Paul J. Dejillas
Professor of Anthropology
It was Milton Friedman who perceives “money as a means for mediating and facilitating exchange (1962:14). But money, in his view, mainly mediates or facilitates economic exchanges by enabling the act of purchase and sale. In this context, Dr. Ramirez introduces the term "mediated economics," money being the mediator of exchange (1996:7).
Part 1. Monetary Theories Vying for World Power
Money as a mediator and facilitator is governed by some rules of the games that are dictated by the market forces. Behind these rules are some theories, which espouse some assumptions and inherent beliefs about economic, political, social, and cultural lives.
What are today's prevailing theories on money as medium of exchange and transaction? What are their major concerns and preoccupations? What are their strengths and weaknesses? What kind of reality do we have under today's money-oriented economy? These are some of the questions I will try to address here.
Economists, especially the monetarists, focus their study around the supply and demand for money. In the demand side, there is the demand theory of money, while in the supply side, we have the so-called quantity theory of money.
The Demand Theory for Money
On the demand side, we have the theory of the demand for money, which answers the following questions:
· Why do people hold cash money?
· What influences people's demand for money?
The main proponent of this theory is Alfred Keynes. For Keynes, people possess three motives or reasons for holding cash money, namely: for transactions-motive, precautionary-motive (security reasons), and for speculative-motive. The theory focuses on the transaction demand for money.
Money is needed to transact trade. For example, I hold money because I need it to buy food, pay my rent, to pay for my transportation expense, and so on. I also need money for precautionary measures, for unexpected expenses, and for emergency purposes, e.g., when a member of my family gets sick and need to be hospitalized, or when accidents do occur. Finally, I need cash money for undertaking profitable business that may arise in the future. It is speculated that the month of May triggers great demand for school supplies, school uniforms, school buses, etc. in view of the opening of classes in the month of June. I need to hold money to go into the small business of supplying the school needs of pupils and students.
Under the demand theory for money, the more people have money, the more purchases or investments they will want to transact, and the more the economy becomes vibrant and alive. We are here introduced to the concept of "velocity of the circulation of money."
From the economist's point of view, the cycle of money is one of acquisition, spending, consuming, saving, investing, and back to the cycle of acquisition, and so on.
The Quantity Theory of Money
The main proponents of this theory are Irving Fisher, Alfred Marshall, Pigou, David Hume, and David Ricardo, among others. The quantity theory of money addresses such questions as:
· What are the effects on the economy if society has too much amount of money in the market?
· What are the effects if society has too little amount of money available in the market?
· What are the effects if people hide their cash money at home and keep it from circulating in the economic system?
The theory holds that the amount of money kept by the people influences the price of goods and services in the community or society. For example, if people and the economy have too much money available to them, prices will tend to go up, assuming that there is no increase in productivity. With prices going up, the effect is to decrease the real value of cash money. More amount of money is then needed to respond to the changes in the level of prices. The technical term for this is inflation. While inflation refers to increases in the level prices, on the other side it can be viewed as deterioration in the real value of money.
The opposite is also true. When there is too little amount of money in the economy, prices tend to go down. The technical term for this is deflation. In this case, the real value of money increases. The theory suggests that we keep only so much money as not to cause significant changes in the level of prices. In economics, we call this equilibrium level or that point where the supply of money is equal to the demand for money.
IN ALL THIS, who benefits and who suffers?
Unexpected inflation favors the debtors at the expense of the creditors. If you have been paying P10,000.00 monthly for your three-years-to-pay car loan for the past two years already and suppose prices of the car have doubled, then, for the remaining years you will be actually paying only one-half or P5,000.00 of the P10,000.00 that you pay nominally to your creditor.
However, if you are not a debtor but simply an ordinary consumer who want to purchase a particular good or service, then, you will need double the amount than you would have otherwise paid before the increase in prices. In this case, inflation is disadvantageous to consumers, but beneficial for the profit-seeking entrepreneur or producer.
