Money As No Thing

The headline of a Bloomberg column in Mint today caught my eye: “Central bankers won’t be big stars in 2009.”

Oh, wouldn’t that make for a happy 2009, I thought, and clicked.

It was then that the sub-title emerged: “We are paying the price for years of Greenspan imposing his free-market ideology on the world’s biggest economy.”

Nonsense on stilts!

To understand that central bankers have nothing to do with the free market, consider this: Suppose in all market exchanges, you could get all that you wanted by giving away nothing, would you not be a happy man?

The idea behind irredeemable government “legal tender” fiat paper money is just that: A con game. They buy up everything they need giving meaningless papers in exchange. They get something for nothing.

Private bankers in a central banking cartel do much the same when they create credit out of thin air. They make loans of this credit from thin air, and their loanees find this “money” in their bank accounts. They then use this paper money to buy up what they want. The banker profits by giving away nothing that is tangible. Nothing is exchanged for something. Lew Rockwell calls them “banksters” (as in “gangsters”).

So what is free market money?

First, and most importantly, free market money is what people accept as money – like gold. Free market money can never be something that is the creature of government.

Second, paper money in such a free market is just a “warehouse receipt” – a property title – that the issuer is bound to redeem on demand.

Third: There is no banking cartel. There are competing private banks. All their paper notes are redeemable on demand – by the basic laws of contract.

The basic laws of contract also govern the relationships between banks and their customers. Thus, a “demand deposit” is exactly what it says it is, money given for “safekeeping,” so lending any portion of these deposits would be considered fraud. This would lead to a 100 per cent reserve. No bankster would be able to create “deposit money” out of nothing.

On the other hand, customers may deposit money in banks for fixed terms on interest, and these will be treated as “loans” to banks, from which they can extend further credit. Thus, there is always something tangible that backs credit. Credit is not created out of thin air. No banker can exchange nothing for something. No more banksters. Only extremely prudent private bankers doing a very serious job involving great trust in an extremely competitive setting (no centralization). And these extremely prudent private bankers are the “overseers of the market economy.” There is The Law: the “private law” of contracts. There is no “regulation.”

Ponder over this and do read the Bloomberg column to reflect on the huge amount of miseducation that mainstream economics departments the world over have fostered. The confusion in the mind of the columnist is apparent in his concluding para, where he says:

“The key is to build guardrails to keep markets from driving economies over the cliff again. Ending the excessive trust that governments placed in a few economists is a good place to start.”

Guardrails are required to prevent The State from driving nations off the cliff.

Note how they are already driving us into war. And they buy the services of soldiers with papers! Poor dumb soldiers.

Of course, we all need to end our trust in government economists.

2009 is a good time to start.

A very happy new year to you.

Song to begin the new year with: We Don't Get Fooled Again.

That's "my generation."

No Home Minister

An editorial entitled “Nabbing the Goondas” in the New Indian Express today brings to sharp focus the peculiarly Indian phenomenon thoughtful social scientists call “the criminalization of (democratic) politics and the politicization of crime.”

The goonda-mafia gangs that run illegal businesses with political as well as police support (politicians control the police) are proof. The editorial speaks of:

“… close links that have developed between sections of the political class and the hoods. The matter has been complicated by the less than exemplary role of the police, who are evidently asked to leave the goons alone since they often serve the partisan objectives of the politicians. Nothing demonstrates the corrosive effect of this unholy politician- bureaucrat-criminal nexus more than the fact that nearly one-fourth of the Lok Sabha MPs have an unsavoury background. The situation is even more alarming where the MLAs are concerned.”

The Rot Runs Deep.

And there is only one solution: Liberty Under Law.

All economic activities that are today occurring in the black market will then transpire in the open market.

Take Gillette razors, for example. Not long ago, you got them from a smuggler. Today every small shop is selling them. Millions of open market jobs have been created.

Now imagine that for everything that man-made “democratic” legislation (which is NOT The Law) has pushed into the hands of mafia gangs today.

This is the best way to cleanse the system.

And also provide a huge economic stimulus. Recall Say’s Law: The sale of X gives rise to the demand for all non-X. When fine Manipuri ganja duly certified by the Manipuri Ganja Farmers’ Association (soon to be set up – so keep the donations flowing:-) is openly sold, all these farmers would possess the means to buy big SUVs, plasma TVs, and all the mod-cons. Ditto for the belly dancer. Or the bookie.

Note that these corrupt politicians and their cronies, the ganglords, drive the SUVs today. They own the plasma TVs.

I therefore find home minister P Chidambaram’s directive to all state governments to crack down on goondas insincere. It is just words. An exchange of letters from On High. The editorial says:

“The union home minister has spelt out the laws under which these anti-social elements should be tackled. These include the National Security Act, the Goonda Act and the Unlawful Activities Prevention Act. But few are unaware of the fact that it isn’t the dearth of laws which prevents firm action, but the lack of political will.”

We could add the Narcotics Act, The Immoral Traffic Act, the Gambling Act, the Gun control laws… ad infinitum.

It is time to realize that man-made legislation has to be rejected for The Law – that is, the “private law” world of property, contracts and torts. And our The State has to be placed Under this law. Today, with the “sovereignty of parliament,” our The State is above The Law.

Note that the common law dates back to the eleventh century – and even earlier, to the laws of the Anglo-Saxon tribes. There were no parliaments then to “make” law. And every feudal king was Under The Law: the “sovereignty of the law.” Which is why the Queen of England still does not make law. Our ideas on law must change to appreciate what true Justice is. It is only this: Liberty Under Law.

So let us all be honest businessmen. There is a certain morality in that. Let all businesses thrive in a natural order. Let enemies of that natural order be quickly identified and dealt with – the real outlaws – that too at the local level, and not from On High.

There would be nothing left to govern.

No home minister.

Everyone would be busy “minding his own business.”

What about me? I will run The Honourable Bhola Unlimited Company Ltd., makers of Bhola Spliffs, Ganesh ka baap ka bidi!

Ha ha.

On Noise... And Silence

As ever-vigilant citizens, we must always beware of any loud noises churned out by our The State’s propaganda machinery – which, it must be admitted, includes much of the mainstream press.

Right now, the Big Noise is over the elections in Kashmir.

Have you ever heard of the elections in Switzerland?
Have you ever heard of any Swiss political party?
Do you know the name of any Swiss political leader?

They are a true democracy in this vital sense: politics does not consume their lives.

Democracy there sings the “sounds of silence.”

Indeed, when I attended the Geneva Auto Show, I made it a point to ask any Swiss citizen I met the name of their great country’s president. I am proud to report that not a single one of them – and I must have asked hundreds – knew the name of their president.

See why they are a successful polity?

And look at the nauseating news emanating from ours: Omar is the dynastic heir; Omar gets “positive signals” from the Congress; Omar comes to Delhi to hobnob with Congress leaders about a coalition. Read the report here.

Some years ago I reviewed Sumantra Bose’s great book on Kashmir; a book that reads as a thriller. Anyone who wants to know about Kashmir should read the book – and also visit the state, as I did in 2002.

During that visit I had a chance to meet the then minister of finance of the J&K government. He said that 90 per cent of his budget expenditure comes from New Delhi.

Wake up all you dunderheads!

This is not Democracy.

This is Political Clientelism.

Killing Democracy... And Progress

As our ideological enemies celebrate the ritualism of their “democracy,” now that the results of the elections in Jammu & Kashmir are with us, allow me to turn the focus on the fact that, while the Congress and the National Conference of the Abdullahs will now call the shots, both these parties have actually LOST vote share significantly. In other words, the results actually do not reflect the “popular will.” As this report says:

"It is perhaps the ultimate irony of the Jammu & Kashmir assembly elections - the party that lost most in terms of vote share looks like being the biggest gainer of the elections. That's the National Conference (NC).

Analysis of vote shares based on detailed results shows that the NC lost a huge 7.1% in terms of vote share in the Valley and 3.9% in the Jammu region and yet managed to hold on to the same number of seats as in 2002.”

The report closes by saying that the vote share of the Congress in the Valley is now less than 10 per cent.

The report is aptly titled, “Losers turn winners.”

I feel sorry for the poor people of Kashmir who turned up in droves in the bitter cold to vote. They had hope. Now it is “meet the new boss, same as the old boss.”

The government in J&K is also highly centralized, in keeping with Congress public administration in the rest of the country. Srinagar is a city without a mayor. The CM calls all the shots all over the devastated territory.

Note that democracy seeks to diffuse power, not concentrate it. Which is why I believe only the Swiss practice real democracy. Switzerland is land-locked, like Kashmir or Nepal. Yet it is one of the richest places on the planet. They do not fight wars – but all the citizens are armed. They like trade: The WTO is headquartered in Geneva. (Who needs a WTO anyway?) Rousseau lived in Geneva. Would he call the J&K elections "democracy"? Would Pericles?

