On Misplaced Sympathy, Ignorance, And Hope

My recent post on the National Rural Employment Guarantee Scheme, which I dubbed “Flagship of the Pirate Fleet,” has drawn many comments, and some of the points raised there, I thought, should be addressed on the main page, because they concern fundamental issues in political and economic philosophy.

In particular, Anusthubh, in a series of comments, demonstrated his deep-felt concern for the rural poor and the undernourished children – and the firm conviction that the Chacha State should do something about this. He is opposed to “free market fundamentalism” and favours “the right kind of intervention.” Towards the end, he wrote that what matters is that the “efficiency” of these right kind of interventions be increased, and “pilferage” reduced.

In response, Anoop Verma, who seems to be on my side, said:

“…leftist ideology happens to be the illegitimate offspring of altruism. And majority of the people are born with an altruist gene. They are compassionate and have a sense of pity. They want to help others, be charitable. But the thing is that altruism is the most evil concept.”

First, let us not shoot altruism. We have so much of naked selfishness all around us that some altruism could do a lot of good. Compassion and a sense of pity are also good, essentially human qualities. Adam Smith said that Sympathy was a “moral sentiment.”

Leftist ideology is not an “illegitimate offspring of altruism”; rather, it is the illegitimate offspring of Sympathy. Anusthubh sympathizes with the poor and the undernourished. Who wouldn’t? When I see the miserable conditions in the slums of Mumbai and New Delhi, I too feel that something needs to be done urgently to improve the living conditions of the majority in our cities of joy. Fortunately, I have studied a little Economics, and a little Law, and my knowledge leads me to oppose rent control, to uphold Property, to champion road building, to advocate aggressive urbanization, and to call for complete economic freedom.

Unfortunately, the vast majority have never studied these subjects; and, if they have, they have been mistaught. Thus, their moral sentiment of Sympathy leads them towards completely erroneous prescriptions. They call in the Chacha State. For the rural poor they champion a “right to work.” For the undernourished they champion a “right to food.” For the illiterate they champion a “right to education.” This makes the personnel of the Chacha State very happy, because they have public sanction for more and more “schemes” – that is, more and more “pilferage.”

Further, as Frédéric Bastiat tellingly wrote, socialist politicians, who are essentially demagogues intent on fooling the people, do not tell their unenlightened supporters that The State has two hands.

There is one hand that takes (the tax-man), and there is the other hand that gives away (the spending programme).

They only show the hand that gives, while completely concealing the hand that takes away.

If a thorough audit was to be conducted on any government programme, from the food distribution system to their schools, it would become apparent that The Market could perform these functions at a far lower cost. How much does it really cost the Chacha State to purchase foodgrains at high “support prices,” store the same in huge godowns (where rats eat up most of the stock), and distribute these grains through their “fair price shops”? How much does the Chacha State spend per student in a government school as compared to a private school?

Sympathy is not the problem. Sympathy is there within us. Altruism is not the problem. True altruists are the salt of the earth. The real problem is ignorance – in the absence of the faculty of being able to think things through to their logical conclusions. It is this ignorance, this lack of thinking correctly, that we must fight against. And in this fight, there is hope. There is hope precisely because The Total Chacha State is such a Total Failure.

So don’t be so pessimistic and cynical, Anoop.

All the forces of history are on our side.

For Gold, Guns, Secession, And Liberty

Chacha Manmohan S Gandhi, the inflationist, has spoken about “security threats” that face our people, and has called for strict action on the part of all his Bhateeja States to tackle the same. Just another chief ministers’ conference in New Delhi. Yawn.

Just as inflation robs us all of our savings, so do the Chacha State’s police forces rob us of our earnings. Just the other day, there was a major scandal in New Delhi’s CR Park #1 Market, about a police inspector named Mukesh, who was extorting money from all the shopkeepers and vendors; and, not only that, beating them up as well. He was transferred.

A few days later, I visited the local florist, who operates from the footpath, to buy some flowers on the occasion of my father’s birth anniversary. The florist told me that Mukesh’s replacement had raised the huftha (weekly bribe), and they were now being fleeced even more.

