The Ethics of Wealth

Despite knowing this, many of us still shy away from talking about it openly. As New Age guru Deepak Chopra puts it: "Most people find it difficult to tell someone exactly how much money they make. This is because they believe that they are worth only what they earn.

" Why should this be so? American journalist Marjorie Kelly tried to answer this question in her article 'Are you too rich if others are poor. "One of our unconscious but profound beliefs about money is that it is a zero-sum game, and that for one person to have more means another has less. In short, that wealth is made on the backs of the poor. But there is an assumption here that is only partly accurate, and that is that money is a physical commodity that can be moved about like a pile of marbles. I suspect that the truth is that money has a dual nature. For if the zero-sum theory holds part of the truth of money, the other part is this: prosperity can beget prosperity.

"John Stussel, host of the 20/20 American TV show's episode on the positive side of greed, accurately puts it: "Bill Gates is a good example. He's now one of the world's richest men. He's got about $40 billion. But does his having $40 billion mean the rest of us have lost $40 billion? No.

"According to Stussel, in a trade-driven economy even if a person is greedy for more wealth, he just can't grab it from others. "To get your money, he has to persuade you, entice you. To do that, he has to make something that you will willingly give him money for. All commerce requires both parties to benefit. Take the simple example. I buy a quart of milk from a farmwoman. I hand her the dollar; she gives me the milk. We both benefit, because she wanted the dollar more than the milk, and I wanted milk more than the dollar.

"Ram Piparaiya, Chairman, Aridhi Hitech Industries, Mumbai agrees: "Money does not corrupt. It depends on the user. Corrupt people become more corrupt with it." He, however, feels that those who don't earn but win money, especially through lotteries or gambling, are more likely to be corrupted by it

.B.R. Tangri, chief manager (PR) at the Oriental Bank of Commerce, Delhi, has a pointblank response to the debate: "How can money be evil? After all, can one survive without money?

"Actually, the notion that money corrupts is itself debatable. Money, intrinsically, is a means of trade. And the person who holds more money has greater power to dictate the terms of trade. Now, we have all heard that 'power corrupts'. But does power corrupt all? What about great leaders who have had the power to shape history, yet did it with integrity and wisdom? Then, shouldn't the responsibility of not being corrupt lie with the person and not the object of temptation?

"A knife can be used by a terrorist or by a surgeon," agrees Somani. "Bofors guns can be used to defend the country or get embroiled in an underhand deal. Whether money corrupts or not depends on one's attitude and character.

""Your attitude towards money," says Pradhyot Somaiya, management accountant with Davnet Telecommunications in Sydney, "has a significant reflection on your attitude to life. Some people see money as a means to an end, some as a tool to wield power, some as an end in itself-thinking it will bring them happiness. A person who sees money as only a means to satisfy needs will be relaxed and more benevolent than one who craves money for providing self-worth, security or power.

"Money may buy you ten yachts and five mansions. But, as the cliché goes, it really cannot buy you happiness. Or self-worth, for that matter. If you run after money to find what you couldn't find within, you are chasing a mirage that will only leave you more at a loss.

Is the Money Evil ?

Remember your first salary check? And the pride you felt to have earned something? How would you have felt if somebody had pointed out that it was wrong to like money? That the pride you were feeling was evil?A large part of this negative image has come about thanks to a misreading of the scriptures by the world's major organized religions, notably Christianity and Brahminical Hinduism . Wealth, claimed the pundits of yore, was a sin if it was not accumulated for a 'godly' purpose. Renunciation was the catchword, poverty the goal and austerity the norm of the day. If you did not practice these, you were a sinner, decreed to being either reborn as a lower animal if a Hindu, or to be barbecued in the fires of hell, if a Christian. There was, however, an easy way out. Just keep donating money to religious institutions and God would turn a blind eye to how you earn your wealth.

As Canadian Nathan Lester says: "Do you see a pattern here? Religion denounces money and then accepts 10 per cent of our earnings!"

