The Real Problem

Our new Health Minister has advocated late marriages (after 30) as a means towards solving the “population problem.”

He has spoken of unemployment and poverty as caused by our “excess population.” He has even asserted that Naxalism is caused by population pressures.

He is dead wrong – but it is funny to see a “democratically elected” politician hold views that his constituents are a “problem”; further, that their children are a problem; and, going even further, that the birth of their grandchildren should be postponed. For the Common Good, of course.

It takes three words to prove that population is a resource:

Cities Are Rich.

Yes, vacant villages are poor. And villages prosper when more and more outsiders buy land there and settle down. Note that more and more villagers are migrating to cities: they prefer locations where population is high. Thus, we need an urban vision: 500 great cities and 5000 towns. Many along the coast. There is much vacant land there. New urban property would be cheap.

Yes, we need to think of Reality – the Fact that Cities are rich. The Fact that villagers are moving to cities. The Fact that all our urban areas are unlivable. We have just 5 cities; the USA has over 200. Hong Kong and Singapore have huge population densities – and no one is complaining. No one there wants to return to village life.

So if population is a resource, what is the problem?

The real problem is our The State. It causes poverty via inflationism. It perpetuates poverty by swearing under oath that it will never build roads. It aggravates poverty through economic restrictionism, including direct predation. It is a State that practices Economic Repression. This The State is The Problem – not the people.

My advice to India’s youth: Do everything early. Drop out of “education” and enter The Market early. Earn your keep early. Marry early. Have your children and grandchildren early. Retire early. Enjoy a long and happy life with lots and lots of children and grandchildren. Actually, why not great grandchildren too? If you marry late, you’ll never get that far.

Think!

It’s Your Life.

Recommended reading: My essay “Population causes prosperity.” To download pdf file, click here.

On The Gujarat Hooch Tragedy

Blogging was intermittent last week, but I have now relocated to New Delhi. The Outer Ring Road was unpassable – my taxi took a detour – and, if memory serves, the first flyover at IIT Gate was built some 20 years ago. Flyovers have been built every year since – and it seems that this business of building new flyovers continues. This, on an airport road. And what an airport, fittingly named after Indira Gandhi.

Yeah, we need a roads solution, but looking to Kamal D Nutt alone won’t help. We also need local roads. These can only be built by those with local knowledge. So centralization cannot work.

That said, the news of 107 people dying from consuming spurious alcohol in Gandhi’s Gujarat, where booze is banned, came as no surprise. My friend Sarina used to tell of her cousin, a student in Ahmedabad 20 years ago, who died consuming spurious liquor there. I am sure that if the press investigates, they will be able to list the history of such tragedies.

I spent some time in Gujarat – and hated it. Cris Lingle and I even took his US passport to the authorities and bought 10 bottles of beer (they took 2 bottles out of the case!) after filling many forms and also having to go out on the streets to obtain photocopies of documents the authorities needed. In the room inside, I spied a young lad pasting labels on bottles.

Gujarat has to decide its own course – to be high, or not to be high, that is the question. I prefer places like Goa, where there is a bar every 10 yards, with names like Frankie’s Bar, Relax Bar, and so on. My favourite is Mr. Booze. On my way to the airport I had a quick Adam Smith lunch at Lounghino’s. The Adam Smith lunch requires meat, bread and beer. In Goa, I got all three. In Gujarat…

The Adam Smith lunch is based on these immortal words:

It is not from the benevolence of the butcher, the baker, or the brewer, that we expect our lunch, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

That’s it. It is either the Adam Smith Lunch or the Gujarati thali.

News has it that the purveyor of the poisonous hooch has been charged with homicide. Yet, the first law that should apply is Tort: he must pay restitution for the damages he has inflicted upon others. This should be under civil, not criminal law, so judgement should be delivered “on the preponderance of evidence,” not the “beyond reasonable doubt” required for criminal cases. Thus, restitution can be delivered to the victims through quick legal action; and that too, without calling for the police.

