The 6000 Chandni Chowks Solution

To understand why cities matter to the rural poor, consider the case of Bhoju, who runs a tea shop on the footpath opposite my nearest market. It is a busy tea shop, and I daresay he sells over a thousand cups a day. Maybe more.

How many cups of tea would Bhoju sell if he had opened his tea shop in his native village in rural Bengal? Not more than 50 cups a day, and that is an optimistic estimate.

There are others like Bhoju here. There is Parimal, who sells cigarettes. Would his daily turnover be higher in a village?

Then there are these rickshaw wallahs, all migrants. One confessed that he had not visited his village for 10 years. Why?

Yet, when I plead the case for economic freedom for all street hawkers and vendors, they unitedly raise an objection: Where is the space?

This is a valid objection, but only in the context of socialist New Delhi, which is a huge city that does not possess a Central Business District.

My response was to point to history. Is it not true that the Mughals built Chandni Chowk – a huge big market place directly opposite the Emperor’s fort? In such a huge market, would there not be enough room for all hawkers? They agreed.

And what about the Brits? Did they not build Connaught Place in a design modeled after the city of Bath, which is a beautiful city that I am fortunate to have visited? Have the socialists built a single great market-place in New Delhi? The answer is a loud “No.”

I doesn’t matter where you go in socialist New Delhi – all the markets are pathetic. Small, dingy, dirty, overcrowded, with no space for the street economy. What hope is there for the street economy if there is no street?

So let us go back to our vision statement: We aim to be a nation of over 1000 free trading cities and over 5000 such towns. We must have huge markets in each. That is, 6000 Chandhni Chowks. And we must invite the rural poor to participate in these urban markets and make far better economic achievements therein. With 6000 Chandni Chowks, there will be enough space for all the street hawkers and vendors that will turn up.

And what about New Delhi?

I continue to maintain the position I had expressed in a ToI article 5 years ago: that the government of India should move out of this city. They must move to a remote small town, and that should be the government’s own town.

This would free up Rajpath – and this extremely wide street could become the new CBD. The “raj” would now be of the market, and all the government buildings lining the street would become supermarkets.

This would also free up Shantipath – the diplomatic district, for all these diplomats would also have to shift to the small government town that would now host our The State. Shantipath could then become a great office district – and “shanti” would prevail through international commerce, not statist diplomacy.

Brand New Delhi.

Brand New India.

(You can read my old article on this subject here.)

Boom Shankar!

On Knowledge... On An Auspicious Day

If my favourite god is Bhola, then my favourite goddess is Saraswati, the goddess of learning, of music and the arts. And today is Saraswati Puja. A good day to reflect on the sublime truth that Knowledge is not The State.

What is Knowledge?

What is The State?

At a cursory glance, The State is politicians and bureaucrats, while Knowledge comes from knowledge workers. And the work of producing and disseminating knowledge has little to do with the work of The State, which is to apprehend criminals and nothing more. Indeed, if The State interferes with Knowledge, society is doomed, because the (mis)use of force is rationalized by its cronies in the universities and the media. We see this in India, we see this in Pakistan. We also see this in the US of A.

One particular kind of knowledge that the US State has patronized over the decades is Keynesianism. Indeed, all those who did not accept the logic of central banking, fiat currency, centralized setting of the interest rate, fractional reserve banking, the chasing of the chimera of “full employment” through constant inflation, and the “macroeconomic” rationalization of these policies using aggregates – like Ludwig von Mises and his student Murray Rothbard – lived their lives in the US of A as a long and hard struggle in conditions close to obscurity. This, in a capitalist society.

These Keynesians who dominated US academia for decades, emboldened with the latest Nobel prize in economics going to one of their own, Paul Krugman, have all been loudly demanding and supporting a “stimulus package” of government spending in order to tackle the current crash. So much so that both Obama as well as Biden have publicly claimed that there is “no disagreement among economists” that a government spending based stimulus package is the right medicine for the US of A right now.

Fortunately, ever since the Thatcher-Reagan years, there have emerged a host of libertarian “think tanks.” These think tanks produce and disseminate knowledge outside the university complex, and their work is often directly political. I call it the “politics of knowledge.” One of the oldest and most established libertarian think tanks in the US of A is Cato Institute, based in Washington DC.

Now, Cato Institute has issued a full-page advertisement in newspapers across the USA, signed by over 200 respected economists who do NOT agree with the stimulus package. I quote the text below which their signatures are placed:

“Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s “lost decade” in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today.

“To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.”

The signatories include two Nobel laureates: James M Buchanan, the founder of “public choice theory” (which is still not taught at the Delhi School of Economics); and Vernon Smith. Also on the list is our very own Deepak Lal.

(Click here for the pdf of the ad.)

Of course, the stimulus package is going through. But we were discussing Knowledge and The State. If the Keynesians are wrong, as our side believes, there will be hell to pay.

Note that The State always appoints advisors who advise them to do exactly what they had decided to do anyway.

This, precisely, was the case with the majority report of economists on Nehru’s ambitious Second 5-Year Plan – to which Professor BR Shenoy remained the only dissenter. Nehru was wrong. His advisors were but yes men. Perhaps a similar disaster is unfolding in the US of A.

I am not at all happy about the Obama administration. Here he is strengthening their trade unions. Of course, there is a direct link between trade unions, Keynesianism and immigration restrictions – and the late Professor WH Hutt wrote tellingly about these. Somehow, I get the uncomfortable feeling that the US of A is heading downhill at a very fast pace.

I’ll leave my reader with that.

Gotta go, light some incense and offer some flowers to my favourite goddess.

I do not worship at the altar of The State.

Cheers!

61 years ago to this day, Mahatma Gandhi was killed by an assassin’s bullet. Exactly 61 years later, the hottest topic being debated is “pub culture”: for example, the lead editorial in the ToI of today, entitled “Not Just Saffron,” laments the fact that both the BJP as well as the Congress contain “culture vultures” who believe that it is their duty to society to oppose the consumption of alcohol – via strong State action. I had earlier termed this “Gandhian Violence.”

Yet, in these 61 years, the tide has turned: the overwhelming opinion in the Young India of today is in favour of Liberty. Even the daughter of a BJP chief minister who opposes pub culture has come out in opposition to her father. Ha ha.

61 years ago, the nation said “Hey Ram.”

Today, the nation is saying “Cheers.”

And it is not true that drinking alcohol is confined to the upper classes. Here is a news report from West Bengal on the hooch and other deadly spirits that the poor there consume. The statistic at the end of the report is chilling: 7.3 million cases of “country spirits” are sold every month in that state alone. The government plans to reduce taxes on these, so as to discourage people drinking hooch – which claimed hundreds of lives last month. So that 7.3 million cases should double soon.

Yet, it was only last night that I met Ahlabadi. We shared a few chillums and I noticed that his face was badly bruised. Turned out that he along with two of his mates killed a couple of bottles of this “country spirit” the night before. Ahlabadi probably fell off his cycle on the way home. But he doesn’t remember what exactly happened. Except the booze. And the wonder that he managed to open the lock on the door to his rooms.

And I was drinking beer. Smoking chillums. Driving home. Very slowly, of course.

And I recall my years in the villages of Bengal, where everyone drank toddy. Why not make toddy tax free? Why not do the same for beer? (That is, light beer.) Why not do the same for wine? Why not allow millions of micro-breweries to mushroom, selling cheap local draughts to all comers – just as roadside vendors sell tea today?

Alcohol poses a public health problem in India only because all government policies encourage hard liquor. Those who can afford better than country spirits invariably knock down a quarter of IMFL rum or whisky every evening. Beer drinking is discouraged by taxation. Ditto with wine.

Now that Young India has unitedly said “Cheers,” let us shift the debate to State policies on alcohol. Beer and wine, consumed daily, are good for you. Toddy, handia, chhung and apong are all healthy. A quart of IMFL is bad. Country spirits are much worse.

Gandhi is dead, folks.

Gandhianism must die too.

Cheers!

Against Our Desi Taliban

Both the news and the opinion pages are full of apprehension that politically connected goon squads imposing their moral and cultural values on others implies that Free India is facing “talibanization.” See this editorial.

The adjective is apt. The Taliban believe that theirs is the perfect culture, the perfect Islam, that they are its guardians, and that coercion is a fine means of achieving the “Perfect State.” The people are just sheep. In the Perfect State, these people will obey orders and pay taxes. Theirs is not an ideology of either freedom or justice; theirs is an ideology of domination. And in this the Taliban are not very different from any of our Hindoo fundamentalists.

So where do we go? To the Congress? I dare say not. Here is the news of a Congress chief minister opposing the “pub culture” as it is not sanctioned by “tradition.” Perhaps Ashok Gehlot believes that the culture of the Delhi Congress is best: there are no pubs, people are advised to drink at home; and The State is the monopoly retailer of booze. Win-Win. Taliban with the profit motive.

Fortunately, our ancestors have left behind telling records of the liberties they enjoyed. Chanakya’s Arthashastra contains a chapter on the regulation of drinking taverns. An interesting rule stipulates that if a traveler passes out in a tavern, the tavern owner is liable for the safety of his person and properties.

The Arthashastra lists out alcoholic drinks that were locally made. It also contains a longer list of alcoholic drinks that were imported. No swadeshi at all. This was India circa 350 BC. There must have been thousands of drinking taverns in Takshashila, Pataliputra and the other great cities of the time. And there was music, dance and entertainment – for the Arthashastra also contains a chapter on the regulation of these arts, and the women who practice them. Ancient Indian culture was closer to the Goa Model of Liberty than the Taliban.

