On Golden Handcuffs, First

My first read of this morning, and an excellent read it was too, was an article by James Ostrowski on LRC today titled “American Justice?”

The article tells how the US justice system has been perverted. At the core of the discussion is the idea of a judicial monopolist – that is, a The State that appoints all judges, and they alone can settle disputes. The article begins:

It is taken for granted that, for the sake of peace, justice and order, the courts must have a monopoly on judicial power within the boundaries of their jurisdiction. Yet, the ability of today’s courts to achieve any of these values with the monopoly power they possess is subject to serious doubt. Even if justice implies a court system with the monopoly power to do justice, the converse is not true. The mere existence of monopoly judicial power does not imply that it will be used justly. Whenever that monopoly power becomes unhinged from true justice, as it did, for example, in Stalin’s Soviet Union or Hitler’s Germany, that monopoly judicial power thereby becomes a great evil. One suffering under Hitler’s or Stalin’s “judicial” edicts would have wished to have recourse to some judicial competition, to say the least.

Do read the entire piece here – and reflect on the fact that all is not well internally in the USSA either.

As I went through our newspapers, I stumbled upon something in ET that is truly shocking: that 31 out of 45 MLAs in the Jharkhand Assembly have criminal cases pending against them. This includes the chief minister. The news report says:

The politician-criminal nexus in India is alive and kicking. Proof of this was provided by the profile of the newly elected MLAs in Jharkhand. As many as 31 of the 45 legislators backing the JMM-BJP-AJSU coalition government, which will be sworn in on Wednesday, have criminal cases pending against them.

It’s not just the ruling coalition which is afflicted with this malaise. The Opposition benches in the state too have several MLAs with criminal antecedents, making it clear that the process of criminalisation of politics is proceeding unhindered. The chief minister-designate, Shibu Soren, who had to quit the Union council of ministers a few years ago after being convicted in a murder case, leads the contingent. Besides him, 16 of the 18 JMM MLAs have criminal cases against them…

Now, Jharkhand is a Bhateeja State affected deeply by the Maoist-Naxalite insurgency. So we must conclude that there are criminals on both sides – all using unjust force on others, mainly the common people, with impunity. And we expect Justice from this very same monopolist State. Great expectation, indeed.

So I do believe that we have much to achieve internally, and that too, politically, than Chacha Manmohan S Gandhi has managed so far, what with his “education” and NREGA. Jharkand surely needs something very different from this dole. These are just money transfers from the Chacha Centre to the Bhateeja State that go into the pockets of those thugs who run the Bhateeja State.

It is also not true that the common people are crying out for doles or schools. They are crying out for bijli, sadak and paani, like the rest of us. [Electricity, roads and water.]

They are also crying out for Justice; for Property. And they are heading towards Communism. In the meantime, our monopolist socialist judiciary has banned liberal parties from the fray, from the civilizing processes of politics itself.

Where is India headed?

Well, while the law and order front is terrible pan-India, and nothing can be predicted, the economic indicators are quite clear. The RBI should be tightening monetary policy soon – for inflation looms ahead, the result of the “stimulus.”

I also found Manas Chakravarty’s column noteworthy: he and his associates say that gold has outperformed both commodities as well as stocks this last decade. Onwards to a gold standard, as I had written in Mint.

I say: Let us stay focused on the economy. There are parts of India that are still OK. Let them take the lead and show the others the way to go – internal peace, economic freedom, and sound money. Let us not sacrifice sound money and the budgetary limits it implies at the cause of all this Chacha-Bhateeja “politics.”

Golden handcuffs on the finance minister!

First that - then ordinary handcuffs for the rest.

Away With Chacha's "Education"

The must-read article of this morning is by Rajiv Desai in the ToI – an article on the Right to Education Act titled “Trick or Teach.” Desai argues that the RTE Act is a “trick” – designed to benefit baboons and political thugs.

Desai begins his piece with a bang:

Here is an incontrovertible fact: the majority of children between the ages of eight and 14, rich or poor, attend private schools. Even poor families shun government schools and willingly pay fees to enrol their children in private schools. To cater to this demand, private schools are flourishing, not just in cities and small towns but in villages as well. These schools have been established as commercial ventures. They are of two kinds: recognised and unrecognised by the government. To obtain recognition, private schools have to fulfil impossible criteria…

Desai continues with a blistering attack on government schools:

The government school system is broken beyond repair and everybody knows that, including the poor. Yet the new Right to Education (RTE) Act turns a blind eye and instead seeks to impose impossible burdens on private schools, not just elite institutions but others catering to the common man. Recognised or not, these schools are filling the gap that government apathy and ineptitude has created.

The finale is also very much to the point:

The RTE Act is poorly framed. It is currently being translated into policy under the ministrations of half a dozen bureaucrats. Like all well-meaning legislation, it will only create more problems. Government schools will remain non-functional. Private schools will have to face, in addition to highfalutin government influence over admission policies, the spectre of dealing with low-level bureaucrats and local politicians (read thugs).

Thus, as with the NREG Act, so too with the RTE Act, the only aim of The Chacha State is to increase the powers of sarkaari baboons and associated political thugs.

In any case, neither employment nor education are “rights.” The very idea is nonsensical. The truth is that the entire effort on the part of our rulers is to hoodwink the people while simultaneously assisting the corrupt. Their intentions were bad to begin with.

Actually, why schools, even the State-owned universities are beyond redemption. I once met a chancellor of a private “deemed university.” I asked the man why he used the term “deemed,” which implies some “recognition” from The Chacha State. The reply: We want to distinguish ourselves from the “doomed universities.”

Thus, Chacha Manmohan S Gandhi has got it all wrong, as usual. To progress, Indians need knowledge. They can get this knowledge either from The Market or The Chacha State. As Rajiv Desai says, as far as schools are concerned, rich and poor are opting for private schools. It is this trend that we must encourage.

Away with Chacha-style “education.”

For A New India

I found the lead editorial in Mint today most inspiring, for it talks about India circa 2010, a nation with a per capita income of over US$3500 – if the right policies are followed.

This is quite obviously a post-Chacha world, for the editors go on to say:

Inclusive growth is right now fallaciously equated with government programmes such as the National Rural Employment Guarantee Scheme. These are at best safety nets for the poorest but may have little relevance in an India that has trebled average incomes. The more relevant form of inclusive growth is job creation to help millions get away from low-productivity farming work.

I would have preferred the term “economic freedom.” Millions are already fleeing “low productivity farming work” for opportunities in cities, but these are invariably closed because of perverse policies. The government that actively engages in job destruction cannot have any role to play in job creation.

I would also have preferred to see some mention of property titles – especially in urban areas. In New Delhi, my guess is that over 50% of the population does not possess clear property titles. Most have no postal address. As one such resident of an “unauthorized” locality recently told me: “I have not clear title, but my property is permanently.” In which case, the local government must issue titles forthwith. This is not a very difficult job at all. Think of Munro in Baramahal way back then, with some horses and a tent, going about “mapping the waves of the great oceans.” The job was so daunting then. Now we have satellite images for free on every computer.

Coupled with this emphasis on economic freedom and urban private property, I would also lay stress on aggressive urbanization, itself enabled by good transport connections, and spurred on by economic opportunities in new urban areas, opportunities that will only flourish with complete economic freedom and a hugely liberalized foreign trade regime. That is, an India with hundreds of cities and thousands of towns.

If we follow such policies consistently for a long time, we will not just be a “middle income country,” I daresay we will become a “developed country.” That should be the goal of India, post-Chacha.

On A Flop Called Chacha

Swaminathan’s Aiyar’s Sunday column in the ToI is titled well: “The best of times and the worst of times.” Here he talks of India’s excellent economic performance despite “terrible misgovernance.” However, what is amazing is that our great leader for most of this dreadful decade that Aiyar is chronicling, Chacha Manmohan S Gandhi, is not even mentioned! Should not the man in charge, under whom all this terrible misgovernance has occurred, not take some of the blame?

Let us leave aside all the pretty growth figures and the tales of the IT sector and some of our big companies. Have conditions in our cities and towns improved? Has anything been done to link satellite towns to cities with good roads? Indeed, has anything connected with The Chacha State (or any of its Bhateejas) improved? The only answer is a loud “No.”

Aiyar concludes on an optimistic note:

So, economic reform itself has improved governance in a hundred ways. I believe this explains why economic growth has accelerated despite terrible misgovernance in some areas. For this reason, we can view the next decade with optimism.

This is an optimism I do not share. Our Chacha has squandered all these years, and all our public funds, on all his pet projects – NREGA, education, climate change – while all these leading economic journalists applauded. The fiscal deficit has worsened under Chacha. No move has been taken towards privatization, for Chacha remains a Nehruvian in thought and deed. Recall that Chacha’s finance minister, speaking at a recent trade union event, dismissed rumours of privatization calling them “malicious propaganda” and said that his The State will work to “strengthen PSUs”: I have a post on this.

