The following is a slightly copy-edited excerpt from the book QUESTIONING DEVELOPMENT: Beyond the Corona Cage: (Kindle Publication, Amazon), by JN Lai, Asst Prof, University of Suwon, S Korea.
(More than ever before, the pandemic demands decoding the mystic quality of money in order to utilize them to meet the emergent needs of the hour. In India, literally piles of money are stacked there in many temples and billions more Rupees in black money are lying idle in foreign banks. One has heard Prime Minister, Narendra Modi promise during election campaigns that he would bring all the black money to benefit the nation. Here then is a personal account of how the notion of money grew in an innocent child before he came to grasp it and its power fully.)
I was a small boy, the time I started realizing the importance of money and purchasing power of some snacks and toys from my small village vendors. It was a confirmation that money is a medium for owning and having for almost everything. Sooner than later, I discovered that money makes the world go round.
From the ancient historical events, we learned that money was associated with the religious places, and it was smoothly heading to the nobles. It looks to continue still. I came to know that money has been real hard for the populous poor to keep a hand on it, but it has an easy flow to a good few temples. Some temples and religious bodies handle money sometimes even more than the banks. So, money is mystic for it stays with spiritual powers and religious personalities which is difficult to understand for the poor.
This strange character has always made the role of money hard to understand. On some other days, during our childhood, my friends and I would talk about and plan to draw and paint money on paper when we grew up, and we thought that we could make money that way easier. Nevertheless, after about 10 years, I came to know that money could not be made the way we imagined. Then in high school, we were told in our economics class that every single currency bill produced in the printing house, has to have gold of an equivalent value in the reserve banks.
I wanted to learn how the value of the currency was determined. I heard multiple times that gold and silver, sometimes finished goods and services, those ready for sale and some other government fiscal factors did the determination, indicating that money bill cannot be printed that easy anytime.
Very interestingly, this time, nothing is getting on board except orders from the financial gurus whether they are in Washington DC or in any other parliaments. Currency bills are just printed out straight away whenever the powers want to do so, no matter what the consequence would be to the future, especially, the masses of poor people. The biggest apprehension and suspicion in the USA is that private bankers print out the bills at their advantage not by the government in public interest and needs. Often times, I wanted to know from the economists and academic experts how this magical power came to be created and manipulated.
If the bookish words and academic knowledge of economics carry value and truth, there would have been a crystal-clear reality about money and currency character. A common-sense premise is that money are printed without any logical support and reserve. Simple evidence is that 30 years ago, a single Indian Rupee could buy products from the market which 100 Indian Rupees can buy today. This reality is a self-explanatory of inflation and depreciation, devaluation of money. If not – What is inflation and devaluation of money across the world all about?
Some 30 years ago, in India as in most of the developing countries, one received Rs. 1000 as salary was sufficient for a person to manage his or her family. Today they receive 10-folds more on the average, but are left short of running their families respectably. The evidence is the ever-increasing number of banknotes and coins of the world are circulated among us but the value of money unit is way behind.
According to an article, Currency in circulation, (Wikipedia, 1990); in 1990, total currency in circulation in the world passed $1 trillion. After 12 years, in 2002 this figure was $2trillion, and in 2008 it had increased to $4 trillion. The total value as of 31 December 2016 using the exchange rate was $4.687 trillion. China was not part of the calculation, otherwise the figure could be a trillion dollars higher. Likewise, another 160 countries were not calculated. The calculation also did not include Cryptocurrencies such as Bitcoin and Ripple, whose total value in circulation exceeds one hundred billion dollars (BIS, CPMI, 2020).
Recently, there is approximately $37 trillion in circulation: this includes all the physical money and the money deposited in savings and checking accounts. Money in the form of investments, derivatives and cryptocurrencies exceeds $1.2 quadrillion (Rank Red, 2020). In the 2019 list of world’s billionaires, Forbes included 2,153 billionaires with a total net wealth of $8.7 trillion (Forbes, 2019).
A tricky game about rich man’s money is – Whose government in the world has not borrowed money? Global debt across all sectors rose by over $10 trillion in 2019, topping $255 trillion. At over 322 percent of GDP, global debt is now 40 percentage points ($87 trillion) higher than at the onset of the 2008 financial crisis—a sobering realization as governments worldwide gear up to fight the COVID-19 pandemic (IIF, 2020). The USA leads the first position with $21 trillion that is 31 percent of the overall global share, Japan is in the second position with 17 percent, China with 9.8 percent and India with 2.8 percent, the biggest democracy in the world, so on and on; they are in debt in trillion and billion bucks (Visual Capitalist , 2019). In one sense, the whole world is in debt. Interesting – From whom do they borrow all this virtually uncountable money, and whose mystic money is that anyway?
Later in the face of the electronic tricky banking network and credit culture, the avatar of virtual money system (not of the cryptocurrency), and greater manipulation of money power is programmed by bankers and few super-rich people. This means, the sweeping majority of the global population are forced to remain victims of the poverty and economic challenge. Now, with all these trillions of dollar worth of money in circulation, billions of poor people remain still in poverty and face hardship.
In the meantime, the coronavirus pandemic has raised the need to decode the mystic power of money so that it can be used to suit the real need of the hour as such. For example, in the case of India, literally, piles of money are there in the temples and the billions more of Rupees in black money are lying idle in foreign banks. We heard Narendra Modi make election promises that he would bring these black money to benefit the nation.
Interestingly, the mysterious power of money is obvious and effective even among the tribes across the world. Once uncontacted tribes come in contact with the “civilized” world, and once they get a taste of convenient modern life, easier means to get good food, to wear clothes and to build shelter, the adage that the money corrupts man always becomes loudly evident.
Thousand years of their primitive outlook living in the jungle setting is changed by the awareness of a few years about the glamour world of the monetary economy. The consumerism and power of money have surprisingly always found the shortest route to alter these people in the jungles. Attributes that were once believed to be permanent traits the tribes, always end up compromised all too soon, and their distinct identities come to be outweighed by modern money. We have seen these everywhere around the world. My personal field observation on the ground is very vivid among the tribes in the Indo-China region. In less than five years’ time, they know and adapt, to live in the consumeristic world buying attractive whole range of Chinese made products, expensive vehicles from the Indian market and building modern houses.
The author is Asst Prof, International College, the University Suwon, S Korea