This Cardinal Is In Serious Error

A few weeks ago, I welcomed Pope Benedict's call, delivered at the German parliament, for a public debate on positivism. 


Well, today, it seems that the first shot has been fired from within the Vatican itself, with Cardinal Turkson, President of the Pontifical Council for Justice and Peace releasing a document titled “Towards reforming the international financial and monetary systems in the context of the global public authority." This document - which is not a "papal document" - opposes a priorism in Economics, espouses empiricism and positivism, and since these are both "intellectual covers for socialism" - as Hans-Hermann Hoppe has written - the document ends up with all the grave errors of socialism, to the extent of calling for a global central bank.


But the Cardinal begins with some half-truths - half-truths that have prompted one commentator to call this document "Right diagnosis, deadly cure." After the diagnosis, the Cardinal asks the question:

What has driven the world in such a problematic direction for its economy and also for peace?

And his first answer is this:

First and foremost, an economic liberalism that spurns rules and controls. Economic liberalism is a theoretical system of thought, a form of “economic apriorism” that purports to derive laws for how markets function from theory, these being laws of capitalistic development, while exaggerating certain aspects of markets. An economic system of thought that sets down a priori the laws of market functioning and economic development, without measuring them against reality, runs the risk of becoming an instrument subordinated to the interests of the countries that effectively enjoy a position of economic and financial advantage. 

This is an issue concerning epistemology. The question is: Does Economics have to follow the method of physics - which is measurement, after which theories are arrived at a posteriori. Or are the Laws of Economics arrived at a priori, by deduction, and are established by logic, just like the propositions of mathematics or geometry, such that they do not need measurement and observation to validate them?


Let us take an example:


The Law of Exchange - which says that when a good is traded voluntarily, both parties gain by the trade; that their individual valuations of that good are unequal. Obviously, if I prefer beer over money, the barowner prefers money over beer. How does such a law require "measurement" or "observation" to validate it? Obviously, this law is NOT going to be established a posteriori. It is true a priori. 


In fact, "value" cannot be measured, for it lies within the valuing mind. "Value is subjective." All that can be measured are prices and quantities - and the price at which exchange transpires will show agreement, not unequal valuation. The "demand-and-supply curves" type of education teaches nonsense - and these curves can only be produced by "measurement." The curves are actually "statistics."  They are thus History - they are not Theory, which in Economics must be true a priori.


Hence, the methods of physics are NOT applicable to the Science of Economics. Positivism and empiricism are the intellectual covers for socialism and interventionism, since they deny the MIND of the acting individual, and they create the false impression of a "national economy" - with its "national income" and its "growth rate" - which must be managed by a super-human mind: that of the central planner; that of the Great Leader. 


Thus, Hans-Hermann Hoppe concludes his brief essay against empiricism with these words:

If we want to attack socialism, we must also attack the absurd intellectual error of empiricism. And if we want to defeat socialism, we must make a principled Misesian case based on the logic of human action and the irrefutable laws of economics.

Since Cardinal Turkson, President of the Pontifical Council for Justice and Peace,  espouses empiricism and disavows a priorism, he is led deep into socialism, statism, and even the "primacy of politics."


Here are some quotes from the rest of the document:

...the world’s peoples ought to adopt an ethic of solidarity as the animating core of their action... [But we are all individuals, and we buy and sell in markets full of strangers. See my article on "catallaxy."]

the risk of an “idolatry of the market..." [The real risk is idolatry of the State and political authority. See also Tom Woods' rejoinder here.]

global social justice seem most urgent... for achieving... a fair distribution of world wealth... [The "mirage of social justice" gone global!]

one can see an emerging requirement for a body that will carry out the functions of a kind of “central world bank” [Horrors!]

strengthening the existing institutions, such as the European Central Bank [Here is a report that Germany will ditch the Euro if the ECB starts printing more of them.]

