Gandhi is not the Prince of Peace & Non-Violence.
That is Jesus Christ.
Gandhi is actually the Patron of State Violence Against Alcohol.
And it is fitting that from tomorrow, which is Gandhi’s birthday, he becomes the Patron of State Violence Against Smokers.
However, I have my doubts about the ability of our The State to effectively impose the ban on smoking in private spaces.
Repeat: Private spaces.
We are allowed to smoke on our pot-holed streets – which belong to The State and are thus public property.
We are not allowed to smoke in offices, bars and restaurants, all of which belong to private people, and are thus Private Property.
Technically, The State should not be allowed to poke its long Pinocchio nose into private property. So the supreme court is just an arm of The State. The judges are not defenders of individual rights and private property. They are part of the organized senseless violence that characterizes our The State.
Yet, as I just said, I have my doubts about the ability of our The State to effectively impose the ban on smoking in private spaces.
Some good news has just come in from Hyderabad, capital of Andhra Pradesh, where tobacco is grown. The news has it that the government there is going to go slow on enforcing the diktat of our Health Dictator, mr. ramadoss, of the PMK Party.
I am told that in Bengali PMK stands for Pondhpaka Mi Korchhi. I am sure that in West Bengal too this ban will not be enforced at all – because the Bengalis are big smokers and do not take kindly to Pondhpaka Mi Korchhi activism.
So I am confident that ramadoss’ dictatorship will collapse.
I recall another time, some years back, when the supreme court banned smoking in trains and railway stations. I was traveling by train from Mangalore to Poona, all along the Western Ghats, and when the train stopped at some obscure station I got off to enjoy a smoke on the platform.
Immediately a burly cop accosted me muttering something or the other about our supreme court.
I raised by voice to its Most Thunderous Level and told the feller to F O! That’s it, dude, F O.
I told him to go after rapists, murderers and thieves – and leave me alone.
He left.
Some hours later, the train stopped at another obscure station and I stepped out once again for a smoke.
This time, one of my fellow passengers also alighted and lit up a cigarette.
Then, looking at me smoking he said, in a conspiratorial aside, “If the policeman comes, you tell him to F O.”
I politely declined.
I told the man, “I fought for my Freedom; now you must fight for yours.”
I am still fighting for my Freedom today.
Are you?
Tuesday, September 30, 2008
Monday, September 29, 2008
A Revolution in Distribution
The German wholesaler Metro AG, which has been operating in Bangalore for quite a few years now, has received the official nod for beginning operations in West Bengal, despite opposition from a key minister. (The chief minister intervened.) Read the news here.
Why is there so much opposition to supermarkets? And to FDI in this sector?
Metro is a big player in wholsesale trading. They do not retail. Thus, the ToI lead edit of today misses the point: this is not a “retail revolution”; rather, this is a “wholesale revolution.”
Now, all the politicians who oppose FDI in retail do so in the interest of the small cornershopwallahs – the so-called “mom-and-pop stores.”
But these small retail shops will only benefit from a wholesale revolution!
In India, wholesaling is very inefficient. Small shopkeepers suffer because of this. The distributional chain becomes excessively long, and includes multiple wholesalers as well as sub-wholesalers. With wholesale supermarkets located in easily accessible parts of the city (unlike the wholesalers of today), small shopkeepers will be able to buy their stocks at cheaper rates. Their profit margins will improve. Their customers will also gain.
But who thinks of the consumer?
Actually, big-ticket retailing is in the interest of the consumer. And here FDI must be allowed. Wal-Marts in every city and town will deliver big gains to ordinary folk. And it is simply not true that these Wal-Marts will lead to the closure of all our mom-and-pop stores. The reason is simple: The bulk of our consumers are poor daily wagers. They do not buy big bottles of shampoo; they buy a small sachet instead. They do not buy rice and wheat in big sacks; they can only afford to buy half a kilo at a time. For all these small consumers, the mom-and-pop store will remain the only retail outlet of choice. Thus, wholesale supermarkets like Metro will be good for these small consumers. It makes no sense at all to oppose Metro’s operations. Efficient wholesaling is in the best interests of both small shopkeepers as well as their poor customers.
I have always been strongly in favour of increasing the efficiency of the distributional chain by allowing retail and wholesale supermarkets – and I have always been in favour of allowing FDI in this area. Here is an article from the ToI I wrote 3 years ago.
FDI in distribution will bring in capital as well as knowledge. There will be a huge impact on the real estate market. Our politicians are foolishly opposing what is in the best interests of all of us – not only as consumers, but equally as small shopkeepers.
Why is there so much opposition to supermarkets? And to FDI in this sector?
Metro is a big player in wholsesale trading. They do not retail. Thus, the ToI lead edit of today misses the point: this is not a “retail revolution”; rather, this is a “wholesale revolution.”
Now, all the politicians who oppose FDI in retail do so in the interest of the small cornershopwallahs – the so-called “mom-and-pop stores.”
But these small retail shops will only benefit from a wholesale revolution!
In India, wholesaling is very inefficient. Small shopkeepers suffer because of this. The distributional chain becomes excessively long, and includes multiple wholesalers as well as sub-wholesalers. With wholesale supermarkets located in easily accessible parts of the city (unlike the wholesalers of today), small shopkeepers will be able to buy their stocks at cheaper rates. Their profit margins will improve. Their customers will also gain.
But who thinks of the consumer?
Actually, big-ticket retailing is in the interest of the consumer. And here FDI must be allowed. Wal-Marts in every city and town will deliver big gains to ordinary folk. And it is simply not true that these Wal-Marts will lead to the closure of all our mom-and-pop stores. The reason is simple: The bulk of our consumers are poor daily wagers. They do not buy big bottles of shampoo; they buy a small sachet instead. They do not buy rice and wheat in big sacks; they can only afford to buy half a kilo at a time. For all these small consumers, the mom-and-pop store will remain the only retail outlet of choice. Thus, wholesale supermarkets like Metro will be good for these small consumers. It makes no sense at all to oppose Metro’s operations. Efficient wholesaling is in the best interests of both small shopkeepers as well as their poor customers.
I have always been strongly in favour of increasing the efficiency of the distributional chain by allowing retail and wholesale supermarkets – and I have always been in favour of allowing FDI in this area. Here is an article from the ToI I wrote 3 years ago.
FDI in distribution will bring in capital as well as knowledge. There will be a huge impact on the real estate market. Our politicians are foolishly opposing what is in the best interests of all of us – not only as consumers, but equally as small shopkeepers.
Sunday, September 28, 2008
Who Owns Your Soul?
At the Liberal Symposium on Saturday, Father Cedric Prakash, a human rights activist from Gujarat, spoke of a new legislation passed by the Gujarat assembly that required any person who changes his religion to not only inform the local administration but also take their concurrence.
What is the libertarian take on such a law?
At the symposium, I made the point that each individual is the proprietor of his own soul. He alone is the deciding authority as to which god is allowed entry into his soul. He can choose to be an atheist. He can also sell his soul - so conversions induced by economic inducements are OK.
Of course, those in authority have sold their souls to the Devil.
But that's another story!
This legislation should be struck down by the processes of judicial review.
Note how private property is the only foundation of a secure Liberty.
And liberty always means Liberty from The State.
What is the libertarian take on such a law?
At the symposium, I made the point that each individual is the proprietor of his own soul. He alone is the deciding authority as to which god is allowed entry into his soul. He can choose to be an atheist. He can also sell his soul - so conversions induced by economic inducements are OK.
Of course, those in authority have sold their souls to the Devil.
But that's another story!
This legislation should be struck down by the processes of judicial review.
Note how private property is the only foundation of a secure Liberty.
And liberty always means Liberty from The State.
Saturday, September 27, 2008
Ron Paul Grills Ben Bernanke
This video of Representative Ron Paul grilling the Fed Chairman Ben Bernanke is a must see.
What is most interesting is towards the end, when Ben Bernanke responds to Ron Paul's question asking as to where exactly the Fed gets all its authority from to create money and credit endlessly out of thin air.
Ben Bernanke mentions the US Constitution, which gives Congress the "power to coin the currency."
Ron Paul butts in stressing the word "coin."
And therein lies the rub, for there is no authority to print fiat paper money.
Ron Paul also says that "you cannot fight inflation with more inflation."
And I loved his reference to the Austrian school of economics and to Ludwig von Mises in particular.
We must all support this great truth-telling politician of America who knows his onions.
What is most interesting is towards the end, when Ben Bernanke responds to Ron Paul's question asking as to where exactly the Fed gets all its authority from to create money and credit endlessly out of thin air.
Ben Bernanke mentions the US Constitution, which gives Congress the "power to coin the currency."
Ron Paul butts in stressing the word "coin."
And therein lies the rub, for there is no authority to print fiat paper money.
Ron Paul also says that "you cannot fight inflation with more inflation."
And I loved his reference to the Austrian school of economics and to Ludwig von Mises in particular.
We must all support this great truth-telling politician of America who knows his onions.
Friday, September 26, 2008
The Obstacle of Customs
There is an interesting story today about Big B and his son getting into trouble with that great horror, the Customs Department, over stuff they brought in from London.
My question is: Is the Customs Department an “obstacle” or is it doing something “useful”?
Think about it.
And then think of Free Trade Across All Borders.
Recommended reading: The Essential Frederic Bastiat (Liberty Institute, 2007).
Bastiat is the only classical economist who hated the customs department and saw through the “indirect use of force” that this obstacle to trade actually is.
He gave an excellent example: A steel magnate in Paris is unhappy about cheap steel coming into France from Belgium. He can now do two things:
One – he can arm 100 men, send them to the border, with instructions to shoot anyone who brings steel into France from Belgium.
But such a course of action is not feasible.
So he takes the other option.
He goes to the government minister of trade and pays for protection. The minister posts armed men at the border (the customs department) at the taxpayers’ expense, with instructions to shoot anyone who brings in steel from Belgium.
The minister and the steel magnate share the high profits now made possible by this “indirect use of force.”
The taxpayers who paid for the customs men now pay even more for steel.
Away with this Obstacle!
Let trade be free!
My question is: Is the Customs Department an “obstacle” or is it doing something “useful”?
Think about it.
And then think of Free Trade Across All Borders.
Recommended reading: The Essential Frederic Bastiat (Liberty Institute, 2007).
Bastiat is the only classical economist who hated the customs department and saw through the “indirect use of force” that this obstacle to trade actually is.
He gave an excellent example: A steel magnate in Paris is unhappy about cheap steel coming into France from Belgium. He can now do two things:
One – he can arm 100 men, send them to the border, with instructions to shoot anyone who brings steel into France from Belgium.
But such a course of action is not feasible.
So he takes the other option.
He goes to the government minister of trade and pays for protection. The minister posts armed men at the border (the customs department) at the taxpayers’ expense, with instructions to shoot anyone who brings in steel from Belgium.
The minister and the steel magnate share the high profits now made possible by this “indirect use of force.”
The taxpayers who paid for the customs men now pay even more for steel.
Away with this Obstacle!
Let trade be free!
Bailout Reader
The Mises Institute has compiled a long “bailout reader” comprising 50 or more articles they have published on the subject. If you want to be totally informed about the US Crash then spend your weekend reading these articles. To access the reader, click here.
Liberal Symposium Today
Today is a great day for India’s liberals, for we are holding a full-day symposium in Delhi that will be addressed by John, Lord Alderdice, president of Liberal International. If you are in Delhi today, do drop by at the FICCI auditorium on Tansen Marg anytime between 9 am and 6 pm.
Thursday, September 25, 2008
On the Rise and Fall of the Anglo-Saxons
There is an interesting Reuters story today, in an Indian newspaper, that quotes the German finance minister saying, in the context of the US Crash, that “the Anglo-Saxon model of capitalism has failed.” He adds that the USA is now bound to lose its superpower status.
Actually, if we study the history of ideas, we do find a dearth of good economists among the English and American people. Lord Keynes is the most obvious example. His ideas were put into practice by the Anglo-Saxons – with devastating effect.
Today, we who know better swear by the Austrian School. This is a school of thought that was born under the Hapsburgs. The founder of the school was Carl Menger, who started off as a bureaucrat. Menger served as the chairman of a government committee on money that stood firmly by gold. His student Bohm-Bawerk served as Austrian finance minister and strictly implemented a currency based on gold.
Indeed, the word “dollar” has its root in a pure gold Hapsburg coin called the “thaler” (or Reichsthaler) which became the most popular coin in the early days of America.
What made the Austrians so special? Was it something to do with the nature of Hapsburg rule? How was it that so many people from so many fields flourished under the Hapsburgs – not just Carl Menger, Bohm-Bawerk, and the Austrian economists, but also Sigmund Freud and the psychoanalysts, Robert Musil the writer, and many more. A complete list is available in a footnote in Hans-Hermann Hoppe’s Democracy: The God That Failed. Here, Hoppe also notes that it was the Anglo-Saxons of America who went overboard installing democracy in Europe. They dethroned the Hapsburgs.
If we go back further in time, to an age when the Anglo-Saxons began their dizzying ascent, we see that their meteoric rise had much to do with the rules they followed. These basic laws of property, contracts and torts which lie at the foundation of Anglo-Saxon jurisprudence were central to the very English concept of “rule of law.” It meant the “sovereignty of law” – and central to this was the notion that “the King is under God and the Law.” The Law was above the King.
All this changed with Democracy – and the sovereignty of law was replaced by the sovereignty of parliament. This new sovereign could now make law, something that no earlier sovereign could. This is how and why the old rule of law broke down. And it is this that lies at the core of today’s breakdown of the Anglo-Saxon model of capitalism.
What can we Indians learn?
Indians must, of course, study the Austrian economists. We must also realize that everything depends on the “rules of the game.” Societies that follow the best rules succeed – like the Anglo-Saxons of old. Societies that follow bad rules fail – like the USA today.
At the core of the current breakdown of Anglo-Saxon capitalism (and democracy) lies the fact that the rules are all wrong. Under bad rules, nothing good can happen.
