Against State Spending: More they Spend, More YOU Lose!

Keynesian allies of central banking make the preposterous claim that higher State spending boosts "aggregate demand" - and that this is the way out of a "recession." To these Keynesians, State spending ADDS to "aggregate demand." If consumers are not spending and if investments are not forthcoming, they say, it is State spending that must lead the way. This will lead to "full employment" - of labour, that is. The textbooks are full of all this.

As we saw yesterday with Sudipto Mundle, professor emeritus of a State-owned institute of "public finance," no one asks: Where is the money coming from? Is it being borrowed, is it from taxation, or is it being printed? Professor Mundle himself begins by quoting total spending - with awe, for the numbers are staggering:

This financial year, starting April 1, 2011, the central government will spend Rs 12.6 lakh crore on various public services and development projects. Adding to that the expenditure of the state governments, total government spending in the country will be in the order of a massive Rs 36 lakh crore...

Since most people "think" like Keynesians, they will read these staggering figures and believe that their own businesses will see improved prospects - after all, there will be so much money floating around, demand for everything will rise, won't it?

So let's think a little harder. If the money is printed, it will cause inflation - and all ordinary people will lose. If the money is borrowed, private investors will not get to borrow it - and invest. The State will just take it and blow up the money, producing nothing - and repaying it out of future streams of taxation. Again, all ordinary people will lose. Lastly, if the money is from current taxes, surely we could have "stimulated the economy" by spending it ourselves! Do we need ministers and baboos to spend our money for us?


Think!


To help you do so, here is a Mises Institute article of today titled "Government Spending Is Bad Economics" by Jonathan M. Finegold Catalan. I quote excerpts from his conclusion:

Government spending is not a method of improving the market's efficiency, nor is it a method of employing allegedly idle resources. The result of government spending is foregone opportunities; the cost is the gain in wealth that would have occurred had economization been allowed to take place, minus the outcome of government spending. One can easily conclude that the notion of positive countercyclical fiscal stimulus is highly suspect, and that a better alternative would be to allow individual market agents to economize economic goods based on their own utility scales....

Government, in fact, is a large disequilibrating force on the market. It forcibly redistributes economic goods, removing them from a process of economization and instead investing them toward the realization of less important, or less preferred, ends. In other words, it distorts the continuous process of coordination....

Overall, we can safely conclude that government spending causes more harm than good; it redistributes the means of production toward the attainment of ends considered inferior by the individuals who make up the society that government is allegedly acting to improve.

Get it, dude?


We'd all be much better off spending (or saving) our own money.


Professor Mundle openly admits, in his opening remarks, that the common man in India thinks State spending is a colossal waste of resources:

There is a general impression, reinforced by daily headlines about new mega-scams and our individual experiences of poor performing government agencies, that the waste of public resources is colossal.

No roads, No highways. Shoddy railways. No electricity. No running water. Nothing.

Excise license, driving license, this permission and that and the other, fiat paper money, and cops - that's what we get: the danda.


This State produces no "goods"; only "bads."


So, never believe that soaring State spending is anything even remotely "good." It is BAD.


Very bad, indeed.


And if any Keynesian still hassles you with arguments about "full employment of labour" - then refute him with the section titled "Idle Resources" in the above article by Catalan. 


Catalan cites WH Hutt's The Theory of Idle Resources. I am a great admirer of the late Professor Hutt, having studied many of his excellent works. He is a must read for all serious economists. His books on trade unions, Say's Law of Markets, Immigration, the Politically Impossible and others are essential for all serious minds. You can download Professor Hutt's The Theory of Idle Resources here.


WH Hutt came from a "working class" background. While at the LSE, he attended a guest lecture by Ludwig von Mises - and "broke on through to the other side," realising that socialism harms the whole of society, working class included. Hutt's works cover areas not covered by any of the others - Mises himself, Hayek or Rothbard. Hence, reading Hutt is a must. He is another of those who richly deserved the Nobel Prize. Professor Hutt taught in South Africa.

Mundle - And The Bundle

The lead article in the ToI today is titled "Following the money trail." It purports to be about State Spending (Rs. 12.6 lakh crore rupees, as stated in the opening line) and is authored by an emeritus professor at the State-owned National Institute of Public Finance & Policy, Sudipto Mundle. However, if you take the trouble to read the entire thing in the hope of some enlightenment, you will be sorely disappointed. As is usual with "bureaucrat-professors" - like chacha manmohan s gandhi - they tend to conceal facts; they tend to deceive.

The first question to ask is: Where is this Rs. 12.6 lakh crore coming from? How much of it is borrowed? How much is just printed money?

Second: How much of this money is to be invested in Capital - and how much is to be "consumed"?  This will reveal how much is spent on salaries and the like, and how much on "welfare": ditch-digging, cheap rice, miseducation, etc. And how much is left over to build roads - which are Social Capital; "collective property."

