Hello me hearties,
It is a strange thing, money. A few songs, lot of movies, and all together too many TV series show money as the root of all evil.
I was reading one day in the newspaper that there was a small group of students who robbed a bank. They were safely anonymous; no one knew who they were, until one of them started spending too much money. A boy started lighting his cigarettes with 100 rupee notes. That is how they got caught.
When I read this news I was only in class 8 or 9. I had never thought seriously about money, of course, but this incident made me think. If I were to burn a piece of paper, why would anyone think anything? People burn paper all the time!
Then why was money so precious? I asked a few friends, what decides the value of money? One of my friends proposed a theory, which almost made sense. He said that the line in the note, which is generally invisible, but appears against the light, is made or gold or silver.
I would have spend my life thinking that, if it was not for a boy who was naughty and well, rich enough I guess, to tear a bit off a10 rupee note to show the whole group that it was only a white thread. I was left wondering again.
I like Jim Carey films. ‘Dumb and Dumber’ is one of my favourites. I laughed a lot at the end when the police takes the bag, which is supposed to be full of notes, from the two idiotic friends and opens it to find it full of pieces paper on which they have written IOU.
I found it funny, but never got the joke actually. One day I overhear someone use the IOU again. I asked them what it meant. IOU is a short form of "I owe you"; it’s like a promise.
Hmmm. I had read on notes many times the governor announcing to "pay the bearer the sum of 100 rupees" or 50 or 10, and I had often wondered, why will he pay someone who already has the 100 rupee note.
In year 1990s when I was in class 10 or so, my father was watching TV. I saw the news that in Afghanistan the people were carrying sacks and carts full of money to buy very small amounts of food. I was very surprised. I asked my father, what the problem was. He of course did not know very surely himself, but just like an adult, he restated the facts and expected me to understand and be quite.
He said: the value of money has fallen, people don't have enough to eat, government has fallen, and a few random sentences like that.
Later I saw the same news in Hindi, and the newsreader mentioned that people have lost all faith in the government and that government was printing too much money.
Now it kind of fitted together. I made the following connections as a child:
1. Paper money has no value.
2. Paper money is like a promise, sometimes also called a promissory note.
3. What makes people believe in the promise is the amount of money there is. If a government prints more money, things go costly.
When I was in college there was something, which was called as the Asian Financial Crisis, in the countries like Thailand, Indonesia, Malaysia, Philippines, South Korea, etc. Money was too much and things were getting expensive. I, of course, did not understand too much even if I was in college then. I must say it is human nature that if they have many things to explore, they choose to explore the areas where they have some faith in achieving success. I was interested in biology and physics. I knew this was not study of animals or of physical phenomena of the world like gravity.
My sister was studying economics. She was studying why people produce things, sell thing, what is money and all that stuff. I am studying it now, when I am 27. Now I am not too bad at it. I got an A on the last economics exam ;).
I asked my sister what was money and she told me a nice story, just as she must have learnt from her teacher. She asked me to imagine old times, very very very old times. Earth was a ball of fire, which had separated from the sun (ahem, that would be physics, see because there are no humans in it yet!).
So the ball of fire cooled down in say about a billion years, and then some basic bacteria and all started forming. No humans still, but life, so we are talking biology. Evolution of life. Then some more biology and evolution and there was human beings, of some kind. Australopithecus, Java man, Neanderthal. Study of how humans lived then.
Then these humans started making groups; some would grow things, others would hunt. Now we have division of work. Stronger people hunt. Children are taken care of. People settle down, they start farming land, cutting down forests. It was good for humans to cut down forest then, since there was only forest all around.
Now there were some people with atta (flour): farmers, and there were people who had meat: hunters. There were other people who would collect and sell coal. Other people who would make metal objects, that hunter or farmer might need.
How did they all get all they needed for living? By bartering. I will give you grain, you give me metal. Here is metal, give me meat. Etc., etc.
While it was simple within a small group it must have been complicated on a larger scale. Imagine in those times if you went from one tribe to the other, each must have had a different barter rate. Trading must have been difficult. And since one tribe that lives near sea has fish but not much metal, and other which has metal but needs colour from the shells, may have to trade with each other, the barter system must have caused lot of confusion and distrust.
And of course there must have been the issue of quality. For example if I buy myself a wife from a man with 3 daughters, (buying wives or slaves was not so uncommon in history) in exchange of a donkey who was stronger than the daughter, can carry more weight and eats less. But then the donkey may turn out blind and the father may get angry. There were family feuds because of such trades for many generations.
When people started conquering large areas and kingdoms appeared, to solve the issue of mistrust and to make more things available for more people from all over their large kingdoms, kings started a way of money exchange. Many civilisations had money like shells of snails, seeds. In one place called Yeo there were people foolish enough to use unmovable large stones, which sat outside the village, as currency.
In China as early as the 14th century ... I mean 1300. You know this, right – when you say 1306, it is in 14th century? Since 0 - 99 is first century. 101- 199 is second century etc.
Going back to China...
So in 14th century china, a king actually made paper money with the seal of the king. But it failed simply because it was too easy to counterfeit, make jali note. They had to replace it with silver and gold coins.
Precious stones and shells and all had intrinsic value. They were precious themselves. And there was only a very, very small amount in the world. Only a little bit of gold and silver could be mined in one year. Kings also had monopoly over digging of gold and silver in many kingdoms.
Think about this (and write your thoughts to me): what is wrong with counterfeit money? If everyone could print a little money for herself and be rich, wouldn’t it be nice? If I am rich, I will give it to poor people, like sabzi walas and all. Why is it bad?
Another one: do you think Yeo people were actually not so dumb in using boulders? Think of a few advantages of using heavy unmovable boulders for currency.
One more: ask someone who has lived both in India and in other countries, how do they exchange their money when they go to and from countries? How is this exchange rate decided?
Just like the story of Mirza sir buying a wife for a donkey, China and USA are angry with each other right now. USA thinks China's money called Rimnimby or RMB is a bad. Chinese people are angry with USA shouting at them all the time. Find out what is ACTUALLY happening between USA and China, by asking a few adults. Note their responses. Ask other people. Remember their response. I will answer the question in next letter. We will compare notes.
A lesson I have learnt today: Google has a wonderful 'Check Spelling' function, which makes your wrong grammar and spelling appear underlined in red. Always check your spelling before you send it away!
Next time I will write to you about another interesting thing also. But if you have something going on in your mind, we can discuss this topic further. We have many years and each year has 52 weeks.
If I write only one letter a week, and I write for N years,
I can write 52 X N letters
Or simply 52N letters
