Would You Lend Them Money?

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


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


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


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


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


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

NO MORE GOVERNMENT DEBT

More Bad News... And A Song

Two pieces of Bad News from our The State:


First, the fiscal deficit is headed UPWARDS, which means more money printing, and more consequent inflation;


Second, our The State is putting up a new Land Acquisition Bill in Parliament for approval, and this is consistent with socialist "legal plunder" of the Citizens' Properties.


Question: Is The State required to protect property or steal property?


Think about it.


And now, for the song:

Professor Roger Waters fired the first shot - a great big cannonball, like Cannonball Adderley.


Here is the second shot - Cannonball Adderley with Count Basie and the Big Band. I mean "Atomic Basie"!


All that jazz!


Here goes:

We Don't Need No Legislation 

by 

Baba Pagal Nath Charsi 

We don't need no legislation, 

We don't need no man-made rules, 

Property must be protected, 

Freedom must be ours too. 

Hey! 

MP! 

Leave our spliffs alone! 

Hey! 

MP! 

Leave our lands alone! 

Hey! 

MP! 

Leave our lives alone!

All along you're just another,

Prick in The House. 

That's right, just another, 

Prick in The House!

How do y'all like it? Some more verses will have to be composed.

Next step: To get a band together to play it.

Baba Pagal Nath Charsi & The Ganjeras.

Money for nothing, 

Chicks for free, 

Play my guitar on the MTV!

Ha ha ha.

Money, Taxes, Prices - And A Parade

The governor of our central bank, the RBI, has assured the Sheeple that he "will do everything to bring inflation under control." The strategy he will adopt: "restrain demand pressures." As though inflation is demand-driven. Oh! We poor sheeple.




Similar sounds are also emerging from Ben Bernanke, chairman of the US Federal Reserve, the chaps who print US dollars:

In his first press conference as chairman of the Federal Reserve, Ben Bernanke discussed rising gasoline prices, blaming higher demand from emerging economies and Mideast oil-supply disruptions as the cause of the zooming prices. Bernanke did not mention the US government's role in the higher energy prices, and he explicitly absolved the Federal Reserve of any blame.

As Mark Brandly points out in this article (in which the above quote is the opening paragraph) on why the US Fed ought to be shut down:

Bernanke's deceitfulness is appalling, although not unexpected. He knows that Federal Reserve monetary policy plays a significant role in gasoline prices. Expansionary monetary policy leads to more dollars being available in world currency markets and weakens the dollar. The weaker dollar results in higher import prices. More than half of the oil consumed in the United States comes from foreign producers....

The word "deceitfulness" is noteworthy. It must be applied to our RBI governor, too. Inflation is a deliberate policy used to finance State expenditure - a very deceitful policy. More dollars or more rupees - the result is the same: the value of the paper note declines. Gold has crossed 23,000 rupees for 10 grams - only because the value of the rupee has fallen. Similarly, in the US, when Nixon de-linked the US dollar from gold, the yellow metal was priced at $35 an ounce. It is more than $1500 an ounce now.

Inflation is nothing but a purely monetary phenomenon - caused by an excess supply of money resulting in the fall of the purchasing power of the monetary unit. To end inflation we must end central banking. Money must be "private money." The country must be put on the gold standard.

In other words, The State must be denied the power to fund its programmes through the deceitful means of printing paper notes to pay for them.

No more MGNREGA, no "right to food" and no "right to free and compulsory education" - that is, no more welfarism to buy votes - and inflation will be ended for ever.

Remember - inflationism robs the poor of their Capital - thereby rendering them poor for ever. Welfarism never benefits the poor in the long run - see the poor in the welfare states of Europe that are now going belly up. Welfarism paid for by inflationism is NONSENSE! It is precisely the "false philathropy" combined with "legal plunder" that Frederic Bastiat warned us about in The Law. This is not socialism; this is anti-social. So much Capital Consumption will destroy our civilisation.

**********************

But we also pay taxes! Should we continue to do so?

I was discussing taxes with a local entrepreneur here - pointing out that all we get in exchange for them is the State Danda: all manner of "inspectors" land up to collect bribes, which are an "illegal tax." We pay taxes in exchange of these bribe-taking inspectors. This is all that is "real" about our The State.

These are not just from the State Police, but also come from the labour department, the health department, the CRZ administrators, the excise department and so on and so forth.

