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.

Students! Rise Against This Tyranny

What is an "adult"? Whereas in older times puberty was considered a sign from Nature confirming adulthood, nowadays, with the curse of Legislation, all is arbitrary. You can drive at 16, you can vote at 18, you cannot marry till 21, and you cannot drink alcohol till 25 - the last, according to the State of Maharashtra.

At the London School of Economics, the Students' Union runs a pub on campus called "The Three Tuns." Even undergraduates are welcome there - and the booze is cheaper than in the market. In India, I have seen many post-graduate institutions - like IIMs - where booze is banned. This is nonsense. Students should rebel against such tyranny. 

The news report on the new Legislation in Maharashtra ends with these words:

Fine would be imposed for under-age drinking and there is a provision of more dry days every year. No liquor shop will be allowed within one kilometre of educational and social institutions, government offices, religious places and highways. There is also a limit on bottles allowed per individual and a liquor shop or bar may be shut down if 25 per cent of the residents of a municipal ward demand its closure.

This is Total Tyranny - designed to ensure that the police and excise officialdom prey on the alcohol trade, as do local "residents' associations" - thereby politicising everything. The cops will also prey on young people who might want to enjoy a drink. And what will happen to tourists who desire a beer on a hot "dry day"? That is why there are no dry days in Goa. I know one such tourist who came to Calcutta on a dry day - and took the next flight out!

What, indeed, is an "adult"? Murray Rothbard answered the question is his The Ethics of Liberty - a book all students, especially of Law, ought to carefully study (pdf here). Rothbard begins by asserting that all legislation on the matter must necessarily be arbitrary, while Nature gives its signal - puberty - most clearly and without bias. He adds that every child has the right to run away from home - and if he sets himself up in life, as a self-supporting individual, the Law ought to treat him as an adult. By that standard, while students are usually dependent on parents till very late in life, the "working children" of our streets ought to be considered as adults and allowed the free liberty that all adults enjoy.

The "ethics of liberty" do not inform this abominable piece of Legislation that has emerged from the Maharashtra Assembly. It ought to be struck down by the courts as not only arbitrary, but also as one that tramples on the rights of all young voters - who must be presumed adults, which is why the vote is entrusted to them.

It was Bastiat, of course, who said it best - of "democrats" who praise the "wisdom of the voter" before the elections; but after they are elected, they think the voter is a numskull and enact all manner of legislation to "protect the voter from himself." In reality, if the voter is so dumb that he cannot handle his drink, then he is unfit to vote, too. Thus, such Legislation takes away the legitimacy of those elected, for they have been voted into office by persons who cannot handle Freedom.

This nasty alcohol policy of the Maharashtra State is anti-student. It is anti-youth. The youth must protest.

And may The Force be with them. 

Here's to Students' Union Pubs on all campuses!

Sick, Sicker, Sickest

Air India is "sick" in the sense that it has accumulated losses of Rs. 5000 crore (50 billion). But the politicians who run it want more and more money put in - and this money is to come from our The State, which is itself in serious deficit. Sick State running sick companies. Our "common loss." 

Praful Patel of the NCP, the minister for civil aviation on whom I have a previous post, has been promoted in the cabinet reshuffle of yesterday. He is now minister for heavy industries and public enterprises - and, in his first public statement on taking charge, has insisted that "Air India should not be declared sick." He wants our The State to pour more cash into Air India. He thinks it can be restored to good financial health - by the new minister in charge of civil aviation. Praful Patel will now have 100 or so other "sick" public enterprises to run - and we can be sure that he will demand bailouts from the Treasury for them all. This is what the CONgress calls "socialism": politicians and bureaucrats running businesses. Since the very idea is sick, all these businesses are sick.

Vayalar Ravi, a CONgress trade unionist from Kerala, is the new minister for civil aviation. In this interview, he says Air India will be his "top priority," and that he wants to bring back its "lost glory." Actually, this short-lived glory of Air India occurred because of private management - because JRD Tata, a "pioneer aviator" himself, looked after its affairs personally. Under State ownership, ministers come and go, each seeking short-term personal gains. Just as the nationalisation of Air India was "legal plunder," State ownership and management of the airline is more and more plunder. Sick idea. Sick company. Sick ministers.

Air India - and all the other PSUs - are neither capitalism nor socialism; they are "cronyism." Every single person involved in them, from minister to peon, is a crony of The State. They are not allies in business; they are allies in plunder. They give credence to Murray Rothbard's dictum: "The State is a gang of thieves writ large." They make me sick.

I watched Vayalar Ravi on television last night, being interviewed by Vikram Chandra of NDTV. As the minister went on and on mouthing socialist inanities, Chandra went on and on expressing complete agreement. Indeed, Chandra addressed the minister as "Sir" - that too, at least fifteen times in two minutes. His prime time show is called "The Big Fight." But when it comes to ministers, he doesn't fight at all. This "crony journalism" is what I find sicker. Our media is full of it.

And now - the sickest: the "crony academic."

Pratap Bhanu Mehta is a former professor of philosophy, law and governance at Jawaharlal Nehru University. Now, he chairs The Centre for Policy Research, a State-owned so-called "think-tank." He is a long-time columnist of The Indian Express - and his column today is on "food security." He writes, in his opening paragraph:

It is a scandal that after two decades of high growth, India still does not make adequate nutrition available to large sections of the population. There is simply no financial, technological or production related reason why this should be so. 

So, just as Praful Patel and Vayalar Ravi think that there is an inexhaustible fund they can tap to fund all their socialist schemes, Mehta too sees no financial constraints to obtaining "food security." We can safely assume that he is a Keynesian funny money man - and he must be so, because Wikipedia says he was "educated" at Oxford and Princeton - in philosophy, politics and economics. Ben Bernanke is also from Princeton, a long time chairman of their Economics department (see my old post on his academic credentials). Paul Krugman, the Keynesian Nobel laureate in Economics, is from Princeton too.

