On The Pope... And Black Money: Take #2

Pope Benedict XVI's address before the German parliament has attracted wide attention because at the outset he quoted St. Augustine's dictum:

"Without justice – what else is the State 

but a great band of robbers?"

In our own country, all the fuss is about "black money" - or money that has evaded the tax-collector. The matter has now been referred to a specially constituted board of bureaucrats - but the news report says they are "dragging their feet." So, the issue is now before the Chief Justice of India (CJI), says another report.


But, tell you me, is not all the inflation, stock-market crash, the crises over the Euro and the US dollar all about "funny money"? Will inflation be over, will these crises be resolved for our country, if all this "black money" is unearthed and "brought back" to the Exchequer? Certainly not!

We all need Sound Money - Gold.

And St. Augustine wrote, in his City of God:

"Without justice – what else is the State 

but a great band of robbers?"

So, now that black money is before the CJI, think about Ashok Jain, KL Chugh and Rajan Pillai - how they were humiliated over black money and how two of them died. The "positive law" was FERA - the Foreign Exchange Regulation Act.


Now, as any Misesian knows, foreign exchange regulation is meant to "expropriate wealth." There is nothing "just" about such a positive law. In my book, if the central banker cannot convert his note into money desired by the bearer, it is the central banker who ought to be in prison: a debtors' prison. Savvy?


After all, the "promise to pay" on the note, signed by the central banker, is a SOLEMN CONTRACT - a contract the central banker is refusing to abide by.


And St. Augustine wrote, in his City of God:

"Without justice – what else is the State 

but a great band of robbers?"

Of course, FERA was INJUSTICE writ large, so we could rephrase the above as follows:

Without Sound Money -  what else is the State 

but a great band of robbers?

It is at this point that Murray Rothbard must be quoted, for in his Ethics of Liberty he wrote what would happen to the State if this were to be the case:

For if the bulk of the public were really convinced of the illegitimacy of the State, if it were convinced that the State is nothing more nor less than a bandit gang writ large, then the State would soon collapse to take on no more status or breadth of existence than another Mafia gang. Hence the necessity of the State’s employment of ideologists; and hence the necessity of the State’s age-old alliance with the Court Intellectuals who weave the apologia for State rule.

This "black money" nonsense is the work of State-employed ideologists, judges and bureaucrats. We, the people, must focus on the "funny money" that is the root cause of our problems.


The person with black money has only evaded taxation - which is "moral" in a nation where the State "consumes capital" and there are no good roads or highways, and 200,000 people are killed in traffic accidents every year, and many more seriously injured.


On the other hand, the funny money man is an issuer of dud currency - a "counterfeiter," as I have explained in this brief column. Throughout history, counterfeiting always attracted the death penalty.


However, the Pope did a lot more in his address: he actually challenged "legal positivism" and even quoted Hans Kelsen, who was Hayek's professor of law, and a very important German legal positivist. 


Hayek of the Law, Legislation & Liberty volumes was not Hans Kelsen's student; rather, he had been strongly influenced by Bruno Leoni, whose Freedom and the Law is a must read.


After smashing legal positivism (while maintaining that positivism is essential for the natural sciences) the Pope said:

Where positivist reason dominates the field to the exclusion of all else – and that is broadly the case in our public mindset – then the classical sources of knowledge for ethics and law are excluded. This is a dramatic situation which affects everyone, and on which a public debate is necessary. Indeed, an essential goal of this address is to issue an urgent invitation to launch one.

I echo that sentiment. Down with legal positivism. Down with positivism in the sciences of human action - like Economics.

The Poor Need Freedom - Not Education, Nor Welfare

I am extremely pleased to see an old post titled "Shah Rukh Kahn and the Truth" top the list of "popular posts" supplied by Google on the right-hand bar. This post makes it obvious that inflationism is bad for the poor - a point I also made the other day, when I discussed the MGNREGS.


But the question remains: What is best for the poor?


Well, for one, SOUND MONEY.


Apart from that - PROPERTY RIGHTS.


And FREE INTERNATIONAL TRADE - so their consumption can improve.


Fourth - LIBERTY!


I gave the example the other day of the NIGHTLIFE INDUSTRY. Think about it: How did black slaves become "superstars" in America? Because of New Orleans - and jazz. In India, when I watch the talent shows on TV (in regional languages, too) the plain fact emerges that millions and millions of Indians are hugely gifted in song and dance, and in playing musical instruments. But they have no place to play - play "live," that is. This hurts the poorest of them all. The better off ones make do publishing music, and appearing in movies and television. The poor ones go broke. I have personally seen hugely gifted rock and jazz artistes in Delhi broke. Broke as hell. 


