Contemporary Issue on Chit Funds -“The Invincible”

An contemporary issue report on CHIT FUNDS â€Å"THE INVICIBLE† 2013-2014 Made by : Fakhruddin Badshah PREFACE This document sketches the the meaning, introduction, overview,its working,online chit funds, I threw some light on latest news about this sector and also tried to cover the latest upsteram and downsteam aspects of this sector (chit fund companies). My aim of writing on this issue is who will going to stop the fraudulant activities being done by this companies. I chose this segemnt for my contemporay because this is going very common among the people in today’s time.So I thought lets give away the the detail of this segment to the people. With the help of this document people will come to know what exactly going on in this domain. This sector is expanding rapidly like anything. This developments has become a catalyst for the growth of vigourous chit fund companies in all over India. So what provisions should be made to curb the alleged false practices done by t hese companies or segment. Thus it is the to think and act on it to protect the interest of small investors and their hard earned incomes. Index Introduction| 5-7| Overview of chit fund| 8|How chit fund works| 9-11| 2012-2013 Highlighted News about chit-fund| 12-13| Who will stop chit funds? | 14-18| Report of MCA| 18-21| Benefits| 21-22| Drawbacks| 23| Safety from Chit funds| 24| CHIT FUNDS – â€Å"The Invincible† Introduction: A chit fund is a type of savings scheme practiced in India, besides other forms of savings scheme offered by various public and private sector banks, post offices, insurance corporations etc. Chit Funds are indigenous financial institutions in India that cater to the financial needs of the low-income households, which have been excluded from the formal financial system. Chit†, in the legal purview, means a transaction whether called chit, chit fund, chitty, kuri or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or a certain quantity of grain instead in the case of villages) by way of periodical installments over a definite period and that each such subscriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement, be entitled to the prize amount.In simple words, A chit fund is a savings-borrowing scheme, in which a group of people enter into an agreement to contribute fixed amounts periodically, for a specified period of time. The amount so collected (or the chit value) is distributed among each of the persons in turns, which is determined by way of lots or an auction. Chit funds provide an opportunity to save excess cash on a daily, weekly or monthly basis, and give an easy access to it in case of emergency. Chit funds are the Indian equivalent of the Rotating Savings and Credit Associations (ROSCA) that are famous thr oughout the world.ROSCAs are a means to â€Å"save and borrow† simultaneously. It is considered one of the best instruments to cater to the needs of the poor. It enables poor people to convert their small savings into lump sums. The concept of chit funds originated more than 1000 years ago. Initially it was in the form of an informal association of traders and households within communities, wherein the members contributed some money in return for an accumulated sum at the end of the tenure. Participation in Chit funds was mainly for the purpose of purchasing some property or, in other words, for â€Å"consumption† purposes.However, in recent times, there have been tremendous alterations in the constitution and functioning of Chit funds. While in most places ROSCAs are user-owned and organized informally, in India, chit funds have been formally institutionalized as well. Legally recognized firms provide a variety of chit schemes. A Chit Fund can either be legally regist ered or unregistered. Registered Chit Funds, as the name suggests are being regulated under the various Chit Fund acts. While unregistered Chit Funds are unorganized and mostly run by the close friends, relatives or family members of the investor.Unregistered Chit Funds which exceed 100 ($2) in value are illegal in India, although it is very well known that unregistered Chit Fund industry is very popular in India, mainly in the rural and semi-urban area, where people have very little access to the banking services and where financial illiteracy is more. The regulation of the Chit Fund industry was put in place by the Government of India to address the problem of misuse of informal Chit Funds by unscrupulous promoters and founders running away with the participant’s funds, leaving the members with little recourse to retrieve their money back.Chit funds in India are governed by various state or central laws. Organized chit fund schemes are required to register with the Registra r or Firms, Societies and Chits. Various Chit Fund Acts governing the industry in India are as under: * Union Government – Chit Funds Act 1982 (Except the State of Jammu and Kashmir) * Kerala – Kerala Chitties Act 1975 * Tamil Nadu – Tamil Nadu Chit Funds Act, 1961 * Karnataka: The Chit Funds (Karnataka) Rules, 1983 * Andhra Pradesh – The Andhra Pradesh Chit Funds Act, 1971 * New Delhi- The Chit Funds Act,1982 and Delhi Chit Funds Rules, 2007 * Maharashtra – Maharashtra Chit Fund Act 1975 Uttar Pradesh: Uttar Pradesh Chit Funds Act, 1975 * Goa, Daman & Diu: The Goa, Daman and Diu Chit Funds Act, 1973 * Pudducherry/Pondicherry: The Pondicherry Chit Funds Act, 1966. An overview of chit funds: The economic development of a country depends upon the availability of resources. The main activities that contribute to the growth are production and employment. Production depends upon the inputs of the factors such as finance, raw materials, labor etc. The mo st important here bring finance, which is the chief mobilized of all the factors of production.In a money economy, finance for development initially comes from private savings. These private savings give to the secondary deposits; this is where the financial institutions come into picture. Financial institutions occupy a central place in mobilizing savings from the people and make it available to the trade, commerce and industries either as a capital or loans. The non banking sector comprises of money lenders, indigenous bankers, pawn brokers, nidhis, â€Å"chit funds† etc.The origin of chit funds can be traced way back to the 17th century when the economic wizards of state of Malabar (now known as the state of Kerala) started this activity. Those were the people who actually founded this financial institution. It became so popular and numerous that people started adopting this activity as a profession by the 18th century all over. As the chit industry grew the number of peop le involved in this industry also grew. This gave rise to many misconceptions, frauds, mismanagement etc. , in this industry.To prevent this State Government of Travancore took the first initiative and introduced the first Chit Fund Regulation being the Chit Fund Act 1914. One important regulation introduced by this act was that of a commission payable to the foreman. The Act brought about a ceiling limit on the commission payable to the foreman that is 5% maximum which is still the same even to this date. How chit funds works: Chit funds which are popular from a very long time but still some people don’t know how exactly this chit fund works and invest their money illogically.This can be understood by the following procedure: Let’s say there are 20 people who come together and form a group. Each one will contribute Rs 1,000 per month and this will continue for next 20 months (equal to number of people in the group). In this group there will be one organizer, who will take the pain of fixing the meetings, collecting money from each other and then doing other procedures. So each month all these 20 people will meet on a particular day and deposit Rs 1,000 each. That will make a total of Rs 20,000 every month.Now there will be a bid on who will take this money. Naturally there will be few people who are in need of big amount because of some reason like some big expenses, liquidity crunch, business problem, Beti ki Shaadi etc etc Out of all the people who are in need of money, someone will bid the lowest amount, depending on how desperate he is for this money. The person who bids for the lowest amount wins the bid. Suppose out of total 3 people who bid for 18,000, 17,000 and Rs 16,000, the one who bids the lowest will win.In this case it’s the person who has bid Rs 16,000. There will also be â€Å"organizer charges† which are around 5% (standard) of the total amount, so in this case its 5% of Rs 20,000, which is Rs 1,000. So out of the total 16,000 which this winner was going to get, Rs 1,000 will be deducted and the winner will get only Rs 15,000, Rs 1,000 will be organizer charges and Rs 4,000 is the profit, which will be shared by each and every member (all 20 people), it comes out to be Rs 200 per person, and it will be given back to all 20 members.So here you can see that the main winner took a big loss because of his desperate need of getting the money and others benefitted by it. So each person actually paid just 800, not 1,000 in this case (they got 200 back). Note that when a person takes the money after bidding, he can’t bid from next time, only 19 people will be eligible for bidding. Now next month the same thing happens and suppose the best bid was Rs 18,000 , then winner will get 17,000 (after deducting the organizer fees) and the rest 2,000 will be divided back to people (Rs 100 each) . So each person is paying effectively Rs 900.This way each month all the people contribute the money, someone takes the money by bidding lowest, organizer gets his charges and the rest money is divided back to members. You will realize that the person who takes the money at the end will get all the money except organizer fee, as there is no one else to bid now. So the person will get around Rs 19,000 in the end, if you try to find out the returns which he got out of the whole deal, it will depend on two things, how much lower bids were each month and the fees paid to organizer, if bids and charges are very low, then a person will make more money at the cost of other situations.So this is pretty much how a chit fund works, there are various versions of chit funds and how they work , but the idea was to communicate the basic model and how it works. | Online Chit Funds is also running with pace of E-commerce With the advent of ecommerce in India, Chit funds have also started going online. Online chit funds conduct auctions online and subscribers can pay their monthly dues and receive prize am ount online through online transactions including electronic fund transfers. Each member will have an online account through which they can manage their chit funds. 2012-2013 Highlighted News about chit-fund: . Cunning strict approaches adopted by RBI to protect the investors from delusive acts of chit fund companies. 2. Last year in the month of December, The Reserve Bank of India (RBI) warned all the state governments about the mushrooming of chit funds and also written to them to take appropriate actions against them for duping depositors. 3. RBI Governor Duvvuri Subbarao said, â€Å"The responsibility for checking the chit funds and for prosecuting the violation of law is of the state government. We have written to all the state governments to be vigilant about this and to take appropriate action†. . D Subbarao also called for greater awareness among police and the general public for checking the proliferation of the chit funds in the country. 5. On 6th December 2012, Min ister of State for Corporate Affairs RPN Singh said that 87 companies have come under the scanner for alleged irregularities related to chit fund schemes and money circulation in the garb of multi-level marketing. The Registrar of Companies (RoC) and its Regional Directors have been asked to scrutinize the balance sheets and inspect the books of accounts and other records of these 87 companies. . India's market regulator, Securities and Exchange Board of India (Sebi) had banned companies such as Rose Valley and MPS Greenery Developers from accepting deposits from the public. 7. The former chief minister also pointed it out that small savings through post offices and co-operatives has suffered a lot as many people are depositing their money to these chit funds expecting huge return. 