Mehta, the Keynesian funny money man who recognises no financial constraints facing The State, thus makes the case for "universalisation" of his food security scheme. He also looks favourably at the possibility of "cash transfers" - all the cash being more funny money, of course. So, when faced with the inevitable consequence of inflation, he displays the real motive behind this column: the desire to sow the seeds of confusion in public opinion, to poison the air. He writes:

The arguments over the causes of inflation — supply bottlenecks, currency policy, global trends, monetary policy, weather, hoarding, speculative investment, deficit spending — no longer serve analytical clarity. They have become contrivances to avoid the core issue: there is a serious governance deficit that will stymie both public and private provisioning.

Mehta's column is titled "A platter of blather." The above is nothing but blather. Pure blather. Every Keynesian knows that money supply increases cause a rise in all prices: the "quantity theory of money." This is the basis of all their "monetary policy."

However, midway through his piece, Mehta, former professor of philosophy, law and governance at JNU, asks two questions:

What the hell CAN government do? Why does it even exist?

 Well, the government exists because of the Constitution. 

And, since government is nothing but force - compulsion, coercion and legislation employed by tax-collectors, cops, judges, jailors and executioners - to all sensible people it makes eminent sense to direct this force very carefully. The bigger the role of The State, the greater the use of force. Thus, to keep Air India and all the loss-making PSUs afloat, force will be applied: taxation. So too with Mehta's "universal food security." Thus, it is our socialist Constitution that is the root of all evil. It has unleashed upon us an "unlimited State." Unlimited taxation, unlimited borrowing, unlimited funny money, unlimited interventionism. That is, unlimited tyranny. Unlimited plunder.

Mehta finds the absence of food security a "scandal." To me, on the other hand, our unsafe streets on which 200,000 pedestrians and cyclists are killed every year is the real "insecurity scandal." I find it a scandal that the Supreme Court has said the "criminal justice system is not working." Of course, all this "infusion" of public finds into loss-making PSUs like Air India is also a scandal - as is all the funny money being printed to fund all this shit.

"What the hell CAN government do?" asks Mehta. Well, one thing it can do very well is plunder.

So let us think of a Constitution of India framed by people like Professor Pratap Bhanu Mehta. It will surely proceed like this:

WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN, SOCIALIST, SECULAR, DEMOCRATIC REPUBLIC and to secure to all its citizens:

FOOD - the government is to ensure universal provision of food,

PROFIT - the government is to run all businesses,

WORK - the government is to employ us all,

EDUCATION - the government is to cultivate our minds,

MONEY - the government is to produce all the money our society needs,

CREDIT - the government is to provide all of us credit, and that too, at very low rates of interest,

HOUSING - the government will ensure all of us are well housed,

SOBRIETY - the government is to ensure none are high,

TIMELY REST - the government is to ensure all establishments close at a decent hour, thereby playing Wee Willie Winkie to us all,

UNSEXINESS - the government is to prohibit anything and everything that makes us horny,

etc. etc....

IN OUR CONSTITUENT ASSEMBLY this twenty first day of January, 2011, do HEREBY ADOPT, ENACT AND GIVE TO OURSELVES THIS CONSTITUTION.

Sounds crazy? Or does it sound sick?

Then, what the fuck is the reason why governments are created?

One answer: To secure our lives, our properties, and to thereby ensure our LIBERTY.

And it is precisely these that are not happening. We are dying on the streets, our properties are not secure, and we possess no liberty at all.

Think about it.

Democracy Is Done For

Hans-Hermann Hoppe's Democracy: The God that Failed is perhaps new, but Ludwig von Mises predicted this god's demise long back, when he wrote thus, in 1940, in Bureaucracy:

Representative democracy cannot subsist if a great part of the voters are on the government pay roll. If the members of parliament no longer consider themselves mandatories of the taxpayers but deputies of those receiving salaries, wages, subsidies, doles, and other benefits from the treasury, democracy is done for.

The question to ask is: Who or what do you "represent"? In India, it is undoubtedly true that our Great Leader, cha(m)cha manmohan s gandhi, represents "those receiving salaries, wages, subsidies, doles, and other benefits from the treasury" - and these include Air India. As far as the taxpayers are concerned, chacha's only desire is to screw them further - education tax, VAT, GST, and, let us never forget, the "inflation tax." Of course, he himself has never been "elected by the people." He lost the Lok Sabha elections from South Delhi - and entered Parliament by the back door (Rajya Sabha: "indirect election") from Assam, of all places for a Sardar. He represents Sonia Gandhi alright - but does she "represent" Rae Bareilly? Or is this some kind of "pocket borough"? No one represents the taxpayers - although the rallying cry of democracy used to be "no taxation without representation." 

In India, no one represents any city or town either. I was mortified to read that Jairam Ramesh, Central State minister for the environment, has ordered the demolition of the Adarsh building in Mumbai - while he himself is a Rajya Sabha MP from Andhra Pradesh. Who represents Mumbai? Certainly not Sharad Pawar, either. What is the point in electing MPs and sending them to far away Nude Elly to represent "the poor"? And that too, falsely.

Of course, the poor are being cheated. As Mises said, what Lord Keynes was really doing was "cheating the workers." But it is Keynesian funny money that has really destroyed democracy, for it has provided the means necessary to fund all the giveaways of modern, pseudo-democratic states. With unlimited funny money, those in charge can buy all the support they need -  not only in Parliament, but also in academia, and in the media. Crony capitalists are surely less harmful than crony academics and journalists.

Now for the good news: All this funny money will end in the near future. I have just read a very interesting confidential report prepared by a prestigious financial advisory that says, among other things, that "the Euro is finished." And Europe is where the "welfare state" comes from. The report says Germany is headed for a "constitutional crisis." The report says lots of things about the US dollar and Ben Bernanke - none of it very new to those who regularly read LewRockwell.com. At least the USSA has Ron Paul - and I wish that man well. I read that inflation is raging in China - thanks to their great big "stimulus" in 2008.

