Francisco D’Anconia’s Speech: The Meaning of Money

The Meaning of Money
Tuesday, January 1, 1957

“So you think that money is the root of all evil?” said Francisco d’Anconia.

“Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. 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?

“When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money. Not an ocean of tears nor all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper, which should have been gold, are a token of honor–your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money, Is this what you consider evil?

“Have you ever looked for the root of production? Take a look at an electric generator and dare tell yourself that it was created by the muscular effort of unthinking brutes. Try to grow a seed of wheat without the knowledge left to you by men who had to discover it for the first time. Try to obtain your food by means of nothing but physical motions–and you’ll learn that man’s mind is the root of all the goods produced and of all the wealth that has ever existed on earth.

“But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man’s capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is made–before it can be looted or mooched–made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can’t consume more than he has produced.

“To trade by means of money is the code of the men of good will. Money rests on the axiom that every man is the owner of his mind and his effort. Money allows no power to prescribe the value of your effort except the voluntary choice of the man who is willing to trade you his effort in return. Money permits you to obtain for your goods and your labor that which they are worth to the men who buy them, but no more. Money permits no deals except those to mutual benefit by the unforced judgment of the traders. Money demands of you the recognition that men must work for their own benefit, not for their own injury, for their gain, not their loss–the recognition that they are not beasts of burden, born to carry the weight of your misery–that you must offer them values, not wounds–that the common bond among men is not the exchange of suffering, but the exchange of goods. Money demands that you sell, not your weakness to men’s stupidity, but your talent to their reason; it demands that you buy, not the shoddiest they offer, but the best that your money can find. And when men live by trade–with reason, not force, as their final arbiter–it is the best product that wins, the best performance, the man of best judgment and highest ability–and the degree of a man’s productiveness is the degree of his reward. This is the code of existence whose tool and symbol is money. Is this what you consider evil?

“But money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. It will give you the means for the satisfaction of your desires, but it will not provide you with desires. Money is the scourge of the men who attempt to reverse the law of causality–the men who seek to replace the mind by seizing the products of the mind.

“Money will not purchase happiness for the man who has no concept of what he wants: money will not give him a code of values, if he’s evaded the knowledge of what to value, and it will not provide him with a purpose, if he’s evaded the choice of what to seek. Money will not buy intelligence for the fool, or admiration for the coward, or respect for the incompetent. The man who attempts to purchase the brains of his superiors to serve him, with his money replacing his judgment, ends up by becoming the victim of his inferiors. The men of intelligence desert him, but the cheats and the frauds come flocking to him, drawn by a law which he has not discovered: that no man may be smaller than his money. Is this the reason why you call it evil?

“Only the man who does not need it, is fit to inherit wealth–the man who would make his own fortune no matter where he started. If an heir is equal to his money, it serves him; if not, it destroys him. But you look on and you cry that money corrupted him. Did it? Or did he corrupt his money? Do not envy a worthless heir; his wealth is not yours and you would have done no better with it. Do not think that it should have been distributed among you; loading the world with fifty parasites instead of one, would not bring back the dead virtue which was the fortune. Money is a living power that dies without its root. Money will not serve the mind that cannot match it. Is this the reason why you call it evil?

“Money is your means of survival. The verdict you pronounce upon the source of your livelihood is the verdict you pronounce upon your life. If the source is corrupt, you have damned your own existence. Did you get your money by fraud? By pandering to men’s vices or men’s stupidity? By catering to fools, in the hope of getting more than your ability deserves? By lowering your standards? By doing work you despise for purchasers you scorn? If so, then your money will not give you a moment’s or a penny’s worth of joy. Then all the things you buy will become, not a tribute to you, but a reproach; not an achievement, but a reminder of shame. Then you’ll scream that money is evil. Evil, because it would not pinch-hit for your self-respect? Evil, because it would not let you enjoy your depravity? Is this the root of your hatred of money?

“Money will always remain an effect and refuse to replace you as the cause. Money is the product of virtue, but it will not give you virtue and it will not redeem your vices. Money will not give you the unearned, neither in matter nor in spirit. Is this the root of your hatred of money?

“Or did you say it’s the love of money that’s the root of all evil? To love a thing is to know and love its nature. To love money is to know and love the fact that money is the creation of the best power within you, and your passkey to trade your effort for the effort of the best among men. It’s the person who would sell his soul for a nickel, who is loudest in proclaiming his hatred of money–and he has good reason to hate it. The lovers of money are willing to work for it. They know they are able to deserve it.

“Let me give you a tip on a clue to men’s characters: the man who damns money has obtained it dishonorably; the man who respects it has earned it.

