Money, Boon or Bane of Human Community
Origin and Evolution in Retrospection

Debasish Paul

In lighter vein, Indian economy is so market driven that even when we are watching a TV news even in somber & conservative ‘Doordarshan’ that   is  the Govt. of India owned channel, advertisements appear on screen and if it is private news channel, you will be held up  for fifteen minutes forced to watch tantalizing advertisements of  not so essential commodities and even before midnight advertisements of family planning utilities and products for sexual drive in American parley  called love making toys, coupling arousal balms/oils  and medicines in the group broadly called Sidenfil. Suffice it to say, it is all for money. Now is the right time to foresee watching lingering crisis of global market economy which allows free play of money.

In post liberation China Chairman Mao Tse Tung abolished private use of money by abolishing so called market economy i.e. private ownership of business in finance, production or marketing. Every citizen received essentials from ration shops in kind. Women were liberated from the confines of domestic low productive jobs, thus releasing full potential of every adult of both genders in order to reconstruct the Chinese economy ravaged by several colonialists like U.K., France, Japanese& Dutch. In government purpose, use of money was restricted. Midday meal was provided in community kitchen. It was economic in cooking of food in community kitchen for scale economy as compared to cooking in each household. In economics we call it a rise in productivity of food preparation as well cost effective.

Woman liberation in bourgeoisie society is burning Bra and commodifying women in commercial entertainment industry of music, song reality show and mostly in film industry. Arousal of sexual feeling is the business mantra. But Communist concept of woman liberation is elevating status of female in society to the level of the male. In simple words Mao Tse Tung addressed, Women, you are half of the sky. Mass literacy raised the skill and productivity of Chinese people at large. Research and development were given utmost priority. Number of scientific innovators multiplied ten times of Neo-Colonial India introducing mixed economy i.e. both private and public sector coexist in new economy which depended at large on imported technology. What China sowed, reaped a long-term rich harvest. Since employment is a honour of every man, China step by step moved over from labour intensive to capital intensive technology mostly based on indigenous research.

 So, we see that money can be grown with patriotism as against capitalist exploitation of labour. A prudent double-edged strategy of import substitution with export promotion yielded the desired result. In China where mass poverty and death due to starvation causing frequent famines naming its main river Hoangho as deluge of dead bodies, growth with development changed the economy qualitatively establishing alternative path of unique Chinese model of development. Now China has developed so much against the back drop of new great global depression originated in jingoist state U.S.A. at first stumbling down for crush of its financial enterprises in banking and insurance sector partly due to bourgeoisie market economy’s contradiction exposing the limitations of market economy so far eulogized by crony economists championing market economy as the final best form of economic system  for everyone, everywhere. Market economy provides immense scope of manipulative use of money in realm of Capitalist economy.

V. I. Lenin said that the post world war economy will be dominated by Finance Capital, it was true up to 2008 after which world war economy is cumulatively destroyed by Money (turned Finance Capital) and market economy are two wings of same bird called open market economy. Due to inefficiency and corruption at the top percolating downstairs, even though post liberation U.S.S.R. treaded the same path earlier, it has disintegrated in 1990 and communism is itself at stake there. Just for similar reason of inefficiency and corruption, in West Bengal the left front government led by Communists has gone to oblivion after an opportunity of being 34 years in power making a world record of leftist party in a constituent state power of Indian crony bourgeoisie subcontinent .Money labyrinth has a clandestine role to play in the Left front’s  trapped demise with more humiliation in latest  election of Assembly failing to retain the status of main opponent speaker by decrease of number of assembly constituencies for long time won over before tying up its eternal enemy ,the crony capitalist Congress party whom they are in diametrically ideological opposite stream, so far keeping Congress out of power for thirty four years as proverbial enemy of the people.  It cannot reconcile, so the outcome was obvious. Power corrupts, absolute power of Left Front for thirty-four years has corrupted it absolutely. Tying up with Congress party has the obvious result of reconciling with some ideology that is irreconcilable as Sukumar Ray commented on it ‘I do not adhere to grammar’ in his famous ’Aboltabol’(Abracadabra).

Why money is so important? Because money can empower a man(?) to realize all his/her subsistence needs and with more money earned with stability fulfills aspirations in life. A person can earn a social status by owning wealth of innumerable varieties of which at first priority being visible displays are house(s) and car (S) by fairly or unfairly (a relative term) earned money. Rich, middle class or poor all these classifications of social status is done by known amount of material wealth, bank balance and cash money in command of a person. Hence money has become omnipresent in while Capitalism has converted everything from material goods to whore service into marketed commodity which can be bought and sold by money. It has monetized the entire economy across the globe.