Mundle does not look into the Bundle.

He sings praises of Nilekani, some ex-IAS chappies, and a BJD MP - and in favour of State education.

Mundle asks an important question in his opening lines - and do read his response to it:

How much of that will be wasted, and how much will translate into actual delivery of development projects or public services, and what quality of services? Nobody really knows.

Amazing!

The Professor Emeritus of the National Institute of Public Finance & Policy writes this!


"Nobody really knows" where The Bundle is going, so says Professor Mundle!

There are 3 aspects to Economic Science:

• Economic Theory
• Economic Policy, and
• Public Finance

Our The State is a Complete ZERO in all three!

Votes For Sale or Goods For Sale?

Julian Assange has done India the favour of exposing the fact that MPs traded their votes in Parliament for cash from the CONgress.

How is that different from voters in Tamil Nadu trading their votes for freebies from Karunanidhi or Jayalalitha, or both?

There was a scandal many years ago when a BJP guy in Lucknow distributed sarees free on behalf of Atal Behari Vajpayee - and many women died in the stampede that followed.

All this is not new to Public Choice Theory, where "vote trading" has been carefully studied for decades. Do study Gordon Tullock's The Vote Motive. It will introduce you to the idea of "State Failure." That is, even in "liberal democratic" states. This is the very opposite of "market failure" - which Economics textbooks teach these days.

Markets do not fail. Freedom cannot fail. I will never forget the first time I was taken to Main Street  in Poona - the central market area from British times - and my guide waved her arm about and said, "You get everything here."

Yeah, Everything.

We get nothing from our The State - except Persecution. If every State Monopoly was privatised, including forests, our lives would be much, much better. We would have electricity 24 x 7. We would be possessed of toll highways and truckways of international quality. Our railways would be first class. And there would be trams in every small town. There would be lots of different meats to eat - like wild boar. And timber would be plentiful and cheap. This includes sandalwood. Poor Veerappan - murdered by our The State without a public trial.

So, screw The State.

And love The Market.

And remember these words of Ludwig von Mises, always:

It is precisely the necessity of making profits and avoiding losses that gives to the consumers a firm hold over the entrepreneurs and forces them to comply with the wishes of the people.

Better to have The Market - where mass production for mass consumption means We The People control entrepreneurs.

The "rupee vote" in The Market works - for our benefit.

And screw Democracy - for MPs just sell their votes, just as voters themselves do. The "vote motive" underlines the "vote market." We The People become wee, the sheeple.

We can happily do without the vote market and the vote motive.

All we need is The Perfect Rule - which is The Inviolability of Private Property - as I wrote about some days ago.

Natural Order. Natural Law. Natural Liberty.

What Drives Me Crazy...

Its getting hotter in Goa, the tourists have more or less gone, but its a happy time, nonetheless. Cashews are falling off the trees - and the air smells of feni. Sexy!

The first distillate is sold fresh - and unbranded, as urak. I had three large shots of urak with lunch yesterday at Lounguinho's: the local equivalent of a "three martini lunch." Great! At just 10 bucks a shot - while the pork chops cost more than a hundred. Great!

Had more urak last night. Bought it from a local bar - unbranded - for a hundred, and downed four or five large shots. High as a kite! Far out!

Met a chap from a "consumer protection group" - and told him about Torts.

The retailer is liable if unbranded stuff is harmful. This includes medicines. And masalas and spices. Or edible oils.

Hope the fellow got my drift - since I had drifted quite far away, in terms of height above sea level.

Woke up this morning wanting to sit atop Mount Kailash - wanted to smoke some Bhola.

Spent 2k on some "seedless grass" and some charas - and extinguished both spliffs after a few puffs.

Awful stuff!

Received the following anonymous blog comment from a Goan this morning:

It is tough for Goans to read about drug cases tarnishing the image of the state in the eyes of the nation, even though, Goa may be far behind Mumbai, Delhi, Bangalore or Chennai in terms of the quantity of drugs flowing on the streets. Every year, there are over 1,000 cases in Mumbai alone against drug peddlers, compared to just about 55 to 60 cases in Goa.

Still, the latest to sting the Goans is the David Driham alias Dudu drug case, which has got murkier by the day not because of the seizure alone, but because of video clippings claiming evidence against the cops. This time, it has tarnished the image of the cops beyond repair because PSI Sunil Gudlar is allegedly seen exchanging some packets, ostensibly containing drugs, with foreigners. The allegation is that he was selling drugs and taking bribe. The top brass of the state police took undue time to suspend Gudlar in the case. When the first video clippings came out, they looked morphed, but the second and third video footings almost gave him out and there are alleged conversations which could nail senior police officers including former Anti-Narcotics Cell (ANC) SP Veenu Bansal.

http://blogs.timesofindia.indiatimes.com/point-blank/entry/dismiss-gudlar-for-insulting-mahatma-gandhi

Legalise it!