“Run for your life from any man who tells you that money is evil. That sentence is the leper’s bell of an approaching looter. So long as men live together on earth and need means to deal with one another–their only substitute, if they abandon money, is the muzzle of a gun.

“But money demands of you the highest virtues, if you wish to make it or to keep it. Men who have no courage, pride or self-esteem, men who have no moral sense of their right to their money and are not willing to defend it as they defend their life, men who apologize for being rich–will not remain rich for long. They are the natural bait for the swarms of looters that stay under rocks for centuries, but come crawling out at the first smell of a man who begs to be forgiven for the guilt of owning wealth. They will hasten to relieve him of the guilt–and of his life, as he deserves.

“Then you will see the rise of the men of the double standard–the men who live by force, yet count on those who live by trade to create the value of their looted money–the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law–men who use force to seize the wealth of disarmed victims–then money becomes its creators’ avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.

“Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed. Money is so noble a medium that is does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.

“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, ‘Account overdrawn.’

“When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, ‘Who is destroying the world?’ You are.

“You stand in the midst of the greatest achievements of the greatest productive civilization and you wonder why it’s crumbling around you, while you’re damning its life-blood–money. You look upon money as the savages did before you, and you wonder why the jungle is creeping back to the edge of your cities. Throughout men’s history, money was always seized by looters of one brand or another, whose names changed, but whose method remained the same: to seize wealth by force and to keep the producers bound, demeaned, defamed, deprived of honor. That phrase about the evil of money, which you mouth with such righteous recklessness, comes from a time when wealth was produced by the labor of slaves–slaves who repeated the motions once discovered by somebody’s mind and left unimproved for centuries. So long as production was ruled by force, and wealth was obtained by conquest, there was little to conquer, Yet through all the centuries of stagnation and starvation, men exalted the looters, as aristocrats of the sword, as aristocrats of birth, as aristocrats of the bureau, and despised the producers, as slaves, as traders, as shopkeepers–as industrialists.

“To the glory of mankind, there was, for the first and only time in history, a country of money–and I have no higher, more reverent tribute to pay to America, for this means: a country of reason, justice, freedom, production, achievement. For the first time, man’s mind and money were set free, and there were no fortunes-by-conquest, but only fortunes-by-work, and instead of swordsmen and slaves, there appeared the real maker of wealth, the greatest worker, the highest type of human being–the self-made man–the American industrialist.

“If you ask me to name the proudest distinction of Americans, I would choose–because it contains all the others–the fact that they were the people who created the phrase ‘to make money.’ No other language or nation had ever used these words before; men had always thought of wealth as a static quantity–to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created. The words ‘to make money’ hold the essence of human morality.

“Yet these were the words for which Americans were denounced by the rotted cultures of the looters’ continents. Now the looters’ credo has brought you to regard your proudest achievements as a hallmark of shame, your prosperity as guilt, your greatest men, the industrialists, as blackguards, and your magnificent factories as the product and property of muscular labor, the labor of whip-driven slaves, like the pyramids of Egypt. The rotter who simpers that he sees no difference between the power of the dollar and the power of the whip, ought to learn the difference on his own hide–as, I think, he will.

“Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns–or dollars. Take your choice–there is no other–and your time is running out.”


The breeze at dawn has secrets to tell you;
Don’t go back to sleep.
You must ask for what you really want;
Don’t go back to sleep.
People are going back and forth across the doorsill where the two worlds touch.
The door is round and open;
Don’t go back to sleep.


鄧麗君 ~~ 我只在乎你 (I only care about you)

Teresa Teng (January 29, 1953 – May 8, 1995) (traditional Chinese: 鄧麗君; simplified Chinese: 邓丽君; pinyin: Dèng Lìjūn; Wade–Giles: Teng Li-chun; Pe̍h-ōe-jī: Tēng Lē-kun, Japanese: テレサ・テン), was an immensely popular and influential Chinese pop singer from Taiwan. Teng’s voice and songs are instantly recognized throughout East Asia and in areas with large Asian populations. It is often said, “Wherever there are Chinese people, the songs of Teresa Teng can be heard.”

Natalia Vodianova

“I have done it. I have everything I want. I have made enough money to secure my family and that is all I care about.”

~ Natalia Vodianova

In 1998 Natalia was selling vegetables at a market in Russia. But in an extraordinary rags to riches tale, she was plucked from obscurity to become at the age of 20 one of the world’s top models – the new face of Gucci.

Now in a secret ceremony in St Petersburg she has married Justin, 33, son of the ninth Viscount Portman and father of her nine-month- old son Lucas.

