Blind Leading The Blind

Two pink paper editors have just expressed their views on the spectrum scam - Swaminathan Aiyar of The Economic Times and Niranjan Rajadhyaksha of Mint - and it is highly instructive to look into their arguments and see where these eminent gentlemen differ.

Swaminathan Aiyar has put his points forward in his Sunday column of today, titled "How to prevent licensing scams." He wants "new law." He writes:

...we need a law that prohibits the discretionary misuse of power apparent in so many allocations of land, mines, and licences of all sorts. We need a law that lays down that no government permit or licence shall be granted save on the basis of an auction...

Having said this, Aiyar then decides, in the very next sentence, that an important caveat is required:

One exception will have to be made. An auction raises costs, and can mean that the winner has to charge high rates to recover his auction bid. In cases where the aim is to keep public prices low, licences can be distributed free of charge by lottery to pre-qualified candidates that will also be corruption-free.

Frankly, I do not think one piece of legislation can be even worded so precisely as to cover both "solutions" that the editor offers.

Anyway, what about "bar licenses"? Even driving licenses are a racket here.

I would have loved to hear the sweet word "Liberty." Why do we need all these licenses anyway? Why can't we be FREE? No birth certificate, no death certificate, no marriage license, no trade license, no electoral card, no ration card, no passport, no visa.

FREE!

Let us turn to Niranjan Rajadhyaksha. The very title of his recent column asks the most relevant question of them all - "Who owns the spectrum?" And he addresses the Boss Lady, not Chacha Manmohan:

Sonia Gandhi may pretentiously worry about our shrinking moral universe, but a rational approach to the problem of corruption should start with one key question: Who owns these natural resources?

Rajadhyaksha finds that the "theory" behind State ownership - which is "socialism" - would have been alright if "decent people are in charge." He finds we Indians are suffering from an "agency problem" - and then, forgetting about the all-important question that used to be uppermost in his mind - he goes on to suggest "independent boards as in Alaska." The Supreme Court is "independent," what?

To answer the all-important question as to who owns what - the "law of the land" - we must begin by underlining the fact that socialist idolaters of "collective property" are completely blind to the reality that Individuals own Property, and that this is the very basis, indeed, the only basis, of civilisation itself.

Observe any crowded Indian bazaar and you will find multitudes of diverse strangers interacting peacefully, surviving through the mutual gains of mutual transactions, and note the stark reality that in almost every instance of these numberless mutual exchanges that are occurring, there is never any need to invoke The Law - that is, in the sense of "government authority." The participants of these numberless exchanges usually go through life without ever having to call for the police, a lawyer, or a judge.

This is a natural, beneficial "order" that is the very basis of civilisation.

This order exists because all the participants are following one basic rule: Property. So the goods arrayed in front of the roadside vendor rightfully belong to him and if we want to make a portion of that our own Property, we must strike an agreement for mutual exchange - which is an exchange of Properties.

Private Properties.

There was never any "primitive communism."

Your wigwam, and your squaw, were always your wigwam and your squaw - and you may add to them your dog and your all-important horse too. And your rifle. And your ammo. Your tomahawk. And don't forget your tobacco pouch and "peace pipe."

When the commandment "Thou shalt not steal" was delivered, Property already existed, for long.

The Lord's Prayer contains the all-important word "trespass" - and that word would not have come into being if Property did not exist, for a long time.

Socialists are blind to Private Property and idolise Collective Property - like, say Air India or ONGC.

And the spectrum.

And all the oil and gas and coal and other stuff under the ground.

And all the forests.

The rivers.

The lakes.

And don't forget Rashtrapati Bhavan and the bungalows of Lutyens' Delhi too.

On the reality that State ownership (that is, "collective ownership," which is "socialism" or "communism"; it is they who "nationalise" claiming it to be a "good thing.") Rajadhyaksha makes the brutal observation that this "theory of collective ownership" would have worked if "decent people are in charge."

Reality is even deeper than that. In reality, collective property is a myth - a lie. Whether it be Rashtrapati Bhavan, a Lutyens' bungalow, Air India, ONGC, Railways, Spectrum, Coal, forests etc - the reality is that these are all being privately exploited by "those who claim to represent the collective." This is why "illegal" iron ore mining is happening on "unowned land" - which is, by default, State land. The error on our part is theoretical-philosophical. We have been blinded by our "education" - and the mainstream media.

Note also, that while The State goes on forever, the individuals who come to "own" these collective properties because they "claim to represent the collective" all come-and-go. They are all ever-changing, given the politics of the day.

Thus, unlike in the case of Private Property, where the individual owner takes good care of what is his own, and leaves it further improved to his heirs who do the same, in the case of these collective properties, the temporary holders of political power who "own" all the collective properties we have, only possess a view to the short-term.

This is also stark reality. Our homes, which are Private, are always clean.

Our streets, which are Collective, are always dirty - like hell!

Thus, collective property is not only a myth, a "legal fiction," it goes against the very purpose of ensuring that properties are well looked after.

This is another realty we are all blind to.

We think the Tiger can be saved as "collective property."

We think that an increase in the foreign exchange reserves of the RBI makes us all rich.

Yet, as far as "Private Property" is concerned, we all follow this "rule" everyday! We are all "rule-following animals" - and civilisation is "learned behaviour." We are all blind to this rule. We have never ever felt the need to articulate it. Our socialist Constitution upholds collective property while it does not guarantee us our Private Property.

Blind leading the blind.

It is extremely important to note that Property arises from a Liberty - not a "right." This is the Liberty to claim something "unowned." It is with this principle of "homesteading" that America, Australia, Canada and New Zealand were populated. South America too. All our tea estates were homesteaded. The old coffee estates of Coorg and its surrounds, I am positive, were homesteaded.

At the other end, there are many interesting examples of socially useful collective properties - like the Lord Mayor of the Olde City of London buying Epping Forest for the "entertainment of the citizenry."

As far as forests and minerals are concerned, I think that collective ownership ought to go to the local inhabitants, and they should work out their own destiny thereafter. Higher levels of "representative" collective ownership should not be invoked.

The "law of the land" is all about Property - owned and unowned. Only then can "exchange" occur.

The first "civilians" of the East India Company who ran the first EIC-administered districts in Bengal provided owners of Property with a title, "in exchange for a tax." This tax was very moderately assessed - it was less than half of what Siraj ud Daula used to collect. These property records included details of tenants - and they were protected too. Disputes were promptly heard and immediately settled. The "natural order" was strengthened by authority - in this honourable case, the authority of a chartered private trading company. With clear titles, landed properties were easily exchanged - and the "mystery of capital" was solved. "Locke was their prophet," says Philip Mason - and it was Locke who said "where there is no Property there is no Justice" (1691). These civilians were called "collectors" - they collected a tax. There was no "welfare." There was Property and Justice. And they built "roads, bridges and canals." There was Liberty.

As far as the spectrum is concerned, I am not a technical man. I don't take too much interest in telecom matters. However, in Principle - if all the fuss is being made about a "first come first served" basis for spectrum allocation, then "homesteading" is the best solution. Whoever get his system going first occupies some spectrum first. Then, slowly, more come in, and then a time comes when there is no more free and abundant spectrum left any more.

It is only then that The Market will come into play - when something is scarce, and hence an "economic good." Then, and only then, there will emerge entrepreneurs who will want to buy spectrum from the original homesteaders. Exchanges will take place. New entrepreneurs will enter the fray. Technology will also step in - to use the spectrum more efficiently, to get more done with less, because spectrum is now an "economic good."

So that's it: Property arises from a Liberty - not a "right."

California Gold Rush!