Let Us Glorify The Honest Civic Corporation

Tamil Nady chief minister's complaint that the Centre is "reducing State governments to glorified municipal corporations" is laughable. In reality, every State capital - including Chennai - is a shambles. It is the State governments that have destroyed municipal administration in India - while tom-tomming panchayati raj (village government). Thus, every city and every town throughout India has been destroyed.


Yesterday, I advocated Free Cities. These free cities will require honest civic corporations to run them - garbage, sewage, roads, footpaths, street-lighting, and so on. They will need Mayors - not chief ministers, who can take a walk along with the entire edifice of our The State from Nude Elly. The "model" from History is that of the Olde City of London - and you can find an essay on that in my Natural Order: Essays Exploring Civil Government & the Rule of Law available online here.


If I may add, all these activities of the civic corporation can be honestly "contracted-out" to competing private firms. There need not be any "bureaucracy." There need not be any "departments." The City can be "free." That is, the citizens can be free. The City can have a Basic Law proclaiming the Inviolability of Private Property - and the rest can take care of itself. Instead of "crimes" there can be "torts" - which are all "crimes against the individual" - and, if convicted, the tortfeasor will have to financially compensate his "victim." There need not be any jails.


In such an administrative and legal framework, taxes will be low, and all voluntary trades will be free.


If such an honest civic corporation can be set up anywhere in India, would you not "glorify" it?


And as for the State Governments - the bhateejas of chacha in Nude Elly - this report says they are all heavily in debt! They are part and parcel of the "fiscal deficit" being financed by Nude Elly through printing money and borrowings. The report says that electricity losses alone are over 70,000 crore rupees. And we do NOT have reliable supply. Wanna glorify these morons?

Say's Law: A Summing Up

Say's Law of Markets, by making a distinction between those who compete with us and those who do not, tells us that the bulk of the market is made up of those who co-operate with us; that too, in two ways: first, by providing us with our needs, the goods and services we do not and cannot produce ourselves; and second, by providing the vital demand for the goods and services we come to the market to sell. 

The market is NOT "pitiless competition." There is more co-operation than competition - and, anyway, "competition is liberty, while the absence of competition is tyranny." There is no "Social Darwinism" in the market.

This is SOCIETY. 

This is the market society built on the principle of the DIVISION OF LABOUR, which is specialisation. This is the polar opposite of Gandhian "self-sufficiency.


Say's Law of Markets thus proves what Thomas Paine wrote in the very first paragraph of Common Sense - that "society is a patron, while government is a punisher." Society is the vast majority, and they are in the market; government is a small minority, set up to apprehend, try, and punish enemies of this market order, who are an even smaller minority. 

This is the "natural order."

To socialists, Society, State and Party are all ONE: "India is Indira." Say's Law proves this vision dead wrong.


Say's Law also tells us much about taxation - that any tax reduces demand. It suggests a minimalist State; it suggests "political economy." Giving taxes to the State hurts market demand for all. Say's Law proves many genuine experts in public finance right when they write that modern taxation is more expropriation - and that indirect taxation, including customs duties, as well as the income tax, should be outlawed by constitution. Say's Law suggests "user fees" ought to replace taxes, wherever possible.


Say's Law can also be used to analyse the effects of interventionism - the key question being how interventionism in one area will hurt non-competing industries, which is the rest of society, the rest of the market order.


Finally, Say's Law "pours lead into the Keynesian's ear" - as one of my readers put it. It shows that government is a cost, not a source of benefits, not a "stimulus to demand." It points to the real source of market demand - which is the production and sale of goods and services, backed by savings and investment. This is the pathway to civilisation. The Keynesians, with their funny money welfarism, heavy taxation and even heavier borrowing, have unleashed the forces of "de-civilisation" - which is rampant capital consumption. All welfare, it may be pointed out, is consumption; nothing is saved; nothing is invested.


As a wise man put it: "It is good if the people support the government - but all hell breaks loose if the government attempts to support the people."


To conclude: In these five posts on this vital Law of Markets  which is currently mistaught universally (the first post is here), I hope I have shown my reader the correct way to look at markets, at society, and at the State. I hope my reader will realise that Keynesian "macroeconomics" must be jettisoned in toto, and replaced by methodological individualism as the epistemology of the Science of Economics.