Thus, inflation and deflation can be advantageous or disadvantageous depending on whether you are a debtor or creditor, or whether you are a plain consumer or a profit-maximizing producer.
Given the influence of money supply on prices, one of the major concerns of the theory is how to limit and regulate the supply of money if it is to maintain its value. Monetarists relegate the concern of regulating the supply of money to the government, in particular the Central Bank, because of money's tremendous impact on the macro level.
The level of money supply in the market is, however, no longer the sole control of the Central Bank. Today, the volume of monetary transactions in the stock market is also becoming a major contributor to the level of money supply in the market. In the Philippines, people are talking of the "Binondo Central Bank" which are known to also influence the supply of money in the economy. These three big institutions in their own ways can cause the level of money supply in the economy to significantly go up or down, depending on their objectives and interests. This is an area where the politics of money can enter into the picture.
HOW IS the level of money supply and demand regulated by the Central Bank monetary authorities? One mechanism by which monetary authorities regulate the demand and supply of money is through the interest rate. How is this done?
This can be illustrated by a simple graph below.
q1 qo q3
When the interest rate is at io, the money market is said to be in equilibrium, i.e., the demand for money is equal to the supply of money. When the interest rate, however, is increased from io to i1, the demand for money decreases from qo to q1, demonstrating our discussion earlier that when there is too much supply or surplus of money in the market, prices tend to go up. The amount of surplus money is measured by the line A-B or q1-q3. Our discussion here assumes that there is no change in the demand curve for money in the market.
The utility of the above graph as a tool for economic analysis is its ability to measure visually and quantitatively any changes that occur in the market.
At the new interest level, the market is not in equilibrium. There will eventually follow continuing adjustments in the level of supply, demand, and prices until all these market forces settle down or stabilize. Until this is achieved, instability and even social disorder or unrest can occur. But the market possesses some inherent equilibrating mechanisms to restore order and stability of the various market forces. Economists refer to this as the "invisible hands" in the market. In reality, we do not know how this invisible hands work.
But we are again reminded of the manipulators, the dollar salters (the Binondo Central Bank), and those few Filipinos who deposit billions of dollars in the Swiss banks. We are reminded of those short-term foreign investors, who come and appear here to invest in our money market, but also suddenly disappear together with their dollars at the slightest disturbance of our social and political order, or even on the basis of some grim speculations. We are at the mercy of these "invisible hands" having brought us to what we are experiencing now in Asia.
The level of supply is not so much the issue per se as the rate it is kept circulating in the market. Money kept at home has no immediate value, except for future use. It contributes nothing to the economy. But put to circulation, it can be used as capital for productive investments, thus, contributing to the growth and stability of the economy. The more money is circulated in the market and used for capital investments, the more the economy grows and the more the economy becomes alive and vibrant.
Because of this, another concern of the quantity theory of money is how to influence the rate of money circulation in the market. Economists encourage people to save their money in the banks or to invest their money in economically productive business undertakings. Money saved in the banks means ever-ready capital available anytime for productive use; it is "stand-by" capital, ready to be harnessed in case of expected and unexpected changes in the market. The more money is saved in the banks, the more available capital is accumulated, the more capital is available to investors; and when harnessed for productive undertakings, it means more production, more employment, and more income.
In turn, more income to the family means better education, improved skills, more amenities, more opportunity to travel and take a vacation, more time and peace of mind to devote to religious and spiritual activities, etc. It also means more freedom and greater opportunity for the individual and the family to directly participate in shaping the events that take place at home, at work, in the community, and in society as a whole. Does this not bring satisfaction, happiness, fulfillment, and joy to the individual and the family?
The main proponents of the velocity aspect of money supply models are Milton Friedman, Karl Brunner, Allan Metzer, and Albert Burger.
In addition to graphs and charts, economists offer several mathematical models and measurements to determine the quantitative impact of money supply on the overall economy. These models and measurements may require the use of calculus, regression, sampling, and related mathematical measures. In monetary economics, many of these measures are intended for macro applications. Students of monetary economics spend most of their time and efforts understanding these theories, models, and measurements with the view of applying these in their thesis, dissertation, and later in their place of work. They will be lucky, or course, if they will be able to land a job in such financial institutions as the Central Bank, Budget and Management, Finance, or in international financial institutions like the International Monetary Fund (IMF), World Bank (WB), and the Asian Development Bank (ADB).