Subsistence agriculture succumbed to commercial farming is forcing subsistence farmers into jobs of wage labour long ago preceded by monetized industry and commerce/trade. Industry exploited surplus value of labour into profit for capital owners and commerce within a state or trade among states have used universal practice of ‘buy cheap and sale dear’ for merchants in stages of wholesale and down the line retail trade to the ultimate consumer. It is fascinating that every time money changes hand, it generates income. The recent phenomena of shopping mall established by large industry owners is an eye opener how much margin can be gained by actual producer reaching ultimate buyers. Bata India Limited is precursor of this model of direct selling in India. But they are single brand sales outlet as against multi-brand shopping malls of new avatar. Consumerism has got a grand boost in shopping malls while getting all kinds of branded consumer goods under one roof. Credit cards initially issued by banks promoting impulsive buying and making an earning from sellers. Usually 2 % bank margin is charged by banks for crediting billed amounts while crediting the malls’ accounts. It has inspired the mall owners to introduce own brand credit cards in order to avoid 2% bank margin payments. Thus, unified production, marketing and finance are three in one model of money making instantly and without leakage. 

Money was invented as a need. But then it became a greed. The utility of money is medium of exchange, measure of value and stock of wealth. In fact, we cannot now even conceive of any civilized human community which does not use money. But like invention of fire which was essential for human progress, has now become such a menace that it is most unpredictable substance of destruction, every where a fire brigade is kept ready round the clock. When bell tolls for interstate or inter axis power open war, who will win is the contender on one side with more sophisticated nation’s weapon’s firepower. It is a vicious circle that more money begets more firepower and conversely more firepower begets more money.

 So monetary power has become a prime consideration in international relations. Hence a huge portion of own wealth of a nation is locked in stockpiling nuclear warheads and concurrently building Air force and naval force in man and machine.

But according to Economist Piero Sraffa as written in his famous book ‘Production of Commodities by Means of Commodities’, more money is locked in weapons, growth of national income is stunted by infertile investment in weapons since multiplier effect suffers being slowed down due to absence of utility of war materials in production of other commodities. But in age of Jingoism, world power hungry states enter the labyrinth of military economy where one can enter but cannot come out losing any path to way out. Peace could generate higher national income by Production of Commodities by Means of Commodities.

As over time human genius created multi product economy, the barter system failed to keep pace with it, in transaction of goods and services as every person has become both producer(either product or service) and consumer and need of goods to sale but the producer who will supply it, has at the same time may have no need to buy his produced good. So legal tender money issued by the sovereign authority, be it a king or head of modern democratic  state was made to be acceptable under sovereign guarantee of face value in particular when the paper currency emerged after initial issue of gold and silver coins on which value was embossed on one side and crowned king or queen’s head on other side as sovereign authority. But as volume of trade and commerce transactions became higher by the dealing parties, the carrying of a huge bulk of metallic money became impractical. Thus, every human community becomes sooner or later gets monetized by paper currency authenticated and guaranteed at par value by the sovereign state. Low denomination money has to cope with the stress of too frequent change of hands technically called high velocity of circulation and get damaged, so remained in low valued metal from gold, copper to stainless steel but relatively higher denomination currency was continued to be printed on especially high-grade durable paper. With inflation implying fall in value of rupee, now very high denomination currency notes as In India INR500.00 & INR 1000.00 are issued by the government through its apex bank now called Reserve Bank of India after independence of India.

But it has encouraged printing of counterfeit money as gain outweighed the high risk of penal activity once caught red handed. This counterfeit money increases supply of money more than available supply of goods. Our neighbor Pakistan in its official note printing press is churning out facsimile of Indian high value currency notes with dual purpose to provide fund to religious fundamentalist groups and Opium production and sales activity smuggled through India of its 70 per cent transaction routed through our subcontinent  belonging to international Golden Triangle’ of global drug smuggling.

