Sunday, 18 May 2014

Economy is not about money, it is about people

History of modern economy started from invisible hand concept by Adam Smith during 17 century. Market force was recognized as the major factor that dictate a market growth or otherwise. As economy structure become more complex, invention of trade mechanism was introduced such as the concept of money. Money concept made economy growth faster, as it made trading more convenient , save and efficient. History shown allocation of money will ultimately decide the trend of economy growth. at least at its facet. 

Understanding economy events from recorded history scripts, logs and books, modern economic pundits unanimously concluded, monetary policies is what economy subject all about. Stimulation, spending, debts, export and import are all monetary. 20 Century economic figure such as John Maynard Keynes and Milton Friedman agreed on regulating economy can be done through regulating the monetary supply. From creation of IMF during 1944 at Bretton wood to abolishment of gold standard on 1971 by Nixon; it made monetary system controllable by America (since US dollar is International Nominated currency). Monetary Valves (such as interest rate, discount rate, government bonds) were installed through out financial institution around the world to regulate the monetary supply. However, economist might been chasing the wrong shadow.

From the perspective of fundamental on economy, it should be always and will be about people. Economy term itself is come from greek means household management which mean again people. People is the one who buying and selling. People is what supply demand came from. And in fact, in all of economical revolution from agrarian economy to industrialization to today information boom economy are driven by innovation of people, not money. Money is nothing mere than a medium of convenient exchange. It is a economy apparatus. It does not induce or cause people to spend. Imagine if million dollar is given to every each of us, but if there is no goods nor services to be purchased, the million dollars mean nothing. Money is good incentive to encourage people to do what they did for the economy for the pass 500 years and so, but was never the root of economy itself.

Economy should be subject of psychology. Ultimately a given nation economy condition is very much depend on psychological wealth of its people. If a nation fill good citizens who possess strong psychological strength, oftenly, the nation wealth grow exponentially. Innovation, creativity and perseverance are the result of psychological aspect. Money in fact was never the best motivator. All great man never look for money, they look for a vision. However, vision is never in the equation of modern economy structure. 

Vision is something we envision for better goods for all. Alleviation of  standard of living, social status, social development all involve humane aspect of vision. Monetary wealth incentive had since accidentally increase our technological breakthrough for the pass 500 years, however, it hinder any form of social development. When you see there are nations (developed countries) of citizens who enjoy lifestyle of King could never experienced before 500 years today, while billion of poor nation (under developed countries) country people cant even has proper access to basic needs (such as water, sanitation and food), the common sense should had tell us that the current economy system is ill. The saddest part, social development today even measured by how much money you had or you have. Modern society population are always ignorance against the current real situation especially when they are in comfortable life. Such trend will eventually make human social structure self destructive. 

The good news is today, many of us have a better freedom to express our concern. There are plenty of channel enable use to share our thought appropriately. By collective informative empowerment at the right magnitude and attitude, we all be able to make changes regardless government monetary policies. As nature always come back with vengeance,  the law of nature of economy will always prevail. Economy is about people. Therefore, if we really want to change current economy system, the best way is by starting change ourself and act upon it. 

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