What would it be like to live in a country where The State has taken on the task of feeding and housing the masses, the vast majority?
What kind of country would this be, where millions and millions are dependent on State handouts?
In either case, this is the immediate future of India.
The poor will get rice for 2 rupees a kilo, and they will receive housing in both urban as well as rural areas – from the Chacha Manmohan sarkaar. The goal: A slum-free India in 5 years. Read the news report here.
But how can our The State dole out benefits to the vast majority other than by taxing the productive few to the hilt? It is surely no co-incidence that a senior civil servant has written arguing for higher taxes on the well-to-do, inviting, among others, this piece of sharp criticism .
In other words, the idea of feeding and housing the masses is nothing but a road to greater tyranny – in the form of heavier taxation.
Reminds me of a kind of beggary we often see – a healthy dude taking around a blind or lame guy, begging in his name. This is what our The State is doing. Its only claim to legitimacy is the poor. These poor people cannot be left to markets, it says.
Of course, if you visit the poor in the slums, you will see that they rely entirely on the market for both food as well as housing. The State might give them rice or wheat cheap, but the poor also buy vegetables, dal, cooking oil, spices and fuel. And water. Rice may be 2 rupees a kilo, but potatoes come at 12 rupees.
They also buy mobile phones. They have cable tv.
And as for the dwelling in the slum, they pay rent to slumlords.
Therefore, at a deeper level, we must ask ourselves the question: Why is urban land so expensive in India? Surely it cannot be that there is a shortage of land, for India is a huge country. Travel around Delhi, Calcutta, Bangalore, Bombay or Madras, and you will see vast open spaces. If these open spaces were connected to the city by good roads, the supply of urban land would increase and its price would fall. This would benefit the poor.
Further, if we look at the socialist policies of our The State, we find the culprit: they have a monopoly on urban land as well as urban roads. This dual monopoly operates as a double whammy. It is destroying all our cities.
Then there is rent control, without which the poor could easily rent cheap rooms. This is very important for poor people, who cannot buy homes. For them, there must be a vibrant market for cheap rentals.
In a liberated, free market scenario, with private sector real estate development, and a vibrant rental market, the poor would be much better off – if roads are built. The central problem with Chacha’s idea is that the State monopoly over urban land would continue. This would be fatal. Chacha is also devoid of a roads' vision - "hubs-and-spokes" etc.
Note how in 40 years, the Delhi Development Authority (DDA) has failed to house even the people of the middle class, and the price of their shoddy housing has only sky-rocketed. DDA clones exist in all our cities and towns today. They are The Problem.
In our socialist heydays, it was the common belief that State monopoly over land and housing would benefit the people. This idea has been proved wrong – even for the middle class. Thus, there is no chance that the continuation of such policies will benefit the poor. The State will only politicise outcomes, building politicised “vote banks.” There will be more and more uglification of our cities and towns – as with the DDA. There will also be political consequences because of open “clientelism.”
The best way to look at it is by comparing housing to other areas where State monopoly has withered – as with phones and airlines. Today, because of markets, everyone has a phone. Today, the cost of an airline ticket is affordable. When only Indian Airlines ruled the skies, it was hell. We must therefore have free markets in housing too. Note that the idea of cheap “nano homes” has already popped up in the minds of housing entrepreneurs.
To conclude: I find it horrifying that our The State has taken upon itself the task of both feeding as well as housing the vast majority. I find it horrifying that it thinks it can accomplish these tasks. I also find the prospects of living in such a country horrifying, for it will be a huge tyranny.
A good society is one in which people are free to make their economic achievements in markets; where The State exists only to act against enemies of The Market. Thus, under Chacha, we are not progressing; we are going back to an even worse kind of Socialism.
Hi Sauvik
ReplyDeleteI am severely allergic to smoke of any sort - be it cigarette, ganja or indica. I don't understand the concept of allowing smoking and how is it in sync with the concept of negative and positive liberties and classical liberalism. I would like to know more about these and look forward to reading more about this.
Had posted this earlier but just wanted to bring it to your attention again.
good one Sauvik, thanks.
ReplyDeleteWe should send Chacha, De Sotos book "Mystery of Capital". Allocating (1) property right to existing slum dewellers (2) selling all government land to private individuals or institutions, and (3) freeing the market for land so that news cities can be build. thats what we need.
Its a pity that Nehru, and his decendents in the present government, draw much of their intellectual philosophy from a critique of capitalism that arose in Europe a hundread or so years ago. The merits of those argument apart, India is simply not a capitalist economy. Their policies have meant that India is even today pretty much a feudal economy with pockets of capitalism, we need to make the transition from feudalism to capitalism. Not just handout a few kilos of rice, but shift up the nutritional intake and quality of food consumed by the whole population. Wall Mart works, not Food Corporation of India.
Dear Anon: So sorry to hear you are allergic to smoke. I have a friend who is allergic to prawns - poor fellow. But just as his allergy does not prevent us from enjoying prawns, your allergy should not prevent others from enjoying smoke.
ReplyDeleteLibertarians and classical liberals hold private property to be inviolable. Thus, we can smoke on our own properties; further, we can smoke on the properties of those who allow us to smoke.
If you want a smoke-free environment, you can ban smoking on your property; further, you can give custom to those who maintain smoke-free properties. Thus, there is no role of The State here.
In my own case, I left a well-paying job because the company banned smoking on the premises.
All freedom is negative. There is nothing called positive freedom. And all freedom is tied to private property.
Hope this helps.
Boom Shankar!