In this war between party animals and political party animals let it be widely known that we who detest political parties and love all other kinds have history and tradition on our side. Including the tradition of liberal public administration. What do our enemies have on their side? God?

We Hindus are lucky that we have many gods, many holy books, and many godmen. We have no pope. Our priests are competitive service providers. They cannot issue fatwas. Our religion teaches us to look for moksha our own way, through our own guru. And we have many false gurus. Many false sadhus. Many false godmen. So the path before us is strictly individualistic. We are not a communitarian faith. The Hindoos who want to talibanize us want to turn us into a communitarian faith – like the Sikhs, Parsees, Christians and Muslims. They want to do this not because they value religion: rather, they want to take over our The State, which is itself based on collectivism.

We Must Not Be Fooled Again.

So party on, dudes, as Free Individuals.

And fuck all the collectivists.

The Road The Chicken Crossed

A new shop has opened in my neighbourhood – all glass and aluminum, with a bright red sign proclaiming “Republic of Chicken.”

Made me happy for the chicken, as a species. Because of modern poultry farming, chicken is plentiful; the cheapest meat. More and more people are eating chicken, and the species is also surviving a lot better.

When I was a boy – the 60s – chicken was a luxury. During my annual holidays at home, in the mofussils of Bihar, I would often take a .22 rifle and go out along the canals in search of jungle fowl (who were attracted to the water). Whenever I did manage to get one and bring it home, everyone was overjoyed; there was a hearty feast.

Today, living in the “Republic of Chicken,” no one has the incentive to hunt for jungle fowl. The market works to protect the wild of the species too.

This logic of using free markets and “animal husbandry” to allow “endangered species” to survive has already worked with crocodiles and emus. In China, there are many tiger farms supplying the need of tiger bones for traditional medicines. If there were more such farms, tiger bones would be cheap, and the incentive for the poacher would be close to zero. Wild tigers would survive.

This logic should be extended across the board to all “wildlife” in India. There can be deer ranches – and venison for dinner. There are lots of other birds apart from chicken that can be reared for the table. We hardly get any turkey in India, but I was told that emu farming has begun.

In India, those who eat meat have nothing to choose from except for mutton, chicken, pork and beef. In Europe, I had a venison steak at an Ikea store; you get partridge, quail and pheasant; and rabbit; you get wild boar; and I was told about a pub that served kangaroo steaks imported from Australia. Crocodile meat jerky is widely sold. Order yours here.

The point worth noting is that the market helps the endangered species to survive.

Now go tell that to the evil western environmentalists who do not want poor people living in Indian and African jungles to make economic use of wild species. They signed a Convention Against International Trade in Endangered Species (CITES).

They imposed a ban on other species crossing the road that the humble chicken crossed a decade or two ago.

And talking of the chicken crossing the road: here are some great laughs. Ho ho ha ha remains the best medicine.

And for more contrarian views on environmental issues, here is my good friend Christopher Lingle’s excellent piece in today’s Mint against the pseudo-science behind the Inter-Governmental Panel on Climate Change (IPCC): Pachauri & Gang.

Cure your mind of the dreadful paranoia these “government scientists” have fostered. Read Cris’ piece.

On Republic Day In Delhi

After blogging, it is my usual practice to stroll for a while in the park opposite, to take in the winter sun. I did the same yesterday, and was smoking a cigarette and thinking of Austrian Business Cycle Theory when my neighbour, a retired colonel, approached. He informed me that our residents’ association was celebrating Republic Day in grand style – and the proceedings were about to begin. I then noticed that indeed one portion of the park had been arranged with chairs, a lectern, and there was even a flagpole with the national flag. As if on cue, patriotic songs started to play on the public address system.

I told the colonel that I did not believe in such patriotism, that there was no point being a “loyal subject” of a regime such as ours. These patriotic songs were all of the 40s and 50s: no one sang these anymore.

He told me that his son had been posted to Siachen. Poor chap. I told the colonel that if we auctioned Siachen, it would not fetch a dime. He said he had only just spoken to his son: the temperature at Siachen was -30 degrees Celsius. It was, in his words, a “constant war against the weather.” I then departed. The park was filling up with people in suits and ties, and I, with my cigarette and pajamas, looked out of place.

I watched the proceedings from within my house. Patriotic speeches. More patriotic songs. Flag unfurled. The colonel salutes. His son is on the battle-ground. The programme ended with one chap shouting “Bharat Mata Ki Jai” repeatedly into the mike. He exhorted the children assembled there to join him in chorus. Some did. And so ended what must be assumed to a spontaneous burst of national pride.

I drove out at about 1730 hrs – and the roads were deserted. The government booze shops were closed, and the usual crowds (and traffic) around them were absent. I returned after 2030 hrs, and Delhi was noticeably dead. There was zero revelry. I wondered what America is like every year on the 4th of July. Perhaps they party there.

Here in Mahatma Gandhi’s republic, the only parties we have are “political parties.” And theirs is a strange culture of their own.

Came home and watched Advani receive an award from UndieTV. Barkha Dutt came on and hailed the bravery of “martyrs” from the police and the security forces who “laid down their lives in the line of duty.”

But that is precisely my point: the small guy gets hit. Like the colonel’s son.

The big guy just got a new heart.

He will live forever.

For A New Republic

Today is a “dry day”: Republic Day. Our The State is celebrating the birthday of our Constitution – but wee the people cannot celebrate. Big Brother insists we must be sober today.

In the meantime, Big Brother is selling heroin. Read this report on how a senior police officer of the IPS cadre has been caught peddling 12 kgs of heroin, worth more than 12 crore rupees. The news report says that this guy used to revel in giving lectures in colleges on the dangers of drug use. While he himself profited from it. This heroin was part of a large haul he had made while posted with the Narcotics Control Bureau.

We need a New Constitution.

A Constitution of Liberty.

It must be Liberty – or the only other way we seem to be going is Talibanization: the rule of a self-appointed moral police. From Mangalore comes the news that goons of the Sri Ram Sena, a Ku Klux Klan-type splinter group of the BJP, attacked women in a pub and ordered them out. Usual remarks about “obscenity” and “indecency” were made about women in western attire, who were dancing with men.

Thankfully, the police arrested most of the goons. The incident was widely condemned in Karnataka – which is BJP-ruled. The central government’s minister also chipped in, terming it an attempt at “Talibanization.”

So that’s the choice: it is either the Goa Model of Liberty or our desi Taliban.

It is either Liberty or a Corrupt Police State.

It is either Liberty or Death.

Onwards to a Second Republic!

On God... And Diminishing Returns

As a wise friend once remarked, rivalry based on religion is like “claiming that my imaginary friend is better than your imaginary friend.”

Nonetheless, the world abounds in religious rivalry.

There must be a solution to this – and it struck my mind that the best way might be to apply diminishing returns to God.

Let us shift the scene to the great new city that we will build on the Konkan Coast. And let us invite every religion in the world to build a temple to their God there. Thus, the new city will have a synagogue, churches for Catholics as well as Protestants, mosques for Shias as well as Sunnis, a Parsee fire temple, a Buddhist monastery, a Shinto shrine, a few Sikh gurudwaras, a Jain temple, and Hindu temples to every god in the pantheon: a Shiva temple, a Vishnu temple, a Brahma temple, a Kali temple, a Saraswati temple, a Hanuman mandir, an Ayappa temple, a Balaji temple and so on. And we must include a temple for the Donyi-Palo faith of Arunachal Pradesh, based on the worship of the Sun and the Moon.

This adds up to about 2 dozen temples for 2 dozen gods.

Let us now think of the life of an ordinary person living in this city, or a child growing up in it. What will be their take on God? Or should that read “gods”?

I daresay that in this City of All Gods there will be zero religious rivalry. God himself will be faced with diminishing returns. There will be so many gods in the city that religious chauvinism will have no appeal. “Sabka Malik Ek,” the citizens will shout in one voice whenever extremists of any religious denomination disturb the peace.

Having solved the Problem of God – which is a major problem – the citizens of this new city will then have to figure out how to survive. In this Holy City all the gods will point in but one direction – to The Market. All the faithful will be encouraged to trade in The Market and thereby prosper. Such a city will soon become a Great City.

And we have a historical example of this happening on the sub-continent: the City of Madras. When the Honourable East India Company built Fort St. George, the governor of the fort received a letter from the directors in London, ordering him to “make your settlement a mart for all nations, for that is how God Almighty of old promised to make Jerusalem great.” Fort St. George rose from nothing to become a great city. We can do the same, by making our new city a “mart for all nations.”

And a competitive market for all gods too.

Peace on earth.

Baboo Steals Toys From Our Kids

Sheer arbitrariness: The directorate-general of foreign trade has banned the import of Chinese toys – without assigning any reason.

Amazing, isn’t it? Children all over the world are happy playing with Chinese toys, but Indians kids are to be forced into playing with Indian toys. Some baboo has decided so. I wonder what dirty piece of subordinate legislation he gets his powers from. His minister, of course, is Kamal Nutt, the arch-protectionist.

