Between Instinct And Reason

While in Juggernaut Puri, my thoughts turned to Stuttgart, Germany, a beautiful city I once had the good fortune to visit, a city where both Mercedes-Benz as well as Porsche are headquartered. In Stuttgart, it struck me, God is crucified - and the people ride chariots. Here in Puri, it is God that rides the chariot, while the people can barely make their way around town. Funny old world, ain't it? In Stuttgart, the Mercedes-Benz museum displays the first "Popemobile" ever made - they made the chariot for their Supreme Pontiff. And all taxis in Germany are Mercedes - for the people. There are, of course, trains and trams - the railway station is stunningly beautiful - and the Intercity Express (ICE) train I took into town travelled at over 350 kmph. Wheels. Wheels for the people.

My thoughts then went to Friedrich Hayek's last book Fatal Conceit: The Errors of Socialism which begins with the assertion that economic activity lies "between instinct and reason." We have given up the instinct to snatch and grab, to plunder, and prefer to trade instead - but we have not reasoned why. We are guided by a "sense of gain" and we therefore prefer survival through peaceful exchanges - but we have not reasoned beyond that. We trade because it is something we have learnt from childhood, as a "means of obtaining desired objects." The child wanting a chocolate will see his father buy it for him - and he learns that this is the way to obtain all that you need. He does so all his life - and his children and grand-children do the same, without reasoning why. It is the same with the worship of God - these are practices learnt by imitation, by following tradition, without reasoning why.

Now, chariots require roads. The road outside the Juggernaut Temple is broad and wide - but there is NO ROAD to my hotel, a cute little old building close to the sea. It has rained in the morning, and there are mud-filled puddles everytwhere. Messy. You feel icky walking around this Holy City. But in Germany, where God is crucified and people have wheels, they have the most incredible roads. There are signs on German autobahns saying "No Speed Limit" - and I once rode a Porsche Carrera at 235 kmph, feeling like James Dean, though fortunately surviving to tell the tale. In India, we have neither roads nor wheels. This is a "centrally planned economy." A planned disaster.

There are two critical areas where we humans go astray in our thinking - when we think about God, and when we think about our Kings. The Sun Temple at Konarak was built by a king in his own glory - but the people paid the taxes. What should they pay taxes for? No one has thought of this. Jawaharlal Nehru called his Big Dams the "temples of modern India" - and the people paid, people who had neither wheels, nor roads, nor phones, nor electricity. The idea was that The State creates wealth by making steel. None thought this absurd - because everyone operated "between instinct and reason," and they deferred to their King just as they defer to God.

All our politicians who wear khadi uniforms are similarly operating between instinct and reason. I asked a little boy whether he would like to make himself a t-shirt by sitting at a spinning-wheel (charkha), which would take him about two years to make one t-shirt, or whether he would just go to a shop and buy one. The little boy - with his "sense of gain" - said he would buy a t-shirt from a shop. We all specialise in the "division of labour" because of our sense of gain - but we never reason beyond that. Neither do the politicians. They themselves do not manufacture their own uniforms at home. They buy them from the Khadi Bhandar. Even Rahul Gandhi has not sat at a charkha - ever. All we see around us are people - both kings as well as commoners - operating between instinct and reason.

Economics is a very young science. It was unknown to the ancients. Its principles have become known only fairly recently. To the Austrian School, it all begins in 1871 with Carl Menger, though Menger himself studied Adam Smith carefully, and his own Lectures to Crown Prince Rudolf followed the Wealth of Nations, which is dated 1776. 

But young sciences often go wrong. Much has gone wrong with Psychiatry - another young science which also began in Vienna. And so it is with Economics. To me it appears that there are barely a handful of people who understand Economics in the entire world. All that is taught in the universities - macro, micro, welfare - is complete bunk.

Even the eminent professors are operating "between instinct and reason." They merely repeat what they have learnt by imitation - they never think things through for themselves. They are like the priests who recite ancient texts they have memorised. The true Science of Economics requires "mental reconstruction" of human actions in markets. The Marshallian diagrams and the Walrasian equations do no such thing. Junk them all, in toto.

And do read Fatal Conceit: The Errors of Socialism, Hayek's last book. Hayek wrote it hoping to challenge any eminent socialist to a debate - but none dared to debate him. They let him quietly die, hoping no one would read his last great book.

Errors.

They are all in serious error.

And these errors are destroying our civilisation.

Some of these errors are so deep that I think the world is run by "criminally insane" people. And you want to go to them for "education"?