Say's Law: A Summing Up

Say's Law of Markets, by making a distinction between those who compete with us and those who do not, tells us that the bulk of the market is made up of those who co-operate with us; that too, in two ways: first, by providing us with our needs, the goods and services we do not and cannot produce ourselves; and second, by providing the vital demand for the goods and services we come to the market to sell. 

The market is NOT "pitiless competition." There is more co-operation than competition - and, anyway, "competition is liberty, while the absence of competition is tyranny." There is no "Social Darwinism" in the market.

This is SOCIETY. 

This is the market society built on the principle of the DIVISION OF LABOUR, which is specialisation. This is the polar opposite of Gandhian "self-sufficiency.


Say's Law of Markets thus proves what Thomas Paine wrote in the very first paragraph of Common Sense - that "society is a patron, while government is a punisher." Society is the vast majority, and they are in the market; government is a small minority, set up to apprehend, try, and punish enemies of this market order, who are an even smaller minority. 

This is the "natural order."

To socialists, Society, State and Party are all ONE: "India is Indira." Say's Law proves this vision dead wrong.


Say's Law also tells us much about taxation - that any tax reduces demand. It suggests a minimalist State; it suggests "political economy." Giving taxes to the State hurts market demand for all. Say's Law proves many genuine experts in public finance right when they write that modern taxation is more expropriation - and that indirect taxation, including customs duties, as well as the income tax, should be outlawed by constitution. Say's Law suggests "user fees" ought to replace taxes, wherever possible.


Say's Law can also be used to analyse the effects of interventionism - the key question being how interventionism in one area will hurt non-competing industries, which is the rest of society, the rest of the market order.


Finally, Say's Law "pours lead into the Keynesian's ear" - as one of my readers put it. It shows that government is a cost, not a source of benefits, not a "stimulus to demand." It points to the real source of market demand - which is the production and sale of goods and services, backed by savings and investment. This is the pathway to civilisation. The Keynesians, with their funny money welfarism, heavy taxation and even heavier borrowing, have unleashed the forces of "de-civilisation" - which is rampant capital consumption. All welfare, it may be pointed out, is consumption; nothing is saved; nothing is invested.


As a wise man put it: "It is good if the people support the government - but all hell breaks loose if the government attempts to support the people."


To conclude: In these five posts on this vital Law of Markets  which is currently mistaught universally (the first post is here), I hope I have shown my reader the correct way to look at markets, at society, and at the State. I hope my reader will realise that Keynesian "macroeconomics" must be jettisoned in toto, and replaced by methodological individualism as the epistemology of the Science of Economics.


Thus, as Sudha Shenoy once put it in an interview with Austrian Economics Newsletter in 2003:

Almost every economics department in the world can be immediately shut down without having any ill-effect on the world of ideas. 

This is the power of Jean Baptiste Say's Law of Markets.

Higher Taxes On The Rich Hurt Society - Especially The Poor

A very bad idea is being floated around - in the USSA by Warren Buffet, and in the UK by Sir Stuart Rose - that the way out of the current economic crisis is to get the rich to pay more taxes. Since such an idea is bound to find acceptability in India, where the masses are poor, and the rich are considered fair game, I am devoting this post to shooting this horrible idea down.


First: The crisis in the West is because of government debt. That is, their The State is spending too much. The only solution is cutting State expenditure, not paying more taxes. The USSA should get out of its foreign wars - and Americans should tell Warren Buffet to go to hell.


Similarly, in the UK, and the PIGS of the Eurozone - the "Welfare State" policies of old have to go, and markets must be freed for citizens to make wealth for themselves. It is welfarism that lies at the core of the crisis in the Euro. Welfarism leads directly to a Big Spending State - and this spending is what needs to be cut. More and higher taxes will work in the opposite direction.


Classical liberals used the term "political economy" with good reason: first, their minimalist government, with very few tasks to perform, would cost very little in terms of taxes, and this was what "political economy" was all about; and second, their minimalist government would leave the citizenry maximally free, and maximum liberty was a cherished goal of their political science. It seems these ideas and ideals are all but lost in the West today. Here is a Daily Bell article on a column by Nouriel Roubini that says his ideas on solving the current crisis reveal him to be a "kind of radical Keynesian" and a "secret backer" of central banking and fiat money.


What about India? A Times of India editorial opposes higher taxation, but does not go far enough.


What we in India need to do is understand that welfarism of the kind chacha manmohan s gandhi has ushered in (on a grand scale) will be disastrous. We need to learn the lessons of classical liberal political economy outlined above for our own future: that is, very low taxation for a most minimal government with the least tasks to perform, such that Liberty is maximised. I have just written a post on how the poor of India need freedom, not education, nor welfare.


Taxing the rich even more hurts the poor, especially in poor countries like India, because only the rich can save and invest, and the poor need Capital for their incomes to grow. If the rich cannot save and invest, because of higher taxes, the poor will remain poor forever.


The Lesson: Big spending, high taxing, high borrowing governments are a curse. Classical liberal political economy got it right. Minimalist governments, low taxes and Liberty are the only antidote to these modern horrors.