8. In Bhubneshwar, The crime branch told that they are making a short documentary to sensitize people about illegal non-banking financial companies (NBFCs).The film will feature a host of financial manage ment companies like Seashore, Ashore and Saffex, whose irregularities were exposed recently. The Economic offences wing (EOW) of the Crime Branch has registered at least 30 cases against several fraud companies in the past six months for embezzling public deposits after giving them false promise of high return. Senior functionaries (Head) of the companies were arrested and their bank accounts being ceased. 9. EOW also making plan to start a toll free number to protect people from fraudulent activities done by chit fund companies. 10.Government making steps towards the projection of model; rules to check chit fund and MLM (Multi-level Marketing) frauds. The central government will soon make stringent provisions in place, like hefty financial penalty, jail terms, de-listing from the registrar of companies (RoC) roster, among others. Who will stop chit funds In October 2012, a women and her elder daughter were running a chit fund, committed suicide by consuming acid in Puthur in Trichy as they were unable to repay their investors. These women had started a Diwali chit fund in the year 2011 and attracted around 300 investors in the area.They had collected around `9lakh from the investors. As per norms, the chit fund company should have repaid the money with interest or given assured gifts to the investors before Diwali of the year 2012. When the investors pressurize the women, they decided to end their lives and consumed poison. Investors are helpless. This is not the only case there are numerous. Most chit fund investors are the rural poor and or small investors. Neither the victimized investors nor the police bring to book the persons responsible. Only the poor agents remain in place from whom the money cannot be recovered.According to Ministry of Corporate Affairs (MCA), there are 4256 listed or registered chit fund companies which are running their business in the country while India chit-fund association estimates that the country has in total 15000 (register ed and unregistered) companies which manage billions of rupees worth of funds. ShriRam Capital, one of the largest players, operates in four southern states and manages over USD 800 million. Some hope that recent hiccups in India’s once-booming microfinance sector, whose rise was led by microcredit, could bring even more business their way.One can imagine how big the business is all over India. Too many regulators could not stop irregularities in chit funds. Everybody agrees that irregularities need to be stopped because these are causing harm to a lot of small investors. But the question is; who will stop it? In 1978, when the RBI banned chit funds, it came under the ministry of corporate affairs as a collective investment scheme. Another way these companies work is through private placement of the non-convertible debentures or collective investment scheme. In this case, SEBI has the power to regulate it.Sahara and many other big names are in on it. Any debenture or private placement cannot be done by more than 50 people. In contrast, these kinds of companies collect money from thousands of investors. If the number of investors of share and debenture is more than 50, it needs to be registered in the market and the SEBI would control it. RBI wants the state government to take steps: In this context, RBI has a different take. Subbarao, Governor, RBI, has advised the state governments to make their law stronger to save common investors from the chit fund trap.It has written letters to the states to develop a definite action plan to take step against these multi levels marketing player. Subbarao explained that RBI has no power to regulate chit funds. So, it has asked state government to take the initiative to prevent the mushrooming of money market agencies. RBI can train police and other legal bodies about chit funds but cannot instruct the police to do so. It is a state subject to plan and executes the prevention process of chit funds. Corporate Affairs ministry looking into it:Union corporate Affairs Minister Sachin Pilot has said that the central government is looking into the issue of some chit funds and the Ponzi scheme that allegedly dupe small investors by using legal loopholes. It would also encourage state government to take necessary action against these firms. These firms are now misusing the loopholes, pilot added. Furthermore he added, â€Å"Our main objective is to protect small investors from these companies, who are taking their (investors) hard earned money. † As many as 87 companies have come under the scanner for alleged irregularities related to chit fund schemes and money circulations.Minister of State for corporate Affairs R. P. N. Singh has informed the Rajya Sabha that the directions have been issued on the basis of specific complaints received by the ministry against these companies, which are â€Å"alleged to be carrying on activities related to prize chit fund and money circulation in the garb of m ulti-level marketing. Legislative hodgepodge: Singh further said that SFIO (Serious Fraud Investigation Office) has recommended setting up of a specific central regulatory agency for the implementation of the prize chit and money circulation scheme (Banning) act, 1978.The act is administered by the Department of Financial services (DFS) which has constituted an Inter-Ministerial Group consisting of representatives from DFS, Ministry of Corporate Affairs (MCA), RBI, Security and Exchange Board of India (SEBI), Department of Consumer Affairs and Central. Report of Ministry of Corporate Affairs: List of Companies not registered but found doing Chit Business Beware of these Companies. Never join them. M/s. P. V. R. Chits (P) Ltd. , B-50, Flatted Factories, Okhla Phase-III, N. Delhi-20. | M/s. Narmal Chits (P) Ltd. , 1427, Gurudwara Road, Kotla Mubarakpur,N.Delhi-3. | M/s. Sahara Chits (P) Ltd. , WZ/A-49, Krishna Park Extension, N. Delhi-18. | M/s. Twenty Second Century Chit Fund (P) Ltd . , 4205-4206, Sant Nagar, Main Road, Rani Bagh, Delhi-34. | M/s. Skylla Chits (P) Ltd. , D-223/115, Laxmi Chambers, Laxmi Nagar, Delhi-92. | M/s. Hari Vimal Chits (P) Ltd. , Shop No. 8, M. R. Market, Rangpuri, N. Delhi-70. | M/s. Merchant Chits (P) Ltd. , CA-24/2, Tagore Garden, N. Delhi-27. | M/s. Mehar Chits (P) Ltd. , IIIrd Floor, 528, Krishna Gali, Katra Neel, Chandni Chowk, Delhi-6| M/s. Vinamar Chits (P) Ltd. , 170-E, Kamla Nagar, Delhi-7. | M/s.Vinamar Chits (P) Ltd. , 272, Hakikat Nagar, Mall Road, Delhi-9. | M/s. Well King Chits (P) Ltd. , C-47, Acharya Niketan, Mayur Vihar, Phase-I,Delhi-91. | M/s. Aegis Chit Fund (P) Ltd. , E-484, Greater Kailash-II, New Delhi-48. | List of Companies which have been debarred from doing any Chit Fund business in Delhi   NAME| ADDRESS| A. G. CHIT FUND PVT. LTD. |    | ARJIT CHITS PVT. LTD. | | BHAGMAL CHITS PVT. LTD. | | CHOJI PRITAM CHITS PVT. LTD. | | DISHTI CHIT FUND PVT. LTD. | DIRECTOR: Sh. Ajay Pandon| DISHTI CHIT FUND PVT. LTD. | DIRECTOR: Sh. Sudarshan Kapoor| EK-ONKAAR CHIT FUND PVT.LTD. | | EROS FIN. ; CHIT FUND PVT. LTD. | | GIRDHAR CHITS PVT. LTD. | | GOLDEN BENEFIT CHITS PVT. LTD. | | J. KRISHNA CHIT FUND PVT. LTD. | | J. V. CHITS PVT. LTD. | | KADS CHIT FUND PVT. LTD. | | KHAJANA CHITSPVT. LTD. | | LEAN CHITS PVT. LTD. | | MINCO CHITS PVT. LTD. | | NIKETAN CHIT FUND PVT. LTD. | | PARVATI CHIT FUND PVT. LTD. | | PARVEEN CHIT FUND PVT. LTD. | | POMA CHIT FUND PVT. LTD. | | PROSPER CHIT FUND PVT. LTD. | | RITESH CHIT FUND PVT. LTD. | | ROHTGI CHIT FUND PVT. LTD. | | ROYAL CHIT FUND PVT. LTD. | | RUHANI CHIT FUND PVT. LTD. | | S. T. S. CHIT FUND PVT.LTD. | | SAFAL CHIT FUND PVT. LTD. | | SATSANGI CHIT FUND PVT. LTD. | | SIMPLICITY CHIT FUND PVT. LTD. | | SUBHASH NAGAR CHIT FUND PVT. LTD. | | TRI NAGAR CHIT FUND PVT. LTD. | | VEDANTA CHIT FUND PVT. LTD. |    | YOG MAYA CHIT FUND PVT. LTD. |    | PARVARISH LEASING ; FIN. (P) LTD| Shop No. 6, Mafare Garden, New Delhi| M. V. A. CHIT FUND (P) LTD. | Shop No. 10, Krishna Mkt. ,Lajpat Nagar,N. Delhi. | HONOUR CHITS (P) LTD. | 2352, Sevak Bhawan,IIIrd Floor, Shop No. 9,Beadon Pura,Karol Bagh, N. Delhi. | * Source Ministry of corporate AffairsBenefits of Chit funds: Chit Fund is an attractive Investment Option which caters to people from all walks of life. It is specifically beneficial to the Salaried Class, Professionals, Businessmen and Self Employed. The uniqueness of Chit Fund as a method of Financial Planning stems from the fact that, it is both a tool for saving and borrowing. In other words, it serves the dual purpose of being an investment for your savings and in times of need the Subscriber can bid for the Prize Amount in order to meet any unexpected expenditure. The benefits of Investing in Chit Fund are numerous. You can choose how much you want to save per month. Chit funds companies offers chits of various denominations and monthly subscriptions amount ranges from Rs 2500/=(Chit value Rs 1 lakh) to monthly subscription of Rs 1,25,000. * The rate of return is very high compared to other Investment Options and it is also secure form of Investment. * Your Monthly payments will be the Chit Subscription Amount minus the Dividend. The details of the Dividend entitled for Deduction and the Balance Amount payable shall be informed every month, which is mandatory. It inculcates the habit of saving and setting apart a particular amount every month towards investment for a rainy day. * It is good for the Housewife to keep or save their small savings in Chit funds as they will get the money at the time of utmost financial need for household purposes. * It is generally used by housewives, employees of same company, peer groups, friends, and family members or some associations. * If it is used in proper or genuine way then it is makes a worth to invest in chit funds (Organized or unorganized). Drawbacks: Chit-funds do not offer any pre-determined or fixed returns. * Higher returns are earned when there are more nu mber of members in the group or if the duration of the scheme is longer. * One would earn more, when more members need emergency funds. Thus returns cannot be calculated and decided when one joins the scheme. * No security in unregistered chit fund companies. So there are more chances of getting hoax by these fraud companies. * Organizer gets benefited more from your savings. * No guarantee if fixed returns. * In chits interest earnings are lower than Fixed deposits (FD). High degree of risk is associated with chits, so relying on chit funds for saving could be more dangerous. * Chit does not make money; it is just a mechanism for liquidity and emergency funds. * Many chit fund owners are collecting huge volume of money from the common people by making false promises to them. Many poor people of our state are being allured by these chit fund owners and depositing their hard-earned money. But the people are not getting back returns for their investments How to be a Safe investor in C hit Funds:With the plethora of chit fund companies around, the safety of a chit fund lies in choosing the right one. In a registered chit fund company, under legal binding, the activities are regulated and institutionalized by the Chit Fund Act. And hence could be considered safe. However, other unregistered companies operating informally do exist. It has been also seen that depositors are being lured by chit funds companies or firms with higher returns than what banks offer them. These companies are also flourishing in the rural belts where banking penetration is low.One should carefully analyze the pros and cons before making investment in chit funds. Therefore one needs to exercise caution while choosing where he desires to invest. Chit funds definitely are an attractive option for regular saving. It inculcates a disciplined approach to financial planning. It has the added advantage of bringing a combination of savings as well as hassle free borrowing. This dual purpose investmen t tool could be a friend in need at times of unexpected financial emergencies. Thence BE SAFE AND BE SELECTIVE while going for any chit fund