[Reader-list] Franco berardi, aka Bifo: Towards a Monetary Holocaust? (in India)

[Patrice Riemens]

After Pankaj Mishra NYT op-ed to the effect that Trump owes nex to 
everything to Narendra Modi, the 'West' now awakes to the realisation 
that yet again India, in its metastasis as a sub-continent scale Bihar, 
is at the forefront, and far from living in the past, is showing us 
('Westerners') the way to a doubtlessly shining future.

Cheers from Amsterdam, p+5D!
(must still have one or two 'high denomination notes' stashed away 
somewhere ...)


original to: 
<http://networkcultures.org/moneylab/2016/11/30/towards-a-monetary-holocaust/>

  Telegram from Bologna: Towards a Monetary Holocaust?

    By Franco Berardi, November 30 2016  /  Text written as a remote
    contribution to MoneyLab #3 Conference (Dec. 1/2,
    2016):

    In a booklet published in 2014 with the title Capitalism a ghost
    story Arundathy Roy tells some interesting stories about the 
evolution
    of India in the neoliberal age: "When those who had been evicted went
    back where they came from, they found their villages had disappeared
    under great dams and dusty quarries. Their homes were occupied by
    hunger and policemen. People returned to live on city streets and
    pavements, n hovels on dusty construction sites, wondering which 
corner
    of this huge country was meant for them... In the drive to beautify
    Delhi fro commonwealth games, laws were passed that made the poor
    vanish, like laundry stains. Street vendors disappeared, rickshaw
    pullers lost their licenses, small sops and businesses were shut 
down.
    Beggars were rounded up tried by mobile magistrates in mobile courts,
    and dropped outride the city limits. The slum that remained were
    screened off, with vinyl billboards that said DELHIciously yours."

    In the `90s the capitalist globalisation promised to pave the way to 
a
    future of prosperity for everybody, or at least for the majority of 
the
    world population.

    Then it became clear that the universal mobilisation of the energy of
    labor was not leading to prosperity for the majority, but only to 
huge
    enrichment for a small minority, a life of precarious exploitation 
for
    many, and marginalisation for the rest. Now globalisation is rolling
    back, stagnation is the likely prospect for the near future. So what 
is
    going to happen? What is the destiny of that 50% of the world
    population who have received nothing of the advantages of
    globalisation, but are now exposed to the effects of environmental
    devastation and social impoverishment that the current stagnation is
    going to provoke?

    The year 2016 has been marked by the sudden awareness that the 
process
    of neoliberal globalisation is failing, and is showing the emergence 
of
    a new alliance of neo-liberal extremism and conservative nationalism.
    The worst of two worlds that once upon a time appeared in opposition:
    anti-global reaction and simultaneously acceleration of the most
    destructive tendencies of the market.

    Norendra Modi, a hindu nationalist and a neoliberal extremist, is the
    Premier of India, a country of 1.2 billion humans. Modi, who makes 
part
    of this new brand of nazi market-worshippers who are winning the
    elections in many countries of the world, few days ago started an
    experiment that sounds as a turning point in the history of the world
    economy. It is called demonetisation but it may result into a great
    leap forward in the process of digitalisation of money.

    Steps towards the digitalisation of money have been taken in the last
    decades, (credit cards, digital payments...) but so far the economy 
of
    the countries of the world has been integrating physical money and
    online money, so allowing the survival of those people who are unable
    to deal with the digital technology. No more. The move of Modi seems 
to
    be intended to accelerate the pace of digitalisation in a country
    where, notwithstanding the expansion of IT technology in the last ten
    years, the digital divide still excludes a majority of the population
    from the possibility of entering the online economy. A wide part of 
the
    population is going to be pushed out of the economy like those poor
    people hidden by the DEHLIciously yours billboards that Arundathi Roy
    is talking about.

    Are we witnessing the first glimpses of the expulsion of half of the
    planetary population from the cycle of economic exchange? Is this the
    beginning of a sort of economic extermination? Is this the hidden
    mission of the dawning Trump-age?

    Actually the reasons that Modi has put forward to motivate his act of
    demonetisation seem quite weak: he speaks of a move against tax 
evasion
    and financial criminality, but in fact he is hitting hard on the
    average people, whilst tax evaders are notoriously investing their
    money abroad, and do not go around with packs of small banknotes.

