For The Inviolability Of Private Property - Worldwide

Let me begin with History - an editorial from an English newspaper, The Morning Post, dated 10 July, 1860. This was brought to my attention by a friend - and it shows clearly how the English mind looked at the concept of Private Property in that Golden Age of Classical Liberalism, the age of Queen Victoria and Gladstone:

Every Englishman is accustomed to pride himself with more than usual complacency upon what is called the sanctity of an English home. No soldier, no policeman, no spy of the Government dare enter it... Unlike the tenant of a foreign domicile, the occupier of an Englsih house, whether it be mansion or cottage, possesses an indisputable title against every kind of aggression upon his threshold. He defies everybody below the Home Secretary [what we in India call Home Minister]; and even he can only violate the traditional security of a man's house under extreme circumstances, and with the prospect of a Parliamentary indemnity. It is with this thoroughly innate feeling of security that every Englishman feels a strong sense of the inviolability of his own house. It is this that converts the moorside cottage into a castle. The moral sanctions of an English home are, in the nineteenth century, what the moat, and the keep, and the drawbridge were in the fourteenth. In the strength of these we lie down to sleep at night, and leave our homes in the day, feeling that the whole neighbourhood would be raised, nay, the whole country, were any attempt made to violate what so many traditions, and such long custom, have rendered sacred.

"Life, Liberty and Property" - this was the mantra of classical liberalism. But the US Declaration of Independence went for a different wording:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty, and the pursuit of happiness.

Never mind the fact that all men are NOT created equal - and that classical liberalism only meant "equality before law." 


But never forget that without the Inviolability of Property there can be no Liberty to Pursue Happiness as one's subjective mind sees it - like cannabliss.


But things are much worse in the USSA today. It is not just that cannabliss farms are being burnt and homes raided by police SWAT teams looking for "drugs" - there is a huge amount of "eminent domain" abuse. Property in the USSA is no longer secure from State predation.


This was brought home to me when I went through Bruce Benson's (edited) new book titled Property Rights: Eminent Domain and Regulatory Takings Re-Examined published in association with The Independent Institute (free download here). It seems the US Supreme Court took a decision in the Kelo vs City of New London case that favoured eminent domain - and this led to a political backlash, and many US States, led by Oregon and Nebraska, passed "measures" to curb the misuse of this power. A conference was later held in which many leading scholars participated - and Professor Benson concludes that the papers presented - all compiled in this book - deliver the verdict that "much more significant limitations on government takings must be imposed."


Of course, not all the scholars are of this view. I found one paper by Steven Eagle of George Mason University' School of Law quite unsatisfactory. He argues that, in the case of assembling parcels of land for urban redevelopment, transaction costs are too high, and eminent domain is therefore justified. He argues for equity participation of owners in the new development. This is what we have tried in India - unsuccessfully.


In reality, transaction costs can be both "good" as well as "bad." If eminent domain was unconstitutional - if property was inviolable - any private developer wanting to assemble a large piece of land for whatever purpose would have to hire property agents as well as lawyers, and these would be "good transaction costs." If eminent domain is allowed, then he would pay off politicians, bureaucrats and policemen - and these would be "bad transaction costs." In the latter case, there would also be a "political backlash" - with further "social costs," like social unrest, demonstrations and the like. This is what we have seen in Mayawati's UP.


What I liked best about Benson's conclusion - that "instability, inefficiency, and inequity are the inevitable result of government planning and regulation" - are his quotes from Mises: like when Mises says that all arguments in favour of government intervention assume that the State is "benevolent and omniscient." Of course, it is no such thing. Politicians and bureaucrats have their own interests. And "knowledge" is fragmented in society. Another quote, from Mises' Omnipotent Government underlined the fact that State personnel HATE and DESPISE private property rights - because it strictly limits their powers. Just as the Gold Standard limits their budgets.


Anyway, whether Proudhon or Marx like it or not - ordinary people in both the USSA as well as India are fighting for the preservation of their properties. In India, Singur and Nandigram brought the Commies down! And their replacement is totally against eminent domain!