In this process, the primacy of the spiritual and of ethics needs to be restored and, with them, the primacy of politics – which is responsible for the common good – over the economy and finance. [Read Anthony de Jasay's Before Resorting to Politics.]

forms of recapitalization of banks with public funds making the support conditional on “virtuous” behaviours aimed at developing the “real economy” [Moral hazard.]

At this point, I would like to remind the Cardinal of his views on the Principle of Subsidiarity, which he upholds, and defines as follows:

According to the logic of subsidiarity, the higher Authority offers its subsidium, that is, its aid, only when individual, social or financial actors are intrinsically deficient in capacity, or cannot manage by themselves to do what is required of them.

Now, money has ALWAYS been "private money": GOLD. Accordingly, we human beings, in freedom, without the aid of any political authority, can manage to produce our own money. Free banking can be conducted under traditional commercial law - as Jesus Huerta de Soto has shown. Thus, according to a Principle upheld by the Church, and also by Cardinal Turkson, there is NO NEED for ANY POLITICAL AUTHORITY over money and banking, and certainly not at the global level.


This is NOT new - not "neo-liberalism." This is "classical liberalism." Adam Smith's "Three Duties of the Sovereign" did NOT include anything to do with money. I have recounted these three duties here.


Mises put it best, in Human Action, when he wrote:

The use of money in a market economy is a praxeologically necessary fact. That gold, and not something else, is used as money is merely a historical fact and as such cannot be conceived by catallactics.

Thus, we Hindus are currently celebrating Diwali - when we traditionally buy gold. It is a "custom" - from History. This has NOTHING to do with "theory."

As far as "world order" is concerned, Mises also put it best when he wrote, in Nation, State, and Economy:

Liberalism, which demands full freedom of the economy, seeks to dissolve the difficulties that the diversity of political arrangements pits against the development of trade by separating the economy from the state. It strives for the greatest possible unification of law, in the last analysis for world unity of law. But it does not believe that to reach this goal, great empires or even a world empire must be created.

I also recommend to my reader this Islamic Judgment on Paper Money - which shows very clear reasoning.

But recall where I began unraveling this litany of errors - with Cardinal Turkson's empiricism, his antipathy to a priorism, and his love for "measurement" in Economics. On the subject of epistemology, I earnestly recommend Hans-Hermann Hoppe's Economic Science and the Austrian Method, which you can find here.


Professor Hoppe's article "Why the State demands Control of Money" is also a very useful read in today's times.

Why I Despise Central Banking, Keynes, And Keynesians Like Paul Krugman

Western Europe, and, in particular, England, developed ahead of the rest of the world only because here the people managed to contain their rulers. Kings, and their royal servants, had to "obey the law" no less than the people. Property and contracts were thus secure from State predation. Economic development naturally followed. In England, the beginning was in 1215 AD - the signing of the Magna Carta. With this, there was "due process," habeas corpus, and much more. After this, the people said, of their rulers:

The King is UNDER God and the Law

and

There is no King where Will rules and not the Law

Such events never happened in nations like ours. Our rulers were always arbitrary.


With the coming of written constitutions, a new concept emerged alongside that of the Rule of Law - and that is "limited government": the purpose of constitutions was to limit the powers and scope of the State. There are two effective means of limiting this power: one, by constitutional law; and the second, by the Budget.


Both these limits to government have been overthrown in modern times by the Keynesians, what with central banking and fiat paper money. These have been weapons in the hands of rulers to buy up support and to finance anything and everything to their own glory, from wars to welfare to space exploration. Entire parliaments can be bought. This is particularly true of India.


The whole world has been inflated. Money is no longer something "hard." It is just government paper. 


Yet, this government paper still has a "promise to pay" inscribed upon it, signed by the central banker. This promise - which makes the note a solemn contract - is meaningless today. The note is actually a Property Title. Today, there is no property backing this title. This is the problem the whole world is facing.


These central banksters practice "fractional reserve banking" with private bankers who are members of their paper money cartel. They say they are "lenders of last resort." Money as well as banking become corrupt under such a system. 


