This is the Cato Daily Podcast for Tuesday, January 24th, 2017.

I'm Caleb Brown.

The ability to plan for your own future without government

suddenly called for everyone to exchange old cash for new cash

or watch that old cash be rendered worthless.

The costs to average people in India were stark.

Cato's Jim Dorn explains.

So Nerengra Modi, the Prime Minister of India, to the surprise of a billion people, imposed a policy of

turn in your cash and we will issue you new cash and this was an attempt to do what, control corruption somehow.

Well right, you had to turn in your 100 rupee and 500 rupee notes.

So fairly small denominations, but these are important vehicles for, you know, millions of people in India especially the poor it's a

cash cash society so by calling in that they were calling in about 86% of the

value of currency outstanding.

And the purpose was to basically go after the so-called black money money that was being handled in the shadow economy and also

therefore to end corruption but the real problem with corruption is that India has a very low rating on the economic freedom schedule

and also on the corruption index.

They have a, they're highly corrupt.

And the corruption stems from over-extension of government,

politicization of economic life, high taxes, lots of regulation,

and the public officials are extremely corrupt.

They're on the take for many different things.

There's rent seeking going on so he thought well we'll just get rid of these

...