Ignorance of the Masses

Some time back, a well known government minister was quoted as saying "If we don't have enough money to complete this project, we'll PRINT money and complete it." This man should have been booed out of the podium by a shocked and disgusted public. Instead, the audience of average folk had cheered. Now you know why this country can't get anywhere economically — people don't even have the basic knowledge to tell the difference between medicine and poison.

Fiat money

When the government prints say, Rs. 1 billion, its value just doesn't materialize out of thin air. Money is just paper. If there were say, Rs. 9 billion already in circulation, then the Rupee is now worth 9/10th of what it was before. In other words, the government has taken approximately 1/10th of everybody's wealth held in rupees. This is why counterfeiting money is illegal. Even a layman should be able to understand that, and why it applies equally to the government.

But looks like the average Sri Lankan can't even understand this. He doesn't realize that the money the government prints ultimately comes out of his own pocket. And if that's how much they know about something as straightforward as inflation, then how are they going to understand some of the more complicated economic measures the government takes? Are these the people carrying around the votes that determine which way the country will go? The government can do anything and say anything, and they'll be none the wiser.

It's not rocket science

This is why we need to educate the general public about economics and politics. They should have an understanding of what they're voting for or against. Most of economics is common sense, not rocket science. If explained in simple terms anyone can understand it.

If I were a politician, I might come to the people and say a variety of things like "I'll cut interest rates", "I'll raise interest rates", "I'll reduce the marginal tax rate", "I'll increase VAT and reduce income taxes", "I'll introduce a fuel subsidy", "I'll cut the fuel subsidy and increase import duty" etc. Most Sri Lankans will not be able to tell whether the long term effects of these on themselves and the economy are going to be positive or negative. So the government will always choose what will result in the most public support during its term. At the end of the term, they'll toss the pin-less grenade at the incoming government and walk off. Everybody will end up blaming the wrong people.

Democracy is very dangerous when the ignorant hold the vote. The answer is not to do away with democracy. The ignorant should wisen up.

One Response to Ignorance of the Masses

  1. aj says:

    Hey you are right.

    But nobody understands what money printing is, let alone whether it is good or bad.
    According to the latest media reports, the government is starting print money again.

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