Money changing hands
Can India’s demonetisation drive alter the way we think about money?
All of a sudden we find ourselves hit by a scarcity of money and what seems to frustrate us the most is the falseness of this scarcity. The Indian government’s decision to wipe out 86% of circulated currency value has indeed threatened to puncture many a cash-injected mattress and made for unannounced hard landing for hoarders. As the demonetisation circus rolls on and reams of editorial content and decibels of television reportage explains its impact from every conceivable angle, it is clear that this is no random act of misplaced populism. Very rarely in India do we see government intervention of this scale that impacts the everyday lives of ordinary people. From long snaking queues outside banks and ATM’s, the inability of many people to be able to pay for their daily meal and some extreme situations like the death of an infant in Thane, who was denied hospitalisation — we have now been exposed to a wide range of side-effects of a very bitter pill. In Kolkata during the communist regime, the public reaction to a 10 paisa increase in public bus fares would usually be to burn a few buses. While the surgical strike against black money has been roundly criticised by all major opposition parties at a national and regional level, we haven’t really seen any sign of common people taking to the streets in protest, or public anger being directed at the face of this initiative — the banking establishment.This is partly due to our collective focus on the immediate impact of this move, primarily on the poorer sections of society, small business owners and daily wage workers who constitute the bulk of our cash economy. There has been a ready outflow of empathy in social media on how this deals a body blow to lower income groups who are simply not equipped with internet banking, debit cards and e-wallets to tide over this liquidity squeeze. Eminent economist, analysts and social thinkers have already spoken out, critiquing the fallacy of this move and even questioned its true objectives. For me this situation poses a question of a more fundamental kind, which seems to be buried under the immediate panic of cash shortage.
Money as we know it is only a piece of paper with no intrinsic value. People accept money at face value only because they trust its universal acceptability. Simply put, we accept money because we know everyone else wants it. This trust is underlined by the ‘promise’ printed on our currency note, signed by the RBI governor. In the early days of money, gold, silver sovereigns issued by emperors and kings were standard measures of precious metals that could be used to place a common value on goods and services. This form of currency would typically carry a portrait of the emperor on one side of the coin certifying it as legal tender. Not only would this serve as a medium of exchange, but also serve as a marker of an empire or emperor’s influence. The point here is that this system, built entirely on trust among ordinary people and a central authority has been in place now for centuries. This idea of money has been untouched by wars, economic and political upheavals. It has seen turbulent times and moments of crisis that have threatened to break that trust. While we have during these times questioned the financial systems that have been entrusted with the task of protecting this idea of money, the idea itself has largely remained unquestioned.
For a moment let us choose to set aside all the immediate anxieties and inconveniences that we find ourselves thrown into and peer closely into some initial snippets of information and perceptions that seem to be attracting little scrutiny. The purpose, to understand if in years to come, people might look back on this moment as one that fundamentally altered the way we look at money.
One of the first things to consider here is the reaction triggered by RBI’s newly issued currency. While some sections of the media and opposition parties have questioned the wisdom of a high denomination when battling the problem of black money, some reactions on the ground seems to be much more profound. I encountered a group of men who are employed as drivers in my office building. Their discussion centred around the physicality of the new currency note. The new currency, they said seemed to lack something in substance. The new two thousand rupees was either too small, almost akin to a twenty rupee note in colour or the paper itself felt strange to their touch. Later while on an auto rickshaw ride, the driver echoed similar sentiments. This new currency lacked the substantiveness of old, it’s worth somewhat questionable. In many social circles these comments will be brushed off for their lack of understanding. It will be brusquely said that the physical substance of currency has no correlation with its economic value.
The other piece of information to consider in this context is actually a bit of disinformation. Following on the heels of the demonetisation announcement, several news sources suggested that the new currency will come enabled with GPS trackers to firewall our currency circulation. There were many who fell for this, till they actually got their hands on the currency itself.