AT THIS JUNCTURE, let us pause and reflect.
The students should by now be realizing the serious limitations that monetary economics offers to the nation and the people as a whole. In our excursus into the history of its development, we have seen that money is not only a continuing economic cycle of acquisition, consumption, production, and so on. It is also a cycle of deprivation, a cycle of unfulfilled needs and desires, a cycle of mental anguish, pain, suffering, and so on. For the producers, investors, and capitalists, money is a cycle of wealth and affluence; for the poor consumers, it is a cycle of agony and misery.
While the reasons for holding cash money may apply to corporations and individuals as well, the demand theory for money is not very clear on the issue of how much money each individual or family should hold. We only see in reality that some people hold great amount of cash money and even amass themselves with enormous wealth, while others are not able to hold any money at all.
Demand theorists are silent on the meaning of demand. Whether demand is triggered because of needs or wants and desires, or still whether it is a demand only by the individual or society, the theory does not say anything on this. The theory does not care whether the demand for money is coming from the urban poor, farmers, and workers or from the wealthy.
The theory also does not say anything about how to satisfy the demand of individuals and their families. It might be expecting too much from the theory, but is it not more beneficial to the people if a supplementary theory be designed to address the issues we have just raised?
One also notes that the monetarists are only concerned of economic variables (investments, production, employment, prices, productivity), and not of non-economic, non-measurable, non-quantifiable variables. In addition, the concern of monetarists is too much focused on the macro level or on the national economy. This is understandable since its impact on the individual and the family can be disastrous when prices start to rise, when it is getting hard to land a job after graduation, or when one is laid off and terminated, and so on.
It goes without saying that the quantity theory of money is not concerned of the family, much less the ordinary man. It would be very interesting if a quantity theory of money were to be developed from the individual's point of view.
Finally, the concern of economists about the circulation of money is commendable. Money has to circulate smoothly and regularly to give life to the people and to all the sectors of the economy. McLaughlin and Davidson point out that this "unimpeded flow is the key to economic health" (1994:337). But there is something amiss. Money circulates only among a few at the top who are rich, famous, and powerful. Many economists hold the view that the pie needs to be enlarged first before talking of sharing and equity. "Why is this so?," "Why do the people always bear the greater costs, sacrifices, and burden?" the ordinary worker asks.
The quantity theory of money and even the money market are not concerned of this question. The theory does not touch on the sharing aspect of the circulation, what it is mainly concerned of is the level of money supply available at the macro level and as long as money is used productively, then, the economy and for that matter the people is monetarily sound.
In the end, it is tempting to point our fingers at somebody. Economists and monetarists are busy arguing how to measure and control the money supply, offering numerous measures and definitions. Yet, we can ask with Davies why a particular monetary theory enjoys a vogue, then, give way to an opposing theory which in turn is displaced by a theory similar to its predecessor?
However, rather than blame economists who are simply doing their work---and they are doing their role expertly, I see this as a challenge to non-economists, especially to cosmic anthropologists, psychologists, sociologists, etc. to be more aggressive in confronting the non-economic aspect of money in their research and studies.
Part 2. Realities Shaping Under Today's Monetary Economy
Today, convenience and practicality are the name of the game. We want to live a life that is convenient, a life that provides a minimum amount of freedom, decency, and peace, and at times a little of luxury. I simply needed convenience and enough space to move around when I intended to discard the precious belongings of my grandmother.