This is the common story throughout India. And, as I said a few days ago, the Rule of Law means that, if the citizens cannot kill and rob, neither can their rulers. Our rulers kill and rob. Here is the latest from Chattisgarh. Srinagar is up in flames because the cops killed a little boy.

What about terrorists? During the Mumbai massacre, I read a report, recounted here, that brave citizens threw stones at the terrorists who were armed with AK-47s. Our Chacha State is disarming us – and not protecting us either. Further, there is this inflation. To combat inflation, we must make Gold our money; and to be secure, we must have our own Guns. Today, the Chacha State is making private gun ownership even more difficult. Should we depend on the State Police for our security, or should we depend on our own selves, and our own guns? I suggest: Gold, Guns and Liberty.

Now, Liberty is always from the actions of the government. We need Liberty from the Chacha State. It is robbing us blind with its inflationism. It is looting us and killing us with its lawless police. But there is more. We need Economic Liberty to survive. We need the freedom to buy and sell freely, to set up enterprises, to keep our customers happy. The Chacha State is not allowing us to do that. For Chacha, free enterprise means Ambani, Tata, Birla, Bajaj, Mahindra, Mallya, Thapar et. al. For me, Capitalism means the Liberty of the Street Vendor. Today, the cops are fucking these poor businessmen.

Not only that: The Chacha State’s policies do not look at India as one nation. There are over 100 brands of feni in Goa – but none are allowed to be sold anywhere in India. You will not find feni at a liquor store in New Delhi, or Bangalore, or Mumbai, or Chennai, or Kolkata. What sense does it make for Goa to “belong” to India? So let us add a third word to our list: Gold, Guns, and Secession. If India is to be One Nation, it must be one undivided market; otherwise, the whole idea is meaningless.

So, Chacha Manmohan S Gandhi is indulging in demagoguery, as usual. He is trying to fool us. As far as “national security” is concerned, he has only sold our national interests to the USSA and earned the enmity of all Muslims. I recommend Shekhar Gupta’s column, “Goodbye America.” It proves that Chacha is wrong on this score as well. I wrote yesterday that Chacha’s “stimulus package” was aimed at befriending Ben Bernanke. Indeed, it may well be that the CIA has taken over our Chacha State.

Yes, our nation is in a deep mess. The Central State has now proved to be our national enemy. The solutions are clear: Gold, Guns, Secession and Liberty.

Chew on that.

Liar, Liar, Pants On Fire

It is Saturday again, and we villagers in southern Goa must travel to our nearest town-market for the week’s provisions, especially vegetables. There, my friend, who is Home Minister and conducts all the purchases (I am just the coolie), said something fantastic, something that must be read alongside Chacha Manmohan S Gandhi’s blustering over “food inflation” that is in the news today.

My Home Minister said that all these past 5 years that we have been here, she never spent more than 150 rupees on vegetables. Today, she had barely bought much – the bag was still quite light on my bony shoulders – and 250 rupees had already been blown away. She further added that, all these years, she had to carry a whole lot of coins to conduct her purchases, but now no longer needed to do so, for nothing sold for less than a 10-rupee note.

The economist in me saw this as a clear sign of the effects of inflation. That is, inflation is not the general price rise. Rather, inflation is the increase in money supply, which causes the general price rise. What did Chacha say?

As per this news report, Chacha called all his Bhateeja chief ministers to a conference in New Delhi and told them to take “necessary steps.” Are these bhateejas the cause of inflation? Certainly not! Chacha is merely passing the devalued buck. The chief minister of Goa can hardly be blamed for the high prices of vegetables here – and anyway these vegetables come from Belgaum, in Karnataka. It is noteworthy that, at the conference, the chief minister of Karnataka alleged that the real blame lies with the central State. He is dead right.

In the meantime, there is another report here of a statement made by the head of Chacha’s economic advisory council, C Rangarajan, an IAS baboon who climbed the greasy pole to head the central bank. This dude says that the “stimulus package,” by which money supply was hugely increased, should not be withdrawn; and if so, only gradually. What is this multilaterally co-ordinated “stimulus package”?

