Building a More Sustainable World with Dick Vodra – Part 2

Intro:

What is finology? Here we explore our personal relationships with money, money’s nature and how we exchange value in daily life. Grounding ourselves in the liberal arts, we explore financial planning 3.0 from the inside out, addressing money as the most powerful and pervasive secular force on the planet. Mysterious money merits study.

Jake Wagner:

Hi, this is Jake Wagner, co-founder of the what is finology project. If you’re new here, we highly encourage you to listen to episode zero in which we share where the project started, where we’re going and some of the intellectual basis that we’ve used to build our body of work. We are grateful that you are a part of the conversation. Please visit www.whatisfinology.org to share your comments and questions. Now back to the episode.

Natalie Wagner-Willis:

So back to dad’s belief that money is this bedrock of essentially every human interaction. And those words are fairly close to his from the book. What I’m hearing from you is that as the world changes, you see a lot of well, okay, maybe not exactly what I’m hearing. Where I’m taking that is the potentially, that physical manifestation of economics that is this bedrock of interaction could break down with this huge transition into an entirely different world and that potentially we need to be looking at resources and other forms of wealth outside of money in order to navigate the world potentially turning kind of upside down because do you think money itself as a system, as a global system is likely to change considerably?

Dick Vodra:

Yes, there are lots of… two points. First, there are lots of forms of wealth. We tend too narrowly to define it in financial terms.

Wealth is simply, it comes from the word meaning earth, and it was basically where you stand, what you own, what produces life. Affluence comes from the word for flow. And it’s sort of the money flowing through your fingers.

So people can be affluent but not wealthy. But if you look at what strong communities have done over time, you’re talking about social capital. The community that you live with. Spiritual capital is the strength of your soul and your relationship to higher powers, if that’s what you believe in. Or just psychological strength, real resources, real wealth. Do you own stuff as opposed to money? Physical, personal capital, health capital. Are you healthy? Do you take care of yourself? Do you have a family that you can rely on? Whether it’s your biological family or your friends or your other network.

And most of those are not financial. And it’s interesting that while we talk a lot about making a living, what we try to do often is, “Why do you want to retire?” “So that I can do all the things that I want to do. So that I can volunteer, so that I can be in nature, so that I can do things that don’t involve money.” And I think it’s interesting that we spend our lives trying to accumulate enough money so that we can live a life that doesn’t require it.

So you go to church and yes you may, probably should pay your money into the contribution plate or your tithe or whatever your statement is. But that’s not primarily a financial activity. It takes money to keep the doors open, but you don’t go there because of the financial relationship. You go there because of the spiritual relationship and the community relationship that you have there. I’ve often felt that the most important things in church happen in the church basement rather than the sanctuary because that’s where people get together and support each other and have the potluck suppers.

And we’ve gone from a world where you had potluck suppers to a world where everybody goes out to eat and pays money. So I think we’ve over financialized the world. Money is necessary.

Natalie Wagner-Willis:

We’ve over financialized wealth.

Dick Vodra:

We’ve over financialized wealth and we’ve over financialized the world.

Natalie Wagner-Willis:

Yeah. Oh interesting.

Dick Vodra:

Because if you don’t have money in today’s world, you’re out of luck. Whereas a hundred years ago there were more social networks to take care of you. So money on balance has been a great thing. Money as the primary medium of society, I think has not necessarily been a great thing.

Natalie Wagner-Willis:

So as a young-middle aged person with a young family looking at the many, many different possibilities down the road, one thing that I’m taking away from this is that I need to be putting in a very serious effort to cultivate my wealth outside of financial wealth and that there’s a very good chance that those are going to be more valuable resources. And that’s a place that it’s wonderful to be sending money to my IRA every month. Fine. Nothing wrong with that. Continue to do it. But putting all of our resources, eggs, so to speak, into the financial basket is potentially a finological mistake. Does that ring right?

Dick Vodra:

Yes. And if you, if the world collapses down to the size of your community, the way it often does. Think of a postwar world where after the World War II in Europe or after the Napoleonic Wars or whatever, where the national power sort of collapses and we’re back to a community basis. The people who could make shoes or grow crops or tell fortunes or whatever, those are skills that people will value in their community.

