Give credit where it’s due

Okay, let me ask you this: How many of you used your credit card to make your Deepavali purchases? Well, one two, 869…okay, okay. That’s all of you. Thanks to this convenience of plastic money, most of us have managed to crystalise many long-cherished dreams of the banker, who understands —– this is the cornerstone of modern economics and the banking industry —– deep down every human being is a sucker for false promises.

According to banking experts your children, and then theirs, all could see no money in their future life. Today’s young could be the last generation that deals in cash, for electronic money and plastic cards threaten to cram their lives. So the logical economic question to ask is what will the young of tomorrow pick from their father’s pocket to watch a movie on the sly? Bankers and economists are racking their minds on this issue and trying to come up with an answer that will be reassuring to these youngsters.

Even as the world waits for their response, just to kill time, not to speak of filling some column space, we will do some number crunching: Statistics reveal that US, a $13 trillion economy, has only about $400 billion in circulation in the form of currency. Americans, on an average, hold seven credit or debit cards for everybody over the age of 15.

What does all this prove? Nothing much, except that the internet provides such useless statistics to anyone who is bored enough to search for them.

Anyway, at a time when a requiem for the money as we know it is being written, it is pertinent to trace its history. Currency was never in currency till 650 CE and only things that could be eaten or made into food were bartered between people. The Chinese, having eaten all that could be bartered, eventually invented the paper money around 650 CE. But currencies went to Europe as late as the 17th century with the laidback Swedes being the first Europeans to adopt it. Why did it take so much time to reach Europe? Well, even then the laws clearly stopped courier companies from handling cash.

No, I am just joking. The truth is that there were no courier companies in China at that time and the Chinese were waiting for the FedEx men to set up shop there and take delivery of the cash. What with one thing or another, the FedEx was never keen to do business with the Orientals, and it was finally left to the DHL to take charge. The Americans, meanwhile, managed to tap currencies through their ATMs.

Elsewhere in India, Muhammad bin Tughlaq, in a typical burst of insanity, tried to introduce paper money but since Gandhi wasn’t even born, they couldn’t find a photo of him to print it on the rupee note. Finally, currencies arrived in India through hawala operators and this straightaway led to the creation of the Enforcement Directorate and several corrupt officials.

The other important invention that followed paper currency was huge suitcases, to help politicians and senior bureaucrats who otherwise would have developed huge back problems trying to carry all the cash that somehow came their way (I am not a fool to commit myself in print that politicos and bureaucrats collect stacks of money in corruption).

Somewhere down the line, cash became cumbersome, especially to those who tried to hoard it. Ergo, the world got Swiss Banks, which did the same thing for us. But people were not so trusting as the Swiss sullied their reputation with their cheese. The general belief was that if their cheese itself was filled with so many holes, just imagine the state of their banks. And this has eventually ended in the idea of plastic money, where money is essentially just that: An idea.

It is a liberating concept where you can spend like the rich even though you can’t afford even a ‘single tea’ in reality. It is this philosophy that runs large corporates, banks and governments. Nobody has any money, but don’t bother. Economy itself has stopped bothering about it.

Individuals, using plastic cards, run up huge bills. When they can’t repay them to the banks, they just shrug their shoulders and move on. The banks, for their part, shrug their shoulders to the government, which in turn, shrugs its shoulders to nobody in particular but to everyone in general. This leads to prices going through the roof making the individual spend even more and get bigger bills next time round.

The whole drama is played again and again and again and again, and eventually all money and life is irrelevant and futile. When you come down to it, this is what philosophers too say. And when there are people to agree with economists, the world indeed becomes a futile place to live in.

Have a great and safe Deepavali. And don’t bother about the credit card bills. I need company.