Invention of money has not proved to be an unmixed blessing as its use has become a source of so many evils too. I f money is not used properly; it can create havoc and may prove to be disastrous for the mankind. Some of the evil effects of money arc listed here.
Economic Defects
1) Use of money has given rise to greed and exploitation of poor which has resulted in greater inequalities of incomes and wealth. History shows that i t is the economic exploitation that triggers any social upheaval.
2) Money helps in extending the scale of production, which after certain limits may result in a situation where production far exceeds the demand. This leads to fall in level of prices, unemployment, decline in incomes and thereby misery for the masses.
3) By facilitating borrowing and lending, money may encourage overcapitalisation (i.e., using too much capital in place of labour) in production, thereby creating large scale unemployment in the economy.
4) When a government/central bank increases the supply of: money by simply printing new notes, it leads to sharp rise in prices. This adversely affects the purchasing power of fixed income groups in the society, resulting in class-conflicts and social disorder.
Social Defects
1) Money has encouraged many kinds of anti-social activities like gambling, fraud, robbery, etc.
2) It makes people greedy and acquisitive.
3) It encourages tendencies of exploiting others.
However, it cannot be denied that most of the evils listed above arise because of improper use of money; these are not evils of money itself. Hence, there is a greater need to use money as a faithful servant than to become slaves of money and invite troubles. It has been rightly remarked that money which has been source of so many blessings to mankind becomes a source of peril and confusion unless we control it.
