"It is said that historians have found a manuscript, which is also said to be a relic from the fall of Majapahit Empire era. This manuscript is still being researched further, because, again, it is said, the manuscript tells: One day, the king was riding his white horse, while distributing 'plain rice' to his people (it is said that nowadays, it can be interpreted as 'throwing T-shirts'), then suddenly fell. The 'Hulubalangs' immediately approached 'sang prabu' and helped him up, even though he limped a little. An ambassador from a distant land who was said to be present, asked if 'his majesty' was okay. The 'Bupala', who was said to be better at speaking English than Sanskrit, answered, 'I want to test my minister'.""When ancient ruler who is believed to have been the richest person in human history, Mansa Musa, ruled the Mali Empire, he led the Empire to its zenith from 1312 to 1337. While it's difficult to estimate his wealth with absolute certainty, estimates range up to $400 billion. It’s accepted that his gifts of gold to whomever he met during his pilgrimage to Mecca led to hyper-inflation and an Egyptian recession lasting a decade," said sunflower while paying attention to the spinning Million Dollar Cube."We all want money—some of us dangerously so, says Laurence Kotlikoff. He then gives two examples: King Midas begged Dionysus for the golden touch and got his wish, starving to death as even the food he touched turned to gold. Imelda Marcos, the infamous First Lady of the Philippines, had very little as she was growing up. When her husband took power and started plundering the country, shoes topped her shopping list. Twenty-one years and almost three thousand pairs of footwear later, the people revolted. The couple escaped with their lives, but not with Imelda’s shoes. Hundreds of them are still tastefully displayed at the Marikina Shoe Museum near Manila [seven hundred twenty pairs of shoes are at the Marikina Shoe Museum in Metro Manila. Of that, 253 are on display, while 467 are in storage. Imelda left over 3000 pairs of shoes upon leaving the palace]. The vast majority of us aren’t money hungry out of sheer greed. We want money for a good reason: we need it.There are good reasons for believing that modern money means much more today to many more people throughout the world than it has ever meant before in human history, Glyn Davies concluded. Money begins with barter. The history of barter is as old, indeed in some respects very much older, than the recorded history of man himself. Cattle–a vague term variously meaning cows, buffalo, goats, sheep and camels, and usually but not always excluding horses–historically precede the use of grain as money for the simple reason that the taming of animals preceded agriculture.To primitive man emerging from the Stone Age, any metal was precious: the distinction between base and precious metals became of significance only after his skill as a metallurgist had improved and supplies of various metals had increased sufficiently to reflect their relative abundance or scarcity. Thus copper, bronze, gold, silver and electrum were known and used before iron, while aluminium, the most common metal in the earth’s crust, became available for use only in the nineteenth century.The world’s first coins were made of gold around 700 BC and that a number of Greek city-states established their own forms of ‘gold standard’ which concept was extended empire-wide by Alexander and later by Roman and Byzantine emperors. Paper currency came about as a result of one (and perhaps, later, two) of the Four Great Inventions: papermaking, printing, gunpowder and the compass. Ancient China led the way, although it wasn’t until the Tang dynasty during the 7th century that merchants began using paper in the form of what would these days be called promissory notes. By the 17th century, London’s goldsmith bankers were issuing receipts as payable to the bearer of the document, as opposed to the depositor (a sentiment echoed on contemporary banknotes with the sentence 'I promise to pay the bearer on demand the sum of X pounds'), while 1661 saw Sweden’s Stockholms Banco become the first central bank to attempt to issue banknotes.Steve Forbes and Elizabeth Ames suggest that government did not invent money. Money originated in the marketplace as a solution to a problem. It arose spontaneously, like the spoon or the personal computer, in response to a need. In this case, the need was for a stable unit of value to facilitate trade. Money has three roles in an economy: as a measure of value; as an instrument of trust that permits transactions to take place between strangers; and it provides a system of communication throughout a society. In order to function in these roles, money, above all, must be stable. When it isn’t, it becomes impaired, and an economy suffers. In the worst instances, when money stops working altogether, a society can be destroyed. Money is a tool that facilitates transactions. It does not create them. And money, in and of itself, is not wealth—nor does increasing the supply of money by the whims of central bankers mean that wealth will be created. In fact, the opposite is the case.It's the people, not government, invented money. If expanding the monetary base was the way to economic vitality, Zimbabwe would be the richest country in the world, according to Forbes and Ames. When that country first became independent in 1980, the Zimbabwe dollar was worth more than the U.S. dollar. In the early 2000s, after redistributionist reforms led to the destruction of the country’s agricultural economy, the Zimbabwe government responded to the crisis with a manic printing of money. The result was a hyperinflation second only to that of Hungary after World War II.We need food to live. But too much food leads to unhealthy obesity. The same applies to money. We need money for commerce. But just as too much food can be bad for your health, an oversupply of money can undermine the health of an economy. The story of monetary expansion is not a story of wealth creation but rather of wealth destruction. History contains countless examples: from the eighteenth-century French debacle of the Mississippi Bubble to the wild colonial inflations preceding the