The Central State Is "Fast" Sinking

After all the Anna Hazare nonsense, we now have the Baba Ramdev bull. I'd love to see these jokers try a "thirst strike."

Anyway, all through this tamasha, two people have been completely silent - chacha manmohan and his boss, sonia. They are silent because neither of them is a politician. Indeed, political power has been transferred, in these difficult times, to completely unelected groups: one, the Anna Hazare-Baba Ramdev-Lokpal lot; and two, the National Advisory Committee (NAC) that instructs madam soniaji.

Why is no one talking of Irom Sharmila from Manipur? The "wiki" on her begins thus:

Irom Chanu Sharmila (born March 14, 1972), also known as the "Iron Lady of Manipur" or "Menghaobi" ("the fair one") is a civil rights activist, political activist, journalist and poet from the Indian state of Manipur. Since 2 November 2000, she has been on hunger strike to demand that the Indian government repeal the Armed Forces (Special Powers) Act, 1958 (AFSPA), which she blames for violence in Manipur and other parts of India's northeast. Having refused food and water for more than ten years, she has been called "the world's longest hunger striker".

Let us end Tyranny - and Corruption will end automatically. Let us end State Power. Let us begin with Manipur - and get the Army into their barracks and Manipuri ganja into our chillums.

Why is the corporate media so hung up on Baba Ramdev? Why is no one mentioning Irom Sharmila?

However, from the corporate media, one voice has definitely, and finally, defected - and that is Shekhar Gupta, editor-in-chief of the Indian Express. His column today says the UPA-2 government is "politically vanquished." He writes:

...never in India’s history has a government with a genuine majority and a strong political core surrendered the state’s sovereign constitutional authority and responsibility as this one has. What is even more dangerous, they have ceded this to just about five characters in fancy dress, in shades of white to saffron, representing Left, Right and the Centre.

Gupta mentions the NAC as an unconstitutional body. And his description of these welfarist jokers as "darbari jholawalas" is apt. He demolishes the NAC with these words on the latest legislation they have drafted, on "communal violence":

This is not a team of modern-day Ambedkars, but mostly of IAS drop-outs and retirees who approach law-making with the “wisdom” of sincere undergrads. You have any doubts, take a look at the draft of the incredibly stupid Prevention of Communal and Targeted Violence (Access to Justice and Reparations) Bill 2011 (www.nac.nic.in/pdf/pctvb_amended.pdf). A Modi or Togadia can see in a minute the wonderful opportunity it presents them. It is totally violative of the states’ rights, is subversive of the Constitution, and will never pass parliamentary or judicial scrutiny. But it will polarise people on a communal basis just when they seem to be getting over that sad past. This bill will not pass. But if the UPA continues to push it, it is guaranteed to polarise the Hindu vote and give the BJP a shot at power that any appeals to Ram Lalla cannot in 2014. This could indeed become Sonia Gandhi’s Shah Bano moment.

Such clowns cannot govern this vast country. On their "welfarism," there is another column in the Express worth reading, this time by the noted economist Surjit Bhalla, which begins thus:

The expansion of poverty programmes in India has been spearheaded by Sonia Gandhi and her National Advisory Council (NAC). She cannot ignore the fact that by expanding old-fashioned anti-poverty schemes, she is also increasing old-fashioned “in the name of the poor” corruption.

Indeed, not just corruption, the NAC's welfarism is the root cause of the high inflation we are currently suffering from. As Ludwig von Mises noted:

The Welfare State with its methods of easy money, credit expansion and undisguised inflation continually takes bites out of all claims payable in units of the nation's legal tender. 

The darbari jholawalas of the NAC and the Anna-Hazare, Baba Ramdev & Co. hunger strikers are not going to do India any good. The country needs a new political direction - and that is Capitalism. Socialism, welfarism and interventionism all have to go. To get there requires nothing less than a New Constitution. The time has come for all patriotic Indians to call for a Second Republic.

And will all those who are reading this please raise a very loud shout for Irom Sharmila and Manipur.

Open Society & Economy - And The North-East

The plight of North-East India was brought to mind by this recent editorial in Mint recommending that the "troubled frontier", i.e. the border with Bangladesh, be "fenced and sealed." This is a recipe that will cost the taxpayer hugely - and lead to the proliferation of border guards, guns and checkpoints. The North-East is underdeveloped because it is not properly linked to the rest of India. Today, Sikkim and Arunachal are hoping to open the border with China. Will autarky be good for the North-East?

