The Demonetization Derby

It is tough on us bloggers. If you ignore current happenings, especially when they are on top of everyone's mind, you are not being socially conscious. If you do write on them, you are hungry to ride the current fad. Hitherto I have done the former and been the chap who is utterly self-centered. This once, maybe, I should try the other one and ride my horse into the demonetization derby, alongside all those other opinions. The advantage is that there is this serious possibility that the one side that I decide to favor would share the post and the other side with all sorts of name-calling will make it go viral. (Yes! Negative publicity IS the best publicity on social media)

Unfortunately, though, I am a middle-of-the-roader - a vanishing species that still believes that one should make up your mind on an action based on the merits of the action and not based on who is doing it. Once upon a time, it was called a neutral view and lauded for its impartiality. NOW it is mere fence-sitting causing that unpleasant feeling in the crotch. The problem is that to assess any action on its merits you need to get neutral information and THAT is rarer than a unicorn's horn.

I cannot even make up my mind entirely on whether demonetization is good or bad. It is easy to dress up a thing as being necessary for things like fighting corruption or terrorism and get people to feel good about it. It is as easy to oppose it, since no action is a magic wand that will make problems go away, and, thus, there is enough scope to attack it on the basis of those portions of a problem that it will not tackle.

I see these views about how it did not work before - in 1978, most recently - and I think 'Hey! It is a bad move. Why don't people learn from History?' Then I remember that, in 1978, there really was no IT sector and no means of really tracking who exchanged how much, at least to the extent of identifying who is worth pursuing with raids and who is not. Now, since such tracking is possible, the lessons of History are not all that clear. AND no-one tells me exactly WHY it will not work NOW or, indeed, HOW they will make it work.

I see views about how black money is mainly stashed in Real Estate, Gold and foreign accounts. Sounds rather stupid to be attacking it with demonetizing currency notes. But if someone HAS bought Real Estate and Gold with cash, then THAT cash would still be lying around somewhere - with that seller, perhaps. I mean, I do know that the recipients COULD have brought it back into the so-called 'White Economy' but could they have brought it ALL back? Maybe they could, maybe not, but no-one is really telling me about that. No-one is really claiming that ALL the cash transactions currently happening are NOT the so-called 'black economy' transactions and no-one is also making ANY legitimate statement of HOW much of that cash would BE unclaimed because it IS black. AND no-one is also saying how likely is it that the people from WHOM this real estate WAS/IS bought by the big sharks would willingly deal in cash going forth - after all, not ALL of them are seasoned black money operators. OR what would be in place to track gold sales/purchases going forth.

Everyone talks about Hawala transactions as a modus operandi for getting money in and out of the country and claim that the big sharks would not be holding cash. But, exactly how much money do the Hawala dealers actually have to keep for operational requirements in order to do these transactions? No-one speaks about that or about what would happen to that money, now. The Hawala dealers will now approach a super-Hawala dealer or what?

But, really, it HAS got to be a political conspiracy since this move has served to destroy the campaign money of opposition parties. But...tell me, please, HOW much money has it destroyed? I mean, yes it is political and all that, but THAT money would still count as black money, would it not? If it can somehow be converted, please let me know how and how much is practically possible, and not things like 'They will find a way somehow' which any idiot can say, while sitting in a tea-shop, to his cronies. I don't need an 'expert' opinion in order to get THAT piece of wisdom.

It is quite possible that ALL this money would amount to a pittance and hardly worth the trouble. AND, even where there ARE benefits of a move, it has to be set off against the costs of the move. AND the costs - financial, social and economic - can be very high. The pain of transition is something everyone IS facing now, some far more than others, obviously. But where is any neutral stance on whether the transition is worth it? I do know that it probably is not ALL good but, unfortunately, any opposing view portrays it as ALL bad and THAT is not something that I can accept either.

If someone would ADMIT to the good AND the bad, weigh both without being dismissive about either side of the coin, then I may be able to believe him. Unfortunately, even where someone is willing to admit the good (or the bad) it is on the lines of 'Yes, this may happen but...' You can dismiss anything that way. I mean I could say, "Yes, studying at IIT may give you a great job and prospects but imagine having to spend almost all the year away from home for four years, facing the pressures of a competitive academic environment etc etc" and make it sound like it is totally worthless to do it...to those who know not much about it. AND, of course, do it in the reverse, "Yes, you may have to starve for a few months but at the end of it you will be a millionaire." AND ALL opinions are patterned after this sort of one-sided crap, if not outright ignoring anything that is seen to favor the 'other side'.

The issue is that there is NO way of assessing the benefits and the costs, from any of the current reports/opinions. Rhetoric is merely mud-slinging unless when backed by facts; and, in cases of finance, facts are important only based on numbers. Every move has its pros and cons. Thus the mere existence of the cons cannot create the idea of the inadvisability of a move AND, of course, the mere existence of the pros does not make a move advisable. Any opinion on any action can only be made by weighing the pros against the cons and 'weighing' implies that you need to be able to put numbers to them.

Otherwise, it is like that hoary old question in probabilities - "The fan above your head can fall or not fall. Considering the risk, how can you sit beneath the fan?" The risk, in this case, is in the probability of the fan falling - which would be less than one-in-a-million, say. The question, though, asks you to implicitly assume that it is 50:50.

THAT about sums up the way people, on all sides of a debate with no exceptions, seem to discuss anything these days. Which is what makes the middle-of-the-roader throw up his hands, take up gardening, and leave all these socially relevant write-ups to other hands.