That’s right: Justice Without The Police.

I wonder how much the Gujarat police rakes in from bootleggers? One doctor I met said that the highest incidence of liver cirrhosis in Gujarat is among police inspectors.

Anyway, I don’t live there. Nor do I plan to, ever. The Gujaratis must fix their own State.

Recommended reading: My old article entitled “Gandhian Violence.”

On The Budget

I am a bit late in commenting on the Budget, but the rain has been incessant (lovely!) and the power has been erratic (ugh!). But what the hell. I read Karan Thapar’s Sunday column in HT, and he was complaining about power cuts in New Delhi. This is the scene everywhere in socialist India: bijli, sadak, paani. [Power, roads and water.] And you will not find allocations on any of these in the Budget.

There is Education. There is Defence. The Social Sector. Poverty Alleviation. Rural Employment. Fertiliser subsidy. PSU losses. And now, Cheap Rice.

And, for spending on these, there is always a huge Budget Deficit. We have seen such deficits year after year for 60 years, and the only result has been that the value of the rupee has plummeted. Then, there were 1p and 2p coins - that is, coins that mattered, had value, and were circulated. Now, we have 10 rupee coins. Even 50p coins cannot be found. Our "economists" have always supported these deficits, as have the crony business elite. But poverty has not disappeared. If only it could simply by printing money.

Well, here is some good news for those who don't like Budget Deficits.

S&P have announced that India’s sovereign credit rating, which was downgraded to negative in February, will probably be further downgraded in view of the huge fiscal deficit. How much is the deficit?

“Including state government deficits and off-balance-sheet items such as oil and fertilizer bonds, the deficit is estimated to reach about 12% of GDP in fiscal 2009-2010,” S&P said.

Manmohan & Co. don’t have the money. It is silly [non-speculative] to buy their bonds – because they are not “investors” of money; they simply blow it up. They earn no returns on Capital. This is perpetual irredeemable DEBT.

If you possess Capital, you must speculate with it; not park it in government bonds.

If we try and peek into the minds of our rulers, we see in them two clear traits: one, the false idea that the economic resources available to them are limitless; and two, a “politics” that is inherently false too, in the precise sense that it is based on untruth, in that they conceal from the public the real aims (and the real costs) of their policies. They have a secret private agenda that does not tally with the interests of the commonwealth.

As far as the Science of Economics is concerned, all I can say is that this Science is based on three pillars: economic theory, economic policy, and public finance. We know they are zeroes in theory and policy; we now know they are zeroes in public finance as well.

For Highways, Against Railways

Good fare in the Sunday columns: Both Tavleen Singh (here) and Swaminathan Aiyar (here) have expressed serious misgivings with Nandan Nilekani’s ID card project. Yeah, let us kill this stupid idea.

I also enjoyed a travelogue on the Konkan Railway – and decided to write today’s post on railways. Mamata Banerjee’s "socialist" railway budget is fresh news. And the Konkan Railway is the biggest rail project in independent India. Yet, how important are railways in the modern world? To be more precise, since our railways are so outdated, and so badly managed, would we not be better off focusing on highways?

At the outset, let us note that railways came to India in the mid-nineteenth century – that is, fifty years before the automobile was invented. Or seventy years before the Ford model-T and perhaps a century before universal automobile ownership in the West.

Further, let us also note that India in 2009 is witnessing an automobile revolution. This industry may be flagging in the USA, in Europe and Japan, but in India it is growing at a rate higher than the national average. Go to any city or town and you will see cars, cars and more cars. I wrote about India’s automobile revolution in a Mint column some months ago.

I live within shouting distance of a Konkan Railway station. It is like all the other stations of this line, as described in the travelogue: quiet and sleepy. Not many people use these trains. But go to the local bus stand and see the activity. We now have a new bus stand in Canacona, and there are over 20 shops in the complex doing brisk business. There is only one kiosk in the railway station, and I doubt it generates much profit.

