Nobody wants to live in a “dog-eat-dog” society, where it’s “every man for himself”. We want to live in a society where people are nice to each other and help each other out – even total strangers.

We want to live in a giving society. We want to encourage people to be Givers.

Of course, in the real world, there is a flipside to this. Sometimes there are selfish people who exploit the kindness of Givers. They’ll happily receive favors from Givers – but without reciprocating, nor paying-it-forward to others.

These are “Takers”. We want to discourage Takers from taking advantage of the generosity of Givers.

Let me propose a hypothetical system for society, where Givers are rewarded (to encourage giving). At the same time, this hypothetical system would also have checks-and-balances, to prevent Takers from exploiting the kindness of Givers.

Then I’ll explain how we can apply this system to the real world, to create a more giving society. Of course, when applying a hypothetical system to the real world, there would be some imperfections – and I’ll discuss those as well.

Here’s The Hypothetical System:

When Bob does a service for a total stranger – say he helps fix their car – he gets rewarded with some “Reward Points” by the people he helps. Over time, he accumulates lots of “Reward Points”, that are a testament to the good things he has done for others.

And what’s the benefit of having these “Reward Points”? Bob can spend these “Reward Points” to “buy” products and services from others. Say Bob needs a ride to the airport, and Tim (a total stranger) offers to drive Bob there. Bob then gives Tim some of his “Reward Points” – that’s Tim’s reward for doing Bob a service.

Now, remember the part about discouraging Takers from exploiting the kindness of Givers? We can see how this works here. If someone is routinely taking favors from strangers (without paying it forward to other strangers)… then he would be spending a lot more “Reward Points” than he receives. Over time, he would run out of “Reward Points”, which limits his ability to get more favors from Givers. So there is a limit to how much a Taker can take from Givers, without paying it forward and doing favors for others.

That’s basically the system in a nutshell. We can see how this hypothetical system would encourage people to be Givers towards total strangers. While at the same time, discouraging Takers from exploiting the kindness of Givers (without paying it forward).

By rewarding Givers and discouraging Takers, over time more and more people would become Givers rather than Takers. Thus creating a more giving society.

How to Apply this System to the Real World:

Applying this system to the real world is simple. Just re-read the description above, except this time substitute the words “Reward Points” with “money”. You’ll see the above description is a basic (though very simplified) explanation of how markets work. Money is a reciprocal reward for serving your fellow man. This is how markets facilitate cooperation and mutual help, even between total strangers.

Now, this might fly in the face of how most people have been conditioned to think about money. Many people have been conditioned to think of money as “the root of all evil”, or to demonize rich people as greedy hoarders who “take more then their fair share”, etc. But these misconceptions stem from not understanding that money is simply a medium of exchange for goods and services.

So money itself is NOT the problem…

It’s the MEANS by which
someone obtains money,

that makes all the difference!

And here’s where the imperfections of the system come in.

You see, the vast majority of people make their money the way I described above – through VOLUNTARY TRADE. They earn money as a reward for serving their fellow man. And that’s a good thing. Because it harnesses each person’s innate self-interest, and channels that energy into serving others (thus creating a more giving society).

As economist Adam Smith eloquently put it…

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner… but from their regard to their own interest.” – Adam Smith (The Wealth of Nations)

But the problem is, there is a small minority of people who try to cheat the system. They try to get money without earning it (by serving their fellow man). Instead, they try to get money through underhanded means — by using FRAUD or FORCE (which includes political cronyism aka legal plunder – since it uses government force).

So for markets to work (and create a more giving society), we need to guard against such abuses of the system. (How we guard against these abuses, is beyond the scope of this article – I’ll address it in future articles.)

For now, let’s examine the validity of a few commonly-held beliefs about money…

Is Money The “Root Of All Evil”?

As explained above, the answer is NO. Money itself is just a medium of exchange for goods and services. And when money is earned through VOLUNTARY TRADE (which it is, in the vast majority of cases) – money is a force for good. It is a reward for serving your fellow man. So it harnesses each person’s self-interest, and channels that energy into making other people’s lives better (even for total strangers).

Because in order to get a stranger to voluntarily give you money, one has to provide them with a good/service that they value in return.

In any voluntary market transaction (where money is traded for a good/service), the seller values the money more than the good/service… while the buyer values the good/service more than the money. That’s why they each choose to make that trade. And they’re both better off as a result. It’s a mutually-beneficial, win-win arrangement. What’s not to like about this?

Are Rich People All Greedy Hoarders,
Who “Take More Than Their Fair Share”?

Again, the answer is NO. The myth that rich people “take more than their fair share” stems from a common misconception. Namely, the myth that wealth is a zero-sum game (where if one person has more, it must mean that others are deprived).

But the truth is…
Wealth is NOT a Zero-Sum Game

Because if wealth were a zero-sum game, then that means for one person to gain, someone else must lose. But as I just explained, a voluntary trade makes BOTH parties better off (and that’s why they each choose to make that trade). This means wealth was created. So wealth is NOT a zero-sum game.

You see, we need to understand that wealth is NOT purely measured in terms of money. True wealth is measured in terms of the goods and services that one can buy. Because without the ability to buy goods and services, money is essentially worthless.

(E.g. When the Zimbabwean dollar was still in use, Zimbabweans had lots of money – billion-dollar notes and even trillion-dollar notes were commonplace. But due to hyperinflation, they could barely afford even basic goods and services with that money. Is there anyone who thought Zimbabweans were wealthy?)

So once you understand that true wealth is not measured in terms of money, but rather in terms of goods and services… then you’ll see that rich people who earned their wealth through VOLUNTARY MEANS (by serving their fellow man, and providing them with goods/services that they willingly exchanged money for) are NOT Takers. They are net GIVERS – because they’ve accumulated far more “Reward Points” than they’ve spent.

Which means they’ve earned more than they’ve consumed… they’ve given more than they’ve taken… they’ve served their fellow man, more than they’ve been served by their fellow man.

And their large positive “Reward Points” balance is testament to that.

It follows that rich people who earn their wealth through VOLUNTARY MEANS should be celebrated, not demonized.

But are there SOME rich people who should be condemned? Yes. Those are the rich people who made their wealth, not through voluntary means… but rather through FRAUD or FORCE (which includes political cronyism aka legal plunder – since it uses government force). But it is important to differentiate them from the rich people who became rich because of their hard work, wise decisions, smart investments, proper hiring, innovations, pleasing of customers, and honest behavior.

I’d like to give credit to Professor Walter E. Williams, as well as Lawrence Reed, for their teachings that inspired this article. Here’s Professor Walter E. Williams explaining the idea of money as “Certificates of Performance” (which I described as “Reward Points” in this article).