On Bimal Jalan's Nano Homes... And City Politics

There is further evidence today that the guiding philosophies of our ruling intellectual elites are in serious error.

Let us begin with Bimal Jalan, who was governor of our central bank, is now a Rajya Sabha MP, “economist,” and author of many serious tomes on the “Indian economy.” Someone said he started off in the IAS – but I am not sure.

Bimal Jalan has been interviewed by the Financial Express on his idea of “nano houses for the rural poor”: the one-lakh house, built like a phone booth, sold through franchisees, and so on.

Don’t get me wrong: I am all for pre-fabricated homes. I would buy one myself. But let us delve a little deeper into this idea and see where the philosophical error lies.

He wants to sell these cheap houses in rural India, to villagers. And that too, with interest subsidies, government patronage and whatnot.

Now, I would rather begin by selling these cheap pre-fabricated homes in cities and towns. Here, housing is terrible for the poor. Indeed, the urban poor know full well that they have left far better housing behind in the villages when they decided to shift to a city slum.

I have often posed this question to villagers as well as city slumdwellers:

Choose between two acres of land in a village and two rooms in a city.

None so far has chosen the two acres.

And note that in everything else that is sold, the marketing campaign invariably starts from the cities, spreading outwards. Jalan’s nano homes will be sold the other way round. And that too, as a “government-sponsored programme.”

One portion of the interview is worth quoting:

FE Question: Your interest in rural housing?

Bimal Jalan: When I was the president of NCAER(1998-2008), we thought a study based on field work should be done on rural housing. That’s how I got involved. This is the interesting thing about NCAER. Very few organisations do sample surveys. This study is based on actual ground level work. From our wider perspective, it is of equal importance because there is a social aspect to Indira Awas Yojna and many other such policies. There is also a banking policy with loans below 4% for certain amount of housing. Government and everybody are interested in rural housing as 65% of our population is in rural areas. If you provide for rural housing, for example infrastructure is very important, it becomes an extremely important input to increase rural employment. That’s how this started.

The NCAER is a government bureau: The National Council of Applied Economic Research. Jalan headed it, he says, for 10 years. They did the “field research” – over open fields, I am sure. Note the reference to the Indira Awas Yojana, where all the “pork” will come from.

And note how, when asked at the end of the interview as to how much his idea would cost, he says: “I Don’t Know.” This is typical of the “planning mentality,” especially when fed on Keynesian nonsense that The State is the fount of all money.

The reason why these “political economists” of India do not mention urban housing for the poor is because they do not want to question the fundamental problem: The State as a land monopolist in every urban area. And a roads monopolist too.

There is actually enough vacant land around each of our metropolises to house the poor in decent localities, with electricity, sewage, streets and even residential addresses, piped water, cable TV and broadband – and the 1 lakh pre-fabricated nano house.

Bimal Jalan’s critical error lies in “thinking rural.” Further, in thinking in terms of State support.

Jalan is now a politician, an MP, so he should be aware of how such subsidised government programmes politicise rural life. And that this “rural politics” is all about “identity” – like religion or caste. This is the precise point made by Kanchan Chandra in “The NREGA Trap,” an article featured in today’s Indian Express. She concludes that only the urban poor possess the luxury of a “self identity” – which is why “urban politics” is entirely “issue based.”

Yes, the cities must take the lead.

Indeed, in cities like Mumbai and Gandhinagar, new candidates have emerged on the political scene. What can we expect from them?

Actually, nothing, says Ravi Shankar Kapoor in this perceptive column.

Ultimately, as Kapoor rightly concludes, nothing much can be done unless we challenge the socialists in their core philosophy.

I rest my case.

Recommended reading: My essay, “Bungalows For All,” available as a free download here.

On APJ Abdul Kalam's "Technical Solution"

Today is election day for both Sonia as well as Advani – and there is a reader’s letter here that asks the important question:

Why is Chacha Manmohan not standing for elections?

In the meanwhile, in his column in Mint, Salil Tripathi laments the fact that the party manifestoes of both the Congress as well as the BJP "lack economic vision.”

So let us turn to the star of the Indian political stage, the scientist and former president of India, APJ Abdul Kalam, who has just outlined his “vision” for a bright and prosperous India. This vision is based on the belief that “a technical solution existed for every social and economic problem.”

Kalam proposes four “grids” as his technical solution:

=> the Knowledge Grid interconnects universities with socio-economic institutions, industries and research and development organisations,

=> the Health Grid joins the healthcare institutions of government, corporates and super-speciality hospitals.

=> the e-Governance Grid interconnects the central and state governments and district and block level offices and

=> the PURA Grid is aimed at Providing Urban Amenities in Rural Areas.

Kalam never mentions roads!

An All-India Toll-Free Roadways Grid is not part of his “technical solution.”

And look at his proposals:

The “knowledge grid” is based on the fallacious idea that the rural poor need “knowledge” from The State; that is, the ministry of human resource destruction

The “health grid” proposes a State programme. It means more ministers like Ramadoss running vast departments, wasting all the resources, producing nothing of any worth.

The “e-governance grid” is a vision of perfect government using computers – whereas real governance is about running cities and towns well, establishing a political order, applying law to all disputes and so on. There is much about government that is human; Kalam seems to think that with the “e-governance grid” the Central Planner On High will run things better. But societies are run by laws based on Principles. Societies cannot be run on the basis of “information.” You need sound theories above all –which Kalam lacks.

Finally, the PURA Grid, Kalam’s pet idea of Putting Urban Amenities in Rural Areas. This remains an idea of “rural development,” to be put into effect by State action, using tax revenues. (But no roads!).

How will a village get an ATM, an “urban amenity”? How will villagers get electricity, piped water and gas? - especially when these are not available even in our cities today, only because they are State monopolies.

Unfortunately, because of economic laws governing the “division of labour,” markets are Urban. Indeed, civilization is urbanization.

The science of Economics suggests Urbanization is the only way to develop the hinterland – for which we need roads and highways.

We need to dump “rural development” and call for an aggressive urbanization: new cities and towns, new hill-stations, new coastal cities, and so on. The USA is 350 million people in 200 cities. We are 1000 million people with 5 cities. We need thousands more. The only way we can achieve this goal is by building roads in a “hub-and-spoke system” pan-India, with every major city treated as a “hub” and the “spokes” leading out to all the smaller, satellite towns surrounding it.

Not a “grid.”

Hubs-and-spokes.

So much for the “technical solution.”

To conclude, Bastiat’s words are eminently applicable to APJ Abdul Kalam:

“The Plans differ. The Planners are all alike.”

And if I sound like a "planner": I plead "not guilty."

The "hubs-and-spokes" road system is a "pattern prediction" based on praxeological principles. It is basic to the economics of transport. It is not a "plan."

For The Private Production Of Security

As we vote, and are encouraged to do so by many who imagine they are doing “something good,” it might be pertinent to ask ourselves the fundamental question of political science:

Why do “wee, the sheeple” set up The State?

The Great Socialist State that exists today does too many things – The State runs oil and gas companies, banks, fertilizer factories and steel plants, hotels and airlines, railways, electricity companies, roads monopolies, water supply monopolies – and all this apart from running courts and police.

Recent events have highlighted the fact that, just as we need to re-examine the IAS, so we must also take a close look at the IPS, the cutting edge of Coercive State Power.

And this cutting edge of State Power is much too mingled up in the “politics” of The State – they guard all the candidates.

But how do they serve the people?

What about the traffic police?

One lakh people die every year on Indian roads: about 350 a day. This is two and a half times more than the USA. The USA has 830 cars per 1000 population. India has 15 cars per 1000 population. But still, 100,000 die every year.

The automobile revolution is on us.

How will we be safe on the roads?

How will we be safe at all?

There are terrorists, Naxals, militants of all kinds.

So how will we be safe?

There is the police from The State.

And the other way is the “private production of security,” a line of thinking that dates back to Gustave de Molinari, who was a close associate of Bastiat and the editor-in-chief of their Journal des Economistes. Molinari’s essay is available here.

There is much that has since been written on the “private production of security,” and I especially recommend Bruce Benson’s The Enterprise of Law: Justice Without The State. Buy it here.

But do try and look at it commonsensically: with locks, guards and watchmen, we are already protecting ourselves via the free market, outside The State. Amit Verma’s post on watchmen misses the point – which is the “private production of security.”

I am on that side.

I uphold the Right to Bear Arms.

So where have we now arrived in our examination of the primary question:

Why do wee the sheeple set up The State?

Allow me to quote the opening paragraphs of Thomas Paine’s Common Sense, a brief pamphlet that was of great influence during the American Revolution of 1776. Its full title is:

COMMON SENSE OF THE ORIGIN AND DESIGN OF GOVERNMENT IN GENERAL. WITH CONCISE REMARKS ON THE ENGLISH CONSTITUTION


Paine begins:

SOME writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins. Society is produced by our wants, and government by our wickedness; the former promotes our happiness positively by uniting our affections, the latter negatively by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher.