schemes. Contemporary Issue on Chit Funds -â€Å"The Invincible† An contemporary issue report on CHIT FUNDS â€Å"THE INVICIBLE† 2013-2014 Made by : Fakhruddin Badshah PREFACE This document sketches the the meaning, introduction, overview,its working,online chit funds, I threw some light on latest news about this sector and also tried to cover the latest upsteram and downsteam aspects of this sector (chit fund companies). My aim of writing on this issue is who will going to stop the fraudulant activities being done by this companies. I chose this segemnt for my contemporay because this is going very common among the people in today’s time.So I thought lets give away the the detail of this segment to the people. With the help of this document people will come to know what exactly going on in this domain. This sector is expanding rapidly like anything. This developments has become a catalyst for the growth of vigourous chit fund companies in all over India. So what provisions should be made to curb the alleged false practices done by t hese companies or segment. Thus it is the to think and act on it to protect the interest of small investors and their hard earned incomes. Index Introduction| 5-7| Overview of chit fund| 8|How chit fund works| 9-11| 2012-2013 Highlighted News about chit-fund| 12-13| Who will stop chit funds? | 14-18| Report of MCA| 18-21| Benefits| 21-22| Drawbacks| 23| Safety from Chit funds| 24| CHIT FUNDS – â€Å"The Invincible† Introduction: A chit fund is a type of savings scheme practiced in India, besides other forms of savings scheme offered by various public and private sector banks, post offices, insurance corporations etc. Chit Funds are indigenous financial institutions in India that cater to the financial needs of the low-income households, which have been excluded from the formal financial system. Chit†, in the legal purview, means a transaction whether called chit, chit fund, chitty, kuri or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or a certain quantity of grain instead in the case of villages) by way of periodical installments over a definite period and that each such subscriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement, be entitled to the prize amount.In simple words, A chit fund is a savings-borrowing scheme, in which a group of people enter into an agreement to contribute fixed amounts periodically, for a specified period of time. The amount so collected (or the chit value) is distributed among each of the persons in turns, which is determined by way of lots or an auction. Chit funds provide an opportunity to save excess cash on a daily, weekly or monthly basis, and give an easy access to it in case of emergency. Chit funds are the Indian equivalent of the Rotating Savings and Credit Associations (ROSCA) that are famous thr oughout the world.ROSCAs are a means to â€Å"save and borrow† simultaneously. It is considered one of the best instruments to cater to the needs of the poor. It enables poor people to convert their small savings into lump sums. The concept of chit funds originated more than 1000 years ago. Initially it was in the form of an informal association of traders and households within communities, wherein the members contributed some money in return for an accumulated sum at the end of the tenure. Participation in Chit funds was mainly for the purpose of purchasing some property or, in other words, for â€Å"consumption† purposes.However, in recent times, there have been tremendous alterations in the constitution and functioning of Chit funds. While in most places ROSCAs are user-owned and organized informally, in India, chit funds have been formally institutionalized as well. Legally recognized firms provide a variety of chit schemes. A Chit Fund can either be legally regist ered or unregistered. Registered Chit Funds, as the name suggests are being regulated under the various Chit Fund acts. While unregistered Chit Funds are unorganized and mostly run by the close friends, relatives or family members of the investor.Unregistered Chit Funds which exceed 100 ($2) in value are illegal in India, although it is very well known that unregistered Chit Fund industry is very popular in India, mainly in the rural and semi-urban area, where people have very little access to the banking services and where financial illiteracy is more. The regulation of the Chit Fund industry was put in place by the Government of India to address the problem of misuse of informal Chit Funds by unscrupulous promoters and founders running away with the participant’s funds, leaving the members with little recourse to retrieve their money back.Chit funds in India are governed by various state or central laws. Organized chit fund schemes are required to register with the Registra r or Firms, Societies and Chits. Various Chit Fund Acts governing the industry in India are as under: * Union Government – Chit Funds Act 1982 (Except the State of Jammu and Kashmir) * Kerala – Kerala Chitties Act 1975 * Tamil Nadu – Tamil Nadu Chit Funds Act, 1961 * Karnataka: The Chit Funds (Karnataka) Rules, 1983 * Andhra Pradesh – The Andhra Pradesh Chit Funds Act, 1971 * New Delhi- The Chit Funds Act,1982 and Delhi Chit Funds Rules, 2007 * Maharashtra – Maharashtra Chit Fund Act 1975 Uttar Pradesh: Uttar Pradesh Chit Funds Act, 1975 * Goa, Daman & Diu: The Goa, Daman and Diu Chit Funds Act, 1973 * Pudducherry/Pondicherry: The Pondicherry Chit Funds Act, 1966. An overview of chit funds: The economic development of a country depends upon the availability of resources. The main activities that contribute to the growth are production and employment. Production depends upon the inputs of the factors such as finance, raw materials, labor etc. The mo st important here bring finance, which is the chief mobilized of all the factors of production.In a money economy, finance for development initially comes from private savings. These private savings give to the secondary deposits; this is where the financial institutions come into picture. Financial institutions occupy a central place in mobilizing savings from the people and make it available to the trade, commerce and industries either as a capital or loans. The non banking sector comprises of money lenders, indigenous bankers, pawn brokers, nidhis, â€Å"chit funds† etc.The origin of chit funds can be traced way back to the 17th century when the economic wizards of state of Malabar (now known as the state of Kerala) started this activity. Those were the people who actually founded this financial institution. It became so popular and numerous that people started adopting this activity as a profession by the 18th century all over. As the chit industry grew the number of peop le involved in this industry also grew. This gave rise to many misconceptions, frauds, mismanagement etc. , in this industry.To prevent this State Government of Travancore took the first initiative and introduced the first Chit Fund Regulation being the Chit Fund Act 1914. One important regulation introduced by this act was that of a commission payable to the foreman. The Act brought about a ceiling limit on the commission payable to the foreman that is 5% maximum which is still the same even to this date. How chit funds works: Chit funds which are popular from a very long time but still some people don’t know how exactly this chit fund works and invest their money illogically.This can be understood by the following procedure: Let’s say there are 20 people who come together and form a group. Each one will contribute Rs 1,000 per month and this will continue for next 20 months (equal to number of people in the group). In this group there will be one organizer, who will take the pain of fixing the meetings, collecting money from each other and then doing other procedures. So each month all these 20 people will meet on a particular day and deposit Rs 1,000 each. That will make a total of Rs 20,000 every month.Now there will be a bid on who will take this money. Naturally there will be few people who are in need of big amount because of some reason like some big expenses, liquidity crunch, business problem, Beti ki Shaadi etc etc Out of all the people who are in need of money, someone will bid the lowest amount, depending on how desperate he is for this money. The person who bids for the lowest amount wins the bid. Suppose out of total 3 people who bid for 18,000, 17,000 and Rs 16,000, the one who bids the lowest will win.In this case it’s the person who has bid Rs 16,000. There will also be â€Å"organizer charges† which are around 5% (standard) of the total amount, so in this case its 5% of Rs 20,000, which is Rs 1,000. So out of the total 16,000 which this winner was going to get, Rs 1,000 will be deducted and the winner will get only Rs 15,000, Rs 1,000 will be organizer charges and Rs 4,000 is the profit, which will be shared by each and every member (all 20 people), it comes out to be Rs 200 per person, and it will be given back to all 20 members.So here you can see that the main winner took a big loss because of his desperate need of getting the money and others benefitted by it. So each person actually paid just 800, not 1,000 in this case (they got 200 back). Note that when a person takes the money after bidding, he can’t bid from next time, only 19 people will be eligible for bidding. Now next month the same thing happens and suppose the best bid was Rs 18,000 , then winner will get 17,000 (after deducting the organizer fees) and the rest 2,000 will be divided back to people (Rs 100 each) . So each person is paying effectively Rs 900.This way each month all the people contribute the money, someone takes the money by bidding lowest, organizer gets his charges and the rest money is divided back to members. You will realize that the person who takes the money at the end will get all the money except organizer fee, as there is no one else to bid now. So the person will get around Rs 19,000 in the end, if you try to find out the returns which he got out of the whole deal, it will depend on two things, how much lower bids were each month and the fees paid to organizer, if bids and charges are very low, then a person will make more money at the cost of other situations.So this is pretty much how a chit fund works, there are various versions of chit funds and how they work , but the idea was to communicate the basic model and how it works. | Online Chit Funds is also running with pace of E-commerce With the advent of ecommerce in India, Chit funds have also started going online. Online chit funds conduct auctions online and subscribers can pay their monthly dues and receive prize am ount online through online transactions including electronic fund transfers. Each member will have an online account through which they can manage their chit funds. 2012-2013 Highlighted News about chit-fund: . Cunning strict approaches adopted by RBI to protect the investors from delusive acts of chit fund companies. 2. Last year in the month of December, The Reserve Bank of India (RBI) warned all the state governments about the mushrooming of chit funds and also written to them to take appropriate actions against them for duping depositors. 3. RBI Governor Duvvuri Subbarao said, â€Å"The responsibility for checking the chit funds and for prosecuting the violation of law is of the state government. We have written to all the state governments to be vigilant about this and to take appropriate action†. . D Subbarao also called for greater awareness among police and the general public for checking the proliferation of the chit funds in the country. 5. On 6th December 2012, Min ister of State for Corporate Affairs RPN Singh said that 87 companies have come under the scanner for alleged irregularities related to chit fund schemes and money circulation in the garb of multi-level marketing. The Registrar of Companies (RoC) and its Regional Directors have been asked to scrutinize the balance sheets and inspect the books of accounts and other records of these 87 companies. . India's market regulator, Securities and Exchange Board of India (Sebi) had banned companies such as Rose Valley and MPS Greenery Developers from accepting deposits from the public. 7. The former chief minister also pointed it out that small savings through post offices and co-operatives has suffered a lot as many people are depositing their money to these chit funds expecting huge return. 