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: Part II

Continuing from where I left off yesterday, it is really great to be back here in Pondicherry - a Fair City with a separate History of its own. On Beach Road, there is a grand statue of the French East India Company boss, Dupleix, who founded this fair city - only in order to Trade By The Open Sea.


This is what Wikipedia says about this Man:

Joseph-François, Marquis Dupleix (1 January 1697 – 10 November 1763) was governor general of the French establishment in India, and the rival of Robert Clive.

The Key Point to note is that, unlike our Politicians and IAS-IPS officers, Dupleix was NOT a "client" of Delhi - or Calcutta.


He built the French East India Company territories INDEPENDENTLY.


And that is what must NOW be done again.


No taxes should be sent to Nude Elly. And no "plan allocations" in "funny money" should be accepted either. Pondicherry, Karaikal, Mahe and Yanam must BREAK FREE.


As I said yesterday, I am proposing a series of four lectures in Pondicherry University (for a fee) - one of which will be titled "Sound Money & Free Banking Under Law." This French enclave can easily solve its funny money problem.


Of course, taxes will have to be collected, honest civic corporations set up in all four territories, and these taxes - paid in Sound Money - will have to be invested well: in roads and streets, in footpaths, sewerage, drainage; that is, in City Capital. This honest tax money must not be wasted in Useless Departments as is happening today.


Free Trade over the Open Sea and a Free Economy will have to be established - Under Law.


This Law will be Private Law - that is, Property, Contracts and Torts - and I have a column on this subject that you can find here.


Further, a Private Law Society can happily exist without a Police Force. Where there is no legislation, there is no role for any "legislation enforcement." Remember, when the London "Bobby" first made his appearance in the 1830s, he was UNARMED - and Londoners jeered at him on the streets.


What will most certainly be required are EXPERTS in Traffic Safety & Engineering. The IPS knows NOTHING about this vital subject - at a time when over 200,000 Indians die on the roads every year, and many times more are seriously injured. Road safety is of paramount importance as the Automobile Revolution has been happening for many years now. To built a Great City in Pondicherry will require Foreign Experts in Traffic Safety, involving Civil Engineering, Electronics as well as Signage.


So, shall we BREAK FREE? 

Karnataka's Horrendous Booze Tax

Let me begin by stating the obvious: 

The higher the taxes, the poorer the people.

Nothing else is true. The professors of "public finance" are all State employees. And this The State relies on "inflationary finance." To willingly pay taxes to such a regime is a "moral crime."


Yes, right next door to IIT-Delhi is The National Institute of Public Finance & Policy. All State-employed professors there. They know NOTHING. They are just APOLOGISTS for this The State.


Now, let me say something about Bangalore. I first came here in 1980 - and have been here many times since. In my second book Antidote2: For Liberal Governance there is an essay called "The Destruction of Bangalore." This book is dated 2003, and this essay is at least two years older. I saw it coming. And you people never listened.


Bangalore was once known as the "Pub Capital of India." I remember Ramda's Pub on MG Road way back when a mug of draught was Rs. 3.50. I remember pitchers at less than 40 rupees.


Today, the prices of beer and alcohol are KILLING.


Goa is cheap. Pondicherry is a little bit worse these days. But even Pondicherry is MUCH BETTER than Bangalore. So I am going back tonight on the Volvo bus. No road, of course, for such a magnificent bus. What are you paying taxes for? For the MGNREGA? 


In Goa, I used to buy cases of the local beer, "King's," for 200 rupees a case of 12 pint bottles. Tuborg pint retailed at 25 rupees. In Pondicherry, a big bottle of Tuborg costs 55 rupees. Here in Bangalore, I buy beer at 90 rupees a bottle. A pitcher of beer at The Sherlock Holmes Pub costs 300 rupees. Is this a FUCKING JOKE or what?


Now, let me tell you how all these high taxes make you all poorer.


When taxes are high, sales are low: Obvious. Less beer and alcohol are sold. The beer and alcohol factories work less, and hire less staff. Ditto for the transporters. Ditto for the retailers. And let me add that there are very few retailers in Bangalore. Goa is FREE. 

I LOVE GOA.

So free yourselves of this ONEROUS TAXATION, Bangaloreans.


It is a "moral crime" to willingly pay taxes to a regime that relies on "inflationary finance."

BE PROUD CITIZENS.

DEMAND LIBERTY!

DEMAND GOOD STREETS AND FOOTPATHS IN EXCHANGE FOR YOUR TAXES.

YOUR ROADS AND FOOTPATHS SUCK.

And as for your taxes, they suck real bad.

Real bad.

And they entrench poverty.

Do NOT willingly pay these taxes.

The Trial Of chacha manmohan s gandhi - Part 3: Take #2

The first post in this series referred to the charge levelled against Dr. Karl Marx at the LSE's Old Theatre - of "having wasted the time of humanity with his theories." 


In yesterday's post, the second of this series, I also pointed out that the entire "miseducation system" that chacha manmohan s gandhi has deliberately designed seeks to waste the precious years of youth in pointless - and intellectually damaging - pursuits. This delays their entry into The Market; it delays marriage by delaying the ability of young people to support themselves; and, what is worse, it corrupts sexual morality by keeping young boys and girls in college where all they do is "party." This is precisely what is happening in the USSA and elsewhere.