Thus, with Chacha at the helm, the economic scenario has worsened, and there are no signs that these bozos are in any way going to set things right by doing the right things. They want to continue with The Chacha State as planner and industrialist, as big employer, at the “commanding heights of the economy.” Indeed, the fact that Soniaji chose Chacha for PM shows that she too believes the biggest job of their The State is to run the economy, which is why an economist was selected.

In the meantime, the law and order front has further deteriorated. There is this Maoist-Naxalite uprising. There is Manipur and Kashmir. Aiyar says that our rulers are “clueless” as to what to do about these. Well, they are clueless about The Economy too.

Methinks Aiyar is not really aware of how life in an Indian city has only worsened this last decade. Aiyar has been living in Washington DC for over 10 years now. Sitting pretty in the USSA it is impossible to know what is actually happening in India. Methinks he is also being “polite” to Chacha, for that is our journalistic “culture.”

It is time we shed this culture, called a spade a spade, and judged Chacha to be the gross failure he actually is.

On Rathore... And Private Law

All the papers are het up about the Haryana Director-General of Police SPS Rathore. Jug Suraiya describes the case:

Haryana DGP, SPS Rathore, who in 1990 sexually molested a 14-year-old girl, Ruchika, who three years after the incident committed suicide as a direct result of the psychological trauma she had suffered. Her family was persecuted by members of the Haryana police; her brother had 11 false cases made against him, and the family eventually had to leave the state. Almost 20 years later, the perpetrator of this crime gets a jail sentence of six months and a 1,000 rupee fine. He leaves the court smiling, saying he will appeal.

However, Suraiya gets it wrong in the very next para, where he says:

The reason given for this gross travesty of justice is that the 150-year-old law relating to sexual molestation, short of rape, of a minor prescribes a maximum sentence of only two years, as against 10 years for rape. This antiquated law – which takes no account of that most repugnant of crimes, that of child molestation – is in the process of being reviewed.

Suraiya is thereby reposing faith in “positive law” – in the written legislation of parliaments. I repose full faith in “private law” – under which this would have been originally treated as a tort, and matters sorted out. But let’s get to the root of the issue first.

In the case of “criminal law” all crimes are “crimes against The State.” Obviously, this cannot work in cases where senior officials of The State are guilty of crimes. How would it be different under private law?

Under private law, all crimes are “crimes against the individual.” These are all primarily “torts” – the word is the root of the word “torture” and implies grievous hurt to a person. In all such cases, in a private law world, the victim can collect the evidence himself and prosecute his own case. Thus, Ruchika would have taken Rathore before a tort court, with her own evidence. This case would be decided “on the preponderance of evidence” (not “beyond any reasonable doubt” as in criminal law) and would therefore be decided fast. The victim would receive a generous compensation, and Justice would have been done. Most importantly, the Victim would receive Justice. Of course, Rathore might receive punishment from his departmental superiors too, but that’s another story.

Suraiya wants to “raise fundamental questions regarding the many weaknesses and perversities in the laws of our land.” I hope I have helped him in doing just that. Onwards to a private law world. What we have today is “unlaw.”

The Car... And The Town Planner

Gautam Bhatia, an architect – and all our “town planners” are architects – has written a leader article in the ToI today arguing for measures designed to “curb the growing menace of the private car.” This is like pot calling the kettle black, for the real “menace” to our society is the town planner. The car is our only hope.

Take New Delhi for example. This is a “new city” and much of south Delhi, where I now live, did not exist when Maruti made its appearance in 1984. Now, new cities are usually laid out in a “grid pattern.” Lutyens’ Delhi, of course, was superior, laid out in “hubs-and-spokes,” with Connaught Circus as the main market, with over half-a-dozen “radial roads” leading to it. This part of New Delhi was modeled after Bath, a pretty English town that I had the good fortune to visit.

How did the town planners of The Chacha State lay out the rest of New Delhi? Well, they laid it out in a series of double T-junctions. All the traffic jams on Outer Ring Road between Nehru Place and the airport are because of T-junctions.

This is also true of the Delhi Development Authority’s premier south Delhi residential colony, Vasant Kunj. This huge housing development is laid out along one central road, on which there are over a dozen T-junctions. Traffic crawls in this “new” area.

Further, the markets of Vasant Kunj, like all south Delhi markets, are too many and too small, unlike Connaught Place, which was one big market, a Central Business District (CBD). Even if 5 cars visit a Vasant Kunj market, there is no place to park.

And talking about cars: Vasant Kunj was built for people who owned scooters – this was the “vision” of the future. Every flat here has a “scooter garage.” Today, every flat-owner has two or three cars, and there is no place to park. Residents report that fights regularly break out over parking rights on common spaces, which are too few.

Is it the car at fault, or is it the town planner?

If another enemy of society is to be blamed for this mess, then it is the economists of The Chacha State, including Chacha himself, an economist and former head of the University Grants Commission. For decades, our school and college students have been “studying” this total bullshit called “The Theory of the Vicious Circle of Poverty.” This argues that poverty is inescapable. Poor nations are condemned to remain poor. They need “foreign aid.”

Peter, Lord Bauer dismissed this nonsense with just one sentence:

“If this proposition were true, the whole world would still be in the Old Stone Age.”

Even the USSA started of poor. But they have one of the world’s highest car ownership figures today, at over 850 cars per 1000 population. India is still one of the world’s lowest, at about 13 per 1000; though in cities like New Delhi the figure goes up to about 150 per 1000. This is still low. But it will accelerate at a dizzying pace because poverty is going to vanish one day if The Market gets free play. Our society can either make space for the automobile in our city and town layouts – or continue with chaos.

New Delhi has to be re-laid in parts. We need an aerial Outer Ring Road, and the old Ring Road is not too good either. Areas like Vasant Kunj need to be demolished and rebuilt. We also need to build more and more satellite towns, entirely from scratch, keeping the car in mind, and therefore connecting these satellites to the CBD by good roads.

We need cars. We need roads. We need well laid out cities. It is our town planning that has failed.

For more, read my Four Wheels For All: The Case for the Rapid Automobilization of India, available as a free download here.

There is also my Mint column titled “The Car… And The Planner,” available here.

And Merry Christmas to one and all, especially all automobile enthusiasts.

Against Baboons In Education

The ToI today carries a debate on education; or, more precisely, a specialized education bureaucracy, an idea mooted by our human resource destruction minister, the lawyer-politician, Kapil Sibal. To do them credit, the editors of the ToI have spoken against the motion. There is a counterpoint, here.

I am, of course, on the side of the ToI editors, against the idea of an Indian Education Service on the lines of the other baboon cadres like the IAS, IPS, IFS, IRS et. al. However, to buttress the arguments of the ToI editors, I would like to talk about the kind of school education Ludwig von Mises received.

I have for quite a long time been noting that there are profound differences in the quality of classical liberal scholarship offered by those schooled in Europe, such as Ludwig von Mises, Friedrich von Hayek and Bruno Leoni, as compared to the standard product of Anglo-American education we are so much more familiar with today.

If comparisons are to be made, the Europeans stand hugely superior. They have a grounding in languages, in classical history, and they seem to have studied the originals, not translations. If you read Mises, Hayek or Leoni, you fill find quotes in the original Latin or French, and in the case of Greek, these quotes will use Greek letters, without offering a translation. What kind of schools created such intellects? Some answers emerge from Hülsmann’s biography of Mises, which I am currently enjoying in hardback, which you can find as a free pdf download here.

Hülsmann first tells us a little about the Mises family in Vienna:

The Miseses had become a typical Jewish family for the Vienna of that time, as described by cultural historian William Johnston:

“It was characteristic of them that a businessman father would marry a wife who was more cultivated than he was. Together the couple would settle in Vienna, often in the Leopoldstadt district, where he established a career while she supervised the education of the children. The cultural ambition of the wife was then passed on to the sons, who aspired to excel their fathers by entering one of the liberal professions.”

By all human standards, Adele von Mises did an outstanding job educating her two sons. Each did far more than just surpass his father. They both turned out to be scientific geniuses: Ludwig in the social sciences and Richard in the natural sciences. Ample administrations of motherly love provided the foundation for their astounding achievements. But there was more. Adele taught her sons to care for others. She taught them to be modest and frugal. She taught them to honor truth and virtue more than the encomiums of the world. She taught them the art of writing. And she taught them always to strive for excellence.

Here we see the benefits of “homeschooling,” of vigorous self-help in the field of education, all of it accomplished within the home.

Let us move on to school:

In September 1892, shortly before his eleventh birthday, Mises entered the Akademische Gymnasium where he would be schooled for the next eight years. The gymnasium schools were very particular institutions, more demanding and quite dissimilar from their present-day successors. A product of the nineteenth-century Continental system of education, they can best be described as “a combination of high school and college.” The children of ambitious and well-to-do parents began attending around the age of ten, after four years of elementary training. Three gymnasium models were available: a classical model featuring eight years of Latin and six of Greek; a semi-classical with Latin and one or two modern languages; and a thoroughly modern option with only modern languages. Erik von Kuehnelt-Leddihn states that the classical model had more prestige than the others, but they were all demanding.

