The Very Long Term

Back in Goa again. Took the dawn train from Mangalore and am happy to report that ours is a truly beautiful country with immense potential. And nowhere is the potential higher than here on the beautiful Konkan coast. My train, which started off from an ancient port city, passed many other ancient ports, like Honavar - but these are no longer cities today. While in Hassan, I read that the Karnataka government has banned iron ore exports from these ports - and there was a long list. I have been travelling up and down these parts by road, too, for many years, and it is true that all the ports here seem to be engaged in nothing but the export of iron ore. This is true of Mangalore, Karwar and even the ports of Goa.

Exporting red mud. Importing nothing.

This is the Kamal D Nutt theory of international trade.

I wonder what would happen to great ancient port cities like Hamburg if the Kamal D Nutt theory was applied. Singapore and Hong Kong are port cities - and both are brand new. We have a long way to go in India, but the first step must be to think things straight.

And that is the thought uppermost in my mind this morning as I reflect on the realities of today, which I saw clearly in Hassan - a city with immense potential reduced to a hell-hole by bad ideas - and on the glorious Konkan coast, now exporting red mud. And my thought for the day is this: We must think of the very long term. There is much to do if we want to build a great country out of this rubble. And it will take a long, long time. But the first step must be taken in the field of ideas. Bad ideas like socialism and Gandhianism must be jettisoned. Sound ideas of cities, markets and civilization must replace them.

Lord Keynes famously said, "In the long run we are all dead." I frankly believe I have never ever heard anything more stupid. Even ordinary people without much education think of the future of their children and grandchildren. Serious businessmen, of course, know well the meaning of "long term." And great men like Adam Smith and Ludwig von Mises will never die, for their legacy lives on. Keynes never thought of these things. His attitude to life was that of a loot-and-scoot politician.

Here in Goa, I no longer contemplate a busy street. Here, there is peace and serenity, and a small garden. This garden is now 6 years old. When we started off there was nothing. It takes time to grow a garden. It will take lots of time to re-build India.

There is a story told of a 90-year old retired Prussian general who called in his chief gardener and instructed the man to plant an avenue of oak from one side of his huge estate to the other. The gardener told the general that the oak takes 20 years to mature and the master was already 90 years old. To which the general replied: "So there is no time to waste."

Ground Zero: Taxes

For the past many days, I have been spending just about a dollar a day on my three excellent meals here on Main Street, Hassan, Karnataka. Idlis for breakfast for 12 rupees, three fluffy set dosas for lunch for 15 rupees, and a huge serving of fragrant lemon rice for dinner for just 15 rupees. That adds up to 42 rupees - or a little less than a dollar. It was Sudha Shenoy who first drew attention to the inappropriateness of international comparisons of per capita incomes. Read this important paper on the implications of Austrian Capital Theory for underdeveloped economies here. And don't believe in all the nonsense you hear about "poor people in India living on a dollar a day." I am managing quite fine.

But talk of taxation! Whereas three excellent meals come for 42 rupees, one miserable beer costs 80. One gives me no buzz, so I have another. That comes to 160 rupees for beer.

Then look at cigarettes: 20 perfectly ordinary cigarettes, not even king size, cost 70 rupees.

And just down the street is the Income Tax office of Hassan.

Then there is the huge petrol tax. What what I observe of the traffic from my window, it seems quite apparent that poor people pay the petrol tax. Here, most people are on two-wheelers: scooters, motorcycles and mopeds. Yes, there are many mopeds here. All these people pay the petrol tax - which is very high here in Karnataka.

And look at what we get in exchange for these taxes. This morning it rained quite hard and I noticed that Main Street, Hassan, does not have a proper storm water drainage system. What "scientific knowledge" is used to build these roads?

There are two words that come to mind while describing India's roads: "slow" and "unsafe." This - in exchange of all those taxes.

Today, the Deccan Herald carried an interview with a big man from New Delhi, the IT Secretary, and they discussed "e-governance." When asked what "government services" had been computerised, his immediate answer was "Income Tax."

The same newspaper carried an ad issued by the Bangalore Income Tax Department on its back page - saying that they were opening 90 "counters" to collect this tax. That's right - 90 counters. The ad warned of "long queues." At the bottom of the ad were these words: "Another step in the service of the taxpayer." Talk about Newspeak!

From the point of view of The Market, these onerous taxes are extremely harmful. As a tourist, I could have spent on a lot of other goodies the market has to offer if all my money was not squeezed away by the beer and cigarette taxes. If people pay hugely for petrol, they do not have much left over for other things. All the other players in the market lose. Demand, the driving force, goes down. This is another implication of Jean-Baptiste Say's "Law of Markets" - a pillar of classical economics that Keynesians know nothing about - and you can read my brief column on this law here.

I hear news that in New Delhi they have thought up a new tax - a Goods & Services Tax. The newspaper editorials are already hailing this new tax as the next great idea that will save the country - just as they trumpeted the case for VAT some years ago. The finance minister was quoted saying that this new tax will transform India "from a 1 trillion economy to a 2 trillion economy." The reporters lapped it up. This idiotic statement was widely reported.

Yes, taxes are a harsh reality in socialist India. The cops are a harsh reality too. As are the roads. Harsh realities all around.

Ground Zero: Workers

The poorest members of the working classes, labouring under the meanest conditions, that I have observed in all these days on Main Street, Hassan, Karnataka, are the municipal workers who sweep the street and take away the garbage. Yet, my overall impression is that the authorities are employing mere labour, without any Capital to aid it, to improve productivity, and thereby raise wages. Once again, it seems that our socialist The State has no idea of Capital, and its vital importance for the prospects of those who labour.

Every morning, a large number of these street cleaning workers land up, both men and women, and all without any tools and equipment. They are poorly dressed, poorly shod, and work with their bare hands. Some wield long brooms - but that's all. Sometime later, a tractor-trailer combine arrives, with half-a-dozen men perched dangerously on the tractor. They pick up the garbage and dump it on the open trailer. The garbage itself is kept on the roadside in small, open plastic containers - not proper bins. In other words, no Capital has been invested in this task. The entire exercise is extremely ugly and unsightly. It seems apparent that no serious thought has ever been expended on how this important task of any local government is to be carried out.

But then, hats off to these poor labourers, for they manage to accomplish something - and the garbage vanishes. They are doing a far better job than the policemen I also see, who are all well-dressed and well-shod, possessed of Capital like walkie-talkies, motorcycles and jeeps. Indeed, my observations over the weeks indicate that the police department here has no shortage of either manpower or equipment. I see many big police buses passing every day, full of tough guys equipped to fight battles on the streets. They seem to be a "law & order" fighting force at most; not a civilian organization supposed to deliver important "services" to the community. The constables on traffic duty are totally helpless. They have been given the impossible task of securing order on a street where the "science" of traffic management has simply not been employed. This, too, is "knowledge failure." Otherwise, the only cops we see here are the bunch that come every night at 10:30 pm, honking and blowing maddeningly loud whistles, closing down everything. "All sound and fury signifying nothing."

Thus, there are privileged workers in India. And there are the rest. My guess is that the rural ditch-diggers of the NREGA must be in the same pitiable position as the street cleaners - employed without Capital. And they are paid for by consuming capital! Makes no sense whatsoever. I think that the policy wonks in New Delhi have false theories of "surplus labour" in their heads - that there exists a "labour army" that The State must employ towards "social" ends. Ultimately, there is no hope for India's labouring poor unless the idea of Capital is firmly embedded in the national psyche. This is a big task, for the Gandhians have also messed up our minds with their insane hatred of machinery.

Yeah, there is work, and there are workers. But the work itself is just a disutility. It is but a means to an end. We seem to be a nation employing wrong means towards wrong ends.

I could have stayed on much longer in Hassan, but I have decided to travel on. The ganja here is simply awful, and I cannot stay long in a town where you do not get good ganja. It sells quite freely here, in plastic sachets, but the stuff is probably poisonous. This is because of some "work" that our policemen have been assigned. Oh, give us Liberty!

I know of a small town in the nearby hills where I might obtain some good smoke. Perhaps I'll head there. Two songs playing in my head:

Nice place to visit, but I wouldn't wanna live here; and

It seems like I gotta travel on.

