Technology isn’t the answer to our finance problems

I believe we live in a techno-uptopian society. By this, I mean that “technology” is seen as the answer to whatever ails us.

How else to describe the over-inflation that is Silicon Valley (and its cousins Silicon Alley, Silicon Forest, and other similarly branded technology centers)? Where is all of the venture capitalist money ($7.9 billion in the third quarter of 2015 alone) going?

We used to build space shuttles. Now we build apps.

Because technology and apps are seen as a solution to everything, it stands that the solution to our money problems can be fixed with an app too.

But this is incorrect, and it’s not hard to see why.

Really, when you hear people expound on how “technology makes our lives easier”, we need to look critically at who is saying that and what they mean. So ask yourself, when you hear this kind of argument, is it from someone who has something to sell you? The phrase “never ask an insurance salesman if you need insurance” comes to mind here.

And more to the point, what do we define as “easier”? The Merriam-Webster cabal defines “easy” as “not hard to do; not difficult; free from pain, trouble, or worry“.

Free from pain, trouble, and worry sounds pretty good to me, I’ll admit. But there are some disadvantages in just reducing the difficulty in things.

So here are some ways in which technology making things easy for us doesn’t actually make things better.

Paying

Electronic payments and “digital wallets” have been around for a while (I’ve been using PayPal for almost 20 years), but the narrative keeps gaining ground. In fact, today the narrative is that “millennials don’t us cash“, preferring to use “tokenization” or payments that don’t require pulling out a card. Apparently, the general consensus is that there’s nothing wrong with paying for purchases through your smartphone, linked to some credit card, and then off you go.

And in truth, this makes payments easy. But is “easy” what we want in this case? Do we really want to make it easy to purchase things? Why is it good to just “tap and go”? Because it saves us time? Is time the only consideration here?

I actually think we would be better served if we made the process of purchasing things less easy. Or if not less easy, than at least less automatic. Because automatic, according our word overlords at Merriam-Webster, means “happening or done without deliberate thought or effort.” And anything that happens without deliberate thought or effort is unlikely to benefit you.

And it’s not just to save money here. If it were somehow more difficult to purchase things, it might trigger our assessment response, which is to say, that voice inside us that asks us “Do I really want this?”

I have some fatuous ideas on how to make purchasing things more difficult (for example, a cool down period, not unlike they do with certain firearm purchases, where you would have to wait before the sale could proceed, to give you time to reflect), but probably the best way I can think of to make purchasing things more deliberate is to use cash. (I tried this for every purchase I made in a month and found the results very interesting.).

Hmm, a non-technological answer.

Planning

Since so many people are paying automatically for things, everything is tracked. Which is nice! Say what you will about cash, but there is no automatic statement generated online.

The problem is that everything is tracked for you automatically. (There’s that word again.) So many people uses services like Mint for their account snapshots, that they forget the difference between descriptive and prescriptive budgeting: One tells you what you’ve done, and the other you tell what to do.

Just having a statement of what you’ve done is not sufficient. Instead, you need to tell your money what to do, in advance. This means you need to be accountable to yourself, by making goals and keeping track of them.

Hmm, another non-technological answer.

Control

Isn’t it interesting that we we often use the phrase “feeling financially out of control”? That word “control” is defined by the supreme leaders Merriam and Webster as “to direct the actions or function of (something); to cause (something) to act or function in a certain way” . Lacking this doesn’t sound like a place where we want to be, and yet, everything in the marketplace is pushing us toward actions that relinquish our control.

Unfortunately, there isn’t an app for feeling in control (though, doubtless, attempts are being made).

Chemistry

In some ways, this sense of collectively putting our faith in some particular market savior is nothing new. If you’re old enough, do you remember this phrase: “Better living through chemistry“?  I love this slogan, because it shows just how much things have changed in our lifetimes. In this age of Bisphenol A scares and organic farming, who in the world (aside from DuPont perhaps) actually believes that chemistry is the answer to our problems?

Nope, chemistry is out. Apps are in. Unfortunately, technology, like chemistry, can only provide “better living” up to a certain point. The rest is up to us.

But enough about me. Do you believe that technology can be a solution for our financial issues?