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   Paper Promises: Money, Debt and the New World Order
Reviewed by Sudhirendar Sharma
31 Dec 2012
oney has not been able to deliver on its promise. Ever since its link to gold was severed in 1971, paper money has been created at will or decree. It is therefore a claim on someone else, whether a bank or a government. Modern money is debt and debt is money. From unsuspecting individuals to national governments and from financial institutions to commercial banks, everyone seems to be under severe debt. While our parents still consider holding debt akin to sin, for individuals and governments it is a basic fact of modern life. Simply put, spending more than what has been earned is more of a norm than exception.

How long will this trend continue? Philip Coggan argues that economic history has been a never-ending battle between borrowers and lenders. Ironically, it is the borrowers who have always won out in the end. Indeed that is the case as total global debt, held by governments, corporations and individuals has reached a whopping $190 trillion at the end of 2010 - more than 3.5 times the size of the total global economy. The trouble is, proposed solution to the issue of debt comes with side effects: devalued currency, trade barriers, and the risk of countries being reduced to a barter economy. No surprise, therefore, that leading banks and governments are back to building ‘gold’ reserve as an asset to fall back upon. Seems the world is returning to its reliance on gold.

One may not be a student of economics to read Philip Coggan's illuminating account of the history of financial crises. There is nothing about money that cannot be understood by the person of reasonable curiosity, diligence and intelligence. Largest creditors have set the rules of the global economic game in the past. If it was Britain and the USA in the past, speculation is rife that it may well be China designing the new monetary system in near future. Spread over thirteen chapters, the book provides comprehensive understanding on money, its rapidly changing nature and the bubble economy it nurtures.

Paper Promises is informative, thought-provoking and engaging. This is one book that deserves to be read because we are all victim of the financial system of which we are an integral part but seem to know woefully little about it.

Paper Promises: Money, Debt and the New World Order
by Philip Coggan
Penguin Books, UK
302 pages, UKŁ 10.

 Other books reviewed by Dr Sudhirendar Sharma
Features > Book Shelf
Spoiling Tibet
Posting Date: 28 Feb 2014

A Journey in the Future of Water
Posting Date: 28 Feb 2014

Yamuna Manifesto
Posting Date: 28 Feb 2014

Corruption Watch

The bad news is that corruption has not only sustained but has grown in size and stature in the country. With scams being a regular feature, seventy per cent respondents in a survey have rightfully opined that corruption has continued to increase in India. One in every two interviewed admit having paid a bribe for availing public services during last one year. Transparency International's latest survey reveals that the political parties top the chart for the most corrupt public institutions, followed by police force and legislatures. No wonder, India continues to make new records on the global corruption arena!

The shocking revelation is that the health and education sectors haven't remained untouched by this phenomenon. With 5th and 6th positions respectively for these sectors on the public perception chart on corruption, corruption has crept insidiously into these sectors of hope for the masses. With bureaucracy being fourth in the list of corrupt institutions in the country, corruption seems to have been non-formally institutionalized with little hope if public services would ever be effective in the country. With economic growth having literally institutionalized corruption, are we now expecting corrupt to be socially responsible - a different CSR.

Poor. Who?

Not giving 'aid' to India is one thing but calling it 'rich' is quite another. If one in three of the world's malnourished children live in India, what does average daily income of $3 indicate? It perhaps means that there is a relative decline in poverty - people are 'less poor' than what they used to be in the past. But having crossed the World Bank arbitrary threshold of $2 a day does not absolve the 'developed' countries of their obligation to part with 0.7 per cent of their Gross National Income in development aid. Should this three-decade old figure not be revised?  

An interesting debate in UK's House of Commons delved on future of development assistance by the British Government. While prioritizing limited resources has been a concern, there has been no denying the fact that development aid must be guided towards tangible gains over a short period of time to start with. There are difficult choices for elected governments to make - should they invest in long-term primary education or in short-term university scholarships? Which of these will bring gains and trigger long-term transformation in the society. As politicians continue to be divided on the matter, poverty persists!!   

Lead View
People, Partition and the Pain
By Rina Mukherji
15 Aug 2013

Dr Jayanti Basu's book analyzes the complex feelings of hatred and longing for the homeland that have contributed to shaping the personalities of a generation of people who were forced to ..
Book Shelf

Yamuna Manifesto

A Journey in the Future of Water

Spoiling Tibet

On Western Terrorism
Devinder Sharma
Carmen Miranda
Pandurang Hegde
Sudhirendar Sharma
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