The Real Problem - The State

The results of the latest population count - the census - is out. Oh my! So many people in India. Perhaps the figure 1.2 billion is staggering - but this is a staggeringly huge country. There is abundant open space - as here on the Western Ghats. The cities are "overcrowded" - not "overpopulated."

One basic point is being missed in all these discussions and debates - and that is, how do we get all this Labour to combine with more and more Capital?

With more Capital, the productivity of labour will rise, and wages will rise as well. The path requires Free Enterprise and Free Capital Flows from abroad - and this means Big Business: "mass production for mass consumption." Laissez faire Capitalism.

Unfortunately, the way we are proceeding under our current The State is the very opposite: Capital Consumption. All "welfare" is consumption, not investment. This is why roads are never built. And hordes of lackeys employed.

The people of India are all hard-working and honest - and they are our greatest resource. If they are freed of inflationism designed to finance welfarism, they will themselves accumulate Capital and engage in Capitalism. Liberty, Property, Sound Money - that is all they need.

In such a poor country, and with such huge numbers of the poverty-stricken, inflationist-welfarism should be seen as criminally insane. Such colossal Capital Consuption will only destroy the nation, and all the 1.2 billion people in it.

We are completely wrong to believe that The State can bring about "economoic development." Such good things can only be brought about by indivdual action - of saving, investing and so on. Individuals accumulate Capital - and then all become investors. As well as consumers. Standards of living keep rising steadily.

If this be "economic development" then it must be said that our The State is preventing it from happening. That, indeed, is our great intellectual error: the "conflict of visions" between Peter Bauer and Gunnar Myrdal, the former for The Market, and the latter for the Planner. Myrdal shared the Nobel prize with Hayek! And the Indian State hugely honoured him.

If you want to study "development economics" from a free market perspective, that of a "classical liberal," read Peter Bauer. He pioneered the study of the "informal economy" found throughout the Third World, and testimony to the capitalistic instincts of the people.

The Census is just a total. But what really matters for all the individuals comprising that total is the Capital with which he can combine his labour. We do not need to control our numbers; rather, we need to cut down The State. It is Consuming all our Precious Capital.