The Swiss have no national language. The people speak French, German and Italian and occupy distinct linguistic regions. Just like J&K has three distinct parts: Jammu, Kashmir and Ladakh.

There is a better world than this.

And we must get there.

Soon!

Now for some more bad news: A new report says that the Indian market is “not suitable” for low cost airline services.

It says 5 airports handle 70 per cent of traffic. Further, there are no secondary airports. And there is very little air connectivity outside the 5 mega metros. The report concludes by advising entrepreneurs to stay away from this field.

I have no hesitation in saying that it is our The State that has killed this industry – an industry that was keeping the customer happy; that too, in a country where surface transport is horrible. This was Progress.

They killed it.

On Solid Paper Money

Apparently, Ben Bernanke is coming to India.

When George Bush came to town, he was greeted with this article of mine in the ToI: “False Currency.” I had actually titled the piece “Counterfeiters Inc.” and I am happy to report that a senior banking journalist, Mythili Bhusnurmath, has quoted this ditty to greet Bernanke:

Dashing through the air,
In a packed-with-dollars plane,
O'er Wall St. he goes,
Laughing all the way.

Dollars on his wings,
Making spirits bright,
Oh, what fun it is to throw,
Dud dollars to all in sight.

Oh, jingle bells, jingle bells
Jingle all the way
Santa 'Ben' is coming to town,
Riding on his plane.

A month or two ago,
We thought we'd take the ride,
But soon recession came,
And now there's nowhere left to hide.

The cost is 'zero' now,
So borrow all you can,
And if you can't repay,
Why turn to 'Ben' again.

Oh, jingle bells, jingle bells
Jingle all the way…

Yet, modern “macroeconomists” invariably fail to understand money. To truly understand what money is it is better to turn away from all the confused economists, and turn to the subject of Law.

In any market exchange, “real” goods are exchanged. Before paper money, hard money like gold, silver or copper were exchanged. The introduction of paper money was based on the idea that the paper note is a “property title” that entitles the bearer to redeem the note for hard money on demand. This “promise” (which is a valid contract) is still printed on RBI notes. But the RBI’s (and the US Fed’s) paper notes are not convertible into any hard money on demand. They are “property titles without property.” This is what makes for continuous inflation. Inflation robs the poor, savers and others on fixed incomes. It benefits borrowers. This destroys the “character” of society. Remember how Max Weber said the Protestant work ethic gave rise to the spirit of Capitalism. An important aspect of this work ethic was thrift. This virtue is destroyed by inflation.

The solution thus lies in a legal system that outlaws all property titles without property. Private bankers will therefore issue notes backed 100 per cent by specie. I had earlier tinkered with the idea of an “option clause” on notes that would allow for the option of delaying redemption for a specified period, but now I reject this idea. Such option clause notes will drive all solid notes out of the markets: Gresham’s Law. And, what is worse, there will be enough room for such bankers to issue a certain percentage of “property titles without property.” This will be inflationary. And it will also, in my opinion, be a corrupt banking practice. Under the Rule of Law simple general rules should hold sway. That is, the paper note is a property title. It is to be redeemed on demand. Period. Once this is The Law, let private bankers adjust and play the game by these good rules. And let the mass of the people, wretched and poor, cheated so long by these counterfeiters, understand The Law as it pertains to Money. After all, what governs a society is opinion – especially opinion on The Law.

And what about Bernanke?

Well, Mythili said it all in her cute ditty.

The cost is 'zero' now,
So borrow all you can,
And if you can't repay,
Why turn to 'Ben' again.

The loon is heading towards hyperinflation. This is the "end game."

Also read a legal judgement on paper money from the point of view of Muslim law. Property titles without property are a fraud under Islamic law.

It is The Law of The Land that we must change.

It is not enough to throw one party out and get another party in - this, while all the bad and repressive laws remain. Governance is nothing but The Law.

Did I hear someone ask: "How do we get from here to there?"

Well, pump the donate button and then watch me raise the decibels.

We gotta fight.

On Shoddy Journalism, etc.

The Economic Times asks a question today that is utterly befitting an ignoramus: “Is war the way out of a recession?” If widespread destruction is a good idea, why go to war? Why not just advise everyone to blow up their homes and build them again? Smash your cars and televisions, folks, and buy new ones. What utter duds!

Barun: Please send The Essential Frederic Bastiat to the editors of ET with my compliments. They need instruction in the “broken window fallacy.”

Yet, the news emanating from our The State indicates the crying need for good economic journalism. Our The State is up to no good as usual.

For one, it is giving sweeping powers to its misproductive bureaucracy. Now, you can be jailed for not supplying correct data to a government baboo. Good economic journalists should read Murray Rothbard’s short article against government statistics. And call for the shutting down of this useless bureau.

Then there is the Delhi sarkaar with its new proposals for taxing cars, imposing a congestion fee, hiking parking charges, taxing the use of the Noida expressway and so on. The “plan” is to improve the buses. But why do we need government buses? Or do we need world-class roads, designed for the safe and speedy movement of cars? – upon which we already pay huge taxes. We already pay a huge cess on petrol and diesel, dedicated to the Central Road Fund. And cannot more revenue be generated by allowing the free retailing of alcohol – instead of this ghastly State monopoly? What about taxes on gambling? Or erotic dance? Or cannabis indica? Why restrict your taxes to the Tata Indica?

In reality, these taxes will be swallowed up. A rumour I heard on the street is that the chief minister’s son is pretty big in the bus business. The Bus Rapid Transit Corridor near my house is a disaster, the perfect example of “planning failure.” Indeed, both the Ring Road and the Outer Ring Road are disasters. And they want to impose higher taxes on cars!

They want to ply buses. They license the autorickshaws. They build these ghastly, unsafe roads. They sell the booze. They teach the kids.

We need economic journalists who can see through their dastardly schemes, and raise loud shouts against the establishment.

Of course, economic journalists should also possess an exact understanding of money. It seems that the simple people of Kerala have just that, an innate sense that only gold is money. Kerala is a huge market for gold.

There is also an interesting article by a senior Indian Muslim politician on how the Pakistani State spreads hate propaganda against India through its textbooks. This should serve as a warning to us in India. Our The State cannot be allowed to occupy the commanding heights of education. Indeed, no government on the planet should be allowed to do so.

Knowledge Must Be Free.

Appeal

Dear Reader,

I am often asked the question: “Well, liberty and free trade are fine, but how do we move from here to there?”

Well, even before any direct political action is contemplated, a certain critical mass must be convinced. And these must be the elite, who will go on to convince others.

The Antidote Blog is dedicated to this cause.

First, to the cause of Truth.

Second, to the cause of Justice.

And third, to the cause of Liberty.

If you believe that Antidote is doing a great job, and that this great job is worth doing, then send in your encouragement: Donate to Antidote. You can find the donate button on the right by scrolling down.

If Antidote is leading the Campaign for Liberty in India, there must be “campaign contributions.” This is basic to the “logic of collective action.” We cannot have “free riders.”

But we cannot use force either.

This is an appeal for voluntary contributions, all of which will be individually acknowledged.

Thank you,

Sauvik Chakraverti
Sole Proprietor,
The Antidote Blog

Retail Therapy

Work is disutility.

Shopping is fun.

Reflect a while on this. Pondering over these truths will help clear many cobwebs in your mind. Like Chacha Manmohan S Gandhi’s “employment guarantee.”

Chacha is maximizing work – a disutility. In either case, the loose spending of every IAS district officer in the land is funded by taxpayers, who had “worked” to produce that wealth. We work to gain utility. We produce something useful with our work – like these words that I am now producing. We do not work in order to produce work for others. Chacha is nuts.

What would I maximize?

Why, the shopping experience, of course. So that after we have sold our output, we can exchange our surpluses for the best goods the world can offer. I would institute unilateral free trade. I would abolish the customs department and all octroi too. The entire sub-continent would become the world’s largest duty-free trading area. Every shop – even the paan-bidi shop – would be a duty-free shop. We would all succeed as consumers. It is in consumption that utility lies. Not in work.

The foolish idea of maximizing work while simultaneously closing all domestic markets to foreigners has deep roots. Gandhi embraced the charkha in order to maximize work. Gandhi disapproved of machines because they reduce work. Rahul Gandhi’s khadi kurta-pajama – the uniform of scoundrels – shows that this false idea of Gandhi is still one of the “core principles” of the Congress party. Note that Rahul Gandhi himself does no work. Yet, he wants to maximize work for all of us. And kill us as consumers too. Chacha is his party’s chosen instrument. Chacha is a “loyal” Congressman. Kamal Nutt is another “loyal” Congress gangster.

What can be done?

I suggest a strong dose of “retail therapy.” Chacha, Rahul, Sonia and Kamal Nutt should be taken to one of the new shopping malls in Delhi and forced to shop till they drop. That will teach them where utility lies.