Society in every state is a blessing, but government even in its best state is but a necessary evil, in its worst state an intolerable one; for when we suffer, or are exposed to the same miseries by a government, which we might expect in a country without government, our calamities are heightened by reflecting that we furnish the means by which we suffer! Government, like dress, is the badge of lost innocence; the palaces of kings are built on the ruins of the bowers of paradise. For were the impulses of conscience clear, uniform, and irresistibly obeyed, man would need no other lawgiver; but that not being the case, he finds it necessary to surrender up a part of his property to furnish means for the protection of the rest; and this he is induced to do by the same prudence which in every other case advises him out of two evils to choose the least. Wherefore, security being the true design and end of government, it unanswerably follows that whatever form thereof appears most likely to ensure it to us, with the least expense and greatest benefit, is preferable to all others.

(Read the entire text here.)

Common sense says wee the sheeple set up The State for our security, and that alone.

And yet, even here, wee the sheeple of India would be better off relying on private agencies. They guard the malls and multiplexes, the factories and the offices, banks, apartment houses, homes and even entire localities. They make us “feel” secure, in so many ways that The State Police cannot ever match.

Someone told me that private security agencies are the number one growth industry in India right now.

If so, they represent an important economic phenomenon for those who believe in the “private production of security,” followers of Gustave de Molinari, friend and associate of Frederic Bastiat.

So where have we arrived? Our question was:

Why do wee the sheeple set up The State?

Common sense says security, and common experience says that this vital security is now increasingly being provided by competing private firms.

We need to encourage this industry.

And think of security in those terms.

On Gauhati, The "Cow Market"

The North-Eastern part of India is commonly perceived to be underdeveloped and poor, incapable of entering the globalized market economy.

However, the name of the biggest city of the area, Gauhati, translates to “cow market.”

(I must thank my reader Salil for pointing this out, in a comment to an earlier post on Assam.)

The idea of a major “cow market” fits in neatly with Carl Menger’s theory of the origin of money (pdf here, scroll down to chapter 8) wherein he writes of cattle being money in ancient times. In his own words:

In the earliest periods of economic development, cattle seem to have been the most saleable commodity among most peoples of the ancient world. Domestic animals constituted the chief item of the wealth of every individual among nomads and peoples passing from a nomadic economy to agriculture. Their marketability extended literally to all economizing individuals, and the lack of artificial roads combined with the fact that cattle transported themselves (almost without cost in the primitive stages of civilization!) to make them saleable over a wider geographical area than most other commodities. A number of circumstances, moreover, favored broad quantitative and temporal limits to their marketability.

A cow is a commodity of considerable durability. Its cost of maintenance is insignificant where pastures are available in abundance and where the animals are kept under the open sky. And in a culture in which everyone attempts to possess as large herds as possible, cattle are usually not brought to market in excessive quantities at any one time. In the period of which I am speaking, there was no similar juncture of circumstances establishing as broad a range of marketability for any other commodity. If we add to these circumstances the fact that trade in domestic animals was at least as well developed as trade in any other commodity, cattle appear to have been the most saleable of all available commodities and hence the natural money of the peoples of the ancient world.

The trade and commerce of the most cultured people of the ancient world, the Greeks, whose stages of development history has revealed to us in fairly distinct outlines, showed no trace of coined money even as late as the time of Homer. Barter still prevailed, and wealth consisted of herds of cattle. Payments were made in cattle. Prices were reckoned in cattle. And cattle were used for the payment of fines. Even Draco imposed fines in cattle, and the practice was not abandoned until Solon converted them, apparently because they had outlived their usefulness, into metallic money at the rate of one drachma for a sheep and five drachmae for a cow. Even more distinctly than with the Greeks, traces of cattle-money can be recognized in the case of the cattle breeding ancestors of the peoples of the Italian peninsula.

Until very late, cattle and, next to them sheep, formed the means of exchange among the Romans. Their earliest legal penalties were cattle fines (imposed in cattle and sheep) which appear still in the lex Aternia Tarpeia of the year 454 B.C., and were only converted to coined money 24 years later.

(I recommend you read the entire chapter.)

Thus, ancient Gauhati must have been a thriving centre of commerce, not very different from Greece and Rome. As with Greece and Rome, cattle owners from all over travelled to Gauhati to make their exchanges. It was not “Assam for the Assamese”; rather, Gauhati must have been an open market for all “friendly strangers.”

If that is the past, we have an idea for the future.

Incidentally, the “Go” in “Goa” also means “cow”: Goa was a land rich in cows, which were money. Also note how “gau” is phonetically similar to the word “cow.”

A history of Goa I just read says that the ancient markets were visited by Arabs, Jews, Christians, Jains, and Buddhists, apart from the Hindus.

The same must be true of ancient Gauhati, which must have attracted tribesmen from all over. Even the Ahoms came from Thailand, I am told.

So I must repeat the point I made earlier: That the “Assam for the Assamese” movement goes against the interests of the North-East economy. In the end, it is like the MNS call for a Mumbai for Maharashtrians alone – the Marathi manoos. The All Assam Students’ Union (AASU) and the Asom Gana Porishad (AGP) need to review their xenophobic ideology. It is interesting that the AGP is an ally of the BJP.

For the success of any market, it must be open to all those who seek to trade. This was the past. This must be the future.

Hit The Road, Jack!

Elections are good news for the helicopter industry. According to this news report, over 180 helicopters have been leased by politicians for the month-long polls.

The most obvious conclusion to make is that helicopters must be used for electioneering because roads do not exist.

This also means that these politicians will never visit these constituencies again. Once polling is over, these inaccessible locales will be out of the politician’s radar. The politician will be back to making money, spending money, and helping his cronies do the same.

It is therefore no surprise that private “industrialists” are picking up the bills for the helicopters.

What can the people do?

Well, one thing they cannot do is sing “Hit the road, Jack” to these politicians, because there is no road for them to hit!

Note that the surest way to keep a locality poor is to cut off all access to urban markets – what military strategy calls a “scorched earth policy.” During war, roads and bridges are blown up for this reason. But no one implements a scorched earth policy on their own people.

Why are there no roads in India?

The only reason is bad policies, which fritter away our revenues on government consumption, ensuring nothing is left for capital investments. Roads are a capital investment.

As I had written once, in a thundering denouncement of Chacha Manmohan S Gandhi’s “employment guarantee scheme,” the opportunity cost of this “politics” is roads.

That article is available here, without my name, but the brief profile of the author at the bottom of the page clearly identifies me as the culprit. Do read it; it is one of my finest yet.

Song of the day: Why? “Hit The Road, Jack,” of course!

Here is the Ray Charles original.

Middle Finger Blues

Aristotle the Geek has provided the link to this hilarious photo of the Maharashtra CM and his wife showing off their middle fingers after voting.

My question: How many megatons of indelible ink are bought for the elections? What is the total cost of ink? What is the cost of transporting all this ink to all the polling stations?

What is the total cost of all the electronic voting machines, including transportation?

What is the total cost of all the government personnel commandeered for election duty, including their special allowances?

What is the total loss effected by closing down all liquor shops for days prior to and during the elections?

If we add all these up, we get the total cost of electing a parliament.

Now add to that the total annual cost of running parliament, the salaries and allowances of the MPs, the secretariat staff, and the 2 crore rupee constituency development fund that every MP receives.

If we add all these up, we arrive at the full and total cost of our farcical democracy.

The Lok Sabha met for just 32 days last year.

And 25 per cent of its time was wasted by uproarious scenes within the “august house.”

The Lok Sabha recently passed 8 bills in 17 minutes, without debate. Indeed, amidst a "din."

Note that the prime minister, good old Chacha Manmohan S Gandhi, has never been elected to the Lok Sabha. He is referred to in this column as an “unelectable leader.” But he is PM!

Something very fishy going on here. Perhaps there is more meaning to the middle finger politicians wave around after voting.

However, there is some good news: 1473 voters in MP registered a “negative vote,” saying they did not approve of any candidate on the list.

Recommended reading: Hans-Hermann Hoppe’s “Democracy, The God That Failed.” Hoppe contrasts monarchy with democracy, and finds it better: a “limited private government” is better than an “unlimited public government.” He does not advocate monarchy though, preferring the “natural order” of a rule of law society.

Excellent book.

Leaves you with much to think about.

Especially the fact that we would all be better off showing our middle fingers to the Establishment, that too, without indelible ink stains on them.

Bungle In The Jungle ... And The City

This news from Calcutta grabbed my attention:

“The war drums of the Maoist threat in Lalgarh boomed on the streets of Kolkata on Friday as thousands of tribals brandishing axes, swords and bows and arrows put up an unprecedented show of strength less than a kilometre from the state's seat of power in Writers' Buildings.”

Do read the full report.

Note that these tribal “Maoists” are led by a body that calls itself People's Committee against Police Atrocities (PCPA).

Something is very wrong with our government system.

Everyone, from all classes of life, is disaffected.