Now, time is of the essence. Life is measured in time. Productivity is measured in time. The wages of labour are paid according to time. Interest is charged according to time. Rents are also paid on the basis of time. It is therefore Time that is the most important "factor of production." Our chacha is wasting time - the most precious years of youth.


But it doesn't stop there.


Throughout India, our horrible transport system wastes time on a colossal scale. Our trains are the world's slowest; and as for our "notional highways," the less said the better. I do believe chacha has deliberately not built proper highways in order to FORCE our people to travel by train, which are his MONOPOLY. Modern buses on modern highways would have given the Indian Railways a run for their money. No one travels by train in the USSA because they have Greyhound buses and good highways.


And what about civil aviation? Our chacha has imposed such heavy taxes on "low cost" airlines that, once again, we are FORCED to travel by his unsafe and slow trains, his MONOPOLY.


I also believe our chacha has taken deliberate measures to ensure that the automobile revolution does NOT happen in India. He has done this deliberately in order to protect his cronies - like Rahul Bajaj MP, whose FUCKED-UP auto-rickshaws clog all the streets in all our cities and towns. Actually, Calcutta had an excellent PRIVATE tramway before the automobile was invented. Private tramways in all our small cities and towns would deliver the two- and three-wheeler industry a death-blow.


Further, our chacha has not pursued an "automobile policy" that seeks to ensure that all Indians have cars; rather, he wants all Indians to own motorcycles and scooters, thereby making their lives unsafe, especially when little children have to be ferried about. He is NOT protecting the people and their kids; he is protecting some bozos who cannot compete with duty-free second-hand car, bus and truck imports.


Amazing, ain't it? We fuckers have to sit "competitive examinations" all through our lives - CAT, IIT-JEE, UPSC et. al. But these cronies must be protected at all costs, and kept safe from competition.


One of the costs of such protectionism is human life - our lives. Over 200,000 people die on our unsafe streets and highways - and many times more are seriously injured. But our chacha, the great Central Planner, Chairman of the Planning Commission, would rather provide us with "food security." He seems to be unaware that billions of tonnes of fruit, vegetables and fish rot throughout India because these perishable commodities cannot reach markets on TIME.


Last evening, I had a great dinner off a roadside stall here in Pondicherry: dosas with fried chicken liver. Excellent! I told the vendor that he was engaged in true "social service" - and that the Pondicherry "Food Minister" was engaged in theft.


Since our chacha has also monopolised the teaching of History, I think he has deliberately kept the Babur Nama out of the curriculum, because therein this Great Mughal writes that he was horrified when, after conquering Dilli, he found there was "no cooked food available in the bazaars." He took immediate steps to ensure that this was rectified and Mughlai kebabs were available for the populace. 


Our chacha, the great History teacher, wants to parcel raw rice and wheat to all Indians! In the meantime, ask any street-food vendor in Nude Elly (or anywhere else) as to how much harassment he faces daily from chacha's khaki-costumed goons.


Theatre of the absurd, ain't it?


While we are all wasting Time, it is noteworthy that our great chacha himself has NO TIME TO WASTE. 


There is a lead editorial in The Hindu of today that points to the fact that our great chacha "has held only two press conferences and two interactions with editors in Delhi in the past seven years. As for interviews, he has allowed himself to be questioned by an Indian newspaper only once and never by an Indian [television] news channel."


In other words, these seven or eight long years of chacha's misrule have been a colossal waste of time - for the Free Press, a vital Institution of Freedom, to which I proudly belong, with a track record of 20 years of distinguished service.


Now, as the ancient proverb goes, "Time is money." 


Of course, chacha's fiat paper money loses value with the ticking of the clock. The inflationist-welfarist-Keynesian bozo!


It is HIGH TIME this waster of time and money was shown the door - Exeunt! as The Bard would put it - and this vast sub-continent got down to the serious business of making money by saving Time, which is the only way Productivity can be raised, thereby raising all wages and incomes. 


We need a wholesale transport revolution. 


We need "street security" not "food security."


And we need Sound, Private Money, which will give all our poor people "financial security." Inflationism erodes the Capital of all. And welfarism is nothing but "capital consumption."


[This will be a 5-part series. Stay tuned for more.]

Garbage In, Garbage Out

The Constitution of India, the longest written constitution in the world, has a chapter mandating the "fundamental duties of the citizen." But it says nothing of the fundamental duties of The State it establishes, nor any limit to its powers, for it does not even guarantee the citizenry security in their properties. Even as I write, the Socialist Supreme Court is discussing the merits and demerits of forcible "land acquisition" by our The State.

In all our cities and towns, there is garbage all over the place. Their is dirt, filth and stench. Flies and mosquitoes proliferate - causing disease and even death. Many die of dengue fever in Nude Elly every year, a disease caused by a particular kind of mosquito.