And why don’t you, dear reader, do the same. It is the shopping season. Discover how much fun it is. How many fabulous goodies you come to acquire, which will give you so much happiness.

But be careful of not shopping till you drop. Be smart. Keep your mind ticking on the law of diminishing returns. Shop till you are ALMOST ready to drop. Then stop. And think.

We are ruled by Nutts Inc.

Good Vibes On Christmas

Since Christmas is a day of peace and goodwill, let us ignore the war drums that are still being beaten (on both sides) and turn our attention inwards, to enormous problems we all face that have nothing to do with Pakistan or Islamic terrorism.

At the outset, let us agree that life in an average Indian city or town is a daily nightmare.

This, while our The State spends the money of urban taxpayers on the charade called “rural development.”

Here is a story from today’s Mint on why garbage does not get lifted in any of our cities – and it is an interesting point that one of the persons quoted says “garbage is a mafia business.”

Hell! If garbage is a mafia business, the whole of our The State must be a mafia business too.

The greatest challenge facing Indians today is making our urban habitat livable.

Here is a Rediff poll on India’s 10 best cities. I daresay if the poll was on India’s 10 worst cities, the same names would occupy the list.

We do not have enough cities. We need to build many, many more. The USA is 350 million people living in over 200 cities. We are 1000 million people with just 5 big cities. 65 per cent of urban Indians live in these 5 mega-cities. Cheek-by-jowl. Overcrowded. Filthy. Unsafe. Pakistan is not responsible for any of this. City traffic is better managed in Sri Lanka than in India.

Our The State has more or less destroyed our “civilization” – a word with its root in the Latin civitas, which means “city.” The Indus Valley Civilization is called so because there were many cities along the river, like Mohenjo-Daro, Harappa and Lothal. These ancient cities all had elaborate drainage systems that worked - and still survive. Modern Mumbai floods up with every rain.

There is something seriously wrong in our own country – and our The State is the root cause of it all. Let no one go to war under its banner. Peace. Goodwill. Trade. Let us use words that give good vibes on Christmas Day.

Christmas in also a good day to think of charity for the poor. Our The State practices “false philanthropy.” Of this there can be no doubt. What can be the best gift we can easily give the poor?

I would say: A wide footpath. Like Calcutta’s Chowringhee.

Let any poor person who wants to shift to a city get a safe place on a footpath to sleep the night. Let there be facilities nearby for washing etc. And let us city-folk encourage these rural migrants to learn one skill quick and enter the urban division of labour. And, most importantly, let no policemen rob them of their surpluses when they conduct their businesses on the public streets.

Wide footpaths, 600 free trading cities, 6000 free trading towns – this will give the rural poor a “foothold” in the global, urban market catallaxy.

Poverty will be wiped out in one generation.

Merry Christmas to one and all.

On A Private Law World

The news that parliament passed 8 bills in 17 minutes, without any debate – rather, amidst a din – should make us pause to reflect on the true meaning of the word “law.”

More specifically: How is good law made?

Is this “democratic” method of making law, which is cramming 500+ rowdies into a room and expecting good law to emerge as a result of their “proceedings,” the best method of making law – that which is binding on the whole community?

I would insist this is simply NOT the way to arrive at good law.

Good law is not collectivist. Good law is individualist. It is “found,” not “made.” It is found when two learned lawyers argue their client’s cases before an impartial judge, citing previous decisions in similar cases. The judge either goes by past decisions or sets a “precedent” – whereby the law takes one small step forward. This law-making process mirrors the market, where individuals enter into exchanges with other individuals.

Legislation is not law. If we want Liberty Under Law we must insist that legislation, or the “public law,” be restricted in its scope to the organs of the government. Legislation can control the police, the civilian administration, the tax bureaus etc. Legislation cannot be imposed on a free society.

So how does society derive its laws? Simple: We the people live under “private law,” which we make ourselves. Note that any contract signed by two people is “law” binding on them both – but it is private law. In the same vein, any injury is a tort, and compensation is paid to the victim without resort to the “criminal law” of The State. There are no “crimes against The State” in this private law world. All crimes are torts against individuals. Thus, my pet peeve, legislation criminalizing the cultivation, sale and use of ganja, would simply disappear from a private law world.

This is Liberty Under Law.

Indeed, this is the “Sovereignty of the Law” – because even a “sovereign” parliament cannot amend this law. The parliament is “under law.” The State is “bound by a law that it did not legislate.”

A Second Republic Awaits.

Fight The Better War

The war drums are still beating.

Of course, the war with Pakistan never stops – see Siachen, where we have been fighting continuously for over 25 years. I was there in 1984 – and war was very much there.

Note that war is a convenient game for our The State. The enemy changes. There is a huge diversion. And we are close to “elections” – our much-celebrated “democracy.”

They’ll pull every trick in the book to make us feel that they are our legitimate “leaders.” With war, the politicians will be on TV morning, noon and night. Cricket, Bollywood etc. will all be eclipsed. They will literally “steal the show.”

I despise war. I am a free trader. I champion unilateral free trade. War is barbaric. But then, our leaders don’t believe in the morality of markets. So they are condemned to remain barbarians.

Here is Donovan’s “Universal Soldier.” My song.

If war does break out, I will be reminded of a game I used to play as a kid with my cousin Bhombol. The game was called “India – Pakistan.” Sometimes he’d be India, sometimes I’d be Pakistan – and we would fight. And fight hard. Till exhausted. War with Pakistan is an old game that has yielded nothing for 60 years.

What about the “War on Poverty”?

Here is an interview with Professor Abhijit Banerjee. He is Ford Foundation professor of economics at the Massachusetts Institute of Technology, USA. He co-founded the Abdul Latif Jameel Poverty Action Lab in 2003.

Whereas Adam Smith studied the “wealth of nations,” this man studies poverty. He begins by saying that the poor were unaffected by the boom so will be unaffected in a downturn. He does not believe inflation affects the poor. He is a firm believer in government action to “help the poor” – but if you read between the lines, he is admitting that the system has failed the poor.

Only one thing can truly help the poor: Self-help. Liberty Under Law is all they need.

The rukawats have all gotta hit the road – and the rukawats are all part of our The State. The same State that is going to war – to “protect” us. Like they protect Bajaj, Tata, Birla and Ambani – and the CII. Which is why Kamal Nutt is a “one man roadblock” to free international trade. They don’t want trade. They want War.

But how about the War on Poverty?

Let’s fight the better war – under the Flag of Liberty.

And as far as personal security is concerned, here is a report on a new urban combat technique that is being widely learnt in Mumbai. The real battles against terrorists are on city streets – not distant battle-fields. Learn self-defence. And get a gun too.

Another story says that the VIPs of India, numbering a little over 13,000, are guarded by 46,000 policemen. This will probably double after a war. Or even during the war.

And wee the peeple will remain insecure.

Principles: Theirs and Mine (Take #3)

As a slew of Nobel laureates tour India, Mint lets out a yawn.

Yet, what Amartya Sen said woke me up.

Speaking at IIT Madras, Sen supported the practice of government-mandated “reservations” for SC/ST/OBC etc – the bane of India.

Not far from where he spoke, indeed, less than a hundred kilometers away, poor villagers are protesting government takeover of their meager acres to “promote industrialization.”

And there is a link between the two – and the link is the “socialist principle”: which is, to take from one and give to another. This is Robin Hoodism: the principle of the predatory State.

But it is no “principle” – in the sense that no “general rule” can be derived from it.

As Hayek said, “Welfare admits to no general rule: some will place it here, and some will place it there.”

Amartya Sen wants to place it here, and the land-grabbers of the Tamil Nadu sarkaar want to place it there.

Which is why I insist that politics is nothing but a clash of principles.

The liberal principle is “To Each His Own” – and this is a very sound principle upon which to base The Law of The Land.

Place the socialist principle On High and you have "universal plunder": The State becomes "that grand fiction by which everyone tries to live off everyone else."

With "To Each His Own" there is No Plunder. There is The Law that Protects Every Individual.

As an aside, there is news of corruption in the Nobel academy.

The Economics prize should anyway be suspect, since it is awarded by the Swedish Central Bank. History has it that this was the first bank in the world to practice the fraud of fractional reserves. The Bank of England, that very English corruption (and Keynes was English), was modeled after the Swedish bank. They award the Nobel prize in Economics.

Joseph Stiglitz, another Nobel laureate touring India these days, delivered the Lakdawala Memorial Lecture in Delhi. Professor Lakdawala was a “great” central planner of the distant past. Here is this Nobel laureate singing the praises of Keynes in today's Economic Times.

Principles, I say!

In the meantime, our The State has gifted 4.5 million US dollars to Harvard University to set up the Amartya Sen fellowship. Talk about cronyism. Or the “philosopher-king.”