Paradoxically, in spite of the convenience and practicality that money offers, it has not provided man even with the minimum of decent and peaceful existence. Today, we are living in a world, experiencing a process of globalization, characterized by the following:
· Alienation to the fruits of one's labor,
· Economistic view and attitude of man,
· Dehumanization or de-personalization triggered by today's sophistication of science and technology,
· Secularization and materialism brought about by too much faith on material wealth, power, science and technology,
· Division of man into extremely rich and extremely poor,
· Division of the world into creditor and debtor, and
· Division of the people into producers and consumers
Man today continues to live in abject poverty, earning just enough to barely survive. He has found no more time to devote to rituals, attend religious ceremonies, and develop himself fully because he is now working 16 hours a day to earn the much-needed money to feed his family and pay his monthly debts. Failure to earn money means his family starving and his creditors running after him in courts. Man becomes very much preoccupied with earning a living, continually experiencing financial problems that give him stress, tension, anxiety, mental anguish, frustrations, and depression.
Automation has forced new work ethos, new work attitudes and views on man that are entirely foreign to us in the developing countries. Today, the process of mechanization is telling the farmer to replace his buffalo with a computer and to learn the corresponding skill requirements, work attitude, and work style (Dejillas, 1988:24). Automation is forcing the farmer to adjust to the pace and speed of the machines and computers that require production and sales quotas. Work as a result becomes a breeding ground for fatigue, mental stress, personal instability, torture, and harassment.
Today, the workers interact with machines and computers that do not understand human language and have no life of their own. Filipino farmers still prefer their carabaos and cows. They do not want to abandon their dogs and cats in favor of high-tech security-alarm systems? The type of working relationship promoted by today's brand of industrialization is becoming highly individualistic, mechanistic, disruptive, and alien to us in the Third World.
Moreover, the kind of lifestyle brought about by the advent of multinational corporations and globalization has alienated man from the fruits of his/her labor. Man works for money, but money comes to him in trickles because much of it goes to the company he works for and circulates mainly at the top echelon of society.
Man used to work to produce goods for his consumption. The goods produced by man are an extension of his personality. He identifies with the good, he values the good, or the good is valuable to him. Today, he is made to work to produce goods for others. In return, he receives his monthly salary. It is money that goes to him, no longer the goods that the worker produces. But he does not value money as much as he would value the goods he made had these been given to him. As a result, he freely uses money, he spends it all without any attachment at all. Money is not an extension of his personality, the goods - yes.
HOW DID ALL THIS come about?
Historically, the development of the economy even in Asia is a very complex phenomenon. The Asian economy has been regarded as indigenous to the people in the sense that it is propelled by popular practical wisdom and traditional religions such as Buddhism, Confucianism, Hinduism, Islam, and folk religion. Through colonization and subjugation, however, Asian countries have pursued industrialization along the capitalist, socialist, or mixed type of economies. China, Vietnam, and North Korea pursue their modernization process along the framework of socialist development, while South Korea, the Philippines, Taiwan, and other Southeast Asian nations have followed the capitalist road of modernization (Bock, 1993:12).
What used to be people-centered, family-based, culture-based, religion-based types of economy becomes subjugated and overwhelmed by foreign economic development models introduced by transnational corporations and supported by military power and giant international economic institutions like the World Bank, International Monetary Fund, and the Asian Development Bank. People no longer participate in decision-making, left out when sharing the fruits of production, and not consulted in securing the life of the community and society.
Transnational corporations and transnational churches control not only the production, marketing, and distribution, but the financial resources of the weak Asian nations. Economic development becomes no longer people-oriented, but state-centered or Vatican-oriented or oriented towards the insatiable desire of foreign investors for profit and power.
Religion is the East's greatest asset. But somehow, rather than restoring the proper meaning of the world that is propelled by a monetized economy, it has learned to somehow adapt to the demands and culture of the monetized economy. Churches and religious institutions have become ambivalent in their stance on many issues like gambling, attacking it as immoral but at the same time accepting donations from gambling institutions and gambling lords discretely. The Churches have become both attackers and protectors of the monetized economy.
All money leads not only to America and Japan, but also to Rome. The ordinary man is forced to live to the kind of life demanded by his colonizer and his creditors. He is forced to comply with the conditionalities imposed by multinational corporations and international financial institutions on the government and on our domestic banks, which in turn pass these conditionalities on to the ordinary man.
