Vedanta Must Get Out Of Niyamgiri

Thanks to a friend on Facebook, my attention was drawn to an excellent article on Niyamgiri by senior journalist Gautam Chikermane, who actually took the trouble to visit the place before writing about it. Chikermane begins by describing the two sides to the dispute:

On one side stands the $7.9 billion (Rs 37,000 crore) Anil Agarwal-managed mining giant Vedanta that wants to extract bauxite from the Niyamgiri Hills to convert into aluminium at its plant in the foothills. Standing by Vedanta is the Naveen Patnaik-led government of Orissa that wants the project to come up fast.

On the other side are the 1,453 people of the Dongria Kondh tribe, who live on Niyamgiri, a mountain they consider sacred. Their belief system hinges on an ecosystem that says everything on the mountain is sacred. From earth goddess Darani Penu (Supreme Goddess) and her husband Kotebali Penu to the lower gods — the arrogant Jatrakudi Penu, who brings drought; Bima Penu, who looks after crops and Takrani Penu, who protects them from disease — to its inhabitants, all is one. The now-popular Niyam Raja Penu, the god who protects the tribals from unnatural deaths, is one of many gods that the animistic-polytheist Dongria Kondh tribe worships.

Now, the fact is that these 1,453 people who live on the hill do NOT want to sell it for ANY amount of money - because they believe it is their God. Chikermane writes:

“When the factory construction (of Vedanta refinery) began, we realised that this will be a rakshsa (evil monster) that will devour our hill,” the Niyamgiri Suraksha Parishad President Kumti Majhi said. “This hill is not a thing to be sold, it is for living.” The analogy with James Cameron’s Avatar is true.

Once again, everything boils down to Principles - and my Principles are entirely based on the Inviolability of Property. The hills belong to these people. If they do not want to sell these hills, Vedanta must look elsewhere for bauxite. The planet contains lots of bauxite - it is a super-abundant ore. Vedanta is a multinational, so it can go to Africa for bauxite. But Niyamgiri it cannot have - because those who own it do not want to sell.

Such cases happen all the time. Suppose a highway is to be built and the authorities want to take over a graveyard or bulldoze a temple - and the owners object. Even an ordinary house can have a great deal of sentimental value that will make its owners refuse all offers to buy it.

Thus, the Naveen Patnaik government in Orissa cannot be allowed to misuse Force in this case. Anyway, this is not an instance where "eminent domain" can apply - for there is no "public purpose" here at all.

Chikermane, in his article, raises "seven questions" - and I will answer all of them.

One, should the world’s second-fastest growing economy consciously leave its statistically-insignificant but humanely-worrisome 1,453-strong group of people behind?

My answer: There are millions of ascetics in India - the sadhus, our holy men. Should they be forced to "develop"? Indeed, the most important question in Political Economy is the rightful domain of force, because all that The State possesses is organized force. In this instance, I believe force cannot and should not be applied.

On the other hand, The Market economy is about free choices. No force is ever used in The Market. People are always free to drop out of the rat race. There are many nations who hate work and prefer leisure and an easy life - like the Goans, whose motto is "Susegaad" which means "Relax." In the West, lots of people "downsize" and opt for alternative lifestyles. This is a personal choice. Peter Bauer, the great development economist, often wrote that in many underdeveloped nations he found that the people were not "poor"; rather, they were "needless." Chikermane quotes Kadra Bamunu, an axe-carrying farmer in the hill’s middle ranges, who told him, through a translator: “We don’t want any car or bike. We need only that which our stomachs want now. What we need, we grow.” This is indeed the "needlessness" Bauer wrote about. And Bauer offered the solution: Let traders be free to offer these people "incentive goods" - like a radio. They will then "work" to earn it - and "development" will proceed naturally.

On to the second question:

Two... is it morally right to leave this chunk of Indians without healthcare, education, electricity, communication? Just 1 km into the hills and my mobile connectivity disappeared. I passed a signboard near a village that said it “has been electrified under Rajiv Gandhi Grameen Vidyutikaran Yojana”, but there was no electricity there. I felt I was lost, the tribals couldn’t care less. On the way down, I met a midwife who said three tribals died of diarrhoea recently. Vedanta Chief Operating Officer Mukesh Kumar said it is impossible to get them to take medicines — they just keep it on top of their huts and offer it to the gods who they believe will protect them. “Can we allow such andhvishwas (blind faith) in our citizens?” he asked.

There is no proper electricity anywhere in India - because it is a State Monopoly. (While I was writing this post, the electricity failed, as it always does, every single day.) The Market should be allowed to step in - but, then again, if these people refuse to buy electricity, no force can be used to make them consume it. Ditto for mobile phones. As far as "education" is concerned, they are extremely fortunate not to have had their minds destroyed by it.

Let us now turn to the quote from the Chief Operating Officer of Vedanta, on andhvishwas. He uses the word "allow." Well, of course this should be allowed. I have myself visited the church in Vailankanni three times to drink the Holy Water which is believed to protect health. Millions in South India have also done so. You get buses in Goa bound for Vailankanni. Should this be outlawed? What about the ice lingam in Amarnath? Once again, what is "morally right" is only the question of the applicability of force. My answer: Leave them alone. On now to Chikcermane's third, fourth and fifth questions:

Three, does development have any meaning? So far, it meant an increase in per capita income that would come from jobs in the organised sector, largely in industry and mining. A large number of companies have taken up projects to help the local population where they set up industries become “employable”, through training and skills. Development has meant the ability to earn and consume goods and services. It has been an uneven development so far, but the trickle down is not far. What do you do when a group of people tells you that they don’t need any of this, can you force it down their throats?