We need gold as money - and free private banking under ordinary commercial law. The writings of Jesus Huerta de Soto are vital in this context. And there is an essay on their import in my Natural Order: Essays Exploring Civil Government & the Rule of Law, which you can read online here. This version is dated 2007 - and I am hoping to have a new edition out next year.


The Keynesians have a very different view of money and banking - one based on "immorality." Keynes claimed to be an "amoralist" - but that was just his homosexuality. As an economist of money and banking, he was a pucca immoralist. Read about Keynes and the "ruling class" who adopted his ideas wholesale in this brief article by Garet Garret. Also, do read the article "Why the State demands control of money" by Hans-Hermann Hoppe.


Today, the most prominent Keynesian in the world is the Nobel laureate Paul Krugman. On the crisis in the Eurozone, Krugman writes that the best way out is to resort to "the power of the printing press" - and let the European Central Bank do the needful, even if current rules do not permit it. 


Really! If printing money could produce wealth, Indians would have been rich long, long ago.


Indeed, even producing more gold and silver does NOT create wealth, as the history of Spain and Portugal testify. The silver mines of Potosi and all the gold looted from South America did not make these nations rich. 


Britain got rich when gold was exported by the East India Company in exchange for spices - much to the displeasure of the mercantilists. What constitutes the "wealth of nations"? Adam Smith answered that in 1776 - and the plain answer was that it was NOT the hoard of bullion. If so, what can more irredeemable paper notes accomplish?


But Keynesian errors are not new. Ludwig von Mises, in his Notes & Recollections, writes of Carl Menger that his essay on "Geld" (money) which he contributed to the German-language Encyclopaedia of the Social Sciences was brilliant. A few pages later, Mises writes:

For obvious reasons I frequently discussed G. F. Knapp's Staatliche Theorie des Geldes (State Theory of Money) with Menger. His answer was, "It is the logical development of Prussian police science. What are we to think of a nation whose whose elite, after two hundred years of Economics, admire such nonsense, which is not even new, as highest revelation? What can we still expect of such a nation?"

Menger, Mises writes, foresaw the destruction of Old Europe. He foresaw the wars that engulfed the whole world. All these wars were financed by "funny money." And these wars will forever continue until the State is once again "limited" by the Budget. And money is gold. Money is private.


Mises once wrote that these "intellectual battles" of our time are something everyone must plunge into - if civilisation is to be saved. These are not difficult issues to understand: what is money? what is banking? etc. I see people crack their brains on crossword puzzles, computer games and Sudoku every day. Yet, these are just pleasurable pastimes, meant to banish boredom.


Surely people can crack their brains at the vital issues of our age - money and banking? The future of our kids - and theirs - depend on it. If Krugman-types win the day, all will be lost.


Paul Krugman also wants to "protect" corrupt banking practices. He wants the power of the printing press to wipe out banking sector losses - irrespective of how much inflation will surely follow, and how much capital loss ordinary people will have to suffer. At least we in India ought to know better than to endure continued inflationism to fund welfare.


In the USSA, there is only one presidential candidate who knows money and banking well - and that is Ron Paul. His photograph graces this post. He wants to "end the Fed." He wants to end war too. He stands for Gold, Freedom, and Peace. 


I wish Ron Paul would add PROPERTY to this list. Without property, there can be no freedom; there can be no "limited government"; there can be no "rule of law": rechtstaat.


Ron Paul will succeed - and civilisation will be saved - only if all you people out there STUDY money and banking and arrive at your own decisions as to what is truth and what is falsehood; what is good, and what is evil.


So, don't "agitate" at political rallies before agitating your brains first.


This is my sincere advice to you all. 

Cities Must Secede - One By One

I found Obama's comment that "Gadhafi's death is a warning to iron-fist rulers" a BIG JOKE. The USSA is in Big Trouble - internally and externally - and they are essentially Hard-Fisted Rulers everywhere, internally as well as externally.