Both these sets of observations could be attributed to a general sense of anxiety, people made insecure by a sudden and drastic manoeuver and ‘leaked security features’ that were meant to offset any overwhelming sense of panic. However, one could also argue that the move to declare most of our currency as illegal forces us to question how we look at money. Take for instance the term ‘cashless’. This is a word that speaks very differently to different people. Most of us who are reading this article, know exactly what this means, having been reared on years of credit card spending, internet banking and familiarity with the world of e-wallets. To a large section of our society, this simply means the absence of cash, without articulating or spelling out a new asset form of money. To most people, ‘cashless’ literally means being alienated from that part of ourselves that draws meaning from having our own money, what we like to call ‘financial independence’. When people voice concerns about the new currency lacking substantiveness or when our government suggests that money can be tracked real time, this is one of the first ideas about money that begin to get dismantled in our minds. All at once, the idea that money is a noose that can be used by the system to control individual behaviour begins to seem like a possibility. People begin to see that money not only does not have intrinsic value, but it also does not have any intrinsic power, that any power that one seeks through the possession of money is discretionary and potentially discriminatory. The idea of money both as a powerful equaliser and simultaneously a guarantor of differences begins to melt away. The equalising power of money is negated by the dismantling of financial independence, now no matter how much money you have or earn, attendant ideas of freedom can no longer be taken for granted. For those who have experienced and enjoyed the discriminatory powers of money, now discover that their privileges stand rescinded. In the middle of a brainstorming session on how to minimise waiting time at the banks, someone hopefully suggested that we try calling in those priority banking privileges. Today to conduct a transaction we all need to stand in the same queue, irrespective of the size of our bank balances and the special privileges we’ve come to expect as a result.
Sensible people have argued that too much is being out of a poorly executed but necessary measure to curb deep-rooted malaise in our society. The belief that this is a temporary situation may well apply to the operational difficulties people face in their own unique way, but there is little doubt that there are some unformed questions, anxieties that extend beyond the here and now. The carpet bombing of our cash economy does not limit its attack on an old idea of money in India. According to some social commentators, money in India has culturally been seen as stored labor. While the move to demonetise supposedly tries to replace this with a new idea, in the process it also negates modern ideas that we have come to associate with money. Ideas like financial independence and leverage are relatively new , products of a market-driven imagination that fuel our consumerist urges and underlines the place of money in our lives.
In the aftermath of the global financial meltdown sections of the western population hit hardest woke up to the harsh realities of being inside a bubble. Not only had ordinary, unsuspecting people been coopted, the state and state regulated systems had through various acts of indiscretion located themselves inside this financial bubble. The demonetisation scheme can be seen as a forced migration of people into a financial system bubble mandated by the very body that exists to regulate it. The cashless economy is not exempt from breaches as made evident by instances of data fraud, not to mention the problem of an unreliable and uneven technology backbone. What happens when a digital wallet service goes bust? Where do we turn to when internet connectivity is turned off due to security reasons? Going forward these and many other such questions will be confronted by the common man. Changing deep-rooted practices and ideas is never easy and many have hailed this move as a necessary amputation. While in the short term the body experiences some trauma, patients have no choice but to repose their trust in the healing power of time.
Normal services may well resume shortly, but in the long run we are likely to see some fundamental shifts in the way we view money. While we wait to see how this actually plays out, there is in the interim an undeniable experience of being in a different sort of a bubble. Over the past few days, as money has been scarce, a large section of our middle and affluent classes are experiencing a return to a pre-liberalised India. Our government through its drastic idealism has propelled us back in time, where retail therapy and anytime, anywhere consumption simply didn’t exist for most people. We’re meeting friends, spending more time at home, spending every bit of spare change with utmost caution and walking instead of jumping into auto rickshaws thoughtlessly. For people who grew up in an India without shopping malls and COD, the adjustment has been largely uneventful and not entirely unpleasant. There is enough loose change for people to still gather over tea by the street-corner. I wonder if the discussions include drafting a requiem for ATMs. Whatever happens in the long run, the promise of ‘Any Time Money’ makes very little sense right now.