What the report predicts is that there will soon be a huge political backlash against funny money. I pray for that day to come soon. Limited government must mean limited by the Budget - that is, tax revenues. No more funny money. No more borrowing. No more "inflation tax." No more "buying support." Represent the taxpayer faithfully - or fuck off!

The report I referred to berates all the crony academics who are all invariably Keynesian - like our chacha. After reading the report, it struck me that "higher education" is what has really destroyed minds - all over the world. Consider the Englishman of medieval times, lamenting the inevitability of "death and taxes." Wouldn't this fellow laugh out loud if someone told him that his sovereign, while spending his revenue, was providing a "boost to aggregate demand"? Wouldn't this fellow think it inconceivable that, with his taxes, his sovereign would "help the poor"? 

One of the greatest bestsellers of Victorian England was Samuel Smiles' Self-Help. Translated into Japanese in the 1860s, it fired the Japs in their catch-up with the West. In Victorian England, this book was on every bookshelf - right next to the Holy Bible. Samuel Smiles was a "moralist" - and the book tells the story of innumerable great men of humble origin who made in big in every conceivable walk of life. Allow me to quote the opening paragraphs:

Heaven helps those who help themselves is a well-tried maxim, embodying in a small compass the results of vast human experience. The spirit of self-help is the root of all genuine growth in the individual; and, exhibited in the lives of many, it constitutes the true source of national vigour and strength. Help from without is often enfeebling in its effects, but help from within invariably invigorates. Whatever is done for men or classes, to a certain extent takes away the stimulus and necessity of doing for themselves; and where men are subjected to over-guidance and over-government, the inevitable tendency is to render them comparatively helpless.

Even the best institutions can give a man no active help. Perhaps the most they can do is to leave him free to develop himself and improve his individual condition. But in all times men have been prone to believe that their happiness and well-being were to be secured by means of institutions rather than by their own conduct. Hence the value of legislation as an agent in human advancement has usually been much overestimated. Moreover, it is everyday becoming more clearly understood that the function of Government is negative and restrictive rather than positive and active; being resolvable principally into protection – protection of life, liberty and property. Laws, wisely administered, will secure men in the enjoyment of the fruits of their labour, whether of mind or body, at a comparatively small personal sacrifice; but no laws, however stringent, can make the idle industrious, the thriftless provident, or the drunken sober. Such reforms can only be effected by means of individual actions, economy, and self-denial; by better habits, rather than by greater rights.

Poor immigrants fleeing religious persecution in Europe built America - because of Liberty, and self-help. The socialist "New Deal" came only in 1933. There is no nation that has been built through doles from the State. Rather, many nations have been destroyed - like Sweden. The spirit of America has been destroyed by the Welfare-Warfare State of the USSA - and its paper dollar.

Interestingly, for Austrian school economists, the word "dollar" comes from a Hapsburg gold coin, the Reichsthaler - called "thaler" for short - which became the most popular coin in old America!

British India had no welfare at all - except during famines. Below is a quote from Charles Metcalfe - to whom we owe the institution of the Free Press - that says a great deal about these aliens who ruled our land so well:

Our dominion in India is by conquest; it is naturally disgusting to the inhabitants…. It is our positive duty to render them justice, to respect and protect their rights, and to study their happiness. By the performance of this duty, we may allay and keep dormant their innate disaffection; but the expectation of purchasing their cordial attachment by gratuitous alienations of public revenue would be a vain delusion.

What our socialist-democrats with all their funny money are doing is nothing but "purchasing cordial attachment by gratuitous alienations of public revenue." As far as the "positive duty to render them justice, to respect and protect their rights, and to study their happiness" they couldn't care less. Ganja, charas and opium were not illegal in British India - nor was the nautch girl. There were no parliaments passing legislation upon legislation - and none of the "delegated totalitarianism" of today. Rather, there was "happiness" - and Justice.

And then the CONgress took over. It all began in 1905, when Lord Curzon enacted the Partition of Bengal. Suddenly, the "majoritarian principle" - which is the principle of democracy - took over, with horrendous effects that continue till today. Nirad C Chaudhuri was a young man then, and he describes the ensuing chaos well in his autobiography:

Overhead there appeared to be, coinciding with the sky, an immutable sphere of justice and order, brooding sleeplessly over what was happening below. But that feeling vanished at one stroke with the coming of the nationalist agitation in 1905.

Note the word "agitation." Democratic "politics" in India even now is all about "agitation" - like Telengana. Again, CONgressmen are agitating for their own State. And the BJP-Shiv Sena are calling for a Mahasangarsh in Mumbai right now.

"Democracy is done for," as Mises said in 1940. Mises died in 1973 - the year I finished school. In 1974, I entered Delhi University to study Economics - and crony academics like chacha manmohan made sure we never read anything written by him. In any case, Mises was totally ignored in America too - as was Murray Rothbard, the most illustrious student from his New York seminars. The crony academics wanted to conceal the truth - and teach The Lie.

Yet, today, even without our willing it, it is the truth that is impossible to resist. The powerful politicians and bureaucrats, the central bankers and all the rest, might be possessed of State authority - but they cannot escape Economic Reality. The era of funny money will be over someday soon. And I wonder what will happen to Democracy.

Shah Rukh Khan... And The Truth

Shah Rukh Khan made a self-effacing statement the other day, peculiar for a movie star. He said:

I'm just a capitalist, happy-go-lucky, dumb star!

It upsets me when people who have made their millions in The Market by satisfying customers in open and free competition call themselves "dumb." Shah Rukh Khan has much to be proud of. But what I really want to focus on is the other word he used to describe himself: "capitalist."

From the Wikipedia entry on him, it is clear that Shah Rukh Khan began his career not as a capitalist, but as a "worker." A capitalist is one who invests his own Capital in a business venture. Shah Rukh Khan did nothing like that. On the contrary, for quite a long time, he was just an actor available for hire by capitalists who funded productions on television. Later, he shifted to films.