Socialism, central planning, and "balanced regional development" have all failed the North-East. So the very idea as to what constitutes "development" must change. No longer must centrally funded "projects" constitute development. Rather, development must be seen as increased "consumption" on the part of the ordinary people. Ordinary people buying mobile phones should be seen as development - and not some PSU.

When we turn the discussion to market-led development, the focus immediately shifts from politicians, planners and bureaucrats to traders and entrepreneurs. In many cases, those who undertake such trading activities will necessarily be "outsiders." These outsiders should be seen as valuable and useful - and not as easy pickings. I have for long heard horrible stories of how Bania shopkeepers who venture into the North-East are treated - especially by all the "rebel" groups. So, to begin, let us understand how these Bania shopkeepers benefit a local population.

In the small market town 3 kms from the village where I live in south Goa - the only market town in a vast, rural (and forested) district - is a Bania shopkeeper. His little shop is always crowded with poor villagers who come from miles around to buy this or that, in very small quantities. And he never fails them. I always get my carton of cigarettes from him - and he stocks hundreds of other goods. We should pause to appreciate the tremendous amount of diligence that goes into running such a shop, upon which so many rely, and how he "improves their consumption." When shops and markets close, people suffer - especially in far-flung parts of the empire. We may also note that all the mathematics the Bania uses are the four operations of Arithmetic.

The land-locked North-East, the furthest-flung part of this empire, presents to The Market the appearance of an unexplored (and unsafe) "frontier." The real foot-soldiers of The Market in this frontier are the intrepid traders. Small traders. Outsiders. Travellers. The specific purpose they serve is that they improve consumption for the local people. Thus, they should be encouraged. Just as any "trade delegation" from abroad is to be welcomed.

The alternative, "closed society" view of one state-one people-one leader - what the Nazis called ein reich, ein volk, ein fuhrer - is seen far too much in local politics these days, all over the land. This view requires fences, border guards, checkpoints and "papers." Consumption does not improve. Taxes are misspent.

Since the editorial specifically recommends a border fence between Meghalaya and Bangladesh, allow me to add something about Shillong. The British built this city, which was then the capital of the entire North-East and is today the region's educational capital. I have never visited Shillong, but I recently read a great contemporary novel set in this city, and the picture it offers is of a town with many markets, trades and professions, churches, schools and colleges - and also a very mixed population. The protagonist is a Muslim girl from UP, a college teacher, with a Manipuri boyfriend (she even eats pork momos!). There are, however, some boors who go round harassing outsiders and extorting money from shopkeepers. One shopkeeper is even shot dead. (Brings to mind a thought: A gun is a consumer durable that serves to make the consumer more durable.)

Instead of a border - fenced and sealed - between Meghalaya and Bangladesh, I suggest a great big highway running from Shillong to the Bangladesh port of Chittagong, so that container traffic can enter the North-East directly from the nearest port. Chittagong is also close to Tripura and Mizoram. The investment in the highway could well come from an entrepreneur in The Market.

There are troubled parts of the North-East - the entire border with Burma is troubled - but there will perhaps always be troubled parts on this troubled planet. All we can do is promote the market ethic. And hope it spreads. But it bears repetition that small traders are the foot-soldiers of the market economy in such "frontiers." I borrow this particular word from Peter Bauer's The Development Frontier: Studies in Applied Economics, in which he writes about Africa - and the skills of the small traders there.

These "development frontiers" of the Third World - or should I say the "socialist" Third World - present a picture that is not very different from parts of Eastern Europe in the 15th and 16th centuries, when Poland-Lithuania was underdeveloped and underpopulated. The lords of all the vast lands were poor. What saved them were the great migrations of the time, which brought urban Jews from west to east. The Polish lords responded by settling them in their own towns and letting the urban market economy develop. This is how vodka came to eastern Europe. All these urban trades "improved consumption." Bangladeshis are great migrants. They are found all over India and are hard-working and honest. It was 7 AM one morning in London when I went out looking for cigarettes. Only one little cubbyhole was open - run by a Bangladeshi.

There is lots and lots of hope for the North-East. Scotland was extremely underdeveloped compared to England in Adam Smith's time. It was trade that made Scotland flourish - a trade that was encouraged and studied in Glasgow University. In those days this university produced more useful knowledge than Oxford and Cambridge combined. There was Adam Smith, of course. But also James Watt, inventor of the steam engine that powered the next century. And there were others as well, in Physics, and in Geology. The novel I read about Shillong paints a horrible picture of the State-run higher education system today.