In the meanwhile, our The State pretends to look after our health. There is a Ministry of Health, whose last incumbent, a political flyweight from Madras, banned smoking in public places; and this includes "private places" like restaurants and bars. 

But there is so much garbage in public places!

I discovered another such pretension yesterday as I examined my bottle of Carlsberg beer. The label says: "By Appointment to the King of Denmark." In other words, this sovereign recommends this fine beer to his subjects - and to the world at large. However, just alongside this solemn proclamation, our The State has FORCED the manufacturers to add their mandatory warning:

Consumption of Alcohol is Injurious to Health.

This displays ignorance; not only medical ignorance, but also historical ignorance. In the old days, no one drank water in the cities of Europe, because the water was full of germs. They drank beer - which is boiled before fermentation. They drank wine.

In India, our people do NOT drink beer or wine - because these have been overtaxed; and these high taxes have encouraged tipplers to go for hard liquor instead. Hard liquor on a daily basis is most certainly injurious to the health. You don't need a doctor to tell you that. You know how sick you feel the morning after.

Indeed, as I was travelling from Madras to Pondicherry, I passed the State-owned arrack factory. I remembered the stench from the old days. I drank this arrack once, with some rickshaw-wallahs in Madras - and it was horrible. If trade was free, arrack-drinkers would have Sri Lankan arrack, which tastes better than any Scotch whisky. Take my word for it.

Beer and wine are consumed by poor people in the West. Anthony Sampson, in his The Anatomy of Britain, records that when Labour Party meetings are held, beer is served, while when the Conservatives meet, it is champagne that flows. I read a biography of Michaelangelo once, in which it was mentioned that this great sculptor survived on wine and bread when he was poor.

Let us move on to tobacco. This is something new in India, for we have always been smokers of ganja, which is non-addictive and good not only for the health, but also the mind. It delivers the smoker a "mild euphoria": that is, it makes him "happy." It also expands the mind, which is why sadhus, while lighting a chillum, say "Alakh! Khol de Teesri Palak." Translated: "Shiva! Open my Third Eye." It is the Philosopher's Drug.

Our The State has prohibited ganja and charas - something even the Brits did not do - while unleashing tobacco upon us. And there too, it has FORCED manufacturers to place ugly "health warning" signs on cigarette packets:

Smoking Kills.

But flies and mosquitoes kill too. And they are caused by garbage.

Tobacco does NOT kill. Deng Xiao Ping smoked 90 cigarettes a day - and lived a long and happy life, during which he transformed China, throwing out Maoist Communism and replacing it with (flawed) Capitalism. 


And there is much more to tobacco than ITC cigarettes. There are cigars and cigarillos; there is pipe and rolling tobacco. All these have been blocked entry into our markets by the Customs Department. Personally, I prefer cigarillos to cigarettes - but here in India, you never get them.

I perceived this great hypocrisy on the part of our The State while in the swank Rajiv Gandhi Airport in Hyderabad. There, they did have two tiny "smoking rooms" for people like me. I pointed out to my fellow smokers there that the Hyderabad region is famous for its tobacco. I also pointed out that the last Nizam of Hyderabad chain-smoked the cheroots that his subjects produced. These locally made cheroots are NOT available in this airport. Meanwhile, the poor masses are smoking awful bidis. Open a bidi sometime and check out the tobacco within it, both quantity and quality. If cigarettes were not taxed, no one would smoke bidis. And if they could freely sell their mahua and handia, no forest-dweller would waste time picking tendu leaves.

In either case, we are dying on the streets. Over 200,000 Indians (and quite a few tourists, too) are killed on our unsafe streets and "notional highways" every year. This, while the State Police are working ever so hard on VVIP Security. They are working hard on "security concerns" that range from the Taliban to all the jehadis and terrorists and Maoists and Naxalites. Yet, they cannot look after our health on the streets. 

Making our streets safe requires no "intelligence." It does not require universal ID cards. It does not require phone tapping or e-mail interception or all the other kinds of snooping that these cops of ours are so good at. It requires Science. We must import experts in this Science. We must import experts in road design and engineering too.

And as for the Socialist Constitution of India - it is garbage itself. It needs to be dumped. We need a constitution that mandates duties for mayors - like the collection of garbage and the protection of life on the streets.

We are a very clean people. Our bodies, our homes, our kitchens - they are always spic-and-span. In Pondicherry, they wash the pavement outside their homes every morning and decorate it with a pretty rice-paste design. It is a crying shame that all our cities and towns are such a complete mess. 

This was not the case in British times. Sir Bartle Frere, while Governor of Bombay, received a letter from Florence Nightingale congratulating him on the fact that Bombay had a LOWER death rate than London! In Calcutta, the streets were WASHED every morning, and there are still to be found the hydrants installed for the purpose. Of course, these are no longer working.

Let us then think of a New Constitution. One based on the Inviolability of Private Property. And one which prescribes duties for mayors of cities and towns - while leaving the people Free. 

Free to smoke whatever they like. Free to drink whatever they like. Free to engage in commerce with the world outside. 

Free!