Today, Shah Rukh Khan is indeed a capitalist. He has produced 9 films himself, and owns a production company. How did the worker transform himself into a capitalist?

Well, all that Shah Rukh Khan did is to save a portion of his earnings by refraining from consumption and, thereafter, when a considerable sum had been accumulated, he converted that saving into investment. With his own Capital well-invested in his own enterprise, Shah Rukh Khan the actor-worker became Shah Rukh Khan the capitalist.

The lesson to learn is that each and every one of us could try and do the same. The ranks of the capitalists are not closed, and new capitalists emerge every single day. Anyone who wants to join that number can do so - provided he saves.

Thus, while there are no "class barriers" separating workers from capitalists, savers in modern society face an unrelenting foe - inflation. The deliberate policy of perpetual decline in the value of the currency unit penalises all those who save. Inflation erodes private capital. It makes the transition to capitalist much more difficult for every worker. An auto-rickshaw driver, for example, who rents his vehicle and saves so that one day he can buy one of his own, finds that great day forever eluding his grasp.

Workers of the World - Unite Against Inflation!

Thus, the real enemies of the workers are not capitalists as a "class"; rather, their greatest enemies are the Keynesians. If you study their theories, you will find that they have no place in their scheme of things for savings. They want to keep on boosting "consumption" - and they even advocate printing money (which is the cause of inflation) to do so!

Now, there is nothing bad about consumption per se. We all produce in order to consume. But, since time immemorial, we have been concerned about the morrow - and we have saved. The farmers of ancient times saved some seeds for the next crop. These crazy Keynesians who go about destroying the value of our savings are engaged in "capital consumption." Most Keynesians call themselves "socialist" - in the sense that they believe in the "Welfare State" - but the truth is that their evil ideas only serve to "cheat the workers," as Ludwig von Mises candidly put it. It is because of Keynesians that inflation persists - and workers are condemned to remain workers, unable to ever accumulate the savings necessary to join the ranks of the capitalists. Murray Rothbard put it accurately when he wrote: "The good thing about Marx is that he was not a Keynesian."

Our Great Leader, chacha manmohan s gandhi, is one such Keynesian, socialist, and welfare statist - and a good friend of all our Marxists. For all the poor workers, he has "produced work" - the NREGA. But, along with that work, he has also "produced inflation." Today, since anyone and everyone is shouting himself hoarse about inflation, our great chacha has called for a "high-level meeting" to discuss this. According to this news report, those who attended this meeting are:

Finance minister Pranab Mukherjee, agriculture minister Sharad Pawar, home minister P Chidambaram, cabinet secretary KM Chandrasekhar, Planning Commission deputy chairman Montek Singh Ahluwalia and Chief Economic Advisor to the finance ministry, Kaushik Basu were seen arriving for the meeting.

The report says that the "meeting ended on an inconclusive note." How could they conclude that they themselves are the cause of inflation?

No deliberate policy of a government can continue unless backed by public opinion. In India, with a State monopoly over higher education, Keynesianism has been instilled into every student's mind. They call it "macroeconomics." It is nonsense. A pack of lies.

Which brings me to the subject of Truth. The motto of our The State is "satyameva jayate" - which means "truth always triumphs." The harsh reality is that, with State education, it is The Lie that has won the day.

I have therefore always preferred The Times of India as my vehicle, whose motto reads "Let Truth Prevail" - but it seems they have deleted all my columns (well over 50 by now) from their website! I wrote one in 2007 on inflation titled "Funny Money" - but it has disappeared. Truth has not prevailed. All that prevails is The Lie.

Yet, it is not that the truth stops working. The Great Lie may be in our textbooks - but inflation is a fact of reality. It is indeed the truth.

If you really want to know the truth I suggest you carefully study Ludwig von Mises' Human Action: A Treatise on Economics. It will take you many months, but it will be well worth it. The 1000-odd pages of this massive tome end with these ringing words:

It rests with men whether they will make proper use of the rich treasure with which this knowledge [of Economics] provides them or whether they will leave it unused. But if they fail to take best advantage of it and disregard its teachings and warnings, they will not annul Economics; they will stamp out society and the human race.

You can obtain a free PDF download of Human Action here.

This post is continued here.

Crisis, Hero, Zero - And Journalism

The lead editorial in Mint today, titled "A crisis of legitimacy," is a historic document, for this is the first time a mainstream business daily has opined that Chacha Manmohan S Gandhi has flopped. The first para says:

A grave crisis of legitimacy afflicts the United Progressive Alliance (UPA) government. This is due, in very large part, to the absence of leadership in government and in the political system. There are no signs of this abating anytime soon.

And the edit concludes thus:

... the prime minister’s first and last line of defence has been his personal honesty and integrity. No one disputes that. But after five-and-a-half years at the helm of India, that shining banner has frayed into a tattered standard. The question is not about him or his honesty but what his ministers do; what do his partymen do; the inability of his government to carry out key, nay the very basic, tasks of governance. In this and much else, Manmohan Singh, in spite of his lofty credentials and even higher expectations, has been found wanting. In calmer moments, he will do well to reflect on what needs to be done to stem the rot that not only threatens his government but also the present and future of the country.

This crisis of legitimacy has many dimensions - political, economic, and legal. In politics, it is about certain legitimising concepts - like "democracy" and "socialism." In economics, it is about markets - as against "welfare" and PSUs. And in law, it is about Property - and legislation.

At another level, the crisis is about "organisations" - like the "political party," the bureaucracy, the armed forces, the State Police and the State judiciary.

What is most heartening is that some editors are realising that a crisis is underway. There are no simple and easy solutions to such a crisis - no "magic bullet" - but it might be comforting to note that this crisis is near universal: it afflicts the USSA and the EU too, where the very same legitimising concepts in politics, economics as well as law are also battling it out. So it is a long haul that lies ahead. More and more journalists must uphold Truth, Liberty, Property and Sound Money.