This danda (Hindi word for "stick") is REAL. This is ALL we get for our taxes. We certainly don't get good roads, footpaths, clean cities and towns, scientific traffic management and suchlike. Over 200,000 of us are killed on our unsafe and horrible roads every year - more than get killed in a small war. Why should we pay taxes - that is, after money has been privatised and The State can no longer print paper notes to fund itself?

Think about it!

If we do not pay any taxes to The State - if business is laissez faire, if we inhabit a "private law society," and if everything is privatised, all we would have to pay for whatever we need are PRICES: for electricity, for water, for expressway tolls... The local entrepreneur here affirmed that he would be happier paying prices than taxes. "Starve The State," he cried out loudly.

Yes, in exchange for prices, businessmen will supply us with "goods." All that we get in exchange for our taxes are "bads." The Danda!

***********************

I HATE the danda of our The State - a State that does nothing right. A State that leeches on the people. A Predatory State.

As you all know, one danda I really hate is the Narcotics Act. It denies me good ganja. That drives me even madder. Especially in the morning. Like right now.

I therefore propose a Great Ganja Pride Parade in Goa. Let all smokers of the Holy Herb assemble, smoke and shout slogans for Liberty. And march. Let us show them our numbers. Let us show them our Anger. Let us show them our Pride - and our determination to be free from Tyranny.  

The Great CONgame

While discussing State spending with a passing stranger last evening, I posed this question:

The budget of the Goa government is Rs.3,320 crores. Would you be richer if this budget was Rs.10,000 crores? Or would you be richer if the budget was just one crore?

The man hemmed and hawed for some time and finally arrived at the truth:

He said, "We would be richer if the budget was just one crore, because we would obviously be paying less in taxes.

"Not just taxes," I said, "We would also not be paying for their inflation and their borrowings."

The fact is that big spending governments are BAD for us. I have written a recent post on this, titled "Against State spending: The more they spend, the more you lose."

It is indeed a GREAT DELUSION that increasing the quantity of money produces prosperity. It is only because of this great delusion that all central bankers can freely practice inflationism. They gain; we lose.

How can we be rich? We need Property - and Liberty. And money must be sound. Hard money is also Property. Gold is Property.

That is all we need. When we have Property and Liberty, we can raise Capital, save and invest, and carefully tend to our businesses. There is no short-cut to prosperity - and printing money is certainly not the way. The only way to be prosperous in a market society is to satisfy one's customers.

Of course, if you want to take this path, you will have to reject State Education. They deliberately spread the Great Delusion - and you succumb to their CONgame.

Bob Marley got it right:

Here comes the CON-man,
Coming with his CONplan...
We build your penitentiaries,
We build your schools,
You brainwash education,
To make us the fool....

Though Bastiat put it most forcefully:

If you want to have theories, systems, methods, principles, textbooks and teachers forced on you by the government, that is up to you; but do not expect me to sign, in your name, such a shameful abdication of your rights.

Reject State Education!   

The Real Problem - The State

The results of the latest population count - the census - is out. Oh my! So many people in India. Perhaps the figure 1.2 billion is staggering - but this is a staggeringly huge country. There is abundant open space - as here on the Western Ghats. The cities are "overcrowded" - not "overpopulated."

One basic point is being missed in all these discussions and debates - and that is, how do we get all this Labour to combine with more and more Capital?

With more Capital, the productivity of labour will rise, and wages will rise as well. The path requires Free Enterprise and Free Capital Flows from abroad - and this means Big Business: "mass production for mass consumption." Laissez faire Capitalism.

Unfortunately, the way we are proceeding under our current The State is the very opposite: Capital Consumption. All "welfare" is consumption, not investment. This is why roads are never built. And hordes of lackeys employed.

The people of India are all hard-working and honest - and they are our greatest resource. If they are freed of inflationism designed to finance welfarism, they will themselves accumulate Capital and engage in Capitalism. Liberty, Property, Sound Money - that is all they need.

In such a poor country, and with such huge numbers of the poverty-stricken, inflationist-welfarism should be seen as criminally insane. Such colossal Capital Consuption will only destroy the nation, and all the 1.2 billion people in it.

We are completely wrong to believe that The State can bring about "economoic development." Such good things can only be brought about by indivdual action - of saving, investing and so on. Individuals accumulate Capital - and then all become investors. As well as consumers. Standards of living keep rising steadily.

If this be "economic development" then it must be said that our The State is preventing it from happening. That, indeed, is our great intellectual error: the "conflict of visions" between Peter Bauer and Gunnar Myrdal, the former for The Market, and the latter for the Planner. Myrdal shared the Nobel prize with Hayek! And the Indian State hugely honoured him.