But the scriptural truth was far from this bribe-God-be-happy image. Notes American financial consultant and inspirational author J. Grady Cash in his book Value-Based Money Management: "Money is not evil. The actual Biblical quote that leads to this common misconception is 'for the love of money is the root of all evil'. The ancient Aramaic text might more accurately be translated as 'for the lust after money is the root of all evil'. It's perfectly acceptable to want to make more money. Only when money is accumulated for its own sake or its accumulation hurts others does money become bad."Ditto in Hinduism. Artha, or wealth, is legitimate; money is indispensable in the present state of society. A man of the world without money is a failure; he cannot keep body and soul together. In fact, according to an injunction of Hinduism, first comes the body and next the practice of religion. Furthermore, money is needed to build hospitals, schools, museums, and educational institutions, which distinguish a civilized society from a primitive one. Money gives leisure, a key factor in the creation of culture. But money must be earned according to dharma; otherwise it debases a man by making him greedy and cruel.

VALUE FOR VALUE

"Money," is a tool of exchange, which can't exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value."

The catchphrase is 'value for value'. And, maybe, trust in a promise made on a piece of paper. In this sense, money or trade recognizes the belief that nothing in the world is free. Whatever we wish to have, has to be earned. So, if A wants what B owns, or is in a position to give, then A has to give B something of equal worth. Rand believed that only those who did not want to trade would condemn money. Who wanted for free what others had created with their effort and capability.

"Money has served as a medium of exchange after trying a variety of other items, which were found lacking," explains N.K. Somani, CMD of Shree Vindhya Paper Mills, Mumbai. "Every person needs products and services in life. Money plays the role of a recognized value for the exchange of commodities and services. If there was no commonly-accepted unit for these transactions, there would be anarchy in the world."

Rand went a step further in recognizing money as the means of sustenance. "Money is the source of survival," she wrote in Atlas Shrugged. "The verdict you pronounce upon the source of your livelihood is the verdict you pronounce upon your life." Perhaps it is worthwhile to wonder why money still draws so much flak. Why is it that most people hesitate to proclaim that they actually like money? What's the taboo all about? When did a simple tool for exchange metamorphose into an ambivalent entity that is at once a source of shame and exultation?

"The man who damns money has obtained it dishonorably; the man who respects it has earned it," proclaims Ayn Rand boldly.

Economic activities

The activities which are undertaken with the object of earning money are called economics activities. These activities are related to production, exchange, distribution, and consumption of goods and services. These activities are done to earn an income and to create wealth. Every human beings undertakes some kind of economics activities with the view to earn his living .All these activities create utilities. For example, a manufacture produces goods , a retailer sells goods ,a principle runs a school and a doctor runs a clinic to earn a living and to create wealth. These activities preformed by men to earn an income and wealth are known as economic activity. Thus , the economic activities are directly related to money. Economics activities are undertaken to produce goods and services so that human wants are satisfied. It has following features: (1) Earn money: One of the major features of economics activities is to earn money. Every human being undertakes some kinds of work with a view to earn money and his livelihood. A teacher teaching in class and a Clark working in an office with the object of earning money are economics activities. (2)Creation of utility: Economics activities are concerned with creation of utilities . Raw materials are produced into finished goods. Finished goods are distributed in the right place at the right time .All these activities creates utilities. Thus, creation of utilities is another features of economic activities. (3)Money Measurement: Economics activities are undertaken with a view to earn an income. All economics activities are related with wealth. Thus , they are measured in money. For example salary of a clerk is fixed and a laborers gets a fixed wage.

Trade

Trade refers to the sale, transfer or exchange of goods. It is an activity by which buyers and sellers exchanges useful goods and services for mutual advantage. It is process of by which goods are taken from the source of production to the consumers. The persons engaged in trade from the source of production to the consumers. The acts as an intermediary between producers and consumers. Trade may be broadly classified into two parts :(a)home trade and(b)foreign trade. (a)Home trade: Home trade consist of buying and selling goods within the boundaries of a country. Payment for such sale are made in national currency directly or through the banks and the internal transportation system is utilized for movement of goods. It may be further sub-divided into wholesale and retail trade. (b)Foreign trade: Foreign trade involves purchase and sale of goods between different countries. For example, trade carried on between new york and Kathmandu. Two countries are involved in foreign trade. It may be further sub-divided into into import trade ,export trade and enter port trade.