In order to inspire such journalists, I would like to introduce them today to the works of a great hero of 20th century economic journalism - Henry Hazlitt (1894-1993). His Economics in One Lesson (inspired by Bastiat, another great journalist) is a must-read, as is his The Foundations of Morality. Hazlitt became an economist under the personal influence of Ludwig von Mises - and it not unsurprising that he wrote quite a few critiques of Keynesianism that need to be resurrected and popularised today. He also wrote against "welfare" - and how Third World poverty cannot be cured by "foreign aid." For 20 years, his column in Newsweek upheld laissez faire capitalism and the gold standard; and railed against the machinations of central bankers, the IMF and the World Bank. Murray Rothbard honoured him on his 80th birthday with this tribute, in which he points out why Hazlitt remained ignored - and what follows is the first of five points:

In the first place, he lacks both a PhD and an academic post – those twin passports to intellectual and academic respectability. For a scholar to discuss or footnote a book by Hazlitt – no matter how important or scholarly – would be to lose caste and brownie points in the status-anxious world of academe.

Note that the Big Flop we started off discussing, our Chacha, has a PhD and has held academic positions - and that he has many friends in academia worldwide. It is precisely for this reason that I say we need many more self-taught journalists like Hazlitt - not only to take on academia, but also to enlighten the reading public.

To reinforce the fact that the university academics of our time are very much "part of the problem," let us turn the discussion away from the great hero Hazlitt to the Great Zero - Milton Friedman of the Chicago School, who won the Nobel prize in 1976. To most people, Friedman is considered a "free market economist" - but the fact remains that he was always a "court libertarian," one who helped the State in many ways, and who is also responsible personally for the "positivism" that characterises the methodology of mainstream Economics.

For example, it was Friedman who came up with the idea of a "withholding tax" (what we in India call "tax deducted at source"). It was also Friedman who conceived of "school vouchers" - a statist idea that does not question the role of State in education, and a vast budget for the same. Friedman and his Chicagoites are all believers in fiat paper money, in "stabilisation," in the notion that Economics can be divided into "micro" and "macro" - and that the State has a role to play in the "macro" domain. Friedman championed welfare as an "automatic right" - in the form of a "negative income tax." None of these ideas are even remotely "libertarian."

Murray Rothbard, whose tribute to Henry Hazlitt I have cited above, also penned a powerful critique of Milton Friedman and his Chicago School. This valuable document is available here. Rothbard concludes thus:

The libertarian movement has coasted far too long on the intellectually lazy path of failing to make distinctions, or failing to discriminate, of failing to make a rigorous search to distinguish truth from error in the views of those who claim to be its members or allies. It is almost as if any passing joker who mumbles a few words about "freedom" is automatically clasped to our bosom as a member of the one, big, libertarian family. As our movement grows in influence, we can no longer afford the luxury of this intellectual sloth. It is high time to identify Milton Friedman for what he really is. It is high time to call a spade a spade, and a statist a statist.

The great "crisis of legitimacy" that is currently underway is in many ways a crisis for academia - that is, "mainstream economics." And this includes the Chicago School. The only challengers to these views are the Austrians - and Hazlitt was very much an Austrian. Hazlitt taught himself - and wrote. That is what more and more economic journalists need to do.

Wikileaks, Radialeaks, And Journalism

Before discussing Wikileaks, let's be clear about one thing - our The State spies on us. Here is a news report on the central State's admission that 6000 phones and 600 email IDs are being "intercepted." These are authorised by the central State's home secretary - and the report says he religiously spends 30 minutes every day signing such authorisations, so the list is growing daily. The report adds that every state of this (supposed) federation does the same.

Yet, chaos, confusion and corruption rule the land. Because you cannot govern with "information" alone. You also need sound "knowledge" - which is theoretical and philosophical. It is here that our socialists have failed, most miserably. This is "knowledge failure."

This is also true of the USSA. The CIA has dossiers on anyone and everyone - but "intelligence" on WMDs in Iraq was wrong. The USSA is getting screwed in both Iraq as well as Afghanistan - and, since the US dollar is heading for collapse, this is further proof of the fact that government must be based on sound theoretical principles. If these are faulty, no "intelligence" - which is mere "information" - can help.

Let us now turn to Wikileaks. I think it is a very good thing that some brave private citizens are spying on The State - particularly the US State. This is precisely the sort of Spy vs. Spy we all needed. In my book, no State should possess deep, dark secrets - and all private people should be possessed of their privacy. Politics and government must be open and transparent. We must proceed in this direction. I hope Julian Assange and Wikileaks accomplish this. May they inspire many more to be like them. In India, Tehelka first made waves with its "sting operations" on politicians. Such efforts need to be multiplied.

Let us not forget that House of Commons debates were once kept secret. It was the great John Wilkes who made their publication mandatory (1771).

The matter of the Niira Radia tapes is somewhat different - for in this case the conversations were recorded and leaked by the Income Tax Department. However, the net result - a shake up in journalism and an expose of corporate lobbying - are entirely welcome. Ratan Tata has asked for Supreme Court intervention to ensure that recordings of his conversations with his lobbyist are not published on the grounds of "privacy" - but if these conversations pertain to "public affairs" like the appointment of a minister, I think they ought to be made public.

As far as the effect of the Radia tapes on Indian journalism is concerned, I maintain that we need more television channels, more radio stations, more newspapers, magazines and blogs. We need more freedom of the press - so that Competition sorts out the bad apples from the good. It is worrying that many regional language TV channels are party organs. Licensing of TV and radio must end.

NDTV (and the Barkha Dutt show) certainly need competition. In all this political hullabaloo her weekly show discussed reality television last Sunday, and corporate philanthropy last night, thereby ignoring real, "hot" issues, deliberately. I also watched a programme in which her ethics were questioned by other senior journalists - and many of them turned out to be closely associated with the government and its politics. Dilip Padgaonkar is an official "interlocutor" on Kashmir; Sanjay Baru was Chacha Manmohan's press advisor; Swapan Dasgupta is a BJP man. This is proof that there is enough space for truly independent journalism.