The ordinary man lives daily fulfilling the terms and conditions attached to his loans and debts, terms and conditions required of his work, as well as terms and conditions demanded by his landlord for renting his place.
Let me highlight some of the stark realities prevailing under today's monetary economy. In trying to view these realities, let us be guided by a framework. As apostles of an interdisciplinary institute, we are called upon to view reality not only from the economic point of view, but also from the political, social, cultural, and even religious perspectives. Cosmic anthropologists may go beyond by looking at the interconnectivity of things.
Widening Income Gap
According to the United Nations, of the world's total population, the top 20 percent hold 83 percent of the world's wealth and the bottom 20 percent only 1.4 percent. There is glaring inequalities all over the world. Only 10 percent of the population controls 72 percent of all capital.
McLaughlin and Davidson (1996:337) cite statistics indicating that the United States, which has six percent of the world's population, consumes 30 percent of the world's resources. According to them, the American people suffer "from a multitude of 'diseases of excess' that occur in many wealthy nations---overeating and attendant diseases, high stress, addictions of all kinds, pollution, the garbage disposal crisis, the recent problem of 'infoglut' (information overload), and most significant, the existential crisis of trying to find meaning life through endless consuming and accumulating (often palliated with drugs)."
Joagland (1999) observes that the global economy created in the 1990s by the spread of markets, information technology and more open trade has yet to prove that it distributes its fruits more evenly than did the system of the Cold War era. He fears that the Internet may connect a world in which the rich still get richer and the poor get poorer---only faster.
McLaughlin and Davidson (1994:327) presents a disturbing picture of one "well-to-do, overfed, overweight Westerners parading to reducing salons or plastic surgeons to remove excess fat and another of destitute children in Brazil foraging all day through mountains of garbage, looking for something to eat, along with homeless people begging and searching for food in American cities." According to them, poverty is indicative of the people's unconcern for others.
Our land is a land of contrast. The ever-widening income gap is reflective of a culture of the oppressed, of the exploited, and manipulated. It is a reflection of the culture of divisiveness and poverty. At the same time, the continuing gap between the rich and the poor is likewise a reflection of today's religiosity and spirituality that give more emphasis on the spirit and transcendental dimensions of development, and its abhorrence to matter as well as non-involvement on structural transformational works. Economic and political involvement is for the laity, as the cliché goes. There is separation between the Church and the state.
G. Davies (1996:596) is still optimistic when he says that "despite the magnitude of the problem, the gap between the rich and poor nations should not be unbridgeable" since, according to him, "if all countries of the world were arranged in ascending order [of wealth] there would be a continuous gradation from the poorest to the richest without any perceptible gap---more like beads on a string rather than shaky stepping stones across a stormy river." This indeed offers sound prospects for sober optimism, even among economists.
Mounting Third World Debt
The debtors are perennially bedeviled by weak currencies or low-quality money, wracked by inflation, and aggravated by a rapidly expanding population wanting to have a share of its already meager, limited, and even depleting resources.
All this is happening because the value of money and the level of prices can be manipulated to the advantage of a few. This is the politics of money. Recent history gives us the following account during the time of Roosevelt as recounted by Weatherford (1997:6).
Roosevelt nationalized gold and made it a crime punishable by arrest and imprisonment for an American citizen to hold gold bullion or coins. Those people who voluntarily surrendered their gold … received compensation of $20.67 per ounce in paper notes.
One year after confiscating the privately owned gold, on January 31, 1934, the federal government devalued the paper money from $20.67 to $35.00 for each ounce of gold. Thus, everyone who had complied with the law and exchanged gold for paper lost 41 percent of the gold's value. The change in the official price of gold increased the nominal value of the government's gold hoard and thus allowed it to issue an additional $3 billion in paper currency.
In March 1972, the U.S. government officials devalued the dollar again to $38.00 per ounce of gold and then to $44.22 the following year. The Swiss government said: "Enough is enough." Beginning on January 24, 1973, it no longer supported the dollar with gold. Other nations quickly followed and they were successful.