Words For Free, Words For Sale

Good news. My old friend from London, Linda Whetstone, who chairs the think-tank International Policy Network (IPN: visit their website here), just wrote to say that the 2nd edition of my little book on Market Economics for the young, Free Your Mind: A Beginner's Guide to Political Economy, is soon to appear translated into the following languages:

Chinese, Arabic, Turkish, Russian, Kyrgyz and Portuguese.

This book has never been published in India, not even in English. The first edition, published by a Delhi think-tank, is now out of print. There is a Hindi translation of this first edition available. This version has also been translated into Gujarati.

Linda wrote to ask whether I wouldn't mind handing over the text for free. I happily agreed. I am, after all, in the business of words. I produce words - and a lot of hard work goes into this. I survive by selling some of these words - and Mint still owes me some money. But I also give a lot of words away for free - like these blog posts. The idea is to pursue long-term success in The Market - to create a brand name, to build markets, and thereby sell the books that I will write in the future.

It was IPN who first published this second edition of Free Your Mind (which you can read and download here) - but on a CD. This is a truly wonderful CD called "Ideas for a Free Society" that contains a huge amount of resource material for both teachers as well as students on the "classical liberal" way of looking at society and the economy. All the great names are there, and I was honoured to be included in that list. This CD was specially aimed at Third World countries where books are difficult to obtain. I have received mail from two think-tanks in Africa, in Ghana and Zambia, that have found Free Your Mind extremely useful, thanks to IPN and their excellent CD.

So that's me. Just another peddler. Selling words on The Market. Building his brand name. Building his loyal customer base. Looking long-term. I have quite a few books for sale actually, and would be glad if some serious publisher got in touch.

On the flipside: I am NOT a "politician." I am not a NGO. I am NOT organizing any political activity.

I am just selling words - words with meaning. Arranged together to convey ideas. Very important ideas.

As the old song goes:

It's only words,
And words are all I have...

Ground Zero: Cities Are Capital

Yesterday, I wrote about how a city high street and its shops are precious Capital whose value must be maintained. It follows therefore that an entire city is nothing but precious Capital, and fixed capital at that. The real task of any city-level civilian administration is to seek the preservation and maintenance of the city's capital value.

This is precisely what the British did to Hong Kong, which was a barren rock when they got their lease, and was a great piece of valuable real estate when they handed it over to the Chinese. In Singapore, they have done a fine job at maintaining the capital value of the city.

The civilians of the East India Company did much the same in India. Calcutta started off as 7 villages whose revenue was granted to the EIC. Soon, it was a "City of Palaces." The footpath on Chowringhee is wider than the whole of Main Street, Hassan. The Maidan opposite is endless open space. Park Street, New Market, and Dalhousie Square, where offices are located, are all nearby. From 7 villages to a mighty city.

Ditto for Bombay, an island with a fort, surrounded by malarial swamps, that the Portuguese gifted the English Crown. Not finding any revenue, the King leased the island to the EIC - and they immediately went about improving its Capital Value, and building a great city. It is a grievous error to think of these EIC civilians only as "clodhopping collectors" in vast, rural districts. The best among them aspired to run the big cities. Mountstuart Elphinstone was Governor of Bombay. And when Sir Bartle Frere was Governor of Bombay, Florence Nightingale wrote him a letter of congratulation on the fact that his city had a lower death rate than London. She joked that soon she would recommend to Londoners that they repair to Bombay for their health. Actually, London has always been known as a filthy city. The new cities in India were clean and healthful. Darjeeling, with its wide Mall Road lined with big shops, has a beautiful, large sanatorium for TB patients from the plains, so that they could recover their health in the clean, pine air. The British built 80 hill-stations in India in 50 years - and that is a lot of Capital, a lot of Property.

Sitting here in Hassan, Karnataka, looking at the conditions on Main Street, the chaos, the filth, the broken footpaths, the cows and stray dogs, the antics of the policemen - and all this within yards of the colonial bungalow of the IAS successors of the British raj - I am overcome with a sense of deep sorrow. It is as if some great evil has befallen our land, a great darkness. It seems perfectly clear to me that there are powerful evil forces that are taking this huge nation of a billion people down the path to "de-civilization." If there is one apt word to describe this evil force, then it is this: SOCIALISM.

By the way, I have thought of a solution to the cows on Main Street. I think there should be a Cow License in every Indian city and town. And there should be a strict policy that these licenses will NOT be given under any circumstances.

There are other animals we could see on city streets. In Rajasthan, tourists love elephant and camel rides. There are always pony rides to be enjoyed in the hill stations. But these urban city street cows must go. License Raj for them. Ha ha.

Ground Zero: On Capital

The concept of Capital is a mental "category" that is an essential part of the "logical construction of the human mind." Even the unlettered nomadic goatherd is possessed of this mental category, and keeps a close watch on his herd to ensure he is not "consuming capital." Even he distinguishes between "capital" and "income."

If we fast forward to the modern age of cities, high streets, and their shops and shopkeepers, it becomes obvious that these shops are precious Capital. I asked around and found out that on this Main Street in Hassan, Karnataka, the going rate for shop space is 5000 rupees a square foot. If that be the case, then try and imagine the "capital value" of the Main Street itself, which is millions of square feet. Indeed, multi-laned expressways in the countryside are not built on such valuable land. This implies that city streets are the most important capital assets under collective ownership.

It does not appear to me that our civilian administrators have realized the huge capital value in the city streets they control. So let us engage in a thought experiment and imagine a scenario in which these were privately owned.

Any private owner of such an important capital asset like a city high street would attempt to preserve the capital value of this asset. He would see his fortunes tied to the fortunes of the property owners on his road, and would therefore work towards preserving the capital value of their shops too. He would build wide footpaths for the shoppers, he would regulate traffic so that the most scarce resource, the road, is used "efficiently." Being in the road business, he would build by-passes for all the "through" traffic, especially the heavy vehicles and the long-distance buses, so that Man Street focuses on its core business, which is shopping. He might even lease out a section to a private tramcar operator - because this would make road use even more efficient, and add even more to the capital value of the street and the shops on it.

Now, we expect nothing more than common sense from administrators in important positions of authority and responsibility. How is it that they do not understand the concept of "capital"? - something that a goatherd knows so well. To the IAS administrator, trained the "socialist" way, "collective capital" is the Steel Authority of India Ltd. He dreams of retiring as Chairman & Managing Director of SAIL. He does not "perceive" all the Capital under his stewardship as the administrative head head of a district comprising many towns and cities. His training at the IAS Academy includes a "public sector attachment." His professors feed him Das Kapital.

The word "capital," in ordinary usage, always indicates something of supreme importance - as in the case of "capital city" or "capital punishment." This very word lies at the root of "Capitalism" - a word that socialists hate. Yet, under the socialists, all that is happening is "capital consumption." The capital value of this high street is being consumed by overuse and abuse. The capital of the jungles is being consumed by stealing iron ore - and let it also be noted that iron ore trucks abuse the roads between mines and ports, which could be used by tourists. To top it all, every one of New Delhi's grand plans of "welfare" involve "capital consumption." They never ever speak of building capital assets - like roads. The latest budget aims at borrowing 3,75,000 crore rupees (1 crore is 10 million) - and this is but capital consumption once again.

Yes, it is indeed a purely "academic question" whether India remains "socialist" or not. I believe there is an urgent need for equipping our mis-trained civil servants with the basic concepts of Market Economics, something they are obviously blind to. From top to bottom, they have lost the mental category of Capital. It is as if their "education" and "training" has performed a frontal lobotomy on their brains, ridding them of this pillar of logic.

It is a Herculean task to imagine how this huge sub-continent with so many towns and cities in conditions like I am seeing in Hassan, or even worse, will be "fixed." The task requires thousands of city and town administrators armed with "local knowledge" and also the basic logic of their critical functions - as, for example, the concept of Capital. Our only hope lies in an intellectual revolution. Socialist training and education must be dumped forthwith.

The question therefore is not whether Manmohan should be Prime Minister - which is a "political question." The real question is whether Manmohan should be The Teacher - and this is the more important "academic question."