What is happening in America today has been beautifully summed up by James Ostrowski (thanks to Lew Rockwell again). What the Americans of today are doing is:
“Taking money from people who made good investments and giving it people who made bad investments in the hope that the people who made bad investments will make good investments in the future and the people who made good investments will keep making them even though they will have less money to do so.”
This is certainly not Capitalism.
And as Bastiat, a Continental scholar who was a great admirer of the Anglo-Saxons, said: “Any social arrangement that is not based on Truth and Justice will fail.”
So go ahead. Reject the Anglo-Saxon economists from Bentham to Ricardo to the Mills, both father and son, to Alfred Marshall and to Keynes. Study the Austrians – from Menger to Mises to Hayek to Hoppe. And study the great Continental scholars, from Bastiat to the great Bruno Leoni. There is a great deal of knowledge outside the Anglo-Saxon universities. We need to study these if we are to get the rules of the game right.
Actually, if we study the history of ideas, we do find a dearth of good economists among the English and American people. Lord Keynes is the most obvious example. His ideas were put into practice by the Anglo-Saxons – with devastating effect.
Today, we who know better swear by the Austrian School. This is a school of thought that was born under the Hapsburgs. The founder of the school was Carl Menger, who started off as a bureaucrat. Menger served as the chairman of a government committee on money that stood firmly by gold. His student Bohm-Bawerk served as Austrian finance minister and strictly implemented a currency based on gold.
Indeed, the word “dollar” has its root in a pure gold Hapsburg coin called the “thaler” (or Reichsthaler) which became the most popular coin in the early days of America.
What made the Austrians so special? Was it something to do with the nature of Hapsburg rule? How was it that so many people from so many fields flourished under the Hapsburgs – not just Carl Menger, Bohm-Bawerk, and the Austrian economists, but also Sigmund Freud and the psychoanalysts, Robert Musil the writer, and many more. A complete list is available in a footnote in Hans-Hermann Hoppe’s Democracy: The God That Failed. Here, Hoppe also notes that it was the Anglo-Saxons of America who went overboard installing democracy in Europe. They dethroned the Hapsburgs.
If we go back further in time, to an age when the Anglo-Saxons began their dizzying ascent, we see that their meteoric rise had much to do with the rules they followed. These basic laws of property, contracts and torts which lie at the foundation of Anglo-Saxon jurisprudence were central to the very English concept of “rule of law.” It meant the “sovereignty of law” – and central to this was the notion that “the King is under God and the Law.” The Law was above the King.
All this changed with Democracy – and the sovereignty of law was replaced by the sovereignty of parliament. This new sovereign could now make law, something that no earlier sovereign could. This is how and why the old rule of law broke down. And it is this that lies at the core of today’s breakdown of the Anglo-Saxon model of capitalism.
What can we Indians learn?
Indians must, of course, study the Austrian economists. We must also realize that everything depends on the “rules of the game.” Societies that follow the best rules succeed – like the Anglo-Saxons of old. Societies that follow bad rules fail – like the USA today.
At the core of the current breakdown of Anglo-Saxon capitalism (and democracy) lies the fact that the rules are all wrong. Under bad rules, nothing good can happen.
What is happening in America today has been beautifully summed up by James Ostrowski (thanks to Lew Rockwell again). What the Americans of today are doing is:
“Taking money from people who made good investments and giving it people who made bad investments in the hope that the people who made bad investments will make good investments in the future and the people who made good investments will keep making them even though they will have less money to do so.”
This is certainly not Capitalism.
And as Bastiat, a Continental scholar who was a great admirer of the Anglo-Saxons, said: “Any social arrangement that is not based on Truth and Justice will fail.”
So go ahead. Reject the Anglo-Saxon economists from Bentham to Ricardo to the Mills, both father and son, to Alfred Marshall and to Keynes. Study the Austrians – from Menger to Mises to Hayek to Hoppe. And study the great Continental scholars, from Bastiat to the great Bruno Leoni. There is a great deal of knowledge outside the Anglo-Saxon universities. We need to study these if we are to get the rules of the game right.
Wednesday, September 24, 2008
On Gold, Steel and Tourism
With the US Crash, the possibilities of a unipolar world have totally disappeared.
Thus, this article advising the Russians to adopt a gold rouble is really worth reading. (Thanks to Lew Rockwell).
If the Russians do adopt gold as their currency, the entire world’s private savings will go into Russian banks.
This is precisely what happened in the 17th century when London and Paris crashed and the Dutch set up the Municipal Bank of Amsterdam with a gold guilder backed by a 100 per cent reserve. Honesty in money and banking paid off – and the Dutch became Europe’s biggest and freest market economy, earning the admiration of both David Hume as well as Adam Smith.
These are points for Indians to keep in mind as a multi-polar world order emerges. What should we cash in on? Of course, we must have a solid currency and banking system. But what else?
Some say manufacturing. And Manmohan has set up a body to look into this. This body, led by a former PSU steel bureaucrat (ugh!), has submitted a list of absurd recommendations:
“No 100% subsidiaries for foreign manufacturers. No special economic zones. And no so-called ultra mega power projects. These are some of the radical changes suggested by a group set up by Prime Minister Manmohan Singh to review the country’s manufacturing policy.”
Read the full story here.
In my book, manufacturing can never take off here without adequate infrastructure – power, water, roads etc. Our labour laws actually lower our competitiveness by making it impossible to cash in on a cheap resource.
Yet, I wonder why no one high up talks of the potential for tourism in India. We have 2500 miles of sunny beaches. We have dense forests. We have a desert, and high mountains. We have culture and tradition. And cuisine.
Tourism is the world’s biggest industry – and India does not feature in it. Today, more Indians go on foreign holidays than foreign tourists come to India. We have negative tourism earnings.
Tourists only come to certain areas: Rajasthan, Goa and Kerala top the list. But even from Kerala there is a report today that infrastructure is inadequate.
This is a fact. From southern Goa, Gokarna’s fabulous Om Beach is just 45 kms – but no road. Tourists fly from Goa to Kerala, missing out on the Karnataka coast, because there are no roads. Electricity invariably trips everyday. Cities and towns are dirty.
Then, of course, there is the issue of Liberty. Indians do not have the freedom to cater to tourists. The ganja smoker is just one example – but right across the board, The State has crippled our ability to keep customers happy. But the tourist is on a holiday – to enjoy life. He will go where life can be enjoyed. Why will he suffer in India?
Whereas Manmohan has supported manufacturing – just as Nehru made steel – I am all for tourism. They say in Goa that one tourist creates 12 local jobs. Can steel-making beat that?
Thus, this article advising the Russians to adopt a gold rouble is really worth reading. (Thanks to Lew Rockwell).
If the Russians do adopt gold as their currency, the entire world’s private savings will go into Russian banks.
This is precisely what happened in the 17th century when London and Paris crashed and the Dutch set up the Municipal Bank of Amsterdam with a gold guilder backed by a 100 per cent reserve. Honesty in money and banking paid off – and the Dutch became Europe’s biggest and freest market economy, earning the admiration of both David Hume as well as Adam Smith.
These are points for Indians to keep in mind as a multi-polar world order emerges. What should we cash in on? Of course, we must have a solid currency and banking system. But what else?
Some say manufacturing. And Manmohan has set up a body to look into this. This body, led by a former PSU steel bureaucrat (ugh!), has submitted a list of absurd recommendations:
“No 100% subsidiaries for foreign manufacturers. No special economic zones. And no so-called ultra mega power projects. These are some of the radical changes suggested by a group set up by Prime Minister Manmohan Singh to review the country’s manufacturing policy.”
Read the full story here.
In my book, manufacturing can never take off here without adequate infrastructure – power, water, roads etc. Our labour laws actually lower our competitiveness by making it impossible to cash in on a cheap resource.
Yet, I wonder why no one high up talks of the potential for tourism in India. We have 2500 miles of sunny beaches. We have dense forests. We have a desert, and high mountains. We have culture and tradition. And cuisine.
Tourism is the world’s biggest industry – and India does not feature in it. Today, more Indians go on foreign holidays than foreign tourists come to India. We have negative tourism earnings.
Tourists only come to certain areas: Rajasthan, Goa and Kerala top the list. But even from Kerala there is a report today that infrastructure is inadequate.
This is a fact. From southern Goa, Gokarna’s fabulous Om Beach is just 45 kms – but no road. Tourists fly from Goa to Kerala, missing out on the Karnataka coast, because there are no roads. Electricity invariably trips everyday. Cities and towns are dirty.
Then, of course, there is the issue of Liberty. Indians do not have the freedom to cater to tourists. The ganja smoker is just one example – but right across the board, The State has crippled our ability to keep customers happy. But the tourist is on a holiday – to enjoy life. He will go where life can be enjoyed. Why will he suffer in India?
Whereas Manmohan has supported manufacturing – just as Nehru made steel – I am all for tourism. They say in Goa that one tourist creates 12 local jobs. Can steel-making beat that?
Tuesday, September 23, 2008
Against the ToI's Keynesianism
There is a Reuters story in both the Times of India and the Economic Times today that says “resentment against the bailouts is growing in the USA.”
This is good news. It means that the advocates of sound money as the basis for a sound capitalism are gaining ground.
Yet, look at the lead editorial in the ToI this morning. They say, to their untutored readers:
“There are some people, such as former White House economist Nouriel Roubini, who feel that the government’s active role in rescuing Wall Street firms is turning America into a socialist state. There are others, particularly in India, who sees the crisis as proof of the inevitable failure of markets and capitalism. Both these views are wrong. There is nothing in capitalist systems that prevents the government from regulating markets. Indeed, that is the contribution of Keynesian economics, which requires the state to help maintain growth and stability in free market economies.”
How did a Keynesian get into the ToI? Huh?
Actually, under the original Keynesian Bretton Woods system, the price of gold was fixed at US$ 35 an ounce. The price of an ounce of gold is almost US$ 900 now, widely expected to rise to over US$ 1000 in the near future. Note that the US dollar now is totally free from gold. This is why there is worldwide inflation.
Keynes never asked the question: What is sound money? He called gold a “barbarous relic.” And his corrupt and insane idea of government spending paper money as a cure for an economic downturn had already unraveled itself way back in Reagan's time, when "stagflation" hit. The Keynesians thought they could "trade-off" inflation with unemployment. If inflation rose, they would reduce the money supply and accept a little unemployment. And when unemployment went too high they would pump in the money and allow a little inflation. Stagflation meant inflation and unemployment going up together. It was officially the end of Keynesianism.
Continued inflationism is the lasting legacy of Keynes. And this impacts poor people in poor countries most - as the ToI must note. The only solution is sound money based on gold: the return of the International Gold Standard. Without sound money, globalization cannot happen. Since the ToI champions globalization, it must consider deeply the question of the money that will be used in international trades.
The US bailouts will only postpone a bigger crash that is bound to occur some day in the future. This is inevitable. We all must accept the fact that we live in a "post-Keynesian" world - as Meghnad, Lord Desai, a Labour peer, put it in a book on "global governance" published more than a decade ago.
Note that the US Fed asked other developed economies to buy bad US debt and help out – but the Germans have refused. In this story from Der Spiegel (thanks to Lew Rockwell) various German think-tankers argue, and rightly so, that these bailouts are sending a wrong signal that all excessive risk takers will be protected – and that is not the “harsh discipline of the market economy."
Of course, all this shows that as the dollar dives – which it must, because more dollars are being pumped in – the US Empire weakens. There are US military bases in Germany – but still the Empire is crumbling.
Except, of course, in the ToI, with its Keynesian editors who call for and attempt to justify State interventions such as this current bailout.
Thank God for blogs – and the space they give to independent opinion.
This is good news. It means that the advocates of sound money as the basis for a sound capitalism are gaining ground.
Yet, look at the lead editorial in the ToI this morning. They say, to their untutored readers:
“There are some people, such as former White House economist Nouriel Roubini, who feel that the government’s active role in rescuing Wall Street firms is turning America into a socialist state. There are others, particularly in India, who sees the crisis as proof of the inevitable failure of markets and capitalism. Both these views are wrong. There is nothing in capitalist systems that prevents the government from regulating markets. Indeed, that is the contribution of Keynesian economics, which requires the state to help maintain growth and stability in free market economies.”
How did a Keynesian get into the ToI? Huh?
Actually, under the original Keynesian Bretton Woods system, the price of gold was fixed at US$ 35 an ounce. The price of an ounce of gold is almost US$ 900 now, widely expected to rise to over US$ 1000 in the near future. Note that the US dollar now is totally free from gold. This is why there is worldwide inflation.
Keynes never asked the question: What is sound money? He called gold a “barbarous relic.” And his corrupt and insane idea of government spending paper money as a cure for an economic downturn had already unraveled itself way back in Reagan's time, when "stagflation" hit. The Keynesians thought they could "trade-off" inflation with unemployment. If inflation rose, they would reduce the money supply and accept a little unemployment. And when unemployment went too high they would pump in the money and allow a little inflation. Stagflation meant inflation and unemployment going up together. It was officially the end of Keynesianism.
Continued inflationism is the lasting legacy of Keynes. And this impacts poor people in poor countries most - as the ToI must note. The only solution is sound money based on gold: the return of the International Gold Standard. Without sound money, globalization cannot happen. Since the ToI champions globalization, it must consider deeply the question of the money that will be used in international trades.
The US bailouts will only postpone a bigger crash that is bound to occur some day in the future. This is inevitable. We all must accept the fact that we live in a "post-Keynesian" world - as Meghnad, Lord Desai, a Labour peer, put it in a book on "global governance" published more than a decade ago.
Note that the US Fed asked other developed economies to buy bad US debt and help out – but the Germans have refused. In this story from Der Spiegel (thanks to Lew Rockwell) various German think-tankers argue, and rightly so, that these bailouts are sending a wrong signal that all excessive risk takers will be protected – and that is not the “harsh discipline of the market economy."
Of course, all this shows that as the dollar dives – which it must, because more dollars are being pumped in – the US Empire weakens. There are US military bases in Germany – but still the Empire is crumbling.
Except, of course, in the ToI, with its Keynesian editors who call for and attempt to justify State interventions such as this current bailout.