    "This is like curse of God on us," said Gian Prakash Gupta, 60, a
    soft-spoken paper wholesaler "We do not know how to use computers, 
how
    to do online transactions, how to use card-swiping machines." The
    business of traders like Mr. Gupta, whose operations lie partly in 
the
    vast informal economy that makes up around 20 percent of India's 
gross
    domestic product and more than 80 percent of its employment, has been
    virtually paralyzed since Nov. 8, when Prime Minister Narendra Modi
    announced a surprise ban on the country's two largest currency notes,
    the 500-rupee bill (worth about $7.30) and the 1,000-rupee
    bill." (Geeta Anand, Hari Kumar: NYT 29 november 2016).

    Some of the comments in the Indian press, particularly in the
    newspapers that represent the pro-financial circles are joyful: India
    will enormously accelerate the race of growth. How so? getting rid of
    the dead weight, the majority of the population that is unable to 
dance
    at the rhythm, pushing them out of the economic circuit, throwing 
them
    down from the racing train.

    "The problem for many is they do not know how to do without cash. In
    the Chawri Bazar, generations of traders have bought and sold paper,
    from wedding cards to calendars to packing material, mostly in cash.
    Their customers paid cash, and they used it to pay their suppliers 
and
    workers."(Geeta Anand Hari Kumar: NYT 29 november 2016)

    From the point of view of economic history the move of Modi seems
    inexplicable. It is not the first time that demonetisation is
    experimented: in November 1923, the German government introduced a 
new
    currency -- the rentenmark -- and declared all old reichsmark notes 
to
    be no longer legal tender, as domestic prices, already 14 times their
    1913 levels in mid-1921 and 1,475 times towards end-1922, had
    skyrocketed to 1,422,900,000,000 times by November next year.

    As the currency lost value by the minute, people rushed to spend 
their
    wages the very moment they received them, fuelling further inflation.
    The only way to deal with this situation was demonetisation: purging
    the system of all existing notes and launching a new currency backed 
by
    solid assets -- in this case, land belonging to the state. With
    credibility restored, inflation fell and the run on the currency, 
too,
    ended.

    On January 1, 1998 Boris Yeltsin changed the name of Russian 
currency,
    with a `new' rouble being made equal to 1,000 `old' roubles. with the
    intention of addressing rampant inflation. But the `new' rouble's
    exchange rate, which was 5.96 to the dollar on January 1, collapsed 
to
    20.65 when the year ended, with consumer price inflation also soaring
    to 84.5%.

    The Narendra Modi demonetisation of Rs 500 and Rs 1,000
    banknotes -- constituting over 86% of the total value of currency in
    circulation -- hasn't been undertaken in response to any 
hyperinflation
    or loss of confidence in the rupee. The rupee has actually been quite
    strong and annual consumer price inflation was just 4.2% in October.
    That implies that the Modi demonetisation does not follow the
    conventional logic of a currency `stabilisation' measure, but is
    a `structural reform', targeted at fostering cashless economy.

    The present demonetisation triggers spurt in digital payments paving
    the way for India towards cashless economy.

    The demonetisation which initially paralysed the economy is now 
acting
    as a catalyst towards digital payment ecosystem. This seems to be the
    beginning of an economic transition. Indian newspapers relate that
    payment processing companies are overloaded and are racing the devil 
to
    accommodate the immense spike in traffic. But in India, most economic
    transactions take place in cash outside recorded market channels and
    hence go largely untaxed. This is fostering a parallel `black' 
economy
    but this allows the majority of Indian population to survive. The
    brutal transformation of the currency system has already provoked
    panic, and casualties, but in the long run it may pave the way to a
    radical redrawing of the monetary field in the direction of radical
    digitalisation, and consequently to the expulsion of a majority of
    society. The digital divide may be turned into a tool for the
    elimination of the "non competitive" section of the human kind. Modi
    came to the fore fifteen years ago as responsible of the 
assassination
    of more than thousand Muslims in the city of Ayodhya. Now his 
projects
    are more ambitious, and he seems aimed to become the vanguard of a
    possible monetary Holocaust.