Somebody who can offer IPOs may not have a lot of value 10 years from now. Or be much less of a value than… so yes, you need both. But I think that people tend to spend more time on either the virtual, you know, in front of a screen or the financial at the expense of these other skills that just being outside, knowing how to cope in bad weather.

Think of a world, in California this summer as an example. Pacific Gas and Electric, the main utility in California has announced that when the situation gets dangerous for fires, they are going to preemptively turn off the power so that if a electric line breaks it won’t start a forest fire. Like so many of the, I think seven or eight of the major forest fires in the last couple of years have started because of interactions between the electric system and the trees or brush. So they’ve said if things get dangerous, we’re going to turn off the power. Potentially for a week.

Well, are you prepared, you generically or you specifically, are you prepared for the lights to go out for a week?

Natalie Wagner-Willis:

That’s right.

Dick Vodra:

Your IRA is not going to help you in that situation. And maybe a generator would help you for a while. But we just as in a continuing that example, we could have built houses that had two electric lines into them. One for a refrigerator and a heat and something for half the power and the other half for everything else you do. So that you can have a generator that we keep emergency services on while the rest of you lived in the dark and flashlights and you go to bed when it gets dark outside.

But we didn’t build those houses just like we didn’t build houses with two plumbing systems like they have in Las Vegas now. One for drinking water and one for less pure water that you can use for watering your lawn. So what we do is we use the best water in the world to water your bushes in the desert instead of keeping it for uses that we need pure water for. We didn’t think ahead and said, “What do we need quality resources for and what can we use other things for?”

We spent the last 50 years building the wrong America. Where everybody, you can’t do anything without a car in many parts of the country because we zoned it that way. Said, “We don’t want gas stations and 7-Eleven’s in your neighborhood. Or schools within walking distance. We want everybody to have to get into a vehicle to do anything they want to do in life. We didn’t even put in sidewalks. So now we’re saying, “Gee, maybe we should have put in bike lanes. But we didn’t do that the first time.” So think about what could happen. And for some of those things, money will be useful, for some of those things, other creativity will be useful.

Natalie Wagner-Willis:

Well I think it’s important to point out that one of the natures of money is that it doesn’t hold inherent value. It holds projected value and it holds value in its ability to be converted into something with real value. But you cannot eat money. You cannot sleep inside of money. It will not keep you warm when it’s cold outside. And therefore if the world stops projecting value on to money, it’s instantaneously worthless.

Dick Vodra:

Yes.

Natalie Wagner-Willis:

So…

Dick Vodra:

And… go ahead.

Natalie Wagner-Willis:

If we’re potentially living into a world where the financial system has potential to break down, to fall out from underneath, we do really need to be for our finological futures, we need to be cultivating our connection to real resources. So food, how do we stay warm when it’s cold outside, how do we continue to care for our children, what not if money suddenly becomes not a means to those ends?

Dick Vodra:

Right. Essentially money is, some people have simply defined it as money is a claim on future energy. If the energy isn’t there, then it doesn’t matter how much money you have. If you have a lot of money and there’s no food in the grocery stores or on your farm or wherever you happen to live, that money is, you said you can’t eat that and it’s not going to be terribly useful. The top 1% of the 1%, they may have lots of money.

Natalie Wagner-Willis:

That’s right.

Dick Vodra:

But again, they’re relying on having guards and we hope, they hope that the guards continue to point their guns outward. Which has not historically always been the case.

So I think that if we started to realize this at an emotional, fundamental level, then we could start rebuilding our lives and our societies so that we would be better, more resilient toward the kinds of changes that might happen. The problem that we face in that is that there’s no money in it.

If you get to the point of, if you set up a neighborhood clothing bank so that your kids who are, how old are your twins?

Natalie Wagner-Willis:

The twins will be two in September and Bradley will be seven on Saturday.

Dick Vodra:

Well, congratulations to Bradley. But if you joined a community clothing exchange, and you put Bradley’s clothes into the box that he doesn’t fit into anymore, and somebody who’s got a five or six year old takes them out and their clothes your twins are going to use in a year or two, that’s a great system unless you’re selling clothes or making clothes. So we have to have a system where, and the people who therefore have a lot of money, the people who own the building that the clothing store is in. The people who own the shipping company that moves the clothes from Vietnam to here. The people who own the TV stations that rely on advertising from clothing sellers, all of those people are going to be unhappy. And those are the people who tend to finance, among other things, they tend to finance the elections of people who are making decisions.