So let us be inspired by Julian Assange and Wikipedia. That's the way to go.

Finally, let me share two items I found on LewRockwell.com concerning Wikileaks:

First, a report in the Guardian that covers leaked cables which indicate that both the CIA as well as the US diplomatic corps have been pressurising foreign governments to toe the Washington line on climate change.

Second, a very pertinent quote from Murray Rothbard's The Ethics of Liberty:

In some areas, a radical distinction between private persons and government officials is acknowledged in existing law and opinion. Thus, a private individual’s ‘right to privacy’ or right to keep silent does not and should not apply to government officials, whose records and operations should be open to public knowledge and evaluation. There are two democratic arguments for denying the right to privacy to government officials, which, while not strictly libertarian, are valuable as far as they go: namely (1) that in a democracy, the public can only decide on public issues and vote for public officials if they have complete knowledge of government operations; and (2) that since the taxpayers pay the bill for government, they should have the right to know what government is doing. The libertarian argument would add that, since government is an aggressor organization against the rights and persons of its citizens, then full disclosure of its operations is at least one right that its subjects might wrest from the State, and which they may be able to use to resist or whittle down State power.

Do read The Ethics of Liberty. It is a book every citizen who values Liberty should read, and I especially recommend it to students of Law. You can download a free PDF here.

Crisis In Mainstream Economics - And The Austrians

I was extremely happy to read this article from the Wall Street Journal that discusses, in some depth, the crisis in mainstream Economics that has occurred because of the ongoing crash. At the outset, the nature of this academic crisis - a theoretical / philosophical crisis - is described in these words:

For decades, most economists, including the world's most powerful central bankers, have supposed that people are rational enough, and the working of markets smooth enough, that the whole economy can be reduced to a handful of equations. They assemble the equations into mathematical models that attempt to mimic the behavior of the economy. From Washington to Frankfurt to Tokyo, the models inform crucial decisions about everything from the right level of interest rates to how to regulate banks.

In the wake of a financial crisis and punishing recession that the models failed to capture, a growing number of economists are beginning to question the intellectual foundations on which the models are built.

Unfortunately, the "new ideas" that are discussed are essentially the same old stuff and nonsense, only this time being paraded around using supercomputers. This is one of the new ideas presented:

Create a richly complex, computer-based simulation of the economy like those scientists use to model weather patterns, epidemics and traffic. Given enough computing power, such "agent-based" models can include millions of individual players, who don't have to be rational or agree with one another.

So, if you are a student and enter mainstream Economics, this is the direction in which you will head. It seems "scientific" - but is actually an intellectual cul-de-sac.

The WSJ article above says that a great deal of financial support to those economists who develop "new ways to model the economy" is coming from the Institute for New Economic Thinking, funded by the billionaire George Soros. Fifty million dollars has been donated to this institute by Soros, and they have already funded 27 "new models" that are being developed.

But, is this "new thinking"? And do we really need new thinking at all?

For the student of Economics looking for real, valid knowledge, the only other way to look at things, other than this mainstream modeling approach, is the "tradition" of the Austrian School. The word "tradition" needs to be stressed - because this is most definitely not "new thinking." The unique approach to this vital science that has characterised this school of thought begins with Carl Menger (1871). In the last century, these ideas were fully developed by Ludwig von Mises - and, following him, by his two most illustrious students: the Nobel laureate Friedrich Hayek, who attended his Vienna seminars; and Murray Rothbard, who attended his seminars in New York. The Mises Institute (website here) is the best place to visit if you wish to study Austrian Economics.

The most important difference between Austrian Economics and the mainstream "modeling" approach is that the Austrians reject mathematics entirely. Their Economics is "logical." Its basic element is the "acting individual" - and not the collective. Indeed, what Austrian Economics proves beyond doubt is that nothing about The Market Economy can be quantitatively predicted, and that no government intervention with its working can be "rational." Just as central economic planning fails, so does Keynesian central banking. So, indeed, does centralised legislation - which is the democratic way by which the modern State intervenes in markets. If you acquire knowledge in Austrian Economics, you will inevitably proceed into other areas - including history, political philosophy, and law. You will gradually develop an integrated world view. You will be possessed of a "social philosophy."

Recommended read: My earlier post discussing Austrian methodology - thereby showing why the standard demand-and-supply diagram of the mainstream is a wrong way to teach the subject.

The Causes Of Economic Growth

There is an old Dylan song in which JFK asks the singer:

"My dear Bob, what does it take to make the country grow?"

And Dylan answers:

"My dear John - Brigitte Bardot, Anita Ekberg, Sophia Loren... country'll grow."

To an economist like me, Dylan answered well. There is NOTHING that a politician like JFK can do to "make a country grow." Economic growth does not occur because of governments - but despite them. Economic growth occurs when individual enterprises flourish, when Capital is accumulated and invested, when more goods and services are produced and consumed, when science becomes technology, and, thus, productivity increases, thereby raising wages, which further fuels consumption... and so on and on, in an endless virtuous cycle. None of these have anything whatsoever to do with The State.

Of course, the study of economic history suggests reasons why some areas have prospered more than others - as, for example, England during the so-called "industrial revolution." What the history suggests is that this was no sudden "revolution"; that it was gradual progress; and that the most important factors behind it were the laws - the laws that protected Property and Contract. It is these that led to the accumulation of Capital.