When I was a kid – the 60s – you couldn’t get any toys in India. Imported comic books carried ads for toys of the kind that were unimaginable here – like remote-controlled cars, bikes, helicopters and so on. We in socialist India, all the bhateejas of Chacha Nehru, had nothing. And the sad story continued right up to adulthood. In high school, we set up a rock band – but couldn’t even get a decent amplifier. Or keyboards. Musically inclined kids are lucky that today the market is so free.

I could go on to my years in college: We were a group of excellent frisbee players at the Delhi School of Economics – but you couldn’t get a decent frisbee in India. Not even a frisbee.

When I went to England to study at the LSE, I visited the famous toy shop, Hamley’s, to buy something nice for my own son. This was 1990 – and most of the toys selling in Hamley’s, London, sported the “made in China” label.

I see no reason why giant toy stores like Hamley’s or Toys-R-Us should not open up in India. And if these stores sell Chinese toys, so be it. Let the market decide. Let the consumer be the king – in this case, our kids. Why should any baboo deny them good toys?

I remember attending a talk by a minister of industry in Goa some years ago. He spoke with horror as to how housewives are buying imported kitchen knives today and kids are playing with Chinese toy cars. He advocated the philosophy of “Be Indian, Buy Indian.”

To me, it is a good thing that Indian kitchens now possess excellent knives. And it is even better than poor Indian kids have cute Chinese-made toy cars to play with. These are reasons to celebrate. The people are happier, better equipped.

So say “No” to Kamal Nutt.

Say “No” to trade barriers.

Good News, Crazy News, Bad News

First the good news: Immigration into the USA is likely to get easier. This is an increase in Liberty, and should be celebrated. Indeed, Indians could buy up all the USA’s unsold housing stock if they’d just staple a green card onto every property title.

This is the best way to solve the problem without inflating the currency.

If the US chooses the other way, there will be hell to pay, as Ron Paul says in his speech before the US House of Representatives. Fine oratory too. Watch the video.

Getting back to India, I was not amused to find the crazy news that a shop in New Delhi – one of the worst cities in the world – has fetched the highest rent in the world. If we want the poor to enter the urban catallaxy, we must make commercial space cheaper by building more of it. The hawker of today will be the shopkeeper of tomorrow.

The “urban planners” of New Delhi have undersupplied commercial space. And zoning laws are in force as far as the rest of the urban area is concerned. The city has never been considered as an economic system. The Mughals had Chandni Chowk; the Brits built Connaught Place and laid out the city in a “hub-and-spoke” design. But these “urban planners” destroyed the city by laying all new areas along T-junctions. They undersupplied roads and commercial space. Just see the pathetic markets of Vasant Kunj.

The Metro is a grand diversion. At Ground Zero it is obvious that a roads solution is a must. Note that the short expressways to Gurgaon and Noida are both toll roads. Our The State has no money to build a road that tax payers can use for free.

Now for the even more crazy news: Our The State from On High has just gifted a 218 kilometre highway to Afghanistan. So this landlocked country can access the sea via Iran, ending its complete dependence on Pakistan for a sea route.

Then why not link Madhya Pradesh to the sea too – that is, both to the Bay of Bengal as well as the Arabian Sea. And institute free trade. Won’t this be good for Madhya Pradesh? Just as two sea links are good for Afghanistan? Let’s ask Kamal Nutt: his constituency is in land-locked Madhya Pradesh, and all his constituents are surely “subsistence farmers and landless labourers.” He wants to keep them that way. I hope not.

Actually, 218 km is enough to link Goa end to end.

And here’s the best part: One Indian soldier laid down his life for every kilometre and a half of this highway in Afghanistan.

Our foreign minister, Pranab Mukherjee, is quoted as saying:

“In effect, one human sacrifice was made for every kilometre and a half constructed.”

Yes, many a human sacrifice is required for The State, the Flag, the Country, the Collective. Hear Leonard Cohen's Story of Isaac.

Actually, the Taliban are no different: they want the most perfect Islamic State. Repeat: A Perfect State, a Collective. They also demand "human sacrifice."

Liberty is about Individualism. This Idea must challenge the idea of the Collective. That is the only way for the whole of humanity to be Free.

Pranab Mukherjee is engaged in statist diplomacy, in war and coercion. This is costing Indian lives.

No one is challenging the Idea behind the Taliban.

I am confident the “Goa Model of Liberty” will send the Taliban for a Six in the Department of Ideas! Boom Shankar!

Finally, the bad news: Government economists are spreading the falsehood that inflation, measured by a statistical price index they produce, is falling. This is to calm the people who expect inflation to rise with any “stimulus package” our The State may indulge in.

In the precise terminology of economic science, the rate of inflation is the rate at which the money supply is increasing.

Yesterday, I spoke to an eminent economist who tracks these things and he said that the money supply is increasing at 19.6 per cent, despite the fact that inflows of foreign capital are going down. So we must expect high inflation in the future. Bad news.

Finally, Why Indians Have Reason To Hope

Hat tip to Ajay Shah for saying:

"I am extremely uncomfortable with the fact that the government has appointed a board of directors [for Satyam]. Let’s think deeply about this. The company is owned by shareholders, the government is an interloper; the government has no business in getting involved in the governance of the company.

"What the government should have done is to collect the institutional shareholders 50% shares are held by institutional shareholders which can be easily put together in a meeting with a five days notice period. So, the government should have put institutional shareholders of the company into a room and told them you pick. The institutional shareholders should have put together a board of directors and that board should go around recruiting a management team. I think we are doing damage to the fundamental concepts of private property and the corporation by putting government into companies in this fashion."

You can read the full interview here. (Thanks to Chandra.)

I also found two videos featuring Ron Paul on the LRC blog. The first is on “the death of the dollar.” Here, he says that we are being misled to believe that inflation rate (rate of price increase) is down when the real rate of inflation, the rate at which the money supply is increasing, is going up. In the US, the money supply has gone up by 70 per cent since October!

He adds that all this is pyramided on debt. At the root of all this debt lies the great con game of creating “property titles without property.”

And I liked the interviewer: He knows his stuff. Hope we get such guys on Indian television.

The other video is of Ron Paul reacting to Obama’s address. Here, he takes on the position of a principled libertarian-constitutionalist and goes on argue that Obama’s nationalism is “scary.” For it is also an “ideological position”: only, this time it is an ideology that governments must do many things; that governments work; that the economy must be “run” by central bankers; that there can be international policing; and social welfare; and so on.

Ron Paul sounds and looks so much like a real person – no great oratory, no drama. An open sincerity. And an abiding faith in Liberty. (The sound is a bit low on this one.)

How could Obama win and Ron Paul lose? The answer is simple: In the US, the government does its basic jobs right – in the sense that at least there aren’t 1,00,000 pedestrian deaths every year, the supply of water and electricity is not erratic, the roads are very good, and the democratic politics gives their government an air of openness and, especially after Obama, inclusion. They foolishly believe that their society is successful because of their government, the central State. A State that is full of pomp and pageantry, from grand inaugurals to shooting off space shuttles. Here, most people will believe that government works. And they will support a man who claims he will make it work even better.

We are very lucky that here in India everyone and his uncle has lost all faith in government and bureaucracy, and politicians and political parties. Here, there is widespread unrest; an open disaffection. Nothing works. “Bijli, sadak aur paani,” the people cry out – and all three are State monopolies. The people, all the people, from rich to poor, are suffering. And they say that “where the people suffer, they change things.”

There is Hope here in India.

Someday we will change things.

On Corruption

After the DDA scam – that the lottery to distribute 5000 flats among 1,50,000 aspirants was rigged (which is only to be expected) – it was not amusing to read the central government’s housing minister’s remark that “the shortage of housing has corrupted the market.”

Actually, the Absence of The Market has Corrupted The State.

The central government’s housing minister is part of our The State from On High.

She quotes some figures:

According to the estimate of the technical group constituted for assessment of the housing shortage at the end of the 10th Five-Year Plan, total housing shortage in the country is 24.71 million dwelling units and 98% of this shortage pertains to the economic weaker section and the low income group.
“The total housing requirement during the 11th Five-Year Plan will be 26.53 million,” said Selja. Highlighting the high cost factor involved in buying houses, she said that it is only in this country that earnings of a life time are not sufficient to buy a house of one’s own.

The reason is an absence of roads – especially in the surrounds of towns and cities, and links between cities and satellite towns. This creates a shortage of urban land and makes it prohibitively expensive. Even ugly properties in dysfunctional neighbourhoods – like DDA’s Vasant Kunj – are expensive. Yet, if you drive down the country lanes between Vasant Kunj and Gurgaon, you will find abundant open land, including unowned scrubland. If there were roads all around, the supply of urban land would increase, making it affordable. Thereafter, a free competitive market in real estate development. The role of the government limited to providing roads. The registration of property titles can be “contracted-out.”

In my book, roads should be Top Priority. The State from on High is diverting our attention with Metros. People have cars today, the number of car owners will grow, and roads must be built. Motorcycling is unsafe today – and all policies should be geared towards making today’s motorcyclists and scooterists car owners. This will also enable better traffic management and hence, safety. Roads must be built for car owners. This means roads must be built all over India – not just the 5-city vision of the Golden Quadrilateral. We need an India-Wide Web network of roads. With cars and roads, all Indians can spread out all over this vast territory. There will be bungalows for all.