But what is our The State doing, (mis)guided by this philosophy?

The news has it that the chief statistician of our The State is going to construct two new statistical indices: one, the Index of Infrastructure Growth; and two, the Index of Infrastructure Utilization.

In a nation without roads!

This is a case of “misproductive bureaucracy” – that is, what is “produced” by these baboos has no utility; on the contrary, it imposes “real costs” on those it purports to benefit. The citizens would be better off if this bureau was closed down and with the savings some real roads constructed.

Note: Central planners need statistics. We don’t.

Principles matter.

And if you want to read an excellent article based on sound principles, here is Kaushik Das’ “Fiscal Stimulus is no Answer” from today’s Mint. Taking a principled Austrian stand, Das argues for real savings leading to real investment. Policy prescriptions are: cut taxes, balance the budget, and allow people to save.

What the Keynesians are saying, give a boost to consumption with higher government spending and low interest rates, attempts to cure the disease with the very same quack medicine that caused it in the first place.

Principles!

Party Manifesto

It seems that in socialist democratic India the only kind of Party we have is The Political Party. Indeed, too many of them - like the pmk.

In a liberal order, Liberty Under Law, there would be many other kinds of parties – like Daaru Party, Ganja Party, Hard Rock Party and, the greatest party of them all, The Rave Party.

The voting public must choose between these two kinds of parties. There is no middle ground. It is either one, or the other. Either we enjoy our parties, or their parties enjoy us – from behind.

Let us start with a small news item saying that a “cocktail party” planned during a Pan-IIT event at IIT Madras was banned because of the leaders of two “political parties” – the pmk (of course) and the dmk. The leaders want to instill “discipline and culture” into graduate students.

When I studied at the London School of Economics, I was delighted to find that the student’s union runs a pub on campus – “The Three Tuns” – and the beer was very, very good. I also have fond memories of a tequila night there. After 18 shots I won the prize – 2 pints of beer! Now that is what I call “higher education.”

It must be mentioned that the professors had a separate quiet bar upstairs, which students could enter only on invitation. I attended Professor Christopher Hood’s “Inaugural Lecture” on the occasion of his assuming the Chair of Public Administration. After the lecture, we all retreated to the professors’ bar and sipped sherry.

This is Civilization.

And if you thought that Goa was home to this Civilization, think again. All beach parties are banned in Goa this New Year’s Eve: the great “security” hoax. Everyone must party indoors, say the netas and baboos whose policies in any case suck the blood of all the highly enterprising shack operators.

Now for the good news:

Dawood Ibrahim is planning a great 53rd birthday party for himself on the 26 of December, at a “secret location.”

As Morrison said, “Weird Scenes Inside The Gold Mine.”

On Legitimate Free Banking

The financial meltdown has affected the typical Indian saver and investor. He is taking his money out of multinational banks and the stock market and depositing them in state-owned banks, believing them to be sounder. And there is going to ensue a “battle for Asian bank deposits,” according to this extremely interesting report in Mint.

Of course, smart Indians are doing better than that: they are buying gold. Here is the story of how the Post Office is selling gold coins in rural Karnataka.

Here is the report on how gold is expected to hit US$865 an ounce soon, up from US$832 now. In times like this, gold is the only safe haven. Even real estate is crashing here.

Since the smart people are moving into gold, what can be said of those who are moving their money into banks owned by our The State? After all, gold is a better asset to hold than the paper money issued monopolistically by our The State simply because the value of that paper money is in constant decline. While the value of gold is rising.

The most serious questions in the Rule of Law concern banking. Since bankers hold the wealth of others in trust, they must be governed by good law. It is this Law, not State-ownership of banks, which can keep all depositors secure.

Legitimate free banking is based on the legal notion that there are basically two kinds of contracts between bankers and their depositors. One is a deposit that can be withdrawn on demand: the demand deposit. Under the Rule of Law it should be illegal for a banker to lend out any money that is handed over to him for “safekeeping.” Indeed, he may charge a fee to keep such deposits. This means no “fractional reserve.” This means 100 percent reserve banking – as far as demand deposits are concerned.

The second kind of contract between a banker and his depositor is a loan contract. The depositor in this case keeps his money in the bank, for earning interest, on the condition that it be returned at some future date. It is only such deposits that the banker can lend.

And there might be hybrid contracts. The report in Mint talks of modern advances:

“Basic products that have worked in other markets— low-balance transaction accounts, hybrid interest-bearing checking accounts, flexible savings accounts that combine cheque-writing privileges with higher-yield term-deposit features, and no-frills high-rate savings instruments—are largely unknown in India and Asia.”

These are hybrids between the two basic contracts outlined above.

How do we move from here to there?

Simple: Just set up one legitimate bank outside the RBI cartel. It will attract all the deposits. Recall the historical case of the Municipal Bank of Amsterdam, which maintained a 100 per cent reserve from 1609 to 1780. This legitimate bank attracted all the money in Europe, reeling under money and banking scandals.

In reality, the simple but smart Indian people are already moving there – buying gold. This is an act of preference in markets. All that is required is legitimate banking that allows them to use this gold as money. Private money backed 100 per cent by gold.

The transition from here to there is very easy.

This post is written in the interest of all private people who save and who need legitimate banking. They should not be cheated. State-owned banking creates a huge “moral hazard” anyway. Under legitimate free banking there is no moral hazard; rather, the banker is forced to be extremely prudent. And, as Hayek said, all these “prudent private bankers are the overseers of the market economy.”

Tally ho central planner.

Tinkerty-tonk central banker.

Pip-Pip.

Hooray!

The Pope... And The Rukawat

In an earlier post, “Heal the World,” I had written about how the free market unites the faiths of Hindus, Muslims, Parsees, Jains, Sikhs and Buddhists. What about Christians?

Well, thanks to LRC, Antidote readers now have a Christmas present from the Pope himself. In his New Year message of peace, Pope Benedict XVI says:

“If economic activities require a favourable context in order to develop, this must not distract attention from the need to generate revenue. While it has been rightly emphasized that increasing per capita income cannot be the ultimate goal of political and economic activity, it is still an important means of attaining the objective of the fight against hunger and absolute poverty. Hence, the illusion that a policy of mere redistribution of existing wealth can definitively resolve the problem must be set aside. In a modern economy, the value of assets is utterly dependent on the capacity to generate revenue in the present and the future. Wealth creation therefore becomes an inescapable duty, which must be kept in mind if the fight against material poverty is to be effective in the long term.” [Emphasis added.]

Reminds me of what the late Peter, Lord Bauer once wrote:

“Poverty indicates just one thing – the absence of economic achievement. Economic achievements are made in markets.”

The pathway to ending poverty forever lies in free markets, free trade and complete economic freedom. In other words, Liberty Under Law.

I am extremely happy that the Pope has endorsed this point of view. So now all major faiths are agreed. This presents a historic opportunity for liberals in India, who are battling against godless commies, socialists and communalists. We have God on our side, in the marketplace.

Ultimately, it is a moral question: How can a human being survive morally and with justice? The only answer: Through peaceful, voluntary exchanges in markets. The immoral way is plunder, which includes living off taxes. This is the moral question that is being missed in the USA today, in discussions on their tax-funded “bailouts.”

Hence, it saddened me to read about the ouster of over a 100 women hawkers from a market in Chennai yesterday. They had been selling there for over 25 years. You cannot do this to the poorest businesspeople in the country while "protecting" Bajaj, Tata, Birla and Ambani. In India, liberalism must be based on a strong moral argument.

But this police atrocity on the old, established fish market only proves my point:

Rukawat Hatao. Gareebi Apnay Aap Hutt Jayegi.

Remove all the obstacles. Poverty will vanish on its own.

On Shashi Tharoor's Politics

The news says Shashi Tharoor is all set to enter politics, batting for the Congress. He is, of course, a great admirer of Nehru. He has worked as a baboo for the UN all his life but could not make it to Secretary-General. Hence he resigned from the UN, returned to India, and began dabbling in politics. The report says that Tharoor would make a good foreign minister. He will be contesting the next Lok Sabha elections from Thiruvananthapuram (Trivandrum, Kerala).

In the meantime, an editorial in Mint says that the new legislation against terror, and the new agency created thereby, are “certain not to work.” The following quote says it all:

“NIA, once established, will have no power to investigate a case without the approval of the Union home ministry. The Union government will have 15 days to take a decision in this respect.”

This is not an effort by our The State to take any kind of preventive action, nor is it an effort to ensure a quick, coordinated response to a terror strike. It will take some weeks before the new National Investigative Agency begins its work.

Weeks!

So there is no alternative to the citizenry demanding the right to keep and bear arms.

Note that Ratan Tata is doing just this: Here he is saying that he will create his own anti-terrorism mechanism. All of us must do so too. That is the only way we can be secure.