I'll Advertise It!

This evening, the old lady came by looking for the cashews from her trees that have fallen in other people's properties. I was told that she used to make feni at home - for her son, but the poor chap became alcoholic and died young. Ditto with another chap I knew in Nude Elly - we called him Boozoo, and he's dead now.

This is the kind of country these tyrants are trying to create - all booze and no Holy Smoke.

As Ludwig von Mises wrote, in Bureaucracy:

Every dictator plans to rear, raise, feed, and train his fellow men as the breeder does his cattle. His aim is not to make the people happy but to bring them into a condition which renders him, the dictator, happy. He wants to domesticate them, to give them cattle status. The cattle breeder also is a benevolent despot.

Song of the Day: Eric Clapton's live version of "I Shot the Sheriff," with a long guitar solo. Video here.

You're Crazy, Mr. Customs Man!

Mint has had a conference on "luxury" - and two reports I read on that set me thinking. I have often written that our Customs Department ought to be closed down unilaterally and free trade instituted with all nations. But these reports - and other sundry observations - make it clear that those in charge of this massive power over the domestic economy are completely crazy. Mad.

Let us begin with the interview with Armando Branchini, executive director of Fondazione Altagamma, a trade body of 74 Italian luxury brands such as Gucci, Bulgari, Fendi and Valentino among others, having collective sales of €45-50 billion. He says that the customs duties on his products are so high in India that people prefer to buy them in Singapore and bring them in - by simply wearing them on their person, like a luxury bag or a watch or shoes or whatever. He says something on the regulation of "luxury brand retail" (some famous 51-49% scheme) - and it sounds ridiculous when you hear that they are willing to invest 100% in their own retail stores @ US$ 3 million per store for 50-60 stores a year! The interview concludes with the statement: "This market and economy is over regulated by the government." Betcha! They're nuts!

The second report is on luxury yachts - and since I have been living on the coast for a long time, it is my view that as the roads and highways are so horrible, free imports of all kinds of boats could allow our coastal cities and towns to decongest and let property and real estate be developed along the coasts. This report says that the Italian luxury yacht-maker interviewed sells 60 a year in Brazil, but only 2 or 3 in India - because of customs duties. We have a 3000 mile coastline! We can have many, many free trading port cities on these coasts. Where are we headed?

Actually, the same applies to luxury cars, to liquors and wines, and to everything else we desire to import. The import duty on cars is over 100% - and this makes no sense since so many MNCs have already set up base here. Does it make sense to charge 100% duty on an imported BMW or Mercedes while charging less for a locally assembled model? Certainly not to the consumer. Nor to the poor manufacturer. Is this some kind of return to the ghastly days of "import-substitution industrialisation"? As with boats and yachts and other luxury goods, the idea of automobilisation should be to see maximum ownership - that more and more Indians own good cars. And by "good cars" I don't mean Tata Nanos. I mean second-hand Mercedes or BMWs. They'd make great taxis - especially when a Bajaj auto-rickshaw costs over 4 lakh rupees (US$ 10,000).

Similarly, we could be big importers of wines, beers and quality liquors - which we don't produce domestically. There are 600 brands of beer in tiny Belgium, for example. What about Bohemian beers? There are so many beers of so many kinds in Germany. And Guinness? Irish pubs, here?

All this could be big business - for importers. A 100% duty on these merely makes the IMFL peddlers rich - while the poor Indian consumer gets screwed. A gourmet restaurant owner once told me she is forced to sell $5 wines for $30! A wine producer from California I once met in Nude Elly complained about our "tariff walls."

The term tariff WALL reflects the craziness of our rulers.

Obviously, with such high tariffs there is little or no trade, so there is little or no revenue. Why do they do it? Obviously, for bribes from domestic cronies. Or perhaps these are called "political contributions" to their parties. All this goes against the "national interest."

Frederic Bastiat was the greatest free trader ever. He put it squarely when he wrote way back then that a State can pursue either the "producers' interest" or the "consumers' interest." In the former case there will be shortages and scarcities. In the latter case, there will be abundance. Then, there will be Supermarkets all over the place with their shelves overflowing with goodies from all over the world, from Japanese saké to everything else that can be called "exotic." Thus, only the consumer interest coincides with the true national interest.

Socialists and communists - who lead trade unions - fool their followers with deluded ideas of a "workers' paradise": but workers are consumers too! Only Capitalism - which is mass production for mass consumption - makes ordinary workers enjoy consumption standards medieval monarchs would be envious of. Socialist, "centrally planned," and communist nations were hell for all consumers - especially their workers, who had to queue up for anything and everything, and where smuggled electronic toys were the rage. India was like that - and North Korea still is. The North Korean ideal is juche - which means nothing else but swadeshi.