The Key Problem today is Corruption. The Market is NOT corrupt, minister, our The State is. There is not only corruption for money. There is the Corruption of The Mind with spurious knowledge. And there is the Corruption of Institutions through senseless practices. I do declare that our The State has been Completely Corrupted by its twin monopolies – the monopoly on roads and the monopoly on land, especially urban land. It is senseless because even ants and bees do not destroy their ant-hills and hives. Man builds cities and towns just as ants build ant-hills. You do not destroy your ant-hill. But these corrupt duds have done just that, running these twin monopolies in a Totally Corrupt way. And they quote meaningless statistics. Do you want these Criminally Insane People to Teach Your Children?

That is the Question.

Take that, Amartya.

On Obama... And Ron Paul

I was just wondering how happy and relieved I would have been if it had been Ron Paul taking the oath of office in Washington DC today. The biggest issues before Obama are: 1. The Money, and 2. US military interventionism abroad. On both these issues, Ron Paul was the only man in American politics consistently talking sense. These are also the two biggest issues before the rest of the world today.

Ron Paul stands for Gold. He would have the US Fed closed down. He says fractional reserve banking is a Ponzi scheme. Let us see how:

I deposit 10k rupees into my current account. The bank lends out 9k by creating another account. Now both of us can lay claim to one piece of property: I can claim back the 10k, and the borrower can claim 9k, his loan. And there is only 10k in the bank.

At the bottom lies the question of Property. We now have one piece of property with 2 legitimate claimants.

The only way in which this can succeed is if you keep on expanding the money supply, thereby creating more depositors – while also lending out more, even to “sub-prime” borrowers. Ponzi with a capital P.

We are now at the end game. LRC reports that Goldman Sachs wants interest rates to be a negative 6 per cent, by increasing money supply and inflation!

Money is really the number one economic problem facing the world today. And it is in the interest of all the poor of the world that money be sound. Gold is Sound Money.

Obama will probably inflate further. That is the way the wind is blowing. It blew Ron Paul away – but he is still there, manning the guns.

And guns brings me to the second issue facing the world today – the political problem of Security. Ron Paul consistently advocates a non-interventionist US foreign policy: Bring the troops home. Cut military spending. Balance the budget. Get the house in order. I do believe that this would make the whole world a better place. We would all have to solve our own problems ourselves.

In the end, we have a Great Leader, but we do not as yet have the Great Society. The key economic problem is Money – because of The State. And the key political problem is Security – because of The State once again. I would have been stuck to the TV if Ron Paul had been speaking, because it was always he who understood these evils well.

But Obama won the “competitive struggle for the people’s votes.” He is Reality. I just hope he doesn’t goof up on these two critical issues. If he does, I hope the Indian media will put the spotlight on Ron Paul. They totally ignored his campaign. What a shame.

On Being Gandhi's Antithesis

Allow me to expand on my own comment to my last post, wherein I admitted to being the Antithesis of Gandhi. This is not limited to the High Life – which I uphold. It extends to every aspect of Gandhi’s thoughts.

He believed in self-sufficient village republics. I believe in free trading cities and towns.

He believed in the charkha. I believe in modern machinery – the key to raising productivity and, thereby, the wages of workers.

He believed in non-violence. I uphold the right to keep and bear arms.

It is only after all these that we come to the High Life: he hated all highs; I love my nasha.

So, the two of us can never meet. We are literally poles apart. I am his Antithesis. Period.

My article, “Liberals Must Dump Gandhi,” was cited for the 2002 Bastiat prize, which I won. The article, with the original illustration by Bonny Thomas, can be found in my Antidote 2: For Liberal Governance. I have never been a Gandhian.

And as for the High Life: In my view, our nation has committed a grievous error by treating nasha as evil. There are good nashas, there are bad nashas, there are strong nashas, there are light nashas. Some damage the health. Some damage the mind. Yet, some are not bad at all: they say light beers and red wines are good for you, but our miserable taxes on these make us all quaff strong stuff. We outlaw our traditional ganja, which is non-addictive and has proven medicinal properties, while at the same time allowing highly addictive cigarettes and bidis. This doesn’t make sense. In other words, these policies are based on ignorance: the ignorance of nasha. Gandhi is responsible for this ignorance as well as the hypocrisy that surrounds it.

Therefore, I strongly suggest that we Indians dump the Gandhian vision. It is colourless, soulless, and erroneous to boot. Let us, instead, dream of a freer and better India. The Goa Model of Liberty. Yes, it is Goa that is truly “vibrant,” not Gujarat, which is a hell hole wherein minorities live in fear. Goa truly embraces the High Life. So do I. And if this bothers some people, I cannot help it. I do not adjust my life to suit the preferences of other people.

It's Gujarat Versus Goa

It’s Gujarat versus Goa, folks.

Both LK Advani and Narendra Modi hail from Gujarat. Both are in the running to be the next prime minister of India, after we say bye-bye to Chacha Manmohan S Gandhi in a few months. Which reminds me: Even Gandhi was from Gujarat.

I have visited Gujarat. It is very far removed from being a “vibrant” place. Rather, it seems at every step to be a tyranny backed by widespread public hypocrisy. You cannot get a drink in Gujarat – while the average Gujarati is happy to claim that his state reports the highest per capita consumption of whiskey in India. A doctor I met said that the highest incidence of liver cirrhosis in Gujarat was among police inspectors. Surely, this is not a “model” for the rest of India? Leave aside the communal violence the state is so famous for. This is a corrupt police state.

Yes, Ambani, Mittal and Tata have endorsed Narendra Modi – drawing Jug Suraiya’s ire. They say he is a great administrator. Their clearances to set up business came through in a matter of days. Thousands of MoUs to set up new businesses were signed in Gujarat recently. So what?

Are the people happy? Are the people free? Is there social harmony? Is there, indeed, a “body politic” based on a common recognition of the same rules? Or is this just a laboratory experiment in Hindootva? We are Hindoo chauvinists, yes; but mind you, we support private enterprise. Big deal. No matter what Tata, Ambani and Mittal might say or do, I find the “Gujarat model” despicable.

My vision of a free India is based on Goa, not Gujarat. Here, the ordinary man is Free. There is harmony between faiths, between cultures. There is a year-round, permanent holiday atmosphere. There is a bar every 25 yards. There are casinos too. Alcohol is a big part of Goa’s civilized culture. My only complaint is about the criminalization of ganja smoking. But in Goa the open public politics allows me to campaign against this repressive legislation. And, as I reported a few days ago, the average Goan is richer than the average Gujarati. He is happier too. He is freer. He is more secure. Not only that, the politicians of Goa are not above the people: rather, they are very much ordinary people. The ordinary Goan is politically aware as well as politically active. It is unthinkable that in Goa a local politician would ever acquire a halo the size of Narendra Modi’s. Or that the police would close all bars.

Advani and Modi are championing the “Gujarat model of Hindootva.”

I am holding up the “Goa Model of Liberty.”

Think deep my fellow countrymen. You have an important choice before you.

Basic Reading

A reader has written asking for my suggestions on basic readings in the philosophy of libertarianism. I suggest:

1. Leonard Read's "I, Pencil." To read click here.

2. The Essential Frederic Bastiat available from Liberty Institute and also from the Friedrich Naumann Stiftung.

3. My little primer, Free Your Mind: A Beginner's Guide to Political Economy, available from the Centre for Civil Society.

4. Ken Schooland's The Adventures of Jonathan Gullible: A Free Market Odyssey published in India by Academic Foundation in association with Liberty Institute.

Happy reading!

India's Enormous Urban Potential

The Times of India website now gives itemized city news from close to 30 Indian cities. I am proud to say that I have not visited only 3 from the list: Rajkot, Surat and Hubli.

There are many reasons to celebrate this focus away from the corridors of power in New Delhi to all these cities. For example: From Rajkot has come the news that a local entrepreneur has bought a car that flies!

The first thing worth noting is that, as far as administering the affairs of these 30 cities is concerned, local knowledge is paramount. Sitting in New Delhi, I can scarcely even read the news from all these cities thoroughly, forget about administering their affairs. So we don’t need a central ministry for urban development. We need mayors.

As an aside, let me add my own local knowledge of the 27 cities on the list that I have visited: almost all of them are a complete mess. Some have hope. All need immediate action to stem the rot. The local man on the spot, the mayor, must be empowered to deal with these matters. Top priority must be given to roads, footpaths and pedestrian safety. Next, cleanliness. These are areas where local knowledge must be allowed to come first.

So shout a Big Boo to our The State from On High.

And three loud cheers for the mayor of your city.

The city news page on the ToI website also tells us that there are many, many more cities in India to choose from – not just the 5 metros. This tells us that if the scope of urbanization is widened, so as to include the thousands of big and small towns that surround these 30 cities, India’s urban future can be bright indeed. The 5 metros are beyond repair, and life in each of them is a daily recurring nightmare. If more and more cities and towns mushroom, there will be greater choice. People will choose better cities and towns to live in.

Where will I go? Why, Mangalore, of course! This is the city where smokers rule. The news has it that the smoking ban of pmk ramadoss is totally ineffective here. This is, indeed, Tobacco City, home to many famous bidi manufacturers, like Ganesh, whose bidis I found selling at the Davidoff store in Geneva. The use of snuff is also widespread – so Hayek, who used snuff, would have had been happy here. My only condition: Include ganja in the list of smokables allowed in this fair city. This will make all the ganja farmers on the western ghats happy. This will bring in tourists. It will also keep the Karnataka cops off my back. Last time around, the cops got pretty mean.

