The world is changing. How do we manage without money?

Economists are sounding the death knell of neoliberalism, with free immigration, globalization of trade and wealth shifting to financiers from manufacturing. Apparently started by Ronald Reagan and Margaret Thatcher, neoliberalism is now being questioned by those who supported it in the past. Economists sound confused. They recognise that although globalisation has increased wealth generally, the distribution has been grossly unequal, while others say that economic growth has to be rapid to benefit those left behind. For rapid growth we need increased trade but free trade is creating inequality. Professor Dani Rodrik sees trade deals, that open up economies to free trade, as a means of strong nations, like the US, imposing unequal treaties on weaker countries. "Newer trade agreements incorporate rules on "intellectual property", capital flows,and investment protections that are mainly designed to generate and preserve profits for financial institutions and multinational enterprises at the expense of other legitimate policy goals," he writes. In other words, governments work as agents of the rich, rather than all their own citizens. In another article he wrote that one economic model cannot fit all countries. "The social world differs from the physical world because it is man-made and hence almost infinitely malleable," he wrote. Thus economists have been largely supportive of Prime Minister Modi's decision to suddenly withdraw the 1000 and 500 rupee notes. They note all the bad effects it is and might have but argue that all inconvenience it is causing is temporary and the final result will be great. Professor Gita Gopinath thinks that it is a good move but will not work in the long run because black money and counterfeit currency will return. Economists point to the rise of high denomination notes in circulation. The number of 500 rupee notes rose from 11.41 billion on 31 March, 2014 to 15.71 billion on 31 March, 2016, an increase of 38%, while the number of 1000 rupee notes increased from 5.08 billion to 6.33 billion over the same period. However, the 500 rupee note constituted only 17.4% and the 1000 rupee note constituted 7% of total notes used. Not very large. The reason is the love for low interest rates among our politicians, regardless of the level of inflation. Rising prices mean that Rs 100 buys nothing these days so we need to use higher denomination notes. The Reserve Bank is not supplying enough replacement notes, whether through inefficiency or design we do not know. Retail inflation has fallen 3.63% in November because of the severe contraction in demand. Farmers are unable to buy seeds because of lack of cash and because they cannot borrow as moneylenders have no cash either. Food prices should rise in April and if the rupee falls sharply against the dollar, because of Trump effect, the economy will tank. Modi can control cash but he cannot control human behavior. Despite huge ego.