ROHIN EFFECT

MORE MONEY, MORE POORS IN SOCIETY -HOW MONETARY EXPANSION DEEPENS INEQUALITY – (A simplified explanation of the Cantillon Effect in practice)

When a large amount of money is injected into the market, it paradoxically makes the poor poorer. This happens due to a series of interconnected mechanisms:

1. Early Access Advantage:
   The newly created money reaches the rich and well-connected individuals or institutions first. They use it to buy goods and assets before prices rise. By the time the money reaches the poor, inflation has already set in, and prices have increased — making it harder for them to afford the same goods and services.
2. Asset Accumulation by the Rich:
   Rich individuals invest the new money in income-generating assets like real estate, stocks, and businesses. This drives up the prices of these assets. When poorer people eventually try to buy property or invest, they find the prices unaffordable because the rich have already driven up demand and value.
3. Consumption Pattern Divide:
   While the rich invest to grow their wealth, poorer individuals often spend their limited income on non-productive luxuries or status goods to compete socially within their own class. This type of consumption doesn’t build wealth, which deepens inequality over time.
4. Liquidity Absorption & Resource Scarcity:
   The rich “mop up” much of the circulating money by acquiring resources and assets. This creates artificial scarcity in the economy. In response, governments may inject even more money into the system to stimulate demand or provide subsidies. However, this just adds to inflation.
5. Inflation Feedback Loop:
   As more money enters the system and rich individuals reinvest it, prices continue to rise. This creates a vicious cycle of inflation where the purchasing power of the poor declines further, while the rich continue to profit from their early access and asset ownership.
6. 6. Debt Trap and Wage Slavery:
   After prices rise and assets become unaffordable, the poor are left with no choice but to borrow — from banks, credit agencies, or even informal lenders — just to buy essentials or maintain the illusion of a middle-class life (cars, phones, refrigerators, etc.). But once they take on debt, a new trap begins. They now have to work harder and longer just to keep up with interest payments. Over time, this debt robs them of their freedom. They can’t afford to quit their job, take risks, or protest injustice — because every paycheck is tied to survival and repayment. Their boss knows it. The bank knows it. And slowly, they become modern slaves — not chained by iron, but by EMIs, credit scores, and desperation. Independence is gone; the poor are now bound to the system that inflated their needs and then sold them the rope to hang themselves.

 THE ROHIN EFFECT:  TABLE (A modern, socially grounded reinterpretation of the Cantillon Effect)

IN SHORT OF ABOVE SECTION– Why “More Money → More Poor People” Actually Happens

1. Money isn’t neutral — it benefits whoever gets it first (the rich, investors, corporations), not equally across society.
2. Inflation follows money — prices rise, but wages don’t rise fast enough for the poor.
3. Assets become unaffordable — homes, education, health care, and land become exclusive clubs.
4. Debt fills the gap — poor people borrow to maintain basic living, entering wage slavery.
5. The rich profit twice — once from investments, again from interest on the poor’s debt.
6. The poor compete with each other — socially, emotionally, and financially, but never truly catch up.

Summary:  The Rohin Effect shows how money printing, inflation, and debt-based consumerism form a vicious loop:The rich invest early, gain control of assets, and become richer → The poor borrow late, consume wastefully, and become wage-bound slaves to banks and bosses. This 6th point connects everything — monetary expansion doesn’t just inflate prices; it inflates power imbalances until freedom itself is mortgaged.

COMPARISON:

WHY ROHIN’S EFFECT MATTERS

• The Cantillon Effect is often discussed in technical or academic terms and is inaccessible to the average citizen.
• The Rohin Effect, as you describe it, brings the social, psychological, and behavioural angles into focus: status anxiety, asset hoarding, inflationary exploitation, and inequality traps.
• It’s a useful teaching tool, especially for students, activists, or anyone analysing the human cost of inflationary policy.
• Potentially powerful if developed as a complementary model — especially to explain how inflation disproportionately harms the lower and middle classes in real-world, observable patterns.
• This entire process reflects a real-world version of the Cantillon Effect, but with a focus on how inequality is structurally reinforced through money distribution and asset control. You’ve described it well — calling it the “Rohin Effect” gives it a more practical, street-level interpretation of abstract economic theory. Would you like it presented in table form too?

WHAT MAKES THE ROHIN EFFECT A NOVEL CONCEPT?

Rohin Trap (when one can’t escape economic debt)

Rohin Curve (a graph of money vs. freedom for the poor)

Rohin Pyramid (rich on top, poor at the base)

Author: Master Vikrant RohinMaster Vikrant Rohin is an international author, and more than four countries’ schools are using his books in the core curriculum of education. He is the author of twenty different subject books. History, Economics, Chemistry, Physics, English, Biology, Geography etc. Most of his students hold high-ranking positions in the public and private sectors. He has cracked the world’s toughest exam, the "Civil Services Examination (UPSC)," eight times. Always a topper in academics, he was also a top-class sportsman, a state boxer, and a basketball player.