“Often these very hard school years hung like a black cloud over families. Failure in just one subject required repetition of a whole year. This was the fate of Nietzsche, of Albert Einstein, and also of Friedrich August von Hayek! Young Mises, of course, got a classical education: the modern languages he learned privately.”

While at the Akademischen Gymnasium, Mises read Caesar, Livy, Ovid, Sallust Jugurtha, Cicero, Virgil, and Tacitus in Latin. In Greek, he studied Xenophon, Homer, Herodotus, Demosthenes, Plato, and Sophocles. One verse from Virgil so deeply impressed him that it became his maxim for a lifetime:

Tu ne cede malis sed contra audentior ito.

(Do not give in to evil, but proceed ever more boldly against it.)

Many years later, he pointed out the crucial role that the immersion in classical literature—and the writings of the ancient Greeks in particular—played for the emergence of liberal social philosophy and thus in his own intellectual development:

“It was the political literature of the ancient Greeks that begot the ideas of the Monarchomachs, the philosophy of the Whigs, the doctrines of Althusius, Grotius and John Locke and the ideology of the fathers of modern constitutions and bills of rights. It was the classical studies, the essential feature of a liberal education, that kept awake the spirit of freedom in the England of the Stuarts, in the France of the Bourbons, and in Italy subject to the despotism of a galaxy of princes. No less a man than Bismarck, among the nineteenth-century statesmen next to Metternich the foremost foe of liberty, bears witness to the fact that, even in the Prussia of Frederick William III, the Gymnasium, the education based on Greek and Roman literature, was a stronghold of republicanism.”

This quote is from Mises’ The Anti-Capitalist Mentality, and it is continued in a footnote:

“The liberty which the Greek statesmen, philosophers and historians glorified as the most precious good of man was a privilege reserved to a minority. In denying it to metics and slaves they virtually advocated the despotic rule of a hereditary caste of oligarchs. Yet it would be a grave error to dismiss their hymns to liberty as mendacious. They were no less sincere in their praise and quest of freedom than were, two thousand years later, the slave-holders among the signers of the American Declaration of Independence.”

My point is: Who knows what is the “best” education system? My answer would be: There is none. There are those with knowledge and there are those without – and the two can only meet in a market. In such a non-system, knowledge will be bought and sold in capsules: you can learn something here, and something else there. Maybe there will then be space for this sort of “classical education” too. But no Indian Education Service can make this happen. They will only rigidify the syllabus into a one-size-fit-all load of nonsense.

I leave you with what Frederic Bastiat, another Continental scholar, said:

“If you want to have theories, systems, methods, principles, textbooks and teachers forced on you by the government, that is up to you; but do not expect me to sign, in your name, such a shameful abdication of your rights.”

He added:

“The monopoly of teaching cannot reasonably be entrusted to any but an authority recognized as infallible. Otherwise, there is an unlimited risk that error be uniformly taught to the people as a whole.”

Our Hideous Monstrosity

Most of my contemporaries think that all is well with India, what with The Benevolent Socialist-Democratic Chacha State ruling the roost. For them, this post is a wake up call.

These are all from the news of just today:

First, the dastardly attack on sadhus (Hindoo holy men) in Mumbai, allegedly by MNS goons. Here is the news report. There is also a short video.

This shows something is very wrong with India’s “opposition politics.” They are only a darker shade of black.

What is the central State’s police minister doing in the meantime?

This news report says he has met with police and administrative heads of 5 Bhateeja States: Chhattisgarh, Jharkhand, Orissa, Bihar and Maharashtra. It adds that he has promised them 50,000 additional central troops to help contain the Maoist-Naxalite insurgency.

Now, 50,000 is a big number. Add to that central forces in Kashmir, Manipur etc. and the figure will quadruple for sure. Obama has only promised 30,000 troops for Afghanistan. Imagine Obama sending 50,000 troops to Texas if they decided to secede. Impossible. They would achieve their secession constitutionally. They possess the necessary “politics.” Ron Paul is a Representative from Texas. We do not possess such “politics” – and as to our main “opposition,” they are neither Hindoo nor “political”: they are in the naked search for power, choosing the foulest anti-political (or criminal) means by which to do so.

What is Chacha doing in the meantime?

Of course, true to form, he is all het up about the polar bear. He is worried about global warming and climate change. He thinks his Chacha State in cahoots with all the world’s States, from Uncle Sam to Uncle Sham, can alter the weather for the better – and they should. Of course, our Chacha has already put this bullshit into the school textbooks, thereby “polluting” young minds.

So here is a news report on how Chacha’s High Priest of Climate Change, RK Pachauri of TERI (aisi ki taisi!), is profiting from all this – for, there is money to be made from every State intervention. Chacha is personally and “politically” in favour of this loot – for no reason other than brazen Clientelism. He flew to and from Copenhagen in his State Aircraft to save polar bears while India burned. A latter-day Nero.

And what is happening in Parliament in the meantime? What heady matters are they busy discussing? We know, of course, that Chacha Manmohan S Gandhi has absented himself from most of this winter session. Well, Rediff has this report on what happened in these august houses yesterday:

The Salaries and Allowances of Ministers (Amendment) Bill was on Tuesday approved by the Rajya Sabha without discussion. It was passed by the Lok Sabha on December 18, also without discussion.

The bill entitles ministers to take along “any number of companions or relatives” by air at the same rates at which traveling allowances were payable to them and their families.

Fly free – the entire clan, plus all the goons.

This is “tax parasitism” – completely contrary to the purpose of parliaments.

These are all goons – just like those that beat up our peacable sadhus in Mumbai.

Predatory State.
Q. E. D.

Chacha's Advisor, And Chacha's Priest

Professor Kaushik Basu of Cornell University has been appointed chief economic advisor to The Chacha State. This probably means the end of his HT columns, which is unfortunate, because he exposes himself in these. I have blogged on his columns twice before, criticizing his Marxist leanings here and his poor understanding of what holds back India’s poor here.

Mint has just published an interview with Basu, but I daresay he leaves out more than he says. One particular answer is worth recording in full. When asked about food price inflation, Basu replied, “This is NOT caused by our monetary or fiscal policies.”

I think we should never trust what the personnel of The Chacha State say. They flatter to deceive.

Anyway, keep this in mind. As they “stimulate” the economy with more and more printed paper money and easy credit, inflation will rise. Then only will it be known what the cause of this deadly disease is – central banksters.

Nothing much else that Basu had to say in this long interview. Read the full text here.

Over now to Ramesh Srivats’ new blog, where he has an excellent post on the new “religion of environmentalism.”

Yeah, they have a “god” – nature.

They have a “priestly class” – the scientists who understand their god perfectly, and can tell its moods.

They have a “fear” of hell breaking out if their priests and their gods are not kept happy.

They have “sacrifices” of current comforts to appease their gods and priests. Srivats goes on and on…

Read the full post here.

Srivats links to two speeches by Michael Crichton, and these make for excellent reading. I particularly liked “Environmentalism as Religion” – here.

So we must conclude that Chacha has chosen his advisors well. In Pachauri he has the High Priest of a new religion. In Basu he has yet another yes-man. How much can he achieve with these? That is the ultimate question.

Lessons From Another Empire

The big debate in India today is over whether the territory should be divided into more and more, smaller Bhateeja States. I have already voiced my opinion against the idea, saying the Bhateeja model is wrong, favouring decentralization to the level of city or town instead, to a Mayor instead of another “chief minister.”

Today, Swaminathan Aiyar has argued in favour of small Bhateeja States.

As my reader weighs the arguments on each side, allow me to buttress my stand with some lessons from history. We look at the Austro-Hungarian Empire under the Hapsburgs, circa 1900, when the aged Emperor Franz Joseph ruled over a huge territory comprising many ethnic and linguistic groups. These included Italians, Czechs, Slovaks, Poles, Ukrainians, Magyars, Romanians, Serbs, Croats, and Slovenes – apart from Germans. This empire is no more, and it might be useful to look into the causes of its downfall.

Note that Franz Joseph was a much respected monarch, held in awe by the bulk of his subjects. Describing conditions in Vienna those days, Jörg Guido Hülsmann, in his excellent biography of Mises, [free pdf here] quotes a contemporary, Felix Somary:

No more than 300 metres separated the University from the parliament building in the Vienna Ringstrasse; if the young people fought almost daily at the University, the conflicts of the deputies were of equal violence, and were battled with a fanatical passion unknown in other countries. If you went only a hundred steps further on from parliament, you could see every day—and usually more often—a carriage drawn by two horses drive out of the Hofburg. In it sat the old Emperor and his equally elderly adjutant, and they would set out for Schönbrunn at an easy trot, always at the same hour, and always down the same street. There was no security escort ahead of or behind the carriage, no policeman sat in the vehicle itself; any assassin would have had an easy job. But nobody took the opportunity.