Thus, as Sudha Shenoy once put it in an interview with Austrian Economics Newsletter in 2003:

Almost every economics department in the world can be immediately shut down without having any ill-effect on the world of ideas. 

This is the power of Jean Baptiste Say's Law of Markets.

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

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.

It's Humans versus Apes

The Science of Economics begins with an understanding of the "logical structure of the human mind" and the mental "categories" embedded within it. The first of these categories is Property - or the ability to distinguish what is "mine" from what is "thine." This, indeed, is the basis of trade - for when we trade we trade properties - and this category is exhibited by all good little children when they say to one another, "give me some of YOUR chips and I will give you some of MY cola."

With the onset of maturity, this mental category of Property develops into the category of Capital - and is exhibited even by illiterate nomadic herdsmen who carefully oversee the size of their herds to ensure that their Property, which is their Capital, does not decrease. In other words, a third category is also present, and that is Income. The human mind naturally possesses the ability to distinguish between Capital and Income in order to ensure that capital is not being consumed; rather, it is being accumulated. This accumulation of Capital is the basis of civilisation. 

This "economic calculation" is nothing but basic Arithmetic. Nothing more advanced is required in The Market. Advanced math is for the physical sciences - not the Science of Economics.

When trading individuals interact in busy markets, it is the category of Property, embedded in each human mind, that ensures perfect order prevails. No posses of armed policemen are required to "maintain order" in any crowded bazaar because everyone knows what is "mine" and what is "not mine" and that in order to obtain desired objects, he must trade some Property of his own.

This is the Human Being. And this is Capitalism - embedded in all our minds.

Let us now turn to our closest cousins - the apes.

Apes cannot trade. If a horde of monkeys descends upon a fruit market, widespread plunder will ensue. This is Thomas Hobbes' "war of each against all." Poor Hobbes. He had never seen a monkey ever. And he was a mathematician to boot. Dangerous people, these mathematicians. Both Mises and Hayek studied Law - that is, the "rules of the game." That is how we understand how society works.

Let us now turn to Socialism - which is the "ideal" upon which the Constitution of India is based. Socialists believe in the nationalisation of all Property. They despise markets and traders. Thus, they do not possess the mental category all decent little boys and girls are blessed with by their Creator. They have been created without this mental category - and thus, they are exactly like our closest cousins, the apes. They are NOT human.

The nationalisation of private property, the forcible acquisition of private lands, the cops and other State functionaries who prey on businessmen - they are all ape-like. Of course, they are supposed to be "trained." But then, as I found out to my utter shock and disbelief some years ago, the Professor of Economics at the elite IAS Academy at Mussoorie is a Marxist! An ape.

Let us now turn to the Law.

In the "natural order" of decent human beings trading peacefully in markets, where Property is respected, no outside Law is required. No "legislation" - which would be an interference. Of course, in our more advanced times, other facets of Property would have to be upheld in Law - and these are Contracts and Torts. All three - Property, Contracts, and Torts - are "private law." Human society can happily exist, and human civilisation can gallop along, without any "democratic legislation" at all - such as the prohibition of ganja, or gambling, or alcohol, or anything else. People are free to harm themselves, but they are not free to harm others or their properties - which would be a Tort, for which compensation would have to be paid. Thus, in such a private law world, there would be no "crimes"; or, in effect, all crimes would be torts; that is, they would be crimes against individuals and their properties. There would be no "crimes against The State or its interfering parliaments."

The ape-like character of democratic legislation is best demonstrated in India by the Foreign Exchange Regulation Act (FERA) - which many called "draconian" but it was I who first deemed it to be "immoral." When the central banker cannot convert his paper note into money, it is he who ought to be in prison: a "debtor's prison," where traditionally such plunderers have been kept on a diet of bread and water until they repay their dues through the auction of their assets. Thus, the Enforcement Directorate, which murdered Rajan Pillai, harassed Ashok Jain to death, jailed and humiliated KL Chugh - these guys belong to the planet of the apes. The judges who tried cases under FERA, the lawyers who pleaded before them - they are all apes.

