For The Inviolability Of Private Property - Worldwide

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

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

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

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

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


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


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


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


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


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


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


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


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


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


Life, Liberty and Property - that is the mantra. 


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


Think about it.

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.

Only Liberty And Property, Dudes

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

More literacy + More per capita income= More democracy

And the sub-title read:

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

And, at the bottom, was the author, 

Manas Chakravarty's, conclusion:

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

Nothing could be further from the truth.

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


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


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


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


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


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


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


Destroyed.


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


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


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


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


So I go beyond what I said the other day:

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

They do NOT need Welfare.

They do NOT need Miseducation.

They do NOT need The Vote.

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

Abolish All State-Owned Enterprise - By Constitutional Law

A good definition of a State-owned enterprise (SOE) is:

A firm with an unlimited capacity to make losses.

We discussed Air India the other day, in which I quoted the following from a news report:

The airline, which is burdened by an accumulated loss of Rs 20,320 crore, has outstanding loans and dues of Rs 67,520 crore -- of which Rs 21,200 crore is working capital loan, Rs 22,000 crore is the long-term loan on fleet acquisition and Rs 4,600 crore vendor dues, latest official figures showed.

Today, the bad news is about BSNL - the State-owned telecom firm - which has now accumulated losses of over 6000 crore rupees (1 crore = 10 million). Its revenues have declined - and its biggest cost is salaries for its 2,77,000-strong workforce. BSNL is opting for a voluntary retirement scheme that will cost the company Rs. 2,700 crore while the Department of Telecom (which means us) will have to shell out Rs. 18,000 crore. 


Overstaffing - the bane of the public sector: "Jobs for the Boys."


What I would like to add today on discussions against SOEs is the fact that they are "unfair competition." If a private telecom firm had made such losses as BSNL, and if its employees numbered so much, it would have folded up long ago. Ditto for Air India. New, private owners would have taken over both these firms. But with SOEs, this never happens. And these loss-makers continue to "compete" with efficient private firms, taking business away from them. Note that the news report above on BSNL says:

BSNL, which offers telecom services in all areas of the country, barring Delhi and Mumbai, had 95.14 million mobile subscribers as of July 31. It is making efforts to catch up with its private counterparts.

That is 95.14 million subscribers "unfairly" taken away from private firms. If BSNSL and Air India had been allowed to fold up, their employees would have found jobs with profit-making private firms - and contributed to national wealth.


Why should there be SOEs at all?


In the old days, like when I was in college studying Economics, we were told that Chacha Nehru set up these State-owned firms because, among other reasons, "private capital was not forthcoming." That is clearly not the case today. In telecom as well as civil aviation, in steel, in hotels, in fertilisers - in everything - private capital is doing wonders. And this is particularly true of telecom and civil aviation, two sectors where SOEs are failing dismally, showing clearly that they "work" only where competition is outlawed - like railways and electricity. This itself shows the inherent inefficiency of SOEs. Ministers and baboons are unfit to run enterprises - and they most certainly should not be allowed to do so with money pulled out from the public treasury.


So, when we have a New Constitution, when we have our Second Republic, let us include a clause that debars The State from funding any SOE.

The Poor Need Freedom - Not Education, Nor Welfare

I am extremely pleased to see an old post titled "Shah Rukh Kahn and the Truth" top the list of "popular posts" supplied by Google on the right-hand bar. This post makes it obvious that inflationism is bad for the poor - a point I also made the other day, when I discussed the MGNREGS.


But the question remains: What is best for the poor?


Well, for one, SOUND MONEY.


Apart from that - PROPERTY RIGHTS.


And FREE INTERNATIONAL TRADE - so their consumption can improve.


Fourth - LIBERTY!


I gave the example the other day of the NIGHTLIFE INDUSTRY. Think about it: How did black slaves become "superstars" in America? Because of New Orleans - and jazz. In India, when I watch the talent shows on TV (in regional languages, too) the plain fact emerges that millions and millions of Indians are hugely gifted in song and dance, and in playing musical instruments. But they have no place to play - play "live," that is. This hurts the poorest of them all. The better off ones make do publishing music, and appearing in movies and television. The poor ones go broke. I have personally seen hugely gifted rock and jazz artistes in Delhi broke. Broke as hell. 


Now, let us say there is LIBERTY - and a 24-hour economy. Nightlife. Ganja-charas. Casinos. Nightclubs. 


Obviously, many, many poor people will make money.


Then, they will spend this money - and other businesses will make money.


Then, these businessmen will spend - and the cycle will repeat itself endlessly.