As Ludwig von Mises made clear long, long ago, global monetary co-ordination is nothing but concerted efforts by all central banks to pump more and more credit into the world economy, thereby inflating the world. In the present case, Chacha, also a central banker, increased money supply in India, in tandem with other central banksters, in order to shore up the US dollar, which would have nosedived if they had not done so. This is multilateralism in monetary matters. That is why I recently advocated unilateralism as the path to sound money – which means the end of inflation.

In his magnum opus, Human Action: A Treatise on Economics, in the section on "International Monetary Cooperation," the last section in Chapter XVII on "Indirect Exchange," Mises writes:

What governments call international monetary cooperation is concerted action for the sake of credit expansion. They have learned that credit expansion, when limited to one country only, results in an external drain. They believe that it is only the external drain that frustrates their plans of lowering the rate of interest and thus of creating an everlasting boom. If all governments were to cooperate in their expansionist policies, they think, they could remove this obstacle. What is required is an international bank issuing fiduciary media which are dealt with as money-substitutes by all people in all countries.

[The fully searchable PDF file of Human Action can be found here. For this quote, go to page 476.]

Chacha Manmohan S Gandhi, and his crony, Rangarajan, are not economists. They are inflationists. They are “banksters” (as in “gangsters”). They should be identified as such. They are the biggest enemies of the poor Indian common man. They are friends of Ben Bernanke.

Real economists believe in the "economization" of scarce resources, in promoting savings, in increasing investment. These inflationists believe in eroding savings, causing malinvestments, destroying economic calculation and causing "capital consumption." They are the cause of all the "de-civilization" we see around us.

We are fortunate that there is even worse news about Chacha mortgaging the interests of the poor Indian to foreign powers. He has just supported the legitimacy of RK Pachauri, TERI, and IPCC. The poor Indian needs cheap energy – not this “sustainable development” and “climate change” bullshit.

So Chacha is a liar on many counts. I hope the nation sees through his deceptions.

On NREGS: Flagship Of The Pirate Fleet

An editorial in Mint today talks of the fourth anniversary party of Chacha Manmohan S Gandhi’s “flagship” National Rural Employment Guarantee Scheme (NREGS) – a party that was celebrated “with gusto” by Chacha and his supreme boss, Soniaji Gandhiji, the Queen Bee of the CONgress hive of hornets.

Interestingly, the editorial reveals that two rats have abandoned this sinking ship. Jean Dreze, professor emeritus of sociology at Delhi University, a great champion of NREGS, and Aruna Roy, the NREGS “activist” who campaigned for the Right to Information Act which is designed to run parallel with NREGA, both boycotted the party. We live in interesting times, folks.

As an economist, however, I maintain that State-funded employment is sheer nonsense; indeed, it is pure theft. If the State pays for the labours of the rural poor through taxation of urban tax payees, it must never be forgotten that the abolition of these taxes would generate far more real employment as the urbanites would spend their earnings themselves, on goods they value. If they saved their money in commercial banks, and the banks lent out these funds to entrepreneurs, a lot of genuine employment would be created.

What is happening under NREGA is even worse: the scheme is being funded through inflation. The Chacha State is printing paper notes (“quantitative easing” is the new term they are employing), calling these notes “money,” and funding this nonsensical politics of welfarism.

Now, inflation is a hidden tax on everyone – including the poor. What sense does it make when all poor people throughout India pay more for sugar, dal and tea, while a small fraction of the rural poor get handouts?

Further, it must never be forgotten that this Total Chacha State is a destroyer of urban jobs. We are an economically unfree country. Much of what is “not seen” in urban India are businesses that have never opened – because of the Total Chacha State’s restrictions on enterprise. Rakesh Wadhwa’s casino in Kathmandu employs 1300 people. There are no casinos in India, save sunny Goa. We do not have a nightlife industry. Bollywood films are big business but poor girls (and boys) cannot boogie live in bars. The talent contests on television show how much music and dance talent exists all over India – but none of this talent has scope for employment in urban India. And Chacha is busy “generating” employment in the boondocks.

The real purpose behind Chacha and Soniaji Gandhiji’s “scheme” is political. These funds are spent at sub-district levels on the advice of local politicos, CONgress vermin of the lowest rung. These funds are handed over to their henchmen. Goons get this money. BureaucRATS get their share of the booty.