Now, let us say there is LIBERTY - and a 24-hour economy. Nightlife. Ganja-charas. Casinos. Nightclubs. 


Obviously, many, many poor people will make money.


Then, they will spend this money - and other businesses will make money.


Then, these businessmen will spend - and the cycle will repeat itself endlessly.


This is Jean-Baptiste Say's "Law of Markets." In a nutshell, it says that if X sells, demand is created for all non-X. 


Do read my column on this important economic law under the title "What Pumps Up An Economy" here.  Jean-Baptiste Say was known as the "Adam Smith of France." Great man. Vital law - of markets.


The poor do NOT need (mis)education from our The State. They know lots of things that school can never teach them - from making idlis to playing the guitar. As Jimmy Page said, "The good thing about the guitar is that they do not teach it at school." Freedom is what the poor need.


And as for welfare - it is phoney. It is funded by "funny money" - which erodes the capital of the poor. End this nonsense.


Liberty!

Bastiat Demolishes The MGNREGS: Take #2

To understand why chacha manmohan’s Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is an extremely screwed-up idea, it is best to begin with Frédéric Bastiat’s “Broken Window Fallacy” – found in his essay “What is Seen and What is Not Seen.” Hayek considered this essay a work of “true genius.”

Even in France of the 1840s, there were socialists who had the idea of running State-owned “National Workshops” with the intention of providing employment to all. In their case, they employed city mobs and used them to beat up dissenters. A dangerous notion, that The State should employ all.

The Broken Window Fallacy runs as follows:

A mischievous boy hurls a brick into a shop-window and smashes it. He runs away. Local people gather and conclude that this is GOOD for their city, as now the glazier has got some business.

Bastiat points out why these bystanders are dead wrong. They see that the glazier has got business. They do not see that the shopkeeper had saved money for a new suit, which he will now have to use for a new window: that is, the tailor has lost business. This is “what is seen and what is not seen.”


As far as the shopkeeper is concerned, if the boy had not smashed his window, he would have possessed a suit and a window; while now, after the repairs, he has just the window, same as he had before, minus his savings, minus his suit. The city has actually LOST.

Thus, reconstruction after a war is NOT good business. Destruction is never good business. Epidemics are not good because doctors make money. Potholes are not good because mechanics gain by them; our cars get destroyed.

Similarly with MGNREGS: We see the district collector – or should we now call him “District Spender”? – spending MGNREGS money. We think the countryside will be better off. But do we do not see where the money came from.

If we look into that, we would see that the money came from us – the taxpayers. And if we had spent the money ourselves, we could have generated “useful employment” (instead of “tax parasitism”). For example, if we had drunk beer with that money instead of paying taxes, brewers and bartenders would have been employed usefully.

Indeed, even if we had saved the money with commercial banks, they would have lent it out – and even better employment would have occurred. Maybe a borrower would have invested in a brewery.

Further: chacha manmohan is also spending freshly printed rupee notes to fund this MGNREGS: “Inflationary Finance.” This erodes the Precious Capital of all citizens. It makes no sense at all. It makes all of us poorer. The value of the currency unit declines. All prices rise.

Lastly: What kind of stupid idea is it that our The State must employ all? Is that a role of the State? Is not our The State already too bloated with employees? Should they not be cutting down on State employment instead of adding yet more tax parasites?  

And is not this same State misusing force to shut down many, many trades – from ganja-charas to dance bars to nightclubs, discos and casinos? Indeed, in India, there is NO nightlife industry.

If all these trades were free, would not “real, useful employment” occur?

Thus, chacha manmohan is NOT an “economist.” He is best called a “diseconomist” – for he is a “dissaver.” He is consuming capital. His State is always in “deficit.”

All this MGNREGS money is best invested in Capital Goods like roads, sewerage, drainage and the like. With MGNREGS, all this money will just be “consumed,” with NOTHING to show for it – except a huge entry in the Union Budget.

Petrol & Gas Price Hikes: Root Cause Is The "Funny Money"

Petrol and cooking gas prices have been hiked - and further hikes are expected. The editorial in Mint says, "the change in the price of fuel is rational and should be accepted by all." Really?


Let us begin by turning our attention to the USSA, where "quantitative easing" began. There is a perceptive post in EconomicPolicyJournal.com in which Ron Paul is quoted as follows:

Ron Paul in a recent debate pointed out that roughly 50 years ago you could pay ten cents for a gallon of gasoline and that the dimes which were made of silver back then are now worth the same (because of their silver content) as a price of a gallon of gasoline today. 