And what song is Shashi Tharoor singing? Why, “The Diplomat’s Song” of course. Here he is asking for more diplomatic pressure on Pakistan. Good thing is that he is not beating the war drums. Diplomacy is still better than war – but it is inherently statist, and comes from On High. It has nothing to do with our insecure lives on the ground.

And never forget that 275 people, on average, die every day on our unsafe streets. To fix this requires no diplomacy. These deaths are not rooted in Pakistan.

Will our The State ever do what it is supposed to do?

What do you think?

Keep the comments flowing, dudes.

On Housing Under Socialism

The contrast could not be more striking:

In the USA, the problem is that there is an oversupply of housing.

In the capital of socialist India, New Delhi, for the 5,66,906 people who had put up an advance payment of Rs. 1,50,000 for a DDA flat, only 5238 flats were allotted by lottery. That is less that 1 per cent. Here is the report.

DDA stands for Delhi Development Authority, which is a monopolist on real estate and land development in the capital.

Note that the DDA still gained: every applicant who did not get a flat lost 5000 rupees to the DDA. That is a neat 281 crore rupees (2.8 billion). What a rip-off.

I once lived in a DDA flat. It was horrible.

And these days, I often visit the DDA locality in Vasant Kunj – and it is a hell-hole. The roads are bad, the markets are bad, there is no place to park, and the flats are extremely ugly, a blot on the sky-line.

Yet, if you take any of the broken roads leading into the area behind Vasant Kunj, you come across lavish farmhouses. And you see that there is an abundance of unowned land just lying idle.

So there is enough land to build decent houses for all.

But there are not enough roads – because this is a government monopoly.

Hence there are not enough flats for Delhi-ites – because the DDA is a monopolist exploiting the consumers.

I spent Sunday afternoon with friends in a DDA flat in Munirka – an ugly, congested DDA locality in upmarket South Delhi. We discussed how DDA localities could be demolished and rebuilt by private developers. All that is required is that present flat-owners have property rights in the new development.

So my drastic solution: Shut Down the DDA.

And then demolish and rebuild every DDA locality.

While doing so, relay and redesign all the roads.

Of course, someone else will have to do the job – because I will be on the Konkan Coast, extolling the virtues of Free Trade.

Which brings me to an excellent piece by Niranjan Rajadhyaksha in today’s Mint, where he calls for free trade. He says the WTO is caught in a “Nath Equilibrium” and that this Big Nutt is widely regarded as a “one man roadblock.”

Rukawat Hatao!

Garibi Apnay Aap Hutt Jayegi!

A Gun Under Your Pillow, Or Our The State

Topping the news today is the report that Chacha Manmohan S Gandhi has cleared the decks for the creation of a new National Investigative Agency to look after the investigation of all terror crimes and also – this is the interesting part – deal with drug trafficking.

War on Terror and War on Drugs: Just like Uncle Sam.

Looking deeper: Manmohan seems to want to keep the top police bureaucracy happy: Here is the report that, after the intelligence failure in Mumbai, the heads of the central intelligence agencies are not going to be touched.

Everything changes, but everything remains the same.

Note that this is an investigative agency. It will get into the act after the crime is committed. What about prevention?

At Antidote we have consistently held up the law-abiding citizen’s right to keep and bear arms, to protect himself, his family and his properties.

Yet, one reader, Rambodoc, has recently posed two questions:

“Don't you think preserving law and order within society and protecting citizens from hostile aliens is the legitimate task of Government? The question is not 'how would private security work' but 'why won't the Government provide security?'”

I think it would benefit us all, including our netas and baboos, if we WAKE UP to the happy fact that our The State is no longer a monopolist on the use of force. This monopoly has steadily been eroded, and now vast swathes of the landmass are “controlled” by illegal armed groups – all “non-State actors,” to use the current terminology. Therefore, the only way to proceed is to further diffuse the power of arms - down to the last Individual.

Here is an article from today's Mint by Mrinal Pande on how the country-made gun, “tamancha,” is manufactured, owned and used in Uttar Pradesh. This quote is illustrative of the fact that the police have more or less stepped aside from their bonafide duties:

“The police is not a problem but an integral part of the business, according to knowledgeable sources. The manufacturers claim they need to give a regular cut to local authorities who thereafter turn a blind eye to the trade. Occasionally, the police may also procure kattas or tamanchas from these factories. These are then ‘planted’ during raids.”

Under the circumstances, the following appears sensible behaviour on the part of the honest villagers:

“The villagers are also avid buyers of firearms in this region. Everyone here who must guard his crops and share in irrigation waters and travel to cities every now and then carrying cash, sports a tamancha. And having a gun under your pillow is considered a style statement in villages.”

So there we have it. Some heat under your pillow, or our The State from On High.

Speaking of “high” reminds me of the spliff I was planning to smoke, what with some fine Manali being presented to me by some friends the other day.

Here at Antidote we are also opposed to the War on Drugs.

And Boom Shankarr 2U2!

The Planner's Evil Eye

Say Happy Birthday to the Maruti 800 folks. She turns 25 today. And in that time, many, many Indians have become car owners. This is something to celebrate.

I remember Delhi before the Maruti 800. Only diplomats had decent cars then – and how we lusted after them. Wee the people had scooters – and these came with a 10-year waitlist. DDA flats had “scooter garages” for all residents. And the roads of Delhi were pretty much deserted.

Today, the streets of Delhi are awash with great cars: the Maruti 800 is not that common. DDA flatowners have 2 or 3 cars per household – and they fight wars over parking space.

Yet, the nationwide average is still very low: we have less than 15 cars per 1000 people. This figure jumps to between 60 and 150 in the big cities. The USA averages 850. This is the promise and potential of free markets and Capitalism: that most Indians will own cars someday soon.

As a blogger, I know full well how technology has empowered me. The car is empowering to its owner. Which is why the 3Cs of today are Car, Cellphone and Computer. Everyone should own all three.

But there are legions of people hell-bent upon ensuring that automobile ownership in India does not rise; that our people are not empowered thus. At the top of the list are the climate change wallahs. The ToI carries a story on their dream scenario. The headline says it all: “Climate Plan Wants Drastic Cuts In Private Cars.”

Yes, of course cars need parking space – but in a free market, entrepreneurs will supply parking towers in city centers. Yes cars need roads – so build them, you morons who monopolize the supply of roads. But this is the precise area where our The Moronic State fails miserably. As this report’s headline says: “UPA Fails To Finish A Single Highway Project.”

Note that we do not possess any real highways in India. A real highway exists not to provide access to roadside properties. That is a function of ordinary roads. A real highway exists to provide movement between two points, by-passing all roadside properties. By that token, our national highways are all “notional highways.” This is State Failure, a failure of central planning, and a failure of public goods theory – of which the Great Czar of Education is miserably ignorant.

There are two ways in which this country can head. One is the “universal opulence” Adam Smith wrote about. The other is back to the central planner, his public transport, and his “climate plan.” Note that the newspaper report says that the climate planners are “alarmed” at the rise of car ownership. They are not “delighted” – as I am, by the good fortune of the ordinary man. They have the “evil eye.” They hate progress. They want to entrench poverty. And they do not realize that the most important problem facing the nation today is transport. We need a transport revolution. They are just standing in the way.

Read my “The Car… And The Planner,” recently published in Mint, by clicking here.

I also found this article linking green technology with free trade quite convincing.

My take on the climate change wallahs - the Al Gore - IPCC agenda - is available here. It is entitled, "Just Hot Air."

Go ahead, read it.

America, RIP

On this bright Sunday morning, let us turn our attention to what is happening in America. After the great $8 trillion bailout of the financial sector, the $15 billion bailout of the US car companies seems small change. It is. Ron Paul has rightly called it a “distraction.”

But let us look deeper, and into our own recent past.

During our socialist heydays, a phenomenon that repeated itself with unerring regularity was the “nationalization of sick industry.”

The modus operandi was as follows: Government policy would encourage credit flow into certain sectors. Thereafter, when these industries proved themselves to be unprofitable, the government would step in and take over the sick companies. Thereafter, all losses would be borne by the taxpayer. Bureaucrats would gain control of the sick companies and profit privately. Unions would gain too.

In other cases, government intervention would cause losses in an entire sector. So there was nothing left for the government to do but nationalize it. This happened, for example, in the textile industry. The government-owned National Textile Corporation, which still exists, was made up of over 100 bankrupt private textile mills. NTC is still bankrupt. The taxpayers lost. The unions gained. As did the baboos.

This is exactly what is going on in America today. And this has been stated by Congressman Ron Paul in the US House of Representatives. He said in the house that America is nationalizing vast swathes of economic activity through a strategy of stealth. See the video here.

What can I say now? Except that the USA is heading down the highway to hell. A highway we Indians have bitter experience of. Their taxpayers will lose, the US dollar will hit rock bottom, and there will be a huge amount of inflation. America will go down the tube.

