The issue after the war was figuring out how to mobilize unused energies to do the jobs that needed to be done. After some strategic cobbling by economic leaders at a conference in Bretton Woods, N.H., the Western world turned to money as its primary tool of self-organization, social reorganization and wealth building.

The West needed a functional foundation for both value exchange and essential compassion. So the delegates at Bretton Woods crafted an operational international monetary system, then put it to work. Helping hands were extended to allies and former enemies alike. The Marshall Plan was implemented in Europe while Gen. Douglas MacArthur and his minions took on the restoration of Japan. In the United States, some 9 million veterans took advantage of the G.I. Bill to receive vocational rehabilitation, unemployment compensation, training and education.

It was a revolution of social mobility and fundamental demographics. Ask your clients about their families in the 1950s. Things changed considerably then, mostly for the better, and furthermore it was unprecedented. Energy was needed everywhere to help organize, stimulate and generate. Necessity had demanded of money what it does best—matching unmet needs with unused energies. Europe and Japan got rebuilt. Former soldiers got retrained and restarted as the Depression’s malaise and the war’s wholesale destruction were left behind.

But the world, like Humpty Dumpty, could not be put back together again, at least not the same way. Before the war, rural communities (and their values) dominated much of the country. Your financial plan was your family, farm and community. A retirement plan was in the backyard and an estate plan was generally some version of primogeniture. All that being said, money was not the sole source of wealth or wealth building or, for that matter, even particularly important to most people. Children had access to both parents during the day. Life was lived mostly within 20 miles of home. Neighbors were known.

Before the war, most people would have worked in proximity to where they slept and raised their families. They would have grown some or all of their own food and been responsible for basic maintenance and repairs on their houses.

After the war, it was different. People migrated increasingly to urban areas. Their work was done more and more at centralized locations.

They had their worldviews expanded by their travels and personal relationships with folks unlike themselves, namely those with different ethnicities and cultures. Men (yes, it was mostly men) commuted in spiffy new cars on freshly built roads and highways that connected them to planned communities with recently erected schools and gathering spots. They enjoyed various urban amenities like indoor plumbing and electricity, sometimes for first time. They mostly accessed their food at grocery stores. The women made room at home and work for the men returning from the war (setting the table for culture wars some 20 years later).

Medical insurance, nonexistent before the war, became an expected benefit of employment and later a political right. Retirement money frequently came from defined benefit plans rewarding loyalty and fidelity (at least until later).

America became increasingly prosperous in that time, but it also became ever more reliant on money to accomplish all of this. Indeed, virtually none of these changes would have been possible but for money. This remains the reality to the present day, when money has become the most powerful and pervasive secular force on the planet.

Unfortunately, we have not yet effectively studied or understood our relationships with our medium of exchange, nor with the awesome forces it generates. And, frankly, there is nobody who can provide this vital education in money and how to live with it—unless it is those of us providing financial advice.

And that means we must provide new contexts and understandings, including these historical ones. It is fine and dandy for financial professionals to have rules of thumb, mathematics, charts and graphs and thick financial plans, but let us understand their limitations. We also have to tell people how many variables are working for or against them: the effect of things like Moore’s law in expanding computer capacity, increased mobility, expanding life spans and the various terrors of modern life. In other words, we must explain the world in terms of all its unknown and unknowable permutations and possibilities, including rational understandings of money itself and how it affects our individual clients.

It is about the numerators. Is any work more important?

Richard B. Wagner, JD, CFP, is the principal of WorthLiving LLC, based in Denver. He is the 2003 recipient of the Financial Planning Association’s P. Kemp Fain Jr. Award, which recognizes a member who has made outstanding contributions to the profession.


 

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