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Here is another example of divergent thinking: which is a thought process or method used for generating creative ideas by exploring possible solutions. Some of us know this as, ’Brain-storming’. Divergent thinking differs from convergent thinking, which focuses on finding a single, correct solution to a problem.

You have to speculate to accumulate:

This could well be selling something, like a car, for less than you paid for it, in order to have the funds to buy something cheap, to ‘flip’ it elsewhere for a huge profit. (Flip - buy something with the intention of quickly selling it for a quick profit, usually after adding economic value). The cheap sale price you place on your item may come about because someone else is attempting to generate cash for their own speculative venture, and as such, is also selling something cheap in order to gain some quick capital. A question arises here; is the value of something reduced because you lose money on it? Or does the ‘util’ of each currency unit that you used to purchase the item, you are now selling at a lower price, maintain its value or even increase in value? What even is, a ‘util’?

Also: For some people, a gift of £100 in the future is worth £10 right now, so the future £100 is heavily discounted for immediate gratification of £10 now. This is ‘discounted utility’.

Let’s start with Sacrament Money from a book of superstitions: ‘Encyclopaedia of Superstitions’, by E & M.A. Radford.

Sacrament Money

‘Sacrament money was the name given to money offered at Holy Communion. It was once very generally believed to acquire curative powers by its association with the sacred rite, and was used to heal ailments of various kinds, particularly epilepsy and rheumatism. Twelve pennies [equivalent to one shilling] or thirty pennies [two shillings and six pence or half a crown] were collected by the patient, or one of their friends, and presented to the parish clergyman in exchange for a shilling or half-crown from the Communion effertory. The coin so obtained was then made into a ring, or a hole was bored into it so that it could be worn around the neck on a ribbon.’ (Radford, 1974).

Interestingly, it is not the patient who is out of pocket. The superstition requires that it is twelve or thirty unmarried persons of the opposite sex to the sufferer who give up a penny each. Sometimes, these donations were also accompanied by any small piece of silver; further costing the donators. The silver was melted by a blacksmith and made into a ring for the patient, and the fee the blacksmith received was the twelve pennies, and no more, other than the surplus silver. This is really an example of what seems to be altruism, yet is actually herd behaviour that is commonly found in the wild. There is a cost to the ‘herd’ but they may find themselves in need of similar assistance in the future, so they give up a penny; which they could have bought a loaf of bread with (though not in 1974, when the book was published). Eat bread, or pay for health insurance?

In my Latin / English dictionary, ‘utility’ is ‘utilitas’ or ‘commiditas’. I suppose then, that we might consider ‘utility’ to be somewhere in the ambit of the use of a commodity. In English, we might ask ‘What use is it?’ or ‘What is its utility?’. In economics, however, utility is defined as the total satisfaction, usefulness, or happiness gained from consuming a good or service. (Investopedia, 2024)

Understanding ‘utility’ helps us to comprehend how we and others make decisions.

There are two ‘utilities’ that are of interest to me as a man-in-the-wild human:

‘Ordinal Utility’, which is the concept of one thing being more desirable than another (bread or health insurance?); and

Marginal Utility, which is the satisfaction, use, or happiness gained from consuming one more unit of a service or good. Ordinal Utility has as part of it: ‘Total Utility’.

There is also ‘Cardinal Utility’, which is the idea of measuring economic value, measured with imaginary ‘utils’. Like this: I like oranges more than strawberries, so, one orange, to me, is worth twenty utils and one strawberry is worth one util. This means, I might swap one orange for your twenty strawberries. I definitely will, if I have two oranges; this is because the second orange is not worth as much to me as the first one. The satisfaction I get from eating one orange is not matched by eating a second orange immediately after. The marginal utiity of the second orange is the value of the first orange less the value of the second orange.

Clearly, ‘marginal utility’ is also a measure of how much pleasure is lost compared to the initial pleasure of the first experience of something.

For strawberries; one strawberry is never enough, so the next strawberry may have a total utility that is higher than the previous one; the idea of eating it is enhanced by the taste and experience of eating the one before. Only when a number of strawberries have been eaten will the marginal utility start to descend towards zero, or even into negative figures. Perhaps five strawberries is enough to achieve maximum satisfaction.

The important thing to remember is, that if this person has ten strawberries and has eaten none, then they have two ‘bundles’ of a commodity that can be used on two separate occasions to satisfy their want; they know this. These two bundles are not equal in value to them, if they are to be eaten, with the second bundle having a slightly lesser value than the first. However, once the first bundle is consumed and total maximisation of utility has been achieved, the value of the second bundle is significantly lower than if no strawberries had been eaten. This is because anticipation of the pleasure of eating them is now absent, and saving them for another time is less attractive. This is crucial in understanding the second of these two different ways of saving money.

Put money aside before having fun; or, having fun first and then saving any surplus money.

We are remembering that the ‘util’ value of surplus money, like strawberries, is less than the money already spent. We are also putting aside cognitive dissonance. ‘Cor Blimey! That was a waste of money. I am not going there again!’. We will come back to cognitive dissonance later. We are also drifting into needing to understand the Marginal Propensity to Consume in Macroeconomics (another time, perhaps).

Discounting utility is about putting off, or denying, a greater pleasure or satisfaction in the future, for a lesser, but sooner, satisfaction. In simple terms, it is akin to answering this question: ‘Would you rather have a sandwich now, or a restaurant meal in one weeks time?’ Of course, this is dependent on a few factors, not least being how hungry you are; preferences for eating in public with attendant social protocols to abide by; and whether the question was understood as including that you do not have to pay for either choice; and many more.