Here is a chilling account of a Police SWAT Team "drug raid" on a Mayor's house, and the article is titled "The War on Drugs has become a War on the American People." Of course - and this is an American War being fought against people all over the world, from South America, to the Caribbean, to Afghanistan and Burma, and even India. There are iron-fisted rulers everywhere - but the good thing is that people are wising up.


Lew Rockwell's column today is well worth reading. He points to the "evil 1%" - who are the personnel of The State. They are NOT the Rich Capitalists - and do also read the great George Reisman's article "In Praise of the Capitalist 1 Percent."

The real Evil 1% is The State.

In our own country, this is becoming increasingly obvious. The CONgress, the BJP, the DMK - the whole system stinks of corruption and sleaze. And as for the Anna Hazare Movement - this editorial from the Express on Kiran Bedi's "corruption" says it all. 


So where do we go to from here?


I suggest Free Cities. Let Indian cities secede from our The State one by one - and engage in trade with the world in freedom. 


Karnataka, whose BJP chief minister has just been arrested for corruption, has two cities that can easily compete with Singapore and Hong Kong if they are free: Mangalore and Karwar. Both have deep water ports. And as for Karwar, it is such a beautiful place, gifted by nature, that it could easily become one of the world's greatest cities. Of course, it won't happen overnight. Rome was not built in a day. 


But there are riots in Rome these days.


Riots in London - and do read this blog post on inflation in the UK. This paragraph is telling:

Since 1998, Britain has lost 40% of its manufacturing jobs and added 35% to its roster of public sector workers, increasing the ratio between these two classes of tax-payers and tax-eaters from 60 drones per 100 bees to 160! And now, despite the highest level of joblessness since 1994, we have the highest gain in the Retail Price Index in 20 years, with the Bank of England actually easing as it rises!

The word "easing" means QUANTITATIVE EASING - better known as PRINTING PAPER POUNDS.

Just as the "hard-fisted" Obama is printing paper dollars.

And chacha manmohan is printing paper rupees - his "inflationary finance" of welfare, and idea he got from the UK and the USSA.

And there are riots in Athens - where "democracy" began.

Yes, let Indian cities secede from our The State - one by one.

Mangalore, Karwar, Pondicherry - and finally, Srinagar, Kashmir.

Secede from the Indian Rupee too - and embrace gold: Honest Sunnah Money.

And let the rest of the world learn.

Incidentally, rahul gandhi is pointing the other way. He gave a speech opposing globalisation. He says "it excludes more than it includes." 


Well, were the ports of Karwar and Mangalore and even Goa "included" in globalisation? Or were they just exporting iron ore of low grade? 


Do we want free trade? 


Or do we want CORRUPTION? 


Some politicians get rich (in Goa it is the CONgress chief minister who is deep into mining iron ore) while those of us who could gain from foreign trade are "excluded" by the guns of the Customs Department sent there by the "iron-fisted rulers" from Nude Elly?


You decide - and act!


I am just your friend, philosopher, and guide.

Would You Lend Them Money?

A friend phoned me yesterday to tell me this story - and asked me to blog it. It seems she phoned her bank and inquired about interest rates on fixed deposits. However, the banker insisted on selling my friend government bonds that carried lower interest - but had tax benefits (and also carried free life insurance). However, my friend, being my friend, refused to swallow the pill - and said she did not want to lend her money to our The State.


She then asked me why her bank was so keen on selling government bonds - what was their incentive? - and I advised her not to lend her money to this bank either, and invest in gold.


But think about it: Lending money to The State has never been a good idea - ever. It brought down the Medicis. It will bring down many European banks. Those who lend money to governments buy "permanent irredeemable debt" - and both the interest as well as the principal are paid out of taxes and fresh borrowings. How is this "sustainable"?


Further, those who still buy this permanent irredeemable debt (in peacetime!) are actually partners of the State and therefore enemies of the tax-paying public.


Thus, the Austrian solution is best. If an Austrian comes into office, he will repudiate the entire debt - contracted by the previous government. And he will ensure that such bonds are never issued again - by constitutional law. Whatever government exists (at the local level) must be financed entirely by legitimate taxes.


