677. Creation of Wealth

Alleviation of poverty is a major theme for India. Addressing an international conference in Rio de Janeiro, Indira who was speaking on pollution, said poverty is the greatest polluter. The government has initiated dozens of programmes towards that end. For a long time it was true that Indian poverty defied such efforts. Now, it is equally true that Prosperity is seen in substantial measure. What is happening? If people are better fed, better clothed, from where do such resources come? Shops, two wheelers, cars, and houses rise in number. In thirty years wages rose from Rs. 1 to Rs. 100/-. House plots have risen from Rs. 2000/- to Rs. 200,000/-. The cost of plots rises by competition, is the answer. Still, someone pays for it. How is this wealth created? I do not know whether economists have answered this question. We see we pay more while people have more and more of comforts.

A nation becomes prosperous when the fields produce more grains and factories produce more products. Indian food grain production has risen four-fold, but how did wages rise a hundred-fold? It is true factories are there everywhere and produce more goods. Who invested in them? Banks and governments have given the capital is no answer, because from where did they get the money? Foreign Aid brought in money will also not answer the question, as we know how much has come in. In 1985 the Five Year Plan investments in total came to 75 paisa per man per day. A thousand times more money is in circulation. It will be helpful if we know the source. There are several possible answers to this question. I wish to address one of them. As it is completely theoretical, it is difficult to present it convincingly.

A plot rises in value when more people are competing to buy it. The worker is paid more as more people want his services. But this cannot be given as an answer since there is increasing unemployment. Man, who lived on one meal, now wants more meals, education, entertainment, etc. So, we pay more is an answer. Where do we get our money? As plots rise in value, money too can rise in value. The value of MAN is wealth. Man is certainly more valuable today. It is awakening. So, it has created more money and greater wealth is the answer. If so, how is that produced? Money is goods. So also, money is TRUST. Today values of life are deteriorating on one side. On the other side, banks recover over 90%, perhaps 93% of consumer loans. Money was created as a medium of exchange. It has always represented Man's Trust in currency and the government. That trust is, on the balance, more today. Hence there is more money in circulation. This answer is vague. Individually, one can see that NOW he who is optimistic is better off. He who avails of confidence-raising schemes is better off as he rises with the rising confidence of the nation. All those who have risen meteorically are people whose work is trusted. One way of becoming prosperous is to raise that level of trust in our lives.