Is financial lust good for the progress of human civilization?

Money is the root of all evil as the famous saying goes, but money is really bad or we are denying that it has really contributed to the growth of the economy and finances of the world. Money turns bad when excess greed captures the human imagination, but it is a blessing if used judiciously and wisely.

History is full of stories about money in which the lust for it can lead to the greatest financial disasters, but its good use can generate economic development. Clay tablets and other devices were used by the Sumerians as a way to facilitate trade and sometimes as forward contracts thousands of years before. This facilitated trade, commerce and business. This is a good example of how money in the form of tablets can help in business development. As the story goes, it was just the greed for money that caused the decline of Roman civilization in which looters carried out crusades for gold and other valuable items that faded the Roman empire from its glory.

Trade in the medieval period required credit to make long journeys to far corners of the world, although banks in the early stages of development extended credit to merchants in exchange for interest from them. In Merchant of Venice, Shakespeare carves a beautiful character of a pawnbroker, the villain who demands the merchant’s friend as ransom for a loan. If the trading trip was successful, then all is well; otherwise, all is not well. Money here was important, no doubt.

Wars fought like the Napoleonic wars or interstate wars in Europe or the civil war in North America required money. But where the money came from, it came from the government issuing bonds. or other third parties. So the money financed wars and led to political turmoil. It was the thirst for money and power that led Napoleon to wage war all over Europe and was one of the factors in making wars.

European countries like Great Britain, France, Portugal, and the Netherlands had merchants and governments. that they had a craving for money that led them to undertake sea voyages far beyond their territories. The large profits that merchants can earn by importing cotton, spices, and other valuable products gave them the incentive to establish their private companies in the new colonies. These Companies to enhance their political strength that would help them carry out trade at their will was notable in the sense that this led to colonization and imperialism. So money was the reason or the real force behind this imperialism of the western countries in Africa and Asia. But at the same time, this was the only colonization that facilitated the spread of science, Western education, and other liberal ideas to the rest of the world. So money was both a curse and a blessing to the world at the same time.

One cannot forget the Great Depression of 1929, the euphoria surrounding the stock market led investors to over-buy the market and led to the boom. But weak economic development led to the collapse of the entire market that lasted for several years, but it was a harbinger of a new economy in the sense that a new economic policy emerged. Keynes, with his theory of employment and wages, presented his views for the government to take action and provide a fiscal stimulus. The greed for money at the same time led the depression to sound the alarm for economists and policy makers to take the necessary steps while formulating sound economic policies that would prove to be a guiding policy for decades to come to control booms and busts. . So money has everything.

A large amount of money is a poison, as an excess of money is a poison, but when it is a limited amount, it is an asset. During the 1970s, crude oil prices rose to staggering levels that caused inflation, there were no forceful policies to tame this inflation. Earlier, Milton Freedman’s logic that Irving Fisher’s equation is good MV = PQ, so if the money supply S increases, prices P increase keeping other things V, the velocity of money, and Q, GDP constant. So he called for a central office, a reserve bank to formulate interest rates so that the money supply is under control, which in turn can control price levels to manageable levels. Thus monetary policy was born. So Money the evil led us to the new theory of follow-up politics, another addition to the lexicon of economics and finance. But wicked inflation—that is, excess money in the economy—came up regularly, so central bank policy frequently moves on interest rates, an uphill task for any reserve bank governor.

At the turn of the century, the dotcom bubble led investors to invest heavily in Internet companies. The euphoria surrounding the companies was great and investors for earning a lot of money in a short time invested heavily in these companies. But they forgot that they are betting on a longer period of growth and not short-term growth. Their lust led to their financial disaster and loss of money. The same thirst for money created the real estate bubble at the beginning of the 21st century. The banks to dismiss their risks in the payment of mortgage loans sold these loans to third parties called Sponsored Private Vehicles. These Sponsored Private Vehicles would create derivatives that would be sold to investors, taking an interest differential. Thus, the profit motive led these private sponsored vehicles to create derivatives which, as Warren Buffet put it, are weapons of mass financial destruction. They acted as a catalyst in the collapse of the entire banking system. Rising house prices created greed among investors to refinance loans and banks, thinking they were out of the danger zone, kept lending money. Thus was born the housing bubble. Once the subprime mortgages defaulted, this created a kind of panic among investors of losing money, so they withdrew their money from the banks. Major investment banks went bankrupt and the entire world economy came to a standstill.

Money is ultimately really the root of all evil politically, socially or economically, the love of money changed the whole landscape of human civilization, but at the same time, development would have been impossible without money. Money was the King, is the King and will be the King for human beings. Lust is lust and humans cannot escape the lust for money as it is in their very nature.