That Will Be 25 Blades
Posted by Jerry on August 6, 2007
Ah ha! Remember my travails in trying to find loose change one morning that ended up with me bitterly condeming an irrational restaurateur for his mysticism? Well, I think this article by the BBC might explain why Indians are so reluctant to part with their loose change.
Here’s an excerpt:
Millions of Indian coins are being smuggled into neighbouring Bangladesh and turned into razor blades. And that’s creating an acute shortage of coins in many parts of India, officials say.
The grocer confessed to melting down tens of thousands of Indian coins into razor blades which were then smuggled into Bangladesh, police said.
“Our one rupee coin is in fact worth 35 rupees, because we make five to seven blades out of them,” the grocer allegedly told the police.
John Drake at Try Reason, from whom I found the BBC article, highlights this Indian predicament as a logical consequence of an economy founded on arbitrary monetary values as opposed to being based on the gold standard. What it means for me is that I need to revisit Alan Greespan’s article on the gold standard in Capitalism: An Unknown Ideal.