Incidentally, our The State is increasing its borrowings by 20 percent - above the budgeted amount. This means some 4,00,000 crores of borrowing - to be "consumed" by welfarism. This is unsustainable. This is "capital consumption." This is the highway to "de-civilisation." This is EVIL!

NO MORE GOVERNMENT DEBT

OWS Quite Like Our Own Anna Hazare Movement

There is a great article bemoaning the statist and leftist nature of the "Occupy Wall Street" movement from the Mises Institute today, titled "Occupied by Government."


It lists out their key demands - and they make me cry! They are:


1. Raise the Minimum Wage to $20:


I wonder who teach these guys Economics or Law - for if poverty could be removed by legislation, India would have been rich long ago!


2. Free College Education:


If the government teaches them, what will they learn? Indeed, they will live forever on minimum wages, and forever go on demanding more!


3. Guaranteed Living-Wage Income, Regardless of Employment:


Further nonsense! What about "economic freedom"? What about "sound money and free, honest banking under law"? What about Ron Paul and his campaign to "End the Fed"? These guys seem to be led by duds!


4. Ending Free Trade And Opening Immigration:


This is the best - AUTARKY! Forget about the "international division of labour." American swadeshi!


5. Immediate across-the-board debt forgiveness for all; Outlaw all credit-reporting agencies:


The Fed is your enemy, stupid. What you are asking for is, strictly speaking, THEFT!


6. One trillion dollars in infrastructure spending:


As the dude who has written this article put it - If this were the solution, why not do 2 trillion? Why not 100 trillion? Why don't poor countries just spend more?


Thus, just as the Anna Hazare Movement here is all bollocks - so is the Occupy Wall Street Movement in the USSA. These guys sound like Noam Chomsky of Harvard U - the guy in the photo above, saying:

Banks Derive Their Money From The State

So, Increase The State

But, there is hope. Some guys are talking about "Fuck the Fed." EPJ has the video of the Boston Fuck the Fed Movement here. It's the third video.


And there is a smart young guy talking Mises, Rothbard, Hazlitt etc. in the OWS area - and there is that video here. Awesome!


If Anna Hazare will fail, OWS will fail too.


And then, perhaps, if guys with sense keep on and on hammering their points home, good sense will prevail, and the correct economic doctrines will rule the world.

Property    Liberty       Gold          Peace

Ron Paul

Say's Law versus The Marxists

The critical question before a poor nation like India is whether the market and laissez faire capitalism will raise our masses out of poverty - or should we stick to étatism? That is, how will the poor get "according to their needs"? Who will think of their needs, and invest in producing them - entrepreneurs or planners? Is Keynesian funny money financed welfare the way out? Say's Law holds the answer.


Say's Law of Markets says that if any poor person manages to sell his produce or services, he will be possessed of the means to demand non-competing goods on the market. This, as we have already discussed, implies the need for economic freedom.


Further, as also discussed yesterday in Part 2 of this 4-part series on Say's Law, modern capitalism is about mass production by Big Companies for mass consumption - by the poor, as in the case of shampoo in sachets or simple mobile phones. 


Thus, the poor, if possessed of economic freedom, will have the proverbial horn of plenty poured upon them by all the Big Companies. And many of them will be small investors in shares, too. In time, they will have TV sets, motorised personal transport, and what not. They will eat better, drink better, smoke better and live better. This is GUARANTEED if markets are free.


Now, this knocks the bottom out of the "iron law of wages" that Marxists believe in, as do Ricardian-Marxists like Piero Sraffa, whose blind follower teaches Economics at the IAS Academy. According to this law, the wages of workers must remain at subsistence. This is untrue - as proved above, looking at consumption. It is also proved by history - looking at the British working class during the 19th century, the heyday of classical liberalism, free trade and laissez faire. 


