Money Banking & Finance

Money Banking & Finance 33
13. Industrial Revolution:
Money can be thought of as an important factor that brought about the industrial revolution during the last century. It made possible the valuation of different resources so that they can be used in the most profitable way. It also helped in the valuation of certain professional services such as lawyers, auditors etc. The feasibility reports can be prepared with reasonable certainty because we can calculate present and future values of assets and expenses in monetary terms. The profound research and development carried on in today's world also owes great to the money.
14. Growth of Multinationals:
Money has accelerated the process of creation of joint stock companies and emergence of multi nationals. It has brought more flexibility in business and trade. It has greatly helped in .the movement of resources across countries and continents.
15. Government:
Money is perhaps the basic need of the governments besides lot of others. Governments need money to perform all such functions as maintenance of law and order, defence expenditure, provision of justice, etc. Governments also need money to make huge transfer payments such as pensions, gratuity, allowances etc.
Role of Money in a Socialist Economy:
Socialist economy is one which is characterised by social ownership of means of production, economic equality and equality of opportunity. All decisions regarding production, consumption are taken up and implemented by the Government. In such an economy the role of money is somewhat restricted and limited. As there is no freedom of choice and private enterprise so profit motive is also absent. The planning and development policies are adopted by govt. and resources belong to the central authority. Due to these factors true worth of the resources is not established and as price mechanism is suppressed in socialist economy so there is a lack of incentive and motivation to increase productivity and efficiency. But inspite of all this money is important for such an economy too. Governments have to prepare budgets whether,they are ruling a capital or a jocialist economy. Further they have to hold and accumulate foreign exchange reserves "or different purposes. A socialist economy is equally in need of money to perform variety of functions such calculation of national economic indicators, preparation of fudgets, borrowing and debt servicing, payment of wages, salaries, pensions, allowances, ubsidies, etc.
lole of Money in Mixed Economy:
It is important to note that neither perfect capitalism, nor perfect socialism exist nywhere on the earth. All the economies of the world are the mixture of these systems
:ith different proportion of each.
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