Thursday, December 15, 2016

Commentary: Demonetization and our morbid optimism



queue at bank on 10 November 2016: courtesy: Wiki
When an analytical article begins on a note such as the following, one begins to hope there is some good news emerging from some unknown – ‘India is in the throes of an unprecedented social experiment in enforced digital disruption, and the world has much to learn from it.’ But as one proceeds one finds that the lessons to learn from the recent monetization in India are one after the other negative to the extent of becoming enshrined as exemplars of financial folly for the whole world. In brief, the move is too disastrous for the rest of the world to NOT learn from it. Even ‘irrational exuberance’, a phrase used by the then Federal Reserve Board chairman of US, Alan Greenspan, to describe the Dot-com bubble of the 1990s seems inadequate and ‘morbid optimism’ seems a better alternative for describing the stubbornness of those who still expect that the move may have unforeseen and even unintended benefits in the long run.


This article examines all those likely outcomes with the sort of patience that one expects of academics capable of cold-blooded analysis. To give the move a last chance, the question posed by the article is – ‘Is there a digital upside to this crisis’, giving a sympathetic hearing to those that may be described as ‘digital idealists’. The article is recommended as every single claim made in it is backed by a study or a report and the links have been duly provided.  In brief, it hurts our national pride but the fact is we have made it as a ‘case study’ for a gigantic policy failure and have been placed under a microscope to be scrutinized by several generations of global business students and researchers.

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