>how many paintings of Mary and ugly baby Jesus do you need?
I had a laugh at that comment. I visited London six months ago and spent an evening at the National Gallery, including the self-guided audio tour. As I wrote in an email at the time,
"I'd guess at least a third of the paintings I saw, often from Italian artists, were about Jesus being born, being circumcised, or being crucified and resurrected, along with lots of stuff about Mary, Joseph, John the Baptist (Jesus' cousin, I guess), etc"
I'm not downvoting you, because this is a common economic misconception, and I'm sure your opinion is shared by many.
Money is never wasted.
While the long explanation is some what technical and boring, the short version is this;
"Money is neither created nor destroyed, it simply moves from one hand to another".
Put another way, the National Gallery had 20 mil to spend. So they spent it. That 20 mil us now in the economy, and will travel further. The family that sold the painting might need a new roof, or a tractor, or whatever. They in turn spend the money and it flows.
An economy is just the flow of money. An economy stalls when the money stops flowing and is hoarded.
Fundamentally you want rich people to spend their money. On "what" is mostly irrelevant.
Here's another simplistic example. The US produces a surplus of wheat. USAid buys a lot of that wheat (using tax money) which is thus a round-about subsidization of wheat farmers. This is prudent because local food security, ie having farmers at all, is a good thing.
Now USAid have a pile of wheat, so they donate it to countries that can't afford it. This buys US prestige, both with those countries and their neighbors.
Now USAid stops. The govt "saves money". Farmers loose their subsidy. Long-term US citizens lose their food security.
Money itself has no value. Spending that money has value. Because only by spending it can you realize that value.
Reminds me of a visit of a garden restaurant in Munich, back in the days. My friend ordered a soup, but got a beer. Pointing out the mistake to the waiter, he was told that it doesn't matter, because the price is the same.
Mind sending me all your retirement savings? I'll even give you a pretty sweet drawing for it. It wont be money wasted[1]; I'll be sure to use it well.
[1] not sure how much you will be able to sell said sweet drawing for nor when, but by definition, it will be worth it.
Alas, I am not a gallery, and thus I don't make an income displaying drawings. I encourage you to target your sales at those best placed to profit from your product.
So from my perspective, I can getter better value moving my cash to dome other suppliers.
But even if I did buy your sweet drawing, the money itself us not wasted (I personally just control less of it.) The same money would now be controlled by you, and I'm sure you'll spend it, thus benefiting others.
The money itself cannot be wasted, it merely moves from one set of hands to another.
My personal control of money can indeed be wasted, since I can transfer it to another for insignificant value. But that's simply my control, not the money itself.
I already spent my retirement savings. I used them to buy index funds and some shares. I think the companies will use my money better than you would, at least in the sense they will give me a return on my investment.
> "Money is neither created nor destroyed, it simply moves from one hand to another".
With regards to how money is created, you may want to read on credit and how banks create money virtually out of nothing, or how the state has a monopoly on printing money (turning "not money" -- paper and ink -- into "money").
The destroying part is much simpler: you can perform an experiment of burning a banknote yourself.
It will be dispersed to more thsn a single family. That's the point.
In this case specifically it's unlikely the family sold an asset simply to buy another asset. They've had it a few hundred years, and the gallery has had their eye on it for decades. It's likely they sold it cause they needed the cash, for a new roof or whatever.
If they spend it, then those people providing the goods and services will prosper. If they invest it in a business, then that business has capital to grow, and all those employees will benefit.
From the article: “ The Virgin and Child with Saints Louis and Margaret and Two Angels was bought for just over $20m (around £16m at the time), funded by the American Friends of the National Gallery London.”
But this money won’t probably be spent further in any ”productive” way, they will be locked in some financial tools that will only help extracting funds from the real sector, which is what one probably really cares about when they say that “money should work”. It’s not similar to a government investment in building a bridge which, while it’s also spending state money, creates ripples of economic activity involving thousands of people and dozens of industries.
That is a very broad generalization. Even if it was 'put into some fund', that equates to a capital investment which can be used to deliver value elsewhere.
Money is complicated - the only way in which I would see it get truly wasted is if you took it out as cash and burnt it. Even then you'll be (marginally) raising the value of all other money left in the system.
There was a line from a movie: "You had all that money in the stock market. What happened?" "Oh, the money's still there; it just belongs to someone else now."
When the last tree is cut, the last fish is caught, and the last river is polluted; when to breathe the air is sickening, you will realize, too late, that wealth is not in bank accounts and that you can't eat money. -- Alanis Obomsawin