Lawyers are very dangerous people, too. Gandhi, Nehru, Jinnah, Patel - they were all lawyers. So was Abraham Lincoln - and look what he did to the USSA. Lawyers are a "self-regulating profession" just like medical doctors. Lawyers teach lawyers, and lawyers alone become judges. So, just as we have "medical malpractice" we also have "legal malpractice." This is our precise condition.

Now, the Central State's Minister for "Free and Compulsory" Education is a socialist lawyer!

Wanna go to his schools?

So what should a Constitution of Liberty look like?

I will expound on that tomorrow. It will be very brief - unlike the socialist Constitution of India, which is the longest written constitution in the world.

Stay tuned.

The Philosopher's Stone

After those horrible weeks in Orissa, it was sheer delight to be in tiny Pondicherry - and civilisation. Shops, shops and more shops, bars and restaurants, masses of people everywhere, and even lots of bright neon lights. 

This small city was built by the French, the roads all neatly arranged in a "grid pattern." The central market area is called Grand Bazaar - and in 1985, I served briefly as the head of Grand Bazaar Police Station. I always recall those days, and those years, for I spent close to three years here, because while I headed Grand Bazaar PS, there was NO CRIME reported. During those years, I noticed that the people are all "god-fearing and law-abiding" and that a "natural order" prevailed. I saw that something was seriously wrong with Thomas Hobbes' view that without The State there would ensue "a war of each against all." There was no such war in Pondicherry. There was only one murder - of an MLA, and that is "political crime." Also, I personally saw the local police tear up the "history sheet" of a newly appointed CONgress minister! I found police work so boring, that I even resigned, but that's another story.

Today, I walked down these streets and their bazaars again, where perfect order prevails, wearing a t-shirt saying:

DON'T STEAL.

The Government Hates Competition.

Today, after over 20 years of "private investigations," a long "intellectual journey," I have found out why this natural order exists. It is so simply because we are all "rule following animals." Apart from religious and cultural rules, we follow commercial rules - and this results in a "commercial culture." Pondicherry exemplifies this culture as, indeed, does any place in this vast sub-continent. The existence of this commercial culture is what civilisation is all about, with its cities, their markets, and all the shops. A "nation of shopkeepers" is really what we are.

Yet, even here, as elsewhere, the truth of what my t-shirt says is evident. Much of the place, especially the commercial areas, is a mess; and traffic is worse than hell itself. In my time, most people rode cycles; today, they have progressed to motorcycles. No one has thought of tramways because I presume they have to apply to some "planner" in Nude Elly for permission. All the "political parties" are centralised, as is the IAS-IPS bureaucracy. All report to Nude Elly. And what an almighty mess Nude Elly is!

I strolled along the Beach Road promenade last night, as I used to do with my dog those long years ago, and passed the Governor's house, with its cannons mounted at the gates. There was a diesel generator on! And it is this The State that produces electricity! Sure enough, the electricity failed in my hotel. I passed a dental college set up by this State, which also runs a University and many schools. I saw a guy wearing a t-shirt saying "Studying Sucks!"

This is the fundamental error our nation has made. We have not sought Prosperity, Peace, Order and Knowledge in The Grand Bazaar; rather, we have asked the guys with the guns, with cannons at their gates, to deliver these to us. Error. The fact that these guys are clueless has already been brought out in previous posts.

Today, what I would like to add is that the guys with cannons at their gates, whether here or in Nude Elly, are issuing wrong commands to their own staff, their personnel. In the liberal scheme of things, the State does NOT command The Market. Rather, it commands its own staff to see that enemies of this market order are brought to justice. This is NOT happening. From Nude Elly you just hear nonsense about free rice for the poor and free and forced education for all, and, of course, the MGNREGA-bullshit; you never hear of all the important things that must be done in each of our cities and towns by the local people themselves, who possess the "local knowledge." They give orders to close down shops at 10pm. They give orders to harass smokers. They don't do any "useful work." This is particularly true of the Traffic Police. And this is true all over India.