His brother Christopher, the 10th Viscount, is head of a family worth pounds 1billion, owning 110 acres of land in Central London.

The couple’s families met for the first time at their lavish cathedral wedding.

It was a far cry from Natalia’s life four years ago when she was a desperately poor teenager supporting her family by selling vegetables from a cart in the bleak industrial city of Nizhny Novgorod on the Volga River.

Last night Natalia’s grandmother Larisa, 73, told how they lived in a cramped one-room flat and struggled to find enough money for food.

Natalia’s parents were divorced when she was just three and she seldom sees her father Mikhail, 40, a business manager.

Natalia’s mother, also named Larisa, 38, remarried and had another daughter, Oksana, now 14, who is mentally and physically disabled.

Larisa said: “We were really very poor. After Oksana was born, Natalia’s mother couldn’t work any longer at the institute where she was employed.

“She had to look after her invalid daughter and she tried to start her own business selling vegetables and fruit. She begged some people for money so she could get it going, but then she couldn’t repay the money in time. So they came to her flat and took away the TV set, washing machine and music player. It was a terrible period.

“Natalia used to carry heavy boxes of bananas when my daughter was selling food at the market. She was there working in all weathers.” In winter, temperatures in the city dip as low as minus 40oC but the markets stay open and Natalia was determined to help.

While she was working at the market, a scout from a local modelling agency spotted her. Within months she was parading on the glitzy catwalks of Paris before Gucci guru Tom Ford snapped her up as to represent his brand.

Larisa says Natalia met Justin in New York two years ago. The model became besotted with Justin, an artist with a love of all things Russian. A keen chess player, he was once beaten in a match by former world champion Garry Kasparov.

Soon she was pregnant, and nine months after Lucas’s birth they decided to marry secretly in Russia.

Natalia has now bought her family a large flat and her mother has given up her market work.

“I could never have imagined after such a struggle my grand- daughter could do so well,” said Larisa.

Temasek should clear the air

Temasek should clear the air
It must not shrug off BoA losses as a blip if it is to emerge stronger
By Ignatius Low, Money Editor
Straits Times

What is one to make of Temasek’s decision to sell its entire stake in Bank of America (BoA)?

The move has resulted in one of the largest-ever realised losses from a single investment in Singapore’s history. The number is so large – at least US$2.3 billion (S$3.4 billion) – that one has to wonder exactly what it was that compelled Temasek to bite the bullet.

After all, outgoing CEO Ho Ching reiterated this week that the investment fund takes a long-term view, at least 10 years and up to 50 years. So it could have well waited a few years for the global economy to recover and cash out then.

Instead, it will now face the wrath of the Singapore public, already shaken by news that Temasek’s portfolio shrank 31 per cent in the wake of the financial crisis and its recent $401.5 million investment in Australia’s ABC Learning Centres has likely lost most of its value.

There are probably three reasons why Temasek chose to cash out.

The first has to do with the fact that, unlike the Government of Singapore Investment Corporation (GIC), which invested in UBS and Citigroup, Temasek did not end up with what it paid for.

Temasek’s original US$5.1 billion investment was in Merrill Lynch, a truly global business engaged in high-yielding activities like corporate finance and private banking. BoA, on the other hand, is focused on more traditional businesses like consumer and corporate lending.

More importantly, Temasek owned as much as 13.7 per cent of Merrill. But after BoA’s takeover, it owned only about 3 per cent of the merged entity. In other words, Temasek went from owning a major stake in a global investment bank to a minor stake in a gigantic US lender.

If BoA did not fit into Temasek’s strategy, it was entitled to exit the investment. If Merrill had been bought by a similar type of institution, say JP Morgan or Goldman Sachs, Temasek would not have been in such a dilemma today.

Secondly, there were very real fears a few months ago that major US banks could be nationalised.

If a bank like BoA was nationalised, the value of its shares would likely plunge to zero or near-zero. That risk was enough to prompt many other shareholders to rush to exit their investments early this year, however painful the loss.

Finally, BoA is showing some signs of distress. A recent US government stress test showed that 10 US banks needed US$74.6 billion more in capital, with BoA making up almost half that amount at US$33.9 billion.

Leadership problems have also emerged. Once hailed as a hero, chief executive Kenneth Lewis was recently ousted as BoA chairman. His position as CEO is now in doubt, and the US government has urged BoA to revamp its board.

So if one is inclined to take a charitable view, Temasek’s action is similar to that of an investor cutting his losses and trying to recoup his money by betting on winners somewhere else. But such arguments are unlikely to assuage Temasek’s critics.

