Towards a Philosophy of Money-7

Case One
It was a personal beginning. Looking across three generations of my family, I was perturbed over the perpetual state of our middle-class indebtedness and incapacities. Our grandfather earned around Rs.200 a month and took care of seven kids, my father managed with somewhat Rs.2000 a month with four kids and I was struggling with one extra zero and one kid to this statistical growth chart. At one level, this was a nearly perfect (officially) standard for any Indian family to live. This was a fact about which the governments of all shades and ideologies felt extremely content rather elated. Still, this was a story that indicated only a series of personal tragedies for three different time periods of a national economy. There was no synchronic relation between the development of personal and national liberty. Statistics of ascendance were contrary to the deeply felt realizations of political decline and consumerist deadlocks. I searched for answers. There were many like colonial legacy, rise of middle-class aspirations, inefficient developmental apparatus of the state etc. but there was a persistent dissatisfaction with these answers. Was I talking of only an Indian story? Was it not similar for any middle-class generation of any developing country? What was happening to the money that people were earning? It was growing still it was losing its worth. Generally, all currencies are fractional currencies e.g.1/100 or 1/10 but over a period of time, fractional identities like paise, pence or cent were losing importance in day-to-day parlance. A currency was bloating as a structure of wealth but the value enshrined in an individual unit was continuously evaporating. Labels were working but the real product was diminishing.

Case Two
Thomas Friedman, the author of famous “The World is Flat”, nearly predicted $100 per barrel for oil just some months back in his op-ed column of The New York Times. He was saying that oil was getting costlier. It jumped from $58 to $97 in around five months. The world leaders were concerned. New financial categories like Sovereign Wealth Funds emerged on the scene. Russia and Venezuela were suddenly flush with so much funds that they could plan any sort of financial extravagance. Peak Oil theorists again started getting noticed. Hugo Chavez started flexing muscles and abusing America at all possible international fora. The worth of oil imports shot up so fast that many importing states simply could not do anything but transfer a part of the burden to the consumer. Those who could not, were inviting larger fiscal crises. The interest rates were tightening in hot economies of the world but the growth indicators particularly stock indices and real estate were shooting up and there was loosening of the same in the developed world yet there was no picking up. The issue of governance was a thorny path full of moral hazards. Sovereignty turned out to be a sham which was simply impossible to discard. It was simply disproportionate to conclude that in such a small period of some months, oil requirements of the entire world could rise so much that its price almost doubled. What was happening? Was oil on the rise or the measure of oil-price i.e. the dollar on the decline?

Case Three
China is the most significant miracle of 21st century that shall continue to change the face of Asia as well as global balance of power in decades to come. Some years back, security experts expected a face-off with America over Taiwan issue. Spratyls Islands in the South China Sea was a hot site for any military confrontation. The Chinese human rights record was considered abysmal. Its communism was simply not palatable to the western values of liberal multi-party democracy. In no case, China had to face a political defeat. Things smoothly went in its favour without using any military force. Taiwan silently started moving toward the eventual unification with the mainland. Olympics 2008 was awarded to the Beijing. The doors of WTO were opened for it. American companies import the maximum from the Chinese factories. Only the Walmart’s import figures are above $20 billion. Today, China enjoys a trade of more than $800 billion with only U.S. with a surplus of over $150 billion. Its forex reserves have crossed one trillion mark and still galloping. What is so strange about the non-war rise of China that its ‘middle kingdom’ theory needs to be redefined? Chinese don’t seem to be using any traditional form of warfare but they are as aggressive as they were. Is it not that they have launched a ‘currency war’ with the America through forcibly pegging Yuan to dollar?
All the three cases mentioned above are built around ‘currency’. In simple words, a currency is a standard value of money expressed through a legal tender issued by the central bank of a country or a monetary union. It is expected to exhibit a certain stable purchasing power but these three cases point out something hidden and far more complex than what meets the eye. Is it a national construct only? Is it a matter of financial or political realm? If it is a global world, why is there not any global currency?