8. In Bhubneshwar, The crime branch told that they are making a short documentary to sensitize people about illegal non-banking financial companies (NBFCs).The film will feature a host of financial manage ment companies like Seashore, Ashore and Saffex, whose irregularities were exposed recently. The Economic offences wing (EOW) of the Crime Branch has registered at least 30 cases against several fraud companies in the past six months for embezzling public deposits after giving them false promise of high return. Senior functionaries (Head) of the companies were arrested and their bank accounts being ceased. 9. EOW also making plan to start a toll free number to protect people from fraudulent activities done by chit fund companies. 10.Government making steps towards the projection of model; rules to check chit fund and MLM (Multi-level Marketing) frauds. The central government will soon make stringent provisions in place, like hefty financial penalty, jail terms, de-listing from the registrar of companies (RoC) roster, among others. Who will stop chit funds In October 2012, a women and her elder daughter were running a chit fund, committed suicide by consuming acid in Puthur in Trichy as they were unable to repay their investors. These women had started a Diwali chit fund in the year 2011 and attracted around 300 investors in the area.They had collected around `9lakh from the investors. As per norms, the chit fund company should have repaid the money with interest or given assured gifts to the investors before Diwali of the year 2012. When the investors pressurize the women, they decided to end their lives and consumed poison. Investors are helpless. This is not the only case there are numerous. Most chit fund investors are the rural poor and or small investors. Neither the victimized investors nor the police bring to book the persons responsible. Only the poor agents remain in place from whom the money cannot be recovered.According to Ministry of Corporate Affairs (MCA), there are 4256 listed or registered chit fund companies which are running their business in the country while India chit-fund association estimates that the country has in total 15000 (register ed and unregistered) companies which manage billions of rupees worth of funds. ShriRam Capital, one of the largest players, operates in four southern states and manages over USD 800 million. Some hope that recent hiccups in India’s once-booming microfinance sector, whose rise was led by microcredit, could bring even more business their way.One can imagine how big the business is all over India. Too many regulators could not stop irregularities in chit funds. Everybody agrees that irregularities need to be stopped because these are causing harm to a lot of small investors. But the question is; who will stop it? In 1978, when the RBI banned chit funds, it came under the ministry of corporate affairs as a collective investment scheme. Another way these companies work is through private placement of the non-convertible debentures or collective investment scheme. In this case, SEBI has the power to regulate it.Sahara and many other big names are in on it. Any debenture or private placement cannot be done by more than 50 people. In contrast, these kinds of companies collect money from thousands of investors. If the number of investors of share and debenture is more than 50, it needs to be registered in the market and the SEBI would control it. RBI wants the state government to take steps: In this context, RBI has a different take. Subbarao, Governor, RBI, has advised the state governments to make their law stronger to save common investors from the chit fund trap.It has written letters to the states to develop a definite action plan to take step against these multi levels marketing player. Subbarao explained that RBI has no power to regulate chit funds. So, it has asked state government to take the initiative to prevent the mushrooming of money market agencies. RBI can train police and other legal bodies about chit funds but cannot instruct the police to do so. It is a state subject to plan and executes the prevention process of chit funds. Corporate Affairs ministry looking into it:Union corporate Affairs Minister Sachin Pilot has said that the central government is looking into the issue of some chit funds and the Ponzi scheme that allegedly dupe small investors by using legal loopholes. It would also encourage state government to take necessary action against these firms. These firms are now misusing the loopholes, pilot added. Furthermore he added, â€Å"Our main objective is to protect small investors from these companies, who are taking their (investors) hard earned money. † As many as 87 companies have come under the scanner for alleged irregularities related to chit fund schemes and money circulations.Minister of State for corporate Affairs R. P. N. Singh has informed the Rajya Sabha that the directions have been issued on the basis of specific complaints received by the ministry against these companies, which are â€Å"alleged to be carrying on activities related to prize chit fund and money circulation in the garb of m ulti-level marketing. Legislative hodgepodge: Singh further said that SFIO (Serious Fraud Investigation Office) has recommended setting up of a specific central regulatory agency for the implementation of the prize chit and money circulation scheme (Banning) act, 1978.The act is administered by the Department of Financial services (DFS) which has constituted an Inter-Ministerial Group consisting of representatives from DFS, Ministry of Corporate Affairs (MCA), RBI, Security and Exchange Board of India (SEBI), Department of Consumer Affairs and Central. Report of Ministry of Corporate Affairs: List of Companies not registered but found doing Chit Business Beware of these Companies. Never join them. M/s. P. V. R. Chits (P) Ltd. , B-50, Flatted Factories, Okhla Phase-III, N. Delhi-20. | M/s. Narmal Chits (P) Ltd. , 1427, Gurudwara Road, Kotla Mubarakpur,N.Delhi-3. | M/s. Sahara Chits (P) Ltd. , WZ/A-49, Krishna Park Extension, N. Delhi-18. | M/s. Twenty Second Century Chit Fund (P) Ltd . , 4205-4206, Sant Nagar, Main Road, Rani Bagh, Delhi-34. | M/s. Skylla Chits (P) Ltd. , D-223/115, Laxmi Chambers, Laxmi Nagar, Delhi-92. | M/s. Hari Vimal Chits (P) Ltd. , Shop No. 8, M. R. Market, Rangpuri, N. Delhi-70. | M/s. Merchant Chits (P) Ltd. , CA-24/2, Tagore Garden, N. Delhi-27. | M/s. Mehar Chits (P) Ltd. , IIIrd Floor, 528, Krishna Gali, Katra Neel, Chandni Chowk, Delhi-6| M/s. Vinamar Chits (P) Ltd. , 170-E, Kamla Nagar, Delhi-7. | M/s.Vinamar Chits (P) Ltd. , 272, Hakikat Nagar, Mall Road, Delhi-9. | M/s. Well King Chits (P) Ltd. , C-47, Acharya Niketan, Mayur Vihar, Phase-I,Delhi-91. | M/s. Aegis Chit Fund (P) Ltd. , E-484, Greater Kailash-II, New Delhi-48. | List of Companies which have been debarred from doing any Chit Fund business in Delhi   NAME| ADDRESS| A. G. CHIT FUND PVT. LTD. |    | ARJIT CHITS PVT. LTD. | | BHAGMAL CHITS PVT. LTD. | | CHOJI PRITAM CHITS PVT. LTD. | | DISHTI CHIT FUND PVT. LTD. | DIRECTOR: Sh. Ajay Pandon| DISHTI CHIT FUND PVT. LTD. | DIRECTOR: Sh. Sudarshan Kapoor| EK-ONKAAR CHIT FUND PVT.LTD. | | EROS FIN. ; CHIT FUND PVT. LTD. | | GIRDHAR CHITS PVT. LTD. | | GOLDEN BENEFIT CHITS PVT. LTD. | | J. KRISHNA CHIT FUND PVT. LTD. | | J. V. CHITS PVT. LTD. | | KADS CHIT FUND PVT. LTD. | | KHAJANA CHITSPVT. LTD. | | LEAN CHITS PVT. LTD. | | MINCO CHITS PVT. LTD. | | NIKETAN CHIT FUND PVT. LTD. | | PARVATI CHIT FUND PVT. LTD. | | PARVEEN CHIT FUND PVT. LTD. | | POMA CHIT FUND PVT. LTD. | | PROSPER CHIT FUND PVT. LTD. | | RITESH CHIT FUND PVT. LTD. | | ROHTGI CHIT FUND PVT. LTD. | | ROYAL CHIT FUND PVT. LTD. | | RUHANI CHIT FUND PVT. LTD. | | S. T. S. CHIT FUND PVT.LTD. | | SAFAL CHIT FUND PVT. LTD. | | SATSANGI CHIT FUND PVT. LTD. | | SIMPLICITY CHIT FUND PVT. LTD. | | SUBHASH NAGAR CHIT FUND PVT. LTD. | | TRI NAGAR CHIT FUND PVT. LTD. | | VEDANTA CHIT FUND PVT. LTD. |    | YOG MAYA CHIT FUND PVT. LTD. |    | PARVARISH LEASING ; FIN. (P) LTD| Shop No. 6, Mafare Garden, New Delhi| M. V. A. CHIT FUND (P) LTD. | Shop No. 10, Krishna Mkt. ,Lajpat Nagar,N. Delhi. | HONOUR CHITS (P) LTD. | 2352, Sevak Bhawan,IIIrd Floor, Shop No. 9,Beadon Pura,Karol Bagh, N. Delhi. | * Source Ministry of corporate AffairsBenefits of Chit funds: Chit Fund is an attractive Investment Option which caters to people from all walks of life. It is specifically beneficial to the Salaried Class, Professionals, Businessmen and Self Employed. The uniqueness of Chit Fund as a method of Financial Planning stems from the fact that, it is both a tool for saving and borrowing. In other words, it serves the dual purpose of being an investment for your savings and in times of need the Subscriber can bid for the Prize Amount in order to meet any unexpected expenditure. The benefits of Investing in Chit Fund are numerous. You can choose how much you want to save per month. Chit funds companies offers chits of various denominations and monthly subscriptions amount ranges from Rs 2500/=(Chit value Rs 1 lakh) to monthly subscription of Rs 1,25,000. * The rate of return is very high compared to other Investment Options and it is also secure form of Investment. * Your Monthly payments will be the Chit Subscription Amount minus the Dividend. The details of the Dividend entitled for Deduction and the Balance Amount payable shall be informed every month, which is mandatory. It inculcates the habit of saving and setting apart a particular amount every month towards investment for a rainy day. * It is good for the Housewife to keep or save their small savings in Chit funds as they will get the money at the time of utmost financial need for household purposes. * It is generally used by housewives, employees of same company, peer groups, friends, and family members or some associations. * If it is used in proper or genuine way then it is makes a worth to invest in chit funds (Organized or unorganized). Drawbacks: Chit-funds do not offer any pre-determined or fixed returns. * Higher returns are earned when there are more nu mber of members in the group or if the duration of the scheme is longer. * One would earn more, when more members need emergency funds. Thus returns cannot be calculated and decided when one joins the scheme. * No security in unregistered chit fund companies. So there are more chances of getting hoax by these fraud companies. * Organizer gets benefited more from your savings. * No guarantee if fixed returns. * In chits interest earnings are lower than Fixed deposits (FD). High degree of risk is associated with chits, so relying on chit funds for saving could be more dangerous. * Chit does not make money; it is just a mechanism for liquidity and emergency funds. * Many chit fund owners are collecting huge volume of money from the common people by making false promises to them. Many poor people of our state are being allured by these chit fund owners and depositing their hard-earned money. But the people are not getting back returns for their investments How to be a Safe investor in C hit Funds:With the plethora of chit fund companies around, the safety of a chit fund lies in choosing the right one. In a registered chit fund company, under legal binding, the activities are regulated and institutionalized by the Chit Fund Act. And hence could be considered safe. However, other unregistered companies operating informally do exist. It has been also seen that depositors are being lured by chit funds companies or firms with higher returns than what banks offer them. These companies are also flourishing in the rural belts where banking penetration is low.One should carefully analyze the pros and cons before making investment in chit funds. Therefore one needs to exercise caution while choosing where he desires to invest. Chit funds definitely are an attractive option for regular saving. It inculcates a disciplined approach to financial planning. It has the added advantage of bringing a combination of savings as well as hassle free borrowing. This dual purpose investmen t tool could be a friend in need at times of unexpected financial emergencies. Thence BE SAFE AND BE SELECTIVE while going for any chit fund schemes.