This itself indicates that a new coastal expressway is required. The better-off people would use personal transport; the lesser-off people would use modern buses. Modern buses on modern highways can outcompete airways in distances upto 500 kms. They would outcompete our slow railways even over 1000 kms. In my book, therefore, our State railways are not worth much. We need good highways, modern buses and trucks, and more personal transport. This is the transportation solution. Not railways.

The Konkan Railway is actually of no use to the Konkani, who uses the horrible NH 17 for all his commutes. Most of the trains on the line are “through” trains, from Delhi or Mumbai going down to Kerala. It is also an interesting fact that the Konkan Railway earns very little from passenger fares; most of its earnings are from freight, especially that of ferrying loaded trucks from Mumbai to Kerala. Yes, the railways carry loaded trucks! Why? Because the “notional highway” is totally screwed-up. Check out the Konkan Railway website here.

So let us not worry too much about Laloo or Mamata at Rail Bhavan. Rather, let us focus all attention on Kamal D Nutt, now the minister for roads and highways. He must be goaded to perform.

Say Yes To Title Insurance

For quite a few days now, I have been enjoying a history of the Indian Civil Service penned by one of its later members, Philip Mason. Thanks to my donors, I have managed to procure the original two volumes of his The Men Who Ruled India, published in 1953, under the pseudonym Philip Woodruff. In India, the single volume being sold is an unsatisfactory condensation.

What emerges from this reading is that the highest priority of the British government was land records.

It was therefore with a deep sense of regret that I read of what is the legacy of the IAS, socialist successors of the liberal ICS. In an extremely pertinent column on title insurance, Madhumita D Mitra writes:

In the words of one international title insurance major, as a potential title insurance market, India is a car crash. Fragmented land holdings have been left unattended by surveys and settlements almost since the British left this country. Mutations have piled up and land records have not been updated for decades. The present system of recording of rights is only “presumptive” which means that the person paying the property/revenue tax shown in the land/property record is just presumed to be the owner of the property. In case of a dispute, it still requires the courts to establish ownership. Transfer of property deeds may be registered, but such registration refers to the document alone and does not validate the ownership.

The term “car crash” is accurate. Mason speaks of how Congressmen eager to take over The State in the 1940s were like those who want to drive a car without learning how to do so. They caused the car crash.

Do read the full column here. Mitra talks about a proposed government guarantee to property titles – and how private title insurance is a far better idea. Unfortunately, the insurance regulator is playing spoilsport. To quote Mitra again:

For any title insurance scheme to succeed in India, a lot will depend on how progressive and adaptable the government and the insurance regulator are to this new concept. Mr. Philip Oldcorn, CEO of First Title, UK, which is working with the United India Insurance Company on a title insurance product for the commercial market, is appreciative of the concerns of the regulator that it needs to worry about the management of liabilities of the insurers in this niche and brand new area of insurance. Officials at National Insurance Company who failed to get their title insurance product past the IRDA however, feel that the regulator should stick to ensuring that insurers maintain their solvency margin requirements under the law and let the companies mind their own bottomlines.

I wholeheartedly agree. Indeed, private sector title insurance can play the role of an effective watchdog over government title guarantees. The insurance regulator should not block the development of a title insurance market.

Leave Those Kids Alone!

Yesterday, the Union Cabinet okayed the Right of Children to Free and Compulsory Education Bill. It will now be tabled in parliament. Read the news report here. The idea is that kids between 6 and 14 will be forcibly sent to free government schools. Private schools will have to reserve places for the poor.

Yet, as Anthony de Jasay explains in this little book, all “rights” must be based on “obligations.” Where the obligation does not exist, neither does the right. Thus, if a landlord signs a rental contract with a tenant, the latter has the “right” to occupy the property because the landlord has a corresponding obligation to hand over possession peacefully. A worker who signs a labour contract has an obligation to work on the terms specified, while the employer has the right to demand that work as per contract.