Liberty - From Here To Eternity

The State does NOT create wealth; rather, it destroys it. In the England of old, the King was never rich, but the merchants of the Olde City of London were fabulously wealthy. They were not selling computers, cars and the like those days. But the fishmongers, the grocers, the vinters who imported and sold wine - these were rich beyond belief. Edward II once had only 2 shillings in his treasury. And as for Henry V, when he went to battle at Agincourt, he had to pawn his jewels with the merchants of the City to raise the necessary funds. Thus, during the send-off ceremony organised for him, the Lord Mayor sat on his right - which is why, till this day, the Lord Mayor of London is second only to the King.

In India, we think the King - or The State - will create the wealth. He will make steel. He will give us "employment." This is a great delusion. This great delusion is multiplied by the fact that The State produces the money - paper notes. Today, Mamata Banerjee is running to the Centre for funds - from Pranabda. The Centre has no funds; all they will do is print more and borrow more. Similarly, here in Pondicherry, I just read that the government of this tiny city has borrowed 4,400 crore rupees (44 billion) from the Reserve Bank of India - and cannot pay it back. With so much money, the city could be built anew. Here, there is so much commerce on the streets - too much commerce, too little street. A sum of 4,400 crore rupees could have built so many miles of broad thoroughfares. Where has the money gone?

In my view, everything begins with "self-help." We must NOT look to the Centre, to Nude Elly, for its "funny money." The merchants of London gave the King his taxes; they did not seek his assistance in running their affairs, building their streets, or other civic facilities. So, each city and town must raise its own internal resources - in gold - and elect its own Mayor, an honest and honourable man, to perform the essential tasks of maintaining a city so that commerce can transpire peacefully. The purpose of a city is commerce.

There were no "political parties" in England - not until the 17th century. In India, our political parties are all gangs of anti-socials - which is what socialism is all about. The Lord Mayors of London were all wealthy merchants themselves, among the wealthiest men in the world. But if you look at chacha manmohan, sonia gandhi, beta rahul, advani, sitaram yechury - none are creators of wealth. They are all wealth destroyers. All these parties must be abolished.

There is only ONE legal principle required to obtain Liberty for all - and that is the Inviolability of Property. If Property is violated by private persons, it is either theft or trespass. Ditto for whatever local government the people set up to run their cities and towns. The local government is established to protect Property, not to violate it. If this Principle is followed, all will be well. Perfect order will prevail along with perfect Liberty. 

The Principle of Property applies even more so to money - for money must be tangible Property and not a paper note.

As far as public thoroughfares are concerned, they are "public property" and they should not be obstructed by private persons. It is the task of the local government to ensure that all thoroughfares are kept clear of obstructions. This is not happening now. Not in Nude Elly - and certainly not in Pondicherry. Every city and town mayor must focus on this issue - roads and traffic regulation. This is much more important than the RAW and IB and their "security concerns." Over 200,000 people die on our unsafe streets every year, and many times more are injured. The IPS are as much a disgrace as the IAS. Both "services" must be abolished.

Outside the cities, lies the countryside - and here, apart from roads, what matters most is the provision of clear Property Titles. This must be done by the people through their own, new agencies, using GPS technology. The patwari system is a complete failure under IAS maladministration. It must be abolished. 

Since cities are NOT self-sufficient, and all the needs of the city come from outside, it is in the interest of the city to see that outlying farmers, for instance, can easily bring their produce to market. These arrangements can be organised by collaboration between each city and its outlying villages. In this manner, real estate development will also occur in the rural areas, benefiting all. Satellite towns will also develop.

It must be noted that England till date does NOT possess a "written constitution." Such a device is totally unnecessary. A bunch of jokers crowded into a room cannot agree on anything - and the end result is disaster for a billion people. A written Constitution is required to establish and then "limit" the government set up. This has not happened anywhere in the world - including the USSA. 

All that is required is the Principle that Private Property is Inviolable by all. If this is "public opinion" then none can use force to take away either the Liberty or the Property of anyone else.

A city mayor - and some "aldermen" or "councillors" - are not rulers. They do not "make law" as legislatures do. They are just like the governing body of a club. That is all each city and town needs. They must find their own people - because everything depends on the use of "local knowledge." If it is your city, then your people must look after it. I also believe trained and experienced city administrators can be hired from abroad - and they should.

This, in brief, is all that a "constitution of liberty" is all about. Private property, private law and private money. Liberty - and perfect order. Peace. Prosperity. Of course, foreign trade should be unilaterally freed - and the cities and towns on the coast should do this on their own. It is in their own interest to do so. The Customs Department should be abolished.

I am also of the view that all the tax arms of the socialist State should be done away with. Local taxes should be raised in each city, from owners of Property - and they alone should be entitled to vote for the mayor and aldermen. Universal suffrage is a disaster. In either case, you need Liberty more than the empty vote. No one in Nude Elly can open a beer bar - but they can vote! What sense does that make?

The motto of the Olde City of London is domini dirige nos, which translates to "Let God be our Guide." That is the motto of Liberty. They did not say "let the King be our Guide" - as we stupid Indians did.

