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After Pankaj Mishra NYT op-ed to the effect that Trump owes nex to
everything to Narendra Modi, the 'West' now awakes to the realisation
that yet again India, in its metastasis as a sub-continent scale Bihar,
is at the forefront, and far from living in the past, is showing us
('Westerners') the way to a doubtlessly shining future.
Cheers from Amsterdam, p+5D!
(must still have one or two 'high denomination notes' stashed away
Telegram from Bologna: Towards a Monetary Holocaust?
By Franco Berardi, November 30 2016 / Text written as a remote
contribution to MoneyLab #3 Conference (Dec. 1/2,
In a booklet published in 2014 with the title Capitalism a ghost
story Arundathy Roy tells some interesting stories about the
of India in the neoliberal age: "When those who had been evicted went
back where they came from, they found their villages had disappeared
under great dams and dusty quarries. Their homes were occupied by
hunger and policemen. People returned to live on city streets and
pavements, n hovels on dusty construction sites, wondering which
of this huge country was meant for them... In the drive to beautify
Delhi fro commonwealth games, laws were passed that made the poor
vanish, like laundry stains. Street vendors disappeared, rickshaw
pullers lost their licenses, small sops and businesses were shut
Beggars were rounded up tried by mobile magistrates in mobile courts,
and dropped outride the city limits. The slum that remained were
screened off, with vinyl billboards that said DELHIciously yours."
In the `90s the capitalist globalisation promised to pave the way to
future of prosperity for everybody, or at least for the majority of
Then it became clear that the universal mobilisation of the energy of
labor was not leading to prosperity for the majority, but only to
enrichment for a small minority, a life of precarious exploitation
many, and marginalisation for the rest. Now globalisation is rolling
back, stagnation is the likely prospect for the near future. So what
going to happen? What is the destiny of that 50% of the world
population who have received nothing of the advantages of
globalisation, but are now exposed to the effects of environmental
devastation and social impoverishment that the current stagnation is
going to provoke?
The year 2016 has been marked by the sudden awareness that the
of neoliberal globalisation is failing, and is showing the emergence
a new alliance of neo-liberal extremism and conservative nationalism.
The worst of two worlds that once upon a time appeared in opposition:
anti-global reaction and simultaneously acceleration of the most
destructive tendencies of the market.
Norendra Modi, a hindu nationalist and a neoliberal extremist, is the
Premier of India, a country of 1.2 billion humans. Modi, who makes
of this new brand of nazi market-worshippers who are winning the
elections in many countries of the world, few days ago started an
experiment that sounds as a turning point in the history of the world
economy. It is called demonetisation but it may result into a great
leap forward in the process of digitalisation of money.
Steps towards the digitalisation of money have been taken in the last
decades, (credit cards, digital payments...) but so far the economy
the countries of the world has been integrating physical money and
online money, so allowing the survival of those people who are unable
to deal with the digital technology. No more. The move of Modi seems
be intended to accelerate the pace of digitalisation in a country
where, notwithstanding the expansion of IT technology in the last ten
years, the digital divide still excludes a majority of the population
from the possibility of entering the online economy. A wide part of
population is going to be pushed out of the economy like those poor
people hidden by the DEHLIciously yours billboards that Arundathi Roy
is talking about.
Are we witnessing the first glimpses of the expulsion of half of the
planetary population from the cycle of economic exchange? Is this the
beginning of a sort of economic extermination? Is this the hidden
mission of the dawning Trump-age?
Actually the reasons that Modi has put forward to motivate his act of
demonetisation seem quite weak: he speaks of a move against tax
and financial criminality, but in fact he is hitting hard on the
average people, whilst tax evaders are notoriously investing their
money abroad, and do not go around with packs of small banknotes.
"This is like curse of God on us," said Gian Prakash Gupta, 60, a
soft-spoken paper wholesaler "We do not know how to use computers,
to do online transactions, how to use card-swiping machines." The
business of traders like Mr. Gupta, whose operations lie partly in
vast informal economy that makes up around 20 percent of India's
domestic product and more than 80 percent of its employment, has been
virtually paralyzed since Nov. 8, when Prime Minister Narendra Modi
announced a surprise ban on the country's two largest currency notes,
the 500-rupee bill (worth about $7.30) and the 1,000-rupee
bill." (Geeta Anand, Hari Kumar: NYT 29 november 2016).
Some of the comments in the Indian press, particularly in the
newspapers that represent the pro-financial circles are joyful: India
will enormously accelerate the race of growth. How so? getting rid of
the dead weight, the majority of the population that is unable to
at the rhythm, pushing them out of the economic circuit, throwing
down from the racing train.
"The problem for many is they do not know how to do without cash. In
the Chawri Bazar, generations of traders have bought and sold paper,
from wedding cards to calendars to packing material, mostly in cash.
Their customers paid cash, and they used it to pay their suppliers
workers."(Geeta Anand Hari Kumar: NYT 29 november 2016)
From the point of view of economic history the move of Modi seems
inexplicable. It is not the first time that demonetisation is
experimented: in November 1923, the German government introduced a
currency -- the rentenmark -- and declared all old reichsmark notes
be no longer legal tender, as domestic prices, already 14 times their
1913 levels in mid-1921 and 1,475 times towards end-1922, had
skyrocketed to 1,422,900,000,000 times by November next year.
As the currency lost value by the minute, people rushed to spend
wages the very moment they received them, fuelling further inflation.
The only way to deal with this situation was demonetisation: purging
the system of all existing notes and launching a new currency backed
solid assets -- in this case, land belonging to the state. With
credibility restored, inflation fell and the run on the currency,
On January 1, 1998 Boris Yeltsin changed the name of Russian
with a `new' rouble being made equal to 1,000 `old' roubles. with the
intention of addressing rampant inflation. But the `new' rouble's
exchange rate, which was 5.96 to the dollar on January 1, collapsed
20.65 when the year ended, with consumer price inflation also soaring
The Narendra Modi demonetisation of Rs 500 and Rs 1,000
banknotes -- constituting over 86% of the total value of currency in
circulation -- hasn't been undertaken in response to any
or loss of confidence in the rupee. The rupee has actually been quite
strong and annual consumer price inflation was just 4.2% in October.
That implies that the Modi demonetisation does not follow the
conventional logic of a currency `stabilisation' measure, but is
a `structural reform', targeted at fostering cashless economy.
The present demonetisation triggers spurt in digital payments paving
the way for India towards cashless economy.
The demonetisation which initially paralysed the economy is now
as a catalyst towards digital payment ecosystem. This seems to be the
beginning of an economic transition. Indian newspapers relate that
payment processing companies are overloaded and are racing the devil
accommodate the immense spike in traffic. But in India, most economic
transactions take place in cash outside recorded market channels and
hence go largely untaxed. This is fostering a parallel `black'
but this allows the majority of Indian population to survive. The
brutal transformation of the currency system has already provoked
panic, and casualties, but in the long run it may pave the way to a
radical redrawing of the monetary field in the direction of radical
digitalisation, and consequently to the expulsion of a majority of
society. The digital divide may be turned into a tool for the
elimination of the "non competitive" section of the human kind. Modi
came to the fore fifteen years ago as responsible of the
of more than thousand Muslims in the city of Ayodhya. Now his
are more ambitious, and he seems aimed to become the vanguard of a
possible monetary Holocaust.
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