Ground Zero: Evil Teacher

I have written about the wealth of traditional knowledge to be found on display on Main Street, Hassan. Today, let me add that formal "education" is also quite big here. I see schoolchildren in uniform travelling to school - most dangerously, if I may add. I have seen the buses of many English-medium schools and colleges. In my local ganja hunts I have seen schools, schools and more schools. It is interesting that the owners of the Dosa Centre have sent both their sons into formal education. The older boy has just passed Telecom Engineering - and is looking for a job. The younger chap is pursuing a PU in Science. I advised him to acquire the rare and precious knowledge that his parents possess - and start a business. I told them of how I had a great South Indian vegetarian dinner at a swank restaurant in Leicester Square, London.

Unlike most people, I do not feel happy seeing young people going to school and college. I always shudder at the thought of the great errors that their minds will be corrupted by. The formal education system is "socialist" in its orientation. It teaches the young nothing about The Market. And these young people have a vital stake in The Market - and in the cities where they live. It is not just that the administration is utterly ignorant of these principles; it is also a sad fact that the people are ignorant of these ideas too.

To most "educated" Indian people, the economy is a potted plant lying on montek's window sill in Yojana Bhawan, New Delhi. They imagine "economic growth" to be something that occurs to this potted plant when montek waters it and cares for it. They have recently been told that this potted plant "overheated" in the harsh Delhi sun, and that suitable corrective measures have been taken. Inflation will recede; growth will return to 8 per cent. Good old montek, they cheer. They do not see the entrepreneurs in the main streets of their own cities and towns. Indeed, they do not see The Market at all.

This brings me to the "academic question" - is India officially a "socialist" country, as the Chief Justice of the Supreme Court has affirmed. It is a fact that this socialist government has passed legislation to the effect that school education will be "compulsory" for our young. It is indeed a matter of serious academic interest whether or not they are trained to see how The Market works.

Note that Law is nothing but brute force. The socialists in New Delhi are using the full force of Law to brainwash the population. These are not teachers like the naked Jain saint whose statue I saw at Sravanabelagola. These are teachers with guns - and teaching by force cannot be called teaching. Yet, that is precisely what they are doing. The history of socialism is nothing but a history of the misuse of force.

The Chief Justice of the Supreme Court is looking for a political party to rise and challenge his ruling. I would much rather prefer a loud campaign in the media against socialism, against socialist education, in favour of spreading the knowledge of Market Economics. I hope editors, columnists and other opinion makers carry this forward. I hope concerned parents take up the cause.

It was Adam Smith's good friend, David Hume, who provided us with the key insight that any government is but a minority, and all it rests on is public opinion. The task ahead is to unsettle the legitimacy of the very word "socialism," now protected by Law.

Ground Zero: First Principles

The dosa shop where I just had an excellent brunch is not something you will find in any village. In the City Market, we create wealth by producing for others, not ourselves. Janardhan makes thousands of dosas every day - for others. In the village you have to make your own dosa - and start grinding.

The City Market thus caters to a "division of labour society," where each produces for others, and obtains his needs from yet others. No one is "self-sufficient." This is what we mean by a "market society." The Gandhian vision of "self-sufficient villages" where each spins his own yarn - and makes his own dosas - is actually "anti-social."

The Market Economy is located always in a City. Note that no one in the City knows a thing about farming. Agriculture is not an economic activity that takes place in any City. Yet, all our "democratic representation" is about villages, villagers and farmers. Cities and the division of labour therein are not even mentioned in school textbooks.

Now, a City is a valuable piece of Property. A small room in a big city can cost more than a few acres of farmland in some distant village. Further, commercial property is the most valuable, and a room in the City Centre is worth much more than one in an outlying residential suburb.

Now, if one seeks to administer the common affairs of a City, one must pay great attention to the Central Business District (CBD) - which is where all the action is. It must be well connected to all the outlying suburbs; it must be clean; traffic must move smoothly.

Of course, this is certainly not how the socialist bureaucracy is administering our common affairs. New Delhi lacks a proper CBD. The Mughals built Chandni Chowk, the Brits built Connaught Place, the socialists built the disaster called Nehru Place. What is not happening in New Delhi is certainly not happening in Hassan, Karnataka. Looking at conditions on Main Street here it seems obvious that important words like Market, City, Property, and CBD do not figure at all in the socialist minds of the local administration. They do not possess important "concepts" in their minds. They have therefore ruined every City.

The officers of the British colonial civil service in India were thoroughly trained in classical liberal political economy. There was an East India College in Haileybury where classical political economy was taught by eminent men, including Malthus. When I last lectured at the IAS Academy in Mussoorie a decade or so ago, the Professor of Economics there was a Marxist. Das Kapital lay on his table, with many pagemarks. His shelves were full of evil communist literature. This is why the civilian administration in India has failed. Their very training is wrong. And it all boils down to words like Socialism. And other words like Market. It is indeed an "academic" question.

More than 10 years ago, I had offered a course on Market Economics for IAS officers - for free, for I was anyway getting a sizable salary from the Economic Times, and I saw no reason to loot the Exchequer. Wajahat Habibullah was then Director of this important government institution, and he found it fit not to reply to my offer. He seemed comfortable teaching Marxist bullshit to his recruits. He is known to be "very close to Sonia Gandhi."

What more can I say? I tried everything I could to prevent this disaster from happening. I tried to spread Knowledge. I conclude this post with lines from an old Dylan song:

Don't say I didn't warn ya,
When yer train gets lost.

Ground Zero: Bananas

Hassan, Karnataka, is a land of bananas. They are sold everywhere - even by paanwallahs - and there are many varieties. I particularly like the small yellow ones, with their tangy taste. I have two after my brunch, and two after my dinner. They come for 3 rupees each.

Cheap, good bananas are good for tourism. Tourist advisories always warn them about germs in India, in the food and in the water. Bananas come sealed by Nature. They don't need any cooking. And they are excellent nutrition.

Similarly, green coconuts are the best source of water here - and they are abundant too. I would rather drink fresh coconut water than buy a bottle of water of some unknown brand.

Thus, as far as hunger and thirst are concerned, here in Hassan there is no problem. There are bananas and coconuts aplenty. You just have to be able to buy them. But what about those who cannot? the socialist will ask. For them The State must provide cheap rice. This is now the great idea coming from New Delhi - a "right to food."

Beggars are a common sight throughout India, and I have observed them here as well. They too hang out in The Market. You won't find the beggar in a sleepy village. Yet, they depend on private charity - and people here are overly generous. They can easily buy bananas. After all, the poor are not a collective. They too are individuals. And they must be helped as such, if necessary.

There are other strange characters who come to Main Street and make "money for nothing." One guy walked along with a gaily caparisoned bull, blowing a horn. Every shopkeeper gave him money. I saw another guy the other day, washed and clean, wearing a crisp white lungi and a saffron kurta, carrying shiny emblems of brass and copper, blowing a long, brass horn. Everyone gave him some money.

I asked the dosa guy how many such people come to his shop every day and he said anything between 5 and 10. And then there are the beggars. Yet, from my observations, I see no reason for any gigantic food distribution scheme on the part of The State. Such money is uselessly frittered away on "consumption." The area, and the City, need Capital investments - roads.

My evening meal was a plate of lemon rice, a huge helping for just 15 rupees or 30 cents, off a roadside stall. And two little bananas, of course. I was enjoying my meal in my room when there was a loud commotion on the road below. Some cops had landed up in a jeep. They were honking and blowing whistles to chase everyone away and close everything down. They accomplished their mission. After a lot of noise, my section of Main Street wore a dark, desolate, deserted look. The guy with the cart selling lemon rice had fled. The cops stood by their parked jeep and seemed quite satisfied with their "work." To me, it seemed that a CURFEW had been ruthlessly and illegally imposed without any reason whatsoever. To me, it seemed that the cops had gone bananas.

Now, just pause and reflect upon the fact that The State wants to generate employment and feed the hungry but the minions of the same State brutally close a thriving City Market down. Something has seriously gone wrong somewhere. Bananas.

Yet, taxation is REALITY on this Main Street, Hassan. I live very close to the local income tax office. I cringe every time a pay 80 rupees for a beer because of taxes. These taxes must not be spent on "consumption." They should go into "capital" - which is roads.

