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. 

We Don't Get Fooled Again!

A Deutsche Bank report just reached me, warning of recession in the USSA. But their analysis is based on "consumer spending" - and this might suggest to many that another "stimulus" is required from the Fed.

This displays ignorance of Say's Law of Markets.

Last night, I watched a BBC programme called "The World Debate" on the current economic crisis, hosted by Nick Gowing. Of the four debaters, three were government people - Christine Lagarde, who heads the IMF; a guy from Obama's economic team; and a dude from the EU in Brussels.


Lagarde spoke of the need for the G-20 to get together and do what they did last time - and I could have cried out loud. That time the G-20 nations inflated their currencies along with the US Fed, which is what "central bank co-ordination" is all about, and which is why the crisis is so widespread today. Nick Gowing, on his part, asked for "more decisive political leadership."

This, too, displays ignorance of Say's Law of Markets.

Today, the Keynesians teach this law as follows:

Supply creates its own demand.

This incorrect formulation of this vital law makes their students believe that "monetary stimuli" create demand.


So, let us think things through: 


The supply of plasma TVs does not create the demand for plasma TVs. Yet, if cars sell, if jeans sell, if shoes sell, and if beer sells - then, and only then, will some people from these latter industries be tempted to buy a plasma TV. Thus, what Say's Law actually means is:

The sale of X gives rise to the demand for all non-X.

If X sells, it creates the demand for all non-competing goods.

So, if you want increased demand for your plasma TVs, don't go to The State asking for a monetary stimulus. Instead, make sure all those who do not compete with you are selling their stuff.


There is another reason for this: If you ask The State to inject a monetary stimulus, all that will happen is another boom-bust cycle - and inflation. The entire economy will be hurt, including yourself, and including all those who do not compete with you.


On the other hand, if you want those industries that do not compete with you to do well, you will NOT favour loose monetary policies based on the false idea of boosting consumption. Rather, you will realise the importance of SAVING and INVESTMENT. You will realise that these businessmen who do not compete with you will need to save and invest - in order to produce. You will favour "capital accumulation" and despise "capital consumption" - which is Keynesian-welfarism-inflationism. You will champion "sound money."  


That is, you will realise that production of goods and services boosts demand - not the production of money. Indeed, not even the production of gold boosts demand. All that happens then is that the price of gold falls - look at the history of Spain and Portugal when they brought gold and silver back to Europe from South America. Spain and Portugal never got rich. And there was inflation throughout Europe. Britain got rich not by digging for gold and silver - but by trading in nutmeg and pepper, and tea, and opium, and tobacco, and sugar, etc.

Increased production of "funny money" is a VERY BAD IDEA.

Thus, Nick Gowing is WRONG when he asks for "more decisive political leadership." The solution does NOT lie in politics. On the contrary. The solution lies in "private money" - and "free banking under law." 


That is: the size, scope, powers and resources of The State and the politicians must be drastically cut down. Money must be given back to the people - to save and invest, to produce. That is how demand can be permanently boosted and boom-bust cycles avoided forever.


Indeed, the current crisis is BECAUSE OF POLITICS. Central banks and their member banks are collapsing. Politics lies at the root of this crisis.


So, let us NOT GET FOOLED. 


Paper notes are just a "money substitute." This is what the "promise to pay the bearer" indicates. Something "hard" is (and always was) real money - GOLD.


So, as the song goes:

I tip my hat to the New Constitution,

Take a bow for the New Revolution,

Smile and grin at the change all around me,

Pick up my guitar and play,

Just like yesterday,

Then I get on my knees and pray:

WE DON'T GET FOOLED AGAIN!

While that covers widespread miseducation in the USSA, Britain and Germany, let us now turn to our own country.


Did you know that both Amartya Sen and chacha manmohan s gandhi were students of Professor Joan Robinson in Cambridge - who was Keynes' right-hand man, and who made it her "mission to destroy Say's Law"? It was Joan Robinson who cleverly coined the "supply creates its own demand" nonsense.


And, as I wrote the other day:

Without Sound Money - what is the State 

but a band of robbers?