Somary is quoted further in a footnote (p51 n52) where he says:

The leaders of our modern great empires are driven rapidly in bullet-proof cars, protected by countless bodyguards. Aristotle thus defined the difference between a monarch and a tyrant: the monarch protects his people; the tyrant has to protect himself from them.

The conclusion seems to be that the Kaiser was more a monarch than a tyrant.

Further, this Kaiser had done great things to improve the lot of his people. Hülsmann quotes another contemporary:

[Franz Joseph]… presided over the radical transformation of Austria that started after the revolution of 1848, and stretched until the very end of his reign in 1916, a transformation that left no sphere of social life untouched. A contemporary witness, himself a democrat born around the time Franz Joseph ascended the throne, recalls the awe that the emperor inspired in all his subjects: And the Kaiser had lived through—in fact co-sponsored— truly monumental changes. The almost feudal landed lordship with its peasants subject to the estate, sleepy little towns with their handicrafts organized in guilds, a capital city with concentric walls and bastions, with large ramparts and glacis, a society the ruling intellectual power of which was the Church and the materially moving power of which was still the stagecoach and the horse—all this formed the environment of the beginning reign of Francis Joseph, which was to encounter so many material and intellectual innovations. Almost all laws that created or made possible landed property for citizens, free peasants and country workers, handicrafts and industry, large-scale trade, railroads and steamship transport, and insurance and banking services were signed with his name. The tremendous development of modern capitalism fell into the period of his reign; and thereby the transformation of the absolutistic patrimonial state into a constitutional monarchy, the rise of the free citizenry, the flowering of the citizens’ parliament, the cultural unfolding of all nations of the Reich, along with the inevitable frictions of the maturing process and, finally, the rise of the working class, the spreading of the social idea, and the beginnings of social legislation. Whoever met Francis Joseph at my time felt the breath of a long and grand period of history that he has carried on. Seldom has a single human life encompassed such immensity.

Franz Joseph’s only failure lay in his inability to hold his diverse subjects together. His chosen method, decentralization to ethnically homogenous states, was a miserable failure – not least because, as Hülsmann points out, all these “states” were NOT homogenous. In each of these states, there were at least two, or even three, “nationalities.” The capital city of Vienna itself was now peopled by many different religious, ethnic and linguistic groups, including many Jews from the far flung provinces, like the Mises family.

The alternative political idea to “community” is “catallaxy.” In communities we know each other; in catallaxies all are strangers. It is the latter concept that the intellectuals of Vienna had not thought of then. Although all the “nationalities” that made up the empire comprised racially similar, white people, the empire could not hold together. These problems plague these regions right up to the present day. There is a deep lesson in this for modern India.

In India, we are not even of one race. We don’t have one religion. We have multiple languages. We first divided the sub-continent along religious lines - and it did not work. We then divided what remained into linguistic regions – and this hasn’t worked either. Hence the call for more homogenous smaller states. But this is the path towards sub-nationalism, of the kind of politics the Shiv Sena practices.

The other alternative is to proceed towards building urban catallaxies, wherein all strangers from all over are welcome. This is the path of internationalism, of globalization.

Note that even the Gorkhas, who want a Gorkhaland of their own, also want tourists to visit their land. They want outsiders to invest there. They also want Gorkha youth to be free to work in all Indian cities. All this can only be achieved by talking the language of catallaxy instead of community.

Dubai's Disaster... And Ours

There are two important documents to which I would like to draw my reader’s attention to today: first, a Mises Institute article on the Austrian perspective to the collapse of the real estate bubble in Dubai; and second, some Deutsche Bank reports on the deficit, growth and inflation in India. There are many important ideas contained in these two, and these are related.

First, Dubai: The article by Fernando Ulrich tells the story very well, beginning with the peculiar economic conditions of the “boom,” when there are more and more buyers in line for everything on sale, from houses, to cars, to even jobs. Read this portion carefully, for it reveals the key Austrian insight: that whereas businessmen may occasionally err, easy money, credit and artificially low interest rates make ALL businessmen err. All the signs are wrong, and they are all read wrong. On the monetary policies followed in Dubai, the following is telling:

With a currency pegged to the dollar, the United Arab Emirates' Central Bank pursued the same harmful monetary policies as its American counterpart, the Federal Reserve.

Interest rates in the United Arab Emirates were kept artificially low for too long, following the Fed in every move. Reckless lending standards obviously helped to give a boost to the damaging credit expansion.

In addition to the aggressive lending by international institutions to Dubai's enterprises, the UAE Central Bank and the banks operating in the country also played a crucial role in fueling the construction bubble.

The Central Bank balance sheet spiked in 2007, reaching a staggering 177% increase over the previous year.

Although the monetary authority trimmed down the money pumping in 2008, decreasing its balance sheet 32% at the end of that year (still double its size in December 2006), the damage had already been done.

Money supply measured by M3 had an annual growth rate of 29.4% in the period from 2006 to 2008.

So there we have it. The same old story. Central banking is to blame. For steady economic growth, credit must be based on real savings.

Let us now move to India – and the Deutsche Bank reports and forecasts that I was privileged to read. The first thing to note is that this major bank is extremely worried about Chacha’s fiscal deficit. The key worry is that if the deficit increases further, and there is inflation, which leads to higher interest rates, growth will suffer. And if growth suffers, the government will not obtain the revenues necessary to fix the deficit. Things could spin out of control, into a nosedive.

The Lesson: The same as from Dubai – we need to fix our fundamentals. The deficit must be eliminated and the Chacha State returned to sound finances. The huge amount of State consumption expenditure (mainly salaries) must be trimmed, and more capital investments undertaken (mainly roads). Privatization must be carried out in full swing, so that the accounts of our The Chacha State are finally in balance. No “stimulus” is required for pumping up of the economy through deficits and artificially low interest rates. Such measures are contra-indicated.

Of course, the only ultimate solution is sound money. It is governments printing paper and creating credit out of thin air that must be done away with.

If India wants to avoid what happened in the US, what happened then in Dubai, the key lies in sound money and legitimate free banking. We have a lot of potential. But foolish policies (like the ballooning deficit) are holding us back. Chacha Manmohan S Gandhi has truly messed up State finances. It is this State that we need to fix.

On Law... And Unlaw

A week or so ago, PTI reported that a Supreme Court judge asked our solicitor-general why prostitution should not be legalized, considering the fact that legislation proscribing the activity has not worked.

Today, the editors of Mint have commented on this. They are worried about the use of force by criminal gangs to coerce helpless women into the business. They are also worried about children being forced into the trade. They point out that western nations like Holland who have legalized prostitution have strict laws against the recruitment of children, as also the use of force by criminals.

The sub-title to the editorial reads:

It will take some juristic creativity to fashion a law in India that does not open the floodgates of violence against women in the name of legalizing prostitution

I totally disagree.

The first step to take must be the legitimization of the trade, thereby making it open and transparent. Only when it is legal can issues of illegitimate force, coercion, and child abuse be tackled.

Second, “juristic creativity” is a dangerous thing. We don’t need it. What we need are simple laws that prohibit certain actions and leave all voluntary exchanges free. This is the world of “private law.” In such a world, what matters are Property, Contracts and Torts – and, maybe, or maybe not, a little penal law. Prostitution, gambling and drugs can all be legal and open in such a private law world – a catallaxy.

This is a “natural order.” There are very few “outlaws” – and they are easy to apprehend and bring to justice because all the people submit to The Law and support it. They help apprehend outlaws.

This is the world to dream of. What is happening today is “unlaw” – where most people violate the written legislations of parliaments. We must all prefer Liberty Under Law.

Quite frankly, it is not prostitution, but ganja, where legislation has not worked at all. I rarely meet prostitutes or those who visit them. I regularly meet ganja smokers – every single day. And they come from all walks of life. The Holy Smoke is sold everywhere.

If there is a second area where the law is openly flouted, more openly than in the case of prostitution, then it is gambling. As with ganja, so with gambling, we are prohibiting “good things.” And pushing big industries underground – into the hands of criminals (and cops). Indeed, these proscriptions criminalize the police.

Gambling is “good” in the sense that it encourages the ability to take risks with one’s money – essential to the Spirit of Capitalism. This is why north Indian businessmen gamble furiously in the run-up to Diwali, a festival dedicated to the goddess of wealth.

The other year I read the story of how Delhi’s State Police “raided” a private house where some businessmen were gambling during the Diwali season and even shot one such gambler dead. This is insane.

I asked a casino owner in Kathmandu how many people were employed in his establishments. He said 1200. I loved the atmospherics in his casino. It was so wonderful to see so many people happily playing with money.

In Goa, there are casinos. But I was even happier to find a little cubby-hole in Margao taking bets from poor folk. Everyone gambles in Goa, rich and poor.