Like the North-East, Switzerland, too, is land-locked and mountainous - and was once poor. At a souvenir shop in Interlaken I found figurines of Swiss women carrying bundles of firewood on their heads. The Swiss have succeeded because of peace, free trade and free enterprise, urbanisation and a top-class transportation system. Goods have to physically travel. Transport is the key, not border fences.

Recommended reading: My recent column in Mint, titled "Catallaxy: Key to an Open Society."

Secession - A "Crime" Or A "Right"?

Arundhati Roy is in the news these days because of a speech she made supporting the Kashmiri people in their battle against the central State. Apparently, the Delhi Police were about to register a case against her for the "crime of sedition." Most commentators have appealed to the "right to free speech" in order to defend Roy. In this post, I seek to go further, and uphold the right of any people to secede from any State that they do not wish to be part of.

Let us begin with the basic theory of "political organisation" - which in modern times is the Hobbesian "nation-state," run on the principles of "liberal democracy." The most important aspect of this State is that the people are governed not by force, but by consent. In the case of Kashmir, or Manipur, or the areas now under the sway of Naxals and Maoists, it is obvious that "consent" has been entirely lost, and all that is being applied is "force." This is quite like the despots of yore, of whom Mises writes, in Liberalism: The Classical Tradition (pdf here):

As long as nations were ruled by monarchical despots, the idea of adjusting the boundaries of the state to coincide with the boundaries between nationalities could not find acceptance. If a potentate desired to incorporate a province into his realm, he cared little whether the inhabitants—the subjects—agreed to a change of rulers or not. The only consideration that was regarded as relevant was whether the available military forces were sufficient to conquer and hold the territory in question. One justified one's conduct publicly by the more or less artificial construction of a legal claim. The nationality of the inhabitants of the area concerned was not taken into account at all.

Alexander the Great, Julius Caesar, and the Socialist Indian State - all believe in this theory. These ideas were finally destroyed by the great classical liberal political philosophers of the 18th and early 19th centuries. As Ludwig von Mises explained the liberal ideal:

The goal of the domestic policy of liberalism is the same as that of its foreign policy: peace. It aims at peaceful cooperation just as much between nations as within each nation. The starting point of liberal thought is the recognition of the value and importance of human cooperation, and the whole policy and program of liberalism is designed to serve the purpose of maintaining the existing state of mutual cooperation among the members of the human race and of extending it still further. The ultimate ideal envisioned by liberalism is the perfect cooperation of all mankind, taking place peacefully and without friction.

This is the "international division of labour" the liberals of yore thought would be accomplished through peaceful and free international trade.

Therefore, since the essential liberal ideas are those of peace and trade between and among peoples, of Property and Liberty, with only "negative duties" for the State, it made no sense to expand territory while endangering the vital peace. After all, Property is all Private. And the idea is not that The State creates wealth, but people do - so the fatal idea of "territory" did not appeal to them at all. They did not want a State that sought "acres and revenues." The classical liberals did not believe in territory as a "collective property." Thus we see Adam Smith strongly supporting the American demand for secession. He also opposed the colonisation of India.

Following this great tradition, Mises stood for the right to secede as an essential aspect of the "right to self-determination." He wrote thus, in 1927:

The right of self-determination in regard to the question of membership in a state thus means: whenever the inhabitants of a particular territory, whether it be a single village, a whole district, or a series of adjacent districts, make it known, by a freely conducted plebiscite, that they no longer wish to remain united to the state to which they belong at the time, but wish either to form an independent state or to attach themselves to some other state, their wishes are to be respected and complied with. This is the only feasible and effective way of preventing revolutions and civil and international wars.

Remember: the goal is peace and peaceful co-operation and trade. Territory is immaterial.

Mises then added a qualification:

To call this right of self-determination the "right of self-determination of nations" is to misunderstand it. It is not the right of self-determination of a delimited national unit, but the right of the inhabitants of every territory to decide on the state to which they wish to belong.

Unfortunately, the 20th century did not see these liberal ideas victorious. This was when the planet and its peoples were divided into "nation-states," each nation behind its own tariff walls, and each operating a "national economy." This is the only reason why this century was a century of great wars engulfing the whole world. Total wars. These wars continue because of these very same stupid ideas. The only cure: Libertarianism, the direct descendant of classical liberalism.

With modern "liberal democracy" - which is essentially Hobbesian - there has come about a new kind if illiberal doctrine regarding the "right to secede." According to this doctrine, the liberal democratic nation-state is "perfectly just" because it provides each citizen with "human rights" and further dispenses to him "social justice." This adds Rousseau's "Social Contract" to Hobbes. The theory of justice is the one propounded by John Rawls.