The urban taxpayer is therefore funding political recruitment. When we next see a Congressman with his large band of “supporters,” we should realize that NREGS funded this support, not adherence to any political ideology or cause, or even personality. NREGS is nothing but political corruption, another attempt to fool the people.

I therefore found another article in Mint today noteworthy, where the author talks of “not guns or butter, but roads and dal.” Yes, she is right. Say no to guns, and say no to the NREGS too. Let us fund roads. And stop the printing presses, so we can all afford dal.

What Is "Rule Of Law"?

Hilarious news: The Shiv Sena, which runs the Mumbai municipal corporation, closed down 27 Marathi-medium schools last year – because they don’t attract students. The comments from readers appended to the news report are interesting: one advocates “hanging the hypocrites”; another wants force to be used to send the children and grandchildren of pro-Marathi politicians to Marathi-medium schools; and yet another wants State power to be used to push the Marathi language.

I would prefer to liberate education from State control. The Mumbai municipal corporation should clear garbage, not run schools.

The State is but the “social apparatus of compulsion and coercion.” The less this coercion, the better.

Speaking of unbridled coercion, there is news from lawless Chattisgarh - where the lawless police are engaged in a declared civil war - that cops shot dead 8 rebels. No arrests, no trials, no “due process.” Very different from how in British times Sleeman and his men dealt with “thugee”: Over 4000 thugs were arrested and convicted in courts. Apart from “intelligence gathering,” the bulk of the “work” Sleeman and his men did lay in collating evidence for the courts. It was tedious work, but they did it because they believed in the rule of law.

So the question arises: What is the “Rule of Law”?

The idea of a rule of law implies that it is not the “rule of men” – which can be capricious and arbitrary. It implies that those in charge of running the “social apparatus of compulsion and coercion” do not themselves flout laws that the people obey. If the people cannot murder or rob, neither can their rulers.

These ideas first took root in feudal England. They began with the signing of the Magna Carta in 1215 AD, when the errant king, John, was forced to sign on the dotted line that he would follow “due process.” This is how the English fortuitously discovered the idea of “constitutional freedom.” This is how “liberty under law” was born. Not by subjecting the people to laws, rules and regulations. On the contrary, this was achieved by placing rulers under law. This is what we in India must achieve. We are ruled by a lawless bunch of cops, who are themselves under the orders of political goons. Rogues rule us. Not law.

Why has this happened? Hans-Hermann Hoppe explains why in his article contrasting monarchy with democracy that I linked to yesterday:

Only the ruling family – and to a minor extent its friends, employees and business partners – share in the enjoyment of the expropriated resources and can thus lead a parasitic life. Because of these restrictions regarding entrance into government and the exclusive status of the individual ruler and his family, private government ownership stimulates the development of a clear "class-consciousness" on the part of the nongovernmental public and promotes opposition and resistance to any expansion of the government's exploitative power.

A clear-cut distinction between the (few) rulers on the one hand and the (many) ruled on the other exists, and there is little risk or hope of anyone of either class ever falling or rising from one class to the other. Confronted with an almost insurmountable barrier in the way of upward mobility, the solidarity among the ruled – their mutual identification as actual or potential victims of governmental property-rights violations – is strengthened, and the risk to the ruling class of losing its legitimacy as the result of increased exploitation is heightened.

Thus, with the public government of unlimited democracy (as contrasted with limited monarchy), every petty tyrant joins the State and embarks on his own brand of tyranny. The idea of checks and balances becomes a fiction: all these public tyrants support and profit from each other’s tyrannies and corruption. This is why our politicians do not run the administration; rather, they make money from transfers and postings, selling “lucrative posts” to the highest bidders. With regular elections, and regular recruitment to the ranks of the bureaucracy, the public is befooled into thinking that they rule themselves. Their education in Civics only serves to blind them further.

Uneducated Englishmen of the middle ages understood political reality far better. It was then said:

The King is Under God and the Law.

That is, the King was under the law, not above it.

Till today, the monarch of the British people does not make law. The monarch only had a free hand in the “administration of justice.” This clear understanding prevailed right up to Adam Smith’s time. Till then, the English people inhabited a "private law society." In the Wealth of Nations (1776), Smith outlined the “three duties of the sovereign." Note there is no mention of making law, nor any mention of supplying society with money. I have highlighted the portion pertaining to the rule of law:

According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings: first, the duty of protecting the society from violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, thirdly, the duty of erecting and maintaining certain public works and certain public institutions which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expense to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.