Gambling is the Spirit of Capitalism – of risk-taking. In the old textbooks of “development economics,” they said that Indians were “risk-averse” – and therefore State-led industrialization was necessary.

A Big Lie.

The truth is that we are a nation of gamblers – much of it illegal, as with cricket. Even our tribal societies gamble – as in the case of “teer” in the north-east. They too are capable of profiting under Capitalism.

Some people shudder at the thought of such a free world. In my case, what I find nauseous is our current reality, full of hypocrisy, mendacity, and criminality. And legislation. And “unlaw.”

While Kashmir Boils... Laputa!

The whole of Kashmir observed a general strike yesterday, in protest against the Central Bureau of Investigation report that held the two women who died in Shopian on May 30 had drowned, and had not been raped and murdered.

It seems that vast swathes of Kashmiri society believe otherwise.

Here are some reports from the Srinagar daily, Greater Kashmir:

First, a detailed report on the strike.

Second, a statement from All Parties Hurriyat Conference Chairman, Syed Ali Shah Geelani, saying that "one should not expect justice from any Indian agency." He says a lot more besides.

Third, a report on the Shopian Bar Association alleging that the CBI used political connections to win over key witnesses.

Fourth, a report containing statements of various "freedom parties" titled "Drama to shield men in uniform."

And fifth, a report on a statement made by United Jihad Council chairman Syed Salah-ud-Din saying that the CBI report was a "murder of justice."

Sorry!

You will have to find these stories yourself from the Greater Kashmir website, which is not designed to link to individual stories. But do check out this fine Srinagar newspaper - here.

There is one common thread running through all these reports: that the men in uniform are a law unto themselves and that the whole of Kashmir must be immediately demilitarized.

Here is what the aforementioned Geelani had to say on demilitarization:

Geelani said seven programmes in different districts of Kashmir seeking complete demilitarization of Jammu and Kashmir remained successful and lauded people for the same. He said the response to his calls has been overwhelming over the issue. Geelani said protests and strike in favour for demilitarization were observed in Varmul, Bandipora, Sopur, Kupwara and Pulwama and would also be held in Budgam, Ganderbal and Islamabad districts.

Secondly, there is another general feeling that all Kashmiris seem to share - right across the political spectrum: and that is, they do not expect any JUSTICE from the Total Chacha State in New Delhi.

Of course, Chacha is in Copenhagen, saving polar bears.

Laputa!

Say "No" To The Chacha State

I found today’s lead editorial in Mint, on Indian entrepreneurs, compelling. I quote:

It is well known that India is not a great place to do business, as the annual World Bank surveys repeatedly show. The latest shows that India is 133 in a list of 183 economies rated according to how easy it is to do business. Separate studies show that… New Delhi’s rickshaw pullers pay Rs8 crore of bribes a month. Street vendors in the Capital have to spend Rs40 crore every year to grease various palms.

(One crore = 10 million.)

Note that these “various palms” that have to be greased all belong to State Institutions – like the police and the municipality. The edit above refers to bribes in Delhi alone; if we try and compile figures pan-India, I am confident that the total bribes paid by our smallest entrepreneurs to these corrupt “institutions” will be staggering.

What would be my solution? Obviously, freedom. That’s it.

However, there are other views on parade today: first, from Arun Maira, former Tata executive who till recently headed the Boston Consulting Group in India, and who is now a member of the (ugh!) Planning Commission. He has written a desperate piece today in Mint as to how markets need “institutions.”

I remain firmly on the side of Liberty – from our The State, and all its corrupt institutions.

There is also this small report in the ToI on the Suresh Tendulkar Committee report, which altered the measure of poverty and recalculated the figure, showing a growth in poverty, especially rural poverty. The recommendations that obviously follow are bigger budgets for IAS district officer baboons. Tendulkar is a former Director of the Delhi School of Economics.

Once again, I stand firmly opposed to such ideas. The “institutions” (like the IAS) through which the poor are supposed to receive State-delivered handouts are corrupt and ineffective. Further, as we all know, much of village India is already in the cities and towns – where they are milked by our “institutions.”

A key institution is the Police. Here is Vir Sanghvi, editor of HT, writing that a new book by the widow of one of the officers slain during the Mumbai massacre shows the Mumbai police “in a very poor light.” We cannot depend on this State Police for security. Their main purpose, their daal-roti, is fleecing small entrepreneurs.

HT is also carrying this story of the Shopian double rape-murder. It seems the Central Bureau of Investigation has concluded, 7 months after the event, that the 2 women were not raped and murdered; rather, they had drowned. Does this mean that the local police, who had registered the case, were stupid? Recall all the tampering with the vaginal swabs of the victims. Who do you believe? Do you have faith in any of these “institutions”?

So what would be my policy prescription? Just this:

Make India the world’s #1 place to do business, free from all “institutional interference” but fully according to “private law”: Property, Contracts and Torts. I have written a column on this, which is yet to appear. We will continue the discussions once it is published, but I hope you are getting my drift: Say “No” to the Chacha State.

On Samuelson... And Catallactics

Paul A Samuelson died yesterday, at the age of 94. Here is the NYT detailed obituary (via Aristotle The Geek). Pity Bastiat died at 50; and Bruno Leoni at 56.

Samuelson wrote the world’s greatest selling Economics textbook. And he famously said: “I don’t care who rules a nation — as long as I write its economics textbook.”

I was one of those young students who had to perforce buy Samuelson’s technicolour textbook in 1974, when I enrolled in a bachelor’s degree course in Economics from Delhi University. I am sure many students are doing the same now, cracking their heads over this confused "prescribed text."

And I daresay that I did not like the book much. I found it all too confusing, too much colour and jazz, too little conceptual clarity. What it does is inflict the students’ minds with a heady dose of étatism: The State is required to “correct” for market imperfections, as in the case of “public goods,” and, more importantly, in the case of swings in the “business cycle.” Samuelson attempted to make Keynesianism the world’s only Economics, adding a false mathematical rigour to his analyses that made them appear more “scientific.”

Yet, I wonder how long Samuelson’s legacy – Keynesianism, mathematics, market failure – will last. His most famous students, like Joseph Stiglitz and Paul Krugman, both Nobel laureates, fail to inspire much confidence. There is the “public choice” school with its exposition of “government failure” that deserves the attention of students and the public alike. And then there are the Austrians – with their unique epistemology, and their deep understanding of individual human action in markets. Austrians also have a clear conception of money, something Keynesians lost all sight of. And sound money is the hottest subject of today.

I am therefore of the opinion that we need a new textbook in Economics, one based on Austrian methodology and analyses. There are many worthies who are capable of writing such an elementary textbook, and I am trying to pen such a Principles of Catallactics myself.

If any publisher is interested in this work, or my other unpublished works, do get in touch.

From Uncle Sam... To Uncle Sham

Topping my list of recommended reads this morning is LewRockwell.com, where the top article is by Ron Paul, and is the text of his Statement before the Foreign Affairs Committee, United States House of Representatives, December 10, 2009. It is titled:

Time to Leave Afghanistan

At least one politician in the USSA loves the USA. Ron Paul is a Misesian. He is also waging a winnable war against The Fed.

About this monster, the must read is the second article on LRC this morning, an interview with Peter Schiff on gold and the US dollar. Schiff is running for Senate now, and is slated to win. He runs an investment company and predicted the current financial crisis as far back as 2006. He predicts gold will soon hit $5000 and the dollar will lose value concomitantly.

So Uncle Sam better wake up: They don’t have the money to wage wars and prop up client regimes. And it goes to show that our very own Uncle Sham aka Chacha must seriously re-think his “diplomacy” – whatever rocket-science that is. Ron Paul sees “non-interference” as the corner-stone of his foreign policy. We should too – and get out of Afghanistan ourselves.

One reason to do that is the burden on the Exchequer, but the more important reason is that there are great big fires burning all over the vast territory. Here is the Chief Justice saying India needs 35,000 courts. And a complete reform of The Law, I would add, because legislation increases litigation – to the benefit of lawyers. They, too, are a vested interest, a "self-regulating profession," and only they become judges, and only they teach The Law.

On Telangana, Meghnad Desai’s column reveals the “politics” behind the scenes. Well worth a read.

For Liberty Under Law

The effects of Telengana, and the consequent demand for many more separate Bhateeja States, continues to dominate the newspapers. Mint has another editorial on the matter today, which progresses beyond our discussions of yesterday. Today, in an editorial titled “Many States, One Market” they are asking a question:

What would it be to do business in an India with more political jurisdictions, but with a semblance of a unified market?

They begin by saying:

There are two contradictory forces at work in India today. On the one hand, efforts to create a single national market by ushering in a coherent goods and sales tax have gained momentum in the last one year. On the other hand, within days of the move to create the state of Telangana, many similar statehood demands have mushroomed. Internal political divisiveness has gathered steam.

The editors conclude that business conditions will be more difficult if there are many more Bhateejas. I would tend to agree with this conclusion. As the editors say, small, unviable Bhateeja States will be rapacious.