American Revolution to the German hyperinflations of the early 1920s and after World War II to the 1970s U.S. stagflation. Reckless monetary expansion has rocked countries like Venezuela and Argentina. In the United States, it led to the collapse of the housing market, the 2008 financial crisis, and subsequent global stagnation.Every profession can be said, makes magic. Biologists cure plagues. Engineers build skyscrapers. Physicists split atoms. Geologists date rocks. Astronomers discover planets. Chemists decompose matter. Judges issue a ruling in the case based on their interpretation of the law and their own personal judgment. Lawyers have different functions and privileges: an advocate, attorney, barrister, canon lawyer, civil law notary, counsel, solicitor, legal executive, or public servant. Lawyers do not know enough about economics, and Economists do not know enough about law. According to Kotlikoff, despite the challenges of the field, but the Economists make marvelous magic.Adam Smith, our first grand wizard, with the conjuring 'invisible hand,' which transforms individual greed into collective good. David Ricardo used Dr. Strange 'four mystical numbers' to explain why, what, and when countries trade. Alfred Marshall produced the numinous 'Avatar' supply-and-demand curves that rule all markets. And our belated great sorcerer Paul Samuelson transposed ancient economic laws into 'the Scream' mathematical runes.Smith, Ricardo, Marshall, and Samuelson are the top economic Dumbledore of all time. But every economist is trained to solve mysteries using the tricks of our trade. This is why economics is so fascinating, surprising, important, and useful, whether applied to understanding global markets, taxing our emissions, or saving our jobs. Though the common conception of economics is that it’s focused on big, world-spanning issues, economists have, in fact, spent what is now a century studying personal finance.Politicians, what about politics? According to Brian McNair, there three characteristics of a democratic regime: first, there must be an agreed set of procedures and rules governing the conduct of elections, such rules will typically take the form of a constitution; second, those who participate in the democratic process must comprise a ‘substantial’ proportion of the people; third, the availability of choice and the ability of citizens to exercise that choice rationally. This in turn, presupposes a knowledgeable, educated citizenry. The importance of an informed, knowledgeable electorate dictates that democratic politics must be pursued in the public arena (as distinct from the secrecy characteristic of autocratic regimes). The knowledge and information on the basis of which citizens will make their political choices must circulate freely and be available to all.The political process nevertheless demands that individuals act collectively in making decisions about who will govern them. The private political opinions of the individual become the public opinion of the people as a whole, which may be reflected in voting patterns and treated as advice by existing political leaders.Democracy rests on a promise of equality, which too often shatters against the wall of money, says Julia Cagé. Money provides us with a sense of security and stability by allowing us to meet our basic needs, build a cushion for unexpected expenses, and invest in our future. By managing our money wisely, we can enjoy a greater sense of financial security and peace of mind. Money is a necessary component of any democracy: it enables political participation and representation. However, if not effectively regulated, it can undermine the integrity of political processes and institutions and jeopardize the quality of democracy.We tend to forget that providing for democracy comes at a price, Cagé added. But if the costs are very unevenly distributed, and if the weight of private money in the total funding is not severely restricted, then the whole system is in danger. Regulations related to the funding of political parties and election campaigns (commonly known as political finance) and lobbying are critical to promote integrity, transparency and accountability in any democracy.What is political party and what is its function? John Kenneth White suggests that defining political parties will produce a variety of opinions, but it can be described as ‘tripartite systems of interactions’: first, party as Organization or ‘the machine’, the formal machinery of party ranging from local committees (precinct, ward, or town) up to state central committees, and the people who man and direct there. Second, party as the Mass of Supporters. For some, this identification is strong, and they consistently back candidates running under the party label. For others, the attachment is relatively weak and casual. Here, party exists in the eyes of its beholder; it is a bundle of electoral loyalties. Third, Party as a Body of Notables. Most political leaders in government and outside it are identified by a party label. Party is sometimes used to refer to that collectivity of notables who accept the party label, and party policy then becomes the prevailing policy tendencies among this collectivity.Political parties are a pervasive phenomenon in representative democracies, says Charles Boix. Although the coordination of politicians into parties, that is, into vote-seeking and governing teams of candidates and parliamentarians, has been a universal, almost lawlike phenomenon in contemporary democracies, the ways in which politicians' have organized and voters have responded to partisan appeals have varied widely over time and across countries. On the one hand, political parties differ in their internal architecture: how hierarchical they are; the strength of their parliamentary wing vis-a-vis the party apparatus; the number, extraction, and commitment of their membership; or their cohesiveness, ranging from loose, almost ad hoc coalitions of interests to tightly disciplined organizations whose members never deviate from the official position of the party.Marjorie Randon Hershey suggests that political parties can act as 'social choice' mechanisms. Political environments have some unique qualities that affect