Here in Pondicherry I awoke to the sweet sound of the muezzin's call of prayer - "Allah ho Akbar." This, too, means much the same. That God is Great, that God is our Guide, that no King and no Man can order us around. The Prophet Muhammad, peace be upon him, like the Lord Mayors of London, was a merchant, as was his wife Khadija.

With this, we can rid our nation of the pernicious disease of "politics" - and those who call themselves "politicians." Like the word "democracy," all these words are meaningless these days; or their meanings have been completely distorted. These words come from Ancient Greece, and they meant other things there.

I delivered a lecture once at the YMCA in Mangalore titled "Politics: The Root of all Corruption." When we chose Socialism and Statism, we politicised everything, and thereby corrupted everything. 

Virtue comes from The Market. When markets are free and Competition is fierce - everyone tries harder and harder to keep his customers happy. Towards this end, they "study the happiness" of the public. This is something no State ever does. All the State does is give you the Big Stick - up your ass. Get rid of that stick - and you will be free. Fix your cities and towns, free your markets, and you will slowly but surely be able to rebuild this shattered civilisation - if that word can still be applied to this sub-continent. Just keep one Principle in mind - that Property must be inviolable.

There arises the question of "unowned" things - and these should be free for "homesteading" on  a first-come-first-served basis. This includes things like radio spectrum, virgin forest lands, oil and gas fields etc. The principle here is "finder's keepers" - something all schoolchildren know only too well. 

And as for me, I have no interest in the "trappings of authority." I am awaiting for the members of my reggae band - The Ganjeras - to arrive so we can start rehearsing for an album and maybe even a show. Our first number planned is "Veeru Was A Good Man" to the tune of Bob Marley's "Johnny Was A Good Man." Let the sandalwood tree be Free! 

The Sun No Longer Shines On Konarak

Took a taxi ride to see the Konarak Sun Temple, 40 km from Puri. Within a couple of kilometres we were out of city limits - and the slums.

Then, we passed some "residential localities" of the middle class - but no markets there, and poor inner roads. No space for the automobile. Or servants. 

And then, the JUNGLE started. All jungle between Puri and Konarak. Forest Department warning signs about deer crossing. Casaurina trees, cashews too - but all jungle.

Finally, reached a sort of roadside town - quite a shambles - with a statue of Biju Patnaik pointing in the general direction of The Sea. But there is no promenade for tourists. A municipal functionary operating a roadblock took 10 rupees tax from me.

A few minutes later, we were near the famous temple - and a cop had to be bribed to drive inside. Another 10 bucks for a ticket - and I made the fortunate decision to hire the services of a guide. 

The Sun Temple in Konarak is built on 24 "spoked wheels" - each with a massive "hub." That is, two hub-and-spoked wheels for every month, representing the phases of the moon. They worked as "sundials" too, my guide told me, and you could tell the time by them.

The temple is elaborately carved - but not too well maintained. Scaffolding all over the place, and many "new stones" that are out of place and ill-designed, obviously by our The State. What is interesting is the representation of the "stages of life" - with animals cavorting for the children, sexual enjoyment for the adults, and metaphysical speculation for the aged. Metaphysics has been the bane of Indian philosophy.

One interesting mural showed a day in the life of a noblewoman - she wakes up and stretches, bathes, helped by servants, and then rides out on a horse to hunt! 

No hunting allowed any more  in Orissa - a heavily forested State of the Federation. Why not deer ranching in the private sector? Barun Mitra is going gung-ho about tiger farming; but I think we should begin with deer. And ganja farming, of course.

I enjoyed a venison steak at the Ikea showroom in the outskirts of Frankfurt-am-Main. The photo accompanying this post is of deer hunters in the USSA.

I must mention what the noble-woman did after the hunt - well, she enjoyed her man. The Good Life! In three or four different positions.

My guide smoked ganja - and we shared a couple of chillums in the unkempt temple gardens. Some other chaps joined us - sellers of precious stones, which seems to be a big "street business" here. This is also "knowledge" not taught in school. The gemstone sellers commented how ganja was a "good nasha" - and how alcohol was killing the people. My guide scored some ganja for me - which did the trick this morning, somewhat.

But the Sun is not shining on this Tourist Destination. The crowd at the Sun Temple was immense! That too, on a Monday evening. All along the road, people have opened dhaba-type shacks. I even found a Cafe Coffee Day - and enjoyed a cappucino. I thought of Goa, where, all along the NH 17, you find establishments calling themselves "Bar & Rest" - the Goans are too susegaad to use the full word "Restaurant"! - but here on this jungle highway there are no bar & rest signs. No Freedom. No road. No wheels. Abundant Space.

I thought a Great Idea would be to rig up a private consortium that would build a sea-side train ride between Puri and Konarak - and develop commercial property all along. The crowd of Bengali tourists would love it. Maybe some would buy Property here for their retirement. This would be real "development" - coming from The Market, an Institution of Free Society that socialists like Biju Patnaik could never comprehend. And they never looked towards The Sea; they only looked towards Nude Elly - for "planned development funds": all the "funny money" of the RBI. Funny money that loses value even as I write.

You might as well burn your Macroeconomics textbook too.