Ludwig von Mises added the insight that protectionist producers are all "schizophrenic" - they exhibit "divided selves." They do not see themselves as both producer as well as consumer. They do not realise that while they sell just one thing, they buy everything else. It makes no sense to lose out as consumers. After all, we produce in order to consume. What is the point producing, say, a Bollywood blockbuster - and not being able to buy a yacht or speedboat and zipping off to Alibag after work every evening, just half an hour by sea? Makes no sense to drive 4 hours on a crowded, broken road - in a luxury car!

With unilateral free trade - the abolition of the Customs Department - all Indians will be better clothed, better fed, they will smoke and drink better, drive better, sail better. Everything they do, they will do better. Swadeshi is nonsense - another of those crazy Gandhian ideas that has resulted in Gujarat closing down all her port cities, including Porbandar, where Gandhi was born. Including Surat, where the East India Company first landed.

Gandhi is amazing in this sense, for both Bastiat as well as Adam Smith realised the vital importance of free trade because they lived in port cities: Bayonne in the case of Bastiat, and Glasgow in the case of Smith. And Gandhi was a bania!

I checked the Internet for our list of customs duties and found they have "98 Chapters" on these - different duties for different goods. And there are additional levies on these duties as well - including the famous "education tax"!

We Don't Need No State Education!

We Don't Need No Customs Department!

Song of the Day: Arlo Guthrie's "Coming into Los Angeles" - watch the video here.

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Deal of the Day from Amazon: The Best of Arlo Guthrie.

The Big Idea

While enough people - especially all those who worship at the altar of Democracy - are out looking for the "perfect ruler," there are others like me looking for the "perfect rule." Indeed, the Golden Rule of Private Property is just that - a perfect rule that we all unwittingly follow; this includes not only the unlettered masses, but also all our "learned" communists with PhDs from Jawaharlal Nehru University (JNU).

For example, let us take any bazaar anywhere in India, where illiterate vendors line up on the roadside with their wares arrayed before them. Even the PhD-holding card-carrying member of the Communist Party of India (Marxist) will be forced to accept, while wandering about that bazaar, that the goods arrayed before each vendor belong rightfully to him; that anyone who violates this Golden Rule will be considered a thief and thrashed; that nothing is "collective property" except for the road or footpath (which is why the "huftha brigade" comes in as "representatives of the collective"); and that along with Private Property, there sits the Principle of Exclusion, by which those who do not agree to a favourable "deal" are excluded from those goods. Once again, this shows "collective property" is a myth, a hoax.

How did this Golden Rule come to be adopted by all? Simple - it all happened by imitation. A child who wants something - say, a bar of chocolate - will see his father go to a shopkeeper and buy it for him. Thus, the child will learn how "desired objects" are obtained - by trade. He will practice this - and teach his children, too. 

Civilisation is "learned behaviour." It means we are NOT "born to be wild." Civilisation is learnt restraints that are self-imposed. If we were wild, we would snatch-and-grab at all that we desired and there would be "chaos." That chaos, indeed, is what the Constitution of India is all about - read on on to find out why.

It is because of the Golden Rule of the Inviolability of Private Property which we all unknowingly follow that "perfect order" reigns throughout all our bazaars. This is why, without any policemen, magistrates, judges or lawyers, transactions worth billions take place in informal markets throughout the Third World. This is the "natural order." This indicates that a "private law society" is eminently feasible. And desirable as well.

This applies especially to India. Here, our The State is a pirate and a predator. Its policemen and its bureaucrats violate Private Property every single day - armed with the might of "democratic legislation" issued by a Parliament that rules because of a Constitution that does NOT recognise our rights to what is our own. 

"Legal plunder" - like "nationalisation" - emanates from this immoral Constitution. And I don't use the term "immoral" lightly. If robbing a street vendor of his wares is "theft," then robbing JRD Tata of Air India is theft too, as is robbing X of his bank or Y of his coal mine. "Land acquisition" is nothing but theft. Legal plunder. Tyranny!

If you read Frederic Bastiat's The Law - which you must - you will find two phrases ringing loudly through the text: "legal plunder" and "false philanthropy." As far as the false philanthropy is concerned, it is financed by new issues of vast quantities of fiat paper money - which is inflationism, and ought to be called "social injustice."

This is allowed to occur because we do not see money itself as Property - that it cannot be mere paper with a State emblem stamped upon it; that it must be something tangible; something "hard" like gold or silver. So, legal plunder and false philanthropy remain with us today, despite Bastiat's warnings of over 160 years ago. I discuss some of these legal issues pertaining to money in this column advocating a return to the Gold Standard. And in this other column calling for Private Money.