individuals’ choices. Democracies need to recruit leaders as well as voters. Political leadership is a public good so, problems of collective choice arise in its selection. In a democracy, citizens must have some role in choosing important government personnel. When a democracy begins to expand, nascent party organizations have a straightforward incentive to selectively stimulate citizen participation. The more voters they are able to mobilize, the greater their likelihood of electing their candidates.As a democracy matures and the franchise expands to approach its natural limits, the challenge then becomes the need to motivate qualified voters to go to the polls. The existence of parties in the electorate, or party identification, as a means of simplifying voters’ choices and therefore making it easier for them to choose to vote. In any of several ways, then, citizens can use party as a means of drawing inferences about the candidates’ characteristics and policy stands.There are several factors that influence political spending. According to Shari Bryan and Denise Baer, in many developing democracies, accurate information about political spending practices is unavailable to the public. Reporting requirements are often non-existent, and where they do exist, enforcement agencies lack the skills and resources to collect the information. The results of the African Political Party Finance Initiative (APFI) study about the characteristics of party financing not only in African countries, but in other regions of the world—from Latin America, Central and Eastern Europe, and Asia (22 countries). The research shows that most politicians are aware of the problems of money in politics and are prepared to address them. At the same time, the study highlighted many areas of concern, such as the role of wealthy business interests in funding campaigns in order to gain access to lucrative state contracts. It revealed the personal risk of bankruptcy that many candidates face as they attempt to raise money for elected positions, and the enticement to abandon political competition in exchange for money.Corruption related to political party financing poses a grave threat to democratic development worldwide. Covert party funding streams, influence peddling, and leveraging state resources for party purposes all compromise the single greatest asset of democracy: the faith and support of ordinary citizens in the political process. The social and political costs of corruption are well known, and a majority of political and civic leaders recognize that many of the problems related to political corruption stem from deficiencies within political parties themselves. One of the great challenges facing political reformers is that little is known about the details of money in political parties or in campaigns. Political party financing patterns are extremely opaque, and the decisions about raising and spending money are usually controlled and managed by only a few individuals. Relatively few politicians could provide concrete details about party funding operations.Vote-buying, or the use of money and direct benefits to influence voters is of concern to political elites around the globe. Business interests and wealthy individuals engaged in politics are stifling democratic participation, undermining the development of economies, and transforming the nature of government. Repeatedly, concerns were raised about the rising number of wealthy individuals who seek office in order to gain access to and control over lucrative contracts, and business contributors who demand paybacks from those whom they support politically. As a result, the political establishment is often seen as a circle of wealthy individuals who make policy decisions based on private interests, rather than the common good.In many instances, political accountability is for sale to the highest bidder. Candidates, often financed by patrons or godfathers, may compromise their independence, neutrality, and platforms to serve as proxies for their benefactors. Political parties do the same by accepting funds from business interests that intentionally support campaigns as a way of ensuring lucrative contracts with the state, or possibly worse yet, for assurances that the state will turn a blind eye to their illegal business practices. In some cases, candidates are willing to forgo political competition or abandon their political parties in exchange for money.In Indonesia, 'Money in Politics' is not as famous as 'Money Politics'. The term 'Money Politics' has been widely used to describe 'wani piro' [How much money are you willing to pay?] practices—and the response is 'piro-piro wani' [as much money as you can]—since Indonesia’s new democratic era began in the late 1990s. Although it is in common usage, the term is imprecise, and covers a wide range of phenomena.We'll continue to discuss it on the last episode. Bi 'idhnillah."As she moved towards the final session, the sunflower sang,My father told me,'Hold your head up high,never give up and keep aiming for the sky,and when darkness finds a way to tear you down,take a closer look, there's hope right by your side.Yeah, I know it's tough when nights are getting longer,and doubts are creeping in' *)
Citations & References:
- Laurence Kotlikoff, Money Magic: An Economist's Secrets to More Money, Less Risk, and a Better Life, 2022, Little, Brown Spark
- Glyn Davies, History of Money: From Ancient Times to the Present Day, 2002, University of Wales Press
- Steve Forbes & Elizabeth Ames, Money: How the Destuction of the Dollars Threatens the Global Economy—and What We can Do about It, 2014, Itzy
- Brian McNair, An Introduction to Political Communication, 2011, Routledge
- Julia Cagé, The Price of Democracy: How Money Shapes Politics and What to Do about It, translated by Patrick Camiller, 2020, Harvard University Press
- Shari Bryan & Denise Baer (Ed.), Money in Politics: A Study of Party Financing Practices in 22 Countries, 2005, NDI
- Richard S. Katz and William Crotty (Ed.), Handbook of Party Politics, 2006, SAGE
- Carles Boix & Susan Stokes (Ed.), The Oxford Handbook of Comparative Politics, 2007, Oxford University Press
*) "You Need to Know" written by Axel Johansson, Tormod Løkling & Iselin Solheim