There is only one word that comes to mind: hubris.

And maybe another: ignorance.

So let us be smart in India, and choose real Capitalism.

For A Second Republic

Nandan Nilekani makes an important point in his timely article in the ToI today:

“I doubt many in Mumbai even know who the mayor of the city is. It's a largely ceremonial post. There was no powerful official representing Mumbai's city administration simply because the administration has no power to speak of. The responses in the immediate aftermath of the attacks orders to the police and military, evacuation operations flowed from above. An entire tier of government at the local level was non-existent.”


But why just Mumbai? There are no institutions of urban local self-government throughout India.

Indeed, as far as local self-government is concerned, our The State has always spoken of panchayati raj based on Gandhi’s vision of self-sufficient village republics. To this day, this is all that Mani Shankar Aiyar jabbers on about. But if we look for achievements, we see that all that panchayati raj has accomplished is the politicization of village life, converting millions of villagers into political clients of our The State.

Powerful Mayors of prosperous cities are never clients of The State. The Lord Mayors of London have always been among the richest men in the kingdom. The institution itself dates back to the early 12th century, and is older than the Magna Carta (1215 AD). Indeed, the then Lord Mayor of London was present at Runnymede when the hapless King John signed “the First Statute of the Realm.”

In modern terminology, the “principle of subsidiarity” is used to show how powers are best divided between the various tiers of government. However, the true meaning of the term goes a little deeper than that. It means that if society is in need of anything, it must first try the market. If businessmen cannot provide the good in question, society must then look towards private voluntary organizations and charities. Only when both these fail should government be called in – and that too, at the lowest level: the city, the town, the village. Then, if there are goods and services that this lowest tier of government cannot supply, these should fall upon higher levels. In India we need to strictly apply the principle of subsidiarity and redesign our government. We must invert the pyramid.

This calls for a New Constitution.

A Second Republic.

See my recent article on why we need a Second Republic here.

On Right Thinking

The Ayn Rand Institute has come up with an idea that I have been advocating for long: To get rid of her surplus stock of housing, the USA should staple a green card onto every property title that any foreigner acquires.

In other words, there is no need for any government “stimulus.”

All the solutions lie in Liberty.

The Ayn Rand Institute says:

“At a time when Americans are suffering from an oversupply of housing, it is tragic that the government continues to forcibly prevent millions of peaceful people around the globe from bringing their wealth, talent, and ambition to this country.

“Imagine if the number of annual immigrants increased from around 650,000 a year to, say, five million. Virtually overnight we would see money pour into the American real estate market, as millions of new businessmen and workers bought and rented homes. Not only would this eliminate the oversupply of houses, we would enjoy the broader, long-term economic benefits of welcoming legions of highly skilled and motivated individuals into the American economy.”

In India too, much bull is being generated on Chacha Manmohan S Gandhi’s “stimulus package.” We should all clamour for Liberty instead. If ganja, gambling, pornography and prostitution were legal, and if international trade was unilaterally freed, there would be millions more legal businesses – and that is all the stimulus we need. Vipin Veetil adds that the Dawood Ibrahim Problem would be solved.

In other words: The financial meltdown has occurred because of governments. Therefore, all solutions must lie outside government, in Liberty. It is doubly foolish to run to the government for solutions to problems that over-government has created.

I therefore find Soli Sorabjee’s PIL “for a direction to the Centre to equip and train the police making them capable of tackling terrorists” particularly foolish, and symptomatic of our “illiterate bar.” It means that the enemy gets the guns.

In the case of security too, we must think of solutions outside our The State. That is, private locks, private alarm systems, private guns, and private security.

This is how we must think.

Think!

Heal The World

It is indeed noteworthy that Eid celebrations throughout India were muted, with Muslims wearing black armbands to protest against terrorism. The Imams of Jama Masjid and Fatehpuri also condemned terrorist “jihad,” calling it a crime against all people.

We therefore have a situation tailor-made for liberal politics and the moral idea that we all seek to survive through free markets.

This is an idea that can unite Hindus, Muslims, Sikhs, Parsees, Jains and even Buddhists. But let us begin with Hindus, the majority, and Indian Muslims, the world’s biggest minority. These communities must be united. This must be the goal of liberal politics.

We have had enough of “divide and rule,” ever since the partition of Bengal in 1905 by that idiot Curzon. It is an important historical fact that the Indian Muslim League was set up in 1906 – in Dacca. Since then, the country has been divided into three parts – but the Hindu-Muslim problem remains. Only a principled liberalism can heal the body politic and unite all faiths.

Both Hinduism and Islam are religions based on free markets. The Prophet Muhammad, peace be upon him, was a trader, as was his wife Khadija. The first Muslims were all traders. There is a story told that when these first Muslims arrived at Medina, the Prophet asked the citizens of Medina and his followers to “fraternize in Allah.” The Medinians rushed to share their belongings with the new arrivals – but they refused, saying in one voice, “Show us the way to the market, and we will earn our keep by working.” The Prophet is on record saying, “He who makes money pleases Allah.”

Similarly, Hinduism discovered the idea that honest profits that accrue to an individual are also beneficial to the whole of society: Shubh Laabh. We have an entire caste group of traders. Traders formed a separate “varna” in Hindu society of old. Indeed, Hindu traders are among the smartest in the world. In London they say: “A Bania can buy from a Jew and sell to a Scot and still emerge with a profit.” All the corner shops in London are owned by Hindus and Muslims from this sub-continent, so much so that there is an Asian rock band in England called Cornershop.

Of course, Jains, Sikhs and Parsees are all people whose lives are based on the morality of free markets. Parsee are all urban traders, and their surnames – like Daruwallah and Bandookwallah – are based on the urban “division of labour.” There is a market inside the compound of the Golden Temple in Amritsar. Almost all Sikhs earn their living through markets – Manmohan and Montek being exceptions to that general rule. Non-theistic Jains are all invariably businessmen of high quality. And if we look at Buddhists – the Tibetans have become the biggest traders in woolen sweaters throughout India. Their momos and thukpas are now household words in every city. And, with freedom, undoubtedly their great rice beer, chhung, would become famous as well.

Liberal politics in India should therefore work towards uniting all the people, of all the faiths, in the idea of free trade and free markets.

Away with socialism!

Away with divide-and-rule!

On The Konkan... And Iron Ore

A small news item on Bharat Sarkaar reducing export duty on iron ore prompted me to inform my readers of the sheer senselessness of iron ore exports, as seen on the Konkan Coast.

I was looking out of the airplane window. The plane was about to land in Goa, when it suddenly decided to take a wide sweep over the sea. And so I saw them all – all the iron ore bulk carriers, over a dozen of them, waiting to load up at Mormugao Port. Yes, the hills of Goa, which could be great real estate, are being exported – while nothing is being imported. Not even tourists: Here is a lament that the port does not even have a proper jetty for cruise liners.

Just across the southern tip of Goa is Karwar, with its long beach, its deep port, its verdant hills and a few little green islands dotting the sea that make it probably one of the most beautiful places on Earth. But the small town is a shambles. And all that the deep-water port is engaged in is exports of iron ore. Thousands of trucks carrying the hills of the Western Ghats travel to the port every day, overladen with this cheap ore, thereby ruining the highway. Karwar could be a free port – like Hong Kong. Now, she exports soil and imports nothing. This is “Foreign Trade Policy.” Oh, how I yearn for a policy-less government.

While Karwar is the northern tip of the Karnataka coast, Mangalore is its southern tip, close to Kerala. Mangalore too has a deep-water port, and there too all the action revolves around the export of iron ore. Nothing else. No imports. And certainly no tourists. The iron ore comes from the State-owned mining firm Kudremukh. I visited their mines often. They lie deep in a national park! Many hills of the national park have been gouged out and exported. The mining town looks poor. It could do with a fresh coat of paint.

I have often traveled between Mangalore and Goa, by car and also by train. There are plenty of other locations on this part of the Konkan where mighty free trading cities can be built – like Honavar. The entire belt is seriously underpopulated – and there is lots and lots of totally unowned land lying waste. This could be developed. With unilateral free trade, this region could become the new economic engine not only of this poor country, but also the world, now reeling under recession. We need to shift the focus from exports to imports.

Kamal Nutt’s Foreign Trade Policy Must Go!

Now for the bad news, which says that this nutt's policy is to continue forever.

India needs more loud shouts for free international trade.

From Delhi... To California

The re-election of 77-year old Ms Sheila Dixit as chief minister of Delhi has only confirmed my thesis that:

1. The Congress is happy with just the BJP opposing it, because then it appears a lighter shade of black.
2. The Congress and the BJP are both silent on many issues because they have a tacit agreement on letting most things remain as they are. There is no real “competition”; rather, there is “elite accommodation.”