Thank God for blogs – and the space they give to independent opinion.
Monday, September 22, 2008
On SEZs... And Religious Freedom
The news has it that 18 more Special Economic Zones (SEZs) have been cleared by the commerce ministry. This brings up the total to 531.
In the meantime, farmers and landowners in Raigad, Maharashtra, have voted in a referendum not to sell their land to Reliance Industries for their proposed SEZ.
It is interesting that the Maharashtra government has responded to this by proposing to declare Raigad a “green zone.”
If Raigad is declared “green” then no commercial development of any kind will be permitted there.
This sounds suspiciously like blackmail: either you sell your land to Reliance, or forever stay a farmer.
This should be opposed on a property rights basis: the owner of property is free to decide what to do with his property.
In either case, what sense does it make for the Maharashtra government to first propose an area for commercial development and immediately thereafter declare the same area a “green zone”? It makes no sense at all.
The other interesting news is that, as Manmohan goes to the US to ink the Great Nuclear Deal, and attacks on Chritians mount throughout India, “the Congressionally-mandated United States Commission on International Religious Freedom, an independent, bipartisan, federal agency that advises both the Administration and US lawmakers, has called on President George W Bush to raise pressing concerns about religious freedom in India with Indian Prime Minister Manmohan Singh when he hosts the latter at the White House Oval office on September 25 late afternoon and then for an early dinner.”
Read the full story here.
This only affirms the fact that India needs a liberal and secular alternative to the socialist secular Congress. The INC is perfectly happy with the BJP being its only serious competitor. A liberal secular party is the need of the hour – but then, this is illegal. I hope that pressure will also be put on the UPA government to rectify this anomaly in our election laws, which debars liberals from forming political parties.
In the meantime, farmers and landowners in Raigad, Maharashtra, have voted in a referendum not to sell their land to Reliance Industries for their proposed SEZ.
It is interesting that the Maharashtra government has responded to this by proposing to declare Raigad a “green zone.”
If Raigad is declared “green” then no commercial development of any kind will be permitted there.
This sounds suspiciously like blackmail: either you sell your land to Reliance, or forever stay a farmer.
This should be opposed on a property rights basis: the owner of property is free to decide what to do with his property.
In either case, what sense does it make for the Maharashtra government to first propose an area for commercial development and immediately thereafter declare the same area a “green zone”? It makes no sense at all.
The other interesting news is that, as Manmohan goes to the US to ink the Great Nuclear Deal, and attacks on Chritians mount throughout India, “the Congressionally-mandated United States Commission on International Religious Freedom, an independent, bipartisan, federal agency that advises both the Administration and US lawmakers, has called on President George W Bush to raise pressing concerns about religious freedom in India with Indian Prime Minister Manmohan Singh when he hosts the latter at the White House Oval office on September 25 late afternoon and then for an early dinner.”
Read the full story here.
This only affirms the fact that India needs a liberal and secular alternative to the socialist secular Congress. The INC is perfectly happy with the BJP being its only serious competitor. A liberal secular party is the need of the hour – but then, this is illegal. I hope that pressure will also be put on the UPA government to rectify this anomaly in our election laws, which debars liberals from forming political parties.
Sunday, September 21, 2008
California Dreamin'... In Goa!
This bright morning, let us turn our attention away from all the miserable news and drop into a little village in south Goa, where my old friend Varuna has begun blogging.
Those who have benefited from reading my Free Your Mind: A Beginner’s Guide to Political Economy might recall that it was Varuna who composed all the little verse that grace the book.
Life In a Goan Village is a new blog, and it takes a fascinating look at many aspects of village life in Goa – from the creepy crawlies that invade your home if you live with Nature, to the local drunk, who turns out to be a woman.
Today’s post is on urbanization and cities. Varuna notes that our cities are unlivable and she also reveals that there is enough land in India – even on the Konkan coast – to build great new cities from scratch.
Here is the relevant para:
“Whenever I drive along the Konkan coast or in the hills of the Western Ghats, I see all around me miles and miles of beautiful empty land. Beautiful and quite uninhabited. I see spectacular views of rolling hills and of the glittering silver sea. And I imagine people fleeing the city and settling down in this idyllic landscape; living in cottages (no skyscrapers) amid trees and gardens. I imagine children running free, learning how to climb trees and recognise flowers and fish, shells and birds. Naturally, as in all idylls, the state is only too happy to provide electricity and water.”
Ask me. I have always felt that a new urban movement is what the country needs.
Continuing with Goa, here is another piece of news worth a blog post: That Goa’s education minister is a Class 7 pass who submitted a false affidavit claiming higher qualifications than that. A criminal charge has been filed.
As in the rest of the country, even in Goa the politicians are rotten. Education must most certainly be taken away from them.
Those who have benefited from reading my Free Your Mind: A Beginner’s Guide to Political Economy might recall that it was Varuna who composed all the little verse that grace the book.
Life In a Goan Village is a new blog, and it takes a fascinating look at many aspects of village life in Goa – from the creepy crawlies that invade your home if you live with Nature, to the local drunk, who turns out to be a woman.
Today’s post is on urbanization and cities. Varuna notes that our cities are unlivable and she also reveals that there is enough land in India – even on the Konkan coast – to build great new cities from scratch.
Here is the relevant para:
“Whenever I drive along the Konkan coast or in the hills of the Western Ghats, I see all around me miles and miles of beautiful empty land. Beautiful and quite uninhabited. I see spectacular views of rolling hills and of the glittering silver sea. And I imagine people fleeing the city and settling down in this idyllic landscape; living in cottages (no skyscrapers) amid trees and gardens. I imagine children running free, learning how to climb trees and recognise flowers and fish, shells and birds. Naturally, as in all idylls, the state is only too happy to provide electricity and water.”
Ask me. I have always felt that a new urban movement is what the country needs.
Continuing with Goa, here is another piece of news worth a blog post: That Goa’s education minister is a Class 7 pass who submitted a false affidavit claiming higher qualifications than that. A criminal charge has been filed.
As in the rest of the country, even in Goa the politicians are rotten. Education must most certainly be taken away from them.
Podcast: For Unilateral Free Trade
I am looking for volunteers to act as change agents in coastal cities and towns, who will champion free trade across the seas.
Towards that end, here is a podcast on Unilateral Free Trade.
If you live in a coastal city or town and are keen to work for the prosperity of your area and its people, through free trade, do write in, and I will get back to you.
Towards that end, here is a podcast on Unilateral Free Trade.
If you live in a coastal city or town and are keen to work for the prosperity of your area and its people, through free trade, do write in, and I will get back to you.
Saturday, September 20, 2008
Get The Morons Out Of Education
After having called for “roads, roads and more roads” just yesterday, I found a deadly seriousness in Jug Suraiya’s hilarious piece today. Read it – and think: What are they “planning” if this is Gurgaon, a brand new city, bang next to New Delhi, their Capital?
But my attention was particularly drawn to a news report in the same paper that talked about corruption in India’s government school system (thanks to Satyajit Dey).
According to a wide survey carried out by the Indian branch of Transparency International, the BPL poor, especially in rural areas, are paying good money as bribes to get their children admitted to school, to have them promoted from one class to another, and even to get a school leaving certificate.
My essential point is this: The poor are “paying” for education?
So why talk of “education vouchers,” as Gurcharan Das does today, an argument based on the premise that the poor are too poor to pay for anything.
According to Professor James Tooley, who has done extensive field research on for-profit schools for the poor in India, the central point missed by advocates of vouchers is that the poor are already paying for private education and getting it.
And now it seems that the schools run by The State are taking money from the poor anyway.
The children of poor people do not need the long road to a high school diploma. Instead, they need the short cut to the market.
In the market, you need just one kind of knowledge in order to survive in the division of labour. Just one. You do not need a “generalized education”; you need specific specialized education.
This can be obtained by apprenticeship (as, for example, to a motor mechanic or a chef); it can be obtained from a for-profit private institute; or it can be learnt from the efforts of educharities (and there can be plenty of them in a free market, no State scenario in education).
The children of the middle class and the rich do not need government education. The only talk is about poor kids – and reality bites here.
I am therefore of the opinion that there should not be any role for The State in education. Primary, secondary and higher education by The State should be closed down. All the government bureaus prescribing curricula and supplying text books should be closed down too.
In such a situation, knowledge will be imparted by those who are in possession of knowledge that other people want.
I will also start a School of Catallactics.
What’s that?
Well, you gotta pay me money to find out.
And they don’t teach catallactics at the tax-funded Delhi School of Economics.
So I’m in business.
But my attention was particularly drawn to a news report in the same paper that talked about corruption in India’s government school system (thanks to Satyajit Dey).
According to a wide survey carried out by the Indian branch of Transparency International, the BPL poor, especially in rural areas, are paying good money as bribes to get their children admitted to school, to have them promoted from one class to another, and even to get a school leaving certificate.
My essential point is this: The poor are “paying” for education?
So why talk of “education vouchers,” as Gurcharan Das does today, an argument based on the premise that the poor are too poor to pay for anything.
According to Professor James Tooley, who has done extensive field research on for-profit schools for the poor in India, the central point missed by advocates of vouchers is that the poor are already paying for private education and getting it.
And now it seems that the schools run by The State are taking money from the poor anyway.
The children of poor people do not need the long road to a high school diploma. Instead, they need the short cut to the market.
In the market, you need just one kind of knowledge in order to survive in the division of labour. Just one. You do not need a “generalized education”; you need specific specialized education.
This can be obtained by apprenticeship (as, for example, to a motor mechanic or a chef); it can be obtained from a for-profit private institute; or it can be learnt from the efforts of educharities (and there can be plenty of them in a free market, no State scenario in education).
The children of the middle class and the rich do not need government education. The only talk is about poor kids – and reality bites here.
I am therefore of the opinion that there should not be any role for The State in education. Primary, secondary and higher education by The State should be closed down. All the government bureaus prescribing curricula and supplying text books should be closed down too.
In such a situation, knowledge will be imparted by those who are in possession of knowledge that other people want.
I will also start a School of Catallactics.
What’s that?
Well, you gotta pay me money to find out.
And they don’t teach catallactics at the tax-funded Delhi School of Economics.
So I’m in business.
Friday, September 19, 2008
For Roads, Roads and More Roads
While The State is basking in the glory of having shot and killed suspected terrorists in New Delhi – recall that Sir William Sleeman and his men brought over 1000 thuggees to trial in a court of law – allow me to draw your attention to another area of stark State Failure:
Highways.
The news has it that the chairman of the National Highway Authority of India (NHAI) has been fired. This is, if memory serves, the fourth chairman of NHAI to meet this fate under the UPA government. This guy lasted 11 months.
The news report ends with what the NHAI achieved under his stewardship: “four-laning of 437 kms on NHDP I in 2007-08 has seen only 49% completion.” They built 200 km of roads in one year. How many cars were bought in the same time?
The UPA government under the Great Czar of Central Planning does not think roads and highways are important. They are spending all the money elsewhere. And their attention is therefore elsewhere too.
In my book, roads and highways should be TOP PRIORITY.
We Pay Taxes For Roads.
And the NHAI charges tolls: double taxation.
The NHAI is also a monopoly.
What do we do?
At a public meeting the other day to launch my small monograph on automobilization in India, I suggested that we phone Angela Merkel and request her for the long-term services of her government’s highways department. There they have roads without speed limits. And many of us are now driving German cars. Why not get German roads too?
But jokes apart, the roads of Germany are the greatest “public asset” of the German people.
I would therefore recommend total privatization of all Indian PSUs to fund a German-quality road network in India – to be supplied to the people as a “public asset” funded by the commonwealth in the interest of common profit.
Further, all highway networks in the west, including Germany’s, date back to the 1940s and 50s. India must therefore build the latest kind of highways.
One great idea I came upon in Gabriel Roth’s new book, Street Smart, is “truckways”: highways dedicated to hauling freight.
We can have separate highways for cars.
Indeed, I would say that we need separate highways for fast cars. We also need separate free roads for all the lesser vehicles – and at the same time we must aim at universal automobilization.
Roads, roads and more roads: That is my “antidote.”
Highways.
The news has it that the chairman of the National Highway Authority of India (NHAI) has been fired. This is, if memory serves, the fourth chairman of NHAI to meet this fate under the UPA government. This guy lasted 11 months.
The news report ends with what the NHAI achieved under his stewardship: “four-laning of 437 kms on NHDP I in 2007-08 has seen only 49% completion.” They built 200 km of roads in one year. How many cars were bought in the same time?
The UPA government under the Great Czar of Central Planning does not think roads and highways are important. They are spending all the money elsewhere. And their attention is therefore elsewhere too.
In my book, roads and highways should be TOP PRIORITY.
We Pay Taxes For Roads.
And the NHAI charges tolls: double taxation.
The NHAI is also a monopoly.
What do we do?
At a public meeting the other day to launch my small monograph on automobilization in India, I suggested that we phone Angela Merkel and request her for the long-term services of her government’s highways department. There they have roads without speed limits. And many of us are now driving German cars. Why not get German roads too?
But jokes apart, the roads of Germany are the greatest “public asset” of the German people.
I would therefore recommend total privatization of all Indian PSUs to fund a German-quality road network in India – to be supplied to the people as a “public asset” funded by the commonwealth in the interest of common profit.
Further, all highway networks in the west, including Germany’s, date back to the 1940s and 50s. India must therefore build the latest kind of highways.
One great idea I came upon in Gabriel Roth’s new book, Street Smart, is “truckways”: highways dedicated to hauling freight.
We can have separate highways for cars.
Indeed, I would say that we need separate highways for fast cars. We also need separate free roads for all the lesser vehicles – and at the same time we must aim at universal automobilization.
Roads, roads and more roads: That is my “antidote.”
Thursday, September 18, 2008
Afghanistan - Then and Now
A district governor in Afghanistan was accidentally gunned down by NATO forces!
Read the story here – and it paints a horrible picture of a nation in great strife.
Afghanistan was handled differently in the days of the British Raj. The Raj did not send the Army. Rather, they sent in “political officers” who were members of a special cadre of senior civil servants. They comprised a “political service” and it was they who had nudged the Indian princely states into reforming their institutions.