Thus, the Big Idea is nothing but the Inviolability of Private Property - the very opposite of our socialist Constitution. The private law society is based on this - and so it includes Contracts, by which transactions in property are lawfully conducted between two or more private parties into the future. It also includes Torts - which apply when damage is caused to Property, even unintentionally or by negligence. 

Legislation is "public law" - and it invariably interferes with the natural order of the private law society. It ought to be rejected in toto. 

In this long interview with The Daily Bell, the philosopher Hans-Hermann Hoppe examines many of the issues involved in depth. What he proves are three  important truths:

First - that Democracy and Freedom are two different things;

Second - that Law and Legislation are also different things, hence different words are applied to them. Law comes from the past, along with Civilisation - like Private Property. Legislation is "new public law" that is manufactured by democratic assemblies - like the Constitution of India.

Third - that fiat paper money is a swindle. As Hoppe says:

More paper money cannot make a society richer, of course, – it is just more printed-paper. Otherwise, why is it that there are still poor countries and poor people around? But more money makes its monopolistic producer (the central bank) and its earliest recipients (the government and big, government-connected banks and their major clients) richer at the expense of making the money's late and latest receivers poorer.

This may be contrasted with the views of kaushik basu, chief economic advisor to the government of india, that I quoted and critiqued in yesterday's post.

Commenting on people like kaushik basu, who is a "Servant of our The State," Professor Hoppe says:

Thanks to the central bank, most "monetary experts" and "leading macro-economists" can, by putting them on the payroll, be turned into government propagandists "explaining," like alchemists, how stones (paper) can be turned into bread (wealth). Thanks to the central bank, interest rates can be artificially lowered all the way down to zero, channeling credit into less and least credit-worthy projects and hands (and crowding out worthy projects and hands), and causing ever greater investment bubble-booms, followed by ever more spectacular busts. And thanks to the central bank, we are confronted with a dramatically increasing threat of an impending hyperinflation...

Yes, it is a huge, big, ugly Predatory State.

The Big Idea is not the "perfect ruler."

Rather, it lies in the "perfect rule."

The Inviolability of Private Property is just that.

All I did was articulate a rule we all follow. This is what enables Liberty. It is the foundation of Classical Liberalism. As John Locke put it, in 1691:

Where there is no Property, there is no Justice.

And as Ludwig von Mises put it in his exposition of classical liberalism:

Private property creates for the individual a sphere in which he is free of the state. It sets limits to the operation of the authoritarian will. It allows other forces to arise side by side with and in opposition to political power.

These are all old ideas. Very old, indeed. Just that we lost them along the way, thanks to learned PhDs from JNU - and all our "constitutional lawyers," of course.

We Don't Need State Education!

Or, as a t-shirt I saw put it:

I was born intelligent, but education ruined me.

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Deal of the Day from Amazon: Hans-Hermann Hoppe's Economics and Ethics of Private Property.

Ganja Prevents Cancer, Kaushik Basu Doesn't

My recent post highlighted how soft drinks cause a huge amount of irreversible health damage, while "soft drugs" like ganja-charas (cannabis, hashish, grass) and beer are completely harmless. That post saw quite a few enthusiastic comments - and so I thought I might add to that evidence something more I just discovered: that ganja-charas possess fantastic anti-cancer properties.

So you can quite imagine the "Statutory Warning" getting reversed on the Bhola King-Size Spliffs. Whereas my packet of cigarettes says "Tobacco Causes Cancer" (because our The State has forced cigarette-makers to emblazon this warning on each pack) these heavy "authorities" will have to stand by idly while The Honourable Bhola Unlimited Company Limited sells its packets of spliffs marked:

Smoke Bhola, Prevent Cancer

Ha ha.

Now for something serious - a "cancer" our nation is suffering from: Inflation.

And here is our The State's chief economic advisor, kaushik basu of cornell university, telling us all - the gullible public - how NOT to prevent it.

How would I prevent the cancer of inflation? Simple. I would emblazon a Statutory Warning on each RBI note:

State Paper Money Causes Inflation

That is, this is not inflation; rather, this is "inflationism." It is a "deliberate policy" - to fuck the people, especially the poor.

What does kaushik basu say? Here is a sample para from a long interview in which he excels at the kind of double-speak and obfuscation that this para exemplifies:

...black money being brought into circulation can create inflationary pressures, and you need to counteract that. One more observation: an economy cannot have more than one money-creating authority. So every country has its own single bank. But with globalisation, as the world is becoming a single economy, we are getting back into the predicament that we had gotten out of. This is not an argument against globalisation, but it is a potential tension point between different countries’ central banks. Inflation management today needs inter-country coordination of policy, inter-central banks coordination of policy and we try to do that already—at G20, for example. 