There is thus "knowledge failure" here within The State, right from the top to the bottom. They do not understand the concept of Capital in New Delhi just as the local IAS administrator doesn't understand that Main Street is a very important capital asset. They don't understand the importance of city markets - especially for the poor. And the police don't seem to be mentally equipped for normal, peacetime, civilian duties. They have all gone bananas.

It is "socialism" that is at fault. It is this anti-market philosophy that is responsible for this ghastly disaster. It has damaged minds. It has made "anti-socials" out of the constabulary. I HATE the word "socialism."

Ground Zero: Local Knowledge

Here on Main Street, Hassan, Karnataka, there is a great deal of "local knowledge" available in The Market in which I live. Much of this knowledge is "uncodifiable" and cannot be learnt in a formal academic setting. For example, every day I brunch at the Dosa Centre next door to me, some idlis, some dosas - and these are special indeed. All for 25 rupees or half-a-dollar. Suneet Shukla, who came down from Bangalore, said he had never tasted anything as good in the capital city. The Dosa Centre sells 23 kinds of dosas, and is run by Janardhan and his wife Shashikala. They have been running this business for 15 years - based on "traditional knowledge." Their own children have been put into the education "system": I met the younger son and he is doing a PU in Science. His young girlfriend, in jeans and a jacket, was studying for a Diploma in Computer Science. There is a lot of knowledge of Science in this area. The Deccan Herald pullout has a page on Science that is pretty advanced. I passed the sprawling, old campus of the Malnad College of Engineering. I saw a bus belonging to a College of Ayurveda. I also saw another bus belonging to a College of Fisheries.

For my evening meal I usually go to the "Prabhat Military Hotel" next door. The word "military" implies food that soldiers eat - so there is lots of meat. The food is excellent and everything is spic-and-span, shining and clean, just what you would expect in South India. This is also "traditional knowledge." This kind of knowledge is vital in any city interested in tourism, for tourists depend on cooked food on the streets, and if they can get this cheap and clean, they will enjoy the experience, probably stay longer, and might even return with their friends. Last night I feasted on mutton curry with ghee rice, spicy gravy and cucumber-onion-yoghurt salad - all for 85 rupees or about 2 dollars.

In the evening food stalls appear and are parked on the side. I sometimes buy hot fried chilly bondas - and they go down well with my beer. They sell many things and I especially liked the delicately flavoured lemon rice for just 15 rupees. Singapore tourism thrives on street food. This knowledge exists aplenty in Hassan.

Apart from food, I also see other forms of traditional knowledge on my section of Main Street. There is a barbershop - and this is a business that does very well with foreign tourists. Barbers are flourishing in Goa. Many are migrants from UP. This is their "traditional knowledge."

Two shops also sell traditional knowledge. One sells cane furniture made locally. This kind of local craft is to be found everywhere in India, including the North-East. It is vital that this be found in the nearest City market. I found all kind of cute trinkets on sale in Halebid and Belur, sold my salesmen on foot. This is also a very big business. In Interlaken, Switzerland, I bought lots of stuff from a souvenir shop that was 450 years old. This is the beauty of Property. Here, trinket shops do not possess Property titles. I saw this in Goa. I saw it again here.

There is another shop selling coir products - local knowledge once again. It is good that all this local, traditional knowledge is available on Main Street. It becomes even more important to maintain this street well, and to see its economy flourish.

There is also a lot of modern knowledge on the street. There are many, many shops dealing with mobile phones. There are two shops selling "fashion" for young people. There are some medical professional: I saw a dental clinic as well as an ENT one.

All said, it appears that there is no "knowledge deficit" in the people of Hassan. On the contrary, there is a pronounced knowledge deficit in the local civilian administration. They don't know Market economics. They don't know the importance of city markets and streets. They don't seem to know too much. This morning there was an item in the paper that the Zila Panchayat chief had announced a "Clean Hassan Campaign." I was hoping to read they had engaged private players to keep Main Street clean. But no, they want to install toilets in the distant villages. Main Street remains quite filthy, with stray dogs, stray cattle, and dung heaps everywhere.

I met a bright young boy on the bus from Belur to Halebid, and he spoke perfect English. Turned out that he was sent to an English-medium school in Mangalore when he was in Class 5 by his wise parents. He is now studying PU in Commerce. He said he had taken two classes in Economics where they taught him the "resources of India." Such "education" is designed to make the student feel that resources belong to "India" and therefore the State has to manage these resources. This bright boy's intellect is being killed.

I told him to study about The Market.

I offer you all the same advice.

It is to The Market that we must turn, the market on Main Street, in each and every city and town. This is where all knowledge flourishes. Main Street is also Knowledge Street. State education is harmful for the mind.

Ground Zero: Scene of a Crime

On the bus to Halebid, Belur and back, I also looked closely at the agriculture here, around Hassan, Karnataka. The soil is rich, dark brown, and very fertile. Water is abundant. Greenery abounds. I saw many fields of tall, healthy maize, but I also saw a host of cash crops - there were banana orchards, coconut groves, patches of vegetables, chillies, and many crops that I could not recognize. There were many fields of flowers - sunflowers as well as marigolds.

I have travelled the area extensively some years ago, lecturing in many small towns, and I had begun a travelogue called Malnad: Where Money Grows On Trees. Farmers here are extermely prosperous, growing cash crops like coffee, pepper, arecanut (supari), vanilla, styvia and what not. The agriculture around Hassan is not that rich, but it is doing quite well. There are no signs of distress.

Thus, everything is hunky-dory here. Pakistan is far away; there are no terrorists or Naxalites; agriculture is prosperous; the land is beautiful with many historical treasures; the weather is extremely pleasant; the people are enterprising and hard-working; there is complete internal peace - but even here they have made a total mess of things. Thus, this is a "scene of a crime" - a crime committed by The State. This is not even "benevolent neglect" - the colonial policy that succeeded so well in British Hong Kong. This is plain and simple "dereliction of duty."

The bus to Belur went down BM Road for quite a while and then, at a fork without any traffic safety arrangements whatsoever, took a sharp right. It must be difficult to cross the road here. A small township has grown up around this meeting of roads, for this is how urbanization always proceeds - along transport connections like rivers and roads, or the sea - but the civilian administration seems totally devoid of this basic knowledge. I do not think they possess the hard knowledge required to design safe roads, signage, crossings and the like. I watch the traffic constable from my window armed with a walkie-talkie and a whistle. He cannot do much when the system has failed. The police seem unable to handle their basic role in peacetime - which is to preserve order on the streets. We are all horribly unsafe in India. This essential knowledge must be imported.

Of course, I was looking around at the beautiful scenery with the eye of a Property man. I saw at least 5 big lakes around which there was no property, and many hills too. A grand casino might look fine on a hill, what? In Goa, they don't give terra firma to casinos, and they must operate on ships in the water. Hassan can compete. Kathmandu gets loads of Indian tourists because of its casinos.

However, the planners in New Delhi have no vision of real estate development. I saw many hills despoiled by rows of huge windmills. These are no solution to the severe power crisis Hassan and the whole of Karnataka faces. They are an example of State subsidy and destruction of real estate value. They symbolise the folly of centralizing power and authority. These windmills and the space centre in Hassan are signs of "science" under socialism. Indeed, under socialists there is always science; there is never any "technology" - which requires The Market. We had IITs right through the bad old days of socialist autarky, but we never had phones, and we never had cars. Think about that - and how Capitalism has improved life in recent years. Raise a toast to Capitalism.

I suggest more. Many years ago, Liberty Institute organized a "Walk for Capitalism" around Delhi's Connaught Place. I participated enthusiastically, shouting "Khulla Bazaar" and "Mukt Vyapaar" and "Jai Vyapari", carrying a placard saying "Taxation is Theft." The walk was a great success and widely reported. I hope you folks reading this try to organize such walks for capitalism in your own city and town. We must inform our The State that most ordinary folks believe in Capitalism.

Ground Zero, Yesterday

Yesterday, I wrote about the "knowledge deficit" in the IAS man heading the civilian administration on Ground Zero, here in Hassan, Karnataka. Today, as I surfed the newspapers, I found this interesting report in Mint: That the central ministry of education has appointed a 4-member committee to look into higher education. This committee is headed by an IAS officer. Should these bureaucRATS be allowed to infect young minds with "socialist" ideas and ideals? A question, I assure you, of mere "academic interest" only.