So you look at it and you say, “Okay, we’re going to do this thing, which is environmentally sound and we’re going to destroy the economy in the process because the economy’s going to be destroyed anyway. We’re trying to get ready.” But tell that to the guy who just got laid off.

So it’s not an easy choice. At an individual level, it is an easy choice. But when you add up, one of the first things you learn in economics class is what makes sense for one person may not make sense for a million people. If you decide to make things better for yourself and save an extra 10% of your income, that’s great. If everybody in your town does that, it’s called a recession.

So the economics of transitioning backwards and if we cut… transitioning backwards isn’t easy. It’s not a disaster. It doesn’t have to be. I mean, in 1957 John Kenneth Galbraith wrote a very famous book on economics called The Affluent Society and talking about how our values are affected by the tremendous level of affluence that Americans had. And that was a world before. We had one black and white television, no color television per house, usually one. The average house size is about 1200 feet. One car, not two. Not to mention the unfortunate things that women couldn’t get jobs. Blacks were still being lynched. And we were not a terribly happy place if you weren’t in the exactly right demographic.

But that was a world in which we used probably a quarter of the physical resources per person that we use now. And at that time we thought it was an affluent society. So cutting back doesn’t mean everybody starves, everybody freezes to death in the dark. But we need to plan if we’re going to do that. And that’s sort of what I decided I could do better than trying to work with one client at a time who didn’t really want to hear that message.

Natalie Wagner-Willis:

Well and there are intrinsic contradictions here that right now, today we are leaning against money as a bedrock. And one of the things I heard with that clothing example is that there is a conflict between efficient energy use and driving the economy. It’s clearly, ultimately more efficient to use already made clothing, continue to hand them down from person to person according to usefulness. But unfortunately that energy efficiency has an effective de-energizing the economy, which has a very felt effect today.

Dick Vodra:

Yes.

Natalie Wagner-Willis:

So…

Dick Vodra:

And… go ahead.

Natalie Wagner-Willis:

Go ahead. No, go ahead.

Dick Vodra:

the transition is always a challenge.

One of the advantages as your father would talk about the role of money, it’s a lot more efficient for you to take some of your money and buy clothes for your twins at the store that had been made in Nicaragua or Vietnam or Bangladesh or South Carolina then it would be for you to, raise the sheep card the wool, spin the fiber and do what your great-great-great grandmother used to do, which was basically a non-financial transaction. It’s a lot more efficient for you to work for an hour and make enough money to keep your kids in clothes for months than to try to do the amount of work it would take to wash the clothes, make the butter, make the fabric, all the rest of the things that we did when we were very poor.

Natalie Wagner-Willis:

Yeah. Not to mention learning how to do it.

Dick Vodra:

Well, you’ve got that problem too. But that’s just because your great-`great grandmother didn’t stay around long enough to teach you, which was very inconsiderate of her part. So I think that that’s what we have, as I said before, is wonderful. I don’t have any moral objections to living well. I think it’s wonderful that in a few weeks I’m going to be able to fly out to Seattle to see my granddaughters and go out in September to The Nazrudin meeting in Oklahoma.

I mean, it’s wonderful to be able to do that. I don’t think there’s anything wrong with being able to do that, it’s just that it’s not going to be possible very long to do that. And the more I do it and the more everybody else does it, the faster it becomes impossible. And if you’ve been on an airplane lately, you know that there’s lots of people visiting their grandmothers or going to business meetings or doing whatever it is they’re doing because every plane I’ve been on for the last few years has been full. The hotels are full and they keep building more of them.

We have a wonderful life that is consuming more resources than we will be able to produce. We’re already reaching, for parts of the world, we’re already reaching limits and it keeps getting, we keep getting tighter. And for instance, in spent, instead of keeping up our roads and infrastructure, we kind of try to defer maintenance. And my wife has a soybean allergy and when we go out to eat, it is very hard to find food, particularly at a reasonably priced restaurant that doesn’t have soybean oil because soybean oil is a lot cheaper than olive oil or canola oil. So everybody has… we looked at the allergen list for several major restaurant chains. Basically the salt and pepper don’t have soy in them, but pretty much everything else does.