However, things are not that great these days either. You cannot get Goan feni in New Delhi, or, for that matter, in any Indian city or town outside Goa – and there are over 100 brands. I recall an economist once telling an audience, “India needs to practice free trade with herself.”

Ha ha.

Given the tendency towards splitting up of states, towards more and more political jurisdictions, the only way by which civil society can guarantee themselves a completely liberated Market is through Constitutional Law.

Recall that the Magna Carta (1215 AD) contained a clause that granted all the towns, including London (whose Lord Mayor, William Hardel, was present at the signing) “freedom to trade by land and sea.” Once this freedom is secured in law, The Market will always be free.

Liberty Under Law.

Such a Market will be out of the reach of political manipulation.

“Unto that haven of freedom, my Lord, let my country awake.”

Bhateejas? Or Mayors?

The Chacha State’s decision to create a new Bhateeja in Telengana tops the news today. The editors of Mint say it “sets a terrible precedent.” The sub-title to their editorial reads:

A weak-kneed government caved in to demands for Telengana, firing the first shots of an Indian future full of secessionist movements and Central subsidies to mismanaged states

The editorial paints an extremely bleak picture of India’s future. It begins thus:

The year is 2030. India, far from being a great power or a prosperous nation, is a poor country. Hobbled by secessionist movements and crippled by subsidies to keep a restive population at bay, it is a country past its prime. The first shots towards that possible scenario were fired late on Wednesday night. A weak-kneed Manmohan Singh government caved in to the demands of a fasting man and some stone pelting in Andhra Pradesh. Ancient Greeks called such behaviour akrasia, or weakness of will. The government of India is exhibiting it in ample measure.

On the other hand, we have Ramesh Srivats’ new blog, where he asks for “a hundred more Telengana’s please.” Srivats’ arguments favour independent cities and towns. He is a resident of Bangalore and concludes with the wish that his city could become one such independent city some day.

Both these opinions are correct in their own way. Of course, the model of a Bhateeja State is useless and unworkable. The only gainers will be politicians and bureaucrats. See Chhatisgarh or Jharkhand. Dehra Doon has gone down the tubes after the Uttarakhand State was formed.

I lived in Pondicherry for 3 years in the mid 1980s, taking my dog for a walk every night on Beach Road. It is about 2 km one way. As you begin you pass the new Secretariat building, where there are many IAS officers under a Chief Secretary. You pass the residence of the Lieutenant-Governor, the Legislative Assembly, the offices of the Inspector-General of Police, the residence of the Chief Minister… and so on. It is a tiny place, Pondicherry; and it has all this huge Bhateeja State government – while The City is a mess.

However, there is one disused building on Beach Road, left behind by the French, which never failed to amuse me – the Mayor’s Hall.

We must not think in terms of Bhateeja States. We must think of economically viable and politically independent cities and towns, each with its own Mayor, free trading and self-governing, and, what is most important, maintaining the city or town excellently.

We must reform not just the Chacha State, but all his Bhateejas as well. It is a huge task, I agree. But it must be done. It is what reason says will work. We need a system that works. Chacha and his Bhateejas are not the answer.

Recommended: Click the labels "civil government" and "subsidiarity" below and read the various posts under those heads.

On Parliament, A Proverb, Carbon, And Some Nonsense

Parliament has once again distinguished itself. The much-hyped “debate” over the report of the Liberhan Commission turned out a farce. BJP MPs disrupted proceedings. The Express editorial is well titled – “Playing House.” Yes, this is all a huge pretence: Uncle Sham.

I was discussing the BJP the other day with Bablu Das, who never progressed in school beyond Class 4, when he uttered a great Bengali proverb. Now, proverbs are always to be found in the conversation of simple, untutored folk like Bablu. It shows their wisdom - a wisdom that has come from the hoary past.

Referring to religious zealots, the bane of the modern world, Bablu said:

Othi bhokti, chorer lokkhon

In other words, excessive demonstration of faith is the sure sign of a thief. Satyajit Dey sent an English equivalent: Too much courtesy, full of craft.

Chew on that and think of all the zealots, both Hindoo as well as Muslim. Their intentions cannot be too good. Give me a man any day who keeps his God to himself, and focuses most on his business; second, on running his household; and third, on enjoying his life – like Bablu himself. Hail fellow, well met.

Next, on the “climate change” front, here is Butler Shaffer advising us to increase our carbon footprints. Indeed, we must. Read this piece and let your kids read it too.

Finally, a reader sent me a link to Jerry Rao’s recent article in the Express. Yes, Rao has written nonsense this time. He champions education – from the same State that peddles lies like “global warming.” And he praises our The State for being slow in building roads. What are “public goods,” Jerry? Is education a public good? Certainly not.

So the wisest man around today is the Class 4 schooled Bablu Das:

Othi bhokti, chorer lokkhon

Keep that in mind.

The Car, The Road, And The Chacha

Our great and glorious leader, Chacha Manmohan S Gandhi, freshly returned from Russia with more nuclear technology, is now off to Copenhagen, to demonstrate his faux concern for the polar bear. All this, while parliament is in session.

In the meantime, one of our leading editors has expressed his skepticism towards the claims of the climate change wallahs: Jug Suraiya’s “A Convenient Lie” takes a huge swipe at Al Gore’s An Inconvenient Truth. LRC too has a great piece against this non-science, here.

However, today I would like to examine Chacha’s role as Central Planner. In this connection, there is news that a 61% jump in car sales occurred this last month, November, as compared to the same month last year. Total car sales are expected to cross 1.8 million units this year. Next year, the figure should cross 2 million, analysts say.

I wonder how many cars sold every year in India when Chacha headed the Planning Commission in the early 80s. If memory serves, before Maruti, barely 20,000 cars sold in India every year. From 20,000 to 20,00,000 is a hundred-fold jump!

But our Chacha and his planners see it not.

They never planned for roads. It was Vajpayee who inaugurated the idea – and the Congress ignored it.

Today, Mint is carrying a report that says that over 30% of road projects are delayed because of various reasons – not land acquisition. The reasons for these delays are:

The disputes have arisen due to reasons like input cost escalation, royalty charges on minerals, entry tax and removal of public utilities on acquired land for road construction.

“Very few cases are stuck over problems relating to land acquisition,” a senior government official is quoted as saying.

So it is NOT land acquisition that is holding up roadwork; it is poor administration. Our The State and its NHAI are to blame.

Meanwhile, Mint also reports:

The government on Tuesday came out with the first batch of supplementary demands for grants in the Lok Sabha seeking to raise public expenditure by an additional Rs25,725 crore during the current fiscal.

This includes "equity infusion" into the “ailing” NACIL. In case you don’t know what NACIL is – it is the holding company for Air India.

Chacha and Co. are blowing up our money on everything except roads.

I have been writing about roads for more than 15 years now. At least I saw it coming. As did most people – except for the deaf, dumb and blind morons on Laputa.

And I wrote on the automobile revolution over a year ago – it was my first column in Mint, and you can read that here.

I also wrote a recent column on the importance of roads, which you can find here.

What more is there for me to say?

Except that the critical function of any “planner” is to think ahead. I give Chacha a Big Zero on this score.

On Climategate... And Chacha-in-Laputa

There are three important articles in the papers today, to which I would like to draw my reader’s attention.

The first two are on the climate-change wallahs. The first is by Jagdish Bhagwati and Arvind Panagariya, who decry the carbon tax in an excellent piece in the ToI titled “A thoughtless tax.” This para is crucial:

The administration of carbon tariffs is also a complex task that will raise hackles. For example, in today's interdependent world economy, most production involves importation of components and raw materials from several sources. Calculating the carbon content of a product is therefore as arbitrary as calculating the "local content" and source of origin in implementing preferential trade agreements and eligibility for cheaper market access; and, because it involves imposing tariffs rather than exemptions from tariffs, it will be more contentious and productive of disharmony.

Next on my list is a piece by Bret Stevens in Mint. He is talking street-sense – pointing to where the money is going. He says:

Consider the case of Phil Jones, the director of CRU and the man at the heart of climategate. According to one of the documents leaked from his centre, between 2000 and 2006, Jones was the recipient (or co-recipient) of some $19 million worth of research grants, a sixfold increase over what he’d been awarded in the 1990s.

Why did the money pour in so quickly? Because the climate alarm kept ringing so loudly: The louder the alarm, the greater the sums. And who better to ring it than people like Jones, one of its likeliest beneficiaries?

In other words, this climate change business is a huge hoax, designed to hoodwink the world, impose more taxes and tariffs, divert subsidies to clients – and, of course, fund friendly academics.

In this connection, the final piece I have is on Chacha Manmohan S Gandhi and how he and his MPs are busy bunking our glorious Parliament. The article titled "Losing touch with reality" is by Pankaj Vohra, political editor of the Hindustan Times. He says:

The winter session of Parliament will go down as one of several dubious distinctions. First, Parliament had to be adjourned during question hour last Monday due to lack of quorum and because most of the members whose questions were listed were absent. But, more important, for the second time in this session the Prime Minister chose to go on a foreign visit….