But let me tell you about yesterday, when I visited two of the most fantastic old South Indian temples I have ever seen - and I have seen most of them, in Tamil Nadu, in Andhra Pradesh, and even in Orissa - Konarak and Jagannath Puri. I have recently visited Hampi. But these temples at Belur and Halebid are something else. They are quite close to each other, about 40 kms out of Hassan.

The journey was quite interesting. The landscape was incredibly beautiful: undulating terrain, here and there a small hill, a water body here, another water body there. Picture post-card beautiful terrain. There seems to be zero understanding that a great deal of great real estate could be developed in the surrounds of Hampi.

As we approached the town of Belur, I saw an overcrowded, congested, higgledy-piggledy agglomeration of new, private houses - the sort of "legal" housing our The State allows. The town offered NOTHING for the tourist. It is a bustling market town, not a tourist town. I walked to the temple in a light drizzle, and it was quite magical inside, in the soft rain. The carvings on the inside and outside are in old, black rock, and most intricate - of demons, horses, elephants, apsaras, and gods and goddesses. Stepped out and ate some jackfruit off a roadside stall. Delicious. This jackfruit deserves to be promoted to foreigners, who have discovered the papaya and the mango but not the great Indian jackfruit.

The temple at Halebid was even better. I could not believe my luck, to see two such splendid ancient wonders of Indian architecture in one day. Halebid town was nothing worth noting at all. Yet, all around the temple, there is a HUGE lake! The bus I took back to Hassan drove along this lake. Nothing at all along the lake. And this is a truly beautiful, ancient SHIVA temple. I didn't ask around for Boom Shankar in Halebid. I knew you wouldn't get any.

That is something I tried when I got back to Hassan. The auto-rickshaw drove me ten kms out of town, along a narrow, broken road. We past some "suburbs" where the middle classes live - and there are no internal roads in these suburbs. Yet, there is abundant space - and quite beautiful, at that. Way up along the road we passed a huge, barb-wired property of the Department of SPACE!

They haven't even colonised the abundant SPACE around our cities and they want to explore outer space!

On the way back we passed some more of these middle class "legal" housing colonies, with their extremely narrow streets. There is a lot of commerce on the streets: too much commerce, too little street. And there is an automobile revolution happening. The King of the City of Hassan drives around in a shiny white Ambassador.

Actually, Mr. Chief Justice, it is first and foremost an "academic question" whether India is a "socialist" country, or not. The constitutional bureaucracy exists to provide "rational-legal administration." The word "socialism" affects this "rationality." In either case, the word should go from the Constitution because India has always been a "mixed economy" and The Market was always there. Today, it is our society's leading edge; our only hope. It is vital that the Economic Science taught to school and college students, and to civil servants, include a thorough understanding of the principles of a market economy, and its central importance to society.

Read some interesting news about Hassan in the papers. First, that the head of the Zila Panchyat lamented about the "population problem" on World Population Day, the day decreed by the United Nations for bemoaning birth and celebrating death. In the same paper there was a report that the coffee farmers of this district face shortages of labour and import workers from other districts in the season. Population problem in Hassan? I saw great, wide open spaces all around, including virgin, unowned forest land. And anyway, we are talking about tourism, which means more people. The more the merrier, in fact. Get the deep philosophical errors in the district's leading "politician" - of the socialist, panchayati raj mould. And I bet my bottom dollar that the IAS dude here is spending a fortune on "employment guarantee rpogrammes."

Saw lots and lots of very happy cows on the drive to Belur, Halebid and back. Not herds of them being driven down the highway as in North India, but healthy, happy cows, here and there, tethered to a post on a grassy knoll, happily chomping on clean, green grass. This is where cows should be - not in the City, that too on Main Street. This morning, there were 5 cows on the road divider. The owners of these cows are abusing collective property. They are also abusing their animals, subjecting them to a horrible life. Their treatment of these cows should be widely condemned. And the civilian administration should look after the most important collective property in a city - Main Street. It matters much more than the Sensex.

Ground Zero

Saw a picture in the newspaper of Srinagar, Kashmir, returning to "normalcy." It was a picture of a busy shopping street, crowded with shoppers and their cars. That is, The Market is the source of "natural order."

I live in such a natural order catallaxy myself on BM Road, Hassan, peacefully and gainfully interacting with complete strangers. These strangers are invariably businessmen who own Property along the two sides of the road. These are all shopkeepers. England was once called "a nation of shopkeepers."

Indeed, as I look out every day from my window in the lodge on to the street below, I see that on this stretch of BM Road, there is nothing positive that our The State has contributed. The footpaths are broken and unsafe, the traffic is terrible and noisy, there is litter, cows wander on the fast lane - and the lone traffic constable walks around lazily in his cowboy hat carrying a walkie-talkie.

Today, I saw the owner of the general store opposite wash the entire stretch of footpath outside his shop. He seems a bright fellow. His behaviour illustrates the fact that, for the individual shop-owners, the condition of the "common property" of roads and footpaths matters greatly. Indeed, the footpaths and the road are their most important capital asset. If these don't work, customers don't come, and the property values of their shops decline. The city declines.

This basic realization seems to have escaped the local "civilian" administration. Last evening I engaged an auto-rickshaw on a ganja hunt. We drove towards the city centre. We had barely travelled half-a-kilometre when the road widened and I saw that we were in a "government square." On one side was the colonial bungalow of the District Magistrate - the IAS man. You cannot see the bungalow from the road. It is tucked away in the back, behind lots of trees. He has abundant land.

Opposite is the office of the District Superintendent of Police, the IPS man, boss of the lazy traffic cop.

Adjacent is the office of the Zila Parishad, a panchayati raj institution comprising the village heads from the surrounds.

Soon after passing the government square, BM Road takes a sharp left turn - and disintegrates altogether. Now, not only is there no footpath; there is no road either. A swanky hotel has been newly built there. There is a smart building with many shops. Private businessmen are investing in real estate in Hasan. The "civilian" administration has its head stuck in some village - "rural development."

BM Road is "Bangalore-Mangalore Road." It is NH-48. Here in Hasan it is an urban thoroughfare. There is a by-pass but it is not used much. Thus, the road is over-burdened with heavy vehicles travelling through. What seems clear is that the "civilian" administration is not looking after cities, their markets, and their roads. Not only that, these vital interests are not "represented" in local politics - which is all about village panchayats.

These administrators are therefore totally ignorant of the principles on which the market economy works - and the importance of cities and roads to the scheme of things. Their professional training is at fault. This training is based on "socialist" principles. Yet, there can never be any "civilian" without a market society. Our administrators are not civilians any more; they are cogs in the wheel of "party government," the central high command of the socialist party exercising "dual subordination" over both party as well as administration.

Today, I am off to Halebid and Belur, two nearby places that feature high on the government tourist brochures. Will report on the trip tomorrow. Stay tuned.

Boom Shankar, Indyeah!

The cops often talk of "narco-terrorism." The libertarian antidote is "narco-tourism." Allow me to explain, especially in the Indian context.

In the early 1970s, when I was growing up in New Delhi, the Connaught Place area was always full of young, white tourists, usually broke, but invariably smokers of the Noble Herb. It was these tourists who discovered Goa, who put Kathmandu on the tourism map, and who discovered the hills of north India, where good charas was plentiful.

I have friends from college who walked the entire length of Goa, staying on every beach, on a 2-month narco-holiday. This was Goa in the 70s. These days things are different. On Palolem the other day, a dealer tried to palm me some adulterated charas. In Goa, smoking tourists are getting screwed.

When I first visited Kathmandu in the early 80s, charas was legal and there was a great narco-tourist market called "Freak Street." There, you could get hash tea, hash coffee, hash omelets, hash cakes, hash cookies - and, of course, you could buy hash to smoke.

