Not Democracy, These Are Tax Parasites

As usual, there is never any good news from our The Chacha State. The first thing I read today was that they are “infusing” 5000 crore rupees into Air India. Frankly, if I had 5000 crore rupees spare in the public kitty, and wanted to give a fillip to civil aviation, in the interest of consumers, who are "the people," I would abolish all taxes on aviation turbine fuel, using the cash to compensate state governments for the revenues they would lose. Makes much more sense. But our The Chacha State represents tax parasites, not taxpayers. And there is more evidence on that score in the news today, from Chacha's bhateejas.

First comes the astonishing news that the Tamil Nadu Bhateeja State is going to distribute colour TVs to “all.” The deputy chief minister is quoted in this news report as saying:

He said 1,04,42,500 colour TVs had been purchased and distributed to around 79, 35,975 families.

Is this the “role of State.” Is this why we pay taxes?

The attitude of our socialist-democrat politicians to the contents of the public treasury is brought out best by this story from Karnataka, where 1 crore was spent on one meeting of the Bhateeja State cabinet; of this money, 28 lakhs was spent on decorating the venue with flowers. The meeting, attended by 34 ministers, their secretaries and staff, lasted “a couple of hours.” No earth-shaking decision was taken. I wonder how much was spent on getting everyone to Gulbarga, 623 kms from Bangalore, the state capital. They must have flown in, ‘coz there couldn’t be much of a road between Bangalore and Gulbarga. Why, there isn’t much of a road between Bangalore and Banerghatta, 20 kms away; or between Bangalore and Sarjapura, 20 kms away on the other side.

It is not hard to believe that “socialism” combined with “democracy” – both powerful words – should bring the nation to such a sorry pass, ruled by parasites. In truth, this had been foretold long ago – by Frederic Bastiat, for instance, in the 1840s. In his brief and humorous essay, “The State,” Bastiat defined the beast thus:

The State is that grand fiction by which everyone tries to live at the expense of everyone else.

He added:

Everyone wants to live off The State. They forget that The State wants to live off everyone else.

In another essay, one that is justifiably more famous, “The Law,” Bastiat exposed the deep errors in Rousseau’s conception of democracy; adding that the only results would be “legal plunder” guided by an ideology of “false philanthropy.” It is precisely these that plague our society today. But there is more:

Political economists have for long been saying that a fiat paper currency is incompatible with democracy. The idea of democracy is representation of the taxpayer, and nothing else. “No taxation without representation” has always been the rallying call of democrats. In England, for over 500 years, the monarch would call a parliament only to obtain a vote on taxes.

However, with central banking and a fiat currency, The Democratic State comes in possession of a money-making machine, something monarchs never had. With such a State established, parliamentarians only work towards channeling State expenditures towards their clients – what is called “pork-barrel politics” or “log rolling.” MPs no longer represent taxpayers because their The State is not dependent on tax revenue. It can print the money on its own. And it can buy up all the support it needs with this “funny money” – witness the MPLADS. All those who believe in the true ideals of democracy must join in the call for “sound money.”

What is the Role of The State in a free society? Writing in 1776, before mass democracy, Adam Smith listed out the “three duties of the Sovereign.” They are:

According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings: first, the duty of protecting the society from violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, thirdly, the duty of erecting and maintaining certain public works and certain public institutions which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.

Defence, the “exact administration of justice,” and ROADS. Not money. Not "making law."

Not television sets. Not airlines. Not steel plants and hotels.

How does the “system of natural liberty” operate? Adam Smith described it thus:

All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society.

We must move from here to there – and fast.