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.

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.

The BATTLE For Honest, Sunnah Money Is NOT For The Faint-Hearted

When Ludwig von Mises proposed marriage to Margit, he was brutally frank about what she could expect if she accepted. He said:

I will write a great deal about money, 

but never make too much of it myself.

This turned out to be absolutely true. He was broke when they reached New York, and Hayek, from London, mailed him a vintage copy of The Wealth of Nations, so that he could sell it to a collector, and survive for a while. Henry Hazlitt invited him to write a few editorials - and Mises was paid just $10 for each of them.


I have been writing about MONEY (and not "monetary policy") for a very long time. My first book, published in 2000, Antidote: Essays AGAINST The Socialist Indian State, contains an essay on money, sub-titled "Why private money is the only sound money" - but my thoughts have developed far beyond that essay written so long ago, thanks especially to my study of the works of Ludwig von Mises. My best so far is the one in my 2007 book Natural Order: Essays Exploring Civil Government & The Rule of Law, which reflects the study of the works of Jesus Huerta de Soto, and this essay can be read online by scrolling down the right-hand bar.


As far as newspaper articles on the subject go, the most historic is my "False Currency," which was published in The Times of India the very day that George W Bush landed in Nude Elly! You read this article here.


Then, there is my "Funny Money," also from The Times of India, which can be read here. There are also two columns on the subject I wrote for Mint: the first argues for "A Return to the Gold Standard"; and the second argues "The Case for Private Money." If I may add, for the record, that shortly after these columns were published, the editor was changed, and the new one discontinued my columns, thereby causing me financial loss, and since then Mint has been publishing opinions by IMF-types.


So, as with Mises, so with me:

I will write a great deal about money, 

but never make too much of it myself.

So, do NOT think I am broke because I blow up cash on booze and dope. Perish the thought. I do no such thing. I am broke because I uphold Honest, Sunnah Money; because I uphold Truth and Justice; because I oppose Corrupt Money & Banking.

Our poor people get poorer because of paper money inflationism, which erodes their precious Capital. Under such circumstances, savers lose, while borrowers gain. Simultaneously, de-civilisation occurs. I oppose all this.

Today, I have just received communication offering me a column in a new journal on governance - and I have happily accepted. A small advance is being put into my bank account soon.

All that I would like to add is that whatever credit is being extended to me by some establishments - like this Internet shop; like the tea shop; and the beer & whiskey shop, be continued - for I shall soon be able to repay all dues.

I shall also shift to a new hotel - and things will be fine.

One thing has upset my mood, though - and that is the fact that my good friend, the sadhu, has disappeared.

I trust he will soon be back where he always was, and that we will enjoy good times together.