THE OTHER SIDE OF MONEY

Money is mankind’s greatest invention, designed to set us free, yet we have become its slaves. It dominates our lives, but what do we understand about it? The back cover of the book, Money: The Unauthorised Biography, the classic work of Felix Martin, has these words printed. As the entire country is experiencing a run for money post-demonetisation, Martin’s book is an interesting and inspiring read.

What is money? Well one view is that everyone, except an economist, knows what money means and even an economist can describe it in the course of a chapter, as author AH Quiggin observed. More so today, when economists are available dime a dozen while economies are crumbling. But that is besides the point.

What demonetisation has proved is that societies not so modern had better understanding of money. The pacific island of Yap is a case in point. It was one of the most remote and inaccessible inhabited places on earth till 1869, when the first European trading post of German merchant firm, Godeffroy and Sons, was established. Yap brought one of the most unusual monetary systems to the knowledge of the world. Yap was a highly complex society with a tiny population. Apart from all other things, the most interesting was its monetary system. The coinage was unique and it consisted of huge, solid thick stone wheels having a diameter of one foot to 12 feet with a hole in the centre varying according to the size of the stone. A pole could be inserted inside the hole to facilitate transportation. This was the Yap money and its value depended on both the size as also on the fineness and whiteness of the stone. It was called ‘fei’.

Despite the size and difficulty of physically moving the fei, this monetary unit could help exchange of goods because it symbolised trust, and on this trust depended its credit-worthiness. It was the value of the spoken word that did the trick in every deal. The idea of money has come a long way since those times and trickery, treachery, and toil all go behind it, but the fact remains that its value is still its credit-worthiness.

Today, monetary thinking drives human societies and the chaos following demonetisation in India exemplifies that. The moot point, however, is that the problem is not with money per se but the mind-set of the people on money. As one of the key framers of the American Constitution, James Madison wrote: “If men were angels, no Government would be necessary. There would never be any question of their over-spending, or defaulting, or simply skipping town, and if they trusted one another implicitly, no Government money would be necessary either.”

But we are not living in a Utopian community and men are ‘no more angels in economics than in politics’. As the world prepares for its first trillionaire, monetisation and demonetisation would coexist. Who gets hurt in the process is the issue. The impact of excessive accumulation, consumption, and competition for acquiring higher status will only come in the long run, but as of now, no one is bothered about what money can’t buy and how much is enough.

As the small population on social media is trying to create a storm in a teacup, a large majority is still confused whether the patience and torment they are bearing will lead them to El Dorado.