Two other contributory factors need to be mentioned. First and foremost - Liberty. In England, constitutional liberty dates back to the Magna Carta (1215 AD) in which a specific clause granted the City of London and all other boroughs the "freedom to trade by land and sea." The City of London is possessed of an even older institution, its free corporation with its Lord Mayor, which was established around 1185 AD. Tradition has it that the King of England cannot march his army through the City of London without the permission of the Lord Mayor. It is the Lord Mayor who upholds the Civic Sword within the City. It is these merchants, possessed of Liberty, who accumulated the Capital necessary to launch many global enterprises long before modern capitalism - like the Honourable East India Company, whose merchant ships sailed into Surat harbour around the year 1605. And there were other great companies as well - the Virginia Company, the Levant Company, the Muscovy Company, the Trader Adventures, and many more. I have an essay on this "One Square Mile of Liberty" in my latest book, which you can read here.

As far as modern times are concerned, the most important factor behind capitalism in England during the "industrial revolution", going on till about 1905, when both Queen Victoria and Gladstone were gone, was the enormous prestige that the ideas of the great classical liberal political economists commanded. Since government rests on public opinion, and since public opinion had been entirely won over on the side of what Adam Smith called the "System of Natural Liberty," all the numerous controls over economic activity that characterized the preceding era of "mercantilism" were speedily demolished. Liberty! Cobden and Bright led a working-class movement demanding free trade in the 1830s - and Bastiat in France was hugely inspired.

From about 1850, other ideas started dominating the public mind - like socialism and democracy. But these have not helped economies grow. These have only consumed Capital and stifled enterprise. Without these, the world would have seen far higher growth.

Max Weber's influential thesis that the Protestant work ethic is the reason behind modern capitalism does not stand in the face of the evidence. Modern capitalism in Hong Kong, for example, had nothing to do with Protestantism - and everything to do with Liberty and Property and Contract. Ditto for Singapore, or the various emirates of the Middle East. Capitalism is human nature - and has nothing to do with religion. It used to be said that India was poor because of the anti-materialist religions of the people - but today, it is quite clear that these religions present no obstacle to enterprise. Murray Rothbard's history of economic thought also details the huge advances made in capitalism, in pre-Protestant, Catholic times.

So here is the real secret: it is the Rule of Law. That is, when the rulers - the State or the King - are UNDER the law themselves, and when Property and Contract are protected, and Liberty Under Law prevails for all.

Liberty! Property! Contract! That is all it takes to make a country grow.

The Word

The illustration accompanying this post is that of an advertisement for LewRockwell.com. The logo stands for "Anarchy" and the lines at the bottom say "The State is the Problem / Anarcho-Capitalism is the Answer." Lew Rockwell is the Founder and President of The Ludwig von Mises Institute, which has for long been "advancing the scholarship of Liberty in the tradition of the Austrian School." The original Austrians - Menger, Mises and Hayek - called themselves "liberals" in the classical European sense. Hayek preferred to call himself a "Whig" - and that was the word Adam Smith applied to his own politics. How did this term "anarcho-capitalism" come about?

In America, the word "liberal" was corrupted. It was robbed by those who are essentially "socialist." Ludwig von Mises was quite horrified. In his preface to Human Action he takes pains to point out that he uses the term "liberal" as it was used in 19th century Europe. It was in America therefore that a new word had to be found by those who, like Mises, believed in laissez faire capitalism - and that new word was "libertarian." The word "anarcho-capitalist" was first used by Mises' greatest American student, Murray Rothbard, who was Dean of the Austrian School after Mises' death. Today, Hans-Hermann Hoppe, Rothbard's illustrious successor, calls himself "anarcho-capitalist."

In my own case, I have preferred to call myself "Austro-libertarian" - thereby differentiating myself from other libertarians like the Ayn Randians. My last book is titled Natural Order - and this is an expression classical liberals in Europe were quite fond of. Frederic Bastiat, for example, wrote favourably of the "natural order," contrasting it with the "artificial order" of State controls and dirigisme. Adam Smith himself championed the "System of Natural Liberty."

In my opinion, it is extremely important to stress that a "natural order" exists in human affairs - that Thomas Hobbes was very wrong. Men are NOT lawless - and the "state of nature" is NOT that of a "war of each against all." As Hayek wrote, Man is a "rule following animal." The basic rule of market exchanges is Property. We see our teeming hordes all following this golden rule in all our bazaars. Hayek wrote that this rule is the product of evolution and is part of our culture - that it is not the product of "reason." No "common will" pronounced this rule. Rather, it operates "between instinct and reason." I believe it is a fundamental aspect of our innate "sense of justice."

If I may add, I was prompted to pen the opening essay outlining the features of the "natural order" after reading, many times over, Hans-Hermann Hoppe's mind-blowing Democracy: The God that Failed a few years ago. The sub-title of this great book reads "The Politics and Economics of Monarchy, Democracy and Natural Order." However, what is conspicuously missing from this book is a description of what "natural order" is all about. I therefore decided to fill in the gap. Ever since then, my e-mail ID has been "naturalorder."

However, in America, libertarians seem to prefer the word "anarchy." There is this excellent article by Robert Higgs of the Independent Institute I read yesterday - and he too prefers to use this word. The article is an important contribution to our understanding of whether a State is necessary - for when I say "natural order" the cynic will immediately reply that "men are not angels." Higgs effectively blows this objection aside and argues thus:

A stateless society will sometimes be bad. Not only are people not angels, but many of them are irredeemably vicious. The outcome in a society under a state will be much worse, because the most vicious people will tend to gain control of the state.

I strongly recommend that you read this article - and think. Yet, as I said, Higgs prefers the word "anarchy" - although he notes that the dictionary gives three different meanings to it, including "chaos and confusion." It worries me - to use this word "anarchy" - since most people do not understand the "natural order" at all. In politics, we must convince, and words are all we have. They are labels with meaning. If most people possess a different meaning to a political word than the one intended, we are lost.

