Economics is all about:
1. Products!
2. People who produce &
consume
3. People who distribute.
Economics Basics that every citizen should know
Everything Grows with time.
So did the Economics.
Economy grew from the time before stone age
to the present space age.
The changes are inevitable in life. The changes
have both advantages and disadvantages, Some
critical moments in history when the economy
changed course that brought both good and bad
to the society. These moments are described
in the following pages under the following
heading.
(1) Economic activity level 0
(2). Economic activity level 1.
(3). Economic activity Level 2:
(4) Governments came into existence.
(5). Money was a great help:
(6). Entry of Paper money.
These are described in small detail in the
following pages.
1. Anatomy of Economics
1. Economic activity level 0:
The people lived in forest, Lived among trees,
birds and animals,
Economics Basics that every citizen should know
Thank god, there was no economists or leaders,
among them. So, there were no economic
activity.
They produced their own needs by hunting the
animals, fruits that grew naturally and shared at
best, among a smaller group of people, say, the
wife, children and may be a few others.
When they turned to agriculture and formed
societies they produced several goods and
services and shared them with larger population
in the society.
2. Economic activity level 1.
As per the school text books on economics, this
1. Anatomy of Economics
is called the barter system.
Producers exchange their products among
themselves, within a small society.
They exchanged service for product and also
one Service for another,
3. Economic activity Level 2:
The next change was the trading of products
between producers across a larger population
in the same society.
While a large population took-up the task of
producing, a few adventurous, risk taking
people took to distribution. They were know as
traders. They transported the products to long
distances, amidst attack from bandits along
the way.
If you desire to understand the extent of risk
and problem from dacoits, you might down
Economics Basics that every citizen should know
load the following ebook for free, and read:
The traders exchanged products with people
spread across far and wide in the society.
Invariably the merchants in large number went
in a caravan.
They faced severe threat to both their lives and
merchandise. They waylaid and looted by armed
bandits.
http://www.free-ebooks.net/ebook/Rebirth-of-
Ahimsika
One can understand the plight of merchants of
the early society from the above book.
Today’s merchants must be a happy lot!
1. Anatomy of Economics
4. Governments came into
existence.
When the societies in the globe became larger,
there were inequalities among them.
As discussed earlier societies who could not
prosper by efforts found invading, the successful
societies and robbing them as an easy option.
The affluent societies were divided while invaders
were less divided among themselves.
The societies formed teams of Governance to
tackle the menace of attack from other societies.
Economics Basics that every citizen should know
That was the reason People created monsters,
called the rulers to save themselves from
invaders.
More knowledgeable among among the producers
/ distributors took to ruling. They expanded the
scope of their role, slowly and steadily. They
collected taxes to meet the common expenses.
Crated infrastructure for the free and fast flow of
goods across the society,
Rulers VS Intruders!
Some of the People created monsters called
the rulers, proved disaster for the society. They
reportedly betrayed the faith of people in them
and misused and abused the nation’s wealth.
Invader sees an opportunity
The invaders with a slightly higher knowledge
than the rulers attacked and snatched the power
control from rulers, with their fire power. The
rulers from the same soil were no match to the
invaders from all over the world.
The new invaders and old bad rulers were
no different.
The only consolation was that, the ruler hail
from within their own society and wealth though
misused, remained within the country. Where
as, the invaders were from alien land with a
different identity and they stashed the nation’s
wealth away.
Some wise men among our ancestors thought of
0
1. Anatomy of Economics
Democracy as a solution as both invaders and
rulers proved diabolic.
Here, the people are allowed to either renew
the authority given to a few to take care of their
affairs or to a new set of people.
The wise men did not think, “What if both old
and new were equally bad”.
A new class of demons, were created, called
leaders in democratic societies.
The wealth created by a society forms the power
of a society. That power is offered to a chosen
few, the leaders, in a silver platter.
The wise men defined democracy as :
The Government
For the people,
Of the people and
By the People.
The bad leaders acted in a way the definition
would stand changed such as this:
The Government
FAR the people
Off the people
Buy the mandate of common man.
The worst still, the new class of rulers created
and controlled every aspect of life such as law
makers, justice system and law enforcers.
0
Economics Basics that every citizen should know
Slowly and steadily the leaders followed the
processes and practices of the Aggressors.
The new rulers perpetuated themselves as a
separate class.
By and large the ruling class succeeded in
wriggling out of the control of Common man who
created them.
Even though the rulers were out numbered by
the common man, rulers had a firm grip on the
large population with the deployment of the
tools used by invaders.
