Ever wonder how bad the Great Recession was?  It was tangentially remarked on in last week’s presidential debate, and I was curious as to the scope.  The best figure I was able to find put the total at 19.2 trillion dollars worth of wealth lost.  That is a staggering amount of money, especially to someone like me who usually makes twenty bucks at a time.  But if that wealth could be lost down the computerised rabbit hole of big commerce, I had to wonder if it really existed.

The standard joke about rich and wealthy comes to mind.  Michael Jordan (or other favoured celebrity) is rich; the guy who signs his checks is wealthy.

But more to the point, what do all those little zeroes on a computer screen really mean?  After all, they can apparently vanish into the vortex left by the collapse of a bank.  There’s shares and interest rates and all manner of algorithmic extrapolations, but what good does that do you if the financial system implodes, or the bank gets hacked, or the thunderstorm that just passed knocked out the power to the ATM?

Counterpoised with this is old money.  I don’t mean lineages of rich people, I mean gold and silver.  The stuff that governments used to use for currency because it was inherently valuable.  The green slips of paper in your wallet don’t really mean anything other than the hope that if you give them to someone, they will give you a hamburger or a tank of gas.  But if the government that backs those pieces of paper isn’t there, the value assigned to that paper is gone.   On the other hand, gold and silver coins issued by now non-existent country will still have value.  A ducat lasts ages, a dollar not so much.  Furthermore, gold resists the depredations of inflation.  A (1 oz.) $20 double eagle, in 1850, would buy a good rifle, a good working horse, or a fine suit of clothes.  Today, that same ounce of gold, at $1234 (I just checked), will still buy a good rifle, a good working horse, or a fine suit of clothes.  So even though the dollar amounts may have changed, the actual value hasn’t changed much.

But that gold still has value based in faith.  Those who place their faith in gold depend upon there being trade.  I can have all the gold in the world (“…such a cold finger!”), but that doesn’t help me out if I don’t have any food.  And yes, gold is shiny and pretty, but it makes a terrible axe, if you’re trying to cut up firewood in the middle of winter.

So where does real value lie?  To me, value lies in capability.  With my tool chest, even though the tools are old and pretty rudimentary, I can build almost anything from a spatula to a house.  How valuable is a come-along if your truck gets mired in the mud?  My chainsaw, in addition to keeping me warm in the winter, also clears roads and, on one occasion, got a fallen tree off my neighbour’s house.  Try growing food without a spade.  It’s pretty hard using a stick: I tried using a digging stick once and it was deeply unpleasant.

Having tools is all well and good, but without the skill to use them they can range from practically useless to incredibly dangerous.  Spending money to acquire skills has always seemed to me to be a good deal.  One thing that cannot be taken from you or left at home is what’s between your ears: the good old brain housing group.  And you never know when your skills may prove useful: you might even find a use for that algebra one day.   And in a full-on Mad Max scenario, who do you think the well-stocked fortress is going to share their limited calories with: some Wall Street type or a guy who can farm, soldier, and blacksmith?

You can make all sorts of arguments for investments: rate of return and bond ratings and all that.  But as for me, I invest in tools and the skills/knowledge to use them.  It’s the essence of a durable good, no matter how bad the recession.