This is happening to our economy today. A few years back the dollar was pegged only at $1.00 to P26.00, today it is at $39.00 or so. So, we need to pay more in pesos. This is monetary transaction at the global level. Add the amount of interests imposed on our debt, and you will understand why our debts keep on mounting even if we are not borrowing. At present, more than 30 percent of our total budget is reserved for debt servicing.
See what the dynamics of money can do to poor countries like us? This is the politics of money, empowering only those who are already empowered. The Swiss government finally opposed America's autocratic control over the value of the gold. Can we---in the conjunction with other Third World who are heavily indebted---do the same by simply refusing to pay all our debts? Or, perhaps a more mild approach, can we not pay our foreign debts in terms of real goods and services?
G. Davies (1996:29-30) notes that the history of money is one of unceasing conflict between the interests of the debtors who continually seek to enlarge the quantity of money and the interests of the creditors, who seek to maintain or increase the value of money (quality). Third World countries are most often the biggest debtors in the world today. They are not only divested of their precious natural resources, they have also become perpetually indebted to the outside world. Third World economy becomes preoccupied not only with survival, but also with paying their continually increasing debts to the world's giant financial institutions.
Third world debts are reflective of the culture of indebtedness and mendicancy of many developing countries, which is in turn expressive of its life of dependency and total deprivation. State visits by Third World officials are essentially "begging" missions triggered by their country's extreme poverty, poor social infrastructures, inadequate basic social services, and attracted by the power of money in transforming highly developed nations.
McLaughlin and Davidson advance another dimension of foreign debt. They maintain that foreign debt is also "taking money and life from future generations, who will find their options severely limited as they are required to pay for the credit-spending binge of the current generation" (1994:326). Debt is "a symbol of the excessive and ever-growing desire for all types of goods and resources by people everywhere" without consideration to the ecological future of humanity.
Drastic changes need to be instituted to restructure our global monetary and financial system. If borrowing money is indeed unavoidable, one major aspect that needs to be looked at is the practice of charging interest rates on the use of money, which we all know today is getting extremely usurious. The other aspect is in the area of currency exchange rates, which in Asia has been erratic and unstable in the past few years.
According to the New Internationalist (April 1988), more than a quarter of the world's scientific research and development (R&D) budget is spent on defense and over half a million scientists are currently engaged in the development of new military weapons (UNESCO, Impact on Science on Society, No. 145, 1985).
U.S. spending on military research is soaring. In just 10 years it has gone from $13 billion to $47 billion per year. The Strategic Defense Initiative (Star Wars) research program alone costs $3.900 billion a year. This sum could provide primary school education for 1,4000 children in Latin America, that is more than the entire child population of Nicaragua.
One average nuclear weapon test costs $12 million - the equivalent of training 40,000 community health workers in the Third World (Ruth Leer Sivard, World Military and Social Expenditures, 1987-88).
Arms build-up is reflective of the people's culture of aggression, violence, fear, suspicion, and mistrust, manifesting itself nationally in terms of ethnic war, religious war, regional conflicts, boundary or cross-border conflicts. It is also expressed in corporate battles and war expressed aggressive spending, aggressive advertisement, and so on.
Arms build-up is also a reflection of the desire of nations for control of world power. On the micro level, it is expressed by citizens who are arming themselves for protection against terrorism, street violence, kidnapping, and robberies, which are increasing because of poverty and unemployment.
A culture of aggression and violence ignites the proliferation of security agencies, "goonstabularies," and the corresponding spread of illegal firearms. It broadens the knowledge and expertise in the production and manufacture of arms and nuclear weapons. Formerly, the skill for producing chemical weapons is a monopoly of the state (e.g. Russia). Today, unable to derive continued sustenance from the State, Russian scientists are making their expertise available even to individual terrorists. It is feared that the Third World War will be triggered not so much by today's ethnic conflicts as by individual terrorists who are now capable of sowing violence simultaneously in various strategic places of the globe---airports, electricity and power, media and communications, banks, military camps and arsenal.