Note that the masses of people roaming around in the bazaars are NOT "organised" into any "society." They are truly a "cosmos" of individual stars, an "order without design." Socialists wanted to organise and regiment such a cosmos into what Nehru called a "socialistic pattern of society" based on economic equality. It is from that point on that the guys with the guns got it wrong. And from Chacha Nehru to chacha manmohan it has been a long, downhill journey. As BR Shenoy asked of these planners, way back in the 1950s, is India to achieve "planned progress or planned chaos"? Today, it should be obvious, this IS planned chaos - especially on the streets, and we are fortunate if there are any streets at all, because these guys want to make steel and fly planes - and, of course, "educate" all the kids. 

Over my dead body, I say. For I was one of those "miseducated" kids myself. On my very first day at Hindu College, Delhi University, in 1974, there to study for a BA degree with Honours in Economics, I was taught The Theory of the Vicious Circle of Poverty. This says that poor people and poor nations are destined to remain poor forever - unless they receive outside aid, which can come from their own State, or from "foreign aid."

This was taught to me and millions of other Indians almost exactly 200 years after Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations (1776), in which he said we are all blessed by our creator with "a natural propensity to truck, barter and exchange." You see little children exchanging toys and other things amongst each other: like "give me some of your chips and I'll give you a sip of my cola." The instinct to trade is "natural." In my boarding school, we boys even developed our own "medium of exchange" - our money - and these were marbles. If you wanted something from someone else, you gave him some marbles, and different kinds of marbles had different values. That is the miracle of the trading, human mind. It needs NO COMMANDS.

The idea of a "command economy" is what has made this into a Predatory State. The commander is evil. He is possessed of two great big evil eyes. And a great big evil mind. If you want to survive, if you want your children to survive - the same children they call the "population problem" - and, most importantly, if you want this wonderful civilisation to survive, all these cities and towns, these shops and markets, these evil people must be overthrown.

Forthwith! 

If I may add, poverty is a HUGE MOTIVATOR. Poor people always struggle hard to succeed, while the children of the rich usually get addicted to luxury and vice, idling their lives away. A great big fortune made by one generation is usually completely dissipated by the next two, rarely built upon. I hope you see what a great big lie they taught me, on my very first day in class, under the head of "Economic Theory."

Song of the Day: Van Morrison's, here.

The Chakra... And Our Civilisation

In Juggernaut Puri, everything revolves around the chakra - the wheel. The road servicing this area is named Chakratirtha Road - which means "the pilgrimage of the wheel." The skylight in my room in a quaint, old hotel is shaped like the chakra. And I bought a souvenir of carved stone of this chakra. There are 16 spokes around the hub - and the base is held up by 10 elephants. Which means the ancients understood that the power of the spoked wheel was greater than that of 10 elephants. There are other figures holding up the chakra that I bought - and these include strange monstrous creatures as well as pretty dancing girls. I think dancing girls must have been big in our ancient civilisation - for the first hall in the Sun Temple of Konarak is the Hall of the Dancing Girls. But no music and dance on the streets of Puri - or should I say "non-streets."

It rained a bit last morning - and the whole town flooded up. Funny how excavations of Harappa and Mohenjo-Daro reveal elaborate storm-water drainage systems - that too, in a desert, where it could not have rained much. Today, our civilisation lacks storm water drainage - it floods up in Nude Elly, where it rains twice a year, at most; and it floods up in Mumbai, too, where the monsoon hits with predictable certainty. So what could be different about Juggernaut Puri.

Read a strange article by the "RTI activist" Aruna Roy trying to define "civil society." I think it might be better if we first tried to define "civilisation" - a word based on civitas, which means "city." If our cities have collapsed, so has our civilisation. And as for "civil society" - it is a meaningless socialist concept. The market order is based on individualism - and it is what Hayek called a cosmos, just like all the individual stars in the night sky, a perfect "order without design." Indeed, one of Hayek's most important books is titled Individualism and Economic Order. 

Aruna Roy is part of our "political society." All her "activism" has resulted in more jobs for the baboos - and there are now "Information Commissioners" everywhere, with their offices and big bungalows, their peons and chaprasis, and their dowdy Ambassador cars. Similarly, Kiran Bedi is "political society" - and Anna Hazare rules a little village, not a city, and it is reported he whips all those who drink alcohol in his "political domain." A real "civilian" would be the owner of the village pub, a "publican." We have none of these.