That should take care of Kapil Sibal's "(mis)education."


Let us now turn to Palaniappan Chidambaram, the Central State Police Minister, whose name has cropped up in the 2G scam. There is a report written by the Political Editor of The Sunday Guardian that says that in the Nira Radia tapes, A Raja told Radia that "PC got a lot of money."


The Central State's Police Minister is corrupt?


And he has been police minister since the 1980s - and there have been no police reforms. Policing has just got worse. Now, road deaths total over 2,00,000 per annum - and the police don't even possess the "knowledge" to fix things.


We must ABOLISH THIS STATE. And replace it with honest civic corporations - one in each city and town.


A Second Republic!


A Republic WITHOUT any police - like the England of old, before Peel set up the Bobby. Like India of the Company, before the Crown passed the Indian Police Act in 1861.


TORTS - which are "crimes against the individual" and for which financial compensation must be paid by the tortfeasor to the victim: this will be better than any "criminal justice system." Anyway, ours doesn't work. And the minister is corrupt. Indeed, the Entire System is Corrupt.


So let us vow to throw the whole thing out, beginning with the Central Bank, and ending with the State Police.


Liberty! Property! Justice! The Pursuit of Happiness, Subjectively Defined!

WE DON'T GET FOOLED AGAIN!

(This turned out to be a 5-part series on Say's Law. The next post can be read here.)

The God That Failed: Take #2

Democracy is also a form of worship. 

It is the worship of Jackals by Jackasses.

—H. L. Mencken

Democracy has been the recipient of many an abuse - perhaps none greater than PJ O'Rourke's Parliament of Whores, though that is an insult to whores, who, unlike parliaments, do not fuck you by force.

Today, this very same parliament has been heaped with abuse in this LRC post by Laurence Vance titled "The US Congress Contains the Biggest Bunch of Buffoons, Idiots and Morons in the World." 

The subject matter pertains to Google, because of whom we all enjoy so many free facilities, and who are now  being accused of being "monopolistic and violating anti-trust laws." Well, if you download Google Chrome, before installation you have a choice of three search engines. Monopolistic?

Anyway, which libertarian believes in busting monopolies by anti-trust legislation and competition commissions? What did MRTPC ever achieve in socialist India? And, as I discussed yesterday, it is State-owned Air India and BSNL that offer the private sector "unfair competition."

What is required is openness to entry by new players - which is how Microsoft's Windows Explorer got busted by Mozilla and Google Chrome.

Yes. The US Congress is nuts. And, incidentally, they are very corrupt as well.

Let us turn our attention to UK. Here is how a post from Andy Duncan's "The God That Failed" blog begins:

It would seem that as we enter the ‘idiot’ season, in which various British government halfwits (a.k.a. politicians) have pontificated on the need for more ‘stimulus’ – because previous attempts at ‘stimulus’ have been so successful – this country is standing at the edge of an abyss of debt collapse.

When will we learn that those who rule us are morons? 

Do read my comment at the bottom - about a moron I saw on BBC, which is "State-owned broadcasting." Like Pravda. Doordarshan. All India Radio. Ha ha. Poor Brits. "Thought Control" writ large.


And there is worse: The very next post says "UK QE to resume in October." Well, Keynes was English, so whaddya expect? Morons.



And now, let us turn to our morons, "socialist planners." Our Great Leader, the socialist-welfarist-democrat, chacha manmohan s gandhi, is concurrently Chairman of the Planning Commission, and this Very Important Department of our The State has got its knickers in a twist over "measuring poverty." Is 26 rupees a day poor, or is 32 rupees? And what about inflation, etc.? 


The fuss is all about welfare - the "right to food," by which this The State will mail parcels of uncooked grain to the well-measured poor, while street vendors who sell cheap cooked food are preyed upon by both policemen as well as municipal functionaries.

The Predatory State pretending to be a Welfare State.

I suggest these people look at the Corruption Perceptions Index of Transparency International. India is ranked 87/178 with Albania, Jamaica, and Liberia, with a score of 3.3 out of 10!