People in the jungle are unhappy.

People in the cities are unhappy.

While Manmohan parrots on about “reviving the economy in 100 days.” Ideally, The State is nothing but magistrates and police – neither of whom have anything to do with The Economy.

And why wait 100 days: If you closed down the customs and excise departments at one stroke, The Economy would take off in one day.

And the take off would occur in cities, where The Market is to be found.

The future is Urban – and it is therefore vital that we get our cities and towns functioning properly.

For this, good roads are essential – good roads within cities, and good roads between cities and satellite towns. This will spread urbanization. This will also be “energy-efficient,” because pot-holed streets, traffic jams etc. waste energy in megatons.

For this reason, today’s editorial in the Times of India titled “Urban Futures” should be considered poppycock. Not one word is mentioned about roads. Instead, the entire argument is based on the phony philosophy of “sustainability” – a philosophy that finds poverty sustainable, but prosperity not so. In India, TERI is the fountainhead of this false philosophy – and the editorial is based entirely on ideas propounded by TERI.

Without any mention of roads.

What about New Public Management? – which prescribes a barebones local government that provides basic services by contracting them out to private firms; a public administration that does not require an elaborate bureaucracy.

These are the kind of ideas we need for running our cities and towns, not “sustainability.”

Cities are eminently sustainable: today, 60 per cent of the globe is urban, living on just 5 per cent of the total land on the earth. If these people dispersed into rural and agrarian communities, it would not be sustainable. Millions would starve.

On Chacha... And The IAS

Chacha Manmohan S Gandhi has enjoyed a long honeymoon with the mainstream press, but perhaps this is finally over.

Here is an article that judges Chacha very harshly, in the light of four names – Jagdish Tytler and Sajjan Kumar, Ottavio Quattrochi, and – this is the surprise – Navin Chawla, who has just become chief election commissioner.

Navin Chawla is an IAS man.

Funny how the IAS runs nothing well – except for elections!

Funny.

Anyway, this is what the article cited above says on Chawla:

“The third example is that of Navin Chawla, secretary to the Lt Governor of Delhi during the Emergency in 1975-77. Chawla displayed fascist tendencies when he ordered the superintendent of Tihar Jail to ‘bake’ Indira Gandhi’s political opponents in cells with asbestos roofs. The Shah Commission of Inquiry, which examined the systematic assault on democracy during the Emergency, said Chawla had behaved in an “authoritarian and callous” manner. It indicted him and two other officers and said: “They grossly misused their position and abused their powers in cynical disregard of the welfare of citizens and in the process rendered themselves unfit to hold any public office which demands an attitude of fair play and consideration for others.”

The same man was appointed election commissioner in 2005. Chawla assumed charge as chief election commissioner on April 21.”

If Navin Chawla, as alleged, is a Congress loyalist, then there is much to think about. In the old days it was called the “bureaucrat-politician nexus.” This is the IAS practice – while in theory they say they are “apolitical.”

Such a system of administration is typical of centralized socialist states – this is “dual subordination,” by which the Great Socialist On High attempts to run anything and everything through his centralized authority over, first, his party, and second, his bureaucracy.

It should come as no surprise that when I last visited the IAS Academy in Mussoorie, with Barun Mitra of Liberty Institute, we were quite appalled to find that their professor of economics was a Marxist-Ricardian, a follower of Piero Sraffa. These guys believe that an economy can be planned by a State – which they control.

We have been liberalizing from 1991 – but key government institutions meant for imparting knowledge are sticking on to the dissemination of lies and propaganda.

Barun and I made known our views on their choice of an economics professor to the then director of the Academy, Wajahat Habibullah, who is now the CIC, known to be “close” to Soniaji (or do they call her “madam” – in hushed tones, with eyes lowered?).

The IAS, as a professional body, must be viewed with suspicion, as deeply embroiled in socialist politics. Their ability to conduct elections well should not hide the fact that nothing else in this country works. The “knowledge” they apply towards advising the politicians, who are representatives of illiterates, should be treated as suspect.

Note that the IAS, IPS and the forest service are established by the Constitution of India.

If we are to swear by this Constitution, we must swear by the IAS-IPS too.

This we mustn’t do.

A Second Republic, nothing less.

Pushing The Tempo

Mint has just published another of my columns.

I continue on the theme of an "exact" social science; this is the third in the series, which I plan to continue.

The first article contrasted science and social science.

The second defended individualism against the "polylogic" of socialism.

This, the third, talks of the miracle of human society - how society achieves so much on its own, including producing money.

Together, these three articles point to the fact that what is taught today in universities around the globe is in serious error.

Thus, while Margaret Thatcher had said, "There is no such thing as society; there are only individuals and families," I have not only upheld individualism, I have also demonstrated what "society" actually is.

Enjoy the reads.

Further, I was recently interviewed via the phone by Scott Horton for his radio show on Antiwar.com, which beams live from Austin, Texas.

I was asked questions on the elections, Indian politics - which I called "realpolitik" - and terrorism. I upheld the citizen's right to bear arms.

Thanks to modern technology, this interview is available as a permanent resource on the internet. Readers can listen to the MP3 file by clicking here.

Spread the virus. Push the tempo.

A Poem Worth Memorizing

SHEEPLE

A Poem by

JOHN LANGLEY

Eager little citizens, eager little slaves,
Kneel before the mighty State who'll hound you to your graves!
Obey your laws and leaders, so clamouring, so clever,
Who regulate your lives and sap your energies for ever.
Pay your taxes, vassals! Pay them to the brim!
Slaves, support your masters' sport and gratify each whim!
From your earnings you may keep just half for you and yours.
The rest will be sequestered by those gangsters and their whores.
Do you long for children? Find a willing mate,
Then sign along the dotted line. You're married to The State.
Your children will be brainwashed by educated fools
To love The State that confiscates your wealth to fund your schools.
But please don't feel depressed or let such sentiments distress you,
For every now and then you get to choose who will oppress you.
In this democratic heaven you are absolutely free
To cast a vote for Tweedledum or else for Tweedledee.
And if you want some facts to tell you where your vote should go,
Your television set will tell you all you need to know.
And if you're short of money after all the tax you've paid,
Your credit card will cover any longing long-delayed.
No bleating, little sheeple! Just do as you are told.
Your wool may all be shorn and you may shiver in the cold,
But your shepherds will continue to fleece you in the field,
While your flesh plumps up so nicely for that final fatal yield.

Treat Narayana Murthy With Caution

Last night, the news on UndieTV reported the launch of NR Narayana Murthy’s new book, “A Better India, A Better World.”

Murthy is the famous entrepreneur who founded the IT firm Infosys and made billions, for himself, for his employees, and his shareholders. His is the shining face of India as an IT superpower. Quite naturally, his views on anything and everything are in great demand. Indeed, many want him to occupy public office and thereby bring his entrepreneurial genius into government. His new book is a collection of his speeches, published by Penguin India. It is expected to be a huge bestseller.

However, I was rather perturbed by what Murthy said on television when asked as to what he thinks the government should do to make India a better place.

He said: The State should provide India’s children with nutrition and free education.

This ceases to be funny.

Murthy may know a lot about IT, but when he steps out of the area of his competence, to comment on matters relating to government, he is dead wrong. As we all know, in India we have a Predatory State. This State is a naked propagandist, and its education is fatal for the intellects of those exposed to it. Added to that, its predatory bureaucracy is an enemy of entrepreneurship – especially the small entrepreneur. This Predatory State is the cause of widespread poverty. We need to educate people to fight against this State, to clamour for Economic Freedom. As an entrepreneur himself, Murthy must certainly be aware of the anti-business attitude of The State. His endorsement of State education in a closed economy therefore seems to be inherently false. In addition, his idea that The State must feed poor children goes against the spirit of self-help that India’s poor people demonstrate – that which this State blocks.

Perhaps, like all our big businessmen, Murthy is also a friend of The State. If so, his views should be treated with the caution they deserve.

I was therefore not surprised to read a news report this morning saying that Narayana Murthy’s book was launched in New Delhi at the residence of the prime minister himself: Chacha Manmohan S Gandhi!

Funny old world.

There is a precise word that political scientists use to describe a State that is hand-in-glove with Big Business. That word is “fascist.”

It is because our State works together with Big Business that none of these super-rich businessmen champion free trade and free markets.

Indeed, Azim Premji, another IT czar, also champions State education. This, while the Sarjapura Road that leads to his Bangalore headquarters is a veritable disaster. India needs roads – but both these great men of IT champion State education. Perhaps because IT does not depend on a roads infrastructure. IT just need telecom.

According to me, India needs roads, Indians need Economic Freedom, and State education must be closed down.

Further, I do not think IT is the greatest thing that has happened to India.

I think the industry that should be encouraged in India is Tourism. We have 2500 miles of virgin beaches, high mountains, tropical forests, a huge desert, varied cuisine, history and culture – and we have “negative tourism”: more Indians travel abroad than foreigners come in!