None of these "civil society activists" have anything to with "civilisation" - which means an amorphous collection of individuals peacefully co-existing in a city, serving customers, surviving thereby, and enjoying life. The emphasis is on "enjoying life" - and the essential reading on civilisation is Plato's Symposium, a word that means "drinking party." Plato tells the tale of one such drinking party that Socrates attended - and, sure enough, there were "flute girls" in attendance. Do read Symposium sometime. It will tell you what is civilisation, or, what was civilisation. We don't possess it anymore - at least not in India.

The Kiran Bedi - Anna Hazare nonsense will also create another government office. They will entrench "political society." We must focus on the root word "civilisation."

And we must also focus on the chakra - the wheel. Our people need wheels - and roads. I had to go out in an auto-rickshaw into town in the morning drizzle - and I got wet. What kind of silly vehicle is this - so open to the elements, and so uncomfortable? Is this "civilisation"? This silly vehicle hogs the non-streets of all our cities because it is "licensed" by The State - and Rahul Bajaj is an MP, a member of "political society."

Last evening, over some whiskies followed by (excellent) Royal Challenge beer, I tried smoking some of the bullshit grass my taxi driver brought me. And I thought of the guy who invented the chakra, the spoked wheel. It struck me that this unsung hero must have had some good chillums to smoke while pondering over the problem. If you remember your Sherlock Holmes, you will recall that for Holmes, a major mystery was always a "three pipe problem." To design the chakra must have taken three or four good chillums, I thought. After all, the chillum was invented long before the wheel, and ganja has been smoked in India from long before the temple of Juggernaut Puri was built. 

Enough of this bullshit grass, and this bullshit town. I am off today, by train, to Sambalpur, in the west, in the jungle, where the ganja is famous, and where Nehru built the Hirakud Dam. That was Nehru - the Dam Builder, unhappy to just sit by and "watch the river flow." Nehru's The State has persisted in blocking everything our free society could be. It was Nehru who established the "license-permit raj." This was his damned Dam Vision.

There are these dams everywhere, and even in Canacona, South Goa, I found a Big Dam (serving no ostensible purpose). 

I hate dams. I like free flowing rivers. I am a Freedom Man - that's how lucky I am.

Interventionism - and The Vision of the Anointed

A question was posed by a reader today - with reference to my morning post on Prashant Bhushan & Co. - regarding corporate corruption. I have posted a reply - but let me take the discussion of this important matter to the main page.

Socialists practise "interventionism." They are always to be found loudly proclaiming that The Market may be fine - but the State must "regulate." This is their ideology. What is "regulation" and how is it carried out?

Regulations are the product of parliaments and bureaus (government departments). Parliaments produce Legislation; and bureaus are empowered by "subordinate legislation." All these rules and regulations are "enforced" upon human beings during their actions in The Market. Thus, they are unfree.

Understand this "vision of the damned": this is their "command economy." They want to turn society into a machine that must obey their commands issued via Legislation. Socialist democracy is nothing but Legislation: the "social market economy." 

The immediate effect of such interventionism is what Peter Bauer called "the politicisation of economic life." Businessmen, realising they must influence the rules under which they will be regulated (by force), begin "lobbying," thereby diverting their attention to worthless politics, rather that tending to their businesses. To the uncritical eye - this is "democracy."

In the US of the 1940s, Ludwig von Mises pointed out how rampant interventionism was destroying American democracy. He said the "representatives of the people" have all become "representatives of special interests" - from agriculture to mining, to whatever. No one represents his "constituency" - and it's all about special interests. The politicisation of economic life through interventionism destroys both politics as well as democracy - and destroys the character of the business community, too.

Then, there is the Vision of the Anointed: those who see Market Society as the Wondrous Creation of God - an "order without design"; something that is "the result of human action but not human design." If humans did not design it - who did? We could call him God. His is the "invisible hand."

This is the laissez faire vision - of a completely Free Market. A natural, spontaneous order based on rules all of us follow - without knowing why. This Golden Rule of Property comes from the past. All I have done is articulate this rule - the Inviolability of Property - but I did not make this rule, nor did anyone else. It is a part of human evolution, which includes our "intellectual evolution" - an "order without design"; the "result of human action, but not human design." It took millions of years before any intellect could articulate this rule - as for example, the Greek philosopher Strabo did in 40 AD, whom I quoted in my post of yesterday.