And I suggest my readers read the World Economic Freedom Index, from the Heritage Foundation, which finds India "mostly unfree," ranked 124/179, below Pakistan, Malawi, Tonga and Benin!


Also, read this analysis of the Economic Freedom Index from the Mises Institute. They are also offering an online course on the importance of Economic Freedom.


Democracy: The God That Failed; The Economics and Politics of Monarchy, Democracy, and Natural Order by Hans-Hermann Hoppe is a MUST READ. Buy it in India here.


Unfortunately, Hoppe does not write much about the "Natural Order": for that, read my eponymously titled book available as a free download on the right-hand bar.

Natural Liberty

Natural Order

Natural Justice

Our The State Is Usurping The Role Of Parents

As if hell-bent on proving that legislation is NOT Law, the Maharashtra government has raised the legal age for drinking alcohol from 21 to 25. This has astonished top Bollywood actors. Amitabh Bachhan tweeted:

On drinking age limit increase to 25! Err... old and mature enough to vote for the country, or join army and fight for the nation... but not old and mature enough to be told when you are allowed to drink ??? Strange?

Actress Sonam Kapoor made a similar reaction on Tweeter, saying:

If you can vote, get married, have children, drive a car ... why on earth can't you drink? It's ridiculous, we are not living in the dark ages.

The latest is that the actor Imran Khan is filing an appeal against this order in court.


The key point to note is: What about PARENTS? Don't they have a role to play here - a role that our fucked-up The State is usurping? 


In this connection, I have a story to tell, of the time when, some ten years or more ago, I took my 15-year old son to Pecos, the Hard Rock Pub in Bangalore, for a beer - and they refused to serve him! I pleaded long and hard against this injustice, saying I was the father - but to no avail. Because, as the manager put it, if an Inspector came, he would be in deep trouble. Inspector Raj! 


Anyway, regretfully, my son and I came out of Pecos, where the music was great - and loud - and stood mournfully on the street outside. Then, my son said: "Cheer up, Dad, I know a place they will serve us. Follow me."


A few minutes later, we were outside another Bangalore pub where, seeing my boy, the doorman raised a salute and said, "Hi Gaurav. Welcome!"  We went in and enjoyed a few beers.


The lesson is that all this is ARBITRARY. 


And there is nothing worse for a nation than ARBITRARY LAW.


Further, this causes CORRUPTION. In this case, it is evident that the establishment that pays the Inspector off does business-as-usual, whereas the establishment that does not gets regularly inspected, so its management must harass customers.



What is "adulthood," anyway?


Between 1800 and 1850, the Honourable East India Company ran a Haileybury College for their recruits to the Civil Service, who were all aged between 13 and 15 - and their diet was bread, cheese and beer all day (fish for breakfast)!

What is the "correct" age of adulthood? Once upon a time, in India, it was considered the attainment of puberty. Those days, you were immediately married.


Today, it is a lot of NONSENSE - as the tweets from the movie stars above indicate. One age for driving, another for voting, another for joining the Army (where they give you cheap rum to drink), another for marriage - and yet another for drinking.


NONSENSE!


Congratulations to Imran Khan for taking our The State to court.


Tip: The lawyer must read Murray Rothbard's The Ethics of Liberty, which contains much on the rights of children. PDF here.

It's The Ethics Of Liberty versus Inflationist-Welfarism

The Great Big Lie of the Inflationist-Welfarists led by chacha manmohan s gandhi is that State Aid is required to "help the poor." Actually, poor refugees from Europe made America the richest place on Earth - because they had Liberty (and Property). And this was BEFORE the dawn of the HORRIBLE 20th Century.


The poor should themselves find the very idea of State Aid INSULTING.


They themselves should demand LIBERTY.


This means the FREEDOM to engage in consensual trades - without let or hindrance from corrupt State Authorities.