Philip Mason’s The Men Who Ruled India tells the story of one such political officer, Herbert Eduardes. This was shortly after the Lawrences took over the administration of the Punjab – and Eduardes was one of Lawrence’s men. He was given the task of taming some wild Afghan tribes in the region of Bannu.
He took with him a contingent of the recently defeated Sikhs and proceeded – but not as a soldier; only as a “civilian.” His only condition to his troops was: “You will buy whatever you need.”
This stunned the Bannochis – who expected all victorious armies to plunder. Eduardes soon found local leaders calling at his tent in order to discuss important matters.
Eduardes returned to Banno year after year and patiently won the confidence of these war-like tribes. He was, like all political officers who worked in the area, fluent in Pushtu and would happily trade one proverb for another with the tribesmen. He understood their culture. He was, like Lawrence in Arabia, a man who understood the local customs well.
I do believe that we need such “political officers” today. NATO ham-handedness cannot deliver any real results.
Note that in Banno, on just his second trip, Eduardes hammered out a basic legal code. All the tribesmen agreed to be governed by that code. And by year 3 he was even collecting taxes.
The British Raj was built on excellent institutions – and the Political Service was one of them. Astonishingly, the cadre came to an abrupt end when Mountbatten let them down.
The Political Service had close relations with all the “princely states,” and these rulers also had treaties with the Crown. The Political Service felt that these princely states should not be amalgamated into India or Pakistan. But Mountbatten was a man in a hurry. He addressed the Chamber of Princes just once, that too in his Admiral’s uniform, and refused to answer any questions. He bluntly told all the princes – and all the political service officers gathered there – that it was all over. He then told Patel that he would deliver him his “basket of apples.”
We could do with a Political Service today – especially in Afghanistan.
And I daresay we could do with those 600 + princely states too. Almost all of them were better run than an average district is today.
Another good read is Charles Allen's The Lives of the Indian Princes.
Read the story here – and it paints a horrible picture of a nation in great strife.
Afghanistan was handled differently in the days of the British Raj. The Raj did not send the Army. Rather, they sent in “political officers” who were members of a special cadre of senior civil servants. They comprised a “political service” and it was they who had nudged the Indian princely states into reforming their institutions.
Philip Mason’s The Men Who Ruled India tells the story of one such political officer, Herbert Eduardes. This was shortly after the Lawrences took over the administration of the Punjab – and Eduardes was one of Lawrence’s men. He was given the task of taming some wild Afghan tribes in the region of Bannu.
He took with him a contingent of the recently defeated Sikhs and proceeded – but not as a soldier; only as a “civilian.” His only condition to his troops was: “You will buy whatever you need.”
This stunned the Bannochis – who expected all victorious armies to plunder. Eduardes soon found local leaders calling at his tent in order to discuss important matters.
Eduardes returned to Banno year after year and patiently won the confidence of these war-like tribes. He was, like all political officers who worked in the area, fluent in Pushtu and would happily trade one proverb for another with the tribesmen. He understood their culture. He was, like Lawrence in Arabia, a man who understood the local customs well.
I do believe that we need such “political officers” today. NATO ham-handedness cannot deliver any real results.
Note that in Banno, on just his second trip, Eduardes hammered out a basic legal code. All the tribesmen agreed to be governed by that code. And by year 3 he was even collecting taxes.
The British Raj was built on excellent institutions – and the Political Service was one of them. Astonishingly, the cadre came to an abrupt end when Mountbatten let them down.
The Political Service had close relations with all the “princely states,” and these rulers also had treaties with the Crown. The Political Service felt that these princely states should not be amalgamated into India or Pakistan. But Mountbatten was a man in a hurry. He addressed the Chamber of Princes just once, that too in his Admiral’s uniform, and refused to answer any questions. He bluntly told all the princes – and all the political service officers gathered there – that it was all over. He then told Patel that he would deliver him his “basket of apples.”
We could do with a Political Service today – especially in Afghanistan.
And I daresay we could do with those 600 + princely states too. Almost all of them were better run than an average district is today.
Another good read is Charles Allen's The Lives of the Indian Princes.
Wednesday, September 17, 2008
God's Own Port
My most important message is Free Trade. It requires nothing but a change in our perception. Towards that end, let us look at the happy news of the setting up of a new port in Kerala, at Vizhinjam.
Its waters are more than 25 metres deep – so it can handle very big ships.
It has a capacity to handle 4 million containers a year.
What should these containers contain?
Can anyone devise a “policy” by which the “commonwealth” is better served that will decide what these containers should contain?
What is in the best interest of all the new residents of this new port city on the west coast?
How can this new city become a Great City?
As the Directors of the East India Company instructed their Governor at Madras’ Fort St. George, in 1690, long before The Wealth of Nations was written:
“Make your settlement a mart for all nations. For that is how God Almighty of old promised to make Jerusalem great.”
I hope the perception is now dawning that the customs department is an obstacle, and an often insurmountable obstacle at that, maintained by the Central Government to enforce its “foreign trade policies.”
If customs duties are enforced, the total business transacted through this new port will only decline.
What is also worth noting is that there are many, many new port cities that can come up on both the coasts if trade was freed.
All the action will be on the coast – if trade is free. This especially includes urban action. Indyeah needs more and better cities and towns, competing for citizens. Let there be many new free trading cities on our coasts. We need new urban spaces.
So think about it: Let not the rulers from land-locked New Delhi have any say in foreign trade, which is conducted principally by the means of merchant ships. If it makes sense to open up the Sikkim-Tibet trade route over land, it makes even more sense to open up the ports – especially a “deep water port” with a capacity of 4 million containers a year.
Free Trade Makes Sense.
And if there is a public investment that is required in the interest of “common profit” it is a coastal expressway network. Then the port cities will develop along with many satellites, and urban overcrowding in any one place will be avoided.
Note that the Central Planner’s “Golden Quadrilateral” highway project does not include coastal expressways.
As usual, nothing makes sense in official policy.
Or I am nuts.
Or both.
Its waters are more than 25 metres deep – so it can handle very big ships.
It has a capacity to handle 4 million containers a year.
What should these containers contain?
Can anyone devise a “policy” by which the “commonwealth” is better served that will decide what these containers should contain?
What is in the best interest of all the new residents of this new port city on the west coast?
How can this new city become a Great City?
As the Directors of the East India Company instructed their Governor at Madras’ Fort St. George, in 1690, long before The Wealth of Nations was written:
“Make your settlement a mart for all nations. For that is how God Almighty of old promised to make Jerusalem great.”
I hope the perception is now dawning that the customs department is an obstacle, and an often insurmountable obstacle at that, maintained by the Central Government to enforce its “foreign trade policies.”
If customs duties are enforced, the total business transacted through this new port will only decline.
What is also worth noting is that there are many, many new port cities that can come up on both the coasts if trade was freed.
All the action will be on the coast – if trade is free. This especially includes urban action. Indyeah needs more and better cities and towns, competing for citizens. Let there be many new free trading cities on our coasts. We need new urban spaces.
So think about it: Let not the rulers from land-locked New Delhi have any say in foreign trade, which is conducted principally by the means of merchant ships. If it makes sense to open up the Sikkim-Tibet trade route over land, it makes even more sense to open up the ports – especially a “deep water port” with a capacity of 4 million containers a year.
Free Trade Makes Sense.
And if there is a public investment that is required in the interest of “common profit” it is a coastal expressway network. Then the port cities will develop along with many satellites, and urban overcrowding in any one place will be avoided.
Note that the Central Planner’s “Golden Quadrilateral” highway project does not include coastal expressways.
As usual, nothing makes sense in official policy.
Or I am nuts.
Or both.
Tuesday, September 16, 2008
On the Great US Crash
A reader, Oindri Mitra, has written in asking for my views on the US government’s bailouts of Fannie Mae, Freddie Mac and now AIG.
What is the “Antidote” view on these?
Let us begin with the basic truth – and that is, there can never be any guarantee of profit in a free market. Any such guarantee constitutes a “moral hazard,” and promotes reckless behaviour.
This means that, just as profits are a positive signal for any business, so are losses a negative signal. The negative signal of losses on the balance sheet indicates that a course correction is necessary. With government bailouts, this course correction never happens. It is back to crooked business as usual.
But the question arises: Why is the US economy on a perpetual boom-and-bust cycle? Why do such huge financial disasters occur?
This is where the artificially low interest rates set in an earlier period by the US Fed come in. A businessman invests after making a back-of-the-envelope calculation of his costs and the possible profits expected. Artificially low interest rates mean that the costs of borrowing are low – and expected profits are therefore that much higher.
Businessmen therefore respond to a wrong signal (of low borrowing costs, which is the cost of capital) – and there is an artificial boom. In the US, this occurred especially in housing. Consumers also borrowed recklessly and invested in housing: the “sub-prime” mortgages reflect this fact.
As all bubbles must burst, so did the housing bubble.
At that point of time, the correct decision to take would have been to liquidate all bad investments. The US government opted for a bailout of Fannie Mae and Freddie Mac instead. Now, it is bailing out AIG. This does not solve anything. It merely postpones an inevitable bigger crash.
As Lew Rockwell writes in a post entitled “How to think about the Crash”:
“The damage is done during the Boom. That's when, thanks to the Fed, the malinvestments and other wealth destruction take place. The Bust is when the errors are recognized, and the rebuilding can begin (to the extent that McCain-Obama do not delay it with a Newer Deal). This is a disaster for the State and its pals in banking and on Wall Street, and the military-industrial complex. The dollar could go down as the world reserve currency, which also means the end of the empire. The Fed-financial complex has done a lot of damage to the rest of us too, of course, and we need to defend the market and finger the villains. Start with Greenspan and Bernanke, and the whole Federal Reserve monster. Then the SEC and all the other regulators who warp the market for the benefit of the power elite. Blame fractional reserves and all the academics and think tanks who have promoted them and central banking. We need to hang this disaster around their necks.”
The CPM is blaming the crash on the free market.
Kamal Nath is laughing at those who preach to him the virtues of free trade.
The US government is not a good poster-boy for free markets. All the good work done by libertarians in promoting free markets and free trade in India is in danger of being undone.
We should blame the crash on the Keynesian fiat money system run by The US State.
After all, where The State guarantees profit, there cannot be anything like a free market, in which losses must be booked too.
The globalizing world needs a sound monetary system. I am glad that this point of view is emerging strongly in America – thanks to Ron Paul.
Sound money based on gold is the only way out if we want to secure a stable prosperity. There will be profits, there will be losses, growth will be steady, and prices will keep falling with sound money. Most importantly, the poor of today will accumulate capital; they lose this ability with inflationism.
The US Crash is happening because of The US State.
So don’t blame it on the market. This is not what would happen in a truly free market scenario.
And don’t call for “more regulation.”
Call for sound money – and the abolition of the Fed.
What is the “Antidote” view on these?
Let us begin with the basic truth – and that is, there can never be any guarantee of profit in a free market. Any such guarantee constitutes a “moral hazard,” and promotes reckless behaviour.
This means that, just as profits are a positive signal for any business, so are losses a negative signal. The negative signal of losses on the balance sheet indicates that a course correction is necessary. With government bailouts, this course correction never happens. It is back to crooked business as usual.
But the question arises: Why is the US economy on a perpetual boom-and-bust cycle? Why do such huge financial disasters occur?
This is where the artificially low interest rates set in an earlier period by the US Fed come in. A businessman invests after making a back-of-the-envelope calculation of his costs and the possible profits expected. Artificially low interest rates mean that the costs of borrowing are low – and expected profits are therefore that much higher.
Businessmen therefore respond to a wrong signal (of low borrowing costs, which is the cost of capital) – and there is an artificial boom. In the US, this occurred especially in housing. Consumers also borrowed recklessly and invested in housing: the “sub-prime” mortgages reflect this fact.
As all bubbles must burst, so did the housing bubble.
At that point of time, the correct decision to take would have been to liquidate all bad investments. The US government opted for a bailout of Fannie Mae and Freddie Mac instead. Now, it is bailing out AIG. This does not solve anything. It merely postpones an inevitable bigger crash.
As Lew Rockwell writes in a post entitled “How to think about the Crash”:
“The damage is done during the Boom. That's when, thanks to the Fed, the malinvestments and other wealth destruction take place. The Bust is when the errors are recognized, and the rebuilding can begin (to the extent that McCain-Obama do not delay it with a Newer Deal). This is a disaster for the State and its pals in banking and on Wall Street, and the military-industrial complex. The dollar could go down as the world reserve currency, which also means the end of the empire. The Fed-financial complex has done a lot of damage to the rest of us too, of course, and we need to defend the market and finger the villains. Start with Greenspan and Bernanke, and the whole Federal Reserve monster. Then the SEC and all the other regulators who warp the market for the benefit of the power elite. Blame fractional reserves and all the academics and think tanks who have promoted them and central banking. We need to hang this disaster around their necks.”
The CPM is blaming the crash on the free market.
Kamal Nath is laughing at those who preach to him the virtues of free trade.
The US government is not a good poster-boy for free markets. All the good work done by libertarians in promoting free markets and free trade in India is in danger of being undone.
We should blame the crash on the Keynesian fiat money system run by The US State.
After all, where The State guarantees profit, there cannot be anything like a free market, in which losses must be booked too.
The globalizing world needs a sound monetary system. I am glad that this point of view is emerging strongly in America – thanks to Ron Paul.
Sound money based on gold is the only way out if we want to secure a stable prosperity. There will be profits, there will be losses, growth will be steady, and prices will keep falling with sound money. Most importantly, the poor of today will accumulate capital; they lose this ability with inflationism.
The US Crash is happening because of The US State.
So don’t blame it on the market. This is not what would happen in a truly free market scenario.
And don’t call for “more regulation.”
Call for sound money – and the abolition of the Fed.
Monday, September 15, 2008
On The Housing Black Market
The news has it that 7,50,000 forms were sold for participation in a lottery for the ownership of 5000 DDA flats in New Delhi.