Thus, the right to secede has been eliminated - even in America! And Abraham Lincoln is the man responsible.

This is really not "liberal democracy"; rather, it is just democracy shorn of the liberal ideals of old; it is the ritual of voting - without Liberty, without Property, and the added plunder of protectionism. It is basically "socialist," sometimes even "fascistic." It is Legislation; it is bureaucracy. It is the "politicization of economic life." It is nothing but "statism." And as for the "political parties" - I have only just written a post on these gangs of thugs.

But this was never the social theory of the classical liberals, according to which, rather than a monolithic Hobbesian central State monopolising "security," each Individual was pre-possessed of Property as well as the right to defend himself and his property. All that the classical liberals desired is a system of laws by which Life and Property could be better protected. They did not accept the "myth of national defence" and they did not desire any "social justice," nor any "redistribution." Property and Liberty were the only great ideas, then.

(You can read an excellent journal article on the Right to Secession, explaining all these ideas, here.)

In modern India, we have got the whole thing completely wrong - because of wrong ideas. There is no point in upholding "territorial integrity" when vital peace, trade and co-operation are missing. Arundhati Roy has done the right thing by supporting the struggle of the Kashmiri people. This surely cannot be a "crime."

My ideal is a world of independent, self-governing and free-trading cities and towns. Peace, Trade, Property, Liberty, Civilisation. Thus, there is no need for a Kashmiri "nation state." Rather, Srinagar, Jammu and Leh should have independent local governments running the cities, ditto for all the towns. I believe that this approach, entirely consistent with the principles of classical liberalism, is the only solution to the crisis of political organisation that faces the people of India today.

Hit The Coast, Jack!

An editorial in the ToI today talks about "Beijing's latest initiative to establish a direct rail link to Bangladesh's port city of Chittagong and help construct Sonadip deep-sea port at Cox's Bazaar... "

If we truly want North-East India to "develop" we must realize that the best way forward is to give the region access to the sea - via Bangladesh. This means unilateral free trade as well as unilateral free immigration with that country. Access to the sea is vital for the region's prosperity - and this means India must invest in highways and railways linking the cities of the North-East with the ports of Bangladesh. Mizoram and Meghalaya will be the first to benefit - being closest - but gains will fitler also to Arunachal, which is opening up its road links with China. If Arunachal is seeing its future in overland trade links with China, I am sure the rest of the region will see even greater benefits in trade by sea, through links with Bangladesh.

India today presents a strange picture of an "artificial order" because of trade restrictions. Our biggest cities are land-locked Nude Elly and Bangalore. Things were different 200 years ago - when Calcutta, Bombay, Madras, Goa, Surat, Cochin and other coastal cities led the way. That is the age to which we must revert - to the "natural order" of Liberty, whereby all "natural advantages" are allowed free rein, and a deep-water port is definitely one such advantage: look at Hong Kong, Singapore, Hamburg...

I suggest a "big bang": Abolish the Customs Department.

Make the entire sub-continent the world's largest duty-free trading area.

Declare India a "catallaxy."

The economy will grow so fast that no statistician will be able to measure the growth rate.

So, shall we all hit the coast, Jack?

Horrifying!

I find it particularly horrifying that the Total Chacha State has decided to use the Army and the Air Force to tackle the Maoists in the jungles of Central India. Chacha Manmohan S Gandhi wants to "enforce the writ of the State."

In the meantime, the historian Ramachandra Guha has penned a thoughtful column on the ongoing crisis in Manipur, wherein he concludes that the best thing that can be done is to repeal the Armed Forces Special Powers Act. This Act, by which the Army has called the shots in Manipur, has been in force since the 50s, since before I was born. And there has never been any peace. Indeed, if anything, the "writ of the State" was never to be found on the ground. It is this scenario that our Total Chacha State wants to repeat in Central India. They want to thrive on chaos. They want never-ending civil wars all over India so that the sheeple have no other choice but to look towards them for a solution. This nefarious plan of theirs must be defeated.

Democracy means self-government. It means Liberty. It means the diffusion of power, not its centralization. It means politics solves conflicts, not bullets. The implications for the Maoists are threefold: the tribals must enjoy their rights to Private Property and free exchange; they must "self-police" their homelands; and the Maoist ideology must be tackled politically - which is impossible because liberalism is debarred entry into Indian politics.