CAD/USD Exchange Rate

The Canadian dollar has significantly appreciated against the U. S. dollar since the beginning of 2000. The CAD/USD exchange rate (currency in USD) increased from 0. 686 to 1. 015 as of March 18, 2011. There was a trend of CAD appreciation in 2003-2008, followed by a rapid depreciation in the second half of 2008. Since the beginning of 2009, CAD has risen sharply and has been trading about at par with USD for the last two years. The recent CAD appreciation was caused by a number of factors and lead to certain economic consequences, which are discussed next. Causes of the Canadian Dollar Appreciation Appreciation of the Canadian dollar in the last years can be explained by internal factors, such as performance of Canadian economy and interest rates, and external factors, such as commodity prices and weakness of the U. S. economy. State of Canadian economy. Canada has been quickly recovering from the recent recession. For the year 2010, real GDP grew 3. 1%, following a decline of 2. 5% in 2009. Strong economy makes Canada an attractive target for investors who seek secure returns. This raises the demand for the Canadian currency and, therefore, pushes the exchange rate upward. This argument is supported by the exchange rate fluctuations in the above graph. The Canadian dollar was rising as the economy began to recover in the late 2009. State of the U. S. economy. Rise in CAD/USD exchange rate can be largely attributed to depreciation of the U. S. dollar. The U. S. dollar has historically been a safe investment target for many investors. However, now this situation is changing and demand for the currency is falling. The U. S. economy has been facing serious difficulties in the recent years. The country’s trade deficit was almost $500 billion in 2010, a 33% increase from 2009. The U. S. s also the world largest borrower with a $4,453 billion of foreign debt. Weak economy and high uncertainty are turning investors away from the American dollar, which is supported by its depreciation against other major currencies. Commodity prices. As Canada is a large producer and exporter of raw materials, the Canadian dollar is strongly affected by commodity prices. Many commodity prices, especially gold and copper, have been rising recently, making the associated industries more profitable and strengthening the Canadian economy. Strong economy, in turn, attracts more investor, and the Canadian dollar appreciated due to increased demand. Interest rate differentials. The U. S. Federal Reserved has lowered the interest rate to current 0. 25% since 2008 in order to stimulate the economic growth. Canada currently has a higher interest rate of 1% and thus attracts more investors for its short-term assets. Demand for the Canadian dollar increases and puts an upward pressure on the exchange rate. Consequences of the Canadian Dollar Appreciation Effect on trade. The exchange rate has an important impact on Canadian trade performance, especially with its largest trading partner, the U. S. The Canadian economy significantly relies on its export activity, but stronger Canadian dollar makes the country’s exports more expensive to foreigners and can decrease the trading volume. According to Statistics Canada, exports to the U. S. fell in 2009 by 36. 4%. Exports then increased slightly in 2010, but still the amount was around C$73. 6 billion under the 2008 level. To prevent their exports from falling and keep their market share, Canadian companies have to lower their price and sacrifice some profit. However, decline in exports should not be attributed only to the currency appreciation. The U. S. economical health and trade agreements also affect the trading activity between two countries. On the other side, Canadian importers benefit from the currency appreciation. Canadian manufacturers can acquire materials, machinery and equipment at a lower cost, which leads to increased capital investment and productivity growth. Thus, strong currency is harmful to exporters and beneficial to importers. The dollar appreciation decreases Canadian export and increases imports, which negatively affects the trade balance and lower GDP’s growth. However, lower import costs offset negative consequences of export decline, and the total effect of the currency appreciation becomes muted. Effect on industries and provinces. Not all industries are affected evenly by the currency appreciation. Manufacturers that heavily depend on exports of their production are affected the most. Such industries include forestry, transportation equipment, and machinery. Imported inputs, however, should also be taken into account when assessing the total effect of the appreciation. Industries that use high imported content in their production are less hurt by the rising dollar. For example, transportation equipment industry highly depends on export, but it also has high ratio of imports to production and can profit from cheaper imports. On the contrary, industries that heavily rely on exports but use low foreign content in production, such as forestry, are affected most adversely. The same logic applies to Canadian provinces. Highly export-oriented provinces such as Ontario, Quebec and British Columbia are influenced significantly by the currency appreciation. Effect on unemployment. Rising Canadian dollar makes labour costs comparatively higher and increase the total production costs in export-oriented industries. Profit margin falls, and manufacturers decrease their labour force. They also add more machinery and equipment as the imported capital become more attractive due to the appreciating dollar. For example, in 2010, manufacturing sector experienced a loss of 37,000 jobs compared to 2009. This decrease in employment can be partially explained by the stronger dollar. Effect on productivity. Stronger Canadian dollar can have a positive impact on the country’s productivity. Productivity greatly affects the country’s living standard. Improved productivity results in higher output, profits, wages and, eventually, the standard of living. As exchange rate increases, Canadian output becomes relatively less competitive in international markets, and domestic companies start to lose their profits. Competition among manufacturers gets more intense, and companies try to retain their profits by increasing their productivity through investment in more efficient machinery and equipment. Companies’ capital to labour ratio rises due to lower cost of imported equipment, and increased use of capital leads to improved productivity in the long run. With lower exchange rate, Canadian firms are more profitable and have more money for capital investment, but with stronger dollar, imported capital and materials become relatively cheaper. On the other hand, higher exchange rate makes Canada less attractive for foreign direct investment because of relatively higher labour costs. The extent of this effect is limited, but the country still loses potential productivity gains. It is important for Canada to increase its productivity and relative competitiveness for the long-run strengthening of the economy in order to make the effects the currency appreciation less severe. To conclude, the appreciation of the Canadian dollar caused by a number of factors has a considerable effect on the country’s trade balance, industries, employment and productivity. However, these causes and consequences should not be considered in isolation but rather interdependently, and fundamentals such as economic performance of Canada or the U. S. should be taken into account.

Historical Roots of Psychology Essay

Psychology is a relatively new science, having emerged as a formal discipline only during the 19th century. It, however, came into existence due to the philosophical aim of understanding and explaining the nature of the mind and the soul. Physiology was later integrated into psychology when the latter sought to discover the causes and the cure for mental illness. Historical Roots of Psychology Psychology is considered as one of the youngest sciences – it emerged as a formal discipline only during the 19th century. Ironically, the historical roots of psychology can be traced back to the ancient field of philosophy. Throughout history, philosophers and religious scholars have sought to understand and explain the nature of the mind and the soul. This objective, in turn, resulted in the institution of psychology as an official school of thought (MSN Encarta, 2008). Ancient Philosophers and Philosophies Greek philosophers started venturing into psychological topics from about 600 to 300 BC. They were said to be most interested in epistemology, a philosophical sub-discipline which studied the nature of knowledge and human existence. As a result, Socrates, Plato and Aristotle wrote extensively about topics such as knowledge, beauty, desire, free will and common sense (MSN Encarta, 2008). The immense interest of the Greek philosophers in epistemology led to the creation of cosmology, the â€Å"study of the universe as a whole, including its distant past and future† (MSN Encarta, 2008). They must have realized that the nature of the universe determined the existence of its inhabitants, including human beings. Contentions French philosopher and mathematician Rene Descartes, however, disagreed with the views of the ancient Greek thinkers – he believed that the mind and the body were independent units. The body was a physical entity while the mind was a spiritual one – the pineal gland (a tiny organ found at the base of the brain) was their sole means of interaction. English philosophers Thomas Hobbes and John Locke, meanwhile, argued that all human experiences (images, sensations, feelings and thoughts) were actually physical processes that took place within the nervous system and the brain. This belief eventually became the basis for monism, a philosophical school of thought which argued that â€Å"the mind and the body are one and the same† (MSN Encarta, 2008). At present, however, psychologists no longer recognize monism due to the immense scientific evidence that validate the intertwined relationship between the physical and mental aspects of human experience (MSN Encarta, 2008). Early Psychology It is widely believed that psychology became a science in 1879. In this year, physiologist Wilhelm Wundt established the first laboratory dedicated to the scientific study of the mind at the University of Leipzig in Leipzig, Germany. Since the late 18th and early 19th centuries, physiology has already been integrated into psychology. Some experts believed that specific parts of the brain were responsible for certain brain activities (MSN Encarta, 2008). This idea paved the way for the creation of psychological subfields whose theories and principles are being used in modern-day psychology. Functionalism Functionalism was one of the most well-known psychological schools of thought during the first decades of psychology. Its founder, William James, was a staunch advocate of Charles Darwin’s evolutionary theory that â€Å"all characteristics of a species must serve some adaptive purpose† (MSN Encarta, 2008). Consequently, James created a psychological subfield which espoused the investigation of the purpose of consciousness instead of its structure. Functional psychologists later came up with the longitudinal research, a technique which was composed of interviewing, testing and observing one person over a long period of time. In using this system, the psychologist can make and record observations on a patient’s development and his or her response to different situations (MSN Encarta, 2008). Sigmund Freud Viennese neurologist Sigmund Freud was one of the most prominent figures in the field of psychology in the late 19th and early 20th centuries. He is best known for his personality theory of psychoanalysis. Psychoanalysis operated on the premise that â€Å"people are motivated largely by unconscious forces (such as) strong sexual and aggressive drives† (MSN Encarta, 2008). Although humans have the capability to suppress their unconscious motives, it is necessary for them to find a suitable outlet if they wish to maintain a healthy personality (MSN Encarta, 2008). Psychoanalysis eventually became a form of psychotherapy through the technique of free association. Freud developed free association as a means of probing the unconscious mind. In this technique, the patient is made to lie down and talk about whatever thoughts, wishes and memories that come to his or her mind. The analyst, in turn, determines the psychological significance of these verbalizations by attempting to interpret them. For Freud, dreams were the â€Å"royal road to the unconscious† – the disguised expressions of deep, hidden impulses (MSN Encarta, 2008). Behaviorism Behaviorism was formed in the 1990s mainly as a response to Freudian psychology. Psychologists who followed the former contested the reliability and usefulness of studying invisible mental processes such as consciousness and unconsciousness. For them, it was better to analyze only behavior that could be directly observed rather than interpreting the vague manifestations of a given behavior. Because of its relatively more scientific methods, behaviorism dominated the field of psychology for almost 50 years (MSN Encarta, 2008). Two of the most well-known experiments in behaviorism are those by American psychologist Edward Lee Thorndike (1898) and Russian physiologist Ivan Pavlov (1906). Thorndike’s tests on cats produced the law of effect, which argued that â€Å"behaviors that are followed by a positive outcome are repeated, while those followed by a negative outcome or none at all are extinguished† (MSN Encarta, 2008). Pavlov’s research on dogs, on the other hand, resulted in the Pavlovian conditioning (also known as classical conditioning). According to the Pavlovian conditioning, it is possible for an organism to relate one stimulus to another (MSN Encarta, 2008). Conclusion It is true that psychology emerged as a formal discipline only during the 19th century and is mostly a combination of philosophical and physiological concepts. But these did not hinder psychology from being a very advanced school of thought today. One of the most important contributions of psychology is the proper treatment of mental illnesses. Prior to the advent of psychology, mentally ill people were believed to be possessed with evil spirits. As a result, they were subjected to physical torture in order to release the malevolent beings that were â€Å"controlling† them. Furthermore, advances in the field of psychology that were geared towards improving mental health just goes to show that medicine has already progressed so much as well. Health is no longer defined as merely being free of disease but also having a vigorous mind. The body, after all, cannot function without the mind and vice versa. References MSN Encarta. (2008). Cosmology. Retrieved April 3, 2009, from http://encarta. msn. com/encyclopedia_761564398/Cosmology. html MSN Encarta. (2008). Psychology. Retrieved April 3, 2009, from http://encarta. msn. com/encyclopedia_761576533/Psychology. html

Basic Concepts and Techniques of Human Resources Term Paper - 1

Basic Concepts and Techniques of Human Resources - Term Paper Example The major objective of the company is to develop as the topmost choice for the customers gaining the fame of being the best place for spending leisure time. A few of the business principles considered by the company concentrates on delivering superior quality service, value as well as cleanliness to every individual customers, offering various opportunities to its working people in terms of reward and performing the worldwide business operations ethically (McDonald’s, 2012). Purpose of the Paper The purpose of this particular paper is to identify the required skills for a specific job position, i.e. Shift Manager which McDonald’s is seeking to fill. Moreover, the selection as well as the recruitment procedure of the aforementioned job position in the company will be taken into concern in terms of job analysis outcomes. Various aspects which include the overview along with the business context of McDonald’s will also be portrayed in the discussion. Strengths & Wea knesses One of the imperative strengths of McDonald’s lies in the fact that it holds a strong worldwide presence in the foodservice retailing industry. The company is recognized to be among the market leaders both in the international as well as in the domestic business environments. Moreover, the company has a powerful portfolio of real estate. In this regard, it has been viewed that the various business outlets of the company are located in such areas which are highly acknowledged for simplicity of access, traffic volume and visibility. The company generated much of its sales with the virtues of its brand recognition creating crucial business opportunities for its future developments. The company have also adopted aggressive market planning which ultimately assists to capture the fiercely competitive worldwide business market by a considerable level (Orji, Bao, Zino & Philippis, 2005). Apart from the strengths, the company also holds a few major weaknesses. The most apparen t weak-point of the company can be observed as its operating income which is quite low in few of its stores especially in Canada and Europe. Moreover, the other weaknesses of the company include issues regarding the quality of the products, huge rate of turnover of the working personnel and lack of product development (Scribd Inc., 2012). McDonald’s has over 33,000 restaurants worldwide engaging approximately 1.7 million employees within the entire company structure. In this regard, about 80% of the restaurants are franchised (McDonald’s, 2012). On the basis of the aforementioned grounds as well as the increasing preferences of the customers regarding fast food, it can be stated that there lies a broader possibility for the company to flourish in future while operating its business functions worldwide. Section 2 Job Analysis A successful shift manager is likely to play the fundamental role in assisting different business organizations or companies such as McDonald†™s in important areas of planning, directing as well as coordinating regular business activities which are entirely associated with the operational functions of any retail store. A shift manager also leads the working staffs of the retail stores towards the completion of production goals ensuring