The Prime Minister was away for eight days to the US and the Caribbean in late November and will be in Russia on a three-day visit when the Liberhan Commission report is discussed in the Lok Sabha on Monday and Tuesday. And when he goes to Copenhagen for the climate change meet, this will be the third time he will be absent.

Is this really a “democracy”?

Or is this just a huge, ugly pretence? Just like the global warming / climate change hysteria?

Chacha off to Copenhagen to save the polar bear.

In the meantime, Maoists have blown up a school in Latehar.

And there is much talk of "urban chaos."

Yes, Pankaj Vohra is right - our great and glorious Chacha has "lost touch with reality." He lives in the cloudcuckooland of Laputa.

On Climategate

Rediff is carrying a report on “climategate,” and Aristotle the Geek has an excellent post on the non-science of the Gore-Pachauri tribe, but what I want to say is “I told you so” – exactly 2 years ago.

My column on the Gore-Pachauri Nobel prize began by questioning the “knowledge credentials” of the winners. I then went on to add:

Innumerable failures of such government-inspired 'knowledge' have occurred in the recent past – from the central economic planning of 'scientific socialism', and the centralized management of money, banking and credit of 'Keynesianism', all the way down to the 'intelligence' behind the Iraq War. Even the 'population explosion' scare which led to a UN Fund for Population Activities (UNFPA) lies totally discredited today. From each of these failures of 'government knowledge', we the people have learnt the hard way that the personnel of government are interested not in our welfare, but in their own. The wiser citizen of today should therefore view the claims of an American politician (that too, a statist Democrat) supported by an unwieldy mass of government-sponsored scientists from all the governments of the world with deep scepticism.

I offered an example of “local warming”:

I was cruising along Delhi's Ring Road, and my dashboard meter reported the outside temperature as 39 degrees Celsius. Inevitably, I was stuck in a huge jam. Within minutes, the temperature zoomed to 49 degrees! Local warming? In my book, if India is to reduce her impact on climate change, she needs to knock her transportation system into shape. Our road surfaces need serious attention. Every Indian street, throughout the length and breadth of this huge sub-continent, is a potholed moonscape. This is how we waste fossil fuels. Funny how TERI, the energy NGO whose boss, the scientist RK Pachauri who heads IPCC, never makes any noises about road surfaces, ever. TERI is headquartered in Delhi, with plush, centrally air-conditioned offices in the swank Habitat Centre – a government-promoted piece of real estate, whose first chairman was none other than our current prime minister, Manmohan Singh.

Yeah. Pachauri and Chacha are buddies. That’s why Chacha has skipped parliament to go to Copenhagen.

Now that climategate has occurred, let us pause to reflect on the Gore-Pachauri-Chacha mindset: they think their The State can fix the climate!

Fatal Conceit?

Adam Smith’s famous “three duties of the sovereign” mentions nothing about the role of State as Weather God. I think all our modern-day sovereigns should read this, citizens too. Note that Adam Smith mentions nothing of a role of State in producing money either. Here are those famous words:

According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings: first, the duty of protecting the society from violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, thirdly, the duty of erecting and maintaining certain public works and certain public institutions which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.

So build roads, Chacha. And don’t try and play Weather God, just as you have assumed the role of Universal Teacher and Universal Employer, and Central Planner and Central Banker as well. Perform your genuine duties. Or get lost.

Mind Your Own Business, Chacha - Part 2

Yesterday, we discussed how “mind your own business” is the motto of Capitalism and Private Property. Today, let us take the discussion a few steps further, to how this is also the motto of Individualism, and, thereby, the secret with which we can unlock the meaning of the word “catallaxy.”

Let us begin with Individualism:

A client called Bablu Das the other day while he was enjoying a chillum, and Bablu put the man off for another day, saying he was “busy.” This “property dealer without property” is the Master of his own destiny, the architect of his own life, who takes orders from no one, and who is responsible only to himself for not only his successes, but also his failures.

This is the credo of every civilized man who survives through exchanges in city markets.

The alternative philosophy of socialism, “all for one and one for all,” is tribalism, inappropriate for modern times. Note how Bablu Das has no “chief” to report to. He does not belong to any “gang.” Or even “group.” Of course, he hates politics, politicians, political parties, and the administration. Hail fellow, well met.

The philosophy of Individualism allows us to look at the City not as “society,” but as “catallaxy.” A society is one where members know each other – as in a tribe. A catallaxy is where strangers trade amongst each other, and the more strangers, the merrier. The precise value to “society” that the urban catallaxy provides is the increased possibilities of strangers interacting gainfully.

We can therefore conceive of another world – based on Individualism and Catallactics. Of everyone “minding his own business.” Of open societies, open to strangers, that is. No more nation-states. No more “narrow domestic walls.” Free Cities and Towns.

Where do we begin? I suggest Kabul. They don’t need Democracy there. They need The Market.

They need to become a catallaxy.

And I am in The Market for 10 tolas of Mazar-e-Sharif hash.

>:)

Mind Your Own Business, Chacha

One of my favourite expressions in the English language is “mind your own business.” Anyone who uses this expression tells the other that he does not want any outside interference in his affairs. He also tells the other that instead of poking his nose in others’ affairs, that person would be better advised to stick to his own. The word “own” is also important here, indicating Property.

The expression “mind your own business” is therefore the motto of Capitalism and Private Property.

Socialists like our great and glorious Chacha Manmohan S Gandhi (and his master, Amartya Sen) believe in a different motto – one that places their The State at the “commanding heights of The Economy.”

In other words, this The State will mind all the businesses of all the people. This is a recipe for disaster. Not only will all businesses run aground, such thinking paves the way for Totalitarianism. There cannot be any Liberty in such a society, for liberty is meaningful especially in the context of the freedom to engage in business.

Where the market economy is not free, where The State directs all businessmen, such a nation can only rapidly head towards ruin – not just economic ruin, but political ruin as well. In such socialist society, businesses will not flourish, and the personnel of The State will become predatory and dictatorial. To the loss of economic freedom must be added the loss of honest politics.

I have written some posts on the Olde City of London, and its Lord Mayor. One of the histories I read of this institution put it this way:

Once in every year, the citizens of Olde London would gather together to elect their Lord Mayor and two Sheriffs. Once that was done, the people returned to “minding their own businesses.” However, these newly elected officials now had to look after civic affairs – and could not mind their businesses during their terms in office. This is why many refused the post even if elected. They were then heavily fined.

Now, the institution of Lord Mayor of London dates back to 1183 AD, and is older than the Magna Carta (1215 AD). Very few were literate then; only a robust common sense prevailed. It took another 1000 years of history, and lots of stupid books, to get everything wrong. The greatest error, of course, was getting The State to monopolize money through a central bank. This paved the way for economic totalitarianism – a State that purported to mind every business but its own.

Of course, the modern State, like the one that lords over us, does far worse than interfere in business. It also snoops on the citizens, collecting information on prominent people that will be of use to the political masters.

Who are these political masters?

If you look at them – from Chacha Manmohan to Sonia and Rahul to Advani to Jyoti Basu – you will find that they have no businesses of their own. They make their living by interfering in the affairs of other people. They tell others what to do.

This is the Total Disaster of a State.

It has occurred because we lost sight of principles. The greatest principle being, of course, that every man must mind his own business.

On Chacha... And The City

Our great and illustrious leader, Chacha Manmohan S Gandhi, has made some appropriate noises on the plight of India’s cities and towns while inaugurating a national conference on the fourth anniversary of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the UPA government’s flagship urban reforms and development programme. The report goes on to say:

[Chacha] said that the two ministries — ministry of urban development and ministry of housing and urban poverty alleviation — have approved projects worth Rs 1,03,462 crore for which the central government has provided an assistance of Rs 55,625 crore.

Yawn. We have heard all this before. And we have never found out where exactly all these lakhs of crores disappear.

The basic truth is that Chacha lacks an urban vision. Note that all this time he has been harping on and on about creating employment via “workfare” in rural India. This, while most of rural India is being depopulated as villagers move en-masse to cities.

In these overcrowded cities, like New Delhi, as we witness every day, these migrants from rural India are hounded and harassed by the State police. And the municipal authorities too. These are the cutting-edge personnel of the Predatory State.

There is something very wrong with our idea of urban local self-government – in that it is corrupt and predatory. If we are to fix urban India, we must institute deep reforms. But, before that, we will need a vision of what kind of India we want to live in. I stand for an urban India: thousands of free trading and self-governing cities and towns. What do we have to do to make this happen?

For one, scrap the JNNURM nonsense. Then, from the central coffers, fund a pan-India highway system based on a hub-and-spoke design. This will allow the primary cities to decongest while boosting the prospects of the surrounding satellite towns. The urban space will grow. Migrants to urban India will have more cities and towns to choose from. There is this interesting report in Mint today that talks about the potential of Tier II and Tier III cities.