The same blog (which features on my Blog List) also has another post on the fact that gasoline prices in the USSA are at record highs.


This is nothing but INFLATION.


Ben Bernanke did his "quantitative easing" (code for printing more paper dollars) and our chacha followed suit with his "economic stimulus." This was just "central bank co-ordination" - so that the whole world would float to a higher price level. That is why we Misesians call them "banksters" (as in "gangsters"). This central bank co-ordination is the state-of-the-art in banksterism. Our chacha is just a puppet in their hands. He is sacrificing our interests for those of the US State - and the US State, and the US Fed, are sacrificing the interests of the American people for the interests of their The State. Rotters! The only solution is the Gold Standard. So, if India was on the Gold Standard today, prices would be falling, not rising. Oil and gas would be cheaper, not dearer. 


Today, it is NOT the case that "prices are rising." Rather, the fact is that the value of the rupee (and the US dollar) is falling. This is because they are flooding the markets with these paper notes. And when the supply of anything increases - like potatoes, for example - its value must fall. That is all there is to it.


Do read another post from EPJ on what a reader told Steven Levitt (of Freakonomics) on gold, thereby educating him.


And do read this Deutsche Bank report on the Indian rupee, which says that its long-term prospects are not bright. Thus, if we do not adopt the Gold Standard today, the prices of imported oil would keep on rising indefinitely in the future. The report also mentions that we still owe some $5 billion to Iran!


Let us turn our attention now to cooking gas. In India, this is sold in cylinders, with street food vendors paying higher prices than domestic users, thereby making cooked food expensive for the urban poor - who do not possess homes with kitchens. 


Second: While this gas comes out free from the ground, the biggest cost in getting it to the consumer, apart from bottling, is TRANSPORTATION. In India, big trucks transporting gas are a common sight on our broken highways. Similarly, in the cities, trucks transporting gas cylinders, little tempos doing the same, and even chaps ferrying cylinders on bicycles are a common sight. All these costs could be reduced by PIPE-LINING gas. Ever heard of "Gaslit London"? All that gas was piped.


Thus, there is no real "subsidy" on cooking gas. If gas was piped, the costs of bottling and transportation would come down to ZERO - and we would all save money.


Lastly, on petrol again - there are HUGE TAXES. If the people rise in protest - as they should - and demand a complete rollback on all taxes on petrol, prices would come down drastically.


So, the Antidote is:

First, a return to the Gold Standard in India.

Second, pipe-lining of gas. 

And third, a rollback of all taxes on petrol.

Rise in protest, my countrymen!

On Anna Hazare... And Bangalore's Metro

I thought that this perceptive article on India and Anna Hazare from TheDailyBell.com titled "The Corruption of India's Economic Miracle" is well worth a read. It rips a Wall Street Journal article on the subject apart - and I place the concluding remarks below:

For another, the article assumes that the current Indian vitality is the result of inexorable cultural and entrepreneurial shift. We would argue this is entirely incorrect. India's resurgence is driven by central banking money printing and may not be seen as a natural expression of industry and society.

It is extremely important that the progress of the BRICS be placed in perspective. Brazil, China, India, even Russia, all have aggressive central banking policies. China and India, especially, have economies that are obviously being stimulated by excessive money printing. Both countries have a problem with price inflation as a result.

Progress built on printing money from nothing is ephemeral. In America and Europe, thanks to the debasement of money and the vast resources it grants (temporarily) to government, economies can seem quite healthy  one moment and then ill the next.

Money printing hollows out economies. It distorts business and job growth. It makes people feel wealthier than they are in reality. In both China and India, economic implosions will eventually take place. It cannot be otherwise, because central bank money stimulation inevitably leads to an exaggerated business cycle and subsequent busts.

For this fundamental reason in particular, the Wall Street Journal article is flawed. India has not necessarily experienced a resurgence of business and market creativity. It is simply going through the same cycle of monetary stimulation that the European PIGS and America went through recently.

As Ludwig von Mises cautioned in his great book Socialism, an ideology he abhorred and battled against all his long life:

There is no evidence that social evolution must move steadily upwards in a straight line. Social standstill and social retrogression are historical facts which we cannot ignore. World history is the graveyard of dead civilizations.

We can go backwards any time.