This commercial, bazaar culture is our real "cultural heritage." It is a culture of of peaceful and gainful exchange. A "commercial culture." A bania can buy from a Scot and sell to a Jew and still emerge with a profit - or so they say in London!

This natural order of the Free Market is what Hayek called a Great Society - as did Adam Smith. And since Smith influenced Darwin, the latter's evolutionary theories also looked at the natural world as an "order without design." This cannot be coincidental.

Similarly, Frederic Bastiat, battling socialists and protectionists in France circa 1850, wrote an entire volume titled Economic Harmonies. There is no "class war." The motive of self-interest does not destroy society - rather, it enriches it, by creating Competition, which is the essence of Liberty, its biggest fruit. Everything and everyone improves all the time. "Competition is Liberty - and the Absence of Competition is Tyranny," said Bastiat. 

He was a devout Catholic, and he proclaimed his faith thus: "To believe in Liberty is to believe in God - and have faith in His creation, Man."

These classical liberals believed in "natural honesty" - and the Scottish Enlightenment was all about "natural religion." This was their vision - of a natural, harmonious order among all mankind, all based on gainful trade, because God planted in all of us "a natural propensity to truck, barter and exchange."  

If the State is completely separated from The Market - laissez faire, private money, free banking under law, private law, unilateral free trade - all businessmen will find that their only way to preserve and accumulate capital will be by "serving the consumer" - and not the politicians and their bureaus. Only then will corporate corruption cease.

Of course, businessmen must realise that their "rightfully understood interests" do not lie in interventionism. That is also the task of the economist. I will address that task in my post of tomorrow morning.

Recommended reading: Ludwig von Mises' Interventionism: An Economic Analysis. This was written in German in the 1940s, shortly after the Miseses had migrated to America to escape Hitler. Mises was working for the National Bureau of Economic Research (NBER) then, and this was translated into English by two NBER staff - but never published till after his death! You can download the book from the Mises Institute here. Obviously, this is how the USA became the USSA - by preferring democracy to liberty, confusing the two, confusing means and ends.

The Laws of Liberty... And Socialist Judges

The following was written by the philosopher Strabo around the year 40 AD:

As for the constitution of Crete which is described by Ephorus, it might suffice to tell its most important provisions. The lawgiver, he says, seems to take it for granted that Liberty is the State’s highest good and for this reason alone makes Property belong specifically to those who acquire it, whereas in conditions of slavery everything belongs to the rulers and not to the ruled.

Note: Ephorus lived in the 4^th century BC, and he was describing Crete as it had been for many centuries earlier.

So get it straight:

Private Property is Liberty.

Collective Property is Slavery.

Further, this is “pre-classical liberalism” – not “neo-liberalism.”

It is socialism, communism and collective property that are NEW – dating back to the 1850s. 

Nehru was following a “political fashion”; he had not studied the ancients and their wisdom. 

Thus, he did not know that Private Property is not only the foundation of Liberty, it is the foundation of civilisation itself.

Private Property is the basic rule all our unlettered people follow in the Natural Order of the market society. Vast masses can only “act” – that is, act to “exchange” – only where there is a clear understanding of what is “mine” and what is “yours”; and this rule alone prevents conflict.

If a Communist Mayor took over and declared everything in his City to be “collective property,” chaos would ensue, and everyone would raid every shop and every mansion to take whatever he wanted in the name of the Universal Brotherhood of Man.

It follows that the Market Society is based on Individualism, and the rights of Property belong to Individuals.

It further follows that the Market Society is not an “organisation.” It is NOT a Command Economy. Each Individual speculates with his own Property, seeking to satisfy his customers, responsible only to himself for his gains and losses.

What happens when conflicts break out and the Natural Order is disturbed?

Then, an “impartial judge” is called in to resolve the dispute.