This is Jean-Baptiste Say's "Law of Markets." In a nutshell, it says that if X sells, demand is created for all non-X. 


Do read my column on this important economic law under the title "What Pumps Up An Economy" here.  Jean-Baptiste Say was known as the "Adam Smith of France." Great man. Vital law - of markets.


The poor do NOT need (mis)education from our The State. They know lots of things that school can never teach them - from making idlis to playing the guitar. As Jimmy Page said, "The good thing about the guitar is that they do not teach it at school." Freedom is what the poor need.


And as for welfare - it is phoney. It is funded by "funny money" - which erodes the capital of the poor. End this nonsense.


Liberty!

Nilekani's UID - Passport To Totalitarianism & A Police State

Before assessing Nandan Nilekani's UID (Unique Identity) Scheme for iris-mapping and fingerprinting each one of us for Police Records, it might be useful to read Wendy McElroy's recent article against passports titled "Passport to a Total State." UID could be a means to convert our totally failed The State into a Total Police State. McElroy, a US citizen, begins thus:

"Your papers!" In old movies, the demand is barked at trembling travelers by a Nazi with a guttural accent. If the demand is made in the opening scene, then the audience knows immediately that they watching a totalitarian state in which travelers are in danger.

"Your papers!" now rings out at every American airport and border crossing. The accent is different but travelers need to recognize with equal immediacy that a totalitarian state is playing out in front of their eyes, and they must be careful.

McElroy asserts: "It is the mandatory nature of any travel document that converts it into a violation of rights." UID will be mandatory, too.

  

She adds: "With the exception of trespassing on private property, people have an absolute right to travel in peace and at their own discretion." 


And she ends her piece with these ringing words:

The passport has grown into what is arguably the single most powerful tool of totalitarian America, second only to law enforcement [read "legislation-enforcement"] itself. It no longer pretends to protect individuals; not a single terrorist has been apprehended as a result of passport checks. But it does cement the totalitarian state. The mandatory passport should be reviled and rejected as an abuse of human rights and common decency. A nation that requires one cannot be free.

 In my life I have never suffered more than at the hands of passport officials and, of course, their counterparts, the visa officials. And The Police, of course. 


The question is: Do we strengthen these bastards? Or, do we get RID of them?


In my book, in a market economy, citizens must have secrets, including especially business secrets. Bank accounts must be secret - as they were in Switzerland once-upon-a-time. 


On the other hand, whatever is done in the political-bureaucratic sphere must be completely OPEN. No "official secrets."


Think about it.


Song of the Day: Mr. Bob Marley, of course, singing:

Why can't we roam,

This Open Country?

Why can't we be

What we want to be?

WE WANT TO BE FREE!

Hey! Mr. Cop,

Ain't got no Birth Cerfiticate (sic) on me now...

You can watch the video of this great song here.

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.

Free-Trading & Self-Governing Cities & Towns As The BASIC POLITICAL UNIT Of The Second Indian Republic

Mohandas Karamchand "Mahatma" Gandhi erred on many fronts: His hatred for alcohol has corrupted Gujarat, where everyone, rich or poor, drinks in hiding, and where the highest incidence of liver cirrhosis is among police inspectors; his hatred for machinery put India back by half-a-century; and, lastly, his "vision" of Gram Swaraj and "rural development" led to the utter neglect and consequent destruction of all our cities and towns. 


In the meanwhile, the villagers are moving en masse to urban areas looking for opportunities in The Market - while chacha manmohan wants them to stay back and dig ditches for his MGNREGS for inflation-affected RBI paper notes.


The village CANNOT be the basic political unit. It MUST be the city and the town. This is what "civilisation" means. This is also what "politics" means, rooted in the polis. 


Today, all our "metropolises" are seats of "higher levels of government" - and these higher levels have destroyed the cities in which they are based. Nude Elly is the best example. But not that Calcutta and Bombay are any better. Or Bangalore, for that matter.


And we have at least 150 smaller cities. And thousands of towns of all sizes. All are close to collapse.


Why do cities matter so much?


Because, where population is high, markets are bigger. In the very first chapter of The Wealth of Nations, Adam Smith says that "the extent of the division of labour depends on the size of the market." So, if you want to become a taxi driver, receptionist, plumber, electrician or even a cigarette-vendor and stay back in your sparsely-populated village, you can FORGET ABOUT IT.


The "division of labour" is what SPECIALISATION in the market economy is all about. Ludwig von Mises calls the Principle of the Division of Labour or Specialisation the "Principle of Cosmic Change and Becoming." This is how we "become" what we want to become - which is how and why I became a Philosopher of Freedom.


You cannot "become" much stuck in a village.