It is therefore pleasant for me to conclude with a piece of news from our own Supreme Court that says that these "socialist" dudes have passed a ruling on eminent domain that says "government is guilty of fraud if property acquired for public purposes is given to private firms."


Looks like we might get to inviolability before the USSA does :).


Life, Liberty and Property - that is the mantra. 


When your property is inviolable - when, as the editorial quoted above says, "no soldier, no policeman, no spy of the Government dare enter it," only then will the "pursuit of happiness" be free.


Think about it.

Saint Augustine - On The Predatory State

The other day, I wrote a post on the Pope's speech at the German Parliament, in which he began by quoting St. Augustine - "without justice - what is a State but a band of robbers?" - and then went on to call for a public debate on legal positivism. I had then written: "Without sound money - what is the State but a band of robbers?"


Well, thanks to Christopher Manion on the LewRockwell.com blog, we now have the full text of the passage from St. Augustine's City of God from which the Pope took his quote, and I am placing that passage below for my readers. Note that these words are written by a bishop who was beatified by the Church of Rome:

KINGDOMS WITHOUT JUSTICE ARE BUT ROBBER GANGS

Augustine, City of God, Book IV, Chapter 4.

Justice being taken away, then, what are kingdoms but great robberies? For what are robberies themselves, but little kingdoms? The band itself is made up of men; it is ruled by the authority of a prince, it is knit together by the pact of the confederacy; the booty is divided by the law agreed on. If, by the admittance of abandoned men, this evil increases to such a degree that it holds places, fixes abodes, takes possession of cities, and subdues peoples, it assumes the more plainly the name of a kingdom, because the reality is now manifestly conferred on it, not by the removal of covetousness, but by the addition of impunity. Indeed, that was an apt and true reply which was given to Alexander the Great by a pirate who had been seized. For when that king had asked the man what he meant by keeping hostile possession of the sea, he answered with bold pride, “What thou meanest by seizing the whole earth; but because I do it with a petty ship, I am called a robber, whilst thou who dost it with a great fleet art styled emperor.”

Remember - this saint uses the word "justice," while these robbers use the term "social justice." I hope you all will read the second volume of Hayek's Law, Legislation & Liberty, which is titled "The Mirage of Social Justice." You can buy this book in India here.


And do reflect a long while on the PRECISE MEANING of the word Hayek uses in his TITLE - the word "MIRAGE." Desert travellers are very wary of mirages. They KILL.

We need Economic Freedom - not funny money welfarism - and we need real "natural justice" in a private law society: Property, Contracts and Torts.

And we need to throw out these robbers - because, as God Alone Knows, I need a Decent Smoke!

Further Implications Of Say's Law Of Markets: Part 2

So far, I have shown how Say's Law disproves the Keynesians, the protectionists and those who oppose free immigration, like the trade unionists. Today, let us take the arguments a few steps further, and also counter the points raised by Murali yesterday - "legal and cultural objections" to free immigration.


Let us begin with the example I gave yesterday - of the bhel-puri wallah. As Say's Law reveals, once he sells his stock, he is possessed of the means to demand other stuff on the market, except for bhel-puri, of course, which he will not buy. Thus, the sale of bhel-puri creates the demand for all non-competing goods. Our bhel-puri wallah might buy a mobile phone!


There are two important aspects worth noting at this stage: first, who are his customers; and second, the fact that the bhel-puri wallah is really a "poor" man, a very small businessman, often hounded by the cops. I will examine each aspect in turn. 


First: the customers of the bhel-puri wallah are a diverse bunch of people who produce a diverse bunch of goods and services, which they have successfully sold, and which has given them the means to enjoy some bhel-puri. This shows that widespread diversity - a hugely diverse division of labour - is good for all businessmen, because there are then more and more "non-competing" goods and services on sale. In other words, the more non-competing goods on sale, the better it is for all businessmen, the greater the demand for his own produce. 


Thus, Say's Law of Markets allows us the possibility of restating Adam Smith's dictum: "The division of labour is limited by the size of the market." This could be also put in the following form: "The greater the division of labour, the greater the demand for all goods on the market." Thus, free international trade is good - because then we have the "international division of labour."