Actually, fora like the G-20 give central bankers the opportunity to co-ordinate inflation - that is, by "competitive devaluation." Thus, if the US Fed injects US$900 billion through "quantitative easing" (printing currency notes) other central banks must do so in some measure too, otherwise the US dollar will nosedive. I have commented on this in an earlier post, written on the occasion of the recent G-20 meet in Seoul, South Korea.

Anyway, the real solution to inflationism is private money - which means lots and lots of independent private mints producing gold and silver coins. And lots and lots of independent private banks issuing notes that are redeemable in coin on demand.

So, better to chain smoke Bhola King-Size Spliffs than read kaushik basu of corny university, ussa.

I am reaching out for one myself!

Song of the Day: Ganja Spliff by Mr. Perfect. And hot deal of the day - a Bob Marley Spliff Poster for less than US$2!

Rukawat Hatao!

The Central State's finance minister has just announced that these socialist jerks of the CONgress whom our extremely naïve ancestors - who were all singularly unlettered in Economics - placed at the "commanding heights of the economy," have yet to take a decision on allowing foreign direct investment into the supermarket - or "retail" - sector. Over 10 years have gone by since Big Time foreign investors first applied - and the State of Rukawat ("obstruction" in Hindi) continues to mull over their proposals. Which means, in India, to sit on the files. And keep on sitting. Sitting on the files - as they get bulkier and bulkier. And we all know why they do this, don't we?

In the meantime, many business schools teaching retail management have already opened up (such as this) - and many thousands of graduates have already been trained for such jobs.

Various questions arise - especially for GenNext - and below is the most important one:

Should our The State have any role in such decisions? Or should they just occur "automatically"? Any foreigner who wants to invest in India can do so, buy land, build shops and stores, hire people and so on, without requiring State approval of any kind. Should the future be laissez faire, laissez passer or not?

While our youth think over their response to the above question, let me list some basic truths of Economics to guide them along:

First: In a country that is predominantly poor, supermarkets can never wipe out small stores and informal street-hawkers because poor people never buy in bulk. They receive their wages daily, and buy their needs in small quantities to last them short periods of time. That is why 70% of all shampoo sold in India retails in small sachets costing just one rupee (one-fourth of a US cent). Supermarkets will sell shampoos in big bottles - and will cater to car-owners who will purchase a month's supplies at one shot. Supermarkets will sell cigarettes by the carton; the poor man will buy his cigarettes from the street-vendor, one cigarette at a time. Supermarkets will sell booze in 750 ml bottles and cases of them - while the poor man will buy his 180 ml "quarter" every evening from a small liquor shop. So, the market segments are different; they do not clash. There is not even the remotest reason to fear that big-time organised retailers who operate supermarkets will wipe out small and informal traders.

Second: The State's "concern" for the informal sector and the street vendors comprising it is false. These are preyed upon by State functionaries - from both the police as well as the municipalities - in every Indian city and town. Everyone knows this. This is "common knowledge" throughout India. Over 10 years ago, Madhu Kishwar made huge noises about this State predation on street hawkers in Delhi with a documentary that filmed some horrendous scenes - and the noise became so deafeningly loud that the then Prime Minister, Atal Behari Vajpayee, responded by issuing a note calling for a "national policy on street vendors." Of course, nothing has come of it. It is just another file - and some other socialist jerk is sitting on it. Meanwhile, this open predation continues - that too, throughout India.

Third: The State's faux concern for small shopkeepers and street-vendors is false at another level as well - for this very same State was quite happy to run State-owned supermarkets and shops when it could. In Delhi's Connaught Place you can still see the Super Bazaar of our The State. There are also quite a few Kendriya Bhandars in Nude Elly that steal business from ordinary shopkeepers.

Fourth: Since India is predominantly a nation of poor people who work at low pay, it follows that the ONLY method of raising wages permanently is by allowing in foreign Capital: the more foreign Capital allowed in, the merrier, for the higher will average wages rise. So, to take the example of retailing, a shop assistant in a small store may get one or two thousand rupees per month - but if the same girl was employed by a supermarket, her salary would be much higher, perhaps ten thousand, only because she would be combining her labour with lots of Capital, like bar-code readers and computers, and so her productivity would be much higher as well. This applies equally to the Gandhian charkha - and hence the chowkidar outside the gates of a modern spinning factory earns many times more than a dude who spends all his time on a charkha.

Fifth: The Central State's finance minister cited above is running a hugely "deficit budget": he not only has to print money to pay State bills, he is also borrowing to the tune of Rs. 3,50,000 crores (3,500 billion rupees). This is the "Monster's Budget" - as I called it in an earlier post. All this will end up "consuming capital" - and screw up the economy. Private investments will falter. Public expenditures will be mainly on "welfare" - so, this money will be "consumed," and not "invested." All this will hurt India's teeming poor: the masses.