Someone with a high discount factor will likely prefer immediate gratification and be less inclined to save for the future. Conversely, someone who tends not to discount satisfaction in the present for greater future satisfaction, has a low discount factor. But, it is a sliding scale because there are different things that are preferred that can be obtained with the same currency; money; which negates bartering. Bartering, of course, is swapping something you don’t want or need for something you do need or want. What we can’t really do with bartering is ask if someone has change for a guinea-pig. I think that last comes from a Monty Python scene.

What we are looking at is; the ‘utils’ for each choice. For someone who hasn’t eaten for a while and so has a definite immediate need, the question has choices that have aspects to them that are entirely different than to someone who is satiated. Let us not forget the Law of Diminishing Utility. ‘Do you know what, old chap, right now I really couldn’t eat another thing!’

Perhaps we might consider someone who works really hard each weekday and scrimps and saves to pay for a two week holiday each year. (A person with a low discount factor) First, we may reach into our understanding of people and consider that this person believes that an annual holiday is an essential need, and not only a want. If it rains throughout the whole two weeks of the holiday, one person may be satisfied that the need is satisfied, and the ‘want’ of a suuny fortnight is sanguinely put aside as only ever having been a possibility. On the other hand, how miserable is the person who has saved all year and invested in a sunny holiday, with want being paramount, and ended up with a fourteen day soggy mope? Each £100 unit saved for a holiday, if they were instead spent individually, may have provided a weekend away; a day trip to a castle; a hiring of a car; and a gift for a loved one, yet the same £100s when combined and spent on a holiday, that is some way off and then disappointingly experienced as a watery dilution of fun, might seem to be wasted. The disappointed holiday-goer would be experiencing cognitive dissonance (it didn’t turn out to be as good as they anticipated), because they did not instead opt for immediate gratification. But the ‘utils’ for each £100 spent on a holiday is not just derived from the holiday itself; there is also some gratification, or satisfaction, from telling the hairdresser where you are going for your holiday. Even, standing by the water-cooler, back at work again, saying ‘Oh, it rained the whole time we were there!’, has some gratification attached to it. Money well spent!

There are, of course, two distinct methods of saving money: save a finite amount of money and then spend whatever is left on what may be considered to be necessary by other people; and pay for what is necessary and then save what is left. We might consider a quote attributed to Aesop to be fitting here to consolidate the first way of saving money (put money aside and then spend the surplus), “It is thrifty to prepare today for the wants of tomorrow.” Yet, doesn’t this really apply to activities like chopping wood in Summer, ready for Winter fires? It is merely practical advice.

In modern times, we might cook more food than we are about to immediately consume, so we can freeze the surplus for another day, thereby saving energy for cooking and time in later preparation and cooking of food.

Personally, I should like to read a book of two characters in conflict that use these two different methods of accumulating wealth to achieve their vindictive goals, much in the style of Jeffrey Archer’s, Abel Rosnovski and William Kane in ‘Kane and Abel’. (In case you haven’t read it, they are rival hoteliers from very different cultural backgrounds). Which one of these new characters in this currently unwritten book or play would be richer (if the idea of wealth is a goal for satisfaction) and which would have a satisfied, self-indulgent smile of vindictive achievement for the ruin of the other? Proverbs 13:11 in the New International Version of the Bible, might lend itself to the plot nicely: ‘Dishonest money dwindles away, but whoever gathers money little by little makes it grow.’

Waste neither time nor money

Benjamin Franklin supposedly said, “Waste neither time nor money, but make the best use of both”, and Johann Wolfgang Goethe might have said, “Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time.”

In modern times we have become quite used to looking after our bodies and be mindful of our mental health. I suggest that, working really hard while we are young to save for our retirement (the opposite to discounted utility of money) is fast becoming a tactic for satisfaction that is not particularly well embraced by many young people of this current period.While getting drunk at the weekend as a slightly delayed process of immediate gratification is rapidly declining in society, it was once the ONLY way of socialising. If we consider the two quotes, by Franklin and Goethe, above, we may inadvertently measure time with the same metric as money by consciously applying our amorphous and never fully developed conception of the value of our time in terms of 'utils'. But how do we convert the util of a finite handful of money into utils for leisure or health? We could, of course, consider 'opportunity cost'; we can't do two things simultaneously; both work and spend time with our families. Even YouTubers have to stop the fun to plan the 'shoot' or edit something. What Goethe is saying to me, is that the future time, when we are old, is ignored when we are young. Many veterans of life are bent and stiff in their latter years due to the extreme work environments and practices of their younger years. I wonder if the violent, yet piquant and bitter-sweet, process of life is preferable to an homogenised 'smoothie' of existence, with no highs or lows; no joys and disappointments; just safe, safe, safe.

Does anyone have any money to save anymore, or should we, excitedly, sell our belongings for a chance at being in a better position of being able to buy someone else’s cheap belongings, with a hope of selling those new belongings at a higher price than our own belongings originally cost us? This question considers the util of our possessions and how we almost never consider an alternative use of things or means of gaining satisfaction, or total maximum utility.

References

Investopedia (2024), Utility in Economics Explained: Types and Measurement, ‘What Is Utility?’.

https://www.investopedia.com/terms/u/utility.asp Accessed 06 February 2025

Radford, E. & M.A., 1974, Encyclopaedia of Superstitions, ed. Christina Hole, ‘Sacrament Money, p293, London, Book Club Associates.