To succeed, tourism needs roads and Freedom.

In Goa, they say one tourist creates 12 local jobs.

Tourism is the world’s biggest industry – bigger than civil aviation and automobiles combined. Far, far bigger than IT.

We need businessmen from the tourism industry to give their take on what policies will make India great.

And as far as education is concerned, do read my recent column, "De-mystifying Knowledge." It proves that Narayana Murthy is in serious error.

The Fatal Conceit Of Dr. Know-It-All

Chacha Manmohan S Gandhi has predicted that the Indian economy will grow at the rate of 8 to 9 per cent this year.

There are various untruths hidden in this statement, which I will seek to unravel below:

First: The economy is not an “organism” that grows in the manner of animals or plants. In reality, there is no “national economy” at all: what exists are millions of businesses and firms, some of which grow, some of which collapse, some of which make losses, and some of which remain the same. All this talk of “India growing at 9 per cent” is just a macroeconomic average, that too an aggregate that means nothing – except to the Keynesians, who wish to manipulate policies in order to achieve “targets” that they themselves set.

Second: The idea of a “national growth rate” is as meaningless as the “rate of inflation” or the “rate of unemployment.” In reality, there is no “price level.” Nor are workers unemployed uniformly throughout the land. All these are but statistical averages, compiled to aid Keynesian-style manipulations of interest rates, credit creation and the money supply. They are the “knowledge” upon which Keynesians rely. Just as central planners rely on elaborate statistics. To those who consider this entire paradigm faulty, like the Austrians or the classical liberals, the nation would be better off if this data was not compiled. Recall that Hong Kong became a developed country, with the highest per capita ownership of Rolls-Royce cars, because Sir John Cowptherwaite, the colonial governor, refused to set up a bureau to collect economic statistics. Cowptherwaite said that such a bureau was dangerous, because its data might be misused by some socialist or Keynesian in the future. The use of meaningless statistical data is the hallmark of socialism and Keynesiansm. Indeed, the architect of Indian planning, Nehru’s close advisor PC Mahalanobis, was a statistician. I have often said that the Indian Statistical Institute (ISI) is a greater danger to India than Pakistan’s intelligence agency, also called ISI.

Lastly: Note how Chacha Manmohan is “predicting” the future. He and his team of planners could not predict the economic meltdown. Although they are all-powerful, although they are armed with all the data, they could not predict anything of any consequence. Chacha Manmohan, throughout his term, was babbling on and on about 9 per cent growth, almost as a mantra for the devout to swallow and repeat – when the financial markets collapsed. All their investments in US T-bills are in jeopardy. All their bank credit to investments in real estate are seen to be malinvestments today. Not only that, they cannot predict how the stock markets will behave.

This inability to predict anything in economic life is harsh reality. If anyone could predict market outcomes accurately, he would be hugely rich. The market is based on “radical uncertainty” – that is, there are risks that cannot be insured. If these risks are beyond insurance, what possibility is there that a team of government baboos can predict the future of an entire national economy?

Real knowledge is always based on an appreciation of the limits to reason, to a deep understanding of what cannot be known. We must know what we cannot know, if we are to claim to know anything at all.

Keynesianism and central economic planning are both examples of “fatal conceit”: that The State knows it all.

In reality, they know nothing. And they know they know nothing. They just keep up the pretence, in order to beguile the sheeple.

A Matter Of Principle

Once in a while, a reader is prompted to click the donate button on the right and contribute to Antidote. I always make it a point to acknowledge all contributions. This time around, the reader wrote back asking me to set up a political party. He was aware of the fact that the Representation of the People Act made it mandatory for all political parties to swear by socialism, but he advocated a clever way out of this restriction.

He said:

“Do you not think that the definition of ‘socialism’ is completely subjective? I could just say that I define socialism as that system which is for the benefit of all and I believe that libertarianism is for the benefit of all. Why not just register a party and get on with campaigning?”

Actually, every political party espouses ideas that it believes will benefit the people and lead to the “common good.” Mulayam Singh Yadav and his star campaigner Sanjay Dudd believe they will create a happy and wealthy society by outlawing tractors and computers. No one starts off saying that they seek to destroy society. Yet, some achieve precisely that, because their philosophy is in serious error. This is the case with “socialism.” The USSR, China, pre-liberalization India, Cuba – these are all instances when socialists destroyed their nations. This was the “unintended consequence” of their erroneous ideas.

Let us turn to the precise words used in the RP Act: The relevant section, 29A (5), says that any party that seeks registration:

“… shall bear true faith and allegiance to the Constitution of India as by law established, and to the principles of socialism, secularism and democracy…”

Note the word “principles.”

The Principle of Socialism is collective property, whereas the Principle of Liberalism is private property.

Recall Chacha Manmohan S Gandhi’s recent interview with the Financial Times of London, where he said quite clearly that the State-owned industrial sector – collective property – would “continue to play a very important role in India.”

Chacha is a socialist. He upholds the socialist principle.

How can any classical liberal or libertarian swear by this principle?

And why should we commit perjury just to enter electoral politics?

Note that nothing stops us from “campaigning” – not for elections, but for spreading our ideas amongst the people. This blog is just one among many doing just that. There are think-tanks. There are many other groups as well.

I believe that if we continue this good work, each in his own way, we will one day convince a critical mass of the validity of the Principle of Private Property.

That is our present task.

It is all a matter of Principle.

(Incidentally, how is the BJP allowed to enter electoral politics when it clearly violates the Principle of Secularism?)

Against Anti-Foreigner Politics

The news that the Pune police are deporting 200 foreigners for “overstaying” reminded me of some strange “politics” that is emerging in south Goa, where I now live. This is a politics that seeks to petition the police to take action against foreigners – for overstaying, for beach parties, for their lifestyles, including especially the substances they use for recreational highs, and for engaging in business activities like running “beach shacks.”

What is most interesting is that this politics is being engaged in by people who call themselves “environmentalists.” Such people of course worship nature, and view human beings and their activities as harmful. These people are also invariably friends of The State.

Now, tourism is central to the Goa economy. This is even truer of underdeveloped south Goa. Here in my village, most people let out rooms to tourists, rent out scooters and motorcycles to them, and perform various other services for them, from laundry to ayurveda and yoga. I even saw a sign advertising tabla lessons, and was informed that these are very popular.

Now, the tourist season is from November to March. In the monsoons, there isn’t a single tourist to be found, and the economy is dead. What harm is done if a few “overstay”? These people rent out rooms – and their landlords are happy. The foreigner pays his rent on time, regularly. Why exactly is The State unhappy? What irks their environmentalist friends so much, that they want them thrown out?

As I have been consistently arguing for long, a market catallaxy benefits by being inclusive, by welcoming into its fold all “friendly strangers.” Tourists are not like Chenghiz Khan and his murderous hordes. They arrive armed not with swords, but with credit cards. Many countries offer free visas on arrival, and are happy to extend these visas on demand. India as a tourist destination is competing with these countries. Yet, the visa regime here is a source of immense frustration among tourists who would like to prolong their stay here.

In Goa, there is a great deal of anti-foreigner politics – and this should not be allowed to continue. It goes against the economic interests of all Goans. If a foreigner buys land here, he outbids the locals to do so. If he builds a house, he adds to local Property. All this is good for Goa’s real estate industry. If foreigners run small businesses, they add to the local economy. They also add to local knowledge – as in the case of the lady who makes cheeses here, or the other lady who employs local girls to make junk jewellery. The local economy gains from additions of Capital as well as Knowledge. It is Win-Win. Why are the nature worshippers unhappy?

As India liberalizes, in halting steps, the market is being opened up to big-time, corporate foreign investors. How about opening up the market to the small foreigner as well? We have everything to gain, and nothing to lose – except prejudice against the “outsider.” This is a mentality that sucks.

And as for the environmentalists, they are, as I said, friends of The State. It is they who uphold the nonsensical Coastal Zone Regulation Act. This legislation disallows Property within 500m of the sea and makes many poor people, who traditionally own beachside properties, unable to leverage their properties in the market. This piece of central legislation condemns all those who dwell on the coast to eternal poverty. Throwing out foreigners will only entrench poverty further.

Away with environmentalism!

Away with anti-foreigner politics!

And here’s to Peace, Commerce, Property and a Great and Open Society.

The Real Enemies Of Indian Society

LK Advani, prime ministerial candidate of the BJP, speaking in Bhopal yesterday, has reiterated his promise to build a Ram temple in Ayodhya if voted to power.

Note how the basic idea is collectivist: that this temple will “belong” to all Hindoos.

Just as Nehru called his steel plants “temples of modern India.”

But do Nehru’s steel plants belong to all Indians? Or are they very much the “private property” of politicians and bureaucrats who “claim to represent the public”?

In precisely the same way, this Ram temple will be the private property of certain people who claim to represent all Hindoos.

The prolonged “dispute” over some land in Ayodhya is therefore a no-brainer. If we understand that collective property is a hoax, and all property is very much private, then the solution is to auction the site. Whoever wants this property will have to bid for it in open competition, and if he wins, it will be his. I had written so in an article published in the ToI many years back.