Second: We noted that the bhel-puri wallah is a very small businessman. Now, especially in a poor country like India, the bulk of the businessmen are of this variety in our cities and towns - very small businessmen. And they are victims of the police. They are hounded, robbed, and their surpluses go in paying bribes. 


Yet, capitalism is all about Big Companies. And these Big Companies are ALL producing for the "mass market." Modern capitalism is nothing but "mass production for mass consumption." Our bhel-puri wallah bought a mobile phone - and he will spend the rest of his life re-charging it. Another example: 70 percent of all shampoo sold in India comes in little 1 rupee sachets - for the poor. This has enormous implications for policy.


This shows that the bulk of demand comes from lesser off people - and, if we want prosperity, every effort must be made to ensure that these people are able to sell whatever goods and services they wish to sell.

There must be economic freedom!

And State Predation on these people must end. This is a very different approach from Keynesian "funny money" welfarism of the kind chacha manmohan s gandhi has instituted, copying the West (where it has failed most spectacularly). 


Thus, either we institute Liberty - by which we will become the world's fastest growing market for mobile phones and other gizmos; or we continue with the charade of a Predatory State pretending to be a Welfare State: free rice for all bullshit.


Murali pointed out that westerners are opposed to "illegal immigration." But what does True Law state on Private Property. Does the US Immigration Department own the United States of America? Or is there, indeed, a "patchwork" of private property? In which case, each private property owner has the full right to decide who should enter his area. If I rent a room in a US hotel, US Immigration should not be able to disallow me entry.


As far as "cultural" objections to free immigration are concerned, these are "tribal mindsets" at work - not the sort of "rugged individualism" capitalism is all about. In any case, they make zero economic sense. Immigrants from different cultures are good for a country precisely because they make the division of labour more and more diverse. In Pondicherry, for example, I met a Frenchman who has been living there for 40 years, running three French restaurants. Such immigration is for bidden in Goa. And in Pondicherry of the old days, there were lots of Vietnamese running their own restaurants - and the city is poorer because they have upped and left. Mexicans in the US have popularised their cuisine. 


There is much people of diverse cultures can successfully sell that is "non-competitive" - like handicrafts and jewellery. Would the USA be a better place with just European food, burger joints and the like? And have you ever tried Vietnamese nouc mam sauce? Isn't Britain better off with all the Indian restaurants? And I did find a Vietnamese restaurant in London! Give me a "cosmopolitan" city any day. And do note that all these diverse restaurants ADD to overall demand - unlike Keynesian funny money.


We in India should therefore consider ourselves fortunate that none of our cities are homogeneous. They are all true "catallaxies." Catallaxies, which are "open trading arenas" - open to strangers, that is - are the "key to an Open Society," something I discussed in a column once. We can either have catallaxies and open societies - based on rugged individualism - or we can have "closed communities." 


Say's Law, as I discussed yesterday, makes a strong case for rugged individualism. Our heterogeneous society is best placed to make such a world, and such an Open Society, happen.


(This series on Say's Law is continued here.)

Only Liberty And Property, Dudes

I found a strange article - actually a sort of book review - in Mint the other day, with the strange title:

More literacy + More per capita income= More democracy

And the sub-title read:

Whether education promotes democracy or the causality is the other way around, has been the subject of a heated debate, with some economists saying that institutions are the prime engine of growth, while others view human capital as the root cause of economic development

And, at the bottom, was the author, 

Manas Chakravarty's, conclusion:

Developing countries in East Asia, for instance, slowly became more democratic as they became richer. That could hold true for China as well. And for India, the success of the Sarva Shiksha Abhiyan and the concomitant higher levels of literacy, together with higher per capita income, will lead to a more meaningful participation in our democracy.

Nothing could be further from the truth.

Note that the author never mentions the sweet word "Liberty." Nor that other sweet word "Property." We have neither - but we have "democracy." It is democratic legislation that banned 70,000 dancing girls in Bombay - and put some 5,00,000 musicians, bartenders, waiters, bouncers and cooks out of work. It is subordinate legislation that does not permit anyone to open a simple beer bar in Nude Elly. 