If you want to study "development economics" from a free market perspective, that of a "classical liberal," read Peter Bauer. He pioneered the study of the "informal economy" found throughout the Third World, and testimony to the capitalistic instincts of the people.

The Census is just a total. But what really matters for all the individuals comprising that total is the Capital with which he can combine his labour. We do not need to control our numbers; rather, we need to cut down The State. It is Consuming all our Precious Capital.

Against State Spending: More they Spend, More YOU Lose!

Keynesian allies of central banking make the preposterous claim that higher State spending boosts "aggregate demand" - and that this is the way out of a "recession." To these Keynesians, State spending ADDS to "aggregate demand." If consumers are not spending and if investments are not forthcoming, they say, it is State spending that must lead the way. This will lead to "full employment" - of labour, that is. The textbooks are full of all this.

As we saw yesterday with Sudipto Mundle, professor emeritus of a State-owned institute of "public finance," no one asks: Where is the money coming from? Is it being borrowed, is it from taxation, or is it being printed? Professor Mundle himself begins by quoting total spending - with awe, for the numbers are staggering:

This financial year, starting April 1, 2011, the central government will spend Rs 12.6 lakh crore on various public services and development projects. Adding to that the expenditure of the state governments, total government spending in the country will be in the order of a massive Rs 36 lakh crore...

Since most people "think" like Keynesians, they will read these staggering figures and believe that their own businesses will see improved prospects - after all, there will be so much money floating around, demand for everything will rise, won't it?

So let's think a little harder. If the money is printed, it will cause inflation - and all ordinary people will lose. If the money is borrowed, private investors will not get to borrow it - and invest. The State will just take it and blow up the money, producing nothing - and repaying it out of future streams of taxation. Again, all ordinary people will lose. Lastly, if the money is from current taxes, surely we could have "stimulated the economy" by spending it ourselves! Do we need ministers and baboos to spend our money for us?


Think!


To help you do so, here is a Mises Institute article of today titled "Government Spending Is Bad Economics" by Jonathan M. Finegold Catalan. I quote excerpts from his conclusion:

Government spending is not a method of improving the market's efficiency, nor is it a method of employing allegedly idle resources. The result of government spending is foregone opportunities; the cost is the gain in wealth that would have occurred had economization been allowed to take place, minus the outcome of government spending. One can easily conclude that the notion of positive countercyclical fiscal stimulus is highly suspect, and that a better alternative would be to allow individual market agents to economize economic goods based on their own utility scales....

Government, in fact, is a large disequilibrating force on the market. It forcibly redistributes economic goods, removing them from a process of economization and instead investing them toward the realization of less important, or less preferred, ends. In other words, it distorts the continuous process of coordination....

Overall, we can safely conclude that government spending causes more harm than good; it redistributes the means of production toward the attainment of ends considered inferior by the individuals who make up the society that government is allegedly acting to improve.

Get it, dude?


We'd all be much better off spending (or saving) our own money.


Professor Mundle openly admits, in his opening remarks, that the common man in India thinks State spending is a colossal waste of resources:

There is a general impression, reinforced by daily headlines about new mega-scams and our individual experiences of poor performing government agencies, that the waste of public resources is colossal.

No roads, No highways. Shoddy railways. No electricity. No running water. Nothing.

Excise license, driving license, this permission and that and the other, fiat paper money, and cops - that's what we get: the danda.


This State produces no "goods"; only "bads."


So, never believe that soaring State spending is anything even remotely "good." It is BAD.


Very bad, indeed.


And if any Keynesian still hassles you with arguments about "full employment of labour" - then refute him with the section titled "Idle Resources" in the above article by Catalan. 


Catalan cites WH Hutt's The Theory of Idle Resources. I am a great admirer of the late Professor Hutt, having studied many of his excellent works. He is a must read for all serious economists. His books on trade unions, Say's Law of Markets, Immigration, the Politically Impossible and others are essential for all serious minds. You can download Professor Hutt's The Theory of Idle Resources here.


WH Hutt came from a "working class" background. While at the LSE, he attended a guest lecture by Ludwig von Mises - and "broke on through to the other side," realising that socialism harms the whole of society, working class included. Hutt's works cover areas not covered by any of the others - Mises himself, Hayek or Rothbard. Hence, reading Hutt is a must. He is another of those who richly deserved the Nobel Prize. Professor Hutt taught in South Africa.