Life's Better In Goa

The news that Goa is the richest state in India came as no surprise. I lived there for a few years and traveled around a fair bit – and never did I encounter the grinding poverty we see everywhere else in India.

One reason is that Goans don’t depend on their government for much. The report highlights the fact that Goans rely on private sector medical facilities. This was true even of the rural district of Canacona, where I lived. We had 2 private hospitals, and everyone went there.

Goans are also blessed with roads – although they are too narrow. And the central government’s “notional highway” going through the state sucks big time. But every village is connected with a motorable road. Roads matter greatly in reducing rural poverty and distress. Note: Buses are all private.

Further, Goa is highly urbanized. The tiny state has over 30 urban clusters, run by over a dozen municipalities. Unfortunately, these are not doing a good job. The state has enormous potential as real estate – but what is happening today is urban overcrowding. Even the tiny market town of Canacona district, Chaudi, bang on the NH17, is overcrowded, dirty and ugly. And all around are vast open spaces and verdant hills: the “unreal estate” that we see all over India. But rapid urbanization, as opposed to “rural development,” is one of the factors that have made Goa rich. Of course, they could be much richer.

One of the strange things I noticed about South Goa is that police stations are all miles out of town. The Canacona police station is miles and miles south of Chaudi. There is little police presence anywhere. Weeks, even months, can go by without encountering a policeman. Apart from the couple of unarmed guys who desperately try to make sense of the traffic at Chaudi – a town whose Main Street is NH17. Heavy traffic. Notional highway. Very unsafe. Two tax-funded cops.

Yes, their The State provides “education,” and Goans score high on literacy, but a scandal broke out recently when their education minister was found to have lied about his academic record. He claimed to be a graduate, whereas he was only a Class 5 pass! Their government education system is only about literacy. Nothing higher than that.

Goa is Goa, of course, because of the Goans, who are smart, peace-loving, and entrepreneurial. Tourists love Goa because of its atmosphere of freedom and fun, and a vibrant cosmopolitanism. Cultures and religions meet here; they do not clash.

And there is more freedom in Goa than anywhere else in India. Goa has casinos – but the cops hate “rave parties.” I think their government should step back a lot more. Tourists are a mainstay of the economy. They say one tourist creates 12 local jobs. And tourists come to have fun; to enjoy a holiday. If rave parties and hash cafes are allowed to flourish, I am sure more tourists will arrive. Even in the monsoon: smoke a joint and watch the lovely rain.

Those who have been to Goa must have enjoyed hanging around in the “shacks” on the beaches. These shacks are at the cutting-edge of Goa’s hospitality industry. And they don’t have property titles. Indeed, in much of coastal Goa, property titles are a bit of a mess. If this is fixed, the “mystery of capital” will be unlocked, and Goans will prosper like never before.

There is also a nasty piece of central legislation that is being enforced on the beaches, called the Coastal Zone Regulation Act. It bars permanent constructions near the shoreline. So there is more “unreal estate.” Fisherfolk, whose beachside properties are worth millions today remain poor. Note that nothing can prevent the sea from eroding the coast. What else is a beach but eroded rocks? What is the business of the central government from On High to legislate on local property matters. These should be decided at the local level.

Goans should unite to throw the central government out of their state. They should build a new highway through their state on their own. They should refuse to implement the CRZ Act. The central government is doing nothing for Goa. Indeed, Goan wines, beers and fenis (there are over 100 brands) are not allowed to be sold anywhere else in India. Why be "loyal subjects" of such a repressive State?

And why not institute unilateral free trade. Declare Goa a free port. Duty-free shopping will bring in even more tourists. Doesn’t it sound better than exporting iron ore?

Think about it.

On Many Important Things

The prize for headline of the day goes to this: Israel bombs UN Headquarters in Gaza. Sounds much like the Maoists blowing up a police station in Chattisgarh. Wouldn’t pure anarchy be better? What is “government”?

Khalil Ahmad’s article, “A world without rules” begins by saying that we call ourselves human only because we have Law. And if our society is lawless we fail as human beings. We “devolve” rather than “evolve”: we all become lower species. He calls terrorists just that. And he then proceeds to discuss the Rule of Law. Excellent piece, thanks to In Defence of Liberty.

Carl Menger theorized on the spontaneous evolution of Law: In any society, the majority is weak while a minority rules with arms. The minority plunders the majority. There is no Law. It is then that the majority gets together and forces the numerically inferior tyrant and his cohorts into signing up on a Law common to all. This, indeed, was the Magna Carta. The fact that the world is lawless does not imply that we must ask the world’s parliaments to make new law. Rather, we must place all the world’s governments under The Old Law. May this uprising happen first in India.

There must be No Plunder – and that is The Law. What is happening today is Universal Plunder – a state of lawlessness.

Next: Thanks to Walter Block on LRC I found this excellent column in the NYT that argues against “fair trade” – in particular, against governments in rich countries banning the produce of “sweatshops” in poor countries. Yes, a factory job is certainly not the worst fate that can befall a poor person here. At least it is in the shade! Obama must read this.

Lastly, readers are invited to read my column in Mint, which I had titled “Science Vs. Social Science.” It shows how the two are totally different in their methods and scope, and that a false social science that apes physics has taken over the universities – all backed by our The State, which is an interested party in these studies. The article calls for the private sector to step in. That is, to set up something infinitely superior to the Tata Institute for Social Sciences. An institute that will never be a lackey of The State. And I hope some brave profit-makers are reading this.

I therefore find it amusing to read what the Paki State has done to schoolbooks there. Let us first put our own house in order.

And the Bozo Award goes to these “economists” who are warning us of the “danger” of falling prices. They don’t know “sound money.” And their thinking lulls the lay public into believing that governments and their central banksters have a role in “price stabilization.” They don't understand Catallactics.

One more reason for a new, private school of social science.

Money In A New World

There are too many comments on my earlier post on "the scandal of money," so I thought I'd respond with a post on the main page:

A wise man, a Swiss-French philosopher whose name I forget, when told of the invention of paper money, said that the only way in which it can work is if everyone has the freedom to issue paper notes. I agree.

So I can issue an IOU. So can you. So can ITC Ltd. Some will circulate – “gain currency” – while others, like mine, won’t. The only question we must now ask is what The Law should be on the subject.

Very simple: These are all “private law” contracts binding on those who issued these notes. Just as we cannot be allowed to issue dud cheques and get away with it, in exactly the same manner, no one can be allowed to freely default on his notes – like the RBI does with impunity today.

There will thus be many kinds of notes based on a variety of real commodities, and these will compete. The result will be that all notes will be “property titles” to tangible properties. There will be no irredeemable paper notes, as is the scandal of today.

In my example of ITC issuing notes redeemable in packs of India Kings, the note will not mention any rupee value or any validity date. The note will exchange at a “price” determined by the market, in an accounting unit of common money. ITC will be bound as a note issuer to always redeem the notes, and it will engage in this manner of profit-seeking precisely if there is a profit in it. There should be, for it is an interest free way of raising funds.

The reader is advised to look at the entire matter first from the point of view of the consumer – the note-holder. And second, from the point of view of a citizen in a “rule of law society.” A note convertible on demand into a tangible asset is surely a far better world for note-holders than the world of today. And won’t citizens be better off under the natural laws of justice? – which begins with private property. Aren’t these laws simple, easy to understand, and moral as well? Won’t everyone agree to abide by them? Won’t “outlaws” be quickly identified and dealt with – with the full support of the law-abiding citizenry? That is, there will be no “enforcement” problems. Compare this with the complicated but immoral laws, rules and regulations of today. Compare this to FERA – and the Directorate of Enforcement.

See The Light?

The Car Versus The Planner

I wonder what the central government’s ministry of urban development has done all these years. India is an urban nightmare. The only solution is powerful city governments run by mayors. And, of course, “company towns,” run by the companies that set up and manage these towns. These company towns can then be run without democracy and without bureaucracy – no IAS-IPS; no elections. Take your pick. Choose to live in the city where the taxes are lowest and the facilities are the best. In such a scenario, the central government would have nothing to do with urban affairs. The central ministry of urban development would be shut down.

And indeed it should be. The news today has it that this bozo ministry has proposed making cars more expensive. The idea is to generate funds for (government-run) public transport – basically MRTS and BRT. To the “urban planner” we must add the “transport planner.”

Two quick points: One, I am extremely happy for my countrymen that they are now owners of cars. This was not the case 20 years ago. Then, we just had the planner. We Indians now have good cars because of many competing MNCs. That is, the private sector. But even then, our per capita car ownership is among the lowest in the world, averaging 13 cars per 1000 people, lower even than Pakistan and Sri Lanka. Far, far lower than Malaysia and Thailand. So which way do we go? Towards universal automobile ownership? Or back to socialist central planning? The ministry of urban development wants to take us backwards. We must oppose them tooth-and-nail.

Second: I am all for decent public transport – but in private hands. The ministry wants government-run bus and metro rail facilities in all towns. Why should entrepreneurs not be free to set up tramways in smaller cities and towns? And why must the government run buses?

It seems to me that our The State is not rolling back at all. Indeed, if anything, our The State is surreptitiously increasing its corrupt businesses. It wants to be a transport planner because it wants to be a land developer. However, land can be developed very well by roads – especially given higher car ownership today. Why didn’t the bozos do that?