The culture of the city of Cairo, Egypt Essay Example | Topics and Well Written Essays - 1000 words

The culture of the city of Cairo, Egypt - Essay Example Cairo is the largest city in Africa and one of the most densely populated cultural center of the region.It is famous for its proximity with the world famous pyramids of Giza and Great Sphinx. Cairo has derived its modern name from the Arabic name 'Al-Qahira. In local vernacular, it is also called Masr. Heritage Sites Memphis was the ancient city located at 20 kilometer to the south of Cairo, which was founded by the pharaoh Menes in 3000 BC. Cairo derives its heritage from Memphis as it remained most important city during those days having located at the mouth of Nile Delta.The ruins of the Memphis tell about its magnificent past and they have been preserved since 1979 as a World Heritage Site. Heritage sites such as Saqqara (Sakkara) Pyramids, Mosque of Ibn Tulun, Khan Al-Khalili, Egyptian Antiquities Museum, Citadel (Al-Qalaa) and many more in Cairo exhibit rich heritage and cultural pride of the place. Gates known as forte were the pride of ancient Cairo. They defended the country from the enemies. It also used to serve the purpose of Source: http://www.touregypt.net/historicalessays/cairogates.htm administration. Only residents of Cairo were allowed to enter the gates. In 1087, the three gates Bab El Fetouh, Bab Zuweila and Bab El Nasr were to built by Badr El Gamali, the prince of armies. The Egyptian Museum The Egyptian Museum is located at Tahrir square in Cairo. Built in 1897 during the reign of Khedive Abbass Helmi II, it has 107 halls. The ground floor is full of huge statues. Mummies and Tutankhamon treasures are situated in first floors. The museum is divided into several sections. Old Kingdom monuments and pre-dynasty stuff are housed at second floor. Middle Kingdom monuments are located in third section. Monuments of the Modern Kingdom are housed in the fourth section. Monuments of the Greek and Roman periods are stationed at fifth section. Coins and papyrus are placed at sixth section. The seventh section is devoted to sarcophagi. The tomb of Tut ankhamun was discovered by Howard Carter. It took almost 10 years to finish excavation job to unleash this tomb. Perhaps, the most fascinating group of artifacts that are available anywhere in the world is said to be associated with the discovery of King Tutankhamun's tomb. Tutankhamun is said to have ruled Egypt somewhere between 1334 and 1325 BC. The tomb is housed in the basement of the Egyptian Museum in Cairo. More than a million tourists visit the museum annually besides local Egyptians. (The Egyptian Museum†¦) Heliopolis The ancient site of Heliopolis is situated to the northeastern side of greater Cairo in a district called Matariya. It is one of the three ancient cities of ancient Egypt after Memphis and Thebes. Heliopolis called the 'City of the Sun' in Greek is now largely surrounded by the suburbs of Cairo. It lay inland to the west side of the river Nile. It is said that it was famous for its learning centers and famous temples, which continued even during Graceo-R oman times. The city got destroyed during 525 BCE and 343 BCE due to Persian invasion although its old reputation and structures attract tourists till date. (Heliopolis†¦) The Citadel The Citadel is most popular among non-pharaonic monuments. It houses museums, mosques and is one of the most fascinating monuments on Cairo’s skyline. When viewed from Source: http://www.touregypt.net/featurestories/citadel.htm the north side, it reveals its true medieval glamour. The area was known for its cool breeze. Saladin built the area to safeguard themselves from the attackers because the area had a strategic advantage of overlooking Cairo. In fact, Saladin had implemented his native tradition of Syria where each town was built like fortress to safeguard the local ruler. The construction was round towers so that it could be used to flank fire on those who try to scale the walls. The citadel walls were made 10 ft thick and 30 feet high. After Saladin several rulers reinforced the str ucture of citadel. (The Citadel in

Challenging disability Essay Example | Topics and Well Written Essays - 2250 words

Challenging disability - Essay Example The challenge which is presented is based on defining the idea of disability from a social perspective, as well as how this can change the perception of the abilities one has. Medical Model and Definitions of Disability The traditional perception of disability is one which is defined by the social capacities one has as well as the experiences which one goes through. According to Crow, the concept of disability is one which is limited, specifically because of the definition of disability that is interpreted within society. The main focus is that one who is disabled has gone through a personal tragedy, specifically which leads to disadvantages, oppression of opportunities and impairments that don’t allow for the same experiences of life to be a part of what one needs. The problem which occurs is one which is based on the medical model of disability, specifically which is interpreted in society as a social context which impairs one from life experiences (Crow, 1996). The definiti ons of disability are one which is defined specifically through a medical application. One who has impairment has a loss of psychological, physical or anatomical structures or functions. One who has a disability is restricted or has a lack of performance of activities, specifically which relates to an impairment. ... Crow shows that the medical model is one which doesn’t align with the social model, which creates the attitude that the individual who is suffering from impairment can’t overcome the difficulty or struggle. Instead, the impairment creates a lack or loss in all activities that one can do within a given environment (Crow, 1996). The main challenge which Crow shows with the concept of disability are that the social stigma surrounding a handicap means that an individual is incapable of everything. For instance, if one has impairment with hearing, then this leads to the inability of all functions both mentally and physically and eliminates the individual from activities that are within society. The experiences which one has differ from the social stigma which has arisen around the concept of disability. The assumptions that are made within society then create a stereotype of the experiences and ideals which are based around the handicapped and impaired. This leads to a belie f that the quality of life that one has who is impaired is limited in experience. However, those who are disabled may not have the limited experience or restrictions which others in society have labeled them with (Crow, 1996). Social Context of Disability The main stereotypes which are taken with the terms of disability are furthered by the ways in which society responds to the given labels which are created outside of medical terms. The first stigma which is created is one which leads to a sense of oppression. When one believes that an individual is disabled, then there is a perspective that this means all the functions and abilities of the individual are limited. The response is to oppress those who are in this state, such as not providing the same

Malaysian Banks Term Paper Example | Topics and Well Written Essays - 500 words

Malaysian Banks - Term Paper Example One of the most premiere cases where it is not shariah compliant that it most incur loss and gains in the house or business regardless of circumstances. A notable case was noted when an individual went to the Bank and said he cannot pay, but the bank refused to sell his house. This is completely against shariah in which the bank must split the loss. Hence, the concept of shariah finance is extremely hard because each country wants some revenue when it comes to financial securities. For the sake of assurance, most banks sugarcoat this with hidden fees and even charge a higher interest rate that are usually hidden in original clause terms. The concept of ‘service fee’ is highly demised because it is a vague term that all Malaysian banks utilized. Before understanding this issue, it is cognizant to understand the elements that surround Islamic Banking. Without a doubt, the Islamic law dictates that the asset must not be a ribawi material or in the medium exchange of gold, not silver. Additionally, a contract between two or more parties to accumulate in partnership. HSBC Malaysian bank also is one of these banks that is not shariah approved because of this issue. Another bank that is not confirm with the shariah standards is the fact Citibank Malaysia. Citibank Malaysia also offers these instruments along with the JP Morgan Malaysia Ltd. These banks financial statements dictate that these credit statements must be approved the counsel that is Shariah Compliant. Schroders Malaysia  is also under the same scrutiny as they sell bonds and other financial instruments that charge an interest rate and are not compatible with equal loss or gain since all payments for purchases are made in money. It is clear that not all banks have the understanding to conduct shariah and even do have an approval, tend to look for their own understanding of financial security. Additionally, the banks make it very clear in clause and terms that

Managing Holistically Essay Example | Topics and Well Written Essays - 3750 words

Managing Holistically - Essay Example The society, therefore, requires the construction companies to effectively maintain sustainability. These companies must be ready to address the complexity of problem conditions through a system and cybernetics approach with the sustainable development as an objective. Here, the problem situation analyzed is of building the Skye Bridge, a road bridge that connects the Isle of Skye with the mainland Highland over Loch Alsh, in Scotland. The project was undertaken by the developer Skye Bridge Ltd. and the construction by the Miller Constructions Company. The construction project intended to meet particular needs like enhancing transportation by connecting the island with the mainland through the Skye Bridge. Non-sustainability was a significant problem context charged against the project. A public inquiry, conducted after the contract, showed that there had been greater public opposition about the ecological and aesthetic elements of the design brought forward by the developer. And so, there occurred the necessity for an amended comprehensive design that could meet all the ecological and aesthetic requirements while being in line with the guidelines set up by Scottish organizations like, the Nature Conservancy, the Scottish Natural Heritage, the National Trust, etc. Ultimately, as Ford et al (1997) pointed out, this modifications to the design cost amounted to about ?4 million; and the total costs could have been reduced if the pubic opinion was sought for much earlier. Moreover, there had been severe criticism about the financial agreements of the project with the Skye Bridge Ltd. Company, especially about the collection of tolls over the years. In the opinion of Ford et al (1997), the initial estimated costs for the construction was around ?24 million, which might be collected through tolls over the agreed period of 27 years. There was much opposition against the high rates of tolls collected by the company from the users. The rate was very cheaper at the begin ning, but gradually developed into the highest bridge tolls in Europe in no time (ibid). McQuaid & Greig (2002) highlight the analysis conducted by the Napier University in 2002 that evaluated the impacts of the Skye Bridge tolls on the region’s economy. The reports showed that the economy faced slow downs and the total loss was around ?4.67 million of income and 256 jobs each year (ibid). As Creig & McQuaid (n.d) point out, even though the bridge enhanced faster crossings, its negative impacts overpowered its positive influences like its impact on tourism and short-stay visitors. Complex Problem Context Construction undertakings, like the Skye Bridge case focus on particular needs, and the challenge of accomplishing such needs varies from technical elements to technological, environmental, ecological, and social elements. The later half of the last century witnessed a notable increase in the degree of sustainable development associated with construction industry, because the society started to realize the adverse impacts of construction projects on the environment and society (Planningcommission.nic.in, n.d). The Skye Bridge Ltd Company was successful in facilitating the particular crossing with the provided specification, but fell short of covering the sustainable devel

PC Reflective Assignment Example | Topics and Well Written Essays - 2000 words

PC Reflective - Assignment Example He revealed that his family and close associates have been shocked initially but later they reconciled themselves with the situation. Laurie Strike actually desires euthanasia which means â€Å"the intentional killing by act or omission of a dependent human being for his or her alleged benefit† There are many form of euthanasia like: The American Medical Association opposes the concept of euthanasia and held the view that a physician assisted death is harmful not only for the ethics of medical profession but for the patient also. The association negates the idea of abandoning the incurable patients instead more love and affection should be shown to these patients to lessen their miseries. Like AMA, many medical practitioners in Australia have the view that medicines are meant to cure the diseases of patients and the concept of euthanasia is quite opposite to it. In euthanasia, medicines are used to snatch the life of a living being. Pope Benedict XVI declares it a grave sin. Besides, he also declares abortion as a kind of euthanasia, when a mother chose abortion to avoid abdominal pains. He stated, â€Å"The deliberate decision to deprive an innocent human being of his life is always morally evil and can never be licit†. He asked the family members of patients who were suffering with the incurable diseases to come forward and help the patients with love and care; in this way the family system would also be strengthened. The National Catholic Bioethics Center declares life as a beautiful gift of God and said, â€Å"God did not make death, nor does He rejoice in the destruction of the living† (Wisdom 1:13). They are saying that human life is precious and any effort to temper with it will be immoral and grave sin. Roman Church also has the same views on euthanasia and terms this concept as morally wrong. According to BBC, â€Å"The Roman Church does not accept that human beings have the right to die. Human