Further, the poor should be instructed by activists to realise that this inflationist-welfarism is all a very "false philanthropy" anyway. The State is a broke institution. In many provinces, they cannot even meet their wage bills. The State is just printing paper money to pay for all the bullshit welfare schemes like the MGNREGA, the cheap rice, and the free schools where the kids' brains get dumbed down. This is causing inflation - which ERODES the SAVINGS of the poor. This ERODES the PRECIOUS CAPITAL of the poor. What bloody NONSENSE is this?


Increasing the quantity of money in circulation NEVER makes a nation rich - not even if the money is gold or silver. The Spaniards and the Portuguese plundered South America for gold and silver - and spread inflation throughout Europe. The price of gold and silver fell!


The British, on the other hand, traded. The British bought pepper, nutmeg and other spices from the East and sold them at a high profit in the West. They brought tea into India from China - and sold it in England. They brought sugar from Jamaica, tobacco from Virginia - and it is the British who got rich, not the Spaniards or the Portuguese.


This is the essence of Adam Smith's An Inquiry into the Nature & Causes of the Wealth of Nations: that the wealth of a nation is NOT its stock of gold; rather, its wealth consists in the properties and possessions of The People. If the people own lots of goodies, the nation is rich. Thus, Adam Smith recommended "The System of Natural Liberty" - which means free trade and the freedom to trade.


Tp put it another way: The People must produce and sell goods and services and only then will they get rich. If they just increase the amount of money in circulation - even if that money is gold - they will fail miserably. 


Now: What are the "Ethics of Liberty"?


Very simple: First and foremost, we must aim at satisfying our Customers, who are our Kings. We must NOT cheat them, but we must try hard at keeping them happy and satisfied, so they keep coming back to us for their particular needs. If we do this - and are allowed to do so - we survive honourably and morally.


Second: When we Spend the Money we have Earned the HARD WAY - then the FUN BEGINS, and we are the Customer, and we are then the King. We must NOT be forced into buying JUNK by Customs Guards paid for by Protectionists. We must demand the BEST goods, the BEST products, the BEST services. 


This is why Free International Trade and the Freedom to Trade go hand in hand.


See you all again tomorrow.

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 5

Yesterday, I discussed the "Corruption of the Law." Today, I shall conclude this Prosecution with a discussion on the natural fallout of legal corruption - and that is Corruption of the Police. They become a "legislation-enforcement agency" - and all these amoral and immoral pieces of legislation passed by our Socialist Parliament are essentially Predatory, like the Foreign Exchange Regulation Act. In any case, the Indian Police are known to be Predatory on every city and town street pan-India. They only protect the VVIPs; they prey on the rest of us.

Let us begin with some History. The modern State, equipped with a Police Force and a Central Bank, is very new. Sir Robert Peel set up the London Metropolitan Police - the unarmed "Bobby" - only in the 1830s. They used to be jeered at on the streets when they first made their appearance. 

In India, the Honourable East India Company ruled without any police force. They had an army - but no police. The "civilians" of the HEICS roamed their vast districts unarmed and unescorted, maintaining land records while sitting among the peasants, settling disputes on time, providing Justice, collecting taxes in exchange for Property Titles - and, of course, building "roads, bridges and canals."

The Indian Police Act is dated 1861. This was immediately after the horrors of the Sepoy Mutiny of 1857, and the Government of India had passed from the Honourable Company to the British Crown. Victoria was now "Empress of India." It is an interesting coincidence that Rabindranath Tagore was born that very same year, in 1861. While Tagore dreamt of an India "where the mind is without fear and the head is held high," the motto of the Indian Police is "Fear is the Key."

Let us fear them not - if we want to be Free.

In this post, I will relate some anecdotes. The first of this is especially for the Free Press, because these events occurred on Bahadur Shah Zafar Marg, the Fleet Street of Nude Elly. I was then working with The Economic Times, and my offices were in Times House. One afternoon, Professor Christopher Lingle came calling - and I invited him out for lunch. There was an Udipi restaurant nearby. The alternative was the vast array of "street food" on the opposite side of the road. Cris is adventurous, and he opted for the street food. We ate all kinds of stuff, like the delicious papaya salad one guy makes, and we washed it all down with a nimboo masala soda prepared by a guy whose masala is his own secret formula. The sign on his stall says he has been in operation since god knows when.

