children illuminate why the pauper effect exists. One survey revealed that parents want their children to be financially and economically savvy, but parents were unable or unwilling to share their knowledge. In a Psychology Today article, money-psychologist Adrian Furnham said, “Surveys show that over 90% of adults would like their children to know more about the financial reality of life than they currently do, but that they are not really confident enough to ensure their children are financially literate, sensible and mature.”
Surveys like these demonstrate why people have such an ambivalence and unconscious hatred of money. Parents neglect to discuss it at any length with children. On the other side of the coin, research has also revealed that money can dampen a person’s empathy response. This is another reason why people tend to dislike currency.
One study showed that there is a money-empathy gap. People who have accumulated wealth may treat the poor badly. Psychologist Paul Piff designed an experiment to prove this hypothesis. In the experiment, two people were matched in a game of monopoly. Piff handicapped one of the players. The handicapped player would never make as much money nor gain as many properties. The “privileged” player also reacted with disdain for the handicapped or underprivileged player. The privileged player’s facial expressions even included sadistic smirks and other pompous gestures. Piff interpreted his experiment this way: people with more wealth tend to hold contempt or dislike for the underprivileged. Further studies have buttressed his research. People with more wealth and higher status do not have the same ability to empathize as poorer populations, thus making them more likely to be mean and cruel.
How else can this research be interpreted? Just because people who have money may exhibit selfish and greedy behavior does not mean that correlation equals causation, and to generalize would be premature and unscientific. But even if people agree that the consequences of the pauper effect has a basis in reality, that the rich truly are greedy and evil, could there at least be solutions to this problem?
Bitcoin Adoption and the New Neuroeconomics
Bitcoin can offer a novel way to help people escape negative views of money, and even alter people’s psychological predispositions. Oftentimes, early experiences with money are negative because families are not incentivized to save or talk about spending, as surveys demonstrated. Furthermore, fiat currency is printed by a central banking cartel and controlled by people who want to keep it mysterious. They tend to make the processes behind printing and keeping money as obscure and inaccessible as possible. These power elites have even been known to steal from the people or print money arbitrarily to stuff their coffers.
It is no wonder discussions and honesty about money are discouraged. No wonder studies show that people hate money and rich people. No wonder talking intimately about it is considered taboo. No wonder money conversations involve tackling difficult moral issues and addressing entrenched psychological problems that uncover the truth about fiat currency: that it is a tool for servitude and slavery. Most people probably recoil in horror upon realizing these truths, but they must eventually be addressed.
Since Bitcoin is borderless and constructed on the platform of decentralized open source software, it is a type of currency that instigates a new way of perceiving money. It could upend the old psychological paradigm, and help pave a different path for a new neuroeconomics. It could spur new options for people to learn and get excited about money. It could help diminish contempt for it. It could even imbue the rich with new found empathy. The fact that Bitcoin is not printed and controlled by a central entity can help people escape the idea that money is evil altogether, and equalize the playing field. Perhaps people can even talk about it more frequently, which will help prevent money issues from slipping into unconscious awareness as repressed impulses and unfinished business. Perhaps the Ayn Rand’s of the world will not need to jump to the defense of money at every occasion.
For example, Bitcoin enthusiast and Journalist Jamie Redman of Bitcoin.com is known as the family man of Bitcoin. He chats with his children about money and the promise of cryptocurrency, and does not despise either the rich or poor. His mentality may be unique, but it seems to foreshadow the idea that Bitcoin is altering our psychology. Vice even wrote an article about his family-oriented ideals called “Meet the Bitcoin Family.” This could mean things are changing for the better.
I hate using “coulds” and “maybes,” though. There needs to be more research on Bitcoin and its global effects on psychological systems, especially the family system, culture, and governments.
Currently, studies reflect the idea that money highly impacts the way people think and feel. But this is likely the result of the kind of money people use, how that money is acquired, and how various influences warp people’s beliefs. Cryptocurrency, on the other hand, is a different animal. It is a currency that does not require faith in central bankers or megalithic governments. A person just needs to gain knowledge of the protocol from which Bitcoin runs, and they will have a basic understanding.
Knowledge and experience of cryptocurrency is already altering the psychological principles regarding how people view money and the wealthy. It has likewise created a new generation of millionaires, who made their Bitcoin riches from starting businesses or similar endeavors. And those within the community do not harbor ill-will toward the wealthy, as is the case with Jamie Redman and his family. As a matter of fact, the Bitcoin community is so tight-knit that they revere entrepreneurs as heroes.
My view is wholly anecdotal, but it is clear that cryptographic currencies bring in a new psychological perspective from which to view money, simply based on the cultural and systemic differences in the ecosystem. Indeed, this new construction of money is an innovation that could alter the course of neuroeconomics, behavioral economics, and humanity itself. It could certainly begin to diminish the pauper effect and help treat the various biases toward money and those who harbor them.
This is my clarion call for both more research and more Bitcoin adoption. There is so much to learn, especially how different monies shape our total psychology.
What do you think about the intersection of money and psychology? Let us know in the comments below!
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The opinions expressed in this article are not necessarily those of Bitcoin.com.