And the proof of that is the photo above of the Bangalore Metro on MG Road. They have DESTROYED MG Road, the prime property in this Fair City, with this ugly overhead train. If it had been underground, the properties on MG Road would have trebled in value. Now, the open space around this magnificent thoroughfare has been blocked. Property prices may not rise much in this ugliness.

Bye Pondicherry, Thanks For Everything, And Some Final Reflections On The Problem That Is The State: Take #2

Dylan once said, "I have new eyes to see the dawn." And Cat Stevens sang, "Morning has broken, like the first morning." 


[Though the only black birds that speak here in Pondicherry are CROWS. I have never seen a town with more crows and more garbage littered all over.]


This morning, I went to see the dawn as usual - but I am leaving today, so I was bidding good-bye to the dawn across the sea.


And how many spectacular dawns I have witnessed here these past many weeks. Sometimes, it is like the picture above - a Gold Sun, with the Gold reflecting across the waters right to your feet. Sometimes, if there are specks of clouds, dawn begins with fiery red hues. And once, only once, did it appear like God had sprayed oil across the sky, for there were speckled rainbows all over! 


Today, it was different: just pastel shades, of pink and blue, over a deep blue sea, the sun itself a pale orange. But it was beautiful.


Good-bye Pondicherry. Thanks for the good times. Hope to be back again someday.


To conclude, some observations that reveal that The People are a Resource, and it is The State that is The Problem.


The tea-shops open here at 4:30am. By that time, I am always bathed and changed, on my cycle, heading for tea - and then, the dawn. By that time, Pondicherry is wide awake, and many, many people are getting organised for their Daily Work. Hard-working, enterprising people of Pondicherry. 


Let us now turn to The State. First, they TAX you. The restaurants charge a 12% local sales tax. That's a lot. What do they do with the money? I have already written about the useless departments they open - like Fisheries! Imagine, every dawn I see REAL FISHERMEN trying to net a catch in tiny craft dating back to 3000BC - no OBM at all - and The State runs a Fisheries Department. Do these guys catch and sell fish? Or do they just live off Tax Revenue? Tax Parasites, all.


Today, let me also talk about the Public Health Department. They have a HUGE BUILDING right opposite my tea-shop. And if you sit there sipping tea in the early hours, MOSQUITOES chew you up! And there are FLIES all over!


Today, I took an early morning walkabout in a pretty park - and mosquitoes bit me there, too. Right opposite was another Public Health Department building.


Incidentally, our The State has banned DDT - the cheapest way to kill mosquitoes. I once published an interview I conducted with Roger Bate of Africa Fighting Malaria for The Economic Times - and he argued furiously against this ban, one that was killing Africans by the million. Shortly after this interview appeared, an Indian DDT manufacturer whose business had been closed down came calling on me at my editorial offices, and told me all about the corrupt politics behind this senseless ban on DDT.


Now, tell you me: We cannot breed. If we do so, Sanjay Gandhi comes and vastectomises us BY FORCE. But mosquitoes and flies can breed freely.


And tell you me: Is General Pervez Musharraf sucking your blood? Or is the RBI Governor doing that, with his "counterfeit notes" that do not honour his SIGNED CONTRACT? All this "funny money" that depreciates in value every day?


The pretty park where mosquitoes bit me in broad daylight right opposite a Public Health Department building must have been built and laid out by the French - but, today, our fellows have built two "children's parks" on the lawns! The equipment there looked like it doesn't work, and is probably dangerous. Your kids might get hurt playing there. They might be better off playing with General Pervez Musharraf.


They are spending YOUR money - on NONSENSE.


Why can't entrepreneurs build parks for kids? Like the guy I met who said he is building a skating rink.

EVER HEARD OF DISNEYLAND?

They have privatised garbage collection - but they don't supervise the work, and much of the equipment is shoddy: little Mahindra trucks that won't carry more than a few kilos at a time, and are OPEN on top. 


The ladies who work at street-sweeping in their uniforms are all sweet and very hard-working, but they have No Capital Equipment.  Thus, their wages can never rise.


We need FOREIGN EXPERT FIRMS to do these jobs - like an ad I saw of an Australian Garbage Company that went:

We Talk Garbage

That's why I like the Philips Slogan:

Let's Make Things Better

The State can NEVER think like that.


The State's slogan is:

Let's Make Things Worse

They have made every city they inherited from the Brits or the French or the Portuguese - worse. Much, much worse.


Because they produce bads, not goods.


Bads like taxes.


Bads like inflation.


Bads like Air India.


Bads like the Indian Police.

Abolish The State.

Replace it with Honest Civic Corporations 

for each and every city and town.