Democracy, public government, public law and public education - especially Civics - have truly befuddled us all. Today, parliament is “sovereign” – and it makes new laws every day, a power that no sovereign of old ever had. This is the tyranny of "public law." Bruno Leoni called this an age of "inflated legislation." Read his Freedom And The Law. I also recommend Friedrich Hayek's Law, Legislation & Liberty, especially the first two volumes.

In feudal times, the uneducated and simple-minded English people had another popular saying:

There is no King where Will rules and not the Law.

So here is another Truth to mull over:

In India, we have the world’s longest constitution, we have regular elections and a constitutionally established “independent” election commission, we have a supreme court and high courts, district courts and magistrates, we have police forces, we have bar councils and innumerable law colleges, and a “constitutional bureaucracy” on top of it all. We even have prisons and hangmen – but we do NOT have the rule of law. We are ruled by goons and baboons.

Q. E. D.

On Reason, Hoppe, And Baboons

We are extremely fortunate that LRC today features Hans-Hermann Hoppe, the foremost libertarian philosopher of our time, in an article titled “Political Economy of Monarchy and Democracy.” Hoppe makes it clear that private ownership of the means of coercion, which is monarchy, is far superior to public ownership, which is democracy. He proves, through basic economic theory, how monarchs have a longer time horizon than democrats, because monarchs own the state and hand it down to their heirs, while democrats are mere short-term caretakers, who invariably loot and scoot. The Hoppe article, which compresses in a nutshell the basic arguments of his path-breaking book Democracy: The God That Failed, is available here. I strongly suggest you sit back and carefully read this article. After that, you might find this editorial in Mint most interesting, for it talks about the “fiscal mess” in the USSA, the great champion of democracy, where a long line of loot-and-scoot caretakers have bankrupted the state.

Hoppe’s article, in these trying times, illustrates how Reason, the foremost tool of thinking man, can come to our assistance as we grope for a way out of our own predicaments, brought on us by unlimited socialist democracy.

Today, Rahul Gandhi is reportedly waging a war of words with the Shiv Sena, arguing the same old line that I rubbished yesterday: “Mumbai belongs to all Indians.” This is further rank opportunism and hypocrisy, this time from the “ crown prince” of the CONgress.

Let us not forget that a CONgress government in Maharashtra passed the infamous order reserving taxi permits for local Marathis. So, Rahul Gandhi, too, is just “playing politics.” This is the lowest point to which our democracy has ever fallen. There is nothing called “Reason” in the chatter of these politicians, from all parties.

Of course, our politicians are expected to be nothing more than the “representatives of the people” – and these people are all illiterates. In the architecture of the Total Chacha State, policy advice employing Reason is expected to come from career civil servants – the baboons of the IAS. I was therefore quite amused to see the Barkha Dutt show on UndieTV this Sunday, shot in the LSE in London, on the occasion of the launch of a new book by NK Singh, an IAS man who has promoted himself into the Rajya Sabha. The title of the book was what amused me the most: Not By Reason Alone.

If not reason, what does this baboon expect to use to guide the nation’s collective destiny? Will he depend on mystic revelation? On intuition? On instincts and gut-feel? Will he consult astrologers?

I myself was on the Barkha Dutt show a decade or so back, with a clutch of IAS baboons. I recounted on prime time television how the IAS Academy then had employed a Marxist-Ricardian (follower of Piero Sraffa) as their professor of Economics. The baboons were not amused. Nor was Dutt. I was never invited to the show again. Ha ha.

So much for the IAS Academy, where Reason is supposed to be employed to train our elite administrators. Do read about Haileybury, where civil servants of the Honourable East India Company Service (HEICS) were trained, and their brilliant faculty of classical liberal political economists, recounted in detail in Philip Mason’s Men Who Ruled India. That is why they were MEN, not baboons.