Yet, we are told we have The Vote. But you cannot eat The Vote; nor can you feed it to your family. Liberty is what you need - not The Vote.


And as for State Education: There are lots of people who could survive very well without formal education - like dancing girls and musicians.


There are lots of people who know something valuable that no formal education can teach them - like the tribals who "know" how to distil mahua from a jungle flower of the same name. They need Liberty.


Democracy is "the god that failed" - and this is clear when we look at Europe and the USSA today. With a "time preference" of just five years, democratic rulers "loot and scoot." Lord Keynes has given them the ability to do so even better. And their "education" (and their "intellectuals") have just endorsed Keynesian and socialist myths. 


If you read Hoppe's book, you will find a clear demonstration of the fact that "traditional monarchies" were better than democracy - because then, the ruler was "under the law," the people had liberty as well as property, and the ruler's time horizon was limitless, because his son would take over after he died, and so he had the desire to keep on increasing the capital value of his State. 


Under democracy, all we have, internationally, is "capital consumption" - which is the road to "de-civilisation." Just wait a few months, and you will realise how The Vote has destroyed the world. Especially "western civilisation." 


Destroyed.


Apart from Liberty, people need the inviolable right to Property - because this unlocks the "mystery of capital." As Hernando de Soto has shown, through field  studies all over the Third World, from Bangladesh to Egypt, poor people own property in these "poor nations" - property worth trillions - but possess no "titles." This bars them from Capitalism. They remain poor - forever. They live in shantytowns.


The sort of book that Manas Chakravarty has reviewed for his column is a good example of the kind of "empirical research" the subject of Economics does NOT need. There is no theoretical proposition in this subject that can be either established or proved by such research. The theories of Economics are best thought through by the economist in an armchair - and then used to confirm reality in the outside world. 


The Science of Economics consists of "looking out from within the consciousness." The importance of Liberty and Property are embedded within our consciousness. 


It is tragic that a columnist who purports to talk "Simply Economics" loses sight of his objective, gets entangled in pointless "empirical research," and then arrives at conclusions that support the ambitions of our Predatory State. 


So I go beyond what I said the other day:

Our poor people need Liberty and Property - and Nothing Else. 

They do NOT need Welfare.

They do NOT need Miseducation.

They do NOT need The Vote.

PS: The picture above is of John Locke, who wrote, in 1691, "where there is no Property, there is no Justice."

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 God That Failed: Take #2

Democracy is also a form of worship. 

It is the worship of Jackals by Jackasses.

—H. L. Mencken

Democracy has been the recipient of many an abuse - perhaps none greater than PJ O'Rourke's Parliament of Whores, though that is an insult to whores, who, unlike parliaments, do not fuck you by force.

Today, this very same parliament has been heaped with abuse in this LRC post by Laurence Vance titled "The US Congress Contains the Biggest Bunch of Buffoons, Idiots and Morons in the World." 

The subject matter pertains to Google, because of whom we all enjoy so many free facilities, and who are now  being accused of being "monopolistic and violating anti-trust laws." Well, if you download Google Chrome, before installation you have a choice of three search engines. Monopolistic?

Anyway, which libertarian believes in busting monopolies by anti-trust legislation and competition commissions? What did MRTPC ever achieve in socialist India? And, as I discussed yesterday, it is State-owned Air India and BSNL that offer the private sector "unfair competition."

What is required is openness to entry by new players - which is how Microsoft's Windows Explorer got busted by Mozilla and Google Chrome.

Yes. The US Congress is nuts. And, incidentally, they are very corrupt as well.

Let us turn our attention to UK. Here is how a post from Andy Duncan's "The God That Failed" blog begins:

It would seem that as we enter the ‘idiot’ season, in which various British government halfwits (a.k.a. politicians) have pontificated on the need for more ‘stimulus’ – because previous attempts at ‘stimulus’ have been so successful – this country is standing at the edge of an abyss of debt collapse.

When will we learn that those who rule us are morons? 

Do read my comment at the bottom - about a moron I saw on BBC, which is "State-owned broadcasting." Like Pravda. Doordarshan. All India Radio. Ha ha. Poor Brits. "Thought Control" writ large.