Thus, the re-election of this Congresswoman should not be viewed as evidence of good government. In actual fact, life in Delhi has been getting worse with each passing year. The re-election has occurred because the democratic process is rigged.

Note that the BJP’s campaign was based on just two ideas: one, that the Congress is “soft on terror”; and two, that the Bus Rapid Transit idea is a flop. Not a word was spoken on the ugly and inherently corrupt State monopoly-monopsony over the retail trade in alcoholic beverages. Not a word was spoken on shutting down the Delhi Development Authority (DDA), which monopolizes real estate development. These would be first on the agenda of any liberal party, which stood for Capitalism. Such a party would also champion economic freedom, which is extremely low in Delhi today.

Of course, I would not be a candidate. Because I do not fancy taking on the responsibility of running this land-locked megapolis. I have my sights fixed firmly on the coast – the Konkan coast, where I dream of hundreds of brand new free-trading cities coming up. Keep Delhi, Sheila. I’ll take Karwar.

Actually, New Delhi is a disaster because of the Congress. They laid out the roads all wrong. Whereas all over the world, city roads are laid out on a “grid pattern,” the roads of Delhi are laid out in a succession of T-junctions. The idea was to save on traffic lights in an era when car ownership was low. But today, Delhi has more cars than Bombay, Calcutta and Madras combined. And every T-junction is a traffic disaster.

This is basic design failure. The city has to be re-designed. All the roads have to be properly laid out. Ms Dixit has been building flyovers for many years – but they have solved nothing. And the new Metro covers just 30 per cent of the population. So the number of cars on the roads will keep on multiplying – what with the Nano soon to come. There is no “vision” of a great, successful city – as with Shanghai. There is just the desire to keep on muddling along, running the same old rackets – like the DDA and the government shops that sell warm beer in blistering hot weather.

Delhi reminds me of that old song by Tom Waits, “Warm Beer, Cold Women.”

And it looks like things are going to remain much the same here forever. So I’m packing up and heading down to the Konkan Coast.

My song: California Dreamin’ – on such a winter’s day!

Above are the Mamas and Papas, great performance.

This is Jose Feliciano, one voice, one guitar.

And no eyes.

Dream On! On Such A Winter's Day!

For A New Politics

The war drums are still being beaten. The top brass of India’s defence establishment say that they can carry out “surgical strikes” on Pakistan as soon as they are ordered to do so.

Which brings us to the fourth activity our The State is capable of: War.

This sums up its total State response to Terrorism:

Diplomacy, Bureaucracy, Legislation and War.

Note that there is no mention of “politics.”

Except, of course, from Kashmir. Talking about the “new awakening” in India after the Mumbai Massacre, Arjimand Hussain Talib, a columnist for the Greater Kashmir newspaper, notes not only how, for the first time in living memory, all Indians are expressing disgust for the political class, but also how this is ushering in a sea change in the world’s perception of India.

He adds, however, a note of caution: that Indians should not think that Islam is at war with them. He talks about the real tenets of Islam and the teachings of the Prophet Muhammad, peace be upon him. Terrorists who kill innocent people are going against the teachings of Islam, Talib says. He calls for a “new politics.”

I am in fundamental agreement with this view. I recall the day when Arjimand took me to the house of a big carpet dealer in Srinagar. On his wall was a saying, in Urdu and English, which said: “The honest trader will surely find entry into Paradise, there to meet the Prophet, who was an honest trader himself.”

Islam is a religion of traders and free markets. It is not a religion of soldiers.

Since Hindus discovered Shubh Laabh aeons before Adam Smith, there should be good “political vibes” between Hinduism and Islam – if Liberalism entered the fray.

That is the “political” path to lasting Security.

Note that in the meantime, the terrorists are giving it good to the the US and NATO forces: 160 Humvees were torched in Peshawar yesterday. They were supposed to be used in Afghanistan.

At least I take comfort in the fact that the private security industry in India is expected to be worth over 50,000 crore rupees (500 billion) in a few years. It is growing at over 25 per cent annually.

That’s the antidote: a new politics, and private security.

The Serpent's Song, Defanged

Everyone should see the Disney cartoon film, Jungle Book. And they should take especial note of Kaa the Serpent, who mesmerized his victims with the song, “Trust In Me.”

Kaa is our The State. And the trick to survival lies in NOT trusting our The State.

So take the spin in the headlines today:

1. Pakistan is to be named a “terrorist state.”
2. Pakistan to take stern action against a particular terror group within 48 hours – a time-table forced upon them by the US State; i.e., the outgoing administration.
3. New federal agency against terror – with “sweeping powers.”
4. New Law – now that’s a laugh. I thought murder and arson are already illegal here!

Our task is to decipher what exactly is going on. From what I can see, they are engaged in “diplomacy” – a completely stupid statist enterprise. Our diplomats are just another baboo brigade – look at Nuttwar Singh.

Second: they are engaged in setting up a New Government Department.

Third: They are engaged in preparing Legislation – on the “sweeping powers” of the new department etc.

Note: This just about sums up all that our The State can do. Diplomacy, Bureaucracy and Legislation are all that can emerge from our The State, in exchange for all The Taxes we are forced to fork out.

Yet, Kaa the Serpent’s song, “Trust In Me,” is grabbing the headlines. The people (sheep) are being lulled into believing that “something is being done.”

Yet, only a fool will believe that our actual internal problems over security and terror can be in any way solved through these three chosen instruments: Diplomacy, Bureaucracy and Legislation.

So don’t fall for the spin. Give the googly the full face of your willow.

And read how the Islamabad Marriot, which was bombed recently, is advising Taj and Oberoi on security. All these swank hotels, in both India and Pakistan, are going to become well-guarded fortresses – with private security.

If this is so, it becomes obvious that every law-abiding, tax-paying citizen should have the right to keep and bear arms.

Amitabh Bachhan has three guns!

Good fellow.

I conclude with a warm welcome to Abhijeet Singh of Indians For Guns, whose comments on my blog posts are a must read.

Comments On The News Today

This morning, the first piece of news that caught my eye is the report of a bomb blast in Peshawar, Pakistan, that killed 21 people and injured almost 100.

Note: Pakistan suffers because of terrorism too.

In the meantime, the new home minister, P Chidambaram, has admitted to “serious security and intelligence lapses.”

There seems to be no agency of our The State that actually works.

Not even the PWD.

How are Indian citizens responding?

The Economic Times reports that many people are going shopping for guns – but the licensing system is a hindrance. A gun dealer is quoted as saying that people without criminal records have a “right” to own guns. Indeed, they do. And gun licenses to such people should be issued without delay or bribery – as a “right.”

The ToI has another report that says business is booming for private security agencies. Better to put your money into buying guns and paying for private security than paying taxes to our The State to fund another “federal agency to tackle terror” – something the new home minister is making noises about.

And private security agencies should be issued gun licenses too.

In the meantime, Chacha Manmohan S Gandhi is about to announce a new “stimulus package” for the faltering economy. His anti-commerce minister, Kamal Nutt, is talking about subsidized loans for exporters. How about a stimulus for importers too, Mr. Nutt?

I wonder why Chacha Manmohan did not take over the home ministry? The reason could well be that he has no experience of hard-core government. He has always worked in “economic ministries” and this is his specialization.

In socialist India, all baboos coveted jobs in economic ministries. None wanted to get into home affairs. Chacha Manmohan is one of that lot.

Yet, in a free economy, there is no need for powerful mandarins to oversee the activities of entrepreneurs in markets. Indeed, The State in a free economy must mainly concern itself with the serious business of policing.

This points to an ideological error on Sonia’s part. She chose Chacha as PM because she believed that running the economy was the most important task of her government.

And Chacha agreed.

Nutts rule our land.

We Don't Get Fooled Again

A wise man once told me that there are two kinds of economists: one who wish to advise The State with their writings; and the other who want to inform public opinion with theirs. This is also true of journalists.

Thus, the lead editorial of the Times of India today, entitled “Fight it Differently,” is written almost as if it were a speech delivered by the editor at a full meeting of the cabinet. Yet, it is actually written to “inform public opinion.”

The editor says:

“The best way forward would be to build an international coalition, led by the US, to help Pakistan tackle terrorist groups within its border, something that the civilian government is evidently unable to do. Strategic analysts have suggested establishing an international force to root out terrorist bases in Pakistan.
Since there is a UN resolution asking member states to curb terror, India must now work towards a UN Security Council resolution to permit strikes against terror camps within Pakistan.”

The editor recommends, to The State, and to public opinion, that this “complex and patient diplomacy” is the best way for our The State to keep the people (sheep) secure.

It also makes it seem as if all the national security problems of India are rooted in Pakistan. If Pakistan is sorted out by this “complex and patient diplomacy,” all our problems will be over. It makes it seem as if our “civilian administration” is in full control of the entire territory, while Pakistan’s is not. This is the “spin” that the editor’s googly contains. Public opinion is lulled into thinking along these lines.