Thus, Advani is a “pseudo-communist.”

And there is zero substance in the debate between the Congress and the BJP.

Indeed, the similarities between these two parties is striking:

Both parties point to a certain section of the people as the “enemy” and seek, through State politics, to appropriate their properties. In the case of the Congress, the enemy is the capitalist, whose properties were nationalized. In the case of the BJP, the enemies are those of other faiths. Both parties believe in “collective property.” Both parties are essentially collectivist.

Once again, this is a no-brainer to those who champion individualism – the credo of the classical liberal / libertarian. According to this philosophy, property is private, and the rights of every individual must be respected. Muslims and Christians are individuals, they are bonafide citizens, and their individual rights to life and property must be upheld under the Rule of Law. Ditto for the capitalist.

Note how Principles matter. Once the Principle of Property is jettisoned, all hell breaks loose.

India is Hell only because our politics is devoid of Principles.

Indeed, under the Rule of Law, there is no “enemy” other than the outlaw. In a market order, an open catallaxy, all “friendly strangers” are welcome. Not only that, all these friendly strangers are also entitled to legal protection of their lives, properties and liberties – as in the case of tourists.

It is only because Indian politics identifies law-abiding citizens as the “enemy” that actual Outlaws have taken over The State. Do read another old article of mine, “The Real Outlaws,” an article inspired by a film on the Gujarat pogroms against law-abiding Muslims.

As I have been consistently pointing out, the debate between the “secular” and the “communal” is a diversionary tactic of The Socialist State. In essence, both are the same, just that one is a darker shade of black.

The only real debate is between Socialism and Capitalism. This is the debate over the Governing Principle: that is, private property and individualism versus collective property and collectivism.

It is India’s great loss that this debate is debarred from electoral politics.

So Think. Don’t vote. Protest.

No Candidate Worth Voting For

Voting begins today – and there is no one to vote for.

As far as Chacha Manmohan S Gandhi is concerned, he seems to be a closet communist. Here he is reaching out for an alliance with the Communist parties once again. The same report says that the commies, knowing how weak the Congress is, are playing hard to get.

So that’s the choice: Communism Vs. Communalism.

Note that Chacha Manmohan was feted by the press when he became PM because everyone thought he was a liberalizer.

But he isn’t.

He is actually a commie. He says that he loved having commies in his government.

He wants the commies back even though they almost brought his government down!

Chacha Manmohan Vs. Advani-Modi is no choice at all.

And do note that as far as The Economy is concerned, both are in agreement.

Whether it is Chacha or Advani, there will be no free trade, no FDI in retail, no privatization – nothing.

And indeed, this is their devilish ploy: to distract the voters with non-issues while keeping the spoils of office intact.

Yes, this is a spoils system, corrupt by design.

Both Chacha and Advani will keep the “socialist” economic system going indefinitely.

Recall Chacha’s recent interview with FT of London, where he said:

“We are a mixed economy. We will remain a mixed economy. The public and private sector will continue to play a very important role.”

Actually, we should be a “mixed society” – composed of Hindus, Muslims, Sikhs, Parsis, Jains, Buddhists, Christians, Atheists et. al.

With Advani-Modi, we can say goodbye to the mixed society.

So, do tell me, what is the choice before the voter?

I would say there is no choice at all.

As far as the smaller, regional parties are concerned, they are all seeking spoils at the Centre – as in the case of PMK’s Ramadoss, who used his cabinet post at the Centre to the hilt. And then dumped Chacha.

This is a “national election” – not a regional one.

And there is no candidate or party worth voting for.

I am therefore in complete and total disagreement with the “One Billion Voters” campaign of the NGO Janagrahaa, in association with sundry corporates, a campaign that aims to “focus on getting the voters out to vote and helping them exercise their franchise wisely.”

You cannot ask people to vote when there isn’t a candidate worth voting for.

The Holy Cow... And Democracy

Every now and then, I see the “holy cow” con game being enacted in this village in southern Goa where I live. It goes something like this:

A ragged-looking couple will turn up at the gate, beating a drum and playing some local musical instrument, accompanied by a gaily caparisoned cow.

Folding their hands, they will beg for alms in the name of the holy cow.

I always shoo them off, but not so the other devout people in the area who, almost without exception, not only offer alms to the couple, but also feed the cow, and - this is the best part - wash the cow’s feet!

What am I driving at?

That democracy is like the holy cow.

Yesterday, I asked one of my village neighbours about her choice in the upcoming elections.

She told me she voted because that’s what everyone did. She would vote for someone or the other, it didn’t matter whom, they were all the same. Come elections, and they would visit the village, go from house to house asking for votes, making promises they never keep. She said it was pointless – that her vote didn’t change anything – but she would vote anyway.

And of course she is right.

Come elections, and small bands of people go from house to house, accompanied by their “candidate,” asking for the vote.

This is not very different from the “holy cow” con game.

Some fall for the holy cow of democracy – feed it, wash its feet, bow down before it – and vote.

We are following rituals that have lost their meaning.

I have seen this in New Delhi too. Come elections, and groups of people march through localities accompanied by their heavily-garlanded “candidate,” looking not much different from our gaily caparisoned holy cow, shouting patriotic slogans, beating drums.

They never come otherwise. And we never see the candidate again, even if we voted for him, and even more so if he wins.

So, from this little village right up to the mighty capital city, the story is the same.

Democracy is just a holy cow.

Bullshit Politics Implies Bullshit Education

There is some war-mongering going on with the BJP talking of sending the army to Pakistan to root out terrorists.

As far as we all know, the Taliban is taking over large swathes of Pakistan. Will the Indian army go to Swat to fight them?

Why talk bullshit? – but then, bullshit is what this election is all about.

The ToI has a thoughtful piece on how all politics is now local, and there are no truly “national issues” this time.

Actually, the only national issue – the issue that affects the entire nation – is The Governing Principle: that is, socialism or Liberalism (in the classical and European and not the modern American sense).

But this is debarred.

And let us not forget that this central issue of Principles is also a moral issue – the morality of gainful trade versus the morality of reservations, handouts, protectionism and bureaucracy.

The nation is losing a lot from the Bombay high court’s refusal to hear the Indian Liberal Group’s PIL against the legislation that outlaws liberalism from the “socialist democracy"; a PIL that is pending 10 years or more. SV Raju, who heads the ILG, fears he will be dead before the case is heard. He is over 70 now.

So Think!

Don’t vote.

Protest!

And if you have any interest in “education” do read my column, “De-mystifying Knowledge,” the full text of which is published here, under the banner of Liberty Institute.

It shows how the search for knowledge with which to survive in The Market is not so difficult a task, especially for the poor, and why The State is certainly not required to assist the natural process of the acquisition and transfer of real knowledge.

It argues that our The State is actually ignorant. They cannot be allowed to teach. Rather, they should be asked to learn.

It shows that the Amartya Sen – Manmohan Singh recipe of State education in a closed economy is a recipe for disaster.

And “thought control.”

We Don’t Need This Education.

Exposing The Pseudo-Socialist Agenda

Guess what?

Chacha Manmohan S Gandhi is campaigning – in Kerala.

He is telling the people there that voting for the Left is a bad idea as it will only “divide the secular vote.”

He says this would be fatal, because it would enable the communal BJP to come into power.

Do you see something devilish here?

I do.

I see that Chacha and the Congress High Command have determined that the only political debate they will allow in the country is that between the “secular” and the “communal.”

They will not allow the debate between “socialist” and “liberal”; they do not want any opposition to the socialist idea. They just want an opposition they can paint a darker shade of black.

Recall Tavleen Singh’s quote from a Congressman that I had blogged a week ago:

“We may not look so good but we know that the BJP looks much worse than us.”

Methinks the Congress looks ugly enough.

And in any case, the “communal” and “secular” debate is a no-brainer to us because we believe in Individualism: that the Individual is the smallest minority, and is entitled, like the rest of us, to Liberty Under Law. No majority can take away these rights.

On the other hand, the Market-State Debate is crucial for our times. Unless we visit this debate, we cannot come up with solutions to our problems. There are various policy issues intimately linked to this debate – urbanization, privatization, free international trade, sound money, individual rights, economic freedom – and none of these issues are touched upon if the political space is only about the communal vs the secular.

The real ugly reality being concealed by the communal vs secular debate is that the Congress, the BJP, the Left, Mulayam, Mayawati, et. al. are all pseudo-socialist.

This is Chacha’s agenda: pseudo-socialism. He achieves this by keeping the Market-State Debate out of the political arena.

The intelligent voter should see that his choices are being restricted. And further, that this is a loss to the nation. It means that our politics remains without an intellectual and moral grounding. It means we will never be able to agree on Principles. Our politics will remain confined to personalities and their no-brainers.

