Monetisation of resources and differential wealth creation

Farmers give us food. Miners give us minerals.Carpenters give us furniture. Plumbers and masons give us a house to stay. These are basic services where the worker has to toil hard and earn his/her income by producing goods and services. There are innumerable such trades from low skilled barber,beautician to high skilled cardiologist and a pilot. Here the service provider has to invest her time and get paid for her work on a day to day basis. Such businesses are not scalable though. One can examine or operate on only a certain number of patients or fly so many hours in a day.If the activity stops then payment ceases.Now compare this with a scalable business such as a stock market trader. He/she can invest either 'x' amount or '10x' amount of capital for the same trade. The trade irrespective of the quantity needs exactly same amount of research,trading strategy and tools. But if the trade works (stop loss is triggered if it does not work) then profits are 10 times higher for the same amount of effort.So a seasoned trader or investor can create much more wealth than a high skilled service provider who actually toils hard. This leads to differential wealth creation in any society.

This has been possible due to developments in technology and its application in stock exchanges, internet, PCs/laptops. As an outgrowth of this people are trending towards trading as a serious profession. Since resources are all monetised, one can actually 'own' crude oil through futures and options. There is no need to physically own a crude oil well. One can do the same with gold, copper, platinum, agri-commodities what have you. I feel this is a dangerous trend. Technology is transferring power in the hands of very few selected individuals,business groups and nations. Crucial national resources are being controlled through 'paper trading' by vested interests. That is why we have 'toor dal' at Rs 130 a kg and sugar nearing Rs 40 a kg.

We as a society need to have a serious debate on this issue. Our oil and gas blocks are seeing a big corporate battle in the Supreme Court. Now food is very expensive for the lower middle class and people below poverty line. Soon water may be a serious issue. It is not that we do not have plenty of resources in this country. We have plenty. But these resources are being controlled by the selected few through 'paper trading'. Monetisation of resources is leading to this differential wealth creation. This could lead to civil unrest in the future if not corrected in time.

rgds

Vibhas