Note that we are already paying taxes on petrol and diesel that are dedicated to the Central Road Fund – but we have no roads. The sad fact is that we are being forced to pay tolls on all highways – in addition to the taxes. This is double taxation. They are a government run by cheats. So, paying more taxes is NOT the solution. Demanding good roads in exchange for the taxes we already pay is.

So, if you love your car, if you desire that your less fortunate countrymen should have cars too, and if you think that the transport planner should go straight to hell – then oppose these stupid (and corrupt) ideas of the ministry of urban development.

In my book, these bozos should be given the pink slip.

The Scandal That Is Money

Allow me to invite you to participate in an interesting thought experiment on money.

In 1973, full 35 years ago, a pack of India Kings cost 5 rupees. Now, suppose that in 1973, you stored away 2 paper notes, each worth 5 rupees. The first was a 5 rupee note issued by ITC Ltd. promising to redeem the paper with a packet of Indian Kings on demand. The other note is the ordinary green Reserve Bank of India 5 rupee paper.

Both these notes were stored carefully in a safe in 1973, and taken out only today. What are they worth?

Well, for the ITC paper note you would still get a packet of India Kings, now worth 100 rupees.

For the RBI note you would get a bundle of bidis.

This shows why money must always be something tangible. Indeed, tobacco has been used as money even up to a few centuries ago. ITC notes redeemable in tobacco would always keep their value intact.

But what do we make of the RBI paper? Well, the best way is to consider it as a case of what ITC did not do – like the dog that did not bark in the Sherlock Holmes story.

Now, suppose ITC was not managed by gentlemanly “boxwallahs” and was run instead by corrupt upstarts like the cheats of Satyam. And they devised a scheme by which to defraud their note-holders. The scheme was as follows:

Over the 35 year period, ITC went about systematically lowering the quality of India Kings cigarettes. So, by 1980, there is no filter tip; by 1985 the cigarette is 10mm shorter; by 1990 the tobacco in the cigarette is exactly the same as in an (ugh) Wills Flake. And by 2009, when you redeem the IK Note all you get are a bundle of bidis with “India Kings” emblazoned on the pack.

Actually, we cannot imagine any reputable company doing something like that in an open market. All note-holders would be up in arms. ITC would be dragged to the courts.

Yet this is precisely what the RBI has done, quietly, silently, gradually. And no one has complained. And, what is worse, the RBI has a “good reputation.” Thanks to Keynesian “macroeconomics” killing all intellects.

The US Fed has done much the same. In Nixon’s time, 35 US dollars bought you an ounce of gold. Today, the same costs 900 dollars. If you stored 35 US dollars in a safe in 1971 and took the money out today you would probably get an ounce of iron. Gold turns to iron just as king size premium cigarettes turned into bidis.

This is the scandal that is fiat paper money. Combined with fractional reserves it is but a Ponzi scheme. A Ponzi scheme, that is, run by governments. And we thought that the role of The State is to uphold the Rule of Law!

My questions: Who should teach Law? And who should teach Economics?

Do you see the great error Indians have committed by asking our The State to occupy the “commanding heights” of Education? We must throw the rascals out of academia.

Loving America, Hating Uncle Sam

Actually, I am a great admirer of America and Americans. I just hate Uncle Sam, their The State.

The real America is of rugged individualism. I loved all the Western movies. I loved John Wayne in “True Grit” – his only Oscar. I love their music – like Grand Funk Railroad singing “We Are An American Band.”. And I hope to own a Harley-Davidson some day – Kamal Nutt permitting.

The Harley-Davidson is a symbol of America. And I found this “Firearms Refresher Course” on the Harley-Davidson Community website, “Reading After Riding.” It was very good reading. And since they asked that this be shared, I have pasted it below for my readers. I have emphasized the best.

FIREARMS REFRESHER COURSE
"Those who hammer their guns into plows will plow for those who do not." ~ Thomas Jefferson

1. An armed man is a citizen. An unarmed man is a subject.
2. A gun in the hand is better than a cop on the phone.
3. Colt: The original point and click interface.
4. Gun control is not about guns; it's about control.
5. If guns are outlawed, can we use swords?
6. If guns cause crime, then pencils cause misspelt words.
7. Free men do not ask permission to bear arms.
8. If you don't know your rights, you don't have any.
9. Those who trade liberty for security have neither.
10. The US Constitution (c)1791. All Rights Reserved.
11. What part of "shall not be infringed" do you not understand?
12. The Second Amendment is in place in case the politicians ignore the others.
13. 64,999,987 legal firearms owners killed no one yesterday.
14. Guns only have two enemies: rust and politicians.
15. Know guns, know peace, know safety. No guns, no peace, no safety.
16. You don't shoot to kill; you shoot to stay alive.
17. 911: Government sponsored Dial-a-Prayer.
18. Assault is a behavior, not a device.
19. Criminals love gun control; it makes their jobs safer.
20. If guns cause crime, then matches cause arson.
21. Only a government that is afraid of its citizens tries to
control them.
22. You have only the rights you are willing to fight for.
23. Enforce the gun control laws we ALREADY have; don't make more.
24. When you remove the people's right to bear arms, you create slaves.
25. The American Revolution would never have happened with gun control.

So let us be brave and free, like the real Americans, riding Harleys, packing Colts.

And let us practice the real Capitalism America seems to have forgotten.

Here is Kaushik Das in Mint today, arguing that “we must save capitalism from the capitalists.” Wrong: We must save Capitalism from Uncle Sam. And I hope some Americans are reading this too.

Kaushik's key point is that the phenomenon of a "large cluster of business errors" can only occur due to government intervention - the Fed.

But then, the US Constitution gave the federal government the power to make coins, not paper notes.

I hope, as the Americans say, you are "getting my drift."

PS: Sunil Agarwal, a PhD scholar at Kurukshetra University, interviewed me recently on the subject of money and banking. The interview has been published on his blog.

Inverting The Pyramid

The greatest error in political philosophy is faith in a strong central government. Indeed, such a strong central institution never “governs”: it is just The State From On High.

This erroneous political philosophy has its roots in “central economic planning” – the idea that the national economy should be made to resemble an “organization.” When Nehru planned, the Congress was his political organization. And India was a “one party dominant” polity. Congress ruled the centre; Congress also ruled most states. Not only that, the Congress ruled the bureaucracy, another organization, subjecting them to “dual subordination”: they were subordinate to their superior officers; they were also subordinate to the Congress hierarchy. Today, neither organization works. The Congress is on its way out – and into the dustbin of history. And as for the bureaucracy, the less said the better.

Where do we go to from here?

I say, let us invert the pyramid. Let us keep our vision intact: We are a nation of hundreds of free trading and self-governing cities and thousands of such towns, with most of the action along our coasts. The first fact is that in this scenario there is no “national economy” to be organized. Rather, there are millions of independent businesses, run on the special knowledge of separate entrepreneurs. And all these businesses are competing. So the question of a supra-organization “running the economy” does not arise.

Second: The task of “governance” is simplified by the fact that human beings who trade are “rule following animals.” There is therefore a “natural order.” These basic rules of civilized conduct in markets govern the manner in which we acquire desired objects. There is a natural order because everyone is trading in order to acquire desired objects. None are stealing, looting or using any force. Any government, anywhere in the world, if it is to succeed, must base itself on the solid foundations of this natural social order. Socialism fails precisely because it does not see this order. They do not see the beauty of the rules of private property that govern all civilized people engaged in market exchanges. They know nothing of Catallactics. They study the great fiction called “macroeconomics.”

Once we have our basic concepts clear – the vision of free trading cities and towns, and the natural order of a trading society – all that is required are institutions of local self-government. Let them be instituted. And let there be diversity. Let the local government build local streets and roads, clean up the garbage, and catch all local crooks. And stop right there. If we invert the pyramid, we can solve all our problems with government. We can soon be a successful nation. Full of successful individuals enjoying the good life of Liberty Under Law.

Full 20 years ago, in 1989, I left the service of our The State and went to study local government at the LSE. My professor was George Jones. I did learn a lot, but I still wonder why George mentioned nothing about the ancient City of London and its Lord Mayor. Perhaps because the LSE is basically socialist and the City stands solidly for Capitalism. The Webbs, I recently discovered, also did not think too much of this ancient institution of urban self-government.

To me, the “Westminster model of democracy” is meaningless unless we grasp the fundamental fact that Britain has a long tradition of strong institutions of local self-government – beginning with the Lord Mayor of London, an institution older than the Magna Carta. Here is a brief history. If you want to study this institution further, here is a good book. I recommend it. My professor did not.

PS: Pravda says the earth is headed for an Ice Age. What does Pachauri have to say on that? (Thanks to LRC.)

For A New Jerusalem

The ongoing war between Israel and Palestine should make us pause to reflect on the fact that being tied to a piece of land is stupid. But that is precisely what the idea of an Israeli State is.

And they call this war crimes ravaged place the “Holy Land”! Yes, Israel is guilty of war crimes. Read this opinion piece from the WSJ.

At least we Indians can take succour from the fact that our own “Holy Land” – the devbhoomi from Haridwar to Gangotri – is truly an oasis of peace. The “Holy Smoke” is of good quality, freely available, and openly smokeable: no cops. Small wonder that young Israelis are flocking in droves to our holy land. They arrive shell-shocked from years of compulsory military service. And they love it here. May their tribe increase!

Man is a migratory animal. The “search for greener pastures” is a constant feature of man’s life on earth. We Indians are a happy diaspora – and I daresay the diaspora are happier than those who remained behind, “kicking around on a piece of ground in your home town.”