In his election speech in Kerala, Chacha said that the Left is on the “wrong side of history.” Actually, Chacha is on the wrong side of history himself – the side of The Dynasty. If anything, I hope this election will prove to be the end of this royal family.

Mint has come out with an interesting article on the political views of a typical urban 18-year old – and it shows a complete disillusionment with politics and politicians. I don’t blame the kid. Even his father says he won’t force him to vote. Do read the full piece.

And Think!

An entire System of Political and Economic Philosophy is being left out of your electoral choice. You are the loser.

The choice between the secular and the communal is a false one. Both are pseudo-socialist. This is why the 18 year old lad from Calcutta says “all politicians are the same.”

To conclude, some good news: the private sector is supplying half-gram gold coins, and they are becoming very popular.

Thank Heavens for The Market!

Mulayam's Miserable Manifesto

The Samajwadi Party has released their manifesto. The photograph accompanying this report shows the actor Sanjay Dutt and the whatumaycallit Amar Singh releasing the document along with their political master, Mulayam Singh Yadav. Behind them is their party symbol – a bicycle.

Samajwadi means “socialist,” and this manifesto brings out the poverty of the socialist vision for India.

Mulayam, Munnabhai & Co. have pledged to abolish English education, discourage computerization, and prevent the mechanization of agriculture. There are also promises to grant “reservations” to various sections of society.

The idea: If we control The State we will use its force to bring forth these “benefits.” This central idea must be contrasted with the Libertarian one of abolishing all unjust use of State power and thereby establishing Liberty Under Law.

There is also the question of “vision.”

Mulayam, Munnabhai & Co. want an insular India, technologically backward, speaking in local tongues.

Libertarians see a successful, globalized India, a fully developed country, hugely urbanized, freely trading with the world, capable of communicating with the world using a global language, where Gold is money, where Capital is plentiful, and where every labourer has machines to help him in his work.

Commenting on the Mulayam manifesto, the Times of India says:

“It seems Samajwadi Party wants to drag India back by decades. That's why it wants to scrap English as a medium of education, even though knowledge of the language gives India an edge among developing countries in the world. In fact, China is going full throttle with English education. Not just this, the party's belief that getting rid of machines will ensure employment is absurd. If that was so, why are millions migrating from vast almost machine-free states like UP and Bihar to cities like Delhi and Mumbai in search of jobs? If SP wishes well for the country, it should be working out how to increase productivity rather than dabbling with nonsensical economics.”

The word “nonsensical” is apt.

What would happen if Mulayam & Co. banned ATMs and we were back queuing up before bank cashiers?

Nothing really makes sense in socialist democratic India anymore. Certainly not Mulayam, Munnabhai, Amar Singh & Co.

Should we vote?

Or should we Think?

Aristotle the Geek has an interesting quote of Ayn Rand in his post today, which deals with principled liberal politics in India. Do read the entire post. Rand wrote:

“Voting is merely a proper political device—within a strictly, constitutionally delimited sphere of action—for choosing the practical means of implementing a society’s basic principles. But those principles are not determined by vote.”

We have to establish these Principles through every available means, including blogging.

That is the task ahead.

But it is not a difficult one.

Regarding English: I once told a group of villagers, in Hindi, that one’s language was one’s passport, determining the geographical area wherein one could live and work. So if you knew Hindi, you could work in north India. If you knew only Tamil, then only Tamil Nadu was for you. But if you knew English, you were a world citizen, and could be at home anywhere in the world, for English is the world language.

The other day, one of these chaps came to meet me, bringing along his little son. He told me proudly that the little boy was attending a private English-medium school.

Also note Mulayam’s hypocrisy: the report says both his sons studied in English-medium schools.

That just about sums up the socialists: they are rank hypocrites with no dreams for the poor, for this nation. Under them there will never be Liberty. What will continue is abuse of State power for unjust ends, as each tries to implement his “plan,” his very own socialism. And we will remain an insular, backward country.

Socialism must be rejected.

On Inflation, Politics And Bangladeshis

The news says that we will soon have a 10 rupee coin. This is a sign of inflation – that 10 rupees has become small change. Just as 5 rupees already has. And the 25p, 10p, 5p, 3p, 2p and 1p coins have disappeared.

So don’t believe the government when they claim inflation is under control. They are themselves the cause of inflation. Pure gold and silver coins are the antidote. Hard money, sunnah money.

In the meantime, Chacha Manmohan, talking to the women’s press corps, said that he “needs 10 years to eradicate poverty.”

Lies!

Inflation is a tax on the poor.

The Congress, of course, has lost all face after the Tytler-Sajjan Kumar mess. This has seriously affected our electoral choices – and Amit Verma laments that the choice before the voter “totally sucks.”

There is no party worth voting for.

Young voters are also recommended Aristotle the Geek’s post today, where he concludes:

“Our political system requires politicians to promise that they will steal. Anyone who doesn’t do that won’t win.”

He offers a libertarian manifesto and shows how and why this won’t succeed at the polls.

I disagree. It is the task of “politics” to convey this manifesto to voters and convince them of the need to support it. In my long experience, with people from all walks of life throughout India, these ideas are easy to convey and usually receive whole-hearted support. We must not forget that in socialist India everyone is fucked – from the poor to the middle class to the rich. And everybody hates our The State.

That is why those atop Laputa-On-High do not want to allow a free market party into the electoral competition. They know they will lose hands down.

I conclude with some comments on Bangladeshi migrants I have met in Europe. In London, I checked out of my hotel in Piccadilly early in the morning, to take the tube to Heathrow, when I found I was short of cigarettes. The only vendor open at that hour was a hard-working Bangladeshi. We exchanged some words in Bengali. Immigrants are always the hardest working.

On another trip, I arrived in Frankfurt on a trans-continental bus. The bus arrived 15 minutes early and my uncle, who was supposed to meet me at the bus station, was 15 minutes late. When I inquired as to the circumstances of his late arrival he said, “I had to go to the masjid.”

This came as quite a shock to me, and I thought for a moment that perhaps my Hindu Brahmin uncle had changed his faith. Seeing the bewilderment on my face, he explained: The Bangladeshis of Frankfurt have built a small masjid inside of which is a shop that sells fish and vegetables imported fresh every day on Bangladesh Biman. He had just bought some ileesh-maach especially for me, he said. All the Hindus are now regular visitors at the masjid shop, and relations between Bengali Hindus and Bengali Muslims are hunky-dory! They are all busy exchanging Bengali books, magazines, music and movies amongst themselves!

In Europe, the close affinities between Punjabis from India and Punjabis from Pakistan mirrors the affinity between Bengali Hindus and Muslims.

This proves that the national boundaries are artificial and should be obliterated for all practical purposes.

Bangladeshis are a hard-working and enterprising people. Unlike the West Bengalis, a nation of clerks. And quite unlike the Assamese as well.

Note that Assamese politics aimed at ousting Bangaladeshis is quite a mirror of the Shiv Sena and Raj Thackeray’s MNS. And thus like the BJP idea too – that there are “outsiders” responsible for our woes.

This is the kind of politics the Congress has ushered into India, as the only “legitimate” competition, apart from the loony Left.

So Think!

Don’t vote.

For A Gold Rupee

A scholar from the Mises Institute has been quoted in a ToI story on the gold standard. I had blogged the quote earlier, but was requested to do a separate post on the implications of a 100 per cent gold backed Indian rupee.

Let us begin with the quote:

Robert Murphy, Adjunct Scholar at the Ludwig von Mises Institute in Alabama, USA, says, "A gold standard is essential today because it would force central banks to raise interest rates to their correct levels. In fact, it would work as a very good safety precaution, since it places a firm limit on how much inflation the central bank can create. Also, it's an excellent option for emerging economies like India, since any country with 100% gold backing for its currency would see its own currency appreciating against others, and more capital would begin flowing there.”

Let us take up each point, one by one:

First, high interest rates would be good for savers. Most people save, and they will be encouraged to do so when interest rates are high and when inflation does not rob them of their savings. The present system penalizes savers and subsidizes borrowers. It encourages borrowing and discourages savings – with fatal consequences, as in the USA. This has enormous moral consequences too – as witnessed in the USA once again. In India, the saving instinct is strong and should not be wiped out by easy credit and cheap loans. An inflation-free gold-backed rupee is the only way to achieve this.

Second: A 100 per cent gold-backed rupee means that there is no means available to The State to create money out of a hat. The finance minister of such a State therefore has “golden handcuffs” on his wrists. This means The State cannot “buy” goods and services by printing money to pay for them. This is vital for “representative democracy” – for it means that The State cannot buy up “vote banks” with sops and largesse. As Sharad Joshi has pointed out in his excellent article on Chacha Manmohan’s NREGA:

“At election time, parties and candidates promise people endowments that will come from government resources that they will get control of if they are elected. That is the reason why socialism/welfarism and democracy cannot coexist.”

The “golden handcuffs” on The State will mean that there will finally be a real representation of tax payers, instead of the representation of tax parasites, which is what we have today, only because The State has the ability to create money and credit out of thin air.