Once we understand that all legal rights are meaningful only when backed by matching obligations, we find that the innumerable “human rights” legislated by socialists are all completely meaningless for the precise reason that no one is backing them with obligations. Socialism means the multiplication of meaningless rights. These rights exist on paper only. And so it will be with this new “right to education.”

Further, the words “free” and “compulsory” jar when placed together. If education is delivered to the people free of cost by The State, then no private entity can possibly compete. Further, this free education should be such an attractive prospect that no force has to be used to get kids into schools. This bill wants to use force to provide something free as a right. Like a right to free and compulsory gulab jamuns. This sounds so confused that I wonder what sort of “knowledge” went into drafting this bill. And, it must not be missed, our education minister is a socialist lawyer.

In my book, knowledge is capable of being bought and sold in markets, like any other good or service. There are people with knowledge and people without, just as there are people with potatoes and people without. So just as the people who want potatoes buy them from people with potatoes, so must people who want knowledge buy it from those who have it. My question: What knowledge does out The State possess that it is so desirous of becoming a Universal Teacher?

Think over this question. Think deep.

And know that the country is a mess because of The State.

Why, even the new bridge in Bombay has been cited as an example of “incompetence.”

How can we allow such an ignorant entity to teach?

Recommended reading: My recent article, "De-Mystifying Knowledge," available here.

What Is Happening In Lalgarh?

Our newspapers are not performing their job as far as the Lalgarh Rebellion is concerned: there is total silence today.

From what we know, the central government’s para-military force, the CRPF, has overcome resistance and taken over this part of West Midnapore district, just 200 kms from Calcutta. Yet, the CRPF is no solution. A military takeover is not “civil government.”

And there is worse on the CRPF: They have now been removed from Baramullah in Kashmir. This follows the hideous incident at Shopian where CRPF personnel were suspected of rape and murder. In Baramullah too, public anger against the CRPF was sparked off by their excesses.

If we leave the CRPF and its excesses aside, and look at the local police, here is a report of an “encounter” in Andhra Pradesh, a hub of Naxal activity, in which a top Naxal leader was killed yesterday. And here is another report that claims in its title that Naxals in AP have been "tamed" - though the concluding paras indicate quite the opposite to be true.

Yet, this is also not the “rule of law.” We can usefully contrast the methods of our desi police with the Brits – and this is of a period before there was any policing in India; the Indian Police Act is dated 1861, shortly after the Mutiny. The example that follows is of the 1830s.

In those days, traveling in north India was horribly unsafe because of gangs of Thugs, who would strangle their victims and loot their possessions. Over 20,000 travellers perished every year because of Thugs.

The records speak as follows:

“There were in the years 1831 to 1837 more than three thousand Thugs convicted… More than 400 were hanged, more than a thousand transported for life… Another thousand were awaiting trial in 1837…. But the work was done; that evil was finished.”

Why did the Brits act in this “legal way”? As the same author says, this was “because they stood for the rule of law as against the individual whim that ruled before.” In Mughal India, as Sir Thomas Roe, Ambassador to the Court of Jahangir, recorded in his journals:

“There is no law in India; the Emperor by his own word ruleth.”

The underlings of the Grand Mughal in Delhi had their own way of administering justice when highway robberies occurred: A robust young man from a nearby village would be hauled up and summarily executed on the spot where the robbery occurred. There are reports of executions ordered without even hearing the accused. Yet, this is precisely what has just happened in Andhra Pradesh. It is this that happened to Veerappan. It is this that must be happening in Lalgarh today.

My point is this: There is “rule of law” only when those entrusted with enforcing this law are under the law themselves. This is the ideal of “constitutional government.” This is also the ideal of “civil government.”

What is happening in India today is that the forces of the Central State are doing exactly what the Mughal Emperor’s underlings did in their time.

Yes, the press must re-focus all attention on the Lalgarh Rebellion. Singur and Nandigram were great upheavals in Indian politics. Lalgarh must become one too. We must engage in civil politics with the rebels. We must speak with the ordinary tribals. Mere force, that too from Laputa-on-High, is no solution at all.