Second, continuing with highways, build twin coastal expressways while simultaneously instituting unilateral free trade. Hundreds of brand new cities will then erupt along our coasts.

Finally, institute urban local self-governments that will raise local taxes and provide just two services: garbage removal and local roads. The latter will increase the land available for each city, lowering urban land prices, which will be good for migrants.

Of course, all this will require a “new politics” – one that exhorts our villagers to hit town and get rich. The politics of villages and poverty must be replaced by this new idea of the future. An urban future. A prosperous future.

As for our great Chacha, he seems to be quite rudderless, sometimes veering this way, sometimes that. Every day he is fighting fires. Nothing is going quite right. All this is because he lacks a clear vision. Which is why he increasingly looks like the rest of them – all corrupt and predatory, all pretending to “govern.”

On Caste, And Markets

Mint today is carrying a report on an interesting study that proves “liberalization” since 1990 has been good for Dalits – who are India’s lowest castes. The method of the study, conducted by the Centre for the Advanced Study of India (CASI) of Pennsylvania University, took samples of Dalit lifestyles from two blocks of UP. It was found that:

1. The ownership of television sets rose from 0.8% to 34%.
2. The number making a living from “unclean” activities like disposing of the carcasses of animals, fell from 39.9% to 2.4%.
3. The chart in the report lists out improvements that have occurred in occupation, in material consumption, and in the “cognitive dimension.” There has been vast improvement in every indicator that has been measured.
4. One interesting statistic shows that 58% of “cleaning staff” are now from upper castes.

The CASI study has a supporter in Narendra Jadhav of the Planning Commission, who is quoted as saying:

“We have seen the study and the results of this survey vindicates the stand of many including me. Liberalization and the market economy gave an opportunity to the untouchable of country to break the established norms of villages and work with dignity. The process still continues.”

Of course, there must be a JNU don on the other side – Vivek Kumar, associate professor at the Centre for the Study of Social Systems, Jawaharlal Nehru University, who says:

“The market ushers in the change for the sake of its profit and for expanding its consumer base. The process of social change cannot be left to the mercy of the market.”

Yes, Capitalism means mass production for mass consumption – and this is precisely how the lives of all are steadily improved. This is not “social change.” Rather, this is “peaceful evolution.” The State must never intervene in this peaceful progress.

Another activist is quoted at the end of the report as saying:

“The market is cruel and insensitive.”

As though our The Chacha State is kind and compassionate!

What is my take on this report?

First, that this proves that freer markets have worked not only for the rich, but even more so for the poor and the downtrodden. Second, that improvements in consumption – as in the case of TV sets and mobile phones – have improved lives right across the board. Third: that rigid caste barriers have broken down. All these have been good for Dalits.

Studies such as this only vindicate what is common perception, or “gut feel.” Since 1990, the only good things that have happened in India have come from freer markets and entrepreneurs, including the much maligned MNCs. Nothing good has come from The Chacha State.

This study thus tells us what is the direction on which we must proceed – viz., more Liberty and free markets, and less and less of The Chacha State.

Nailing Pranab's Lies

Our finance minister, Pranab Baboo, told parliament a bald lie yesterday when he said that our current inflation has been caused by shortage of food items, i.e., by a poor harvest. The drought, the flood – these have caused inflation, Pranab Baboo asserted.

Nonsense!

Inflation is caused by excess money and credit. Inflation is always a monetary phenomenon. Indeed, the word “inflation” was always used to refer to growth in the money supply. It is only nowadays that we use the word to refer to a general rise in prices, which is caused by inflation of the money supply.

So, the only cure to this inflation is limiting the expenditures of our The Chacha State. With the NREGA, higher pay for baboons, the “stimulus” etc. the State has vastly increased the money supply. This is why all prices are rising, including of gold.

Let us now turn to banking – and here too, the news is not good. Pranab Baboo told parliament the other day that his State-owned banks wrote off debts of over 25,000 crore rupees in the last couple of years.

Something fishy in the money.

Something fishy with the banking too. Read the report here.

My ideal is a world of private money and free banking under law. Politicians in such a world will be unable to create money or credit – and would have to budget State expenditures with great care. This “limited government” would be limited by law – and also by the budget.

Ultimately, what is happening today can only be called LOOT. This is what happens when we romanticize The State and its personnel. Time to realize that they are all crooks. Time to take money and banking out of their hands.

On NPM... And Minarets

My column has appeared in Mint today, where I discuss New Public Management (NPM), which is the public administration of Capitalism. I advocate the sacking of public service bureaucracies, as in the case of garbage removal.

There is one small error in the document, though. The second sentence in para #5 reads:

Thatcher’s 3Es slogan for her government was “economy, efficiency and effectiveness”.

Actually, her 3Es were “economy, efficiency, and economy.” That’s right, economy came twice. Someone altered the text thinking it was an error on my part. I have written to Mint and also received a reply, so the error should be out of the internet edition soon.

In the column I have taken several swipes at the baboos of the Indian Administrative Service – swipes that I think are well-deserved, for if the country is a total mess, they must surely be as culpable as the political leadership. Note that today it is a bureaucrat who is prime minister.

The feeling I get from our netas and baboos is that they are NOT interested in making our lives better, in making our country a better place to live. Their main interest lies in carrying out the charade of government – that is, of a government that only pretends to govern.

That said, the big news of today is the Swiss referendum banning new minarets. The Express has even commented on it in an editorial. Yes, Swiss democracy is really unique – and Rousseau was a citizen of Geneva. When I visited Geneva I carefully noted that the coat of arms on the city’s cannons was the coat of arms of The City of Geneva. I was in Switzerland about a week, and asked every Swiss person I met to tell me the name of their President – and none knew who he was. We never hear of Swiss elections, ever. In the present instance, the law was passed by referendum: direct democracy. I still have some souvenirs from my trip, among them a medal of the flag of Switzerland, surrounded by the flags of all the 26 cantons. There is much we can learn from the Swiss.

I have nothing against minarets. I like them, in fact. The call for prayer sounds sweet to my ears. And I enjoyed living in that part of Goa where there are churches, temples and mosques. I am glad we are not a homogenous people; that we are not of one culture. We can truly aspire to become a “catallaxy.” Beats a “nation-state” any day.

On Sugary Beer, Steel, And Tourism

The most interesting item in the news today is a report in ET that says our The Chacha State is planning to set up “ultra mega steel plants.” But before I get to that, allow me to digress a bit on something strange that someone pointed out to me the other day: Kingfisher beer contains sugar and corn syrup. No wonder I couldn’t stomach the stuff. I bought a bottle of Carlsberg yesterday and looked up the ingredients – no sugar, no corn syrup. Good beer.

Why would Kingfisher sweeten its beer? I do believe their idea is to make the taste of beer palatable to the youth. Most kids don’t like the taste of beer and prefer drinking sweet drinks like Bacardi Breezer. I think Kingfisher is targeting this section – by destroying the taste of its beer. Methinks Mallya has too much on his hands now, what with a Formula 1 team and an airline that’s not doing too well. Anyway, it’s a great thing that he’s got competition. Vive la competition. Vive la real beer.

Getting back to our The Chacha State that also makes Steel – we cannot ridicule them enough, so allow me to ask another question: Which industry would I encourage if I were The State?

My answer: Why, tourism, of course.

This requires good roads – and Liberty, so that entrepreneurs can keep tourists happy. The hospitality industry must be free. Bars, casinos, nightclubs. And hash cafés. Entrepreneurs must have Liberty.

Tourism is the biggest industry in the world – far, far bigger than steel, or software. Today, India’s tourism earnings are negative: more Indians go abroad than foreigners come in. This is disgraceful for a nation with the highest mountains, dense forests, a desert, 4000 miles of virgin beaches – and so much of history and culture to show off. Disgraceful.

Roads are of critical importance for the growth of Indian tourism. I recall the old days when Haryana hit the tourism map with government-owned bars on highways. This turned out to be quite a success because car-owners from Delhi would drive out to enjoy an afternoon or evening in one of these bars. Today, the highways do not work, and Haryana has dropped off the tourism map.

I even saw this in Goa. The Jog Falls are just 200 km away, but none go because of bad transport connections. I was on a bus from Goa to Mangalore once, and made friends with a fellow passenger, a German sailor from Hamburg. He said he saw such bad roads only in “some parts of Africa.” And note that Chacha’s “golden quadrilateral” does not cover the coast.

So there you have it. I would focus on getting tourism to take off. I wouldn’t give two hoots to steel. In Goa, they say one tourist creates 12 local jobs. Not only that. Tourism creates a happy atmosphere as well. No more “narrow domestic walls.” Openness. Happiness.

Today, official policies are destroying this great industry. There is no Liberty. And there are no roads.

And Chacha wants to also make steel.