Things are different today, after the government ban. On my last visit to Kathmandu, a shady guy in Thamel sold me some bad hash. Notice that the Maoists who are in power are not talking about tourism, the hash market, and things like that. Their soldiers are just waiting for government jobs. There is no "liberation" unless The Market is liberated from State control. These guys just want to become tax parasites. Their chief ideologue holds a PhD from New Delhi's Jawaharlal Nehru University. The mission of the Maoist leadership in Nepal is to control a State; it is not to liberate a people.

Coming to Hasan, Karnataka, on whose huge, untapped tourism potential I have just written, the quality of ganja on the market is simply awful. Suneet Shukla brought some stuff from Bangalore and that was awful too. I know for a fact that the stuff you get in Delhi is just as bad.

What poisonous stuff is selling in our markets?

This is a serious question of public health when the authorities have unleashed a culture of hard drinking.

I think states like Karnataka, which borders Goa, should seriously consider narco-tourism. Amsterdam flourishes on tourism.

We must also consider the farmers who grow the stuff and are exceedingly poor. I visited one such farmer and was shocked by his poverty and his unconnectedness. We had to motorcycle it along a rutted track in the jungle in order to reach his shack. These guys should own SUVs.

Narco-terrorism is just a symptom of the futility of State prohibition of ganja and charas. Narco-tourism allows us to liberate the trade and bring all players into The Market - with all the consequent benefits.

Boom Shankar, Indyeah!

On Hassan... And Tourism

The glossy booklets on India's tourist attractions printed by The State in New Delhi always contain the image of the naked statue of Bahubali in Sravanabelagola. Hasan is the nearest city to this wonder of our ancient civilization so I decided to check the place out yesterday. Along with me was Suneet Shukla, a young journalist from the Indian Express in Bangalore.

Now, in Hasan itself, there are no signs of any tourism industry. I have just seen one foreigner in 7 days. Predictably, there were no tourist buses to Sravanabelagola. We had to take the government bus. This is not a direct bus. We had to change buses en route. The buses were rattletraps. The roads were too narrow. I feel nervous when the big bus overtakes a slow two-wheeler.

The statue of Bahubali is located on top of a massive rock that dominates the small town of Sravanabelagola. You have to walk barefoot up a very long line of steps carved out on the rock face. It was slow going, but the effort was well worth it. I was much inspired by the statue of the naked Jain saint. Alone, unarmed and unclothed he had preached his message - and the people listened. I have seen another ancient statue like this one in the nearby hill town of Karkala. I have also visited Moodabidri, the "Kashi of the Jains," also located nearby. The Jains are a non-violent, non-theistic, trading community. There is much more to our Indian civilization than Hindutva.

There were very few tourists in Sravanabelagola. I saw only two foreigners. It seems the town fills up only during the annual Jain festival, when the devout come. It is a town of annual pilgrimage. It is not a tourist town.

We took a long break on top of the rock after coming out of the enclosure where the great statue is located. We chose a shaded corner and stood around enjoying the cool weather and the lovely view. There are wide open green spaces all around, there is a lake below, but we see that the town of Sravanabelagola has been cramped into a small corner of the big picture. From up there it looks like cars cannot move within the town. This is local overcrowding amidst abundant space - a common urban feature throughout India.

We returned to Hasan by the evening. Suneet engaged an autorickshaw to look for some grass and found some terrible stuff. We smoked it anyway. Spent the evening drinking hugely overtaxed beer. Not much fun being a tourist here.

Today, I just want to plant the idea - of tourism. There are two other attractions near Hasan, Halebid and Belur, and I plan to visit them next week. Otherwise, the city of Hasan has all the qualifications necessary to be on the tourism map. Street food is excellent, cheap and clean - indeed, it is a treasure-trove of ancient knowledge. The weather is simply perfect. The scenery is pleasing. What is missing is Liberty. What is missing are roads. What is missing is the vision of a big tourism trade. In Bangalore they only talk of IT - and, these days, mining. Tourism is the world's biggest industry. One tourist creates 12 local jobs. Tourism is the industry of fun and holidays - and an "open society." We have a great deal of untapped potential here. Hasan proves it.

On The Tax, The Road, The Cop and Their Academies

The report on the Chief Justice of the Supreme Court of India swearing by "socialism" - a dirty word to me - ends with the following words:

Taking the cue, the Bench disposed of the petition saying though the PIL raised an important question of law, it was purely academic in nature at present. "The court will decide such a question as and when a political party which is refused recognition by EC raises it," the Bench said.

In other words, the "academic" nature of the argument is not worthy of attention. Allow me to share with you the dangers of such a view.

I have now been in Hassan, Karnataka, for a few days. I buy 2 small cans of beer every evening because beer here costs twice as much as Goa. I have necessarily have to curtail my consumption. I have suffered. The retailer has suffered. The beer industry has suffered. Indirect taxes are a dangerous weapon in the hands of our The State.

Yet, what do we pay the taxes for? Neither side of BM Road, where I live, has a footpath. In the evening, motorcycles are parked all over what should have been a footpath, and walking is impossible.

The road is broad but the traffic is insane. Two traffic cops stand lazily by. They are joined by a crane vehicle. I tell them to get rid of the stray cows. They do.

In the night, at 10:30 pm, all the action is shut down by force. The cops play Wee Willie Winkie.

Now, in a purely "academic sense," bureaucrats and policemen are "trained" in Academies. If these academies did not teach them only socialist principles but also told them about markets and cities, they would understand that The Market is the most important institution we possess. They would look after cities and city markets better and would view the urban street as the MOST IMPORTANT collective capital good the citizens possess. They would look after streets, footpaths and markets. They would throw out stray cattle instinctively. Here, they are uncaring at best, ununderstanding of market phenomena, and predatory at worst.

In a purely "academic sense," knowledge of The Market should inform our civilian administration. After all, technically we are a "mixed economy" and The Market has always been there, thankfully. Today, it is all that is working.

The Chief Justice wants us to take the political road and form a political party. At least I will never do any such thing. I will continue to oppose socialism in an academic sense. This is an issue of contesting philosophies, of conflicts of visions, of knowledge failure. Let us ponder over the deep issues raised instead of wasting our energies in electoral politics - always a mug's game.

On Our "Patriotic" Supreme Court

There are many people trying to get the word "socialism" out of the Preamble to our Constitution so that it disappears from the Representation of People Act and genuine classical liberal and libertarian parties enter the fray. Chief among these objectors who have gone to court is SV Raju of the Indian Liberal Group, and his PIL has been pending before the Bombay High Court for over 15 years. The ILG are remnants of the old Swatantra Party.

Now, the Supreme Court of India has let down all these hopes by ruling that the word "socialist" should remain and only socialist parties allowed entry into Indian politics. Read the full story here. Note that the bench was headed by the Chief Justice.

I get the feeling that the Chief Justice and his cohorts are being "patriotic": they are saluting the flag - the CONgress flag - they are saluting Nehru and his descendants, they are saluting an idea they know in their hearts has failed. But they are saluting the idea nevertheless, in a patriotic way - that is, "the last refuge of the scoundrel." They are being "loyal" to the regime.

"Where there is no Property there is no Justice," wrote John Locke in 1691 - and there is no justice in India because of socialism, socialist legislation and socialist judges.

However, the Chief Justice must also know something about practical politics. It takes a political leader to make a political idea take hold of the public mind. Nehru performed this function for socialism. But who is there to perform this function today? The judges are hoping for a miracle that will never happen. Never will Chacha Manmohan S Gandhi, Boss Sonia and Baby Rahul manage to sway public opinion to socialism once again. As a practical political idea, socialism is truly dead in India.

Anyway, it seems to me that there is some good news to take out of this bad news - and that is, the Supreme Court has fallen off its high pedestal. It should be viewed as just another arm of The State. Another chamcha of the Gandhis.

On Rousseau, Adam Smith, Geneva, Democracy & Republicanism

The patron saint of the modern democrat is Jean Jacques Rousseau. To truly appreciate this man's errors, we must "understand" his life in the context of his ideas. Rousseau was Swiss - where they have "direct democracy." Rousseau's statue sits proudly at an important junction in Geneva - and this is a city that has a long and proud tradition of republicanism. They had no king. They ran their own city. I inspected the old cannons on the ramparts of the old fort in Geneva - and the cannons bore the emblem of the City.