Financial Leasing in the Context of Uniform Commercial Code of the Essay

Financial Leasing in the Context of Uniform Commercial Code of the United States - Essay Example nless the lessee has selected that person and directed the lessor to acquire the goods or the right to possession and use of the goods from that person, (b) that the lessee is entitled under this Article to the promises and warranties, including those of any third party, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods, and (c) that the lessee may communicate with the person supplying the goods to the lessor and receive an accurate and complete statement of those promises and warranties, including any disclaimers and limitations of them or of remedies.2 For lessors the essential challenges in financial leasing are the length of time the financial institution’s investment is exposed which is the duration of the financial lease. Since the financial institution only holds the title of ownership of the asset in financial leases they do not ha ve possession of the asset therefore the care, maintenance, state and condition of the asset is not within the control of the financial institution. This exposure is considered a risk by financial institution since in the event of a default or failure of the lessee to satisfy his part of the agreement the state and condition of the asset may not make it marketable or commercially viable for the financial institution or the lessor to recover his investment at the onset. Taking the above into consideration the lessor can exercise his right by virtue of Article 9 of the Uniform Commercial Code of the United States to secure his investment supported by Article 1 203 of the same Code which states that: A transaction in the form of a lease creates a  security interest if the consideration that the... For lessors the essential challenges in financial leasing are the length of time the financial institution’s investment is exposed which is the duration of the financial lease. Since the financial institution only holds the title of ownership of the asset in financial leases they do not have possession of the asset therefore the care, maintenance, state and condition of the asset is not within the control of the financial institution. This exposure is considered a risk by financial institution since in the event of a default or failure of the lessee to satisfy his part of the agreement the state and condition of the asset may not make it marketable or commercially viable for the financial institution or the lessor to recover his investment at the onset. Taking the above into consideration the lessor can exercise his right by virtue of Article 9 of the Uniform Commercial Code of the United States to secure his investment supported by Article 1 203 of the same Code which states that: A transaction in the form of a lease creates a security interest if the consideration that the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease and is not subject to termination by the lessee, and: the original term of the lease is equal to or greater than the remaining economic life of the goods; the lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods;

Management Research Paper Example | Topics and Well Written Essays - 2500 words - 1

Management - Research Paper Example In a clinical setting, the scientific organization approach remains founded on the idea of planning of job to attain effectiveness, consistency, specialization, and generalization. The Bureaucratic approach sees the clinic as section of a wider community organized in structure as one unit. Aims at bringing different units under one roof. Administrative theory emphasizes on the management goals and their achievement in a clinic (Ziegenfuss, 2007). Neoclassical theory stresses on a person’s or team trend and human associations in assessing output. It explains how clinic staff coordinates to bring out the desired results in an organization. The modern theory consists of three approaches, the systems approach, the socio-technical, and the contingency or situational approach. The systems approach considers the clinic like a system made up of a set of connected dependent branches. Socio-technical approach recognizes the clinic as made up of social scheme, technical scheme and its su rrounding. This ensures effective mixing with the surrounding to produce the desired results in a clinic. The contingency approach considers a clinic like institutional scheme connected to the surrounding and that various surroundings need varying institutional associations for efficient functioning of the clinic (Ziegenfuss, 2007). ... Mintzberg’s grouping recognizes (Kelly, 2012): Interpersonal role Informational role Decisional role Interpersonal role In this category, there are three types of interpersonal roles, which include: a. Figurehead: all managers, however, mainly senior managers, remain figure leaders since they participate in figurative and official functions like greeting guests and making dialogues at institutional occasions. The challenge that could remain incurred in this situation is communication barrier and the timing of the communication to suit your audience and make them comfortable. b. Liaison: it entails official and informal within and without contacts; the challenge that could prevail here is the ability to maintain all the contacts and be able to reach them evenly. c. Influencer: comprises of tasks intrinsic in the directing activity, the function of which is to encourage and head. The challenge that may prevail here is lack of enough knowledge and expertise to be able to deal wit h all the team members in the organization as well as keep them motivated and ready to work. Informational role The informational roles of a manager comprise of the following: Monitor- The manager has to view and follow the flow of information and the progress of the staff to ensure that they all conform to the set instructions and act to directives accordingly. The challenges the managers can encounter here are the other staff viewing them as dictators and completely following up their affairs and thus develop hatred towards them. This will affect the performance of the subordinate workers as well as that of the managers hence leading to low output. Disseminator- the managers have the role of spreading information to their subordinates when necessary to

Visual Art in Greek Mythology Essay Example for Free

Visual Art in Greek Mythology Essay Visual art is one of the most important facets of ancient culture. Not only is visual art aesthetically pleasing to the senses, but it aids us in grasping the concepts of civilizations and stories that we could not fully understand in simple text. Greek mythology has bred some of the most beautiful works of art ever created. These works tell the stories they represent in lively form, color and style. One of the most famed works of art representing Greek mythology originated in 460-450 BC. This is the statue of Zeus. There are arguments about whether it is Zeus or Poseidon, because they are both pliable possibilities, but for simplicitys sake, let us assume it is Zeus. The statue of Zeus is one of great pride. He stands without hesitation. He appears to be in his 40s, but his physical body is muscular and shapely. His very stance is once that demands attention and respect. This represents his role: Zeus the chief god. Zeus is strong, powerful, and just. In the statue, Zeus is about to throw one of his lightning bolts of justice. His face is very stern and focused, as if he is seriously concentrated on the matter at hand. He stands unashamed of his exposed manhood, which is very representative of Zeuss character. Zeus is most known for his tendency to spread his seed throughout both the goddess world and the mortal woman world. It was considered a great honor to be a son or daughter of Zeus. Years and years later, in 1622, a sculptor named Gian Lorenzo created the sculpture Pluto and Proserpine. This sculpture represents the story of the capture of Persephone by Hades. Hades, the Roman Pluto, is depicted holding Persephone, the Roman Proserpine, by her waist and thigh. Persephone is turned away from Hades, pushing his face away. She attempts to squirm free of his strong grasp, a look of horror and fear on her face. It would seem this represents the moment Hades brings her to the underworld and tells her she is to be his queen. It is clear they are in the underworld because of Hades dog at his side. As Persephone pushes him away, he almost looks offended at her refusal. It is clear she cannot escape, for his body is obviously strong and muscular, and both her feet are off the ground, but her attempt is a feisty, determined one. This shows how much she does not want  to stay with Hades in the underworld. The pain she feels is so apparent; her other arm is raised, as if reaching for some sort of escape, and her face is turned, as if she wouldnt even look at him. The open mouth of Hades dog also indicates that theres some sort of struggle going on, like it is barking. There is so much violent, sexual energy in this sculpture. It probably also represent the very moment before Hades ravishes Persephone. Moving further through time, the beautiful painting Cupid Kissing Psyche is created by Francois Gerard in 1798. This piece is absolutely mesmerizing. In the story of Cupid, or Eros, and Psyche, Eros is commanded by his mother Aphrodite to shoot his arrows at Psyche and make her fall in love with an ugly creature because she is jealous of her beauty. When Eros sees Psyche, he himself falls in love with her, and takes her away to be his secret bride. The only condition she must follow is that she cannot see him, for she cant know his true identity. At first Psyche is frightened, but begins to love Eros, still unknowingly. This painting represents this stage of the story, where Psyches love for the unidentified Eros is growing. The very color scheme of this painting is intensely calming and serene. Psyche sits amidst beautiful scenery, staring straight ahead. Eros is next to her, but she does not seem to notice. His hands are so close to her, but its hard to tell whether he is touching her or not. The beautiful youth of Eros is obviously deeply in love with her. Though Psyche cannot see Eros, her face seems to sense him there, and there is no trace of fear. Though it is a painting of Eros and Psyche together, I believe the painter intends for it to be an expression of their love, and not a literal scene. (Meaning, Eros is not actually there beside her. ) She is holding herself tenderly, as if treasuring a memory. Both their bodies are painted so softly and so insanely beautiful that the mind is overcome by their love when viewing this work. In 1809, painter John Vanderlyn painted Ariadne Asleep on Naxos. Ariadne was a beautiful brown-haired maiden who fell in love with the hero Theseus. Ariadne aided Theseus in his slaughter of the Minotaur, and in return, requested to be his bride. Theseus accepted her offer, and after defeating the Minotaur, brought her with him. On the island of Naxos, however, Theseus abandoned her as she slept. This painting represents the moment Theseus sails off, as seen in the background to the right. Ariadne sleeps, stretched out on the ground, her body exposed and relaxed. She looks peaceful, as if she is happily dreaming of her lover, Theseus. The red shades used around her body give her a sexual energy, and yet she rests on a cloth of white, representing her innocence and virginity. Perhaps she is dreaming of her long-awaited wedding with Theseus and the birth of her sexuality. It is tragic in the sense that she may be thinking all these things, while her fiance is sailing off without her and she has no idea. But because she is portrayed in such a desirable way, it almost hints that there will be someone else. As one story goes, the god Dionysus finds her on Naxos and makes her his wife. There is a burst of light where Theseus is sailing away, representing a love that leaves her. But there is another burst of light coming from the opposite direction, hidden in the left, illuminating her body, possibly representing a love that finds her. Painted more recently, in 1908, is Apollo and Daphne by John William Waterhouse. The story behind this painting begins with a conversation between the sun god Apollo and the god of love, Eros. Apollo asks why such a youth like Eros is carrying around weapons of war, and Eros becomes offended. Eros shoots Apollo with the gold-tipped arrow, making him fall desperately in love with the wood nymph Daphne, while he shoots Daphne with the lead-tipped arrow, making her despise Apollo. Apollo pursues Daphne and she rejects him. Daphne is soon transformed into the laurel tree, and Apollo is seen professing his love to this tree. This painting shows the end of the chase. Apollo is reaching for her, his face locked to hers. In his other hand is his musical instrument, ready to woo her. Daphne looks distressed and frightened because of Apollos persistence. The roots begin to hold her in place, beginning the transformation. In their faces, you can see the results of Eros arrows. Apollo is so focused on winning Daphnes affections that there seems to be nothing else in the world for him to do. Daphne seems so repulsed by him, you can almost hear her scream Leave me alone! just by looking at her face. These five examples really express the importance of visual art in mythology. Because we can see these pieces whenever we want, we can relive the stories whenever we want as well. They allow us to really see the thematic emotion behind each story and each god, goddess, nymph and mortal. They take the immortals and make them, well, immortal.