Mundle - And The Bundle

The lead article in the ToI today is titled "Following the money trail." It purports to be about State Spending (Rs. 12.6 lakh crore rupees, as stated in the opening line) and is authored by an emeritus professor at the State-owned National Institute of Public Finance & Policy, Sudipto Mundle. However, if you take the trouble to read the entire thing in the hope of some enlightenment, you will be sorely disappointed. As is usual with "bureaucrat-professors" - like chacha manmohan s gandhi - they tend to conceal facts; they tend to deceive.

The first question to ask is: Where is this Rs. 12.6 lakh crore coming from? How much of it is borrowed? How much is just printed money?

Second: How much of this money is to be invested in Capital - and how much is to be "consumed"?  This will reveal how much is spent on salaries and the like, and how much on "welfare": ditch-digging, cheap rice, miseducation, etc. And how much is left over to build roads - which are Social Capital; "collective property."

Mundle does not look into the Bundle.

He sings praises of Nilekani, some ex-IAS chappies, and a BJD MP - and in favour of State education.

Mundle asks an important question in his opening lines - and do read his response to it:

How much of that will be wasted, and how much will translate into actual delivery of development projects or public services, and what quality of services? Nobody really knows.

Amazing!

The Professor Emeritus of the National Institute of Public Finance & Policy writes this!


"Nobody really knows" where The Bundle is going, so says Professor Mundle!

There are 3 aspects to Economic Science:

• Economic Theory
• Economic Policy, and
• Public Finance

Our The State is a Complete ZERO in all three!

The Bus Driver - Of Our The State

I was at the dilapidated State Transport bus station in Udipi, waiting for my bus to Karwar. There was just about enough time for a quick lunch, so I popped into the restaurant there for some idlis. Around me were a few employees of the State-owned bus company, including the driver of the bus I was about to board.  I decided to give them my frank opinion of their employer. It was heartening to find that they all agreed with me -  including the restaurant-owner and his staff.

In a nutshell, I told them that if their State-owned bus company was privatised, all buses would be run by private companies - for a profit. As employees of profit-making private companies, they would be much better off than they were today, working for a State-owned firm that makes chronic losses. Further, I added, if the State invested all its money in good roads, their lives as bus-drivers would be far easier. Given the terrible roads of today, I told them, their daily grinds must be pure torture. They all nodded in agreement - and my waiter even asked me to petition The State accordingly.

And then I boarded the bus - a rickety-rackety swadeshi rattletrap, dirty and grimy, fitted with the most uncomfortable seats imaginable. The driver clambered onto his seat and started the engine, which groaned and moaned like a stricken beast. From my seat, I hollered out at the driver: If buses were private, you would be driving a Volvo. He looked back at me - and smiled.

Our journey began - and the road, the Notional Highway #17, was the pits. I sat and reflected on the only bus trip I had taken in Europe - from London to Frankfurt - and how easy it was on bus drivers there, given the excellent roads. Easy on passengers, too.

A few hours later, the bus stopped at some small town - another dilapidated bus station - and I got off to enjoy a smoke. Chanced upon my driver and entered into conversation with him once again.

I suggested that people like him were not much different from  jawans in the Army or constables in the State Police - who slog it out for poor pay while their bosses and their political masters make hay. He looked down at his khaki uniform - and nodded sagely.

I noticed this phenomenon in Gujarat too, during my recent trip there. In Gujarat, there are no private buses - all are State-owned. The buses are terrible, the bus stations are terrible, and the roads are terrible as well. The Customer gets screwed. And the bottom rung of State employees who do all the dog-work think themselves privileged!

In my life, I have worked a brief while for The State, spent some time with a firm that made losses, and some more time with a firm that made profits. Of these, the last was the best. I always advise youngsters  to work for successful, profit-making firms, and to shun State employment.

I have also closely interacted with a few Class IV employees of our The State - and was always left with the feeling that if they had opted for entrepreneurship instead, they would have been much better off, not only materially, but also spiritually.

In the bad old days, State employment was preferred for its "job security" - and for its perks like free housing and lifelong pensions. Today, these must be seen as a hoax - because our The State practices inflationism. This is a way of cheating all workers - including State employees. Class IV employees of our The State are cheated the most - since their meagre savings get eroded.

Thus, privatisation and a drastic cutting down of the State Budget, accompanied by a massive retrenchment of its work-force is not only in the interest of the general public; it is equally in the interest of the numberless lower-rung employees of The State.

If Liberty prevails, entrepreneurship will flourish, and many good jobs will be created.

With free trade across land and sea, the Consumption of all will improve dramatically. With their wages, all workers will be possessed of world-class "wage goods."

