Demonetization of Indian Economy: Philosophical Critics

Abstract

What is money? Is it only a medium of exchange simply? Is “money” absent in the barter system? Is it an instrument of settlement of payment only or is it an instrument to store value for future consumption or to facilitate future transaction or exchange value for completion of the underlying the transaction? Is it not an instrument to exercise authority or to transform value from one form to another form or to redistribute the power to transact over time? Is it an authoritarian concept or pluralistic one? The connotation “money”, however, has different meanings in the orthodox vis-a-vis heterodox philosophy of economics. In the philosophy of orthodox economics, the money is described within the framework of rationality–individualism–equilibrium” nexus while that in the heterodox philosophy, it is within the “institutions–history–social structure” nexus. The study critically views both the concepts with the philosophical perspectives and reviews the state theory of money (STM) and the modern theory of money (MTM). The study employs implicit learning and tacit knowledge methodology and explores them theoretically and holistically concludes with the reference to recent demonetisation in India.