British India was an urban success story. Do read Anthony King's Colonial Urban Development. They built 80 "hill-stations" in 50 years - and all the Big Cities and even all the Small Towns were well looked after.


These morons have destroyed them all - including Simla, including Darjeeling, and including Mussoorie, where the IAS Academy is located.


They have built only 3 new cities - and all are State Capital Cities: Chandigarh, with its hideous Le Corbusier architecture; Bhubaneshwar, where I just returned from, and which is a disaster; and Gandhinagar, from where Narendra Modi rules over Prohibition-era Gujarat.


The Principle to invoke is Subsidiarity - which means that, first, if something is required, the Free People will be asked if they can produce it themselves, via The Market, or via Charity. If there is something the Free People cannot produce, and this is required, like a good road with a broad footpath, then this task must be handed down to the LOWEST LEVEL of government - which is the City or Town "Civil Government," which is an "honest civic corporation."


So, let this be the First Task of all the Free People of Urban India - to set up ONE honest civic corporation in their respective cities and towns. These are governments with their "nose to the ground." We need these first - and thousands of them.


We can think of higher levels of government later.

On Their News... And Mine

The 15th of August was not just the anniversary of the First Indian Republic: this day also marks the 40th anniversary of the US dollar's link with gold getting broken. The year was 1971 - and the president was Nixon. Then, an ounce of gold was worth 35 dollars; today, it is well over 1300 dollars. Do read Doug French's article on this "unhappy birthday of global fiat paper money." After that, Cris Lingle's piece for The Freeman on the "dangers of central banking" is worth going through too, and slowly. 


Our Great Leader, chacha manmohan s gandhi's Independence Day Address to the Nation from the ramparts of Red Fort was received unenthusiastically here in South India: the local paper I read, in its editorial, called it "uninspiring and repetitive, and full of excuses." But an editorial in The Indian Express carried an excerpt which is worth pasting below for my reader's attention:

"Controlling rising prices is a primary responsibility of any government,” said Prime Minister Manmohan Singh during his Independence Day speech at Delhi’s Red Fort.  “We have continuously taken steps to rein in prices,” the PM continued, “but, unfortunately, sometimes we have been confronted with a situation in which the reasons for rising prices lay outside the country.”

I hope my reader by now knows that the above statement is a bald lie.


In a Free Market Economy ALL PRICES ARE FREE. The government only acts against ENEMIES OF PEACE AND ORDER. The money is HONEST.


Inflation is a purely monetary phenomenon. It occurs because the central bank increases the supply of money to fund The State, which is a "dissaver," always in "deficit." Inflationist-welfarism is thus a CRUEL JOKE on poor people. It MUST be ended.


Do also read this latest Deutsche Bank Update on Inflation in India.


The main person in the news, however, is Anna Hazare, with his crusade against corruption, aimed at nothing else but the creation of YET ANOTHER government department! 


I have a few posts on this nonsense you can easily search and find, but today I would like you to read two excellent articles against this nonsense by two young fellows whose minds I played no small a role in shaping. These young lads are Vipin Veetil and Chandrasekaran Balakrishnan. The former dropped out of the Delhi School of Mathematical Economics after a few discussions with me (and some talks); he then became an editorial writer for Mint; after which he is now pursuing a PhD in Economics in the USSA. The latter is from the Planning Commission (no less) and writes the Hayek Order and also the Soldier of Freedom blogs, both of which are on my Blog List.


The first of these articles, jointly authored by the two, was published in Forbes Magazine, and can be read here.


The second of these articles, from Pragati Magazine, authored by Vipin, can be read here.


I hope you will all then realise what the ONLY solution to GOVERNMENT CORRUPTION is - and that is, a drastic cutting down of The State and its powers, so as to let all businessmen FREE of State Interference.


This means A Second Republic!


No less.


And now, for my news. An anonymous comment that I did not publish inquired as to why no posts had appeared for five whole days: was I in jail or an asylum? he asked. Well, the answer is a little of both. The cops picked me up from my perch next to the sadhu, took me to a hospital - and from there, by ambulance, to the National Institute of Mental Health (NIMHANS) in BANGALORE! What a horrible ride!


Anyway, the first evening, a nurse wanted to inject me with some "sedative" - but when I looked at the pamphlet of this injection, it said it was meant for "serious psychoses and mania." I was horrified! Have I exhibited such symptoms? I asked the nurse, She said if I did not take the injection, she was authorised to use force on me by calling for the security guards. However, better sense prevailed. She called in the Junior Doctor. I told him that I am a student of "reality"; that I have been "calm and composed all day"; and that "psychoses" according to the DSM III mean a "gross distortion of reality." I told him that not I, but all "mathematical economists" suffer from this "gross distortion of reality." I told him that 9.3% inflation rate and 7.7% growth rate are both gross distortions of reality.


