In dialectical materialism we find a synthesis of two words dialect and matter. Dialect means any situation or effort that conveys two messages for two different people or two messages for a single person in an introspective mood. Whereas matter or materialism is the science of matter and/or its distribution, atleast for Marx and Lenin (we can see the dialect arising in case of matter “and/or”). The purpose of the above lines is to relate it with the situation the Indian economy is facing, poverty and unemployment at very high levels almost.
The current situation suggests that the Indian government is trying to reduce poverty by pumping more money in the system through fiscal measure, taxes and expenditure, whereas, the central bank is continuously raising interest rates to convey its separate message. The purpose, of the government is to reduce poverty and of the central bank is to contain inflation and increase employment, given the constraints of real supply of goods and services… Their action says this thing too.
The efforts at the government level produce dialect. We all understand the goal of efforts by the government, poverty reduction, and they are justified from the point of view consumption, investment, and, savings. Actually what the government is trying to do is to increase public investment/expenditure through welfare schemes to affect the level of income, and, higher level of employment and consumption. But at the same time inflation is bound to rises and is rising which is decreasing the value of money. The relationship between quantity of money and its value is negative. Then a natural question that arises is then why we should increase money base within the economy if it is eroding past wealth what people have accumulated. When inflation rises, it relatively decreases the value of amount of money in hands which we call real value of money.
The central bank of India has, however, committed to low inflation and high employment levels. Even this task is not without dialect, since, lower money supply will lead to lesser amount of investment and jobs which is also responsible for high inflation we experienced in the recent past due to increase in money base. The problem remains unsolved poverty... If the central bank increases interest rate it will increases unemployment and if it allows employment to occur inflation will spurt.
Therefore we are in a twin situation. “If inflation increases it will reduce the value of money in our hands and if employment increases it will shoot inflation, again. We are literally experiencing a dialect regarding the efforts on the part of the government and on the part of the central bank, too."
The current situation suggests that the Indian government is trying to reduce poverty by pumping more money in the system through fiscal measure, taxes and expenditure, whereas, the central bank is continuously raising interest rates to convey its separate message. The purpose, of the government is to reduce poverty and of the central bank is to contain inflation and increase employment, given the constraints of real supply of goods and services… Their action says this thing too.
The efforts at the government level produce dialect. We all understand the goal of efforts by the government, poverty reduction, and they are justified from the point of view consumption, investment, and, savings. Actually what the government is trying to do is to increase public investment/expenditure through welfare schemes to affect the level of income, and, higher level of employment and consumption. But at the same time inflation is bound to rises and is rising which is decreasing the value of money. The relationship between quantity of money and its value is negative. Then a natural question that arises is then why we should increase money base within the economy if it is eroding past wealth what people have accumulated. When inflation rises, it relatively decreases the value of amount of money in hands which we call real value of money.
The central bank of India has, however, committed to low inflation and high employment levels. Even this task is not without dialect, since, lower money supply will lead to lesser amount of investment and jobs which is also responsible for high inflation we experienced in the recent past due to increase in money base. The problem remains unsolved poverty... If the central bank increases interest rate it will increases unemployment and if it allows employment to occur inflation will spurt.
Therefore we are in a twin situation. “If inflation increases it will reduce the value of money in our hands and if employment increases it will shoot inflation, again. We are literally experiencing a dialect regarding the efforts on the part of the government and on the part of the central bank, too."
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