Another Ugly, Corrupt, Exploitative MONOPOLY

Mint has come up with an extremely important editorial today, on delays in the judicial system, and their huge economic and social costs. The marginalization of our poor people begins here, they say; this is why the poor take to extremism. All extremist groups operate kangaroo courts. This has increased the costs of policing, and the budget of the police has risen by 25%, they add.

I read an informed article in Manushi once, on the rise of the Shiv Sena in Mumbai, which traced their success precisely to the failure of the justice system. The Shiv Sena delivered justice to ordinary Mumbaikars, which the State courts failed to do.

However, our judicial system also soaks the rich. The editors say:

…poor contract enforcement is ensuring that investment decisions now have risk premia that factor in judicial delays. As a result, the cost of borrowing capital goes up: Many investments that would have been viable become unviable due to these delays.

I daresay the entire logjam is designed to raise the flow of “speed money.” This is typical of any exploitative monopolist. The only solution is to break the monopoly. Let there be other courts that can compete – a “private law” system. The editors of Mint say “it is important that there be alternative mechanisms to resolve disputes.” Professor Robert Cooter, author of the excellent textbook on Law & Economics, personally informed me of the “Rent-a-Judge” companies of California. Disputants choose their own judge. He decides fast and has an incentive to be fair and just – otherwise these parties will not accept his verdict, which he cannot enforce; and, further, he will never get business again.

While my reader wonders about the possibilities of market justice, the southern Express carries not one, but two, stories on judicial corruption at the highest level. These refer directly to the chief justice of the Karnataka high court: one, to his benami properties; the other, to improper and biased decisions favouring his associates.

So our choice should be clear: It is either rent-a-judge or these corrupt monopolists feigning to be possessed of the sublime quality “just.”

Once again, it must be emphasized that the real fault lies in deep philosophical errors. As in Economics, as in Sociology, so also in Law, the evil doctrines of “positivism” have obscured all understanding and appreciation of natural laws. Once again, because of this evil doctrine, in all these important disciplines, a class of “professionals” has emerged, all self-regulating, and all in one way or the other benefiting from The State. The profession of Law is one such parasitic profession. Lawyers become judges, lawyers teach law, and lawyers all start off as private entrepreneurs. The rest of society must therefore see this bunch of black-coats as part and parcel of the overall monopoly, exploitative of the populace, ignorant of the true principles of Law. The only real solution is to treat them all as private entrepreneurs, forcing them to compete in the provision of legal services in a free market, without any supports from The State. Specifically, no more positive law, which increases litigation, thereby benefiting lawyers. We must move to a “private law” world.

It must be remembered that most of us go through life without ever visiting a court or a police station. Most business is based on trust. Our day to day transactions never lead us to the courts. There are natural laws at work here – but legal positivists understand them not. We are extremely fortunate that Friedrich Hayek escaped from the clutches of this evil doctrine, for his own professor of law, Hans Kelsen, was a major positivist. Hayek’s later views on law and legislation were influenced deeply by the great Italian legal philosopher, Bruno Leoni, a truly astounding classical liberal scholar, and, like Hayek, not a product of Anglo-American education. Hayek was a lucky man, indeed, to have escaped the clutches of legal positivism.

However, all this reflects on the character of the Total Chacha Manmohan State. Do they deserve the title "State" at all?

Of course, the Honourable East India Company ran its own courts in its Indian cities, and through its territories. It was because of the better justice and respect for property there, under EIC rule, that Calcutta became the greatest city of Bengal, displacing Murshidabad, the Nawab's capital, where justice was notoriously arbitrary. There are no scandals in the history of the East India Company's judges. And Sir Elijah Impey was libelled by Macaulay in his History, so the standard story of the Nuncoomar case which features Warren Hastings as a judicial murderer can be seriously disputed. Let us not forget that the British parliament was finally forced to exonerate the great Hastings from all charges that had been levelled against him; that too, after a long and protracted trial.

There is a story I read of a ruler of one of the princely states in the 1940s which tells of how he ran his courts. He had hired an eminent retired judge to visit his capital and decide all appeals once every fortnight. As for the lower courts, all delays in delivering judgements of over a fortnight resulted in a cut of pay for the judge. The maxim was that even a flawed judgement is better than a delayed one. This ruler was then interviewed in the 60s, when he laments what has happened since the Chacha Nehru State took over: undertrial prisoners languishing in jail for years, and court cases that never ever come to any conclusion. Lawyers, of course, keep earning their fees. And they alone can become judges.

Break this monopoly!