Fiscal Independence - For Pondicherry: Take #2

:

A sweet Tamilian lady called on me this morning as I sat on my perch next to the saintly sadhu. She, too, talked about me being an Indian Police Service Officer - which is in The News - and I told her that I was in the IPS from 1984-89, after which I resigned. I added that I was also Editor of The Economic Times in Nude Elly between 1998-2002 - and that I also resigned from this position, because of grave differences over editorial content. The particular editorial I wrote, and which they rubbished, was AGAINST Sonia Gandhi.


Next, I advised her to read my books, published by Macmillan India in 2000 and 2003 and available from flipkart.com - the first titled Antidote: Essays AGAINST The Socialist Indian State; and the second titled Antidote2: For Liberal Governance. If I may add, just for the record, the latter book was originally titled "Columns For Freedom" - but the Editor of Macmillan India who suddenly replaced Joseph Mathai insisted on a change of title.


Now, the second essay in my first book is titled "State! - or Why The Socialist Indian State Is A Predator." This should be fairly obvious to us today, especially if you read Madhu Kishwar's column of just today highlighting corruption that plagues rickshaw-wallahs and street vendors throughout India.


But the political atmosphere in India in the 1940s and '50s favoured "State Socialism" as a means of "helping the poor." This, while the poor are debarred from "helping themselves."


I mean, imagine that? If our The State makes steel, the poor get rich! What FUCKING NONSENSE!


It is also IMPOSSIBLE for The Exchequer to "employ all the poor." This is LUNACY. And the "funny money" used for the purpose is a REAL CAUSE OF MASS POVERTY - because "inflationism ERODES the CAPITAL of the poor."


So, suppose a poor man tries to save 5000 rupees to buy a bunk-shop - by the time he has saved the money, the shop will cost 10,000 rupees, and he will have to save the money all over again.


The Officers of the Indian Administrative Service are all employed in this "Pork Barrel Politics." They get their Budgets from the Centre - and run a huge number of Completely Useless Departments. Like the Department of Fisheries - where the fishermen cannot even import Out-Board Motors (OBMs). I saw another van today belonging to the Department of Hindu Religious Institutions. There are so many more - like the Pondicherry Industrial Development Corporation (PIPDIC) - which surely supports "import-substitution" in a coastal city where ZERO FOREIGN TRADE occurs. 


Similarly, there is the Pondicherry Tourism Development Corporation. But Beach Road is absolutely not a "happening place" for tourism. The Traffic Police ban motor vehicles - including motor-cycles. And I wonder who bans the sale of alcoholic drinks and non-vegetarian food on Beach Road. And cigarette smoking and sales, too. This, while they are surely spending money on MGNREGA - "pork barrel politics."


Beach Road ought to be extended by 10km both North as well as South. And the entire beach opened up for the entrepreneurs and street-food wallahs of this Fair City. Remember, one single tourist creates 12 local jobs - while the MGNREGA is only "inflationary."


Then, I saw a van belonging to the Pondicherry Housing Board. Just like Nude Elly and the disastrous Delhi Destruction (Development) Authority, which has made housing out of the reach of all - especially The Poor. In Nude Elly, over 50 per cent of the population lives in SLUMS. And a second-hand DDA flat can cost 1 crore rupees (100,00,000 rupees).


There are slums near Beach Road - where I drink tea every day, and buy cigarettes. I am sure the people there have no Property Rights.


And, in Pondicherry, there are two huge drainage canals - which could easily be covered up and converted to commercial property. There is the Main Canal between the French Town and the Tamil Town. There is also a Petit Canal right here on Mahatma Gandhi Road where I work on my blogging - and around which poor people live.


This implies that Tax Money should be spent on Capital - like roads, streets, sewerage, drainage, the covering up of canals. 

NOT THIS NONSENSE!

If this is done, this Fair City will expand, and Plot Owners will build their own houses - and Pay Taxes.

Same is to do with the Education Department: they teach NONSENSE. They should be SHUT DOWN. As Ludwig von Mises wrote in his great book on Liberalism:

There is, in fact, only one solution: the state, the government, the laws must not in any way concern themselves with schooling or education. Public funds must not be used for such purposes. The rearing and instruction of youth must be left entirely to parents and to private associations and institutions.

The Good People of Pondicherry surely don't need a "Right to Miseducation."  

I am sure all you Good People of Pondicherry are also studying what is happening in the US over the US dollar. That is the illustration accompanying this post - thanks to Google Images, once again - but the same is happening in India, too.