Here is a report saying that the three worst airports in the world are Indian. And some good news: air traffic control may be hived off. We must fix our transportation. The truckers strike should make us reflect on how critically all trades depend on transportation. And even the road to Gangotri is horribly unsafe.

But the Israelis keep coming. You see them in Goa, in Rishikesh, they have colonized Manali, and have a major presence in Pushkar: notice these are all smoking destinations.

I think smoking tourism should be encouraged. I visited Amsterdam as a smoking tourist, and there were countless others like me. All there to smoke. And the City of Amsterdam was prospering.

I am sure individual Jews would be happier as a diaspora than under the monopolistic protection of an Israeli State that is in a condition of permanent war; and that too, subsidized by the US State. All this will cease once the US dollar nosedives – thanks to Paul Krugman and Ben Bernanke. God bless them both for terminating the US Empire. And all their militaristic meddlings overseas. When you have friends like these you don’t need enemies.

But I was hearing some good music while writing this post: Alpha Blondy’s “Jerusalem” – in which he speaks of a city where “you can see Christians, Jews and Muslims living together and praying, saying shalom, and salaam walaikum.”

Today, we must think of such a Great Holy City in a new land. Why not in India? Why not call it New Jerusalem? – and put a Statue of Liberty on its harbourfront: “Give me your tired, your poor, the wretched who yearn to be free…”

Utopian? Not really, for I have spent some years in the Konkan. Mangalore is a city with churches, mosques and temples – and complete harmony. And a deep water port. In the village in South Goa where I spent a few years there was a mosque, a temple and a church. Complete harmony.

I like harmony. Voluntaryism. No use of force or violence. Justice as in trade. Natural order.

War is for barbarians.

On Satyam, The Market, And The State

The one lesson from the Satyam fraud: Do not blame The Market for the character flaws of certain people.

Also note that The Market has its own way to deal with such fraud: the frauds and their company lose their reputations. Share prices plummet. They will never be trusted again. Markets are self-correcting.

Further, the news that our The State has stepped in to arrest the chairman of Satyam should not blind us to the fact that our The State commits far bigger frauds every day. Like the paper money fraud, for example. Or the NREGA. Or the 1 lakh crore “stimulus” just announced. The Satyam fraud is a mere 7,800 crore.

Thus, we can conclude that the punishment meted out by The Market is far more effective than any punishment government can deliver.

Markets possess the means to punish cheats and frauds – and this gives rise to many proverbs, like “cheats never prosper” and “honesty is the best policy.”

I sincerely doubt whether the personnel of our The State ground their careers on any such policy of honesty. State organizations – like the DDA – are dishonest in principle. And there is nothing within The State to correct them. Apart from “democracy”: we can vote once in 5 years to throw the rascals out.

On the other hand, there are millions of honest businessmen – from chai-shop owners to vada-pau sellers. They remain honest because of the harsh discipline of the market. If they cheat, they lose customers forthwith.

The conclusion: The Market is not flawed. Certain players in the market are. And The State is not the solution. For The State is even more flawed. If left alone, The Market inflicts its own brand of harsh punishment to frauds and tricksters. The Market is based on the principle that honesty is the best policy. The State, on the other hand, is not based on any “virtues.” Rather, it is a predatory organization. Thus, the news that the police have arrested the chairman of Satyam should not be interpreted as an act of justice. When we encounter the police in our daily lives we see them as brutes, as corrupt predators. And there is no punishment whatsoever for those who indulge in this predation and corruption.

So let us raise three loud cheers for The Market.

And let us always boo The State.

On Obama's Doctor... And His Tyranny

The name of a medical doctor of Indian origin, Sanjay Gupta, has been doing the rounds as Obama’s choice for the post of Surgeon-General of the USA. As a libertarian, I do not see any reason why such a position in government should exist – but that apart, I was happy for a desi. That is, till I read his column in Time entitled “Why I would vote no on pot.” (Thanks to LRC.)

He begins by making some noises about Woodstock – as if ganja was discovered in the USA in 1968. He seems to be totally unaware of 4000 years of ganja use in India. He should be taken on a guided tour of every Indian “holy city” – from Haridwar to Varanasi, and from Ajmer to Gangotri – to see with his own eyes that ganja is “traditional” in Indian culture.

He notes the medical utility of ganja – against Alzheimer’s, against nausea during chemotherapy, against glaucoma – and then says he will still vote no because those who want to vote yes do not suffer from any of these diseases; they just want to get stoned legally. He thinks this should remain a crime. He knows nothing about the Rule of Law. He is the kind of doctor used to telling people what is “for their own good.” Such people invite tyranny with a clear conscience. But is he right? Is ganja smoking indeed injurious to the health? Allow me to relate the story of an 86-year old chillum smoker I met, who told me that he had been smoking half a tola of charas every day since the age of 11. And he pulled the chillum as hard as any young man could.

My 56-year old friend, Ustad, a grandfather and a keen smoker, once confided to me that he began smoking charas after stealing some from his father’s pocket. “Does your father still smoke?” I asked, and he replied in the affirmative. I asked him to inform me whenever his father was next in town, so that I could share a chillum with this old man.

And that is how I met this 86-year old great grandfather and shared a few chillums with him. From the strength with which he pulled on the chillum, it was evident that his lungs were fine. And from his deep conversation, quoting scriptures and ancient proverbs, it was evident that his mind was fine. From the fact that his little great grandson was on his lap, and he was blowing the smoke all over the kid, it was evident that he considered it harmless. Precisely what we call “tradition.”

Sanjay Gupta probably drinks alcohol.

But then, so do most of you.

Reminds me of an “East Meets West” postcard I saw in Goa: A white guy in lungi and chappals smoking a chillum, and a brownie in suit and tie drinking whisky.

Bum Lehri!

Gaarh de tumboo gehri!

On Street Food

Yesterday, I watched a poor man preparing his dinner. He built a small fire and stoked it using a chimta. He dug into his stock of atta and kneaded dough for his chappatis. He took some dal out from a container and put it to boil. He had some Capital: chimta, tawa, pots and pans, stirring spoons etc. It was then the thought struck: What if someone is poorer than this? What if he has no stocks of atta and dal? What if he does not have the means to build a fire? What if he has no tawa, no pots and pans?

The answer should be fairly obvious: the poorer man will have to depend on street vendors of cooked food. It therefore follows that vendors of street food are the greatest friends of the poor. Yet, they remain a persecuted lot today. If anyone puts up a roadside stall selling food, he is hounded and harassed by the authorities. His surpluses are regularly stolen. And what is worse, tax money is spent on a “food subsidy” for the poor. Like all other subsidies, these cause inflation – further hurting the poor. Another case of “false philanthropy.”

Vipin Veetil at First Principles analyses how food inflation is a monetary phenomenon. Thus, every action of our The State actually hurts the poor. The new “stimulus package” is no exception. Indeed, if nations could solve their economic problems by simply printing money, there would be no poverty anywhere. And no one would need to work either. There would be money, money and more money everywhere. Makes you stop and think, doesn’t it? Watch this video of Ron Paul on the 2 trillion dollar bailout in the US, including some acidic comments on Nobel laureate Paul Krugman.

The Capitalism espoused here at Antidote is dedicated to the smallest businessman – the street hawkers and vendors in all our cities. They should be allowed to run their businesses freely. And at all times. The city never sleeps. Today, they are totally insecure. And at the mercy of predatory officials.

Note that Singapore attained independence in 1965, a year after Nehru’s death. At that time, the city-state had over 2,50,000 street vendors. The government built special markets for these hawkers in all the outlying residential areas (removing them from the central business district) – and then studied their operations and earnings. Finding that their earnings were not insubstantial, the Singapore government began taxing them. Today, all these hawkers are middle-class taxpayers.

And, what is more, these vendors of street food are a tourist attraction. Win-win all around. We must do the same in India. Actually, the first Mughal emperor, Babur, was a great fan of street food. When he conquered Delhi, Babur was aghast to find that the bazaars of his new city did not sell cooked food. It was thanks to Mughal patronage that a street food culture exploded in India. But this culture is now slowly dying. It must be revived. It is street food that feeds the really poor. Not the “ration shop.”

Conflict of Visions

When will they ever learn?

(Of course, they don’t want to learn; they want to teach! Talk about hubris.)

After having destroyed India through 60 years of “rural development,” our The State now wants to export their ideology to Africa. Click here to read the news report on foreign minister Pranab Mukherjee’s inaugural address at the Afro-Asian Rural Development Organisation conference.

Mukherjee must be aware that we exported the ideology of rural development to Africa long ago. Tanzania’s “ujjuma” policy under Julius Nyrere was nothing but a replica of Gandhi’s vision of self-sufficient village republics. Nyrere was a staunch socialist, a good friend of Indira Gandhi, and an economics teacher to boot: the splitting image of Chacha Manmohan S Gandhi.

Tanzania has now rejected the ujjuma vision. India has not. Indeed, our The State is now seeking to export this vision of doom to other, less suspecting African nations. The justification: This is for the poor. Mukherjee categorically rejects the notion that markets can improve the lot of the poor. He asserts that direct State intervention is required on their behalf.