There is just no running away from the fact that the investment fund has lost as much as US$4.6 billion of the nation’s reserves (the topmost end of the loss range) from a single investment in just over a year.

Here, Temasek will need to clear the air on two major issues. The first is the timing of the sale.

Temasek unloaded all its shares by the end of the first quarter of this year when prices averaged US$6.73, just before an April rally that saw BoA shares double from US$7 to US$14. It is impossible to time the market perfectly, of course, but could Temasek have waited a little while more for the situation to improve?

Just three days ago, US Treasury Secretary Timothy Geithner was quoted as saying that the US financial system has completed a big part of a painful adjustment away from its excessively leveraged state, and was ‘starting to heal’.

Tellingly, none of the other sovereign wealth funds that had ploughed into the global investment banks at roughly the same time had exited their investments.

The Singapore Government has already admitted to buying into these mega-banks too early. Did Temasek make it two wrongs by also selling too early? Could it have hedged its bets by selling only part of its stake?

The second issue is whether Temasek had taken sufficient measures to protect itself against downside risk, knowing full well that it was investing such a hefty amount in a US bank in the middle of a gathering financial storm.

The comparison with GIC is illustrative. GIC invested US$6.88 billion in Citigroup just one month after Temasek’s investment in Merrill Lynch. But GIC’s investment came with a protection clause: It could opt not to convert its investment into shares should the stock price dip, and instead receive 7 per cent in coupon interest in perpetuity.

That clause came in handy when it was asked by the US government to convert its investment into shares three months ago. To give up its right to that coupon interest income, Citigroup was forced to offer GIC and other similar investors a fairly low conversion price of US$3.25 a share – so low that other Citigroup shareholders complained.

As a result, GIC is not in Temasek’s position. It is, in fact, sitting on a small paper gain today, going by Citigroup’s closing price of US$3.55 yesterday.

To be fair, neither Temasek nor GIC – or any shrewd investor – could have predicted the ferocious market meltdown that occurred in September last year. These are, after all, extraordinary times, and so extraordinary outcomes – and losses – will be expected.

Still, Temasek should not shrug off the loss as yet another wiggle in the curve it had no control over. It must not stop doing what it does best, which is to continue to be aggressive and obtain the best possible returns for the people of Singapore.

But some serious soul-searching is in order at the 35-year-old institution so it can emerge stronger and better-equipped for the job ahead.

Zouk's poster girl moves on

Zouk’s poster girl moves on
by Cara Van Miriah
Tue, May 12, 2009
The Straits Times

Zouk’s marketing manager and poster girl Tracy Phillips is leaving her job this Thursday after 10 1/2 years to pursue her interests.

The 31-year-old, who is a familiar face in the local clubbing scene, will be taking time off to take up a course in apparel merchandising at the Textile and Fashion Industry Training Centre in Leng Kee Road next month.

She will also be working as a freelance creative consultant in the areas of music, fashion and design.

The former business student from Nanyang Polytechnic tells Life!: ‘It has been a fruitful decade at Zouk but I feel that it’s time for a change in my lifestyle.’ She had tendered her resignation in January.

Her job involves advertising and promotions as well as coming up with ideas to make sure the club, which celebrated its 18th anniversary this month, remains vibrant.

She says: ‘People assume that when you work at a club, you party most of the time.

‘In reality, I start work at 10.30am from Mondays to Fridays, clocking between 12 and 15 hours a day.’

The former St Joseph’s Convent student joined the club in September 1998 as a marketing assistant after a year’s stint as a production assistant in a local film production company.

‘I was a regular partygoer at Zouk before I joined the club,’ she says. ‘What drew me to the job was the club’s music, people and culture.’

In 2000, the Zoukette was promoted to assistant marketing manager and marketing manager a year later.

Then 23 years old, she also took care of the nightspot’s public relations.

Although partygoers say she has been instrumental in many of the club’s events, especially the seven-year-old Flea & Easy flea market held there once every three months, she insists ‘Zouk’s success has all along been a team effort’.

Her boss and Zouk’s founder Lincoln Cheng, 61, tells Life! the management has already planned for her departure.

‘Tracy has certainly contributed immensely to the success of the club and she will be sorely missed,’ he says.

Zouk’s assistant marketing manager, Ms Mari Muramoto, 28, will lead the marketing team from Friday.

Before joining Zouk a year ago, she had worked for fashion label Diesel in Tokyo for three years.

After spending a third of her life at Zouk, will Ms Phillips miss it?

She says: ‘I will definitely miss the people whom I have worked with over the years. I practically grew up in Zouk and they are like my family.

‘But I am moving on for new challenges.’

This article was first published in The Straits Times.