Finally, let us turn to the point that a 100 per cent gold-backed rupee is excellent for emerging economies like India; that we will see our rupee appreciate, and also attract capital flows.

The key point to note is that no “global action” is required. India can and should anchor its currency to gold on its own – and watch as the fiat currencies lose value against the Gold Rupee. This means that we will stop exporting iron ore and start importing on a huge scale. The international purchasing power of every Indian will go up. We will be the world’s biggest shoppers. The consumption and thereby the wealth of every Indian will go up because our money is Gold, nothing less.

Of course, as Murphy notes, this will also attract Capital to India, where money is Gold, because the money is not only safe, but also appreciating. All this Capital will help India become a fully “developed country” as more and more Capital is used alongside our abundant Labour, thereby raising Productivity.

Mises once said that any country, no matter how poor or underdeveloped, can on its own return to gold and sound money whenever it chooses to do so.

Chacha Manmohan and his band of merry robbers are taking us in the opposite direction, into the waiting arms to the international rent-seeking bureaucracy of the IMF. Note that the IMF is selling gold today. Its expanded “money” will be backed by nothing.

If we proceed in this chachacha direction, of internationalism and the IMF, our rupee will always be weak, we will forever export iron ore, and we will never be able to import much. We will, as individuals, remain poor.

With a 100 per cent gold-backed rupee, Indians will dominate the world economy.

We will not, like Chacha, be handing out a begging bowl at G-20 meets, pleading for benefits and grants in the name of the poor.

We will be Rich!

On Assam... And Immigration

Assam lies bang in the middle of the 7 land-locked states of north-east India – and all is not well there. Many bombs went off some days ago, and this has been happening since the mid-70s, when the All Assam Students’ Union took up as their central objective that of deporting “illegal” Bangladeshis. This, of course, is to be accomplished by The State. It is not a liberating idea. It is State Coercion on peaceful people. It is a search for a political license to tyrannize some members of civil society in the belief that such action is for the “greater good.” Is it?

Actually, Bangladesh is the North-East’s closest access to the sea. A free trading and self-governing north-east should ideally be based on free trade and immigration with Bangladesh, its friendly neighbour – through treaties of the EU kind. The north-east will benefit hugely from easily accessible deep-sea ports. They are dependent on Calcutta today – a small, riverine port.

And as for the immigration, here is a report from Mint today, that talks of how this non-issue is still the central point in the upcoming elections to send a dozen bozos to land-locked Delhi!

And don’t forget Chacha Manmohan is a Rajya Sabha MP from Assam.

In British India, Assam, Bangladesh and West Bengal were one.

The British took over Assam and the north-east very late in their reign. It was not until the 1850s that Assam got the benefits of British rule – railways, tea, towns and cities, Bengali and Bihari immigrants, and education in the English language. My great-grandfather, a doctor, migrated to Upper Assam (Dibrugarh) then, from Khulna in present-day Bangladesh.

The report in Mint reveals the true nature of this non-problem:

Assam, which has 14 Lok Sabha seats, shares a 270km border with Bangladesh. The terrain is such that it cannot be easily fenced or patrolled [being mainly riverine]. People from Bangladesh sneak in through Dhuburi district bordering West Bengal, or through Meghalaya or the Barak valley, and then work their way up the banks of the Brahmaputra to the upper Assam districts, locals say.

“They settle along the banks of the Brahmaputra, on remote riverine islands and other forsaken places,” says Moushumi Borgohain, a professor and the head of the department of economics at DCB College. “The men pull rickshaws or become labourers while the women work as maids.”

It is interesting that the BJP manifesto talks of “fencing” this border. And the report talks of a “silent invasion”: but these are peaceful, hard-working labourers, not soldiers who have “invaded” our territory.

A fenced border is precisely like that of the US with Mexico.

I advocate the obliteration of all artificial borders.

It is because of the deep imprint in their minds of the artificial geographical borders of the Indian nation-state that Assamese students fail to see that their economic future lies in the direction of Bangladesh and the sea, and not land-locked Delhi, 2500 miles away, with its Kamal Nutt international trade policies. That too, with just 14 MPs from diverse parties, many of them reported to be big crooks. And there is Chacha Manmohan, of course.

It is this statist politics that is the bane of Assam and the North-East. Evicting people is strong State action. This is now the central focus of Assam “politics.” But is this “civil politics”? Note that there is no “market politics” in Assam – that talks of the morality of peaceful trade and the huge gains to be made from free trade and free markets. Assam, like many of the other states in the region, is engulfed by a violent “politics.” Evicting human beings is more of this violence. It is unjust. And it is a politics of chauvinism, not cosmopolitanism. There is a “collective identity” that is being sought: an Assam of and for the Assamese alone. What a poverty-stricken vision!

In a market order, a bazaaroo hukumat, every Individual who earns his keep in The Market is deemed honest and legitimate, worthy of the protection of the local Civil Government. Bangladeshi rickshaw-wallahs, labourers and maids are therefore people who are possessed of valid claims to the protection of the local civilian authority.

As far as the “forsaken lands” they take over, these are technically “unowned” lands. They have “mixed their labour with the original soil” and so deserve marketable property titles to their legitimate Properties. This is the Principle of Homesteading, by which unowned lands are occupied by human settlers, under the protection of a local Civil Government, and thereby under The Law.

Immigration is a global issue – and I am firmly on the side of free international mobility for all, especially the poor.

India, with a growing diaspora worldwide, should champion free immigration and practice it too.

The Mughal Emperor called himself Jehanpanah, or “Refuge of the World.” This is logical to any sane government because the new settler is also a new taxpayer. Allowing Bangladeshis, Nepalis, Afghanis, Burmese and other foreigners into India will only benefit India. An open attitude is essential for a region’s success in the globalized market economy of today.

Frankly, I think it is horrifying that educated people who call themselves “students” should desire to use physical force and violence on rickshaw-wallahs, labourers and maids. This is linked to the Advani vision.

And there is the other way.

Peace. Liberty. Prosperity. Cosmopolitanism.

Great Cities that thrive on diversity.

Openness to the entire world.

The idea that nothing can be accomplished by violence, and peaceful trade is the Only Way for the whole of mankind.

This is the culture of Goa.

Question: Does the “hati” in Guwahati mean “market”?

PoCG # 5: Posession Indicates Property

Returning to our discussions on the Principles of Civil Government, after a brief digression on Time, let us not wade too deep in the philosophical issue of Property. Let us, instead, assert the fact that there is a Natural Order in all our bazaars only because every member of Civil Society trading there follows a golden rule:

Possession Indicates Property.

That is, we are not looking towards our Civil Government for Law. No siree!

We have our own Law.

We are all “rule-following animals.”

And that is why there is a Natural Order in our bazaars. No city market depends on government policemen to “maintain order.”

THIS IS OUR STRENGTH.

Therefore, the only task of the Civil Government is to uphold the natural law already present in society – a Law that comes from the past. This Law says that Possession Indicates Property. That is, Private Property.

Thus, the fruits, vegetables or fish arrayed before a vendor belong to him. If we agree to a bargain, I hand him some money, which becomes his Property and he hands me my purchase, which becomes my Property. This Law is recognized by all. There are no disputes, Without police or courts and lawyers, billions worth of goods are peacefully exchanged in bazaars throughout India because we all follow this Law.

Note that if the government took the opposite course, under the influence of socialists and communists, and declared all property to be common property, the Natural Order would instantly collapse. Barbarism would ensue as every “comrade” descended upon every shop and took away whatever he desired in the name of the new “brotherhood.” Collective property is a dangerous hoax.

This implies that we have instituted a Civil Government amongst ourselves so that we can enjoy property ownership with legal security. We have certainly not instituted the government so that The State owns everything and we own nothing. So Laputa-On-High has got their fundas totally wrong. They probably smoke some bad stuff up there.

Going further, this also implies that we have not instituted a Civil Government in order to deprive some sections of their properties and bestow the same to some other section – which is the hallmark of socialist politics. No! Rather, every Individual has a legal claim on what he owns. He contributes to the running of the government by “sacrificing a small portion of his Property so as to enjoy better protection of the rest” – as Thomas Paine put it. Redistributionism goes against this basic Principle of Civil Government. As do reservations.

We can now pause to look at the Congress and the BJP in the light of the above Principle: Their cheap rice and wheat schemes are based on looting A to give to B. This, while the personnel of Their The State, raking in taxes and spending the same recklessly, will gain hugely anyway. All subsidies, all redistribution, should cease.

Also note that neither political party is actually socialist, with a heart that bleeds for the poor, for they are both inflators of the money supply – which redistributes wealth away from the poor. Inflation is a huge tax on the poor. Sound money, on the other hand, is based on the Principle of Property.

Thus, Advani’s desire to seize all the assets of rich Indians abroad and spending the same on the poor is more of the same socialist nonsense. As my friend Ashok V Desai has written, these are “avaricious dreams.” This is Advani's "mythical trillion." He also adds that the figures are all wrong and there is nothing in law that allows our The State to confiscate money held abroad. It is just a diversion – the politics of nonsense.

