Friday, October 28, 2011


Gautam's questions and Anil's analysis in my previous post is definitely worth a fresh post. I thought; why not bring it on the stage so that all of us can have a healthy discussion.

Why is money measured as wealth?
Why do we need money?
Why is there an unequal distribution of wealth?

I might not touch upon all, I might deviate or just cut short; but these ones are worth a discussion. In earlier times; in our land; temples served as secure area to store people's assets. Their role in those times were one of the roles of present day banks - safe haven to store assets; which were not in cash but in kind. Cut to present day banks; they operate in an interesting concept. They charge interest on money borrowed which feeds as interest credited to the money saved + other investments. Was this a practice in then banks/temples in our land? I do not know.

I cant help but think about the banks bailout in USA. The President passed bills to accommodate bank bailouts which funded the Congress for the campaign and other activities; only to downgrade their credit ratings. What an irony!

Anyway, why we need money and why are people selfish to accumulate wealth is obvious. I dont want to discuss these. But why is GDP the chief economic indicator? Is owning money/wealth a sign of happiness? Is our happiness linked to possession of material wealth? Progress is defined as a mere increase in commercial transaction in our conventional model which stresses on economic growth; which is limited as the measures are quantitative.

Gross Happiness Index is been around for a while - countries like Bhutan and Denmark had realized quite early that the ultimate aim of most people is not be rich, but be happy and healthy. So we find, India more happy and healthy than the USA, Bangladesh more happier than India and Costa Ricans lead a very peaceful and healthy life than most of us only next to Vanuatu and Columbia. Gross national happiness has more insights.

Coming back to do we need money? The answer would depend on if we want to go back to barter system? The devastation in Greek's economy has enabled her citizens to make use of time bank. Its a reciprocal service exchange that uses units of time in currency. In simple terms, services are bartered in cashless transactions. The "time" one spends in providing some service earns "time" that one can spend to receive services. For e.g. a teacher can spend her time teaching piano in exchange for a legal assistance.

This has emerged has a creative solution to a crisis called Greece. This exchange network has not only eased people's crisis but also is bringing people together and building solidarity when any economic upheaval can divide people. What about tax, deficits, credits and all such factors in a given economy? Are these relevant? Can such a priceless commodity be adopted; how will this be accepted among world economy?


  1. Hi,
    Good to see you again.

    I dont think you will agree. But let me tell you this.

    There are certain rules of nature.If tomorrow ,we decide to bring down all mountains and fill up the seas and bring the whole world to a plain land,do you think it will stay that way? A tsunami or flood will bring it back to what it was.
    If tomorrow we decide to distribute the whole money in the world equally to everyone, do you think it will stay that way? I am reminded of the story of the landlord and his servants in the Bible. There is no better answer.

    We are all different.In a world where intelligence is the deciding factor, the clever will survive.We have only limited choices in life.

    I dont quite agree with people who say that money is not important.It is good to hear someone say that.But then what is the happiness of the one who starves?
    And what are we all doing? The so called intelligent of the lot?

  2. A thought provoking write up! Measure of happiness and an equitable spread of wealth in a nation would be a better index of measure of prosperity and happiness

  3. Each one of us will have a different reaction to this post and also different concept of need for money.
    I for one would like to have enough money to meet my regular needs,which includes a drink.

  4. If you had asked me then I would have told "money is important but it isn't everything". If we have enough money to buy bread, everyday, we can then think of being happy and other things. When you're hungry, happiness would be the last thing that would be on on your mind.

  5. Everything is important in life and interconnected too..its only the extremes which are bad for everyone around..we must have the money too for our needs, may not be for wants, we should go through life the righteous way,and whatevr comes our way must be welcomed

  6. B, I agree with Doc about the indispensability of money.

    We cannot negate money in total. Money and possession of money has come about to be the matters of security and comfort, an insurance for the uncertainties of the future. This said, the need for money is often snowed under by the want for money. Which can also be called greed , avarice etc. The result we see in the financial contagion that has afflicted Banking systems in the West.
    Even if we suppose that there happens to be a government and social security system which caters admirably the need for food, shelter, clothing and medical security of its population, there is a human element which will need something else. The longing to own , to possess. Even a bird or a beast may not be content with a nest or a lair you may build for it on a hillock. I for one would want some economic leverage that is my own, no questions asked when I can use my earned money to procure things I want. The freedom to be myself. The economic freedom. Which was negated by Communism resulting in its decimation. I do not want to be fed from a community kitchen.
    Barter yes, it happens still among countries, where for example oil is traded for copper etc. But going back to that era is neigh impossible and unwise. For instance I want you to do me a programme for my X venture. I can do a months of driving you to office and back. How do we determine that your effort on the programme is equal to me driving you for one month? We might be soon at each other’s throat .won’t we?