Four, does it mean that if development as defined is rejected, Niyamgiri will remain a sort of tribal island — beautiful, no doubt, but an island still? The argument against it is: they don’t know what the benefits of development are, let them taste decent living, earn a decent income, then let them decide, right now, there is a consumption-asymmetry. Can we allow that, should we allow that?

Five, who will decide the direction of this development? If you think the answer is “free markets”, perish the thought. The Niyamgiri incident is a blatant joke on the free-market system. How can an illiterate, inarticulate, ill-informed group of people take decisions about their land, their lives against some of the world’s most sophisticated minds behind the state government of Orissa and Vedanta? The information-asymmetry is just too wide to even begin a discussion. Today, the two can’t even sit on the same table. On the other side, will natural resources such as bauxite or iron ore be left untapped because it is the natural habitat of tribals.

Mining is a "primary sector" activity - very primitive. On the other hand, tourism is a "service industry" in the tertiary sector, very advanced. Now that Niyamgiri is in the news, and these tribals have been likened to those in the film Avatar, it is not at all impossible to believe that the area will see thousands and maybe even millions of visitors. The picture accompanying this post is of the Niyamgiri hills. They look quite beautiful - and should attract visitors. Then, they will trade goods and services, learn from each other - and "develop." The original inhabitants of the beaches of Goa were all illiterate fishermen. But, thanks to tourism, they have become richer and "taste decent living, earn a decent income."

Chikermane asks: "Will natural resources such as bauxite or iron ore be left untapped because it is the natural habitat of tribals." Why not? The beautiful hills of the Western Ghats, especially in Goa, are more valuable as real estate than iron ore mines. Go and see Kudremukh, Chikermane. Has any "development" happened to the local population? I am confident that even if GOLD is discovered under the Grand Casino in Monte Carlo, they will not tear it down to dig for it.

Chikermane also asks: "Who will decide the direction of this development?" Again, the only answer is the Property Owner. We trade Property and Knowledge. This is done by Individuals. The "collective" has no rights here. The State has NO ROLE in "development." The area of development is the economic arena - and that is the preserve of The Market.

Chikermane asks: "How can an illiterate, inarticulate, ill-informed group of people take decisions about their land, their lives against some of the world’s most sophisticated minds behind the state government of Orissa and Vedanta?" This is the kind of evil nonsense that the Nobel laureate Gunnar Myrdal preached in his Asian Drama. It was Myrdal who sold to the West the idea that the illiterate poor of the Third World could NOT take correct decisions in The Market - and, so, these decisions should be taken for them by Central Planners, the English-speaking "economists" in suits and ties whom Myrdal considered an "intellectual-moral elite." The works of Bauer have totally demolished this ridiculous view. And the harsh reality of our "misplanned" India have only served to confirm it. Chikermane should visit any Indian market and observe things carefully for himself. If he does, he will see that it is the poor and the illiterate who take the most pains to ensure that they get the best deals - while the "educated" rich are easily conned. On to his sixth question:

Six, where is our political economy headed? “I am your soldier in Delhi,” Rahul Gandhi told a small, 5,000-strong rally at Lanjigarh a day after the Vedanta verdict. “Development does not mean destroying a mountain or oppressing the poor. Look at how we are bringing development to Haryana and Andhra Pradesh. Our government in Delhi will fight for you.” I agree with his politics — if the state government, particularly its khaki uniform, has lost its credibility and the Centre has moved in to fill the void, a political advantage should be taken. Clearly, Niyamgiri is not the last such act on the political theatre.

Our socialist democratic theatre of the absurd is heading nowhere. We MUST make Property inviolable. Leon Louw, the South African libertarian who has helped many African nations write their Constitutions, once told me that "even if your Constitution does not guarantee Property, the Government can do that." Good advice, indeed. On to Chikermane's last question:

Seven — and this is the most difficult question — how do you propose to bring economic well-being to Niyamgiri? The Dongria don’t want it. But they can’t be left behind as India progresses. The two have to meet at some point and that point doesn’t have to be one of conflict. Instead of looking at the two players as hostiles, it is the role of the government, policymakers and thinkers to throw up creative ideas that help bridge this gap. Remember, Niyamgiri is not about land acquisition that can be fixed as Parliament debates the bill shortly. It is about choices — national, corporate and individual. To view it as an either-or is a grave error all of us could be getting trapped into.

I have already suggested tourism. What the Dongria people do not want is the conversion of their sacred mountains into sheet metal. However, like the rest of us, I am sure that they too would like to be better off. But this requires Individual effort and enterprise. All that The State must deliver is Justice. In his Two Treatises On Government (1690), John Locke wrote these immortal words:

Where there is no Property, there is no Justice.

So, let there be Justice. Let there be Property. Let there be Liberty.

And let us all unitedly fight against the Legal Plunder that our cronyist-socialist system is all about.