Further, if capital accumulation proceeds apace, and per-capita capital invested rises, the wages of all workers will also rise, because each one's productivity will rise. Ricardo erred on this score because he and the classical economists did not look at the consumer; nor did they know anything about "marginal productivity." Once we factor these concepts in, thanks to the advances made in economic theory by Menger and later Austrians, we can be sure that, if the Keynesians and the welfarists are prevented by public opinion from consuming capital, wages will rise along with consumption. Demand will continuously rise.


It must also be noted that if money is gold, inflation will end, and all prices will steadily fall - increasing consumption. The poor will inherit the earth.


So there are the following prescriptions:


1. Economic freedom.
2. Capital accumulation.
3. No funny money.
4. No welfarism.
5. No interventionism.
6. Laissez faire, laissez passer, laissez aller.


On the other side we have centralised economic planning - and Montek!


Now, the real Marxist question is: How will "each have according to his needs"? Montek is busy "measuring poverty" - for which purpose he has sanctioned State funds to hundreds of economists and statisticians, and confusion still prevails. When this confusion is finally settled, some poor people will get rice cheap. The planner will provide the poor with rice.


What is the market and the entrepreneur?


As Mises defined it, "the social function of the entrepreneur is to make provision for the uncertain future." It might rain - and so entrepreneurs invest - "make provision" - in making umbrellas. And shopkeepers stock them. If it rains, you can always get umbrellas. 


Now, smart entrepreneurs are ALWAYS surprising you with goods you never knew you needed. Smart entrepreneurs invest - "make provision" - to research consumer wants, they invest in R&D, and they come out with all kinds of surprises for satisfying unspoken needs. Skype is a great example. Poor people in India go to internet cafes and speak to loved ones abroad using Skype. It is cheap. And there is video. 


Meanwhile, the planner is thinking of rice. He has "made provision" for NOTHING. He is in perpetual DEFICIT. 


Anything to do with the market works - cars, mobile phones, civil aviation... anything. 


On the other hand, anything to do with the State fails - highways, railways, Air India, BSNL, electricity, water, drainage.


I think the choice should be clear.

Away with the Marxists!

Away with the planners!

Away with the socialists!

Away with the Keynesians!

Away with the welfarists!


Away with the protectionists!


Away with the trade unionists!


Away with the interventionists!


Away with immigration controls!

Laissez faire capitalism - for the poor!

PS: The final summing up post can be read here.

Petrol & Gas Price Hikes: Root Cause Is The "Funny Money"

Petrol and cooking gas prices have been hiked - and further hikes are expected. The editorial in Mint says, "the change in the price of fuel is rational and should be accepted by all." Really?


Let us begin by turning our attention to the USSA, where "quantitative easing" began. There is a perceptive post in EconomicPolicyJournal.com in which Ron Paul is quoted as follows:

Ron Paul in a recent debate pointed out that roughly 50 years ago you could pay ten cents for a gallon of gasoline and that the dimes which were made of silver back then are now worth the same (because of their silver content) as a price of a gallon of gasoline today. 

The same blog (which features on my Blog List) also has another post on the fact that gasoline prices in the USSA are at record highs.


This is nothing but INFLATION.


Ben Bernanke did his "quantitative easing" (code for printing more paper dollars) and our chacha followed suit with his "economic stimulus." This was just "central bank co-ordination" - so that the whole world would float to a higher price level. That is why we Misesians call them "banksters" (as in "gangsters"). This central bank co-ordination is the state-of-the-art in banksterism. Our chacha is just a puppet in their hands. He is sacrificing our interests for those of the US State - and the US State, and the US Fed, are sacrificing the interests of the American people for the interests of their The State. Rotters! The only solution is the Gold Standard. So, if India was on the Gold Standard today, prices would be falling, not rising. Oil and gas would be cheaper, not dearer. 


Today, it is NOT the case that "prices are rising." Rather, the fact is that the value of the rupee (and the US dollar) is falling. This is because they are flooding the markets with these paper notes. And when the supply of anything increases - like potatoes, for example - its value must fall. That is all there is to it.