They changed my ward.


Things are better now. The doctors are all very friendly.


Oh yes. MY MOTHER was there all the time. But she should be leaving soon.


All should be well.


See you all tomorrow.

The Trial Of chacha manmohan s gandhi - Part 4: Take #2

Today, I will discuss the Corruption of The Law; and this is particularly relevant because chacha's hand-picked, chosen "human resource destruction" minister is a socialist lawyer. In any case, what "human resource" are they talking about when all the minds of all the kids are being poisoned with the gloom  of the "population problem"?

It has been my proud privilege to have influenced some students of Law from SDM Law College, Mangalore, who invited me to lecture there. One of them, in fact, won the All-India Moot Court Competition, and would certainly have made an excellent lawyer. I gave them much to read, including, of course, Frederic Bastiat's classic essay The Law, with my foreword. None of these good boys joined the legal profession. They said the profession itself was corrupt.

The Law is corrupted when we confuse it with Democratic Legislation. Law is eternal, and universal; and true Law is all about Property. Legislation is man-made, passed in a "house of representatives" by the majority of the day; and legislation is forever changing. There is no "Certainty of the Law" with legislation. Indeed, our Constitution itself has been amended some 100 times in 50 years; likewise, even the Representation of People Act is not what it used to be. 

And this Socialist Constitution does not uphold Private Property. Thus, instead of protecting Property, our The State engages in ceaseless violations of what is ours. This is how The State becomes a thief. As Bastiat put it in his opening remarks, "the Law becomes guilty of the very crimes it is supposed to punish." This is what Socialism is all about: what Bastiat called "legal plunder." Indira Gandhi legally plundered Air India, banks, insurance companies and coal mines from their "rightful owners." And Parliament passed all the Acts of Nationalisation.

But it doesn't stop there.

Legislation is the Instrument of Socialist Interventionism. Each and every piece of legislation aims at "social engineering." Thus, the license-permit raj was based on an Industries (Development & Regulation) Act. Similarly, it is the Telecom Regulation Act that has caused the 2G scam. Regulation, as Professor Deepak Lal pointed out, is their "New Dirigisme." 


Similarly, the evil prohibition of ganja is because of some such Act of Parliament. All this evil socialist legislation is in violation of Property. All this legislation takes away our Liberty. 

And things get worse: these corrupt both the bureaucracy as well as Democracy itself. Bureaucrats get "empowered" to intervene in The Market. They call it "regulation of the market" but it is really "regulation of people." In effect, these socialist-democrats do not know what "civil services" are meant for. It is noteworthy that they renamed the Indian Civil Service and it became the Indian Administrative Service. There is nothing "civilian" under Socialism. There is no "civilisation" either, as we can all see.

Democracy is likewise corrupted. No longer are Members of Parliament "representatives of constituencies." Rather, they all become representatives of some "special interest group" or the other. One represents steel, another represents mining, another fertilisers - and this is how they corrupt the working of all the "parliamentary committees." Constituencies lie neglected - and we can see this all around us. Votes are bought and sold. The public choice literature calls it "log rolling" - but it might be better to call it "vote trading." 


This is particularly true of the Democracy of the USSA. PJ O'Rourke's Parliament of Whores is a must read. O'Rourke is HL Mencken Fellow of Cato Institute and also Foreign Affairs editor of Rolling Stone magazine. All you rockers out there should read all his books. In particular, Bono, who is being misled about Third World poverty by Jeffrey Sachs. 


Serious students should read both the books Ludwig von Mises has written against interventionism, pointing out how it leads inevitably to Socialism and also how it corrupts Democracy. It is because of interventionism that the USA has become the USSA. General Motors has been nationalised!

Now, lawyers are themselves a "special interest group." And they are particularly dangerous because they are a "self-regulating profession" - like MBBS doctors. Lawyers teach lawyers, and only lawyers become judges. And what do you think they teach? They teach the ugly lie that democratic legislation is true Law. This is "legal positivism." Utter crap. It is this that corrupts the Law and empowers all the interventionists. Predators, all.

And chacha has chosen one of these miseducated socialist lawyers to teach all the kids; that too, by FORCE.

Is he not guilty of the very crime that poor ol' Socrates was executed for by Athenian Democracy: "Corrupting the minds of the youth"?

Stay tuned for the concluding part of this Prosecution. Part 5 will appear tomorrow, Inshallah.

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!