Along with the form, each applicant has to deposit Rs. 1,50,000. Banks are happily loaning this money to applicants.
Does this make any sense?
What exactly is the resource that is in such severe shortage that 7,50,000 people scramble for 5,000 flats?
It certainly cannot be land – for around the DDA’s Vasnat Kunj there is enough open land to construct lakhs of farmhouses!
So how do we understand this phenomenon?
Very simple: DDA flats sell in the market at a premium over their cost. So an allotment via the lottery is a windfall gain. Everyone and his uncle queue up for application forms hoping for this windfall gain. Banks step in too – for they cannot lose.
The DDA is a creature of socialism, with its monopoly on land development and housing. In those days it was felt that competing private real estate companies would not cater to the aam aadmi and that a monopoly run by The State was preferable.
Yet, monopolies run by The State are much worse than competitive private firms in a free market.
The DDA monopolizes the supply of land, of housing, and of roads – in Delhi. As a monopolist, the DDA gains by undersupplying all three. The undersupply pushes up prices – and the DDA rakes in monopoly gains for its personnel. The public are cheated. The aam aadmi is left homeless.
The premium paid for a DDA flat is nothing but a “black market price.” This premium is paid because the good in question is extremely scarce. This extreme scarcity is because of State Monopoly.
Note that this premium is not paid because DDA flats are “better” or more aesthetically pleasing, or more functional. DDA flats are terrible. DDA localities are the pits. No one would actually choose to live in them – if there were a choice.
Conclusion: There must be a competitive market for developed urban land, housing and commercial space: a competitive, private sector-driven real estate market. The DDA must be closed down.
Along with the form, each applicant has to deposit Rs. 1,50,000. Banks are happily loaning this money to applicants.
Does this make any sense?
What exactly is the resource that is in such severe shortage that 7,50,000 people scramble for 5,000 flats?
It certainly cannot be land – for around the DDA’s Vasnat Kunj there is enough open land to construct lakhs of farmhouses!
So how do we understand this phenomenon?
Very simple: DDA flats sell in the market at a premium over their cost. So an allotment via the lottery is a windfall gain. Everyone and his uncle queue up for application forms hoping for this windfall gain. Banks step in too – for they cannot lose.
The DDA is a creature of socialism, with its monopoly on land development and housing. In those days it was felt that competing private real estate companies would not cater to the aam aadmi and that a monopoly run by The State was preferable.
Yet, monopolies run by The State are much worse than competitive private firms in a free market.
The DDA monopolizes the supply of land, of housing, and of roads – in Delhi. As a monopolist, the DDA gains by undersupplying all three. The undersupply pushes up prices – and the DDA rakes in monopoly gains for its personnel. The public are cheated. The aam aadmi is left homeless.
The premium paid for a DDA flat is nothing but a “black market price.” This premium is paid because the good in question is extremely scarce. This extreme scarcity is because of State Monopoly.
Note that this premium is not paid because DDA flats are “better” or more aesthetically pleasing, or more functional. DDA flats are terrible. DDA localities are the pits. No one would actually choose to live in them – if there were a choice.
Conclusion: There must be a competitive market for developed urban land, housing and commercial space: a competitive, private sector-driven real estate market. The DDA must be closed down.
Sunday, September 14, 2008
The Car... And The Planner
An interesting article of mine has appeared today in the newspaper Mint.
The article is entitled “The Car… And The Planner” and argues the case for planning for the automobile revolution that has been underway on our potholed streets for over 15 years now.
We must build the roads infrastructure for India’s burgeoning car owners, whose numbers will only grow.
The planner pretends to possess the faculty of thinking ahead – but in this case he has failed miserably.
Read the full article here.
The article is entitled “The Car… And The Planner” and argues the case for planning for the automobile revolution that has been underway on our potholed streets for over 15 years now.
We must build the roads infrastructure for India’s burgeoning car owners, whose numbers will only grow.
The planner pretends to possess the faculty of thinking ahead – but in this case he has failed miserably.
Read the full article here.
On Kamal Nath Once Again
This is the darndest yet:
Our commerce minister, Kamal Nath, has made a public statement that the growth of India’s exports is being stymied by the ministry of finance under P Chidambaram.
K Nath is aiming at 200 billion rupees of exports – but this target cannot be achieved because of Chidambaram’s intransigence on certain policy issues.
Note that the commerce minister’s only goal is to increase exports. He does not want to increase imports – which is why he walked out of the WTO and wrecked all prospects for freer international trade.
India is actually leading a band of poverty-stricken Third World countries at the WTO – all of whom want to export everything and import nothing.
The guiding economic theory for them is a spurious “balance of payments” kind of argument: exports “improve” the BoP; imports don’t.
This is the false idea of “mercantilism” that Adam Smith refuted. Like Kamal Nath, the mercantilists also thought that exports were better than imports because they led to an inflow of gold. Imports led to a gold outflow – and surely that was bad for a nation. Mercantilists therefore attacked the Honourable East India Company, which was exporting gold in order to import and profitably sell spices – mere luxuries and fripperies, according to these critics.
Adam Smith’s central argument was that the “wealth of a nation” consisted in the properties and possessions of its people. These are best augmented through imports. The country should therefore export whatever it has an advantage in – and import the rest. He called for free trade – and this was achieved thanks to Cobden, Bright and the Manchesterites some 50 years later.
Let us understand the absurdity of the “balance of payments” doctrine. Note that there is no BoP calculation made for individuals, cities or even states. The idea becomes relevant only for the entire nation, because it is one currency area. But what is the balance of payments for New Delhi? Or Mumbai? No one knows and no one cares.
On the other hand, look at your own life. Why do you produce? Why do you work? The only answer to that is – in order to Consume. The purpose of all Production is Consumption. Indeed, the purpose of Life itself (in the strictly economic sense) is Consumption and Consumption alone. For all the other animals, this holds true. The mighty tiger hunts to consume; that is the only purpose of his life.
But since only Man produces, he has become confused over the issue. He believes production matters more than consumption. Politicians like Kamal Nath feed this delusion.
Correct understanding indicates that, just as the purpose of life is consumption, the purpose of Exports is Imports. Just as it makes no sense to Produce and Produce and not Consume, it makes no sense to Export and Export and not Import anything. If our export target is 200 billion rupees, our import target should be in that range too.
Note that this is precisely the opposite of Kamal Nath’s agenda: he only wants to Export. That is the be-all and end-all of “commerce” for him. Imports he hates.
Not that Chidambaran favours free imports either. The customs department comes under Chidambaram.
They are all in it together: sab milay huay hain.
And they are all entirely wrong: sab galat hain.
The task is therefore cut out for India’s liberals: They should champion Unilateral Free Trade.
No more export policy, no more import policy, no more balance of payments statistics.
Instead, leave all decision making to individuals – and keep the money sound.
Our commerce minister, Kamal Nath, has made a public statement that the growth of India’s exports is being stymied by the ministry of finance under P Chidambaram.
K Nath is aiming at 200 billion rupees of exports – but this target cannot be achieved because of Chidambaram’s intransigence on certain policy issues.
Note that the commerce minister’s only goal is to increase exports. He does not want to increase imports – which is why he walked out of the WTO and wrecked all prospects for freer international trade.
India is actually leading a band of poverty-stricken Third World countries at the WTO – all of whom want to export everything and import nothing.
The guiding economic theory for them is a spurious “balance of payments” kind of argument: exports “improve” the BoP; imports don’t.
This is the false idea of “mercantilism” that Adam Smith refuted. Like Kamal Nath, the mercantilists also thought that exports were better than imports because they led to an inflow of gold. Imports led to a gold outflow – and surely that was bad for a nation. Mercantilists therefore attacked the Honourable East India Company, which was exporting gold in order to import and profitably sell spices – mere luxuries and fripperies, according to these critics.
Adam Smith’s central argument was that the “wealth of a nation” consisted in the properties and possessions of its people. These are best augmented through imports. The country should therefore export whatever it has an advantage in – and import the rest. He called for free trade – and this was achieved thanks to Cobden, Bright and the Manchesterites some 50 years later.
Let us understand the absurdity of the “balance of payments” doctrine. Note that there is no BoP calculation made for individuals, cities or even states. The idea becomes relevant only for the entire nation, because it is one currency area. But what is the balance of payments for New Delhi? Or Mumbai? No one knows and no one cares.
On the other hand, look at your own life. Why do you produce? Why do you work? The only answer to that is – in order to Consume. The purpose of all Production is Consumption. Indeed, the purpose of Life itself (in the strictly economic sense) is Consumption and Consumption alone. For all the other animals, this holds true. The mighty tiger hunts to consume; that is the only purpose of his life.
But since only Man produces, he has become confused over the issue. He believes production matters more than consumption. Politicians like Kamal Nath feed this delusion.
Correct understanding indicates that, just as the purpose of life is consumption, the purpose of Exports is Imports. Just as it makes no sense to Produce and Produce and not Consume, it makes no sense to Export and Export and not Import anything. If our export target is 200 billion rupees, our import target should be in that range too.
Note that this is precisely the opposite of Kamal Nath’s agenda: he only wants to Export. That is the be-all and end-all of “commerce” for him. Imports he hates.
Not that Chidambaran favours free imports either. The customs department comes under Chidambaram.
They are all in it together: sab milay huay hain.
And they are all entirely wrong: sab galat hain.
The task is therefore cut out for India’s liberals: They should champion Unilateral Free Trade.
No more export policy, no more import policy, no more balance of payments statistics.
Instead, leave all decision making to individuals – and keep the money sound.
Saturday, September 13, 2008
Podcast: Beyond Criminal Justice
I am concluding the series of podcasts on law with this one, entitled "Beyond Criminal Justice."
It offers the possibility of Security - that too, without much of the present-day "criminal justice system"
To download this podcast, click here.
The next podcast will be on free trade.
It offers the possibility of Security - that too, without much of the present-day "criminal justice system"
To download this podcast, click here.
The next podcast will be on free trade.
On Terrorism... And Morality
Bombs exploded in New Delhi last evening. Scores of ordinary peaceful people were killed.
They call this “terrorism.”
Manmohan has now said the battle against terror is his “top priority.” That means he will not have time to look into what is happening to his other hobby horses: education, employment guarantee, loan waivers, and the nuclear deal.
[In the meantime here is a shocking story of corruption in the loan waiver scheme for suicide-prone Vidarbha. A loan waiver can be a balance-sheet transaction. Why did they add this bit about giving cows away – for the netas to steal? What kind of lunatic public policy is this?]
The only answer to terrorism is moral. Today, bomb blasts have become as routine as traffic accidents, and life is cheap in India. But behind all politics there must be a moral purpose. This includes the terrorist. And it is here that the real question lies: As with the Naxals, so with these terrorists, there must be a political dialogue based on morality. What should be the main element of that dialogue?
But before that: Let it not be forgotten that the EFFECT of all this terrorism is to increase police powers and budgets while simultaneously diminishing civil liberties. This is the actual political result. If Manmohan gives “top priority” to the war between his sarkaar and terror, this is going to be the only political result. There will be no real “politics” – as in the sense of a moral dialogue.
Of course, there is no “magic bullet” to put an end to wars and senseless violence forever – but the political “leader” must show the moral way for all: and that is, peaceful, voluntary and gainful exchanges in markets. If this Way of Life is encouraged through the moral dialogue that should replace socialist politics, much can be achieved.
Wars and senseless violence will only end when the desire to produce and exchange replaces the desire for plunder. And only one of these ways of seeking survival is the moral one. And that is the moral tone liberal politics must take in Indyeah.
In the end, while there may not be any God, there will always be Good and Evil. If a political choice must be made between them, politics must be moral.
They call this “terrorism.”
Manmohan has now said the battle against terror is his “top priority.” That means he will not have time to look into what is happening to his other hobby horses: education, employment guarantee, loan waivers, and the nuclear deal.
[In the meantime here is a shocking story of corruption in the loan waiver scheme for suicide-prone Vidarbha. A loan waiver can be a balance-sheet transaction. Why did they add this bit about giving cows away – for the netas to steal? What kind of lunatic public policy is this?]
The only answer to terrorism is moral. Today, bomb blasts have become as routine as traffic accidents, and life is cheap in India. But behind all politics there must be a moral purpose. This includes the terrorist. And it is here that the real question lies: As with the Naxals, so with these terrorists, there must be a political dialogue based on morality. What should be the main element of that dialogue?
But before that: Let it not be forgotten that the EFFECT of all this terrorism is to increase police powers and budgets while simultaneously diminishing civil liberties. This is the actual political result. If Manmohan gives “top priority” to the war between his sarkaar and terror, this is going to be the only political result. There will be no real “politics” – as in the sense of a moral dialogue.
Of course, there is no “magic bullet” to put an end to wars and senseless violence forever – but the political “leader” must show the moral way for all: and that is, peaceful, voluntary and gainful exchanges in markets. If this Way of Life is encouraged through the moral dialogue that should replace socialist politics, much can be achieved.
Wars and senseless violence will only end when the desire to produce and exchange replaces the desire for plunder. And only one of these ways of seeking survival is the moral one. And that is the moral tone liberal politics must take in Indyeah.
In the end, while there may not be any God, there will always be Good and Evil. If a political choice must be made between them, politics must be moral.
Friday, September 12, 2008
The Rules Must Be Changed
When false theories are allowed to run amuck, the “natural order” of society breaks down and there is chaos. This is the case with the false theories of socialism and communism that deify “collective property” like the PSUs.
The correct theory is that property is all privately owned. And it can be exchanged at the Liberty of the owner.
So if there are disputes, they are settled in a court of law.
Now look at Singur. The latest says Mamata has been “offered” 70 acres and she will not relent on her “agitation” unless she gets 300 acres.
The root cause of all this “excessive politicization of economic life” is the false theory that The State is to be an intermediary in the sale and purchase of land. Or to decide its use. This is a “commanding heights” kind of argument, but pertaining this time not to Steel, but to Land.
The only permanent solution is a free market for land.
The role of The Government (at the local level) should be to bestow clear titles to verified owners. This should be the new lex terrae – the Law of the Land.
