Today, speaking in Rajya Sabha (upper house) former Prime Minister of India Dr. Manmohan Singh commented by using John Maynard Keynes’ quotation “In the long run we are all dead” to suggest the government’s claim “decision of demonetisation is taken in the interest of the country in the long run” is misleading and ignoring present distress faced by common people.
The quotation “In the long run we are all dead” comes from British economist JM Keynes’ earlier work, The Tract on Monetary Reform, in 1923. He wrote ;
“The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again.”
Many commentators use John Maynard Keynes’ quotation “In the long run we are all dead” to suggest that that what is true about the short run cannot necessarily be inferred from what must happen in the long run, and we live in the short run.
Dr. Manmohan Singh a reputed economist who also served as governor of the Reserve Bank of India (the central bank of India) and architect of 1991 economic reforms posed serious questions on government’s decision to demonetize Rs 500 and Rs 1000 currency notes by terming it “monumental mismanagement had been undertaken.”
The popular argument by the ruling Bharatiya Janta Party (BJP) and government in the favor of demonetization is that this step will cause distress and inconvenience to the people in short run but it will benefit in long run. Prime minister Narendra Modi also emotionally urged people to give him 50 days speaking at the event in Goa last week.
However Manmohan Singh, today in Rajya Sabha seemed not hopeful. By quoting Keynes’ famous quotation he said “It is important to take note of the grievances of the people and ordinary people who have suffered by the imposition of currency ban overnight. The PM has said wait 50 days, it is a short period, but for the poor and deprived, even 50 days can bring about disastrous effects,”. He also pointed that ” (in the long run) this step will weaken and erode our peoples’ confidence in the currency system and in the banking system”
The point Manmohan Singh made here is very clear that we simply can not ignore the present distress which he called “torture” to agriculture laborers , farmers, small industries and people associated with informal economy. By raising serious concern cover the way demonetization has been implemented in the country, he asked the prime minister “I would like to know from the prime minister to name any country he may think of where people have deposited their money in the banks but not allowed to withdraw their money ?” He went on saying “this alone I think enough to condemn what has been done in the name of greater good to the people in the long run”
(The author is a doctoral fellow at the Department of Economics, Aligarh Muslim University and can be reached at firstname.lastname@example.org)