They divided the people on Caste, communal,
linguistic, ethnic and every other conceivable
ways.
5. Money was a great help:
There was a hitch in barter system, practiced by
the early socieites.
The one who want to exchange his product, say
1. Anatomy of Economics
“Wheat” against say, sugar, he needs to find
another person who produces sugar and also
seeking to buy wheat and nothing else.
This makes the search for right match between
two producers longer and painful.
The kings found the solution. Kings who ruled
societies centuries ago produced Money with
precious metals like Gold and silver.
The money with precious metal help exchanging
goods for money. This speeded-up exchange of
goods.
6. Entry of Paper money.
Invariably every advantage has a disadvantage
accompanying it.
Entry of paper money - like gold/silver coins, was
helpful in smooth exchange oof goods or service.
But it brought a disaster with it.
Economics Basics that every citizen should know
Chinese did it first
Paper bills were first used by the Chinese,
who started carrying folding money during
the Tang Dynasty (A.D. 618-907) — mostly
in the form of privately issued bills of credit
or exchange notes — and used it for more
than 500 years before the practice began to
catch on in Europe in the 17th century.
History tells that Chinese invented paper
currency.
This, perhaps solved problems caused by
insufficient Gold-Silver in proportion to increasing
trade demand.
But, for sure, provided necessary ammunition
for the start of the economic disaster.
We will discuss the second and further disasters
triggered by the Paper Money in the following
chapters.
7. Capitalism.
The people in the society who do not seek
employment.
• They have varying extent of Right knowledge
than the common man and leaders.
• They run enterprises engaged in trading,
manufacturing, financial, health care,
automobile workshops in small villages to
1. Anatomy of Economics
multi-location an- multi product companies.
• They contribute to wealth generation in any
society,
• The Capitalist do not produce Primary
Products.
• Their main strength is Money. They mix
labour, technology and machines with money
as investment and produce Secondary
Products and services. Their input is money
and output is money.
• The production and sale of secondary products
are less risky, highly profitable compared
to profit from making Primary Products and
services.
• As small scale Industrialists, they are the
largest employers in any society.
• They do not harm the common man indulging
in fraudulent business practices.
8. Crony Capitalism
Economics Basics that every citizen should know
After invaders left the soil the Leaders assumed
the role of invaders. Sadly, the invaders left
behind their mind-set which the leaders and
elite of free nations inherited.
One wrong step!
New rulers of the erstwhile colonies not only
inherited Invader’s mind-set but also the entire
governance processes. This include economic
policies, practices, law & justice system.
But took one of the inappropriate step. They
created the Crony Capitalists, from among the
capitalist in line with the Zamindars created by
Invaders.
Zamindars: The invaders hand-picked some
loyalist from among the people of the society. The
land was distributed among them and declared
the owners of the land by the invaders (Zamin =
land) Zamindars.
1. Anatomy of Economics
The Zamindars helped invaders to creating
wealth from the land using the common man as
labour working for wages.
Crony Capitalist: The ruling class followed
invaders in creating Crony Capitalist. They
identified their loyalist from among the class
Capitalist. This small group among capitalist can
be thought of having more wrong knowledge
than the rest of their class.
They can be described as Capitalist without
any capital of their own. They were provided
caby the leaders from public wealth (through
Financial systems - Banks).
Just as most of the leaders created by the
people outsmarted their creators and became
their detractors, the Crony Capitalist, control
the entire class of Leaders, as though they are
the masters.
(1) They exploit their vicinity to leaders to their
advantage.
(2) Produce either monopoly goods charging
exorbitant profits.
(3) They take the wealth out of the countries to
other economies both legally and illegally.
(4) They corner tnd he nation’s wealth a major
contributor to the poverty of a society.
(5) Produce Pseudo Products & Services. The
pseudo wealth is
(a) redundant to any society
Economics Basics that every citizen should know
(b) Value and survival depends entirely of the
real wealth.
(c) results in inflation (weakening of money)
and
(d) leads to poverty and deprivation.
Just like Leaders wrested the control of wealth
generated by the people who created them,
Capitalists made the Leaders subservient to
them.
Said in another way, the Crony Capitalists are
Monsters created by leaders.
To day, the third world countries are ruled by
Crony Capitalists through the leaders.
They change the governments by funding
differently.
Leaders of most nations do not have a say in
the economic issues in their country.
9. Global capitalism.
This is what was claimed by proponents of
Globalisation about Globalisation:
1. Anatomy of Economics
Economic globalization
is the increasing economic integra-
tion and interdependence of national,
regional and local economies across
the world through an intensification
of cross-border movement of goods,
services, technologies, and capital
An anecdote to exemplify, the folly of political
leaders and economists who lead India to an
economic disaster called Globalisation, two and
a half decades ago.