Because it’s cheap and we can get cheap calories if we just downgrade a little bit. And we can let the roads go a little bit and we can let the bridges, you know, hopefully they won’t fall this year. And eventually, and we don’t fund the pension plan. We make promises to people that we’ll have a pension for them, but we don’t put the money in that’s necessary to keep the pension going. So we’re not, and then we’re not taking the carbon out of the air or preventing it from getting in there.

We said, “Well, maybe next year we’ll try to stop emissions and try to reverse the curve.” But we haven’t. And we talk about windmills, but this year or last year, latest year we have, there was more new power supply from new coal plants than there was from new windmills and solar energy. And there was more from natural gas than there was from windmills and solar energy.

So while it’s nice that we have windmills, they’re not replacing anything. We’re not using coal and natural gas because we’re using windmills. We’re using more of everything. And as long as we don’t have to pay all the bills that come with that, whether in the form of the health from using too much soybeans or the climate change from burning too many fossil fuels. It looks great today.

Natalie Wagner-Willis:

You know, Dick, I find it interesting that you stated at the beginning of this part of our conversation that you, you don’t think there’s anything immoral about it. And I don’t want to pass a moral judgment here on the call today, but I do think that there is a question, a moral question here with regard to using a disproportionate amount of energy and in essence taking that energy away from other life, other bodies of creation that also need it. And be that other people in other nations or be that the trees that took a long time to grow that are no longer there and the animals that lived in those trees, the hundreds of animals that lived in each tree.

I think that it is worth asking, is there an immoral piece of our lives today with using this vast amount of energy that is leading towards a future that we can’t predict or that we, I don’t want to summarize it exactly, but I do think there’s a moral question here with regard to the energy that we’re using and what it means to others. Because we live in a shared world.

Dick Vodra:

Ah ha. You cracked the code. Congratulations. Because what I was saying is that from the standpoint of your family, I don’t think it is immoral for you to want to have a nice vacation, the five of you or have a nice dinner out or drive a nice car. What is immoral and unsustainable is that it doesn’t work. And on a grand scale, the more you do this now, the worst the future looks for your twins.

Natalie Wagner-Willis:

Right.

Dick Vodra:

And we have the great insect apocalypse, which people don’t notice. But when I was growing up, particularly the age of your son, not necessarily even the age of you, after you did a Sunday drive, it was always my job to clean the bugs off the windshield. And there were special products for cleaning the bugs off the windshield.

And now you can go for a year without having to clean any bugs off the windshield because there aren’t any bugs anymore. I mean the number of insects is down 75% in many environments, whether it’s the bees and the butterflies or just almost anything. And nobody knows why. So there are a lot of impacts now, as you said to the rest of the life on earth that we tend to value much less than we value people, but they do not have a value of zero.

And we are acting like the only thing that matters here is us and we are acting as though the only, sort of like the line in the musical Rent where it says there’s no day but today. That tends to be how we live. And I understand what they’re saying in that play, but we act as though that’s how we can afford to live and somehow, something will happen so that we’re okay or our children are okay or our grandchildren or our pets or our trees when, if we pay any attention to it, we know that they won’t be.

So yes, there is a mammoth morality issue, which I’m happy that you brought up when you look at the impact of what we’re doing. What I was saying is that the action itself, wanting to have good food and indoor plumbing and a warm house, that isn’t immoral, but the problem is that the way we go about getting it turns out to be both very immoral and totally unsustainable.

Natalie Wagner-Willis:

Well, it’s time for us to…

Dick Vodra:

I never, I just wanted to point out that I never get invited back to cocktail parties.

Natalie Wagner-Willis:

This is not and uplifting… I do not feel uplifted at this moment. There is that.

Dick Vodra:

No, I think it’s very hard. And even the people who claim to be, who are genuinely concerned about environmental issues are still talking about the necessity for growth and how we’re going to have smart growth or we’re going to have sustainable growth. Well, sustainable growth is impossible because if you simply… compound interest at 3% it means that in a hundred years you’ve got 16 times as much as you started with. And in 200 years you’ve got 250 times as much as you started with.