The republicanism of Geneva was much admired and talked about in the rest of Europe. Adam Smith, a staunch Whig, fancied himself a republican and even paid Geneva a visit during his two-year tour of Europe as tutor to the young Duke of Buccleugh - for which position he resigned his professorship in Glasgow. In Geneva he visited Voltaire - and the two got on famously. He also consulted a famous physician in the city, a physician who had sent his young son out to Glasgow to study under Smith; this, after reading Smith's first book, Moral Sentiments. Adam Smith breathed deeply of the free air of Geneva. There was great political turmoil in Geneva then as the City's lower house tried to get more powers at the expense of the upper house. Rousseau was active in this politics, writing on behalf of the lower house. This was the "democracy" Rousseau knew.

I too had the occasion to breathe the free air of Geneva. I spent a few days there in 2000. The Geneva Motor Show was on. It is the most important motor show in Europe - and the Swiss don't make cars. They make watches - but you get Japanese watches there too. In the supermarket where I bought gifts for friends back home I saw Japanese plum wine, Darjeeling tea, and Californian almonds. At the Davidoff store in Geneva I bought Egyptian and Indonesian cigarettes. There were also Mangalore Ganesh beedis for sale @ Sfr 2.30 a bundle. Geneva is an old free trading and republican city. The World Trade Organization is headquartered in Geneva.

I spent seven days or more in Switzerland. I tried an experiment there with every Swiss person I met. I asked them the name of their President - and not a single one knew. Swiss democracy is strangely silent. The world never hears of Swiss elections. There is something that lies deep in Switzerland - a political culture that is entirely "local." I stayed for a while in Lausanne, a city on the opposite side of the lake from Geneva - and it has its own independent government.

Rousseau was no great philosopher - but he was Swiss. Even Rousseau would have laughed at modern mass democracies with centralized states. Both Rousseau and Adam Smith would have laughed at modern republicanism. Bastiat was a great critic of Rousseau - read "The Law."

Question what you learnt in "civics." Question all authority. The words remain the same but their meanings have all gone. Humpty Dumpty is the boss.

On Hernando de Soto... And Property

Hernando de Soto is making big waves in India these days. The Peruvian economist who champions land titling as the solution to the "mystery of capital" is talking to our The State about property titles for slum dwellers in our cities of joy. But the bureacRATS are not too happy. The IAS dud who heads the minitsry of urban development is quoted in this feature as saying:

"De Soto's approach is essentially based on capitalist economic principles. Our government will try to meld them into our socialist objectives," he added.

Note that every poor Indian does not live in a slum. In Goa, poor people also have homes. Simple homes, but homes. Slums are ubiquitous in all our big cities because The State controls real estate development here. In New Delhi, land is never bought and sold; it is always "allotted" - by The State. Hence the slums. It is these "socialist objectives" that have caused slums. Not that DDA localities are any better.

But I would take de Soto with a pinch of salt if I were you. As he says in this long interview, he runs an institution called Institute for Liberty and Democracy. He proudly says he "believes in both." He has obviously not arrived at the truth that a private property natural order is fundamentally incompatible with democracy. Throughout the democratic world, Property is under relentless attack.

In India, things are far worse. We cannot build anything on farmland unless The State allows us to "convert" the land to alternative use. If this ridiculous assault on Property was done away with, and if local governments built roads into the surrounds, lots and lots of new properties would be built and owned by Indians. Cities would decongest. People would have real homes. Read my brief paper, "Bungalows for all" by clicking here. I am not talking of "slum development." I am talking of real estate development. Donald Trump language. Capitalism. Property.

Indeed, Property is not just an "economic principle." Property is truly the "name of the game." All that we see in markets is people exchanging properties. Homes are basic properties. Even cavemen "owned" their caves. If you forcibly occupy Baba Mast Ram's "Surya Gupha" in Devaprayag, the good baba, with whom I have smoked many chillums, will turf you out. From caves we moved to tree-dwellings. Now we have skyscrapers. If the Property Principle prevails, all Indians will have liveable homes someday soon. There will be no slums. But roads will have to be built as Top Priority. This must be done especially at the local level, using local knowledge.

Property is not just the name of the game, it is the pith and essence of civilization, of cities and markets, of prosperity and social order. It speaks volumes of our absent political leadership that a senior IAS man does not see that without this Principle in operation, no "rational-legal administration" can be built. They are all Maoists, these IAS duds.

The Myth Of "Representation"

Read the Deccan Herald this morning. Impressive. Hats off to our English press. They are surely leading the way.

The story I found noteworthy in the paper is on our MPs voting themselves huge salary increases. They want each MP to be paid more than the wages of a Secretary to the Government of India. What I find peculiar is that these guys have surely lost the plot. In a democracy, MPs are supposed to "represent taxpayers." The rallying cry of democracy has always been "No taxation without representation." In India, socialist democracy creates and maintains armies of "tax parasites." Now our MPs want to join the bandwagon. How long will these people go on looting the taxpayer?

The taxes on booze in Karnataka are horrible. I am told that taxes on petrol are also very high here. But there are no roads and the cities and towns are all a mess - because we are not "represented" where it matters: in the running of our own cities and towns. The genius of the English constitution is that it is based on local self-government. The Indian Constitution just sets up the Central State without any social foundations.

I noticed this also in Srinagar, Kashmir. We never hear of a Mayor of Srinagar, do we? All government revolves around a Chief Minister of the entire Province. This is also true of a huge province like Karnataka. These chief ministers lack local knowledge and do not engage in local politics. Without sound institutions of local self-government our centralized democracy is just a sham. It is the very opposite of the ideal of "political freedom" that Democracy traditionally upholds. This is one more reason to reject this centralized, socialist democracy.

The taxes we are forced to cough up to these representatives of tax parasites get my goat. They even steal my money from Mint, who send me their cheques after deducting taxes. What do we pay taxes for? Who represents the interests of the taxpayers? I trust I have left you with lots to mull over today.

On The Road, Again

Fled the humdrum, domesticated life in South Goa and am now holed up in a clean, single room in a small lodge in Hassan, Karnataka, looking for both solitude as well as adventure. It's like the old Dylan song:

But sometimes a man must be alone,
And this is no place to hide.

Hasan should be on the tourist map. It is the closest city to Halebid, Belur and Sravanabelagola. Nestled in the hills of the Western Ghats, "the weather here suits my clothes." I love the monsoon, anyway.

I took the Konkan Railway to Mangalore and then the bus to Hasan. The railway urgently needs competition from buses - for which a Coastal Expressway is a must. The seats were hard and horrible. The bus had excellent reclining seats but I couldn't sleep a wink because of the bumpy road. It was a government bus from a government bus station 10 kms from the rail station. The auto-rickshaw from the railway station to the bus station cost more than double the railfare. Guess our government hasn't heard too much about "multi-modal transport." It has been a tragedy that wee the sheeple handed all transport over to The State. Everything needs to be privatized.

The highway from Mangalore to Hasan is terrible. Our Tata bus groaned and moaned all the way, not possessing the power to take on the climb. The road was jam-packed with heavy vehicles and progress was excruciatingly slow.

Got some poor quality grass through a local contact. At least now I am putting into my body what I want to put into my body - I am excercising self-ownership.

The lodge I am staying in is on a wide, busy thoroughfare. The shops nearby cater to all my needs: there are two booze shops, three restaurants and even a bar called "Cocktail" where I had some beers this afternoon. Hard-drinking men sat around, downing whiskies and rums in the daytime. Beer is ridiculously expensive. This is very bad for tourism. But the bar itself had a Wild West atmosphere. Next door was the Hasan Armoury - a gun shop!

Read the Times of India yesterday, Mysore edition. The leader article was by a State-employed nuclear scientist arguing that "India needs to play a major role in harnessing this technology." Hasan needs electric power alright: there are long power cuts throughout the day. This should be privatized. With nuclear power under State-ownership, we will never get electricity 24x7.

Anyway, the author of the article is not an economist. He is merely arguing for State subsidy for his own "knowledge" area. An economist talks about "economization" - something we do all the time, about means and ends, of choosing between options. The country needs roads - and Adam Smith said this was the "third duty of the Sovereign." In his exact words, apart from national defence and the administration of Justice, the sovereign has:

...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.

