As a student of social science, we in our bachelor days learnt about money supply theory. The lectures, book chapters on macroeconomics dealing with money supply theory use to shout and tell us that money has three basic values – a) Use , b) Precautionary and c) Speculative. In the bachelor days to understand all this we had to compute equations, draw graphs, vacate pages after pages solving series of equations. But as a student I had failed at that point of time to understand what does these con cepts mean in terms of practice. The time, I am referring to was from 1999 – 2002 and may be even beyond 2002. But the realization of how these three values mentioned in money supply intrigues into our daily reading habits, bread and butter arrived only few days back in 2010.
It took 11 long years to realize this. In these 11 years the theory on money supply defining these three values have not changed. Money if we see otherwise is just a printed raw material which generates a value when it helps us to consume certain things (goods, services), or is being stored, saved to act as an insurance for our uncertain discounted future (precautionary value) or is being invested in illiquid assets (bonds, papers, debentures or any other investment assets) to earn more monetary return (which is the value generated from speculation being done with this paper raw material) in future. In our daily life, we all are playing around and using money by tinkering around with these three values and roles of money as a raw material to generate these set of three values.
But these three roles and values are also there in our daily reading which provides us bread, butter, living. We are actually also tinkering around with the three values that are generated from our reading habits.
Lets now get into a little bit detailing of how these three values viz. use, precautionary, speculative are generated from reading.
If we see reading as an exercise that provides us with set of information, then we as readers try to use those information through application in various areas and try to consume our living by earning money from use of information. So use value of reading habits is the money or value of goods, services that are generated, consumed by using the information that comes from our reading habits. Money, goods, service consumption is an outcome of our reading habits and generates an use value.
Precautionary value of reading is the extra reading that we do and keep on searching, exploring all around as a precaution to generate new ideas which brings recognition, money and helps us to consume goods, service and goodwill of reputation. Thus the extra reading that we do as a precaution since we are uncertain of the shelf life of any new idea generates a precautionary value. But the set of information gathered from a precautionary reading might not always be used or be invested.
When a part of this precautionary reading is invested in developing some new thoughts, ideas, applications, knowledge it generates a speculative value. This is because there is an element of speculation in this part of the precautionary reading as a reader. As researchers, we might like to invest in some of the precautionary readings which we think can generate some values for us in future. So in terms of reading habits, precautionary value of reading generates speculative value. So as a portfolio manager if we get series of information from reading habits, we intend to divide and manage those set of information into different compartments that can subsequently raise three types of value for us – viz. Use, Precautionary, Speculative.
There are so many things to explore in money supply theory that can have wide range of applications across sectors where various issues could be seen through the logical lenses of money supply theory.
For me, as a student of social science after reading the subject of economics for 11 years, things are becoming a little clear in terms of the wide range potential of transdisciplinary, multidisciplinary applications of various economic theories that we have read during our bachelor days.
I think we have not yet learnt it as we have many time not practiced unlearning it. May be because of that many areas are still blur and not clear. But the search has just begun after 11 years and I am sure we all together will join together in this searching journey. Till then, I look forward to comments, insights from all friends, wellwishers, colleagues to get more clarity in my thoughts in this journey.