So even 3% growth cannot be sustainable. And at some point, there’s a rule of thumb. Herb Stein wrote a thing that said, “If something cannot go on forever, it will stop.” And the question is, do we stop it or do we let it stop us? And once you understand how that works, it’s very hard to be sort of routinely optimistic and wonder whether I ought to be putting my money into a emerging market stocks or you know, housing rates or something.

So I think that the… but 50 years ago, if you had cancer, the doctors would not tell you that you had cancer. They might tell your spouse or they might tell somebody else, but they’d think, “Well, gee, if I don’t tell you, then you won’t get discouraged.” And then gradually people just realized that if I know, then I can participate much more actively in my care and I can make things better than if I am simply a passive recipient of somebody else’s medical decisions.

And I think that that’s important now that we know what’s happening and that we don’t pretend it’s not. And knowing what’s coming means that we can take steps now to make things better than they would otherwise have been. And that I think is the goal of all planning is to make the future better than it would have been if you didn’t do planning. And I think whether you buy into Worldview Two and the things I’ve been talking about, the environment or not, I think a very good definition of planning is simply to help someone live a better life than they would have lived if they didn’t have planning.

And so independent of the Worldview Two conversation that that’s where the value of financial planning rests. And that’s where a lot of finology is about understanding where the interventions can be positive and where they might not be and what kinds of decisions can you ask a client to make? What’s going to be effective in changing behavior? Those are important questions that we’ve struggled with for 25 years at The Nazrudin Project, I think with some success. So whether or not you’re focused on climate and energy, there is still an important role for helping people make good decisions. And I think that that’s what the financial planning world ought to be all about. And that’s what finology and the work of Dick Wagner was all about.

Natalie Wagner-Willis:

that intersection of how money can help us navigate life with grace. Dick, thank you so much for this time together, for your thoughts, your energy. It’s always a pleasure to be with you. And this –

Dick Vodra:

Well thank you.

Natalie Wagner-Willis:

This has been very interesting. I’m confident that our listeners will agree. It seems a little unfortunate that we can’t have an empowering take away with regard to some of those Worldview Two stuff

But I think that what it comes down to is understanding what resources we do have and how we can cultivate what planning means and how we can cultivate our own ability to navigate life with grace.

Be that, because we need access, we need resources and be our access to those resources be through money or our community is yet to be seen down the road. But that’s what we can do, is understand that wealth is not held wholly in money and that cultivating our other resources of wealth is an important finological step.

Dick Vodra:

Yes, and, and ultimately an important financial step. I mean, if you think about the people who have been getting flooded out of their homes for the last several months, the image that we always like to see and it often is effective, are the people, the community coming together to fill sandbags, to build the levees, to protect the homes. Nobody’s getting paid to do that. Somebody has to buy the sandbags. But basically this is neighbors helping each other and people knocking on each other’s doors as the fire comes through the town in California. It’s a lot easier to do that if you know who those neighbors are.

And I think that that is a, those are important values that we as financial planners can encourage our clients to participate in. Whether it’s through joining a volunteer fire department, joining a church, participating in a food bank, supporting a farmer’s market, becoming physically fit yourself, taking care of your own fire risk or flood risk. Those are all things that you can do whether you’ve got a little bit of money or a lot of money but are going to greatly enhance your personal wellbeing and the personal wellbeing of the people you care about.

So I think it is possible to have a positive outcome and recommendations from this and that a planning process that includes all the forms of wealth is something that will serve everybody well in the years to come.

Natalie Wagner-Willis:

Beautifully said. I love that. Well let’s sign off for today and Dick, thank you again very much and I’ll see you in Nazrudin in September.

Dick Vodra:

Sounds like a great idea. Thanks an awful lot Natalie.

Natalie Wagner-Willis:

Thank you Dick. Be well.

I want to thank the What is Finology team. Co-founder and curator, Jacob Wagner, senior assistant Natasha Hoggatt and project producer Gail Pelsue. This episode of the What is Finology podcast is dedicated to our guiding light, the father of Finology and co-founder of this project, Richard Wagner. Without you, this doesn’t happen. And thank you to you, our listeners. This needs you. Please send us your thoughts and questions at whatisfinology.org or on Facebook. I’m Natalie Wagner Willis, as always be well.