The Medici

To look back at the ascent of the concept of modern day money, we need to take notice of Italy in the 1200s. Money, in token form, had come into being by then. However, lending was still not a profession of good standing. Christianity forbade usury, the practice of charging interest on the loan doled out. However, if a money-lender didn't charge interest, how would he make a living? How would he cover the defaults?

Jews were the answer to this riddle. A different religion allowed them a different set of rules. In Florence, sitting behind their benches, they gave loans without compunction or fear of the after-life. Dealing with numbers for generations on an end has clearly made them a smart bunch of fellows. The Christians could only sit in the side-lines, working away at their 'legitimate' professions.

This changed in the latter part of the 1300s. Giovanni de Medici, of the notorious Medici family in Venice, rose to clear his family of their stamp of infamy. Using his sharp intellect, he hit upon an ingenious way of tapping into the money business, and still remaining within the remit of the Christian laws. He started to work on Forex! There was no low forbidding a commission on changing currencies at the time. The commission, after all, was not interest. It was just a commission. And once this happened, there was no stopping the Medici family. By spreading their services far and wide in Italy, they grew in scale, allowing lower operating costs. Low costs and higher profits - the family became richer and more powerful. Two (three) queens and a pope eventually came from this family.

Meaningless conversations

There is a channel called 9XM. It is a good channel. It plays current Hindi music videos. However, the videos are interspersed with short clips of characters that the channel has come up with. They seem to serve no purpose other than separate successive songs from each other.

But the nature of content that these characters talk about is abysmal. Some of them say out front to not think but just listen to what they have to say. Why? Because they have nothing meaningful to say. One character, a slimy slob, has conversations with another one of its kind which ultimately leads to one of them yelling 'bakvaas band kar'. What is the point of having such a video? There are no promotional ads featured on the screen while this video runs. So ad revenues are definitely not the reason for them. I kind find any rational reason why a channel would feature such kind of meaningless content. And the absence of a rational reason makes me speculate that the video is just a representation of commonplace humor/conversation to change the flow of the music. That makes me sad... There is too much money and time going around and we, as a generation don't use it to talk sense... God help the next generation...

Fractional Reserve Banking

The history of money is fascinating. And it is not easy to get your head around it in one go. The way I understand it, banking began with goldsmiths being entrusted by normal people with their gold for safekeeping. They realized that at any point in time, only a fraction of the people (say 10%) will come back to demand their gold back. This fact allowed them to lend out gold to others, gold that was not theirs to begin with, and charge interest on it. This was the birth of fractional-reserve banking.

Most banks work on the same principle nowadays. Each bank has to maintain a capital ratio, a ratio of the amount of money in reserve, and the amount of money it lends out. This ratio changes, but is always less than one...

The masters of money ...

I have come across some fascinating documentaries tracing back the history of money and how economics had a major role to play in world affairs since the beginning of organized society. I might dedicate a few blogs to how things were ...

Wasted Years

I was wondering. 40 years back, salaries were low, progress was less and there was little to go around. However, the number of kids you had was alarmingly high. There may be exceptions but in general, people used to have 5-6 kids at least. Where did they get the money to support them?

We argued that lives were 'simpler' and people spent less outside. They cooked at home, spent time at home, at parks and other places where spending money was not necessarily part of the equation. With that kind of a 'safe' lifestyle, Looking back, compared to present day hustle and bustle, things do seem idyllic and relaxed. Who wouldn't want those days back?

However, the counter-argument is that the days when the majority of the country was enjoying this idyllic existence, partly because they didn't have the money to explore, learn and innovate (due to the expenses of raising 6 children), the developed world was doing exactly that. The computers, the science and the innovation was not happening here, but there. Anyone who has had any experience in experimentation will agree that it takes some risk and money. With a close-to-the-chest balance of money, there was no money to spend thus.

Wasted years :(

Ancient Inventions with Terry Jones

It was bound to happen. With me watching so many of these marvelous documentaries, I had to come back and tell you about one that is phenomenal.

"Ancient Inventions with Terry Jones" walks across centuries to discover inventions which we would have assumed are modern day but to my utter surprise (and I am sure yours too, if you care to investigate) are thousands of years old.

The grid-plan in modern day cities was 'invented' in the Indus valley civilization and simultaneously in the Aztec and Mayan cities of South America. It was shamefully, and quite unsuspectingly copied by New York in the 1800s when they decided to bring some order to the city plan. An interesting corollary is that the 'Wall Street' was actually a street with wooden walls to separate the British and Irish settlements from the native Indians.

Cities were marked by some other characteristics that date back centuries as well. For example, cities are marked by eating joints and the ability to find and eat food without having to cook for it yourself. Well, these fast-food joints and restaurants were common in Rome around 1 BC. In fact, one of the dishes quite resembles the modern day hamburger!

Another invention to interest you would be books. Romans at it again! The city of Parthenon came up with the first library of over 20,000 papyrus scrolls for the intellectual stimulation of their residents. However that prompted jealousy by the Egyptians. So what did they do? They banned the export of Papyrus, of course. That prompted the Romans to find an alternative source of 'paper', I guess. I don't know how many animals were sacrificed for them to find it, but they finally struck on the right writing medium - Parchment, i.e dried skin of sheep. These skins, for all their inefficiencies compared to papyrus had one good feature. They could be sewn together. And lo and behold - the first books!

Enough advertising, now go see the documentary...

Side-stepping

You know what the problem is?! The problem is that in this country, people side-step too much. There is no accountability of the government machinery which leads to underdeveloped roads, loss of power and unclean drinking water. How does the Indian man respond to it? If her can afford it, he lives in areas which are blessed with the few well made roads, he lives in an apartment which has a power backup (and a monthly bill of it) and finally, he buys an RO system for his house. With all that side-stepping, it is a shame that we dance like numb-skulls. What do the people who cannot afford it, do? Well, they develop a wrecked body from the unsuspecting hops and skips of their bikes over the potholes. They learn to live without power, interpreting an unproductive wastage of hours as an idyllic life-style. And finally, they learn to drink the filthy water, complimenting themselves on their superior immune system.

But apart from all of that, do you know what all of this leads to?! Elitism! People fight for their share and start living lives that are marked by how they can differentiate themselves and prove themselves better than others. Its true that people differentiate themselves around the world. But the better way to do it is usually through their actions, achievements or skills. In India, the differentiation is done through money and a basic standard of living. Paying Rs 80K for an apartment that still looks like shit from outside (in Bby) is a pointless way of differentiation....