Thus, what is really in the "public interest" is that foreigners be free to open supermarkets (or anything else) - while our The State be closed down! Then, graduates trained in retailing will be immediately well employed. And all this Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)  ditch-digging to "create jobs" will end.

This is because these foreigners will INVEST their own resources in order to see that we are supplied with better goods and services, while our The State will make it its business to CONSUME our own resources - by borrowing them, and also by fraudulently creating new money via the printing press. In the former case, Capital will combine with labour, improving productivity and raising wages - and also keeping customers happy. In the latter case, precious Capital will be foolishly wasted by baboos, impoverishing us all.

In any case, at least the Foreign Investment Promotion Board (FIPB) ought to be shut down pronto. They have never "promoted" any foreign investment. They are part and parcel of all the obstruction - the State of Rukawat.

Rukawatein Hatao - aur gareebi apney aap hutt jaayegee.

That is: Remove all the obstacles (including the Customs Department, Excise licenses etc.) - and poverty will be eliminated too, on its own.

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Yes, from now on, I will try and promote some Amazon product or the other at the end of every post.

Against The Passport-Visa Regime

Visa scams are a regular feature of life in India - and there are visa touts aplenty in Nude Elly - but the scam I found today in the Express occurred in the USSA, in California, and was committed by an educational institution; that too, mainly on Indian students.

On this touchy subject, my song is the one Bob Marley sang:

Oh why can't we roam,

This open country?

Why can't we be

What we want to be? -

We want to be Free.

Surely, there are better ways of proving one's identity to a foreign State official than a passport? Even an International Driving License is better. And as for the visa - why should a local cop be perturbed if a stranger in town is spending his money in the bars and pubs, and in the high-street shops, armed with a credit card called Visa that guarantees not only his identity but also his economic worth; that is, his credit-worthiness? Why do these have to be counter-checked by a tax-funded bureaucRAT (white-skinned) in an embassy? These embassy-based visa bureaucRATS - the rudest of their ilk on the planet - are the cause of all these scams.

Let us not entertain arguments over "community" and how immigrants "do not integrate" themselves into this mythical social entity. The urban market economy has nothing to do with community; rather, it is individualistic. Immigrants must integrate themselves in the "division of labour" alone, and it can never be reasonably expected of them that they must integrate themselves with a mythic host community.

Further, the chief advantage of the urban market catallaxy is that it enables gainful trades between complete strangers. As tourism is the world's largest industry these days, more strangers in every nation is a great idea, for it would give this great industry - which is all about holidays and good times - a boost.

The real reasons for the continuation of the passport-visa regime by Western nations lie elsewhere - in their desire to keep out cheap labour, in order to favour trade unions. This backfires on them - as with every single instance of interventionism - for their own citizens cannot consume labour services any more; no more gardeners and maids for them. And their exports dwindle too - because high labour costs make them uncompetitive.

If we look at the Western nations of Europe - they are all linguistically homogeneous, excepting Switzerland. This homogeneity made them nation-states, nothing else. Thus they came by nationalistic chauvinism. And proceeded to hate "outsiders." Hitler was the worst of the lot - but there are many others, from Enoch Powell (see his "rivers of blood" speech) in Britain to Jean-Marie Le Pen's Shiv Sena-like anti-outsiderism in France.

In India, every city is a melting-pot - there are multiple communities, multiple languages, multiple religions. Let us endeavour to keep things that way. In our neighbouring area, there are lots and lots of poor people, who want to come here for various reasons: to work and integrate in the division of labour - like the ubiquitous Nepali chowkidar; to obtain medical attention - as with Afghanis and Africans; or to get themselves some educational "degree" - as with many youngsters from Africa and the Middle East; and finally, as genuine tourists. I would insist that they do not hurt us in any way by coming into our country. 

So let them come freely. Let us be the first to dismantle this horrendous passport-visa regime created by the West - as an example to them. 

The Mughal Emperor was also called Jehanpanah or "Refuge of the World" - and this was "fiscally rational" policy, because if someone escaped the clutches of the Shah of Persia and settled in Mughal territory, the Mughal Exchequer would gain. What better way to tax Bangladeshis other than letting them settle freely in India? To spend tax revenues to keep prospective taxpayers out - which is what the West is doing these days - is "irrational." It is absurd. And it goes against the "sentiment" engraved upon an international monument.