I champion roads. They should be Top Priority. Nuclear power India does not need.

Saw an intersting advertisement in the ToI put up by the Karnataka BJP - in Kannada. Jalebis all over an English paper! Lots of mugshots of local politicians who don't speak our language and profess to linguistic chauvinism. The signs on the government bus was in Kannada - very bad for tourism. English is the language of the future. I champion the English language. It can be learnt fast from for-profit companies. Learning English does not require government schools.

Saw another ad in the ToI on the back bage - of the central government's Ministry of Urban Development building a modern bus station in Bangalore. The central government suffers from serious knowledge failure. If we want to develop our cities and towns we must hand them over to local bodies possessed of local knowledge. Buses can be run, and bus stations built, by the private sector - as is already happening with airports. Their problem is the complete absence of the ability to think consistently. Perhaps the minister needs a "decent smoke." I surely do. Goodbye.

For A New National Anthem - And FUN!

Kashmir is burning; the army has taken over Srinagar; indefinite curfew has been imposed; and the ToI has a lead editorial titled "Absentee Leadership." Good title; poor edit.

In the socialist, democratic India of today, political leadership is glaringly absent. Chacha Manmohan, Boss Sonia and Baby Rahul are all zeroes. And the Opposition is entirely without heroes. Made me think of our National Anthem.

"Jana Gana Mana" is a song in praise of The Leader. The first line says, "nayaka jaya he," and nayaka means Leader. The song was written and composed by Rabindranath Tagore as a paean to George V when the Emperor came visiting. It was adopted by Nehru as the National Anthem because the Great Socialist is always The Leader. The history of socialism worldwide shows that all these great leaders failed; their stories are all about "fatal conceit."

So we need a new National Anthem. This should be a Song for the People. I suggest BB King's "Let the Good Times Roll." The opening lines are as follows:

Hey everybody,
Let's have some fun,
You only live once,
And when you're dead, you're done,
So let the good times roll,
Let the good times roll,
I don't care if you're young or old,
Let the good times roll.

Yes, in India, we the people must get down to the serious business of having FUN. Our political leaders are all totally devoid of any idea of having a good time. Indeed, through their misgovernance, they are giving all of us a real bad time. Let us resolve to get rid of all these rascals and institute Liberty.

And then, let the good times roll.

P Sainath: Soft Heart, Softer Head

I have commented earlier on Sonia Gandhi's decision to "universalize" food security - the much trumpeted "Right to Food." Today, thanks to Chandra once again, my attention has been drawn to a staunch supporter of this brainless idea: P Sainath, writing in The Hindu.

Sainath begins by denying anything called a "scarcity of resources." He writes that the line, "there is no money," is "most dishonest."

In reality, the most dishonest idea of all is that The State has unlimited resources. It is this dishonest idea that lies behind huge government deficits, currency printing, and inflation - which is a tax on the poor. It is this idea that enables politicians to buy up support anywhere and everywhere - including Parliament. We must all realize that resources are limited, and that The State must spend only what it receives in taxes, and nothing more. We must also realize that the less taxes there are, the better, for then the size of The State is small, and there are less "tax parasites." Sainath, on the other hand, wishes to make India a haven for such parasites - because he wants The State to "feed the hungry."

Reminds me of an Obama joke on LewRockwell.com that I just read:

Q: Have you heard about McDonald’s’ new Obama Value Meal?
A: Order anything you like and the guy behind you has to pay for it.

Sainath's compassion with other people's money extends far beyond feeding the hungry. He wants a Total Welfare State. He says:

I was a member of the BPL Expert Group. In a note annexed to that report, I argued that in four sectors — food, healthcare, education and decent work — access had to be universal.

My question: How do you become a member of a government expert group unless you are seen as a friend of The State?

So Sainath wants a Right to Food, a Right to Education, a Right to Work and a Right to Healthcare - all provided by a paternalistic State. He says nothing about the Right to Property. He is therefore a close ally of the socialist State and its bureaucRATS - who would "administer" all these soft-headed schemes with freshly minted currency notes: inflationary finance.

Actually, there is no "right" unless someone has a matching "obligation." If no one has an obligation to give you food, healthcare, work and education, all these rights are meaningless. No good has ever come of the huge compendium of "universal human rights." Indeed, it is governments worldwide, especially Third World governments, that are the biggest violators of human rights. Human beings need protection from their governments. Sainath is pointing the other way. His friend, The State, is therefore quite pleased with him, and is equally happy to tell the poor: "Welcome to my parlour," in exactly the same way as said by the spider to the fly.

Let us not be soft-headed. Let our heads at least be hard. Let us see this The State for what it is: A Predatory State. Let us see that it has failed in everything it has taken up - with our money, and with inflationary finance: from making steel to education. Let us see that our The State cannot run a single city or town efficiently. Let us see that the people in the cities are unhappy, people in the towns are unhappy, people in the jungles are up in armed revolt, and Manipur and Kashmir are aflame. Let us fix real problems. Let us fix this The State. Let us not give it more tasks to perform - with our money, and with inflationary finance. Sainath, who denies the scarcity of resources, believes in inflationary finance. His views are fatal to society.

My "vision" of State and Society is very different. I would like to see The State cut down to size. I would like to see most taxes revoked - so that people can keep their money, save and invest it, and buy their own food, education, and healthcare. I would like to see an end to all State "licensing" so that there is Liberty - and everyone can "work" on his own, without bureaucRATS getting in his way. I would further like The Law to be applied to whatever remains of The State - so that The State is NOT "above the law," as is the situation today. I do NOT view this The State with rose-tinted glasses, as Sainath does.

Remembering A "Hero & Saint"

Thanks to Chandra, I was made aware of the fact that this year marks the birth centenary of Professor BR Shenoy, the only official economist to pen a "Note of Dissent" to Chacha Nehru's grandiose Second Five Year Plan that was modeled after the Soviet strategy of "heavy industrialization."

Chandra has also provided the link to a speech made on the occasion by one of our central bankers, comparing Shenoy with Hayek. Yet, Shenoy is better described in the words Peter Bauer used for him: "Hero and Saint." He was a Hero for standing up to Nehru and his economist-sycophants. And he was a Saint for taking the consequences without batting an eyelid. Shenoy was hounded out of academia. His name was not heard of when I studied Economics in Delhi University in 1974-77. He was still alive then. Hayek received a Nobel prize during those very years.

The memorial lecture I have cited above, by a central banker, quotes at length from Shenoy's "Note of Dissent." I will quote just a few words:

To force a pace of development in excess of the capacity of the available real resources must necessarily involve uncontrolled inflation. In a democratic community where the masses of the people live close to the margin of subsistence, uncontrolled inflation may prove to be explosive and might undermine the existing order of society …We should be therefore, forewarned of the dangers of an over ambitious plan.

Nehru printed money to build his steel plants. The result was "uncontrolled inflation." This method of financing The State continues till today; and even as I write, a columnist in Mint argues for more "stimulus spending." The words have changed, but the idea is still the same - that government spending gone out of control is "good for the economy."

In the memorial lecture cited, para 4 is particularly noteworthy:

Shenoy’s Note of Dissent was a sole voice in the wilderness. Yet, ignoring his views was costly and the rest is history. What followed was the foreign exchange crisis of 1957-58 and the response to this was even more physical controls. The majority view prevailed for the next 35 years and the economy was punctuated by cycles of large deficit financing, foreign exchange crisis and draconian controls till it culminated in the foreign exchange crisis of 1991.

Actually, Shenoy's was NOT a "voice in the wilderness." His was a voice that was DISPATCHED to the wilderness because he disagreed with the great socialist Nehru. That took guts - and the willingness to face all consequences.

Anyway, inflation is still with us, as are inflationists. Yet, it is heartening to hear that Shenoy is being remembered today. The battle against inflation must be waged. May a thousand Shenoys rise.

The enemy today remains the socialist State. Today, they no longer want to print money to build steel plants, for Mittal has amply proved he can do this better than The State. Rather, the effort is build a Welfare State with a bloated welfare bureaucracy - all "tax parasites." Leading this effort is prime minister Chacha Manmohan. He is no hero. He is a sycophant. He is no saint. He is pure evil. The Shenoys of today have their job cut out for them.