It rained on the return journey - and all was cool. Not violent rain like the Goan monsoon, but a gentle drizzle, with blowing gusts of cool wind. It was nice driving through The Jungle, but when we reached The City all was a mess. Can't enjoy the weather in The City. 

Saw a guy with a t-shirt saying "My idea of a Balanced Diet is a Beer in Each Hand" - but I find the beer here prohibitively priced. For the price of one beer I bought a 180ml bottle of Seagram's Royal Stag IMFL whisky. It costs much less in Nude Elly. It costs even less in Goa. So the poor drink chullu. Smoke bidis. And horrible ganja. And their savings are eroded by Inflationism.

What the fuck!

You might as well burn your Microeconomics textbook too.

It is the Science of Economics you need to know - as developed in the Tradition of the Austrian School.

So stay tuned to this blog, where I will elaborate key principles each day.

Jagannath Puri - Revisited - On The Ganja Juggernaut

I am now in Puri - the premier beach resort on the East Coast. Here, the oldest hotel is the BNR - named after the private Bombay-Nagpur Railway that first connected wheels to this place, and the rich people of Calcutta built their holiday homes here. Then, in those early days, BNR built a hotel in Puri. Now, it has been privatised, and my driver said it belongs to a relative of the former railway minister, Laloo Yadav.


There are many ancient holiday homes near my hotel - one, in fact, owned by the CONgress MP from this area, the son of Nandini Sathpathy.  Yet, this place is a mess. This dude ought to be made Mayor of Puri - instead of MP. And, he smokes ganja. All Oriyas do. They have a festival when all three gods are worshipped - Brahma, Visnu and Shiva - and the offerings are paan, betel and ganja. The ganja is for Shiva. There are many Shiva temples here.


I got ganja from a legal shop just 5 minutes ago. You cannot do this in Goa. Orissa can compete - positioning itself as the Ganja Capital of the Free World. Also, there is no Coastal Zone Act here - my hotel is right on the beach, as is the MP's, just around the corner from mine. But the place sucks. Goa is far, far prettier. Here, they have made a mess of their city. 


The mess starts from Bhubaneshwar. My taxi ride was slow and uncomfortable. Many a traffic jam. And there was no bridge over the railway crossing that must date back to BNR times.


No road to the beach resort.


And no beach road either.


No Marine drive.


The city needs a Mayor - like all Indian cities do.


But I love the Freedom - to be able to buy and smoke ganja without police harassment.


Freedom!


Tomorrow, I will watch the sunrise across the sea. 


And smoke a chillum while doing so.


Enough of Goan sunsets.

Mises - On Mexico's Economic Development

I spent a happy morning reading a monograph on Mexico's economic development penned by Ludwig von Mises in the early 1940s, shortly after he had moved to America, but before the end of WW2. The monograph has much of interest to other Third World nations, in Latin America, Asia and Africa, including especially India, which took all the wrong advice from all the wrong economists. Let us begin with "industrialisation."

Over 70 per cent of Mexico's population was engaged in agriculture in the 1940s - and Mises rightly asserted that the country needed to industrialise. Mises begins with a critique of the "closed door method of industrialisation": that is, which aims not at securing the nation in the "international division of labour," but which aims at the "commercial insulation" of one's own country.

This foolish path is what we followed in India, thanks to Raul Prebisch and Hans Wolfgang Singer, who had the full support of every United Nations development organisation. Prebisch and Singer had argued for "import-substitution industrialisation" - and Mises writes about how foolish the idea is, "to cheer when the statistics show a decline in imports." He rightly says:

The advantage derived from foreign trade lies entirely in importing, not in exporting. An increase in exports is only the means to increase imports. A reduction in imports is not a blessing, but a calamity.

The lesson: You must integrate your nation into the international division of labour by specialising in the export of those goods you can produce efficiently and in which you can compete - and use the proceeds to import all your needs, including especially capital goods for your factories.

Import-substitution, on the other hand, penalises domestic consumers - while also hurting foreign nations. When these foreign nations cannot sell to you, they cannot buy your exportables either. Double whammy!

Autarky, or economic self-sufficiency, is "economic suicide."

Another point that Mises makes - extremely relevant to all under-developed nations - is that they need to import Capital. Thus, policies of expropriation, taxation, currency control, and nationalisation which hurt foreign foreign investors must be done away with. If foreign investors are not secure in their investments, the nation will lose.

Today, India is holding up foreigners who wish to invest in supermarkets - and this hold-up is nonsensical, according to Mises. Indeed, there is an entire section in the monograph on "Small Business and Distribution" in which Mises champions the small shopkeeper - and says how his "eminence lies in his adaptability," while the chain store is standardised. The small shopkeepers of North America have survived chain stores and supermarkets, Mises notes, because they adapt themselves faster and better to local and personal conditions. In any case, in poor nations, people buy in small quantities - from small shops.

Mises pays great attention to transportation - favouring the privatisation of Mexico's horrible railways. He says they should be expanded with an eye on freignt and not passengers, which also means lower investments. For passenger traffic, Mises favours building roads and airports - so that civil aviation, personal automobiles, and motor buses can flourish. Indeed, this sentence, written in the early 1940s, before India gained independence, is worth quoting in the India of 2011:

Under present conditions, the construction of modern motor roads is more important than the improvement of the railways.