If "anarchy" is problematic - and it is - what word can replace it? Over the last few years, I finally decided on the exact word I personally want to use - and that word is "catallaxy." Ludwig von Mises was very fond of this word, and the entire section of Human Action that discusses what most people would call "Economics" is titled "Catallactics." Mises says that this word was in vogue in the 19th century too - and was first used by Archbishop Whately, who was a prominent political economist of his day, apart from being a theologian. The word is derived from the Greek word for "exchange" - and it is Hayek who researched its meaning and discovered that among the ancient Greeks this word possessed two additional meanings - first, "to welcome into the community"; and second, "to turn from enemy into friend." These additional meanings convey something about market exchanges that is extremely important in our troubled times.

The scourge of the modern world has not only been the hideous philosophy of collectivism, but also its natural corollary - something indispensable to statolatry - and that is "nationalism." The Nazis, of course, were "national socialists" - but narrow nationalism, powered by the dubious (and collectivist) idea of "community" - has torn our world apart. Protectionism and wars have been the natural outcome of the philosophy of "national economy." And we still live with these disastrous ideas.

The word "catallaxy" - and especially Hayek's discovery of the other meanings to this word - suggests something other than narrow "community." After all, the urban market economy is individualistic. Further, the most important "social" advantage provided by the urban, cosmopolitan market is that it provides a means of gainfully interacting with complete strangers - and the more strangers the merrier. This word therefore conveys a very powerful meaning - and suggests a rational, natural order in which all individuals can peacefully survive, and human civilization can progress without the "narrow domestic walls" of the closed community. I wrote a column on this word some months ago, and it concludes thus:

Thus, there is a “natural order” in all cosmopolitan open catallaxies. Posses of armed policemen are not required to “maintain order” in any crowded marketplace anywhere in the world. This order exists on its own. Without the “narrow domestic walls” of community, the idea of catallaxy solves the social problem for all individuals, while also uniting humanity in a rational, natural order.

To conclude: I am currently halfway through William Dalrymple's fascinating travels through the territories of ancient Byzantium, From the Holy Mountain. About the capital city, which is now Instanbul, Dalrymple notes that 72 languages were spoken in its bazaars in ancient times. Today, thanks to "national socialism," every minority has been chucked out, millions massacred and widespread tyranny rules. Dalrymple notes that this is where Christianity was born - and then taken to the West. He visits communities where Aramaic, the language of Jesus, is still spoken, where worship is still conducted as in those early days, where the most ancient hymns are still sung. He further writes about shrines where the common folk of today, both Muslim as well as Christian, continue to worship together. Yet, he also portrays a civilization that might just disappear - to be replaced by the uniformity of "community" imposed by the guns of "nationalists." This is what happened to India during the Partition. This is precisely the direction in which the "cultural nationalists" of the Hindutva type are leading our nation today. In the meantime, the USSA is spurring Islamophobia. War and civilization cannot go together. For the furtherance of civilization, cities, and markets, I do believe the word "catallaxy" is best.

On The Right To Keep And Bear Arms

Here are some questions that all honest, tax-paying, law-abiding citizens of India must ask themselves:

1. Should we blindly trust The State?
2. Should we blindly trust the State Police to look after us and protect us?

If the answer to these questions is a loud "No," then we must face up to the fact that, in India, we are faced with the peculiar situation that they have all the guns, and we have been systematically unarmed.

We are defenceless.

They have all the guns.

And, to top it all, the Central State Police Ministry is seriously attempting to make gun ownership even more difficult for us.

The new arms policy requires a citizen to prove grave and imminent threat to life prior to the grant of arms license.

Think about it: The criminal, the terrorist, the Maoist - they do not require gun licenses at all. They simply buy illegal guns in the black market and use them. There are numberless factories in India that produce crude guns - and these are quite popular, and cheap.

But if a regular citizen wants a regular gun, the procedures make it impossible; there is a huge amount of corruption; and these legal guns and the ammunition required are horrendously expensive.

Ten terrorists killed hundreds in Mumbai recently - because the citizenry has been unarmed.

The State Police could do nothing to prevent this two-day slaughter.

How can we protect ourselves?

For quite a few years now, I have been a member of Indians For Guns. This group, led by Abhijeet Singh, champions our right to keep and bear arms. I am in full support of their endeavours. You can visit their website here; their Facebook page here.

"A gun in the hand is better than a cop on the phone" is a saying I strongly believe in. In the field of personal security, as in all other fields, I strongly believe in self-help. I believe in private security; I believe in private guns.

Today, there is some good news for people like me: A group of MPs from many parties, led by Digvijay Singh, former Chief Minister of Madhya Pradesh, a veteran CONgressman who has been in the news for strongly criticizing the State Police in their handling of the Naxalites and Maoists, has called upon the Prime Minister and opposed the new arms policy being touted by the Central Police Ministry. Read the news report here. This is a most welcome development. The report mentions that Digvijay Singh is the patron-in-chief of the National Association for Gun Rights, India. Finally, we seem to have some "good politics." By good politics I mean a politics that is for the citizenry, and against the powers and privileges of the State and the State Police. Our current Central Police Minister, P Chidambaram, plays politics of the opposite sort. Chidambaram seems to be in the pockets of the "security establishment."

There is one part of India where all the citizens have the right to keep and bear arms, and that is Coorg, in Karnataka. I visited this district and lectured far and wide. One of the colleges presented me with their emblem: Two crossed machetes with a rifle going through them! It is noteworthy that there is complete peace in Coorg. No terrorism. No Naxalites. And no police atrocities either.

As an economist, I would like to add that our State Police today are nothing but an ugly MONOPOLY. Further, the political theory that the State Police monopoly should be our only provider of security is nothing but COMMUNISM. Free societies cannot be thus. And Indyeah must aim to be a free society.

The first economist in the world to say this was Gustave de Molinari in France during the 19th century. Molinari was a close associate of Frederic Bastiat and the editor-in-chief of their Journal des Economistes. His brief essay on the "Production of Security" - with a foreword by Murray Rothbard - can be found here. It is well worth a read in these troubled times, in this troubled country - a country in which the State Police are largely seen as predators, not protectors. I strongly recommend this essay to readers of my blog.