If you have NOT been following matters in the USSA over the US Paper Dollar, I recommend this article by Robert Murphy of the Mises Institute, titled "On the Brink of Inflationary Disaster."


The solution lies in Sound Money and Free Banking Under Law in Pondicherry - which is the title of a lecture I am hoping to deliver in Pondicherry University, soon.


To conclude, the Good People of Pondicherry must realise that this BRI "funny money" is The Problem.  


When this "funny money" reaches this Fair City, the First People who get to spend it are the IAS-IPS and the Politicians. They gain - while those who spend it last, or who SAVE, lose. Borrowers gain - and all the RICH PEOPLE of India are borrowers: they borrow from shareholders; and they borrow from the banks. And this includes many Public Sector Banks - which LOSE MONEY by buying "non-performing assets."


Fiscal Independence is what this Fair City needs.


But enough for today, I will revisit this discussion tomorrow.


State tuned.

It's The Ethics Of Liberty versus Inflationist-Welfarism

The Great Big Lie of the Inflationist-Welfarists led by chacha manmohan s gandhi is that State Aid is required to "help the poor." Actually, poor refugees from Europe made America the richest place on Earth - because they had Liberty (and Property). And this was BEFORE the dawn of the HORRIBLE 20th Century.


The poor should themselves find the very idea of State Aid INSULTING.


They themselves should demand LIBERTY.


This means the FREEDOM to engage in consensual trades - without let or hindrance from corrupt State Authorities.


Further, the poor should be instructed by activists to realise that this inflationist-welfarism is all a very "false philanthropy" anyway. The State is a broke institution. In many provinces, they cannot even meet their wage bills. The State is just printing paper money to pay for all the bullshit welfare schemes like the MGNREGA, the cheap rice, and the free schools where the kids' brains get dumbed down. This is causing inflation - which ERODES the SAVINGS of the poor. This ERODES the PRECIOUS CAPITAL of the poor. What bloody NONSENSE is this?


Increasing the quantity of money in circulation NEVER makes a nation rich - not even if the money is gold or silver. The Spaniards and the Portuguese plundered South America for gold and silver - and spread inflation throughout Europe. The price of gold and silver fell!


The British, on the other hand, traded. The British bought pepper, nutmeg and other spices from the East and sold them at a high profit in the West. They brought tea into India from China - and sold it in England. They brought sugar from Jamaica, tobacco from Virginia - and it is the British who got rich, not the Spaniards or the Portuguese.


This is the essence of Adam Smith's An Inquiry into the Nature & Causes of the Wealth of Nations: that the wealth of a nation is NOT its stock of gold; rather, its wealth consists in the properties and possessions of The People. If the people own lots of goodies, the nation is rich. Thus, Adam Smith recommended "The System of Natural Liberty" - which means free trade and the freedom to trade.


Tp put it another way: The People must produce and sell goods and services and only then will they get rich. If they just increase the amount of money in circulation - even if that money is gold - they will fail miserably. 


Now: What are the "Ethics of Liberty"?


Very simple: First and foremost, we must aim at satisfying our Customers, who are our Kings. We must NOT cheat them, but we must try hard at keeping them happy and satisfied, so they keep coming back to us for their particular needs. If we do this - and are allowed to do so - we survive honourably and morally.


Second: When we Spend the Money we have Earned the HARD WAY - then the FUN BEGINS, and we are the Customer, and we are then the King. We must NOT be forced into buying JUNK by Customs Guards paid for by Protectionists. We must demand the BEST goods, the BEST products, the BEST services. 


This is why Free International Trade and the Freedom to Trade go hand in hand.


See you all again tomorrow.

On Their News... And Mine

The 15th of August was not just the anniversary of the First Indian Republic: this day also marks the 40th anniversary of the US dollar's link with gold getting broken. The year was 1971 - and the president was Nixon. Then, an ounce of gold was worth 35 dollars; today, it is well over 1300 dollars. Do read Doug French's article on this "unhappy birthday of global fiat paper money." After that, Cris Lingle's piece for The Freeman on the "dangers of central banking" is worth going through too, and slowly. 


Our Great Leader, chacha manmohan s gandhi's Independence Day Address to the Nation from the ramparts of Red Fort was received unenthusiastically here in South India: the local paper I read, in its editorial, called it "uninspiring and repetitive, and full of excuses." But an editorial in The Indian Express carried an excerpt which is worth pasting below for my reader's attention:

"Controlling rising prices is a primary responsibility of any government,” said Prime Minister Manmohan Singh during his Independence Day speech at Delhi’s Red Fort.  “We have continuously taken steps to rein in prices,” the PM continued, “but, unfortunately, sometimes we have been confronted with a situation in which the reasons for rising prices lay outside the country.”