Think of the opposite!
George Bernard Shaw shows the way, how!
George Bernard Shaw was once approached
by a seductive young actress who cooed him
in his ear:- ‘Wouldn’t it be wonderful if we got
married and had a child with my beauty and your
brains?’ George Bernard Shaw who was hardly a
handsome man replied: ‘My dear, that would be
wonderful indeed, but what if our child had my
beauty and your brains?’ The actress who did
not need much persuasion just sped off.
If Globalisation was thought of as an ambition
(instead of being termed foolishness) to achieve
great economic goals, then the following proverb
will fit in.
Economics Basics that every citizen should know
The Disaster that struck the world!
Its name is Globalisation!
CHINESE SAYING.
He who opens his heart to ambition
closes it to peace.
In 1990s the governments woke up to a new
slogan. The Globalisation!
Many did not understand or realize the
consequences of adopting it. Those who
understood were not listened to by leaders who
were authorised to act.
Who benefited by Globalisation?
There is nothing in nature that benefit every
one equally. Benefit is relative and not absolute.
When some one gains there are the others who
loose.
There are people with donkey-dominant-
mind. in a society. The same way, there are
Donkey Dominant societies in the world.
Normally the Donkey dominant Societies in the
world and donkeys in donkey societies are
the worst losers!
Today, the world economy is reeling under
Globalisation where the global economists run
riots.
The demons that dance
0
1. Anatomy of Economics
The two types of demons: They are the Bad
leaders & Global capitalists in every society.
They are responsible for the derailment of the
economy, in their society
We will be discussing all about the .demons and
their dance in the next book in this series of
three books.
ECONOMICS & POVERTY
Year after year there, are newer scientific
discoveries and technological advancements
that has lead to larger and faster production of
goods and services. But, yet there is increased
poverty, deprivation all over the world. WHY?
The economic theories have evolved on the
following:
1. Deals with Profit maximizing in wealth
generation activity which is the end point of
the economic activity.
2. People, an important component and their
their well being is determined by wealth share.
The poverty is high in countries where there is no
wealth share both in economic theory followed
and political activity practiced.
Why do the Invaders & Leaders
Exploit the common mon, the poor?
Because, the Mind of Man is an
Animal farm!
0
Economics Basics that every citizen should know
1. Animal mind-set: in human, Making the
weaker their food.
2. Hunt for wealth: Every person looks for a
large number of material wealth & services for
a happy, comfortable and safe living. Stronger
deprives the weaker.
3. Poor Learning & thinking abilities:
The nature has produced people with varying
extent of abilities to be able acquire the Material
and services.
Those with higher abilities are successful in
grabbing larger chunk of the wealth produced in
a country. .
The poor are poor because the others in the
society with higher ability grab the most and leave
very little for their survival and not comfort.
Why do they not share the wealth?
The jungle law prevails in the forest. The
mightiest animal rule the rest. There it is the
power to attack and kill.
In the world of humans,, it is the knowledge,
the ability to learn & think is the power. We are
no different from animals, Perhaps each one of
us is a complex Animal Farm, with several animal
minds.
The poor will not be exploited and get the fair
share of the societies wealth only when they
develop the abilities to Learn & think.
1. Anatomy of Economics
The mind-of- Man an Animal farm
The Fox-Dominant-mind-set, of humans are
successful in reaching the positions of political
power, in modern societies.
They secure their power and position by building
a hand-picked Lion-Dominant-Minded, among
capitalist as their “Money Bank.” The nation’s
wealth is allowed to be siphoned by them in
covert and overt ways. A small share of them is
thrown back among the Fox-minded leaders
to run their political system.
Invaders had Zamindars and leaders have
Crony Capitalists for this purpose.
Common man who outnumber the ruling class
by several order of times did not have sufficient
knowledge to hold their control over the wealth
that he produced.
Instead , the ruling class, the monsters created
by common man controlled both the producers
of real goods & services and also the wealth they
produced.
Thinking disabled are vulnerable in the society.
Invaders taught the rulers, the technique of
dividing people and engaging against each other
as an easy way to rule common man.
Emotive issues like language, Caste, Religion is
good enough to keep people fighting between
them. This would keep leaders come handy to
keeping the attention of common man away
Economics Basics that every citizen should know
from what the leaders do!.
Ethnicity, Caste & Religion, language, based
riots take place all over the country, one can
safely conclude that all these are engineered by
Leaders of every hue in the society.