Moreover, those who regularly accept this counterfeit money adding with their black money use their higher capacity to hoard essential commodities for raising the price level i.e. inflation which has a class bias. Merchant class always gains by inflation and working class at the receiving end suffers for the higher cost of living. Since only around seven percent of Indian population are privileged to work in government and both private elite corporate sectors and government undertakings, only they enjoy timely Dearness Allowance and periodic pay hike by Government Pay Commission to keep more or less parity of their income ,they do not suffer by inflation of essential commodities especially food items whose prices are increasing at double digit rate in recent decade.

 In a country where sixty-eight per cent of global population do not get one squire meal every day, the startling awards of Pay Commissions are virtually creating an affluent middle class as by unstated official model the India Government believing in higher consumption driven economic growth. So, Reserve Bank of India instructs to keep interest on loan for purchase of cars and the luxury flats at Banks at low level as these are the costliest consumer durables. Being kept at equitable mortgage by the financing banks, these bulk loans are also belonging to category of Secured Loans. Taking this opportunity, the builders and promoters are raising prices of apartments at phenomenal high-level reaching crores even in deindustrialized state of West Bengal. However, the realty sector knows that a large segment of the buyers would not be residents but speculators hatching their eggs to grow soon as much costlier birds. In fact, the realty sector from end to end is perking place and incubator of black money. Worst sufferers are the working class in industry which are closed down by owners to make place for realty business in downtown areas.

 The average low or unskilled workers who lose their jobs in traditional industries do not get later any alternative employment. The traditional farmers and fish growers respectively lose their cultivable lands and water bodies to realtors having high prowess and political connections. Having   no   other   skills, they fall into chill penury. Some starve to death; some do suicide and the rest become criminals who are dare devils now a days are joining Syndicates now a days to cater to booming   realty sector supplying it low grade materials at higher prices forcefully. Inter Syndicate and intra Syndicate bloody clashes over domain of business reminds us the world famous inter Mafia groups’ rivalry and frequent killings as depicted in ‘Godfather ‘the famous American novel.

As right to ownership of private property emerged under law of the state, surplus generated in agriculture, industry and trade activities became to be stored in money, initially in home but with emergence of banking system, money is kept in bank where it became custodian initially. But soon banking system offered plethora of other services like cheque facility, money transfer for trade and commerce in between buyer and seller without physical handling of cash which is not secure. With introduction of computerization, in daily operation in banking system, unforeseen facilities are offered to bank customers like cash withdrawal and deposit round the clock in Automated Teller Machine and drawing money from ATM not only of own bank but of any other bank anywhere in the globe by use of international debit card. Thus, money and banking have become interwoven for every kind of use of money. But man being a greedy animal, more the banking system is monetized, innovative ways to manipulate the hi-tech computerized banking to siphon off money out by clandestine method has evolved. Credit and debit cards are counterfeited to perfection to misappropriate the ATM outlets. On line banking is also exploited channel out money to proxy accounts with connivance of a section of dishonest bank employees. No   Freud can happen without coupling of insider and outsider parties in banks whether it is such regular cash misappropriation or money lending to unworthy creditors that has grown in such burgeoning proportion that in current period twenty thousand crores of bad debt in Indian banking industry. New laws are promulgated in parliament to hard treatment of willful defaulters in penal provisions of confiscating the properties of companies including even penalty and imprisonment. Punishment of bank employees issuing such loans are now being meted out with much higher penalties convicted of connivance of criminal conspiracy against own bank.

Money breeds new to newer kinds of corruption. Political status gives power if the party they join wins the election and forms the governments in state and/or centre and absolute power corrupts absolutely as said by Lord Acton. Film artists who are highly paid specially established heroes and heroines are coming into politics to learn the art of making money faster and grow personal wealth by leaps and bounds. Learnt from their own statement to Election Commission before filing application of nomination for appearing in election for the post of MLA or MP, such film stars are entering politics has risen in West Bengal since film stars who have become MP or MLA in earlier elections, have multiplied their money & wealth by crores in five years!

Film industry itself is in mainstream prompted by making copycat Hindi films of super hit Hollywood commercials in Mumbai and south Indian producers have come to West Bengal to make copycat Bengali  lewd commercial movies of South Indian languages  in order to plough money on same story and Bengali translated scripts .Though it can be debated, Mahatma Gandhi called films as Satanic machine of western culture. But no one can deny that mainstream film industry is haunted by black money in generating more black money. Once addicted to earning black money in cinema acting, Akinete (Artist) becomes Neta (Leader) in lure of earning much more black money.

