Overall, A Complete Lack Of Principles

While surfing the web this morning, I participated in an ET poll on whether our The State can actually make slums vanish in 5 years. I voted “No.” In the comments box I wrote that it is impossible for our The State to feed, house and employ the vast majority. Where are the resources? And if our The State does not have the resources, should official policy not be to let The Market free and invest only in those areas where private capital is not forthcoming – like roads?

Anyway, speaking of resources, I found this Reuters story on how fiscal prudence is being given the go-by this year, because our The State is targeting higher growth. It is as if “economic growth” is a State Subject. As is “development.” In reality, both growth and development are Market Subjects. Both require entrepreneurs, private saving, and private investment.

Indeed, as the Reuters story cited above says, the huge borrowing programme of our The State is already raising long-term bond yields and will eventually crowd-out private investment. Interest rates will rise. So will inflation. There will be neither growth nor development if our The State is allowed to continue on its chosen path.

There is no alternative but to cut down The State, balance the budget, and liberate the entrepreneurial classes. This means free trade, free markets, and complete economic freedom based on the inviolability of Private Property. There is no other way by which The Poor can be employed, housed and fed.

However, the news also has it that the new commerce minister, the man who has replaced Kamal Nutt, is not a free trader, but a neo-mercantilist. Here he is promising a big “stimulus” to exporters. What about importers? Are we to continue exporting without importing? Looks like the new man is nothing but a Kamal Nutt clone. So expect more of the same on the international trade front. After all, the boss man is the same – Chacha.

Thus, I must confess that I do not harbour high hopes from the Chacha Manmohan State 2.0: these guys have all their fundas wrong. They are stoned on the idea that they have unlimited resources – the mythology of Keynesian economics – and that they can and must do anything and everything. They are neo-mercantilists. They are also socialists. A horrible combination.

It is this thinking that percolates down to lower rungs of our The State. Thus, here is the Karnataka chief minister promising to subsidise 50 Kannada films each year. He has just “donated” 5 crores of Our Money to a Kannada film academy.

The conclusion: Our rulers lack Principles.

But you already knew that, didn’t you?