English Quiz for Bank Exams 2016 – Set 18

When wealth came into existence,
a moral structure was made around money. The Puritan legacy inhibited luxury
and self-indulgence. Thoughtful people spread a practical gospel that
emphasized hard work, temperance and frugality and the result was quite
remarkable. The world has been affluent since its founding. But it was, by and
large, not corrupted by wealth. For centuries, it remained industrious,
ambitious and frugal. Over the past 30 years, much of that has been shredded.
The social norms and institutions that encouraged frugality and spending what
you earn have been undermined. The institutions that encourage debt and living
for the moment have been strengthened.. The moral guardians are forever looking
for decadence out of movies and reality shows. But the most rampant decadence
today is financial decadence, the trampling of decent norms about how to use
and harness money. The deterioration of financial traditions has meant two
things. First, it has meant an explosion
of debt that inhibits social mobility and ruins lives. Second, the transformation has led to a stark
financial polarization. On one hand, there is what is called an investor
class. It has tax-deferred savings plans, as well as an army of financial
advisers. On the other hand, there is the lottery class, people with little
access to financial planning but plenty of access to payday lenders, credit
cards and lottery agents.

The loosening of financial
inhibition has meant more options for the well-educated but more temptation and
chaos for the most vulnerable. Social norms, the invisible threads that guide
behaviour, have deteriorated. Over the past years, people have been more
socially conscious about protecting the environment and inhaling tobacco. They
have become less socially conscious about money and debt. The agents of
destruction are many and State governments have also played a role. They hawk
their lottery products with aggression,
which some people call a tax on stupidity. Twenty per cent of the world’s
population consists of frequent players, spending about $60 billion a year.
Aside from the financial toll, the moral toll is comprehensive. Here is the
government, the guardian of order, telling people that they don’t have to work
to build for the future. They can strike
it rich for nothing.

Payday lenders have also played a
role. They seductively offer fast cash –– at absurd interest rates––to 15 million people every month. Credit
card companies have played a role. Instead of targeting the financially astute,
who pay off their debts. they have found that they can make money off the young
and vulnerable. Fifty-six per cent of students in their final year of college
carry four or more credit cards. The nation’s leaders have played a role as
they have always had an incentive to shove costs for current promises onto the
backs of future generations. It has only now become respectable to do so. The
market itself has played a role. Software stalwarts built socially useful
products to make their fortune. But what message do the salary packages that
their top, managers get send across the country when they ignore millions of
fellow countrymen who suffer from poverty, malnutrition or hunger? Austerity
has become a thing of the past.

The list could go on. But there
could be some recommendations. First, raise public consciousness about debt the
way the anti-smoking activists did with their campaign. Second, create
institutions that encourage thrift.
Foundations and religious institutions could issue short-term loans to cut into
the payday lenders’ business. Colleges could reduce credit card advertising on
campus. The tax code should tax consumption not income. But the most important
thing is to shift values. The ‘wise’ made it prestigious to embrace certain
middle class virtues. Now it’s socially acceptable to undermine those virtues.
It is considered normal to play the debt game and imagine that decisions made
today will have no consequences in the future.