If the Budget of The State is cut down and inflationism ended, the poorest workers will also be able to convert their savings into Capital.

Jawans, sipahis, peons, railway karamcharis, Air India hostesses - all should see their employer as a beast, and opt out. Their trade unions should come out strongly in favour of the reforms I have suggested above.

Yes, I am an Enemy of the State - by which I mean an enemy of the monsters on top. I am not an enemy of the small guys.

I shot the Sheriff - but I did not shoot the deputy.

Fuck The Budget

In India, the annual budget of The State is hugely over-hyped - only because of the delusion that it is The State, with its taxation and spending, that makes private economies grow. Far from the truth.

I have not read much about this year's budget, but on that of the previous year, my post was titled "A Monster's Budget."

In that post, I had concluded sying that if The State was "minimal" (and not a monster) - low taxes, low spending and no borrowing - then this would be in the best interests of society, for the citizenry would have more of their own money to save and invest. Private saving and investment would spur the growth of all our independent, private economies.

Thus, instead of looking towards the Budget of our The State for economic "solutions," the citizenry had better look towards Economic Freedom and The Market - where all the good things lie.

For example, my last post was on free trade over the Open Sea.

Or about the Freedom to grow and sell ganja-charas - and, who knows, a Bhola Company could be floated, much bigger than ITC.

What about nightlife - so much talent, but cruelly repressed.

What about casinos?

What about micro-breweries everywhere, selling fresh draught beer to all, especially the poor?

What can the Budget accomplish compared to Liberty?

Foreign Trade - Without Our Central State

The Central Ministry of Commerce controls all our international trade. Therefore, there is very little of it. I have many previous posts on the erstwhile commerce minister, Kamal D Nutt, famed as a WTO-wrecker and a staunch protectionist. Hence, on the west coast, all the ports export iron ore and import nothing. Makes perfect sense to Nude Elly, so very far away from the sea.

Today, there is an interview with the central State's commerce secretary, Rahul Khullar, IAS, in Mint, that reveals much about the deep errors in how these fellows think. The title says the man is very worried about our "trade deficit." The very term refers to a fictitious "national economy," whose exports and imports need to be "balanced" by such bureaucrats. Note that at a sub-national level, such statistics are never resorted to: like, say, the trade balance of Bombay or Goa. Such a concept only matters to individuals, who need to balance their sales and purchases; that is, their income and expenditure. Since only individuals (and individual firms) engage in trade, they alone are capable of taking rational decisions on this score: that is, how much to export and how much to import.

I have only the other day written a post on the fictional nature of the "national economy": that, in truth, there are only "private economies," billions of them, and that notions like GDP and its "growth rate" are false. Today, let me extend that discussion to the ideas expressed by our commerce secretary in the above interview. These are all entirely false ideas, designed to perpetuate bureaucratic and political control over foreign trade.

But why have we Indians set up this State? Is foreign trade regulation one of those purposes? Or should we not just demand from our The State the very same "liberty to trade by land and sea" that the English people seized from King John in 1215 AD?

To begin with, let us understand that we are all, as individuals, major importers. If I sell words - my export - then I import just about everything else into my house. The same applies to my town, in which there are neither any farms nor any factories, and everything on sale in its shops and bazaars have been imported from without - but from the land, and not from the sea, which lies 200 yards away. The question then arises: Why should the sourcing of products in our town and city markets be limited to what is produced domestically? When no individual, town or city is "self-sufficient," why should the nation be so? If a merchant ship laden with goodies draws up at my nearest port, should it be turned away?

In matters economic, one must always think like an individual and never in terms of "national economy" - a false concept designed to confuse the citizenry into thinking that the personnel of The State must plan, regulate and control economic affairs. If we think deep, as the classical liberals did, then The State is nothing but an organisation based on compulsion and coercion established to secure life, liberty and property, thereby allowing each citizen to pursue happiness freely. Thus they called for laissez faire - or "let free" - which means a clear separation of State and Market.

The State, to the classicals, comprised tax collectors, policemen, magistrates, jailors and hangmen - none of whom have anything to do with business. These ideas were lost when the concept of "national economy" took over the public mind, thanks to public education, and each nation-state, with its own fiat paper currency monopoly within its territory, began to intervene in matters economic.

While looking at our own The State in Nude Elly, we must note that this institution cannot even "balance" its own budget! It has always been in the red. It continues to be so. They live off the "perpetual irredeemable debt" - and some 3,50,000 crore rupees are being borrowed this year. Should we not ask of our The State: Hey, dude, why don't you "balance" your own budget instead of trying to fool us all with this bull about a "trade balance"?

