MONEY

How important is money?

To answer this question, let's look at Maslow's Hierarchy of Needs (below):

 
Abraham Maslow proposed a psychological theory of "hierarchy of needs" in his 1943 paper "A Theory of Human Motivation".  He divided human needs into 5 layers.  The lower 4 layers of physiological, safety, belonging-love and self-esteem needs are called "deficiency needs" or "d-needs".  Physiological needs are essential for survival; but deprivation of safety, belonging-love and self-esteem needs may cause anxiety and tension.  The 5th or top layer of the need for self-actualization is termed "being needs" or "b-needs".  He suggested that the d-needs must be met first before the individual becomes motivated to pursue fulfillment of b-needs. "Meta-motivated" people are those who pursue constant improvement to achieve satisfaction of the highest layer of self-actualization needs.

Money is important only in-so-far as it can satisfy physiological needs and perhaps safety needs.  It cannot buy love, social attachments nor self-esteem.

How much money does one need?
 
To decide, let's look at Jeremy Bentham's theory of the "Diminishing Marginal Utility of Wealth" in his "Pannamonial Fragments", Works, III, p.228:

So far as depends on wealth, -- of two persons having unequal fortunes, he who has most wealth must by a legislator be regarded as having most happiness.

But the quantity of happiness will not go on increasing in anything near the same proportion as the quantity of wealth... The effect of wealth in the production of happiness goes on diminishing, as the quantity by which the wealth of one man exceeds that of another goes on increasing: in other words, the quantity of happiness produced by a particle of wealth (each particle being of the same magnitude) will be less and less at every particle; the second will produce less than the first, the third than the second, and so on. 

That is, money is also subjected to the dictates of the irrefutable Law of Diminishing Marginal Utility.  Therefore beyond the point of satisfying the basic physiological and safety needs, acquiring more wealth may bestow lesser and lesser satisfaction with each quantum of wealth acquired.  That's also because the satisfaction of the higher level needs of belonging-love, self-esteem and self-actualization cannot be bought.

"Contentment is natural wealth, luxury is artificial poverty" - Socrates

"Freedom is not procured by a full enjoyment of what is desired, but by controlling the desire." - Epictetus

So, now we can understand the sentiments expressed by Socrates and Epictetus above.

Conclusion

Money is important for us to meet our basic requirements of survival like food, water, shelter and warmth; the provision of economic security and stability, and the freedom from fear.  But, the point whereby those needs are met also mark the moment when the Law of Diminishing Marginal Utility starts to kick in; making us realize that further efforts in acquiring wealth will become less and less productive or worthwhile.

It may be countered that the richer one gets, the greedier one becomes to getting more money.  But, this is because such a man is not conscious of the fact that money is not useful for its own sake.  Money is only good as a means to procure goods and services to satisfy only the more basic levels of his needs.  Beyond the point of diminishing marginal utility, he will achieve more happiness by expending his time and energy in satisfying his higher needs!