    There was a system of banking security and trustee ship in ancient India even during the time of Buddha and is documented to have existed later in the time of the Mauryas. It was in vogue in Greece, Rome. Temples and Royal places where the Banks then, where wealth was kept , loaned from etc. I see money as the turnaround of economic cycle, a less cumbersome designation of transactions..

    Unequal distribution of money- can we determine what is the bench mark for “equal”?Inequities were not borne out of some turmoil in the recent times. It was in various forms economical and social from early times. What we could do is to alleviate the intensity. Inequity is the product of economics, of the disparity of wants and needs. Aren’t they?

    I would see it necessary to interpolate GDP as is conventionally measured with GHP ( gross national Happiness). If and when we arrive at a good system of measurement we will see how miserable a country we are.

    The bail outs of financial institutions in the West using tax money is criminal. The USA makes rules for the rest by packing the IMF and the WB with its men and let its Banks and financial sector run berserk and amuck. The sub- prime ( what a beautifully coined name) crisis originated there. Banks in Europe bought junk securities floating down the Atlantic as dead money and the result we all see. India was insulated because with all the draw backs we were conservative in matters of finance and banking. If the West has greedy Bankers and big business to pull down its financial system we can be content that we have unscrupulous politicians to do that here .
    These are my thoughts. May be some others can further the discussion.

    Lastly I agree with Mr Chowla, “ I for one would like to have enough money to meet my needs, which includes a drink”.

  7. Very Interesting Post. My views - I think we need money to survive in this world. And if we have gone about the right way to earn it and have done our part in the economic system, we have the right to enjoy it too. Happiness comes from the fulfillment of wishes. We just need to be careful what we wish for. :)

  8. Doc,

    Welcome back

    Exactly! My last para poses those questions that harbors claim that there are certain rules that would go haywire.

    One theory goes that such inequality must exist for the world to go about normally. Also, the Keynesian economics is interesting to read. If you are interested in economy; you may find it interesting how the world turned towards implementing Keynesian theory during 2008 recession.

    As you said, there is no definite answer; but debating about it is sure enthralling.


    Thanks. Balanced spread of wealth is disturb the balance due to unequal distribution now :)
    Yeah funny!!

    Chowla sir,

    :-) Thats a decent ask


    Absolutely right. Basic needs must be met with; money is a means. We are talking about the greed here :)


    You got me. The greed in extreme forms is why the world is struggling now


    I dont deny either Anil. Money is a means to fulfill our basic needs; and yeah we need to respect it.

    Exactly my thoughts; the need to secure the future? Whose? Kids, kid's kids..and so on has brought greed and hence amassing huge amount of wealth. We need money to fulfil our basic needs.

    As I said, barter in Greece now serves as a balm to soothe the pain of the people; it is bringing people together. Definitely; it cant solve the problem.

    Thanks for your views and explanations. I agree with you on all fronts about the financial institutions in the West using tax money to feed the already raging bank's inability.


    Yup :)

  9. I am one of those who believes money is very important. We all say, we must have enough to meet our 'basic' necessitates. But how 'basic' is really basic? At least, I can't be happy with just basic food, clothing and shelter. Same goes for a large majority of people. I feel there is nothing wrong in wanting to be rich, just that it shouldn't be at the expense of hurting someone.

  10. Insignia - Maybe its the rudeness of age, maybe its my callousness, which makes me say, money matters, yeah for sure. But, is it everything - to me no..absolutely no..

  11. something to think of. But i dont think the idea will do any good. especially related to india.. as we humans have become veyr how do i say selfish.

    Not sure if money is the true bad thing here .. its the mentality of the people who use the money which needs to be questioned

    and Greece well its effecting the euro in a big way ...


  12. You are right. We earn for happiness. It's not about the monetary gain at all. If we get that happiness by other means, then why not?

    Happiness is different for each person. And it has nothing to do with things being materialistic or non materialistic. To me, happiness is one thing, to you it's other. We tend to mistake this happiness with luxurious gains and possessions. We should ask ourselves what makes us truly happy.

    Off the track comment I guess, but such a thought provoking post. Pity not understood well by most including me.

  13. Destiny's child,

    Amassing huge amount of wealth such that your next 10 generations can lead an opulent life without working is NOT basic. Do we agree on that?

    Again, money is just a means. If your basic needs could be supplemented in some other way; would you still want money?


    Money matters now for everyone as thats the way world is. I am just trying to analyze the path we have chosen and what we have gotten ourselves into.


    :-) Money is a means, you agree? Its how we have abused it as you say


    :) I am thinking of just sticking to thoughtless humors hereafter :P


I'd love to know what you thought :-) Please shoot!