Causes and effects of international labour mobility

Causes and effects of international labour mobility Introduction Globalisation is the process of intensified international competition and trade. It enables the movement of goods, production factors, labour and technology across borders. If countries use their resources efficiently then globalisation can also enhance growth and social welfare. This depends on how much competition there is and a country has to have a certain stability and mobility of labour and resources for production. The common trade theory suggests that globalisation will equalise the prices of products and costs of production and free trade will lead to a more efficient allocation of resources. It is also beneficial for the customer since free trade suggests high competition and therefore companies will be able to offer low prices to their customers. This seems to be the case in the long run but problems that arise in the short run include high unemployment and income inequalities. Globalisation is an ongoing process that has been around for quite some time now. EU firms can o ffshore many tasks which were never possible before. This also means that international competition is completely changing and going through a transformation. Competition took place mainly between firms or different industries in different countries, however now since a lot of firms go abroad for their production, because it is cheaper, competition takes place between individual workers that use similar skills for their tasks in different countries, so they no longer compete within a nation. This of course can be beneficial for some workers but can also harm other workers. Europe is exactly facing this problem at the moment and this paper will focus on the impact globalisation has on the low skilled workers and income inequalities in Europe. European Globalisation trends Globalisation is taking place in nearly every country on the planet, but it has different effects on different nations. Trade expansion in Europe seems to be proceeding at a rapid paste, especially trade with low wage countries. Due to immense improvements in technology, transportation and communication, it is now a lot easier to handle the production process and this might have caused some firms to move parts of their production process to other nations. Offshoring and outsourcing are the common terms used when companies move their production process abroad. There are many reasons for why companies move to other nations for production. But the main reasons could be because it is cheaper to produce in less developed countries, firms only have to pay low wages and get a better output than in the home country. Especially labour intensive goods are shipped to less developed countries because there are more people that would do the job for less money. Therefore globalisation seems to hav e a negative effect on employment, especially low skilled labour. Since a lot of firms moved their production abroad and the ones that didnà ¢Ã¢â€š ¬Ã¢â€ž ¢t only employ high skilled labour, it makes it even harder for the low skilled labour to find employment. New technologies also lead to higher unemployment rates among low skilled workers, because the low skilled workers that used to have a job are no either replaced by new technological advancements or by high skilled labour. Overall one could say that globalisation lead to a high demand for skilled labour and on the other side a rise in unemployment among low skilled workers. EU trade In Europe most of the countries are part of the EU, which has special trade agreements. Trade among industrialised countries differs significantly from trade with the developing world. This is mainly due to the fact that industrialised countries are relatively similar, in the sense that they use similar production technologies and have similar factor endowments, so one could say that they produce pretty similar goods. Trade between them therefore mainly exists among industries. So countries would import and export products from the same industry sector. For example Germany exports their yogurts brands and France French yogurts to Germany. These goods are similar because they are both yogurts but they have different tastes and characteristics, that is why these countries trade. It is the same with cars, Germany sells German cars to France and France sells French cars to Germany. Trade among industrialised and developing countries is different. Countries export goods belonging to one s ector and import goods belonging to another sector. Germany would for instance export Volkswagens to China and import rice or computers in exchange. Theoretical approach Comparative advantage Ricardian model Globalisation leads to increased trade amongst countries. Countries usually produce goods where it is the cheapest to produce them. Krugman discussed this in Chapter 3, if free trade exists with countries that pay low wages then this will harm the country that pays high wages. In the end the consumer profits from this because if firms have low production costs then they are able to offer the products at a lower price. And the producer benefits from a higher income if he uses his resources more efficiently. Krugman gave an example of this where W represents the wage rate in the home country W* represents the wage rate in the foreign country And the home countries unit labour requirement for good i is aLi, and the unit labour required for good i of the foreign country is a*Li. Now if WaLi < W*a*Li then the home country will produce the good I because it is cheaper, as wages are less at home. Or if the relative productivity of a country is higher than the wages, then the good will be produced in that country. This can be calculated as a*Li / aLi > W / W*. So overall if a country produces the good that uses the resources most efficiently then trade will be beneficial for that country. EU Unemployment To explain why Europe is facing this high unemployment ratio one has to look at the relative wages. This can easily be determined by looking at the relative demand and supply of labour services. If W / W* rises then the relative demand for home labour services will fall. If the home country would produce goods with expensive labour services then this can have a huge impact on society. Because it means that production costs are high as the producer has to pay high wages and therefore he canà ¢Ã¢â€š ¬Ã¢â€ž ¢t offer the final goods at an attractive price. If nobody buys the products because they are too expensive then the demand for labour services will go down too. This can also lead to fewer goods being produced at home because costs are too high, which will lead to a further reduction in demand for labour services in the home country. The Ricardian model only focuses on the productivity of labour across countries. According to this model a country gains from Trade if a country has a comparative advantage in producing a specific good. If the country produces the good it has a comparative advantage in, then it is able to use all its resources more efficiently and will gain more from producing this good. So here this model shows that overall if a country trades according to rules mentioned above, then the relative price of the good will increase, wages will increase and the producer is able to offer the good at a lower price so therefore even the consumer profits from it. Heckscher Ohlin Samuelson Model The Ricardian Model suggests differences in productivity of labour between nations cause productive differences. The Heckscher Ohlin model suggests that there are other factors of production between different countries, not just differences in productivity of labour, that cause differences in production. Usually the price of a good should be the same as its production costs, and the production costs also depend on how much wages they have to pay and the lending/renting rate of land. Changes in lending rates can affect the final price of a product, depending on how intensively you use land in production. For example if there are two products cloth and food, cloth is labour intensive and food is land intensive. If lending rates for land increase then this should have a bigger affect on the price of food than the price of cloth, because the production of food requires more land than the production of clothes. Heckscher Ohlin model also suggests that an economy will be efficient at producing goods that are intensive in the factors of production in which the country has a lot of. Just suppose the domestic country has an abundant amount of labour relative to land. This suggests that domestic country is abundant in labour and the foreign country is abundant in land. Likewise, the domestic country is scarce in land and the foreign country is scarce in labour. Because the domestic country is abundant in labour it would be very good at producing cloth, as cloth production is very labour intensive. The foreign country on the other hand should produce food as it is abundant in land and the production of food is very land intensive.(64-68) With trade the relative price of cloth should rise in the labour abundant country which is the domestic country, and should fall in the labour scarce country which is the foreign country. According to the Heckscher Ohlin Model, in the domestic country the rise in the relative price of cloth leads to a rise in the relative production of cloth and a decrease in the relative consumption of cloth. The same will happen to food in foreign economy. So what will happen is that the domestic country will become an exporter of cloth and an importer of food. And the foreign country will import cloth and export food. So one could say that a company would be very good at producing the goods that are intensive in its abundant factors, this just means a country produces the goods it has a comparative advantage in. And likewise a country should export goods that are intensive in its abundant factors of production and should import goods that are in its scarce factors of production. (58-63). To explain the wage inequalities among European low skilled workers one has to understand The Heckscher-Ohlin-Samuelson factor endowment model. This model predicts that trade among different countries derives from differing factor endowments across nations. This model looks at different countries that are trading with each other and these countries are also on the same technological level, which just means that they use the same technologies in their production process for both products. The production process for both goods in this case, requires two different inputs, this could be high skilled labour for one country and low skilled labour for the other country. For example, the production of one of the goods, for instance computers, requires more high skilled labour, while the production of the other good, for instance cloth, needs more low skilled labour. It is assumed that one of the two countries is relatively well equipped with either low skilled labour or high skilled labour, for instance Europe is equipped with relative large amounts of high skilled labour and the foreign country is relatively well equipped with low skilled labour. Usually when two countries trade industrialised countries have more high skilled labour and the developing countries have more low skilled labour. The Heckscher Ohlin theory in this case suggests that industrialised countries like Europe would export computers and the developing foreign country Europe is trading with should export cloth. The outcome would be that the relative price of cloth would fall in the industrialised country, but would do exactly the opposite in the developing country, the relative price would increase. This would lead to changes in wage distribution; low skilled labour in the industrialised country such as Europe would decline relative to the wages of high skilled labour. This can be explained because globalisation increased trade among countries and enabled countries access to products that were produced abroad, furthermore this implies that through trade the relative supply of low skilled labour has increased. According to this theory, inter -industry trade would as a result have the effect of increased wage inequality in industrialised countries like Europe, while inequality should decrease in developing countries. (58-61) Overall it seems as if owners of abundant factors gain with trade and owners of scarce factors lose. This model assumes that after international trade factor prices will be equal in both countries. This just means that once the domestic country which has a higher ratio of labour to land than the foreign country trade with each other, the wage rate and the lending/renting rate of land are the same in both countries. But that is not the case with every country that trades because labour moves around and usually both countries are not exactly the same in terms of infrastructure, technology and communication as the Heckscher Ohlin model suggests (68-69). Because ever changing differences in relative product prices has a large effect on the relative earnings of resources, and with trade the relative price also changes, so trade has a negative impact on income distribution. Causes and effects of international Labour mobility (chapter 7) p154 Heckscher Ohlin model focuses on trade as an explanation of bringing together factor prices, and capital / labour movements have similar effects. Capital tends to move from high wage countries to low wage countries. However labour migrates from low wage to high wage countries. Workers usually move to foreign countries in order to get paid more. Krugman suggested that labour will migrate to countries with higher labour productivity and higher real wages. And he further states that due to immigration wages will fall and due to emigration real wages should increase. If wages do not fall despite immigration, employers have no incentive to create additional jobs, and the immigration and this causes unemployment. Due to the fact that countries do not produce the same goods, due to differences in technology and due to immigration barriers, real wages across countries will never be equal (156-157). Companies in Europe which is considered an industrialised country will outsource those activities that use a large amount of unskilled labour. Moving these activities abroad would then lead to a decrease in the relative demand for low skilled labour in Europe within each industry. This means that outsourcing has a similar effect on reducing the demand for low skilled labour relative to high skilled labour within an industry, as does skill-biased technological change. Technological advancements and wages Skill-biased technological change reduced the demand for unskilled workers leading to higher long-term unemployment among low skilled workers in Europe. So low skilled workers would have to receive training in order to retain a job. At the same time, international outsourcing also leads to a shift in relative demand for labour. Firms outsource the low skill intensive parts of production and therefore increase the relative demand for skilled labour. Technological advancements also enabled companies across the world to better communicate with each other. Fast communication is a key factor when you are trading. Better infrastructure and more ways of transportation also enabled and increased trade among different countries. Benefits from globalisation According to the traditional trade theory globalization will equalize the price of products and production factors. Free trade will lead to a more efficient allocation of world resources as competition will shift production to the producers with the lower production cost. This more efficient allocation of resources will boost growth with positive effects on social welfare. Innovation and increased international competition can lead higher productivity, higher wages and improved living standards. Consumersà ¢Ã¢â€š ¬Ã¢â€ž ¢ welfare will improve due to a decrease in prices. However, the fall in prices relies on the level of competition in the product markets. Conclusion If economies have different capital/labour ratios, free factor mobility will encourage capital (labour) to move from the economies with a high (low) capital/labour ratio to those in which capital (labour) is relatively scarce. This process will affect the distribution of income since it will increase the relative income of capital (labour) in the countries initially with a high (low) capital/labour ratio. As globalization accelerates further, both costs and benefits will tend to raise while costs such as higher unemployment and income inequality will be concentrated in the short run while benefits in the form of lower prices, higher productivity and income will only occur later on.