But this requires dumping a false theory – by the judiciary.
We need to alter the kanoon-vyavastha – the Administration of Justice.
This will change the “rules of the game” – and give everyone Security and Liberty. With these two essential blessings of the “right rules,” rules that are in harmony with the laws of nature, including human nature, every Indian will have a better chance to succeed in life.
We need to THINK how to bring this about.
Can we do this through public dissemination of our ideas alone?
Or do we need an organized political party? – which is still illegal.
That is my question.
If you have any ideas, do keep the comments flowing.
The correct theory is that property is all privately owned. And it can be exchanged at the Liberty of the owner.
So if there are disputes, they are settled in a court of law.
Now look at Singur. The latest says Mamata has been “offered” 70 acres and she will not relent on her “agitation” unless she gets 300 acres.
The root cause of all this “excessive politicization of economic life” is the false theory that The State is to be an intermediary in the sale and purchase of land. Or to decide its use. This is a “commanding heights” kind of argument, but pertaining this time not to Steel, but to Land.
The only permanent solution is a free market for land.
The role of The Government (at the local level) should be to bestow clear titles to verified owners. This should be the new lex terrae – the Law of the Land.
But this requires dumping a false theory – by the judiciary.
We need to alter the kanoon-vyavastha – the Administration of Justice.
This will change the “rules of the game” – and give everyone Security and Liberty. With these two essential blessings of the “right rules,” rules that are in harmony with the laws of nature, including human nature, every Indian will have a better chance to succeed in life.
We need to THINK how to bring this about.
Can we do this through public dissemination of our ideas alone?
Or do we need an organized political party? – which is still illegal.
That is my question.
If you have any ideas, do keep the comments flowing.
Thursday, September 11, 2008
Democracy Is Coming... To The USA!
Allow me to also recommend a blog – the one belonging to Lew Rockwell, who is president of the Ludwig von Mises Institute.
If you are a serious libertarian, you would be well advised to subscribe to their “daily article” from www.mises.org.
Lew Rockwell’s blog, however, is a must read because it covers libertarian politics – especially the campaign of that other Republican candidate, Ron Paul, the senator from Texas who has a huge fan following.
Ron Paul stands for a non-interventionist foreign policy (get the troops back home), and he also stands for sound money – the abolition of the federal reserve.
Whereas Ron Paul lost the Republican nomination to John McCain, that has not stopped his “Campaign for Freedom.” He held a huge convention recently in Minneapolis – where one of the songs performed was Donovan’s “Universal Soldier” – one of my favourite anti-war songs.
While the world is hooked on to the Obama-McCain non-debates – what Rockwell calls “The Great Distraction” – Ron Paul has managed to snatch a phenomenal political victory from the jaws of defeat.
He has roped in all the third party candidates and got them to agree on 4 major policy issues. The idea is to bring into the political debate those vital issues that concern all Americans – which the major parties would like to keep under covers.
Here is Lew Rockwell’s post on this great event, which has been completely missed by our Reichwing press, all besotted by the grand distraction.
“The Republican/Democrat duopoly has, for far too long, ignored the most important issues facing our nation. However, alternate candidates Chuck Baldwin, Cynthia McKinney, and Ralph Nader agree with Ron Paul on four key principles central to the health of our nation. These principles should be key in the considerations of every voter this November and in every election.
We Agree:
Foreign Policy: The Iraq War must end as quickly as possible with removal of all our soldiers from the region. We must initiate the return of our soldiers from around the world, including Korea, Japan, Europe and the entire Middle East. We must cease the war propaganda, threats of a blockade and plans for attacks on Iran, nor should we re-ignite the cold war with Russia over Georgia. We must be willing to talk to all countries and offer friendship and trade and travel to all who are willing. We must take off the table the threat of a nuclear first strike against all nations.
Privacy: We must protect the privacy and civil liberties of all persons under US jurisdiction. We must repeal or radically change the Patriot Act, the Military Commissions Act, and the FISA legislation. We must reject the notion and practice of torture, eliminations of habeas corpus, secret tribunals, and secret prisons. We must deny immunity for corporations that spy willingly on the people for the benefit of the government. We must reject the unitary presidency, the illegal use of signing statements and excessive use of executive orders.
The National Debt: We believe that there should be no increase in the national debt. The burden of debt placed on the next generation is unjust and already threatening our economy and the value of our dollar. We must pay our bills as we go along and not unfairly place this burden on a future generation.
The Federal Reserve: We seek a thorough investigation, evaluation and audit of the Federal Reserve System and its cozy relationships with the banking, corporate, and other financial institutions. The arbitrary power to create money and credit out of thin air behind closed doors for the benefit of commercial interests must be ended. There should be no taxpayer bailouts of corporations and no corporate subsidies. Corporations should be aggressively prosecuted for their crimes and frauds.”
This is surely a great day for libertarian politics in the USA.
While the mainstream Reichwing Indian media has ignored this development, Russian television has not: here is a link to the news report on Russia Today.
Song of the Day: Leonard Cohen’s “Democracy Is Coming - To The USA!”.
If you are a serious libertarian, you would be well advised to subscribe to their “daily article” from www.mises.org.
Lew Rockwell’s blog, however, is a must read because it covers libertarian politics – especially the campaign of that other Republican candidate, Ron Paul, the senator from Texas who has a huge fan following.
Ron Paul stands for a non-interventionist foreign policy (get the troops back home), and he also stands for sound money – the abolition of the federal reserve.
Whereas Ron Paul lost the Republican nomination to John McCain, that has not stopped his “Campaign for Freedom.” He held a huge convention recently in Minneapolis – where one of the songs performed was Donovan’s “Universal Soldier” – one of my favourite anti-war songs.
While the world is hooked on to the Obama-McCain non-debates – what Rockwell calls “The Great Distraction” – Ron Paul has managed to snatch a phenomenal political victory from the jaws of defeat.
He has roped in all the third party candidates and got them to agree on 4 major policy issues. The idea is to bring into the political debate those vital issues that concern all Americans – which the major parties would like to keep under covers.
Here is Lew Rockwell’s post on this great event, which has been completely missed by our Reichwing press, all besotted by the grand distraction.
“The Republican/Democrat duopoly has, for far too long, ignored the most important issues facing our nation. However, alternate candidates Chuck Baldwin, Cynthia McKinney, and Ralph Nader agree with Ron Paul on four key principles central to the health of our nation. These principles should be key in the considerations of every voter this November and in every election.
We Agree:
Foreign Policy: The Iraq War must end as quickly as possible with removal of all our soldiers from the region. We must initiate the return of our soldiers from around the world, including Korea, Japan, Europe and the entire Middle East. We must cease the war propaganda, threats of a blockade and plans for attacks on Iran, nor should we re-ignite the cold war with Russia over Georgia. We must be willing to talk to all countries and offer friendship and trade and travel to all who are willing. We must take off the table the threat of a nuclear first strike against all nations.
Privacy: We must protect the privacy and civil liberties of all persons under US jurisdiction. We must repeal or radically change the Patriot Act, the Military Commissions Act, and the FISA legislation. We must reject the notion and practice of torture, eliminations of habeas corpus, secret tribunals, and secret prisons. We must deny immunity for corporations that spy willingly on the people for the benefit of the government. We must reject the unitary presidency, the illegal use of signing statements and excessive use of executive orders.
The National Debt: We believe that there should be no increase in the national debt. The burden of debt placed on the next generation is unjust and already threatening our economy and the value of our dollar. We must pay our bills as we go along and not unfairly place this burden on a future generation.
The Federal Reserve: We seek a thorough investigation, evaluation and audit of the Federal Reserve System and its cozy relationships with the banking, corporate, and other financial institutions. The arbitrary power to create money and credit out of thin air behind closed doors for the benefit of commercial interests must be ended. There should be no taxpayer bailouts of corporations and no corporate subsidies. Corporations should be aggressively prosecuted for their crimes and frauds.”
This is surely a great day for libertarian politics in the USA.
While the mainstream Reichwing Indian media has ignored this development, Russian television has not: here is a link to the news report on Russia Today.
Song of the Day: Leonard Cohen’s “Democracy Is Coming - To The USA!”.
Wednesday, September 10, 2008
For Real Ahimsa, Not Gandhigiri
Thank you, Amit Varma, for endorsing my blog – and a warm welcome to all who have tuned in to Antidote after reading his hearty recommendation.
My chosen topic of the day is Gandhi Jayanti – and the news report that there is going to be a massive celebration on the theme of ahimsa or non-violence in the city of Nagpur on G Jayanti this year.
Yet, on the same day, throughout India, the health dictator’s diktat, employing State force, which is violence, will enter private spaces in order to tyrannize smokers. The health dictator is also seeking Gandhi’s blessings for his violence.
Indeed, Gandhian prohibition of alcohol, as in Gujarat, is enforced by police violence.
Gandhian preference for khadi has meant a “textile policy” that used force against all mill owners.
Gandhian self-sufficiency has been imposed by the coercive and violent means of the customs department.
Away with this bogus ahimsa!
How can we have real ahimsa then?
Very simple: It is only when we interact in markets as individuals, buying and selling goods and services, that no force and violence is used upon anyone.
Every exchange is voluntary – no force, intimidation, coercion or threat is used.
So let us leave maximum space to The Market – and the natural result of this will be the end of all violence.
And let us reduce The State to a minimum – because it is the Gandhian state that is wedded to unjust violence.
Note that Gandhi borrowed the ahimsa concept from Jainism. Jains are invariably businessmen – and only business communities understand the need for peace and non-violence.
Free market zindabad!
Bharat sarkaar murdabad!
My chosen topic of the day is Gandhi Jayanti – and the news report that there is going to be a massive celebration on the theme of ahimsa or non-violence in the city of Nagpur on G Jayanti this year.
Yet, on the same day, throughout India, the health dictator’s diktat, employing State force, which is violence, will enter private spaces in order to tyrannize smokers. The health dictator is also seeking Gandhi’s blessings for his violence.
Indeed, Gandhian prohibition of alcohol, as in Gujarat, is enforced by police violence.
Gandhian preference for khadi has meant a “textile policy” that used force against all mill owners.
Gandhian self-sufficiency has been imposed by the coercive and violent means of the customs department.
Away with this bogus ahimsa!
How can we have real ahimsa then?
Very simple: It is only when we interact in markets as individuals, buying and selling goods and services, that no force and violence is used upon anyone.
Every exchange is voluntary – no force, intimidation, coercion or threat is used.
So let us leave maximum space to The Market – and the natural result of this will be the end of all violence.
And let us reduce The State to a minimum – because it is the Gandhian state that is wedded to unjust violence.
Note that Gandhi borrowed the ahimsa concept from Jainism. Jains are invariably businessmen – and only business communities understand the need for peace and non-violence.
Free market zindabad!
Bharat sarkaar murdabad!
On Demand: Podcast On Common Law
Since two of you have specifically requested for it, here is a podcast entitled "Introduction to Common Law."
I hope others too find it useful.
To download and hear the podcast, click here.
In the next podcast I would like to cover the criminal justice system as it has evolved to what it is today. But do feel free to request for other topics that may interest you. If I know something about that area of knowledge, I will surely satisfy your query.
This blog believes in keeping the customer satisfied!
I hope others too find it useful.
To download and hear the podcast, click here.
In the next podcast I would like to cover the criminal justice system as it has evolved to what it is today. But do feel free to request for other topics that may interest you. If I know something about that area of knowledge, I will surely satisfy your query.
This blog believes in keeping the customer satisfied!
Tuesday, September 9, 2008
End Arbitrariness On Immigration
The news today has it that skilled Indian chefs are to be allowed into the UK, but not software techies.
My objection is: This is arbitrary. It is decision making on economic issues by baboos. It is like central planning. It is Big Brother knows best.
But Big Brother never knows best.
Note that the news story mentions the hectic politicking that was required to get the chefs in. It says:
“People from the Indian restaurant industry recently took to the streets in London and Glasgow to protest against new immigration measures that prevented them from recruiting chefs from the Indian sub-continent…. Several representations were also made to the government by MPs and associations of restaurant owners.”
If this hectic politicking had not been done, the British baboos in charge of immigration would not have “seen” that there was indeed a shortage of chefs. It was public action that made them "perceive the fact" that the UK needs chefs. Their statistics on employment were of no use. This is precisely the "knowledge failure" that planners inevitably suffer from.
So thay have said OK to cooks. But what of motor mechanics? Or plumbers and electricians? Or taxi drivers? Or nurses? Or whatever?
Note that the effect of these restrictions is to keep wages artificially high in Britain. But that only hurts the Brits as consumers of labour. And this hurts Britain’s competitiveness. No English gent can afford a butler like Jeeves today because of these restrictions.
What is the way out?
One good way is to auction the right to immigrate: a visa auction. At least this will put a market price on the visa and take away government arbitrariness.
Another way is to staple a visa on the passport of anyone who buys property there: get a property title, get a visa. The unsold housing in the USA would all get sold if the USA used this procedure to award visas, instead of leaving it to its baboos.
Of course, I favour the extreme:
That is, allow in anyone with a valid credit card guaranteeing his identity and his creditworthiness. We could then get rid of ALL the baboos on the borders, not just the customs guys, but the immigration chaps too. “Imagine there’s no country.”
Paradise on Earth.
My objection is: This is arbitrary. It is decision making on economic issues by baboos. It is like central planning. It is Big Brother knows best.
But Big Brother never knows best.
Note that the news story mentions the hectic politicking that was required to get the chefs in. It says:
“People from the Indian restaurant industry recently took to the streets in London and Glasgow to protest against new immigration measures that prevented them from recruiting chefs from the Indian sub-continent…. Several representations were also made to the government by MPs and associations of restaurant owners.”
If this hectic politicking had not been done, the British baboos in charge of immigration would not have “seen” that there was indeed a shortage of chefs. It was public action that made them "perceive the fact" that the UK needs chefs. Their statistics on employment were of no use. This is precisely the "knowledge failure" that planners inevitably suffer from.
