The other day, towards the end of a post on corruption, cops and courts, I wrote briefly about a New Constitution. Today, I will continue on that theme.
The basic problem we face in India today is that our The State is "unlimited." It does anything and everything. It does everything it should not do - and it does nothing that a government worth its salt must do. This is a constitutional problem. Or should we call it a "constitutional crisis"?
The basic premise behind constitutionalism is that the government thereby created is "limited" - and there is a wide sphere of Liberty for the citizenry. The Indian Constitution does not perform this essential role. We see this everywhere - from the State-owned booze shops in Nude Elly, an ugly monopoly-monopsony, to the "common loss" PSUs like Air India. This, while our Property is not secure. While Liberty does not exist. And while The State owns everything in a nation where the people own nothing.
This idea of constitutionally "limited" government is pooh-poohed by modern libertarians who insist that no constitution can effectively rein in a State. The personnel of the State will always continue to expand their powers and privileges at the expense of the Property and Liberty of the people - and so, modern libertarians, especially in America, are "anarcho-capitalists." Their slogan is "abolish The State and all its works."
What I will argue in defense of my proposal is that, as times change, so must constitutions. That is, if constitutional checks on governments conceived many centuries ago no longer work - as in America - the lesson for us to learn here in India is we must think of much stronger checks.
In the West, their greatest failure has been their inability to keep their states out of the business of money, banking and credit. Further, they have never imposed any limits on their governments' ability to levy taxes; and on their ability to borrow. Any government with unlimited resources cannot be limited. For us here in India, these "new limits" become crucial.
Ludwig von Mises clearly saw how "sound money" operated just like a constitutional check on governments. The quote below is from his Theory of Money and Credit, first published in German in 1912:
It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it belongs in the same class with political constitutions and bills of rights.
To Mises, sound money meant the "classical gold standard." Under this standard, gold coins are money - and paper banknotes are "money substitutes" that must be redeemable on demand. The supply of hard money cannot be tampered with by The State. This is a constitutional check on governments the modern world needs. And we in India will do well to learn from the mistakes of the West - from whom we have imbibed the political ideal of constitutionalism.
However, we must go even further. It is my firm belief that the ability of the State to levy taxes must be "limited" as well. Unlimited taxation is an assault on the Property of the citizenry. Taxation in modern times has become cruel - more "expropriation" than "taxation." Many of the weapons of taxation and employed less towards taxation than as a means of influencing actual market outcomes. This is especially true with regard to indirect taxation and customs duties, because of the existence of widely varying and constantly variable tax rates. This "arbitraryism" must also be constitutionally checked.
If we severely limit the ability of the State to levy taxes, we will achieve yet another means of limiting the State itself.
Remember: the lesser the taxation, the greater the amount of Capital left in the hands of The People! This is the ONLY way to achieve Rapid Economic Development - that is, if The Market is FREE, and each and every Individual is the Chief Central Planner of his own, Individual Economy.
There is no "national economy."
There are a billion or more Private Economies.
For all these Private Economies, which belong to each citizen, it makes perfect sense if taxation is as low as possible. A constitutional limit on the ability of the State to levy taxes, including a list of prohibited taxes, makes eminent sense.
But the modern State goes even further than money creation and taxation in its greed. It borrows continuously and endlessly. This borrowing constitutes a "permanent irredeemable debt" - and ought to be constitutionally forbidden. Even in national emergencies like war, public borrowing is harmful - for it conceals the economic costs of war from the citizenry. Such borrowing is, in fact, a sort of deception that is patently anti-democratic, for the government of the day can bypass the only "democratic" restraint the taxpayers possess - namely, that the government they have established with their resources stays "limited" to those resources. The so-called "representatives of the taxpayers" are in fact burdening future taxpayers, while deceiving present taxpayers. This "function" is not being performed.
As I wrote in my post of a few days ago, our Parliament has not really met for over 21 days now, but in the meantime they did manage to pass a bill for supplementary grants to the general Union Budget, sanctioning addition expenditure to the tune of over Rs. 40,000 crores, "without discussion."
We will require yet another constitutional "limit" on the aggression and greed of The State apart from the ones I have listed above - and that is, its ability to legislate away our Freedom, and our rights to do what we like with our own Property. Thus, a good constitution ought to contain a provision that makes Property inviolable by The State. This is the Key to Liberty.
In what I have outlined above, the essential concerns remain the same as they were to the founders of the American Republic in 1776 - Liberty and Property.
However, the "limits" I have proposed are much, much stronger. Even if such a constitution is enacted, I have no doubt in my mind that governments in the future will attempt to wriggle out of its confines and expand their size and scope - and that constitutional courts, which are always a part of The State anyway, will take their side with specious arguments. But these are concerns of the future - and they belong rightly to future generations. Each generation has to fight for its own freedom.
And as for the "pursuit of happiness," this is a purely "subjective" matter whose solution has to be left to each individual mind, which will direct its proprietor's "human action." That action can only be feasible, and then executable, if Liberty prevails for all.
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