So Think!

There is much to think about.

Since Life Is Time

I had decided to move onwards from the protection of Life to the protection of Property – but a power outage, which is a fairly regular occurrence here, made me decide to digress awhile, to discuss Time, by which Life is measured.

All through the power cut, I wasted Time. This happens regularly all over India. Power cuts and traffic jams on broken roads waste a colossal amount of Time. Which is Life.

They say that when one person keeps 60 people waiting for one minute, he wastes one man-hour. Billions of man-hours are wasted in India because of our The State. Power cuts, traffic jams, queues and long procedures at government departments, broken highways, slow trains etc.

Yet, Time is the most important “factor of production.” Labour is paid according to Time. Rents on land and buildings are paid monthly. As is interest on Capital. A nation that wastes so much Time wastes all the other factors of production. It remains poor because it can hardly produce.

And there are only two ways of permanently increasing incomes – one, by increasing the amount of Capital employed alongside Labour; and two, which follows from the first, producing more in the same Time, which means increasing Productivity. Neither happens much in India. Hence permanent poverty.

I am therefore of the opinion that what India really needs is a TRANSPORTATIONAL REVOLUTION. Much can be achieved by people themselves buying cars, fast boats, airplanes and the like, but I would like to see the Public Purse invest heavily in a top-class roads infrastructure. Contrast the “common profit” derived from such a public investment to the cheap rice and rural works programmes of our The State.

So don’t vote. Think!

Your Time is your Life – and it is being wasted by The Socialist Democratic State.

PoCG # 4: The Protection Of Human Life

Continuing on the theme of Civil Government, I was going to write today’s post on Property, when something in the news from Bangalore made me decide to write instead on Life, which comes before property. The news said that a traffic policeman on his motorcycle was knocked down and killed. I doubt whether you would get such news from anywhere else in the world.

Yes, it is true. Our cities are horribly unsafe. Whenever we go out on our pot-holed streets, we risk our lives. Our highways are a shame.

A Civil Government is established with the primary purpose of ensuring the protection of Life – and, secondly, the produce of life, which is Property. But Life comes first – that is, Human Life.

Since such a government is based on the bazaaroo culture, it follows the First Law of MacDonald’s: Thou Shalt Not Shoot The Customer. It is a culture of peaceful voluntary exchanges.

A bazaaroo culture does not go to war. The success of the culture, and the markets upon which it is based, depends entirely upon adding more and more “friendly strangers” to the overall catallaxy. This is how “economic growth” happens. In the bazaars, no one cares whether you are a Muslim or a Dalit: you are first and foremost The Customer – and you are always right. The bazaar seeks to include more and more customers within its fold. This includes foreigners.

Indeed, such an order does not only seek more customers, it also seeks more and more sellers of goods and services within it, because whenever anyone sells something he possesses the means to buy all other goods and services being offered on the market: Say's Law.

The bazaaroo culture seeks economic freedom for all comers, including foreigners – because this is how the market cattalaxy acquires energy. If the dancing ladies of Bombay are allowed to perform, the energy in the markets of Bombay increases. Every other businessman in Bombay prospers when this is so. The fact that foreign goods add to catallactic energy was visible every time we passed a smuggler's shop in the old days. Foreign cars, TVs, music systems, mobile phones, clothes, watches, cosmetics etc. have added to the energy in Indian markets. Kamal Nutt is an "uncivil" politician.

The core concerns of the bazaaroo culture are: Peace, and the peaceful inclusion of all friendly strangers within the urban market order. No one is to be excluded. All are welcome. There is no question of War; there is no question of discrimination. There is no “population problem”: indeed, the maxim is “the more the merrier.” Shopkeepers are happy when the markets are crowded. Buyers are happy when there are lots of shops, and all their shelves are overflowing with goods from all over the world.

This happens when the civil government follows Principles and protects all human Life, including foreigners; when the market order is inclusive.

Note how all the political parties contesting elections are silent on roads and road safety. None are talking about their duty of protecting Human Life within India, within our cities and towns, on our streets and highways. Over 100,000 people die on our unsafe roads every year. That is, more than 300 every day. More people die on Indian roads every day than were killed in the recent terrorist attack in Mumbai.

This would be a disgrace to any “civil government.”

If the political parties do talk about “security” it is to do with matters that strengthen the coercive powers of The State. They "play politics" with security - and this is the politics of a very "uncivil government." A good example is Advani's insistence on fencing the border with Bangladesh. It is good for the BSF and those who will get to build the fence. It is bad for India's urban catallaxies. Bangladeshis are friendly strangers. They are consumers. They are cheap labour. They are good for India.

The bazaaroo culture, which seeks to protect Life, is based on Peace – both internal and external – and the consequent extension of the market order. Its primary duties are to protect Life and Property.

Thus, the Congress talking of “protecting the poor” with cheap rice etc. is hogwash.

And as for the BJP, they are fomenting internal wars by making Varun Gandhi their mascot. Recall that Varun’s father, Sanjay Gandhi, did not approve of Human Life. And his mother, Meneka Gandhi prefers animal life.

So Don’t vote. Think!

In the meantime, here’s a quote from a Mises Institute scholar in a ToI story on the gold standard:

Robert Murphy, Adjunct Scholar at the Ludwig von Mises Institute in Alabama, USA, says, "A gold standard is essential today because it would force central banks to raise interest rates to their correct levels. In fact, it would work as a very good safety precaution, since it places a firm limit on how much inflation the central bank can create. Also, it's an excellent option for emerging economies like India, since any country with 100% gold backing for its currency would see its own currency appreciating against others, and more capital would begin flowing there.”

So we do not need money supplied by The State.

We need a Civil Government to protect Life & Property sincerely.

Safety, Property and Liberty – and Roads.

And Peace – internal as well as external.

I will continue this series tomorrow. Stay tuned.

PoCG # 3: Subsidiarity

It is election time in socialist India, and our excursion into the basic principles of “civil government” has already established the fact that something is very wrong with “government” throughout India; this, despite the fact that The State is quite strong.

But The State is just Laputa. It comes From On High. Note that it attempts to “represent” The Collective: The Nation. Wee The Sheeple.

And recall my defence of individualism, in which I had showed how we are all competing individuals in urban catallaxies, serving strangers and being served by strangers, and there is no “we” at all.

Our society is a failure today because the collectivist philosophy is wrong. We need to build local governments where we all matter as contributing individuals. Of course, these can all be run on auto-pilot if Principles are followed.

With arbitraryism, the absence of principles, the consequent entry of the government into areas it does not belong, and its inability to attend to any of its basic duties, coupled with a public treasury that is in disarray, all that The State can do is “firefighting.” Every day a new crisis occurs, every day a new legislation is passed, and another one proposed, and every day it is seen that nothing is working at the level of the City and Town.

Especially The Road.

And it is The Road that holds the key to a bright urban future, the spread of population, widespread settlements all organically linked to cities and their markets, and a betterment of life for both the urban as well as the rural populations.

Note how “rural development” has completely failed despite zillions being spent on it. It failed because it is based on wrong principles. Markets are urban. The winds of commerce must therefore blow from city to the village – and roads are crucial for this purpose.

So our greatest task as a people lies in establishing political arrangements to run our cities and towns, with our own resources. The first Principle at this foundational stage of civil government is Subsidiarity.

The Principle of Subsidiarity states that nothing should be asked of the local government that can be supplied by the people themselves, either as businessmen or charities. Even at this foundational stage, this Principle has huge implications for innumerable tasks that governments have taken on – from supplying money, to education, to healthcare, to ration shops for the poor.

The Principle of Subsidiarity, if strictly applied at the foundational stage of Civil Government – the level of the City or Town – will lead to a small government, one that will require a small public collection to administer. I believe this to be of vital importance: this is the Key to keeping government small and local – that is, “civil.”

Of course, there will be some things we all need but these local governments cannot provide – like, say, trans sub-continental highways and maglev railways – and for these higher levels of government will be required to solve these problems and provide these goods. But if the Principle of Subsidiarity is applied throughout the scheme of building a new civil government, then there will be very little for The State sitting in New Delhi to bother itself about, or bother us about.

Do not forget that in Switzerland, where they have direct democracy and 26 “cantons” that fly their own flags, and three languages, not many people know the name of their country’s president. Such polities are very good. There is no tyranny.

I will continue these discussions tomorrow.

In the meantime, on voting and elections, here is something Tavleen Singh wrote in her Sunday column entitled “Pity the poor Indian voter”:

The BJP manifesto comes as confirmation that it is not a party worth voting for. It is nothing more than a copy of the Congress Party without the royal family. And, with some ugly saffron accoutrements and a very old Leader. In the words of a friend in the Congress Party, “We may not look so good but we know that the BJP looks much worse than us.”

The Congress is happy with the competition it has allowed into this “socialist democracy.”

So Don’t vote. Think!