In the real world, the “division of labour” is not theory; it is datum. Wherever we look around, we see specialization, including among the poor. One washes cars, the other dishes, a third sweeps floors and the fourth is a cook. There are doctors, engineers, barbers and electricians. There are receptionists, plumbers and lawyers. No one is self-sufficient. This division of labour was noticed even by Aristotle – but Gandhi missed it. As does the Congress government today.

What is important to note about the division of labour is that the extent of specialization is dependent on the size of the market. Thus it is maximized in cities, where markets are huge: you cannot open a Thai restaurant in a sleepy village. In sleepy villages, like the one I inhabited in Goa, nothing much is available: for each and every thing we must go to the nearest town.

This datum (it is not theory) is central to the “conflict of visions” between India’s libertarians and the socialists who run our The State. They pursue “rural development”; we advocate urbanization. Gandhi’s vision, which our The State shares, is of an India comprising millions of self-sufficient village republics. Our vision is of thousands of free trading and self-governing cities and towns.

The rural poor have been “voting with their feet” and migrating to cities in droves for decades. Yet, our planners have adamantly pursued rural development while simultaneously neglecting cities and urbanization. We have just 5 (devastated) cities for a population of 1000 million. The USA has over 200 cities for 350 million people. That is the direction in which we must head. We must build more cities, and the winds of urban commerce must be allowed to fan over village India. It cannot be the other way around. They key then lies in transportation links between urban and rural India. We must end the “rural-urban divide.” Roads must be the government’s top priority.

Talking about transportation, I was not surprised to find a ToI editorial arguing in favour of government funded public transportation. They have applauded a 4000 crore grant from the centre to the states for the upkeep of government-owned bus fleets (and for the shoring up of the bottom-line of Tata Motors, perhaps). Why not private sector public transportation? Why government buses? Why government metros? Why not private tramcars?

As I see it, government bus companies that run at a loss are entities that no entrepreneur, who must make profits, can compete with. The government bus company can charge lower fares always – because it is run at a loss. Ditto for government schools.

Thus, the government should only build roads – and stop right there. Then invite entrepreneurs to supply all modes of transportation: buses, taxis, trucks, tramcars, railways etc. This will bridge the rural-urban divide. This will allow for the growth of thousands of satellite towns around all our cities. The massively enlarged urban space is what will really benefit the poor.

delay in post

Due to power cut from morning to 5pm, today's post is delayed.

On Sonia-ji's Medicine

I started my day reading James Grant’s essay in the Wall Street Journal entitled “Is the medicine worse than the illness.” (Thanks to LRC.)

And it was only thereafter that I read about Sonia-ji ordering a dose of the same quack medicine for Mera Bharat Mahaan. The news says:

"In the next 100 days, the United Progressive Alliance (UPA) government has decided to inject Rs 1 trillion [1,00,000 crore] in the Indian economy to stimulate internal demand to keep it insulated from the world recession. This would be done in association with the private sector," Manish Tewari, Congress spokesperson, told reporters.

Tewari said the decision was taken on the advice of UPA chairperson Sonia Gandhi.

"UPA has taken the decision to provide stimulus to the Indian economy on the advice of Sonia-ji. This is to increase productivity, control inflation and increase employment opportunities," he said.

In reality, as Rothbard said, we are faced with “a robber who justified his theft by saying that he really helped his victims, by his spending giving a boost to retail trade.”

What will happen if 1,00,000 crore rupees are spent in the next 100 days? Well, there will be a mad scramble to be one of the first to spend the new paper money. Those who succeed in this race, through bribery and corruption, will get to buy up assets at today’s prices. If they take loans, they will repay at tomorrow’s prices – and gain even more. The netas and baboos and their cronies would quickly convert their papers into gold – as a hedge against inflation. The purchasing power of the rupee will rapidly decline – and it is only then that this new money will finally “trickle down” to the poor. All poor people, savers, those on fixed incomes (including rents) will lose.

Sonia-ji says she intends to “increase productivity, control inflation and increase employment opportunities.” Quack.

James Grant, in the WSJ essay referred to above, concludes thus: Ben Bernanke should be directed to put himself into the shoes of a foreign holder of U.S. dollars. And then asked, under oath, would he continue to hold dollars?

Of course not!

Just as our politicians and netas won’t hold paper rupees. They’ll grab their loot and invest it in secure gold. The rupee is for the poor – as a means of keeping them poor.

On Larry White... And The Mess We Are In

Today’s post is late because I was attending a talk by Professor Lawrence H White on free banking (courtesy the Centre for Civil Society). Larry and I differ on fractional reserves, but what he said at the talk and later to us outside the classroom was hugely enlightening. This enlightenment will be reflected in future posts on money and banking.

Larry and I both concluded that departments of economics around the world have failed miserably in spreading basic knowledge on money and banking. Widespread economic illiteracy has been fostered by government-appointed academics. Plus, the central bank recruits thousands of these mistaught economists – adding to economic illiteracy.

In fact, Larry began by talking of “spontaneous order” – the idea that markets display “order without design” – and he said that there are two areas wherein modern man is simply unable to imagine how these two tasks can be left to the spontaneity of markets: one is money; and the other is education.

It would be best to tackle the education first. Once the exact understanding of money and banking is taught, money will be coming from the market too.

Topping my selections from today’s news is the story that the Ministry of Company Affairs has made a mess of storekeeping the records of 15,000 firms. These firms have to compulsorily register with them. I do believe that this is a fit case for “contracting-out.” Registration and record-keeping can easily be done by private competing firms on behalf of the government. Or because of the necessities of private law. Even land records (a total mess today) can be privatized. There can also be title insurance. This will allow for a free market in land.

From Delhi, the news is not good. Chief minister Shiela Dikshit wants to extend the Bus Rapid Transit corridor idea to more roads. If you travel on the BRT today, you get the feeling that our The State has done the exact socialist thing: they have stolen something from one group to deliver to another group – and this, while they benefit. Here, with the BRT, they have literally stolen the road – and given it to bus passengers. And they continue to benefit: Note that VVIP cars always travel on the bus lane.

The notoriously corrupt Delhi Development Authority (DDA) has also climbed greater heights in terms of predation. The news has it that their recent lottery of 5000 flats (among 1,50,000 applicants) was rigged. The minister might just cancel all the allotments and go in for another lottery. Why not just close the DDA down?

From Mumbai, the news is that a bookstore has been advised by the cops to remove books by Pakistani authors from its shelves – apparently on the orders of Raj Thuggeray. Now the intelligentsia of these two warring nations cannot communicate with each other. All communications will then be “official” – with our foreign secretary meeting theirs and so on, ad nauseam. The vital exchange of free ideas between free people will be stopped.

At least in Delhi I was luckier. I just picked up Ahmed Rashid’s book on the Taliban. Sorry, Raj Thuggeray, but I could not wait for a swadeshi journalist to write a book on the subject.

Nutts Rule Our Land.

Gurgaon: A Travelogue

The other day, I had the occasion to take some people on a guided tour of Gurgaon, the new city that has sprouted up south of Delhi.

After passing Indira Gandhi’s dacha – which, I pointed out, is now well within city limits – we took the Mehrauli-Gurgaon road.

As someone who has been regularly traversing this route for more than 20 years, I pointed out to my guests how, after “liberalization,” the Mehrauli-Gurgaon road has become a “Main Street” of sorts, with thousands of fancy shops lining both sides.

This time, however, all the shops were closed: The Metro. They are building the metro link to Guragon as an overhead line. They are digging and putting up pillars all along Main Street!

And the horror story didn’t end. After crossing the Delhi border and entering Haryana, the first little town you come across is Sikandarpur. The pillars of the metro have been built right through Sikandarpur’s narrow Main Street! All cars have to by-pass Sikandarpur. There are signs saying the “market is open,” but no one goes.

And so we were finally in Gurgaon. An almighty mess. After some strange twists and turns we were back on the old Mehrauli-Gurgaon road, the part that connects with the Notional Highway to Jaipur.

A few years ago, they had screwed up this vital highway connector road by allowing a dozen or so shopping malls to be built alongside. So now this has already become Main Street. And the metro rail pillars are being built right bang in the middle of this Main Street!

Why not build it underground?

The politician, who is not spending his own money, will say, “It costs too much.”

Then why not make the Mehrauli-Gurgaon road into a 8-laned proper Main Street, with wide footpaths and plenty of parking – why, that would cost even less.

And does the politician, who is spending other people’s money on other people, ever think of the huge losses being borne by the owners of all the swanky shops? Is this grossly unjust “private cost” being factored in?

And so we drove around Gurgaon. All the high rises. And all the broken streets. The shabby little markets. And then we stepped back. I took my guests a few kilometers down the Gurgaon-Faridabad road. We stopped at the edge of the plateau and stepped out to look and the tremendous expanse of empty land that greeted our eyes. Land from here to there to there. Land, land, and more land. And in the middle of all this open space, some tall housing towers have been built, crammed together. “This is Gurgaon,” I told them.

And sure it was. On the way back we could see that Gurgaon was nothing more than tower housing amidst abundant land. There is enough space to build bungalows for all. After all, the netas and baboos live in bungalows on one acre plots in the city centre. Why can’t the people live in bungalows 30 km outside?

My guests thanked me profusely for the enlightening tour. We went for lunch to Red Coral on the Mehrauli-Gurgaon road, but this excellent restaurant was closed: the metro.

Maybe they are just trying to drive property prices down. If the entire stretch had become a real Main Street, with an underground connection, property prices would have soared.

Predatory State?