The monetary economy is indeed a fertile breeding ground for the stockpiling of arms and nuclear/chemical weapons.
The Asian Crisis: 1997-98
The Asian financial crisis of 1997-1998 is a glaring demonstration of the inadequacy and weakness of today's global monetary system. Numerous studies on the Asian currency crises have pointed out common factors for the crisis (Ito, 1999:2):
1. Overvaluation of currencies
2. Too high short-term capital inflows
3. Too high foreign currency denominated borrowings among banks
Most analysts attribute the main cause of the Asian crisis to factors that are economic in nature. Much of the money in Asia comes from foreign inflows, which are affected by swings in exchange and interest rates. They are designed for short-term investments only and could immediately be pulled out of the market given the slightest disturbance. According to this view, the Asian economic crisis is a liquidity crisis, it is an acute crisis of lack of cash. If so, then, it stands as a concrete proof that there are some fundamental flaws to today's monetary and financial models.
Peter Drucker correctly observes that the Asian financial crisis is the result of "the emergence of the symbol of economy---capital movements, exchange rates, and credit flows---as the flywheel of the world economy, in place of the 'real economy'---the flow of goods and services" (1987:3).
Others, however, attribute non-economic causes to the financial crisis, e.g. weak political governance, the desire for quick cash inflows even if these are on a short-term basis only, social unrest, and the creditor's fear that they could not be repaid. The other causes include weak bank and non-bank supervision, mismanagement of foreign reserves, "crony capitalism," and weak corporate governance.
Causes and Effects
I HAVE TRIED TO VIEW the above global realities from the viewpoint of economics, politics, sociology, and culture. In some instances, the religious dimension has been raised. The discussions are summarized in tabular form on the last page of this lecture notes.
The religious dimension needs to be discussed and developed further. In addition, the perspectives of cosmic anthropology need also to be highlighted and integrated into each or some of the dimensions.
Nonetheless, from our limited discussion one can already detect that there is something wrong with the monetary system operating in the market. Today's models and theories only tend to widen the gap between the rich and the poor. Ramirez (1993:20) rightly points out that "there is anomaly in the money system," since "it has spawned organized greed, widening the gap between the rich and the poor, between the urban and rural areas, between the one-third world and the two-third world."
By quoting Dr. Ramirez, I am not alluding that money is the cause of all our sufferings today, or that money is the "root of all evil." What I want to point out is that there is indeed something wrong in the creation, use, and circulation of money. Specifically, there is control and distortion in allocating and appropriating money. Money has not been oriented towards man's total development. Worse, it has spawned the rise of values and attitudes that are personalistic, exploitative, and destructive to life and to our environment---the kind of values and attitudes which existing models of today's monetized economy have generated.
In general, the realities under today's monetary system have their structural and moral or ethical dimensions. To view realities from only one dimension is rather simplistic an approach and will not provide a holistic view of realities. After all, money is not only an economic medium. It is also a political, social, cultural, and even religious instrument.
THE WEAKNESSES AND LIMITATIONS of the underlying assumptions and beliefs of today's monetary models and theories need to be unmasked and discarded in favor of new paradigms that truly respond to the full and total development of each and every man.
There are important non-quantifiable issues that do not enter into the existing monetary models. The importance that monetarists give on the economic dimension of money seems to be an over-simplification of the multi-dimensional faces of money. Davies (1996:xvii) in fact says, "economists, especially monetarists, tend to overestimate the purely economic, narrow and technical functions of money and have placed insufficient emphasis on its wider social, institutional, and psychological aspects."
For the Next Lecture
For the next lecture, we will be discussing mediated economy in the context of a globalizing world. Globalization is today spreading like wildfire across countries all over the world undertaking transactions
For their own benefit, the students are encouraged to read one article under the List of Readings in Lecture 5 of the syllabus and to respond to the following questions:
1. What is the purpose of the author in writing the article?
2. Summarize the substantial issues discussed in the article?
3. Give your own insights, reactions, or reflections from your reading of the article?