I believe we desperately need to bring our own country to order.

If we leave aside Islamic terror (and Kashmir) for a while, and look around our own portion of this vast sub-continent, we will see an infinite number of armed violent groups – the Ranbir Sena in Bihar, the insurgent groups in Manipur and Nagaland, the Naxalites, the Maoists, and so on and so forth. In all these areas our The State exists as but a cipher. An open lawlessness prevails. As one IAS officer who served as a District Magistrate in Jharkhand told me a few years ago, “The writ of the DM does not run outside the gates of the DM’s bungalow.” Even in rural Bengal: The Indian Express recently carried a picture on its front page of political goondas carrying revolvers. They were going around rounding up villagers to vote! By force!

And do not get your emotions in a tangle because of the Mumbai massacre.

195 people died in Mumbai over two days. 275 people die on our unsafe streets every day. As Dylan put it, there is “blood on the tracks.”

So don’t point your finger at Pakistan, dear editor, for you have four pointing back at you.

Do not fall for this “spin.” Defend your stumps from this googly. With the full face of the bat.

Then you will discover that our biggest problem is not Pakistan at all.

Our biggest problem is the completely dysfunctional State that holds vast powers over us; powers that are being relentlessly abused. There is no Justice. There are no roads. Policing is atrocious. The rupee is nose-diving. There is rampant lawlessness. Every urban area, every town, and every city, is a shambles – while Mani Shankar Aiyar talks of “panchayati raj,” an idea that only promotes State Clientelism in rural India. That too, a rural India that has never been physically connected to urban India by roads, thereby entrenching poverty.

Yet, we have huge potential. But if we want to realize that potential we all must see that it is our The State that is our problem. We must fix government – beginning with institutions of urban local self-government. We must have a new idea of The Law – as a safeguard, and not as an instrument of coercion. We must also promote a moral culture of self-help in the markets.

All this, and more, can only be promoted in the Indian political arena by committed Liberals. Calling all such bravehearts: Stand Up And Be Counted!

For A Jail Bharo Andolan

The Times of India’s leader article today is titled “They Have Failed Us,” referring, of course, to our “political class.”

What is a “political class” in a democracy? Unless there is a clear “Us” and “Them” here. And “They” are not “The People.”

Now, let us turn to what this failed class is saying and doing.

They are all engaged in sham diplomacy with Uncle Sam. So we have Condoleezza Rice shuttling between Washington DC, New Delhi and Islamabad. We are complaining about Pakistan to her. She is asking Pakistan to “get tough on terror.”

Note that US Intelligence failed in both Iraq as well as Afghanistan. Why drag the US into our affairs – unless it is just a ploy to make “The People” believe that “They” have friends On High?

In the meantime, and this is noteworthy, our foreign minister first assures the media that there will not be any military action against Pakistan. He then backtracks, and says this can happen. We might be headed for War – but our foreign minister doesn’t know it. So who knows it? Someone even higher up.

And this is the precise danger: All the action we see is from On High. And all our security threats are on the ground. And, what is more, all the public anger is on the ground too.

An interesting opinion today comes from Dhiraj Nayyar, wherein he talks about “We, The Elite,” referring to the English-speaking upper class, the English media etc. He notes that this elite must play a constructive role in channelizing all the public anger that is frothing over right now. As a member of this elite, allow me to suggest some concrete action.

Many are talking about a Tax Revolt, something I have supported for over 10 years. However, at this precise moment, I suggest we look for ways to get Liberalism onto the centre-stage of Indian politics.

Indian democracy has been hijacked by socialists, communists, communalists, casteists – all ideologies based on “groups.” Only Liberalism can counter this by focusing all attention on The Individual, his Rights, his Properties and his Liberties. This is the pathway to real freedom.

Secondly, only Liberalism believes in Urban Local Government – strong Mayors in every city and town, and this is the only way we can see positive change On The Ground – which is where all the problems lie. And this means better security too.

Thirdly, terrorism is also based on group thinking, whether Islamic or Hindoo. Once again, the political language of Liberalism can help reduce inter-faith tensions. Do not forget that the terrorists in Mumbai say they were egged on by the anti-Muslim rhetoric of Narendra Modi and Togadia. Ugh!

So my suggestion for concerted political action by “The People” is this: Let us undertake a “Jail Bharo Andolan” outside the Bombay High Court soon, to press for the hearing of SV Raju’s PIL against the Representation of Peoples Act that disallows Liberalism from Indian politics. Raju is president of the Indian Liberal Group and his PIL has been pending for over a decade now. I recently met Raju and he was bemoaning the fact that he may well be dead before the court decides to hear the case.

I will end this post here. Let me gauge the response to this idea before proceeding further.

Yes. A Second Freedom Struggle Awaits.

And a Second Republic is the goal.

If you believe in Liberty Under Law, get set to protest strongly against this socialist monopoly over our politics.

As Desai says, “They Have Failed Us.”

End False Philanthropy

My column entitled "The Curse of False Philanthropy" has just appeared in Mint.

It shows how we are all steeped in the "moral sentiment" of Sympathy for the poor, and discusses how this Sympathy is being exploited on all sides - by beggars, by charities and, most importantly, by governments. Especially the government of India, which claims to be a monopolist on poverty.

The article shows that government philanthropy based on paper money entrenches poverty. In other words, the "redistribution" that actually transpires is from the poor to the rich - the very opposite direction to that which politicians claim.

The article is a must read for all those who truly want to "help the poor."

To read the entire article, click here.

Parable Of The Sheep

I visited Abhijeet Singh's website after he commented on my blog, and found the amazing "Parable of the Sheep."

It sums up our situation.

I recommend this short Bastiat-like parable to all my readers, and especially to those who are opposed to citizens owning guns.

To access the parable, click here.

I also recommend Abhijeet's blog.

There is also, on Abhijeet's website, a spirited call for an armed citizenry by Eric S Raymond, where he says:

"We live with a recent history of massacres by governments that have dwarfed in scope and cruelty anything Barlow or Jefferson could have imagined. The Turkish massacre of the Armenians, the Nazi final solution, the Soviet purges, the killing fields of Cambodia, the Hutu-Tutsi massacres in Rwanda; each and every one of these vast and hideous slaughters was preceded by and relied upon the disarmament of the victims.

It is more important than ever, today after a century of blood, that we retain the power both to protect ourselves and to discern the cause of such oppressions. That cause has never been in civilian arms borne by free people, but in their opposite and enemy — the organized and conscienceless brutality of cancerous states."

To read the full text, click here.

On Gold, Guns, Guts And Glory

The people were crying out for bijli, sadak, paani (electricity, roads and water), just as now they are crying out for “security.”

Why were they not getting bijli, sadak and paani?

Simple: All three are government monopolies.

The government exploits its monopoly powers in all areas. It does so in textbook fashion, lowering supply and lowering quality as well.

Now, extend this analysis to government-provided security – another monopoly.

The response from our The State to the massacre in Mumbai has been confined to a new federal agency – some thousands of crores for some baboos. There is also talk of “co-ordination” between the Navy, Coast Guard and Coastal Police.

Actually, a vigilant constabulary around the Gateway of India and in other parts of Mumbai could have tackled these terrorists as soon as they landed. We need to reinforce basic policing at the ground level. Our The State From On High is only thinking of another central government bureau from On High. This will never do. As I have been consistently arguing – we need the right to keep and bear arms. We need to break the State Monopoly on Security.

Similarly, with bijli, sadak and paani: it is State Monopoly that has to go. Even if some areas like local roads need government investment, let these be run by local government. Our The State From On High cannot be trusted to invest in local roads for one simple reason: it does not know local conditions. Ditto for security – which is why policing is a local subject all over the world. I strongly suggest a focus on urban local government, with Mayors in control of a city or town police. That too, a police that is not vested with the legal powers to harass and bully peaceful tradesmen. Even with this local police, with all their teeth drawn out, we will have to rely on private security agencies to secure private areas. Security, thus, will be privatized and localized.

If this sounds too extreme, consider then the worst government monopoly of all: the money monopoly. Today, the rupee is going down, along with the stock market. Wise people are moving to gold. And these wise people include many ordinary citizens too.

An interesting news report today says that the Post Office is selling gold coins in Karnataka – and has sold 8,500 coins in 15 days!

Thus, my argument remains consistent: we must privatize electricity, roads and highways, water supply, security and money.

This does not mean libertarians trust private businessmen more than we trust governments. Actually, we trust no one. Businessmen must compete with other businessmen. And government must be limited by Law, and local government – especially urban local government – must be given maximum importance.

Then, and only then, will we have the Libertarian Citizen: Who uses gold as money, carries his gun, and earns his honest keep through voluntary market exchanges. More and more such Individuals will make this terrorized land one in which the “mind is without fear and the head is held high.” India will regain all her lost glory.