Do read another post from EPJ on what a reader told Steven Levitt (of Freakonomics) on gold, thereby educating him.


And do read this Deutsche Bank report on the Indian rupee, which says that its long-term prospects are not bright. Thus, if we do not adopt the Gold Standard today, the prices of imported oil would keep on rising indefinitely in the future. The report also mentions that we still owe some $5 billion to Iran!


Let us turn our attention now to cooking gas. In India, this is sold in cylinders, with street food vendors paying higher prices than domestic users, thereby making cooked food expensive for the urban poor - who do not possess homes with kitchens. 


Second: While this gas comes out free from the ground, the biggest cost in getting it to the consumer, apart from bottling, is TRANSPORTATION. In India, big trucks transporting gas are a common sight on our broken highways. Similarly, in the cities, trucks transporting gas cylinders, little tempos doing the same, and even chaps ferrying cylinders on bicycles are a common sight. All these costs could be reduced by PIPE-LINING gas. Ever heard of "Gaslit London"? All that gas was piped.


Thus, there is no real "subsidy" on cooking gas. If gas was piped, the costs of bottling and transportation would come down to ZERO - and we would all save money.


Lastly, on petrol again - there are HUGE TAXES. If the people rise in protest - as they should - and demand a complete rollback on all taxes on petrol, prices would come down drastically.


So, the Antidote is:

First, a return to the Gold Standard in India.

Second, pipe-lining of gas. 

And third, a rollback of all taxes on petrol.

Rise in protest, my countrymen!

On Kings, For Kings: Take #2

This morning, at the tea-shop, I met two Gurkhas from Nepal. One said he'd been in Pondicherry for 12 years. The other said he'd been here for 26 years! Both said that they'd prefer to stay back home - if only their country had some economic prospects to offer. Both said that today things were far worse than during King Birendra's reign. They decried Nepal's politicians. And they did not say anything good about their new king, Gyanendra, or his son, Paras.


Hans-Hermann Hoppe comes to mind. In his magnificent book Democracy: The God That Failed Hoppe puts forward the thesis that "traditional monarchies" are always much better than democracies. Yet, if we look around, we see so many kings who don't know a thing about government: Thailand, Nepal, Bhutan, Japan - and even England and all the Crowned Heads of Europe.


To me (and I do believe Hoppe will concur with me on this) the greatest monarchs of Europe were the Hapsburgs - and America did the world a great disservice by pulling them down. Of course, they had their own tragedies, too - and the mysterious death/suicide of Crown Prince Rudolf was one of these. It damaged Carl Menger's career, for sure, for Menger was Rudolf's teacher.


In the world of today, democracies are ALL failing - from the USSA to Europe to Japan to India - and the main reason is the "funny money" which is causing "capital consumption" and consequent "de-civilisation."


Traditional monarchies must replace them - or we must head for a "Natural Order."


Traditional monarchies ruled without Parliament. The monarch commanded the public administration - and that is all. People lived in a "private law society." There was zero legislation. The King rarely passed statutes binding on all his subjects. The people had Property, Contracts and Torts - and Liberty, too.


And there is more. Traditional monarchies never produced paper money. Money was GOLD - and gold is a form of "private money." Under traditional monarchies, the world was under a Gold Standard. Below is Adam Smith's famous "Three Duties of the Sovereign" - and do note there is NO mention of money:

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.

Now, if some monarchs here and there want to emulate their ancient forbears and govern their nations well, I recommend a book, and that is Carl Menger's Lectures to Crown Prince Rudolf of Austria. Menger had been hand-picked by the Empress Catherine to tutor her son in "classical liberal political economy" and had he made it to the throne, Rudolf would surely have made an excellent king.


But this book is now with us, in an edition prepared by Professor Erich Streissler of Vienna University, from the hand-written notebooks of Rudolf himself, which were found in the State Archives.


Kings who wish to deserve their crowns and thrones ought to read this book.


And then, who knows, the magic of the Hapsburgs might be recreated in some other parts of the world.

Liberty - From Here To Eternity

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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