A few days later, I bumped into Cris again at the Rajiv Gandhi Institute, where I had gone to attend a seminar. After the seminar was over, I had to rush to office to pen my editorial of the day, and Cris tagged along  with the special purpose of trying out the BSZ Marg street food once again.

But lo and behold! When we arrived we found that every single hawker and vendor had been evicted!

Cris, who is a very widely travelled man,  then made a remark that I have never forgotten. He said:

"The poor people of India are exceptionally honest. In any other country if such things happened, the people would have turned to crime."

That is the moral choice we all face - to survive through moral, voluntary and gainful exchanges in The Market, or to live off plunder and theft.

Continuing on the same theme, my second anecdote is about India's "super-cop" KPS Gill. Around 1999 or thereabouts, Professor Madhu Kishwar raised a big stink about police predation on street-hawkers and vendors, particularly in Nude Elly itself. She even made an excellent - and blood-curling - documentary film on the subject, which I hope, if she is reading this, she will put on YouTube. 

As a columnist and editorial writer with ET, I supported Madhu to the hilt. Finally, she called me for a meeting at the India International Centre. And who should be there but KPS Gill. We briefly discussed the matter of police predation on the poor - and Gill thundered, "You cannot stop it." As if on cue, Renana Jhabwala of the Self-Employed Women's Association (SEWA), whose members include women street vendors from all over India, retorted, "In my lifetime we will stop this." It was quite a sight seeing Renana, a tiny woman, say this to this huge, big super-cop. One can only wonder what "commands" such cops issue to their subordinates. There must be come "corruption of the mind" that makes them, in reality, not super-cops, but super-thieves.

My own horrible experience with the Karnataka cops is well known: arrested repeatedly, harassed, and even an assassination attempt. They serve their political masters. Just as KPS Gill killed thousands of "Sikh terrorists" without trial for Indira Gandhi and her CONgress. The Free Press hailed him as a "hero" then; in particular, Chandan Mitra of The Pioneer.

My concluding anecdote is not about cops, but it is extremely relevant nonetheless. While I was working with ET I had to give up writing in the "white papers" as I used to do while a freelancer. Thanks to Jug Suraiya I finally managed to edge myself onto the ToI edit page - and my monthly thunder began. One such monthly thunder was titled "Predatory State: The Black Hole of Social Science." The article has been preserved here. 

A few days later, I received a phone call from Professor ML Sondhi, a former Indian Foreign Service officer who became a JNU don and was then Chairman of the Indian Council for Social Science Research as a BJP appointee. Sondhi invited me for dinner - at the IIC, of course. I took Parth J Shah along as witness. During the course of the meal, Sondhi made me the following indecent proposal:

How can we co-opt you?

My stern reply: 

"I have studied too much Political Science to allow that to happen."

I am most certainly NOT getting aboard this Pirate Ship of State.

It is my firm belief that this Predatory State must be dismissed in toto, cops and all. And by all I include all their "co-opted" professors.

Let us live in the "natural order" of The Market. As a "Private Law Society." Let us also abolish the corrupt Reserve Bank of India, which funds all this corruption with its fraudulent paper notes. Inflationism must be ended permanently - especially so in a country where millions and millions are so desperately poor. I recommend my column on the Gold Standard, and another on Private Money.

Some people might want to be "conservative." To them I address the following question:

Which Department of our The State would you like to see conserved?

And as for the cops, they are nothing but what Bob Marley called "uniforms of brutality." Gandhi made a fatal error after Chauri Chaura. Let us be a wiser nation today. A wise nation that knows what Freedom really means. And where both order as well as morality come from: which is, The Free Market.

Shubh Laabh to all of you.

[PS: On the "natural order," I recommend my column defining "catallaxy." And on how the world can live happily without police forces tyrannising us, I earnestly recommend Professor Bruce L Benson's The Enterprise of Law: Justice Without The State, of which, I have just learnt, a new edition has appeared.]

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.