Anyway, Not By Reason Alone was launched in London by a galaxy of baboons, including the biggest baboon of them all, montek, the central planner. Also dancing in attendance was Mukesh Ambani, the expansion of whose business empire has nothing to do with either Reason or Enterprise, but more to do with keeping baboons happy, which he was doing very well on the LSE stage. He is a towering example of what étatism does to businessmen. Peter, Lord Bauer, also of the LSE, said étatism led to the “politicization of economic life.” This applies completely to the Ambanis, the Tatas, the Birlas, Bajaj et. al. Their only “enterprise” lies in managing baboons.

Perhaps NK Singh, montek, Ambani and the rest should now consult the Oracle of Delphi, and ask the question: How long will the Indian people tolerate this nonsense? Not much longer, I think. But that is my gut-feel, not Reason. I feel it in my bones that there is going to be a huge political upheaval in India soon. And perhaps in the USSA too.

Read Hoppe. His is the voice of Reason.

Opportunistic Politics In Mumbai - Take #2

After decades of bitterly divisive communal politics, the RSS, the BJP and even the Chacha State’s police minister, an eminent socialist lawyer, have issued a call that “Mumbai belongs to all Indians.” This is their response to the huge public outrage on the Maharashtra cabinet decision, made by a CONgress-NCP administration, to reserve taxi permits for local Marathi-speaking boys. I had commented on this tyranny against poor migrants in an earlier post.

Note that politicians of the RSS-BJP have never included Muslims and Christians among “all Indians.” That is the trademark of their communal politics.

HL Mencken defined the demagogue as “one who preaches doctrines he knows to be untrue to men he knows to be idiots."

So let us first examine the errors in their doctrines.

The word “belongs” indicates Property. Thus, the statement that “Mumbai belongs to all Indians” is as nonsensical as saying that Air India or SAIL or the Rashtrapati Bhavan belong to all Indians. Theirs is thus the doctrine of collectivism, of collective property, a fiction, a deliberate untruth. On the other side, the Shiv Sena and the MNS have always insisted, and continue to claim, that “Mumbai belongs to all Marathis.” They too are appealing to a collective identity, although a narrower one. Yet, both doctrines are the same – they endorse the idea of Mumbai as collective property.

In reality, Property presents the picture of a “patchwork quilt.” We all own bits of Property, most of it outside Mumbai. Further, many bonafide foreigners own Property in India – and their rights too must be protected. This is especially true of Mumbai, India’s commercial capital; that too, in a globalizing world. These demagogues are still stuck in the world of socialism, collective property, collective identity and the Volkswirtschaft (national economy). They cannot comprehend the real world of individuals, individual property, individual identity, and the Weltwirtschaft (world economy).

To classical liberals, the only true purpose of “civil government” – the social apparatus of compulsion and coercion – was the protection of life, liberty and property. That is, the lives of all individuals, the liberties of all individuals, and the properties of all individuals – including foreigners. Modern capitalism would never have erupted in Britain had the laws not protected the loans of foreign bankers. Today, foreigners face huge hassles buying property in India, including in Goa.

Thus, all this talk is but demagoguery and pure rhetoric. There is nothing of any substance in this chatter. These politicians are just “playing politics.” This is socialist democracy at its opportunistic worst.

Frankly, I don't know what the big fuss over Mumbai is about. Bombay might have been a fine city, but Mumbai is certainly not. There are many Maharashtrians in south Goa, and one I just spoke to this morning, an artist, told me how much he hated the city, and preferred to live in our little village here. He spoke of the dreary Mumbai city-scape, all grey apartment blocks. I told him that I would never ever live in Mumbai either, having experienced its local trains on my last visit there (reminiscences of which can be found under the label "Mumbai Musings" by scrolling down on the right hand bar). As with Calcutta, as with New Delhi, as with Madras, Bangalore, Poona, Simla, Darjeeling... all of urban India is a hell-hole. We need to build new cities and towns, as ET has commented in an editorial today. I would add that we need to rebuild all the old cities and towns too. There is nothing about them to be "proud" of.

The devastated condition of all of urban India, including especially Mumbai, gives further evidence to the fact that our socialist democracy is producing politicians of an extremely low class. They are nothing but cheap demagogues who think, as Mencken said, that we are all idiots. We must be - for they are in charge of our "education." Catch - 22, indeed.