Mises, thus, would not have advised us to build the Konkan Railway. Rather, he would have insisted on an ultra modern coastal highway. And we would have been immensely better off. Mises waxes eloquent on Mexico's tourism potential, and also on the possibility of her "coastal regions" taking a lead in "processing industries" catering to the export market.


On currency policy, Mises praises The Banco de Mexico for allowing the free purchase of gold and advises this poor nation to refrain from inflationism - a foolish policy to which the US and Britain have "sold themselves." He points out that if the Mexican peso is pegged to gold, it will appreciate against the currencies of these great economic "powers." Then, of course, Bretton Woods was yet to happen, and a world fiat currency system was unthinkable.


On government spending, Mises was no Keynesian, writing that:

When the government spends more, the individual citizens spend less.

He advised low taxation, too.


But it is the section on education that deserves our greatest attention today, not just in India, but in the West as well. I will quote it in full:

Mexico is a country rooted in an old civilisation. Its universities are notable seats of teaching and research. It has succeeded in the last decades in the establishment of an efficient system of primary education for the masses. It is anxious to further vocational and technical schools. All foreign experts are unanimous in the praise of Mexican achievements in this field.

However, the economist must warn of the dangers of some trends in contemporary education. Germany and France were paramount in the development of teaching and instruction. But the results did not come up to expectations. Germany is today [1943] a nation of barbarians; Germany, once styled as a nation of poets and thinkers, is now a nation of gangsters. The high state of French education did not prevent a moral and political collapse.

The truth is that the French and German schools instilled in their pupils a pernicious mentality. The students were imbued with the religion of étatism [French term for "statism"]. They were taught that the State is God, that nothing counts but its power, greatness, and glory. And they were also taught to despise and to hate all other peoples. Graduates looked down upon the business of private citizens. Their only aim was to obtain jobs in the service of the government. The ideal of the Frenchman was to be a fonctionnaire, that of the German to be a Beamter. [Both words mean "civil servant" or "State functionary."] They were not eager to work; they wanted to give orders and to be paid out of funds collected by taxation. They preferred the parasitic life of a bureaucrat to the industrious life of a plain citizen. They did not care for anything other than a career in the daily increasing body of State employees.

Corrupt politicians and unprincipled civil servants have ruined the glorious civilisation of Western Europe. The institutions of learning and of education were instrumental in creating the vicious mentality that led to this disaster. It is a characteristic fact that many of the most eminent harbingers of the new barbarism were professors of the German universities or members of the Académie Française. Intellectuals have built the houses in which Hitler, Mussolini, and Laval lived at their ease. It was a real trahison des clercs ["treason of the intellectuals"] as Julian Benda stigmatised it in his well-known book.

A nation that would guard itself against such a catastrophe has to watch its educational institutions. The youth have to be protected against the arrogant self-conceit that makes them disparage ordinary business activities. It is true that one goal of learning is to train people for the correct fulfilment of duties in the civil service. But the first requirement of a government employee is due regard for the individual citizen, for the man whose work produces the means of supporting the nation and the State.

The worst outcome of the étatist superstition is the habit of considering the "State" as a mythical being, commanding inexhaustable treasures that it can lavishly spend. The State should do this, and this, they say; it should pay more and more for various purposes. It never occurs to the étatist mind that the State cannot spend except by collecting taxes or by incurring debts or by embarking upon inflation. They do not realize that "The State" that pays is the citizenry itself and not some mythical Midas.

The problem of a balanced budget and of an equilibriated economc system are not political and technical; they are moral and intellectual. If public opinion is convinced that The State has never-failing sources of income, and that the only decent way to make a living is to get salaries or subsidies from the Treasury, then even a well-intentioned government and parliament cannot succeed in making both ends meet.

One of the main purposes of education must be to dispel the superstitions of étatism.

It is a common mistake of our contemporaries to view a country's economic problems primarily as a matter of "material" factors and of technical changes. The main issue is intellectual and moral; the spirit is supreme in this field, too.

Thereafter, Mises makes some concluding remarks:


1. Civilisation depends on material well-being. The richer a nation, the better.


2. There is only one way to get richer - Production.


3. To produce more requires Capital - and the private accumulation of Capital is a blessing, not a curse.


4. Private Property and Free Enterprise are the foundations of civilisation.


The final paragraph is worth quoting in full:

The German socialist and harbinger of National Socialism, Ferdinand Lasalle, sneered disparagingly at liberal civil government as a "nightwatchman" and proclaimed, "The State is God." It is this superstitious belief in the omnipotence of government that has brought about the present crisis of civilisation.

Unfortunately, this paper is not available in PDF on the internet. You can buy the book containing this essay - and many more - in India here. And from the Mises Institute here. Well worth buying, and studying - and telling others, too.


The fact that State-employed professors in Indian universities were teaching State-worship to their students is well brought out in my old post titled "The Evil Professors of Delhi U."