So thay have said OK to cooks. But what of motor mechanics? Or plumbers and electricians? Or taxi drivers? Or nurses? Or whatever?
Note that the effect of these restrictions is to keep wages artificially high in Britain. But that only hurts the Brits as consumers of labour. And this hurts Britain’s competitiveness. No English gent can afford a butler like Jeeves today because of these restrictions.
What is the way out?
One good way is to auction the right to immigrate: a visa auction. At least this will put a market price on the visa and take away government arbitrariness.
Another way is to staple a visa on the passport of anyone who buys property there: get a property title, get a visa. The unsold housing in the USA would all get sold if the USA used this procedure to award visas, instead of leaving it to its baboos.
Of course, I favour the extreme:
That is, allow in anyone with a valid credit card guaranteeing his identity and his creditworthiness. We could then get rid of ALL the baboos on the borders, not just the customs guys, but the immigration chaps too. “Imagine there’s no country.”
Paradise on Earth.
Monday, September 8, 2008
The Vision Statement
There have been some discussions of late on a libertarian “vision”. Many say that this is unnecessary since each Indian should be free to have his own vision, and the Liberty to chase his dream.
But this is missing the point of “political action.”
There must – repeat, must – come a stage – soon, I hope – when India’s liberals and libertarians will cease all this definitional chatter and take up political action against the socialists, communists and communalists. These political forces have destroyed this country.
For any such political action a “vision statement” is essential. Further, all the groundwork of political action is principally concerned with the task of communicating this vision to the broad mass of people.
Do read Thomas Sowell’s classic A Conflict of Visions: The Ideological Origins of Political Struggles.
Even if you don’t read the book, the title says it all. You cannot engage the numberless masses in a political struggle for Liberty unless you generate a “conflict of Visions” with your political message.
The liberal/libertarian vision is of an urban India. This comes into immediate conflict with the ruling vision of villages and “rural development.” Where Gandhi spoke of millions of “self-sufficient village economies” we speak of hundreds and thousands of free trading and self-governing cities and towns, with the maximum of them along our 2500 mile coast.
Thus, we need a coastal expressway. And many “hubs-and-spokes” expressway systems in the mainland.
These are the 3 Ts of Prosperity:
Trade
Towns and
Transport
On transport, the book/pamphlet that was launched on Friday the 5th is titled “Four Wheels For All.” I argue the case for universal automobile ownership in India. It is a “vision” of prosperity based on free trade – the duty-free import of used cars.
On Towns I have written a piece entitled “Bungalows For All” for a think tank for presentation at the next UN Habitat conference. This is based on the fact that there will be no shortage of urban land if we build more and more urban areas – all linked by roads. The public builds the roads, the private people drive their cars. The population spreads out. More and more land is colonized for urbanites – and this solves the habitat problem. You need a handkerchief sized plot of land to build a modest cottage near a city or town. You need acres and more to survive in rural India. And there is enough land in India.
The idea of free trade is best expressed in the slogan “Duty Free Shops For All.” Without customs duties (better called “import taxes”) all shops would be duty free. Good for the shopkeeper; even better for the consumer. We are firmly on the side of the consumer.
I hope this contribution to the debate on “vision” is useful to India’s budding liberal movement.
Luckily, we still have time to think things through.
But this is missing the point of “political action.”
There must – repeat, must – come a stage – soon, I hope – when India’s liberals and libertarians will cease all this definitional chatter and take up political action against the socialists, communists and communalists. These political forces have destroyed this country.
For any such political action a “vision statement” is essential. Further, all the groundwork of political action is principally concerned with the task of communicating this vision to the broad mass of people.
Do read Thomas Sowell’s classic A Conflict of Visions: The Ideological Origins of Political Struggles.
Even if you don’t read the book, the title says it all. You cannot engage the numberless masses in a political struggle for Liberty unless you generate a “conflict of Visions” with your political message.
The liberal/libertarian vision is of an urban India. This comes into immediate conflict with the ruling vision of villages and “rural development.” Where Gandhi spoke of millions of “self-sufficient village economies” we speak of hundreds and thousands of free trading and self-governing cities and towns, with the maximum of them along our 2500 mile coast.
Thus, we need a coastal expressway. And many “hubs-and-spokes” expressway systems in the mainland.
These are the 3 Ts of Prosperity:
Trade
Towns and
Transport
On transport, the book/pamphlet that was launched on Friday the 5th is titled “Four Wheels For All.” I argue the case for universal automobile ownership in India. It is a “vision” of prosperity based on free trade – the duty-free import of used cars.
On Towns I have written a piece entitled “Bungalows For All” for a think tank for presentation at the next UN Habitat conference. This is based on the fact that there will be no shortage of urban land if we build more and more urban areas – all linked by roads. The public builds the roads, the private people drive their cars. The population spreads out. More and more land is colonized for urbanites – and this solves the habitat problem. You need a handkerchief sized plot of land to build a modest cottage near a city or town. You need acres and more to survive in rural India. And there is enough land in India.
The idea of free trade is best expressed in the slogan “Duty Free Shops For All.” Without customs duties (better called “import taxes”) all shops would be duty free. Good for the shopkeeper; even better for the consumer. We are firmly on the side of the consumer.
I hope this contribution to the debate on “vision” is useful to India’s budding liberal movement.
Luckily, we still have time to think things through.
Sunday, September 7, 2008
On Bijli
At the book launch on Friday the 5th, Rene Klaff, sitting in the audience, asked the question: “Why are issues like automobilzation and roads not on the agenda of any Indian political party?”
He gave the example of the German FDP in North-Rhine Westphalia who achieved great electoral success by campaigning on the slogan “Free Movement For Free People.”
I replied that an element of power is the ability to keep certain issues out of the political discussion. The people are shouting for bijli, sadak, paani – but the political discussions are all about “education,” employment guarantee, loan waiver, and the great nuclear deal.
Of course, I also said that cars and roads are things that the liberals of India must articulate from the political soapbox. This can be our USP.
We emphasize transportation – not education.
Shubh Laabh and Shubh Yatra!
Our entire urban vision rests on a “hub-and-spokes” transport network.
But what do we say of bijli?
Manmohan pyaray has gone nuclear – and this will be under the ownership of The State. They will generate power as efficiently as they make steel.
We will privatize and allow entrepreneurs to choose the fuel for their power plants: coal, lignite, hydro, naptha, gas… whatever.
This is the only way by which anyone can get bijli – by paying for it.
There can be prepaid bijli connections just like with mobile phone cards today.
As I explained to one of my rural smokey friends last night, for millennia Indians have been lighting oil lamps in their houses at dusk. Some bells tinkle, Lakshmi is praised.
And they have been able to light these lamps only because they bought the oil from the local merchant.
Similarly, they will always have bijli if they buy it.
With government ownership (including nuclear) our nation’s bijli problems will never be solved.
One question: Would you like a nuclear power plant coming up in your city, town or village?
I bet there will be a great NIMBY reaction when the government proposes locations for their atomic power plants.
NIMBY stands for “Not In My Back Yard.”
Think about it.
He gave the example of the German FDP in North-Rhine Westphalia who achieved great electoral success by campaigning on the slogan “Free Movement For Free People.”
I replied that an element of power is the ability to keep certain issues out of the political discussion. The people are shouting for bijli, sadak, paani – but the political discussions are all about “education,” employment guarantee, loan waiver, and the great nuclear deal.
Of course, I also said that cars and roads are things that the liberals of India must articulate from the political soapbox. This can be our USP.
We emphasize transportation – not education.
Shubh Laabh and Shubh Yatra!
Our entire urban vision rests on a “hub-and-spokes” transport network.
But what do we say of bijli?
Manmohan pyaray has gone nuclear – and this will be under the ownership of The State. They will generate power as efficiently as they make steel.
We will privatize and allow entrepreneurs to choose the fuel for their power plants: coal, lignite, hydro, naptha, gas… whatever.
This is the only way by which anyone can get bijli – by paying for it.
There can be prepaid bijli connections just like with mobile phone cards today.
As I explained to one of my rural smokey friends last night, for millennia Indians have been lighting oil lamps in their houses at dusk. Some bells tinkle, Lakshmi is praised.
And they have been able to light these lamps only because they bought the oil from the local merchant.
Similarly, they will always have bijli if they buy it.
With government ownership (including nuclear) our nation’s bijli problems will never be solved.
One question: Would you like a nuclear power plant coming up in your city, town or village?
I bet there will be a great NIMBY reaction when the government proposes locations for their atomic power plants.
NIMBY stands for “Not In My Back Yard.”
Think about it.
Podcast: Property Is Liberty
In my last podcast we spoke of John Locke, who wrote in the year 1690 that "where there is no Property there is no Justice."
In this podcast we take the discussion one step further, to the proposition that:
Where There Is No Property There Is No Liberty.
To hear or download this podcast, click here.
In this podcast we take the discussion one step further, to the proposition that:
Where There Is No Property There Is No Liberty.
To hear or download this podcast, click here.
Saturday, September 6, 2008
A Brute In Love Town
Coming from Goa to Delhi, it is hard to believe that we are in the same country.
I was invited to Prem Nagar last evening with the promise of a “decent smoke.” I had never visited this locality before. But I liked the name, which translates to Love Town, and so I went.
After a few big chillums indoors, the resultant “cottonmouth” demanded a beer, and my hosts arranged for a couple of cans of Foster’s lager.
We were rather cramped indoors, and the weather outside being pleasanter, it was decided that we sip our beers in the park.
We found a quiet corner and sat down. Near us were two fellows also sipping beer.
Prem Nagar is a poor locality although centrally located, and there were the usual ragpicker kids who wanted the empty cans. Smart kids.
But just then a burly cop entered the park. He went up to the other guys who were peacefully enjoying their beer just as we were – and started beating them up mercilessly.
We split.
Three points to note:
First – this would be unthinkable in Goa. Repeat: Unthinkable.
Second – where do people drink in Delhi if bars do not exist? In Delhi, The State has a monopoly on the retail trade of alcoholic beverages, but they expect you to carry your hooch indoors if you want to drink. This is tyranny. The licensing of bars must be totally liberalized. Note that there was a pakora wallah just outside the park where we were sitting. I was contemplating ordering some onion bhajjis. This man too, and the peanut vendor, would prosper if bars were delicensed.
Third – there was a perfect “natural order” in Prem Nagar. This order was disturbed by the brutal cop. I can understand police action against anyone who is drunk and disorderly. But brutalizing peaceful citizens?
I drove off with my cans of Foster’s lager – to a place I know where cops do not come. The rag pickers lost. The pakora wallah lost. I lost too.
I was invited to Prem Nagar last evening with the promise of a “decent smoke.” I had never visited this locality before. But I liked the name, which translates to Love Town, and so I went.
After a few big chillums indoors, the resultant “cottonmouth” demanded a beer, and my hosts arranged for a couple of cans of Foster’s lager.
We were rather cramped indoors, and the weather outside being pleasanter, it was decided that we sip our beers in the park.
We found a quiet corner and sat down. Near us were two fellows also sipping beer.
Prem Nagar is a poor locality although centrally located, and there were the usual ragpicker kids who wanted the empty cans. Smart kids.
But just then a burly cop entered the park. He went up to the other guys who were peacefully enjoying their beer just as we were – and started beating them up mercilessly.
We split.
Three points to note:
First – this would be unthinkable in Goa. Repeat: Unthinkable.
Second – where do people drink in Delhi if bars do not exist? In Delhi, The State has a monopoly on the retail trade of alcoholic beverages, but they expect you to carry your hooch indoors if you want to drink. This is tyranny. The licensing of bars must be totally liberalized. Note that there was a pakora wallah just outside the park where we were sitting. I was contemplating ordering some onion bhajjis. This man too, and the peanut vendor, would prosper if bars were delicensed.
Third – there was a perfect “natural order” in Prem Nagar. This order was disturbed by the brutal cop. I can understand police action against anyone who is drunk and disorderly. But brutalizing peaceful citizens?
I drove off with my cans of Foster’s lager – to a place I know where cops do not come. The rag pickers lost. The pakora wallah lost. I lost too.
Friday, September 5, 2008
Duds Inhabit The LBZ
After the book launch last evening, I had the occasion to spend some time with two of my students.
I took them on a guided tour of Lutyens' Bungalow Zone (LBZ) – the VVIP area of New Delhi, where pyaray Manmohan and all his ministers live.
As we drove around the roundabouts, I instructed my students to note the fact – fact! – that the whole of LBZ is laid out on a road system based on “hubs-and-spokes.”
We noted that the house where Nehru lived, Teen Murti House, was built right upon a “hub.” We then took a “spoke” from this hub and landed up at another hub, which is the Race Course Road roundabout, where pyaray Manmohan now lives.
I instructed my students on why hubs-and-spokes are basic to all transport economics.
We appreciated the fact that if such a pattern of roads was built in India, treating each major city and town as a hub and building spokes from it to connect to all the outlying second and third tier towns, urban India would blossom.
We also appreciated the fact – fact! – that pyaray Manmohan and his ministers are blind.
They live in a hub-and-spoke system but see it not.
Actually, even Old Delhi was built on a hub-and-spoke roads system: the Ajmeri Gate takes you on the road to Ajmer; the Lahori Gate takes you on the road to Lahore; the Kasmiri Gate takes you on the road to Kashmir… and so on… just as “all roads lead to Rome.”
And, of course, these bozos want to teach History!
They should be history.
I took them on a guided tour of Lutyens' Bungalow Zone (LBZ) – the VVIP area of New Delhi, where pyaray Manmohan and all his ministers live.
As we drove around the roundabouts, I instructed my students to note the fact – fact! – that the whole of LBZ is laid out on a road system based on “hubs-and-spokes.”
We noted that the house where Nehru lived, Teen Murti House, was built right upon a “hub.” We then took a “spoke” from this hub and landed up at another hub, which is the Race Course Road roundabout, where pyaray Manmohan now lives.
I instructed my students on why hubs-and-spokes are basic to all transport economics.
We appreciated the fact that if such a pattern of roads was built in India, treating each major city and town as a hub and building spokes from it to connect to all the outlying second and third tier towns, urban India would blossom.