Aids to Trade

There are various obstacles in the way of smooth running of trade. All the obstacles are overcome with the help of various agencies known as Aids to trade. Some of the aids to trade include following services: (a) Transport: Goods are produced at a few places but are required for use at several different places. It is the function of transport to carry goods from centers of production to centers of consumption. (b) communication: T he transmission of information from one place to another for various purposes is known as communication. Development of industry and trade is very much depends on means of communication. (c)Banking and Finance: Banks and finance institutions provide finance to business units. They are traders of money and credit. They provide capital for the business in the shape of loan and also help them in remitting money from one place to another. (d)Insurance: During the movement of goods from place to place or during storage, there are chances of goods being damaged or lost .It protects the traders from the fear of loss of goods. (e)Advertising and Publicity: The consumers may not be the aware of the availability of various goods in market. The producer will also like to increase his customer .The advertisement is used to educate customer and to publicize goods and services to promote their sales.

Business

Business is an economic activity, which is concerned with the creation of wealth. It is restricted to only those activities that relate to production, distribution and exchange of goods and services .Purchase of commodities for self consumption or preventing gift or donation is not business. All business activities are economic activities but all economics activities are not business. Hence, an economic but all economic has four aspects:(1)creation of utilities,(2)regular exchange,(3)satisfaction of human wants ,and (4)economic gain. Now let us examine how far business satisfies these four criteria of an economic activities (1)Creation of utility: Business creates various types of utilities of goods. The utility may be form utility, place utility, time utility, etc. Utilities are created by means of production. When raw materials are proceed into finished goodS, it form utility. By transporting goods from one place of production to the place of consumption, place utility is created. The process of storing goods when they are not required and supplying them at a time when needed is called time utility. In these ways business creates many utilities in goods. Hence, business is essentially an economic activity. (2)Regular Exchange: Business is an economic activity which involves regular exchange of goods and services. It also include some services e.g. banking, transport, insurance, etc. which facilitates exchange. There is no business activity when a person grows vegetables in his kitchen garden for consumption by family members .This is because vegetables are not produced for exchange. Similarly one or few dealing do not constitute business. Similarly transactions should be repeated several times. (3)Satisfaction of Human wants: The ultimate aim of a business is to satisfy human wants by providing goods and services to the consumer. The business should try to satisfy the consumers so that demand for his product is maintained. The existence and expansion of business depends solely upon the satisfaction of the consumers. (4)Economic Gain: A business produces goods and services for sale at a price which often more than the cost of production. The excess gain, which is the main motive of every business. Thus, business is performed with a view to earning profit. Without profit motives business will not be an economic activity A business needs profit not only for its existence but also for expansion and diversification. The investors want an adequate return on their investments, workers want higher wages and the businessman needs money for reinvesting. These can be met only when some money are made. The profit motives does not mean exploiting consumers by charging higher prices for low quality goods. The businessman should charge a reasonable profit and it will be beneficial both to society and business.

Function of Business

A business has to perform a number of function in order to achieve its objectives. One of the major function of business is to produce goods from raw materials. Here the major function of business can be identified as follows: (1)Organizing function: One of the major function of business is organizing function. Man, machine, materials, machines and money are essential factors for any business. So organizing function accumulates and coordinates all the necessary factors of business. (2)Financing Function: Finance is the Life - blood of any business. The availability of factors of factors of production depends upon the availability of finance. So every business needs finance for its success. Hence under this function required capital is estimated, accumulated and properly utilized. (3)Production function: Production function is another important function of business. Converting raw materials into finished products to satisfy human wants by creating utility is known as production. Under this function raw materials and semi-finished product are proceed and assembled to create utility. (4)Marketing Function: The function of business is not complete with the production of goods and services only. The main goal of production is to satisfy human wants through the consumption of goods and services.