I hope my reader by now knows that the above statement is a bald lie.


In a Free Market Economy ALL PRICES ARE FREE. The government only acts against ENEMIES OF PEACE AND ORDER. The money is HONEST.


Inflation is a purely monetary phenomenon. It occurs because the central bank increases the supply of money to fund The State, which is a "dissaver," always in "deficit." Inflationist-welfarism is thus a CRUEL JOKE on poor people. It MUST be ended.


Do also read this latest Deutsche Bank Update on Inflation in India.


The main person in the news, however, is Anna Hazare, with his crusade against corruption, aimed at nothing else but the creation of YET ANOTHER government department! 


I have a few posts on this nonsense you can easily search and find, but today I would like you to read two excellent articles against this nonsense by two young fellows whose minds I played no small a role in shaping. These young lads are Vipin Veetil and Chandrasekaran Balakrishnan. The former dropped out of the Delhi School of Mathematical Economics after a few discussions with me (and some talks); he then became an editorial writer for Mint; after which he is now pursuing a PhD in Economics in the USSA. The latter is from the Planning Commission (no less) and writes the Hayek Order and also the Soldier of Freedom blogs, both of which are on my Blog List.


The first of these articles, jointly authored by the two, was published in Forbes Magazine, and can be read here.


The second of these articles, from Pragati Magazine, authored by Vipin, can be read here.


I hope you will all then realise what the ONLY solution to GOVERNMENT CORRUPTION is - and that is, a drastic cutting down of The State and its powers, so as to let all businessmen FREE of State Interference.


This means A Second Republic!


No less.


And now, for my news. An anonymous comment that I did not publish inquired as to why no posts had appeared for five whole days: was I in jail or an asylum? he asked. Well, the answer is a little of both. The cops picked me up from my perch next to the sadhu, took me to a hospital - and from there, by ambulance, to the National Institute of Mental Health (NIMHANS) in BANGALORE! What a horrible ride!


Anyway, the first evening, a nurse wanted to inject me with some "sedative" - but when I looked at the pamphlet of this injection, it said it was meant for "serious psychoses and mania." I was horrified! Have I exhibited such symptoms? I asked the nurse, She said if I did not take the injection, she was authorised to use force on me by calling for the security guards. However, better sense prevailed. She called in the Junior Doctor. I told him that I am a student of "reality"; that I have been "calm and composed all day"; and that "psychoses" according to the DSM III mean a "gross distortion of reality." I told him that not I, but all "mathematical economists" suffer from this "gross distortion of reality." I told him that 9.3% inflation rate and 7.7% growth rate are both gross distortions of reality.


They changed my ward.


Things are better now. The doctors are all very friendly.


Oh yes. MY MOTHER was there all the time. But she should be leaving soon.


All should be well.


See you all tomorrow.

The Trial of chacha manmohan s gandhi - Part 5

Yesterday, I discussed the "Corruption of the Law." Today, I shall conclude this Prosecution with a discussion on the natural fallout of legal corruption - and that is Corruption of the Police. They become a "legislation-enforcement agency" - and all these amoral and immoral pieces of legislation passed by our Socialist Parliament are essentially Predatory, like the Foreign Exchange Regulation Act. In any case, the Indian Police are known to be Predatory on every city and town street pan-India. They only protect the VVIPs; they prey on the rest of us.

Let us begin with some History. The modern State, equipped with a Police Force and a Central Bank, is very new. Sir Robert Peel set up the London Metropolitan Police - the unarmed "Bobby" - only in the 1830s. They used to be jeered at on the streets when they first made their appearance. 

In India, the Honourable East India Company ruled without any police force. They had an army - but no police. The "civilians" of the HEICS roamed their vast districts unarmed and unescorted, maintaining land records while sitting among the peasants, settling disputes on time, providing Justice, collecting taxes in exchange for Property Titles - and, of course, building "roads, bridges and canals."

The Indian Police Act is dated 1861. This was immediately after the horrors of the Sepoy Mutiny of 1857, and the Government of India had passed from the Honourable Company to the British Crown. Victoria was now "Empress of India." It is an interesting coincidence that Rabindranath Tagore was born that very same year, in 1861. While Tagore dreamt of an India "where the mind is without fear and the head is held high," the motto of the Indian Police is "Fear is the Key."

Let us fear them not - if we want to be Free.