We also appreciated the fact – fact! – that pyaray Manmohan and his ministers are blind.
They live in a hub-and-spoke system but see it not.
Actually, even Old Delhi was built on a hub-and-spoke roads system: the Ajmeri Gate takes you on the road to Ajmer; the Lahori Gate takes you on the road to Lahore; the Kasmiri Gate takes you on the road to Kashmir… and so on… just as “all roads lead to Rome.”
And, of course, these bozos want to teach History!
They should be history.
Thursday, September 4, 2008
Invitation To A Book Launch
I am in Delhi today for the launch of my little book on automobiles and automobilization entitled Four Wheel For All.
If you are in Delhi today, do attend the event. Pasted below is, first, the back cover text; below that is the invitation:
BACK COVER TEXT:
India has been gradually liberalising the automobile industry and opening it up to international competition. Today, the streets are awash with foreign brands, made in India. Yet, the launch of the Tata Nano has evoked horror from many environmentalists and town planners. They abhor the idea of universal car ownership in India.
In this important contribution to the debate, noted liberal scholar and author Sauvik Chakraverti challenges the readers to think of the wider impact of greater automobility, arguing for policies that will make cars affordable to all, lowering taxes and tariffs, including import of duty-free used cars.
Chakraverti looks at the issue from many angles. He places his reader between two options: as a successful individual owner of his own car, driving where he likes to go – which is self-directedness or autonomy – or being "moved in masses" at the whim of the "transport planner". And so it emerges that the car is part of the solution – the escape button every Indian needs. But the roads must be built on a war footing. And greater automobile ownership will create a political constituency in support of better roads. With greater connectivity, choices and markets will enlarge, the economy will get a boost, and freedom will reign.
This paper is firmly on the side of progress – enhanced personal mobility will greatly empower the aam admi, the euphemistic common man.
INVITATION:
Liberty Institute
&
Friedrich Naumann Stiftung für die Freiheit
Celebrating Automobility
From Ford's Model T (1908) to Tata Nano (2008)
Murad Ali Baig
will release
Four Wheels for All
by
Sauvik Chakraverti
Panel Discussion
Kaushik Deb, TERI
Barun Mitra, Liberty Institute
Chairman: Mohit Satyanand
Venue: Conference Room 3, India International Centre Annexe, New Delhi.
Time: 6 pm.
Come one, come all – and make the event a success!
If you are in Delhi today, do attend the event. Pasted below is, first, the back cover text; below that is the invitation:
BACK COVER TEXT:
India has been gradually liberalising the automobile industry and opening it up to international competition. Today, the streets are awash with foreign brands, made in India. Yet, the launch of the Tata Nano has evoked horror from many environmentalists and town planners. They abhor the idea of universal car ownership in India.
In this important contribution to the debate, noted liberal scholar and author Sauvik Chakraverti challenges the readers to think of the wider impact of greater automobility, arguing for policies that will make cars affordable to all, lowering taxes and tariffs, including import of duty-free used cars.
Chakraverti looks at the issue from many angles. He places his reader between two options: as a successful individual owner of his own car, driving where he likes to go – which is self-directedness or autonomy – or being "moved in masses" at the whim of the "transport planner". And so it emerges that the car is part of the solution – the escape button every Indian needs. But the roads must be built on a war footing. And greater automobile ownership will create a political constituency in support of better roads. With greater connectivity, choices and markets will enlarge, the economy will get a boost, and freedom will reign.
This paper is firmly on the side of progress – enhanced personal mobility will greatly empower the aam admi, the euphemistic common man.
INVITATION:
Liberty Institute
&
Friedrich Naumann Stiftung für die Freiheit
Celebrating Automobility
From Ford's Model T (1908) to Tata Nano (2008)
Murad Ali Baig
will release
Four Wheels for All
by
Sauvik Chakraverti
Panel Discussion
Kaushik Deb, TERI
Barun Mitra, Liberty Institute
Chairman: Mohit Satyanand
Venue: Conference Room 3, India International Centre Annexe, New Delhi.
Time: 6 pm.
Come one, come all – and make the event a success!
Wednesday, September 3, 2008
For One Huge SEZ Called Indyeah
Recently, the Times of India reported that the Special Economic Zones (SEZ) are stuck in the quagmire of land acquisition: the total land required is 92,000 acres.
Now, the first thing worth noting is that 92,000 acres is chickenshit for a huge country like India – a land mass measuring 3 million or 30 lakh square kilometers. So let us get the math right.
50 acres is 0.2 square kilometers.
100 acres (Amarnath row) is just 0.4 square kilometers.
500 acres is 2 square kilometers.
1000 acres in Singur is just 4 square kilometers.
So the total 92,000 acres of land required for all the SEZs is less than 400 square kilometers.
The total area of India's tiniest state, Goa, is 3701 square kilometers.
Goa is divided into north and south. The north is well populated and that is where the action is – for tourists. The coastal areas of the north are all hugely urbanized. There are 10 municipalities in north Goa.
South Goa is underpopulated and largely rural. There is only one municipality here – Canacona, where I have been living for the last 3 years.
South Goa measures 1900 square kilometers.
In this total area there are over 600 square kilometers of hills, dales and forest – all technically "unowned" land.
My point is this: All the SEZs could be easily fitted into south Goa itself.
There is no shortage of land in India.
The only problem is that The State is the default owner of all unowned land.
So, as Milton Friedman remarked, "If you give the Sahara Desert to the government there will be a shortage of sand in 5 years."
There is a shortage of land in India only because The State owns it all.
Of course, the SEZ policy is economic nonsense. With unilateral free trade, the entire sub-continent could be run like one gigantic SEZ.
I am glad that the chief economic advisor to the government of India, Subhashis Gangopadhyay, has recently rubbished the idea behind SEZs. He has said that "this policy will lead to corruption and landgrabbing."
SEZs are just another form of cronyism. Note that this policy is the brainchild of the ministry of commerce, headed by none other than that wrecker of international trade, Kamal Nutt.
Away with cronyism.
Away with State ownership of all unowned land.
And let the entire sub-continent become the world's largest duty-free trading area: a huge SEZ.
Now, the first thing worth noting is that 92,000 acres is chickenshit for a huge country like India – a land mass measuring 3 million or 30 lakh square kilometers. So let us get the math right.
50 acres is 0.2 square kilometers.
100 acres (Amarnath row) is just 0.4 square kilometers.
500 acres is 2 square kilometers.
1000 acres in Singur is just 4 square kilometers.
So the total 92,000 acres of land required for all the SEZs is less than 400 square kilometers.
The total area of India's tiniest state, Goa, is 3701 square kilometers.
Goa is divided into north and south. The north is well populated and that is where the action is – for tourists. The coastal areas of the north are all hugely urbanized. There are 10 municipalities in north Goa.
South Goa is underpopulated and largely rural. There is only one municipality here – Canacona, where I have been living for the last 3 years.
South Goa measures 1900 square kilometers.
In this total area there are over 600 square kilometers of hills, dales and forest – all technically "unowned" land.
My point is this: All the SEZs could be easily fitted into south Goa itself.
There is no shortage of land in India.
The only problem is that The State is the default owner of all unowned land.
So, as Milton Friedman remarked, "If you give the Sahara Desert to the government there will be a shortage of sand in 5 years."
There is a shortage of land in India only because The State owns it all.
Of course, the SEZ policy is economic nonsense. With unilateral free trade, the entire sub-continent could be run like one gigantic SEZ.
I am glad that the chief economic advisor to the government of India, Subhashis Gangopadhyay, has recently rubbished the idea behind SEZs. He has said that "this policy will lead to corruption and landgrabbing."
SEZs are just another form of cronyism. Note that this policy is the brainchild of the ministry of commerce, headed by none other than that wrecker of international trade, Kamal Nutt.
Away with cronyism.
Away with State ownership of all unowned land.
And let the entire sub-continent become the world's largest duty-free trading area: a huge SEZ.
Tuesday, September 2, 2008
Against Our Health Dictator
I get the feeling that The State can do nothing useful or in the common interest. It is a sign of the total failure of our political leadership – what leadership? – that this joker ramadoss of the virtually unknown PMK party of Tamil Nadu is given free rein to bully the entire nation.
This time, the Health Dictator is going to impose a blanket ban on smoking indoors. This is a gross violation of the property rights of the owners. These decisions should be taken in the private sphere. In my book, this intrusion into private spaces should be struck down by the processes of judicial review.
The last Nizam of Hyderabad chain smoked locally made cheroots as an encouragement to his tobacco farmers. A recent report in The Economic Times says that business is booming for India's tobacco growers. All the increased demand in coming from China. There seems to be much more Liberty in communist China than socialist India. And for good reason too – for all the taxes on tobacco are funding the brand new superhighways the Chinese are building.
In India, the masses smoke beedis – and there is zero revenue. If taxes on cigarettes were lowered, many beedi smokers would switch to cigarettes – and revenues would soar. Then, there would be enough money to build highways all over the country – not just the much-touted Golden Quadrilateral. We could have superhighways coming out of our ears if The State governed sensibly instead of just tyrannizing the citizenry. Note that if the highways were built out of tobacco (and ganja) taxes, our lives would be better protected. Over 1 lakh people die on our pot-holed roads every year. Millions more are seriously injured. This is because of State Failure: The State owns the roads. In China, the number of road fatalities are coming down every year. The Chinese know what is the proper role of The State.
Enough of this state-sponsored violence against smokers. And jigger tobacco: I want ganja legalized.
I suggest a Smokers' Rally in New Delhi.
Let us all march to the Health Dictator's office smoking cigarettes, spliffs, chillums, beedis, hookahs, bongs… the lot.
And tell the joker to bugger off.
This time, the Health Dictator is going to impose a blanket ban on smoking indoors. This is a gross violation of the property rights of the owners. These decisions should be taken in the private sphere. In my book, this intrusion into private spaces should be struck down by the processes of judicial review.
The last Nizam of Hyderabad chain smoked locally made cheroots as an encouragement to his tobacco farmers. A recent report in The Economic Times says that business is booming for India's tobacco growers. All the increased demand in coming from China. There seems to be much more Liberty in communist China than socialist India. And for good reason too – for all the taxes on tobacco are funding the brand new superhighways the Chinese are building.
In India, the masses smoke beedis – and there is zero revenue. If taxes on cigarettes were lowered, many beedi smokers would switch to cigarettes – and revenues would soar. Then, there would be enough money to build highways all over the country – not just the much-touted Golden Quadrilateral. We could have superhighways coming out of our ears if The State governed sensibly instead of just tyrannizing the citizenry. Note that if the highways were built out of tobacco (and ganja) taxes, our lives would be better protected. Over 1 lakh people die on our pot-holed roads every year. Millions more are seriously injured. This is because of State Failure: The State owns the roads. In China, the number of road fatalities are coming down every year. The Chinese know what is the proper role of The State.
Enough of this state-sponsored violence against smokers. And jigger tobacco: I want ganja legalized.
I suggest a Smokers' Rally in New Delhi.
Let us all march to the Health Dictator's office smoking cigarettes, spliffs, chillums, beedis, hookahs, bongs… the lot.
And tell the joker to bugger off.
Monday, September 1, 2008
On Markets, Cities - And Dalits
There is an interesting story here about a Dalit entrepreneur, Chandra Bhan Prasad, who is a champion of liberalism, the free market, cities and urbanization – and globalization.
As a Dalit, he has witnessed a sea change in not only his own fortunes, but those of his entire caste group, since Indian began "liberalization" in the 1990s. Indeed, he adds that the rise of Dalit politics and politicians reflects this improvement in the living standards of Dalits.
The story reveals that most Dalits now hire cars for their marriage ceremonies. During the socialist era, they were denied even horses.
I have absolutely no doubt that Chandra Bhan Prasad is completely right in his views. Caste oppression is a totally rural phenomenon: India's cities are marked by caste anonymity. And since markets are urban, the future of India's Dalits, as market-based individuals in cities and towns, will be devoid of the label of caste. The market will destroy caste oppression.
There is an economic reason for this. In the urban economy discrimination has a private cost. If you do not serve customers because they belong to a particular faith or caste, you will have to bear the loss for your prejudice. Thus, caste and faith become irrelevant to the urban catallaxy. We all survive, in cities, by serving strangers, and are served by strangers in turn. The city is therefore the harbinger of civilization and civilized behaviour. Conditions in the rural areas are barbaric. It has been well said that "India does not live in her villages; India dies in her villages." The future must be urban – especially for Dalits.
I myself noted this on my first day in the western world, when I came to London as a student in 1989. And the brief article I wrote on the experience has been on the website of the Ambedkar Society for many years now. This is the link – but you will have to put my name in the search box and find it.
As a Dalit, he has witnessed a sea change in not only his own fortunes, but those of his entire caste group, since Indian began "liberalization" in the 1990s. Indeed, he adds that the rise of Dalit politics and politicians reflects this improvement in the living standards of Dalits.
The story reveals that most Dalits now hire cars for their marriage ceremonies. During the socialist era, they were denied even horses.
I have absolutely no doubt that Chandra Bhan Prasad is completely right in his views. Caste oppression is a totally rural phenomenon: India's cities are marked by caste anonymity. And since markets are urban, the future of India's Dalits, as market-based individuals in cities and towns, will be devoid of the label of caste. The market will destroy caste oppression.
There is an economic reason for this. In the urban economy discrimination has a private cost. If you do not serve customers because they belong to a particular faith or caste, you will have to bear the loss for your prejudice. Thus, caste and faith become irrelevant to the urban catallaxy. We all survive, in cities, by serving strangers, and are served by strangers in turn. The city is therefore the harbinger of civilization and civilized behaviour. Conditions in the rural areas are barbaric. It has been well said that "India does not live in her villages; India dies in her villages." The future must be urban – especially for Dalits.
I myself noted this on my first day in the western world, when I came to London as a student in 1989. And the brief article I wrote on the experience has been on the website of the Ambedkar Society for many years now. This is the link – but you will have to put my name in the search box and find it.
Subscribe to:
Posts (Atom)