And there is worse: The very next post says "UK QE to resume in October." Well, Keynes was English, so whaddya expect? Morons.



And now, let us turn to our morons, "socialist planners." Our Great Leader, the socialist-welfarist-democrat, chacha manmohan s gandhi, is concurrently Chairman of the Planning Commission, and this Very Important Department of our The State has got its knickers in a twist over "measuring poverty." Is 26 rupees a day poor, or is 32 rupees? And what about inflation, etc.? 


The fuss is all about welfare - the "right to food," by which this The State will mail parcels of uncooked grain to the well-measured poor, while street vendors who sell cheap cooked food are preyed upon by both policemen as well as municipal functionaries.

The Predatory State pretending to be a Welfare State.

I suggest these people look at the Corruption Perceptions Index of Transparency International. India is ranked 87/178 with Albania, Jamaica, and Liberia, with a score of 3.3 out of 10!


And I suggest my readers read the World Economic Freedom Index, from the Heritage Foundation, which finds India "mostly unfree," ranked 124/179, below Pakistan, Malawi, Tonga and Benin!


Also, read this analysis of the Economic Freedom Index from the Mises Institute. They are also offering an online course on the importance of Economic Freedom.


Democracy: The God That Failed; The Economics and Politics of Monarchy, Democracy, and Natural Order by Hans-Hermann Hoppe is a MUST READ. Buy it in India here.


Unfortunately, Hoppe does not write much about the "Natural Order": for that, read my eponymously titled book available as a free download on the right-hand bar.

Natural Liberty

Natural Order

Natural Justice

Our The State Is Usurping The Role Of Parents

As if hell-bent on proving that legislation is NOT Law, the Maharashtra government has raised the legal age for drinking alcohol from 21 to 25. This has astonished top Bollywood actors. Amitabh Bachhan tweeted:

On drinking age limit increase to 25! Err... old and mature enough to vote for the country, or join army and fight for the nation... but not old and mature enough to be told when you are allowed to drink ??? Strange?

Actress Sonam Kapoor made a similar reaction on Tweeter, saying:

If you can vote, get married, have children, drive a car ... why on earth can't you drink? It's ridiculous, we are not living in the dark ages.

The latest is that the actor Imran Khan is filing an appeal against this order in court.


The key point to note is: What about PARENTS? Don't they have a role to play here - a role that our fucked-up The State is usurping? 


In this connection, I have a story to tell, of the time when, some ten years or more ago, I took my 15-year old son to Pecos, the Hard Rock Pub in Bangalore, for a beer - and they refused to serve him! I pleaded long and hard against this injustice, saying I was the father - but to no avail. Because, as the manager put it, if an Inspector came, he would be in deep trouble. Inspector Raj! 


Anyway, regretfully, my son and I came out of Pecos, where the music was great - and loud - and stood mournfully on the street outside. Then, my son said: "Cheer up, Dad, I know a place they will serve us. Follow me."


A few minutes later, we were outside another Bangalore pub where, seeing my boy, the doorman raised a salute and said, "Hi Gaurav. Welcome!"  We went in and enjoyed a few beers.


The lesson is that all this is ARBITRARY. 


And there is nothing worse for a nation than ARBITRARY LAW.


Further, this causes CORRUPTION. In this case, it is evident that the establishment that pays the Inspector off does business-as-usual, whereas the establishment that does not gets regularly inspected, so its management must harass customers.



What is "adulthood," anyway?


Between 1800 and 1850, the Honourable East India Company ran a Haileybury College for their recruits to the Civil Service, who were all aged between 13 and 15 - and their diet was bread, cheese and beer all day (fish for breakfast)!

What is the "correct" age of adulthood? Once upon a time, in India, it was considered the attainment of puberty. Those days, you were immediately married.


Today, it is a lot of NONSENSE - as the tweets from the movie stars above indicate. One age for driving, another for voting, another for joining the Army (where they give you cheap rum to drink), another for marriage - and yet another for drinking.


NONSENSE!


Congratulations to Imran Khan for taking our The State to court.


Tip: The lawyer must read Murray Rothbard's The Ethics of Liberty, which contains much on the rights of children. PDF here.