The Film Stars, political leaders and other High Net Worth Individuals whose earnings (Declared wealth more than 10 Billion) reaching the sky are mostly addicted to Black Money. Liquid cash, which is sacrosanct legal tender money issued by India Government, has created ironically a vicious circle of Parallel Economy of Black Money. It is growing fast as Plague like epidemic communicable disease across the nation. In Realty sector from end to end liquid cash   monetary transactions far outweigh payments and receipts through banking system using Cheques. It benefits both the givers and receivers at each such clandestine transactions concealing   their actual income on the supply side of materials and related services. Final buyers bear the brunt as promoters /developers claim of  liquid cash at the time of booking showing the one tenth of booking deals in money receipts .But Banks and other such institutions’ funds in financing Housing Loans is of actual use to buyers when promoters/ developers show the full real value in record as it demands a deposit of margin money as own financial stake of the buyers before releasing the loan components in case of readymade dwelling units in bulk or in EMI(Equated Monthly Installments)as well in case of under construction projects phase by phase .Thus honest buyers become the ultimate victims of  this illegal use of legal tender money very ironically.  

Black money is defined as money grafting in  illegal economic activities prominent among which are cross country  drug trafficking, Mafia and religious (?)fundamentalist  terrorist activities ,payments in greasing the palm of influential bureocrats and politicians doing Defence goods’ bulk value of ammunition purchase deals as well ethical or legal economic  activities  generating high income on which proper income and service taxes are not paid, in particular by self-employed professionals like Lawyers, Doctors, Chartered Accountants and private businessmen in finance, industry, commerce, trade and service. In fact, Income Tax practitioners with innovative power of providing novel to more novel ways & means to enable their clients to conceal income are becoming Mercenaries of money laundering depriving as enemy within depriving the state of tax dues.

When individual money is parked in financial institutions, it becomes Finance Capital. It becomes a double-edged   sword. In private sector banks, the growth of Corporate sector as most beneficiary is facilitated. It grows in size and volume of business. In order to economize on cost of production, labour saving technology replaces and traditional labour intensive technologies are phased out. So, through Finance capital formed by common man’s deposits goes against the industrial sector employees. It is termed as zero employment economic growth, in cases even negative employment industrial growth. Indira Gandhi in 1969 nationalised majority banks as a political move in order to utilize bank funds for the growth of agriculture which still employs 50% of Indian working class. But man proposes, god disposes. Over time the  public sector Banking  in India is worst sufferer of the money laundering  of different kinds, in particular the deliberate default of borrowers in banks has reached to such record breaking  staggering heights  that they have  to make such high provisions for Non-Performing Assets (bad loans not repaid) that they are facing stress of sky high losses  as follows as reported in The Times of India ,Kolkata on May 14,2016:

Gross NPAs for public sector banks increased from INR2.67Lcr.or 5.43% of gross advances, as of March31,2015 toINR4.76L cr. or 9.32% as of March 31,2016.The level of indebtedness  of Indian corporate was highlighted in Credit Suisse report, according to which, borrowings of top ten corporate houses totaled over INR10 lakh crore. These corporate houses are Reliance, ADAG, Essar, Vedanta and GVK. RBI’s review of asset quality of the loans disbursed by banks, which RBI governor Raghuram Rajan described as a “deep surgery”, highlighted the bank loans which were hidden until recently (Source The Times of India June 14,2016).

Banks in stress: 6 Public Sector Banks post Rs.7,000 Crore Losses (January-March 2016

Banks' names
Gross NPA (%) (crores)
Profit/Loss (crores)
Bank of Baroda
UCO Bank
Central Bank
Dena Bank
Allahabad Bank
Union Bank

Source: The Times of India, Kolkata, May14 2016

Political parties which are heart and soul of Indian democracy are defrauding the Election Commission by false use of money receipts in cash. ‘Parties got 63% of funds in cash during 2004-15 polls. Cash collection accounted for a significant 63% of total funds or over Rs.2100 crores garnered by different political parties during all assembly polls between 2004 and 2015 and 44% in the last three Lok Sabha elections.
Data analyzed by Association for Democratic Reforms (ADR) showed the parties collected Rs.2107.80 crores state assembly elections in this period.

