Perfman HR: Does Printing More Notes Make a Country Rich?

This is a question that often haunts the common man

. Why doesn't our country print more notes and all would be well! Lets understand this through a fundamental truth. There is a common fallacy in the thinking of human beings that resources and capital are finite resources that will one day run out of stock. Most of us go through life truly living this thought whereas the truth remains that Resources and Money are the products of human will and creativity and imagination which are virtually limitless and never-ending. If you harbour the above delusion, worry not you are not alone in this presumption which has been one of man's oldest delusions. From the earliest days, land was money and then there was gold which was thought to be wealth and after oil was discovered, it was hailed as the game-changer when it came to describing riches. But here's the truth - in reality there is indeed no such thing as a natural resource, except for the mind of man. Thanks to the theories of economists and thinkers down the ages, we seem to believe that substance is of more importance than minds, while in fact the opposite is true. Let's prove this statement by the following analogy: as of today, Israel has a per capita GDP of $27,651.80. Compare this to Saudi Arabia's $19,021.60. Taiwan, Hong Kong and Singapore have no natural resources to speak of yet they all have a higher standard of living than India or Russia, both countries that are rich in natural resources.

Also the fact remains that scarcity does not explain wealth. If so, then my grandfather's love letters to my grandmother would be worth at least the price of a year's EMI's on my car!

Money is not wealth per se but rather how citizens of a country move it around. Money just helps smooth the progress of transactions. Thanks to Money, a dentist doesn't need to waste time hunting around for a barber that needs a dental job at the same time that he needs a haircut! Which brings us to the moot point that Real Wealth is represented by the goods and services that Money can buy. If this were not so, any country could achieve wealth simply by printing more pieces of money! Hoarding Gold or other precious metals is not a substitute for Real Wealth in an economy. India which has the one of the largest supply of gold in the World would have been a developed country by now which is not the case - though we are getting there.

One last thought A hundred years ago, it was not uncommon for people to die prematurely from even something as nonchalant as an infected boil. Even a rich zamindar who would have probably been endowed with the best medical attention that his money could buy, would not have access to antibiotics that today could be purchased from a pharmacy just around the corner for a hundred rupees! So would you rather have Mukesh Ambani's wealth and income in today's world with its abundance of goods and services or during the time of our wealthy zamindars?

Atin Dasgupta is director and founder of Perfman HR. Indian Executive Search Company Perfman HR is headquartered in Mumbai.

Perfman HR: Does Printing More Notes Make a Country Rich?

By: babloo

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