How will this judge “discover” the Law of Liberty? Hear Hayek on this:

The distinct character of the rules which the judge will have to apply, and must endeavour to articulate and improve, is best understood if we remember that he is called in to correct disturbances of an order that has not been made by anyone and does not rest on individuals having been told what they must do. In most instances no authority will even have known at the time the disputed action took place what the individuals did or why they did it. The judge in this sense is an institution of a spontaneous order. He will always find such an order in existence as an attribute of an ongoing process in which the individuals are able to successfully pursue their plans…

In the Market Society, individuals meet and make peaceful and gainful exchanges. While doing so, they follow the Golden Rule of Property. This creates a spontaneous, “natural order.” Just as posses of policemen are NOT required to maintain order, so also the “specific commands” of Legislatures are unnecessary. The impartial judge is concerned only with the disputes between individuals  - and not the “will” of any “organisation” like The State. Let’s call in Hayek, again:

The judge, in other words, serves, or tries to maintain and improve, a going order which nobody has designed, an order that has formed itself without the knowledge and often against the will of authority, that extends beyond the range of deliberate organisation on the part of anybody, and that is not based on individuals doing anybody’s will, but on their expectations becoming mutually adjusted.

The judge thus takes into account decisions made in similar cases in the past; and, if he does set a “precedent,” he only “delimits the range of permissible actions” that will apply to unforeseen instances in the future. The judge is a servant of the Natural Order. He is not a servant of The State. He is there to “preserve the peace” – a peace that existed before conflict broke out. This is what Common Law is all about. Common law judges did not impose the monarch’s will – and the monarch never “made new law.” Common law judges “discovered the law” from the past – from custom and usage, and precedents.

Hayek says:

The efforts of the judge are thus part of that process of adaptation of society to circumstances by which the spontaneous order grows. He assists in the process of selection by upholding those rules which, like those which have worked well in the past, make it more likely that expectations will match and not conflict. But even when in the performance of this function he creates new rules [sets precedents], he is not the creator of a new order but a servant endeavouring to maintain and improve the functioning of an existing order. And the outcome of his efforts will be a characteristic instance of those “products of human action but not human design” in which the experience gained by the experimentation of generations embodies more knowledge than was possessed by anyone….

He must thus be conservative in the sense only that he cannot serve any order that is determined not by rules of individual conduct but by the particular ends of authority. A judge cannot be concerned with the needs of particular persons or groups, or with “reasons of State” or “the will of government,” or with any particular purposes which an order of actions may be expected to serve. Within any organisation in which the individual actions must be judged by their serviceability to the particular ends at which it aims, there is no room for the judge.

So, can a Socialist ever be an “impartial judge” – or will he always side with authority? Hayek notes:

In an order like that of socialism, in which whatever rules may govern individual actions are not independent of particular results [like “redistribution”], such rules will not be “justiciable” because they will require a balancing of the particular interests affected in the light of their importance. Socialism is indeed largely a revolt against the impartial justice which considers only conformity of individual actions to end-independent rules and which is not concerned with the effects of their application in particular instances. Thus a socialist judge would really be a contradiction in terms; for his persuasion must prevent him from applying only those general principles which underlie a spontaneous order of actions, and lead him to take into account considerations which have nothing to do with the justice of individual conduct [as with rent control, nationalisation, land acquisition or the war on drugs].

Hayek goes on to say what kind of judge – and what kind of justice – best suits the Natural and Spontaneous Order of the Market Society:

The difficulty many people feel about conceiving of the judge as serving an existing but always imperfect abstract order which is not intended to serve any particular interests is resolved when we remember that it is only these abstract features of the order which can serve as the basis of the decisions of individuals  in unforeseen future conditions, and which therefore alone can determine an enduring order; and that they alone for this reason can constitute a true common interest of the members of a Great Society, who do not pursue any common purposes but merely desire appropriate means for the pursuit of their respective individual purposes.

All this MUST be based on the Institution of Private Property.

Law, Liberty and Property are an inseparable trinity.

Thus, there can never be any Justice under Socialism and Socialist Judges.

And a Socialist Constitution.

Onwards to a Second Republic!

And a Private Law Society – based on Property, Contracts, and Torts.

To conclude – here is Adam Smith’s good friend, David Hume:

But, though it be possible for men to maintain a small uncultivated society without government, it is impossible they should maintain a society of any kind without justice, and the observance of the three fundamental laws concerning the stability of possessions [property], translation by consent [free exchange], and the performance of contracts. They are therefore antecedent to government.