During the Lok Sabha election elections held in 2004,2009 and 2014 cheque payments accounted the highest collection at 55% (nearly Rs.1300 crore), while cash accounted for Rs.1039.06 crores. In the case of state elections, funds collected through cheque payments was Rs.1244.86 crores between 2004 and 2015’ (Source The Times of IndiaMay24,2016)

If in any society, where money earning is the be all and end all of life, that society becomes cesspool of desperate money earners. Swami Vivekananda went to USA with prime motive of creating a fund to establish Belur Math as centre for free education and Medical treatment of orphans when he found that Indian rich and affluent are eager to spend money on filthy festivities as marriage of Cats, flying kite with currency note, throwing wine party to invite white British rulers on pretext of worship of Durga etc but not interested in any contribution toward philanthropy.
Though he immediately surprised in money hankering of Americans, but still in his mission for fund creation, he had fallen in trap of a band of swindlers who cashed on his gift of the gab by alluring him to sign a contract that would yield 200 Dollars on everyday speech. They would organize every such talk show. Without asking learned friends like V.C. of Oxford University and alike, Swamiji started whole night reading and preparing a lot for everyday fresh speech which took a toll on his frail health. The swindlers were making millions but then only ill and withered Swamiji talked about it to learned friends who advised him to return the paltry fund he had so far garnered and cancel the contract forthwith. Then Vivekananda admitted that within a dream his Guru Ramakrishna is also advising him to stop being ruined in mind and health. Whom to blame? Capitalism is a system, where vested interest group tries to churn out profit exploiting even a noble hermit.

Like living animals, though it is an inanimate object, money can reproduce money in the womb of financial institutions under license from Reserve Bank of India in order to operate in money market. Banks and Non Bank Financial Concerns(NBFC) are registered and allowed to accept public deposit of money .By investment of the consolidated deposit in agriculture, industry and tertiary sector ( trade & commerce)at a lending rate higher than rate of interest on deposits, to start with ,banks earn an income by the margin of interest between deposit and lending rates. Some more earning sources are modern avenues of money remittance by RTGS (Real Time Gross Settlement) implying instant money transfer from one banking unit to another of any distance by computer application software. Also issuing Letter of credit, Bank Guarantee, Drafts issue are non fund-based income implying no interest burden on banks.
But in considerable number of cases NBFCs have become honeycomb where money does not get invested in productive pursuits to generate money income. Instead these become plundered like honey gatherers smoking out the honey combs to force bees to fly or die and they can squeeze out the gathered honey. It happens when ruling party members/crooked political bigwigs endorse and enhance brand equity by lending their names in prospectus or appear in public functions of fake NBFCs to get in return share of the plunder of deposits in good faith. Here greed for money is like a catalyst of fly by night swindlers presenting them as promoters and high-profile endorsers ruining the easy prey informal sector sun burnt toiling earners. Alike honeybees burnt and expired in fire and smoke, the depositors allured by an exorbitant rate of interest which does not conform to any economic rationale, lose their hard-earned money. Promoters vanish overnight, agents who collected deposits from neighbors and acquaintances are facing the wrath leading to being physically wounded or making suicide unable to face the stress. Depositors go astray losing lifetime savings. The endorsing politicians whose virtue is vice, have best of both the worlds, once sucking billions from NBFCs later voted back to power of Green assembly.

We have already noted the converse case when of late giving money to borrowers in good faith from scheduled commercial banks have been facing enormous disaster for huge provisioning for Non-Performing Assets (neither principal nor interest paid) mainly of the Mammoth private industry houses becoming willful defaulters, having high prowess. It is just like a pregnant ‘would be mother’ expecting a baby, the baby is ‘still’ born. Thus in bona fide financial institutions, money married to eligible grooms i.e. apparently good entrepreneurs does not return with interest, the expected baby.

For inflation more money chasing less goods are a myth for which reserve bank of India introduces Dear Money (high interest on bank loan except on house and car) Policies. But inflation is a product of many factors interwoven in India’s mixed economy coupled with global warming of mother earth by industrial nations becomes unkind to agriculture, the primary sector and foundation of economic growth by drought in four big states .It creates food scarcity for which industry and service sector professionals& employees, retail consumer price index increases. This hampers industrialization as named Scissor’s Crisis in now defunct USSR.

So, both in bona fide institutions of banking and Finance and in the evil world of some NBFCs, money does not definitely reproduce money, instead it becomes a Pandora’s Box. We are citing in conclusion the famous film ‘Gold Rush’ where Chaplin had to eat his shoes in frustration to find gold and hence completely became a victim of insanity.

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Aug 4, 2020

Dr. Debasish Paul

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