Let us not forget that Chacha is a central planner. He overestimates the ability of the State's powers of compulsion and coercion in economic affairs. He therefore proceeds naturally to overestimating the ability of the armed forces to solve a mass uprising. We need a mass politician to do that. Not Chacha. He is taking us headlong into disaster.

Horrifying!

Crises Are Good For Them, Barkha

Barkha Dutt of NDTV has written an article on the latest Maoist outrage - derailing a train in Bengal, causing over 100 deaths - that advocates strong State action to neutralize the Maoists. To quote:

Like in any conflict zone — with the Maoists too— we seek a deft combination of battle strategy and smart politics operating on parallel tracks. When we see civilians under attack or poor jawans forced to be at the frontline of danger, we certainly expect our government to use force — both preventive and offensive — against brutal, senseless terror. Whether this force takes the shape of the paramilitary or the army; whether air support should be deployed to speed up the ferrying of troops and weapons — we may leave to the strategists.

Note the royal "we."

My friends at the Natural Order Blog have a thought for today that all of us should ponder over:

“Fear of disorder and love of well-being unconsciously lead democracies to increase the functions of the central government,” said Alexis-Charles-Henri Clérel de Tocqueville in a warning that should be heeded by all freedom-loving people.

Barkha Dutt's column is titled "Call a spade a spade." She wants to call the Maoists a spade. What about the Total Chacha State? Shouldn't we call the King of Spades a spade too?

In reality, such crises are great for the King of Spades and his minions in North Block - the "strategists" Dutt refers to. I recall a senior IPS officer from Assam telling me, in the early 1980s, that "law and order problems are good for us." He added that "we get more powers, more personnel, more jeeps and more wireless sets." Barkha laments the fact that poor jawans die on the field - but these senior strategists in North Block just shuffle files and make hay.

If I may pen my sincere thoughts on a "solution" to Maoism, then it is this: Get the State Police to entirely withdraw from any involvement in tribal affairs. I briefly served as District Superintendent of Police in Arunachal Pradesh in 1987 - and the great thing there is that I had powers only in the towns. The hinterland was beyond my control - and the tribals lived happily in their "natural order." That is why there is still peace in Arunachal Pradesh. This should be the model for all forested areas inhabited by tribals. Give them full powers over their lives and properties. Give them Liberty and Property Under Law. And then tackle the "ideology" of Maoism politically.

What will happen if the Maoists "take control"? (Actually, they are already in control.) They will then have no "enemy" to fight. They will have to govern under Law. With the right politics educating the tribals on their rights and liberties, the natural order will be speedily restored. Of course, this will require The Market - a social institution that no political party in India says anything in favour of.

Kamal D Nutt, Sher Shah Suri, Manipur, Tolls - And TAXES!

The ToI has done well by drawing our attention to the neglected and unsettled North-East in a thoughtful editorial. There has been an economic blockade of Manipur for 45 days. What struck was the conclusion:

A lesson from the ongoing economic blockade is the urgent need to improve connectivity. More and better highways must be built across these states to end their political and economic isolation.

There is no better way to pauperise a people than by denying them connectivity to urban markets. This is why the word "remote" means "poor". When we say "remote village" we imply that it is distant from urban markets, and that getting there is tough. This word, "remote," applies to the ENTIRE North-East. Indeed, why only the North-East, the entire country needs modern highways - inter-city, inter city and peripheral towns, coastal expressways, all in a "hub-and-spoke" design. This should be top priority. Not ditch-digging, miseducation, or free rotten cereals.

Autocrats in the past understood well the importance of roads - for without them there would be no trade, and without the trade there would be no taxes. There are economically rational reasons why autocrats invest in "public goods" alone - so that they can pocket the surplus for themselves. Sher Shah Suri was one such autocrat, yet it is he who built the Grand Trunk Road from Peshawar, now in Pakistan, to Dacca, now in Bangladesh. This road is the lifeline of North India till today. Imagine North India without the Grand Truck Road. You cannot.

The late Mancur Olson, looking at autocrats in history providing public goods - "all roads lead to Rome" etc. - concluded that there cannot be "predatory states." But his analysis falls flat in India, where a Central Planner has employed a "scorched earth" policy on his own people. Read my very old column proving that our Total Chacha State is predatory, here.

Chacha Manmohan S Gandhi's vision of roads is well reflected in the views of his roads and highways minister, the great Kamal D Nutt, WTO-wrecker. This minister is looking to "contract-out" highway-building to private companies who will charge tolls. He is looking for ways to quadruple toll collections.

Hey, Chacha!

Why the FUCK do we pay (so many) taxes?

These include a ROAD TAX.