I would insist that Torts are also antecedent to government. With Torts, “criminal justice” becomes redundant – as I have argued earlier. On this subject, do read Bruce Benson’s The Enterprise of Law: Justice Without The State.

So, dear reader, contemplate the desirability of a natural and spontaneous order in which we all can peacefully co-exist and pursue our own individual ends – under the Law.

So, its not just about Liberty.

It is Liberty Under Law.

                       

[All HAYEKsplosive quotes are from Law, Legislation & Liberty, Vol. 1, “Rules and Order”, Chapter 5 titled “Nomos: The Law of Liberty”. You can buy the book from Amazon by clicking on the icon alongside. I recommend it highly.]

What Is "Governance"?

The lead editorial in Mint today says that our Great Leader, prime minister chacha manmohan s gandhi, has "plumbed new depths." India is facing an "abysmal crisis of governance" - the editors say. This is the opening sentence:

If any confirmation of India’s abysmal crisis of governance was required, Prime Minister Manmohan Singh supplied it on Wednesday.

What is this magical "governance" that our The State is supposed to provide our society? Who are the personnel of this State who will do the job? Do politicians, bureaucrats, policemen, judges, tax collectors, customs officials, PSU chiefs, RBI governors, bureaucrat-professors and "teachers" provide us with this magical governence today? What, indeed, is "governance"?


Answer: Governance is fiction. There is no such thing. It is a dangerous word, full of Hobbesian content, which makes simple people believe that, without The State, there would ensue a "war of each against all." Hobbes was an ass - and a mathematician.


In reality, the Market Society is possessed of its own Natural Order. There must be millions of crowded bazaars all over India where millions throng to buy and sell - without any policemen "maintaining order." How does this order exist on its own?


The Market Society is all about "how to acquire desired objects." People in such a society learn from childhood that trade and exchange is the way. When doing this, they all observe the Golden Rule of the Inviolability of Private Property. Thus, while the shops are all wide open, no one goes in to plunder. Man is a "rule-following animal," as Hayek said. He added that the observance of these rules lies "between instinct and reason." In other words, while we have overcome our instinct to plunder, we have not reasoned why. Hence, we are a nation of zombies whose very Constitution violates the Golden Rule of the Inviolability of Private Property. Our "politics" is monopolised by socialist and communist "parties" whose constitutions are also violative of this Golden Rule.


Between instinct and reason, indeed.


"Civil government" - the term Locke used - is not The State. It is a classical liberal concept based on the Free Market and Private Property. The word "civil" lies at the root of "civilisation," "civility," and "civil service."


"Where there is no Property there is no Justice," wrote Locke.


Thus, with this socialist Constitution our civil servants of old have been transformed into predatory "bureaucrat administrators." The old District Collector - who took a tax in exchange for a property title - has been transformed into the District Spender. All his spending is part of the Capital Consumption our The State is engaged in. There is NOTHING he provides that may be called "governance." Not even a footpath or a zebra crossing. And property titles have been forgotten - even in cities, where millions live in slums.


The editors of Mint conclude that chacha's performance "does not augur well for the country’s governance." They contemplate a new bunch at the helm of our The State and say:

For the fact is that every new government that comes to power makes its predecessor look like an angel.

But these are not "government." These are all our The State. Everything is predatory. Tax, print, borrow, spend, regulate, legislate, protect, subsidise and "distribute the booty." Every State Government of this Federation does the same. The cities and towns are all collapsing - including Nude Elly. There are no roads. The State Police is predatory. The courts do not work. And Air India flies!


On my part, I hold that it is a very good thing that chacha manmohan has brought about this "crisis of legitimacy" that our The State is suffering from. I hope more and more people will realise that we will all be much better off if we abolished this The State altogether. This is a "good for nothing" organisation, predatory to boot.


In the classical liberal worldview, "civil government" (in cities and towns) exists only to preserve a pre-existing natural order. This order is "presumed." There can be no civil government if this order did not exist - and military government would be required. The civil government only preserves and maintains the pre-existing order.


So, avoid using the word "governance"; loaded, as it is, with statism.


And do contemplate the wonders of the Natural Order - the cosmos.