The poem by Emma Lazarus inscribed on the Statue of Liberty in New York is titled The New Colossus, and goes thus: 

Not like the brazen giant of Greek fame,

With conquering limbs astride from land to land,
Here at our sea-washed, sunset-gates shall stand
A mighty woman with a torch, whose flame
Is the imprisoned lightning, and her name
Mother of Exiles. From her beacon-hand
Glows world-wide welcome, her mild eyes command
The air-bridged harbor that twin-cities frame.

"Keep, ancient lands, your storied pomp!" cries she,

With silent lips. "Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore;
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!"

The Statue itself was a gift from the people of France. The money was raised through holding a public lottery - that is, it was built on gambling money.

In the meantime, The USSA is no longer the "golden door": since Nixon, the US dollar remains just paper debt piling up and losing value with every passing day. When you read debates over free immigration there, the only defenders of the regime are those who wish to avail themselves "social security benefits" while denying these to outsiders.

Reminds me of the story of the first Muslims of this world, who fled with their Prophet from Mecca to Medina. There, the local inhabitants rushed out to greet them, offering every hospitality - and even the Prophet encouraged this bonhomie, saying, "Fraternise in Allah."

But these, the first Muslims, would have none of it, and said, in one voice:

Show us the Way to the Market,

And we will make our Way by Working.

Who the fuck wants "social security" from some foreign State anyway?

Central Asia, once part of the USSR, has disintegrated today - and each nation-state has established its own passport-visa regime, thereby hurting traditional itinerant businessmen. No more "Silk Route."

Yes, the passport-visa regime must go - and Indyeah should take the lead.

Against Soft Drinks - and For Soft Drugs

Cricket heroes and Bollywood heroes are always to be seen advertising soft drinks like Coke and Pepsi. And no "hero" ever advertises beer! At least Peter Tosh was possessed of the courage to sing, as regards ganja:

 

Legalise it,

I'll advertise it.

As compared to "soft drugs" like ganja and beer, soft drinks are extremely harmful to your health - and if you want proof, do read this article by Dr. Joseph Mercola: a very good doctor indeed, whose columns I regularly read on LewRockwell.com, where they despise "Obamacare" and encourage doctors like Mercola who talk of ways to maintain "natural health" while warning about "conventional lifestyles," like soft drinks. He begins by saying that, along with french fries, doughnuts and chips, soft drinks rank high among the "5 worst food and drinks."

Soft drinks contain sugar - too much sugar. So does tea and coffee - of which too much is consumed in India these days. What happens to your body after you drink a Coke or Pepsi, with all that sugar (and no cocaine!)? Dr. Mercola tells us what:

Once [the soft drink has been] ingested, your pancreas rapidly begin to create insulin in response to the sugar. The rise in blood sugar is quite rapid. Here’s a play-by-play of what happens in your body upon drinking a can of soda [American word for soft drink]:

• Within 20 minutes, your blood sugar spikes, and your liver responds to the resulting insulin burst by turning massive amounts of sugar into fat.
• Within 40 minutes, caffeine absorption is complete; your pupils dilate, your blood pressure rises, and your liver dumps more sugar into your bloodstream. As you could see in the report above, DeNies’ blood glucose level was 79 at the outset of the experiment, and after 40 minutes it had risen to 111!
• Around 45 minutes, your body increases dopamine production, which stimulates the pleasure centers of your brain – a physically identical response to that of heroin, by the way.
• After 60 minutes, you’ll start to have a blood sugar crash, and you may be tempted to reach for another sweet snack or beverage.

As I’ve discussed on numerous occasions, chronically elevated insulin levels (which you would definitely have if you regularly drink soda) and the subsequent insulin resistance is a foundational factor of most chronic disease, from diabetes to cancer. 

Dr. Mercola concludes thus:

[Ingesting a soft drink] clearly elevates your insulin levels, and elevated insulin levels are the foundation of most chronic disease. Not only does drinking just one soda [American word for soft drink] per day increase your risk of diabetes by 85 percent, it also increases your risk of:

• Heart disease
• Cancer
• Arthritis
• Osteoporosis
• Gout
• Non-alcoholic fatty liver disease (NAFLD) 

Another reason why soft drinks are bad is, as Dr. Mercola points out, they contain "tap water."

Let us now turn our attention to beer - which contains neither sugar nor salt, and is boiled prior to fermentation. This boiled and fermented barley-water is GOOD for you and your health. It is "nutritious." Germans call it "liquid bread." It is especially good where the natural drinking water is contaminated - as in much of India. And beer is not "hard liquor."

And look at ganja-charas, which are not physically addictive - unlike the sugar in the soft drink. Indeed, ganja cures many diseases, from glaucoma to asthma. I have an asthmatic friend who has been cured by ganja-charas - and no longer requires an inhaler.

And look at tobacco, tea and coffee - all of which came from abroad; that too, in fairly recent times.

So let's hear it for beer and ganja:

Legalise it,

I'll advertise it.