In this post, I will relate some anecdotes. The first of this is especially for the Free Press, because these events occurred on Bahadur Shah Zafar Marg, the Fleet Street of Nude Elly. I was then working with The Economic Times, and my offices were in Times House. One afternoon, Professor Christopher Lingle came calling - and I invited him out for lunch. There was an Udipi restaurant nearby. The alternative was the vast array of "street food" on the opposite side of the road. Cris is adventurous, and he opted for the street food. We ate all kinds of stuff, like the delicious papaya salad one guy makes, and we washed it all down with a nimboo masala soda prepared by a guy whose masala is his own secret formula. The sign on his stall says he has been in operation since god knows when.

A few days later, I bumped into Cris again at the Rajiv Gandhi Institute, where I had gone to attend a seminar. After the seminar was over, I had to rush to office to pen my editorial of the day, and Cris tagged along  with the special purpose of trying out the BSZ Marg street food once again.

But lo and behold! When we arrived we found that every single hawker and vendor had been evicted!

Cris, who is a very widely travelled man,  then made a remark that I have never forgotten. He said:

"The poor people of India are exceptionally honest. In any other country if such things happened, the people would have turned to crime."

That is the moral choice we all face - to survive through moral, voluntary and gainful exchanges in The Market, or to live off plunder and theft.

Continuing on the same theme, my second anecdote is about India's "super-cop" KPS Gill. Around 1999 or thereabouts, Professor Madhu Kishwar raised a big stink about police predation on street-hawkers and vendors, particularly in Nude Elly itself. She even made an excellent - and blood-curling - documentary film on the subject, which I hope, if she is reading this, she will put on YouTube. 

As a columnist and editorial writer with ET, I supported Madhu to the hilt. Finally, she called me for a meeting at the India International Centre. And who should be there but KPS Gill. We briefly discussed the matter of police predation on the poor - and Gill thundered, "You cannot stop it." As if on cue, Renana Jhabwala of the Self-Employed Women's Association (SEWA), whose members include women street vendors from all over India, retorted, "In my lifetime we will stop this." It was quite a sight seeing Renana, a tiny woman, say this to this huge, big super-cop. One can only wonder what "commands" such cops issue to their subordinates. There must be come "corruption of the mind" that makes them, in reality, not super-cops, but super-thieves.

My own horrible experience with the Karnataka cops is well known: arrested repeatedly, harassed, and even an assassination attempt. They serve their political masters. Just as KPS Gill killed thousands of "Sikh terrorists" without trial for Indira Gandhi and her CONgress. The Free Press hailed him as a "hero" then; in particular, Chandan Mitra of The Pioneer.

My concluding anecdote is not about cops, but it is extremely relevant nonetheless. While I was working with ET I had to give up writing in the "white papers" as I used to do while a freelancer. Thanks to Jug Suraiya I finally managed to edge myself onto the ToI edit page - and my monthly thunder began. One such monthly thunder was titled "Predatory State: The Black Hole of Social Science." The article has been preserved here. 

A few days later, I received a phone call from Professor ML Sondhi, a former Indian Foreign Service officer who became a JNU don and was then Chairman of the Indian Council for Social Science Research as a BJP appointee. Sondhi invited me for dinner - at the IIC, of course. I took Parth J Shah along as witness. During the course of the meal, Sondhi made me the following indecent proposal:

How can we co-opt you?

My stern reply: 

"I have studied too much Political Science to allow that to happen."

I am most certainly NOT getting aboard this Pirate Ship of State.

It is my firm belief that this Predatory State must be dismissed in toto, cops and all. And by all I include all their "co-opted" professors.

Let us live in the "natural order" of The Market. As a "Private Law Society." Let us also abolish the corrupt Reserve Bank of India, which funds all this corruption with its fraudulent paper notes. Inflationism must be ended permanently - especially so in a country where millions and millions are so desperately poor. I recommend my column on the Gold Standard, and another on Private Money.

Some people might want to be "conservative." To them I address the following question:

Which Department of our The State would you like to see conserved?

And as for the cops, they are nothing but what Bob Marley called "uniforms of brutality." Gandhi made a fatal error after Chauri Chaura. Let us be a wiser nation today. A wise nation that knows what Freedom really means. And where both order as well as morality come from: which is, The Free Market.

Shubh Laabh to all of you.

[PS: On the "natural order," I recommend my column defining "catallaxy." And on how the world can live happily without police forces tyrannising us, I earnestly recommend Professor Bruce L Benson's The Enterprise of Law: Justice Without The State, of which, I have just learnt, a new edition has appeared.]