Matters become clearer when we think about gold as money; that is, "private money" neither produced nor regulated by The State. Then, just as none think of how many rupees are travelling in and out of Bombay, none will bother about how much gold is flowing in and out of our borders. Each individual will manage his own gold hoard and freely speculate with it, and this includes speculation on imports. Then, just as the East India Company sent out its "tall ships" laden with gold to buy up all the spices in the fabled East and bring them back so as to be able to sell them domestically at a huge profit, many Indians will prefer to be importers rather than exporters. They will send out their gold and impatiently wait for their "ships to come in." Today, the commerce ministry in Nude Elly is giving out "incentives to exporters"! This, while the value of the rupee is in constant decline - thereby discouraging imports! If we adopted a gold standard, things would be the other way around, and imports would become progressively cheaper, especially if the rest of the world stuck to fiat paper money, which would always decline in value against gold. We would become big importers. And our exports would benefit too, because imports of raw materials, components, and technology would become cheaper. We would export high-tech stuff - not low grade iron ore dug out surreptitiously from State Property in the Western Ghats by politically connected "contractors."

With cheap imports, even our poor people would be able to consume foreign wines instead of the harsh grogs of IMFL - and the very idea of Indian Made Foreign Liquor is a product of "import-substitution industrialisation," another of the false theories our State universities teach.

Away with all these theories!

Let us instead use common sense - and let History be our guide. Ancient civilisation developed by the sea - the Mediterranean, in particular - only because there were huge gains from overseas trade. These civilisations flourished only because there was no ruler strong enough to control what went out or what came in - and gold was private money.

One account of the river Thames outside London in the 12th century described the scene as a "forest of ship-masts." This was about the time the Magna Carta was signed, delivering the people the "liberty to trade by land and sea."

Cochin, Mangalore, Surat, Porbandar (where Gandhi was born) - there are so many ancient ports on our shores. Let them all be free to trade with the world outside. And let many new port cities emerge.

Liberty!

Das Capital Is Inside Your Head

A glaring example of "false education" comes to all of us almost every day as some pseudo-economist or the other in Nude Elly, that too, from atop Raisina Hill, makes pronouncements on future "rates of growth" of the "national economy": both concepts are false. The latest is that the GDP will grow @ 8.56% next year, an extremely precise "measurement," that too of an amorphous "aggregate," looking into the very uncertain future.

Capital is a "mental category" inside your head, along with "income." These mental categories, both part of the "logical structure of the human mind," enable the illiterates on the banks of the Narmada here, those who herd cattle and goats in the manner of their ancient forebears, perform mental "economic calculation" within their minds so as to ensure they consume "income" and no more; indeed, that they consume less than income, so that they "save," and their Capital, the size of the herd, keeps growing - which is "capital accumulation." Cowboys in America did this. Sheep ranchers in Australia do the same.

Capitalism is therefore about each and every Individual, with his own mind, superintending all affairs pertaining to his own Capital. While the mental category of Capital is inside our heads, the actual stuff is usually material - and thus we have Individual Private Property. Since each must look after his own Property and Capital, one very important question that arises in inflationary times is regarding "store of value." Inflationism robs savers. Fiat currency no longer serves the purpose of a stable store of value. Gold, silver, art, land - people are preferring alternatives. For a simple reason: if you store your Capital in these forms, it will increase in value.

Whereas illiterate goatherds, shepherds and cowherds ensure capital accumulation (we call it "animal husbandry") the constant decline in the value of the fiat paper currency is because our The State is engaging in the very opposite form of behaviour: Capital Consumption. That is "deficit financing." Air India, the railways, the electricity boards, education, NREGA, salaries of millions of staffers - all this is "consumption." Not a "good shepherd" at all. Rather, the very Predatory State.

The idea of "limited government" means three things: firstly, limited by Law in its ability to use coercion, compulsion and force; second, limited by Parliament in its greed for taxation; and third, limited finally by the Budget voted.

It is only because of "unlimited democratic government" that the currency is in constant decline. The State is abusing its money monopoly to fund itself. The problem before each citizen as the Proprietor of his own Capital is, as I just pointed out, how to "store value" - into the uncertain future. The best advice I can offer the citizen is to press for an end to the money monopoly. We must be free to choose media of exchange as well as stores of value. Further, there must not be any taxes or customs duties on gold and silver. We must also be free to write contracts into the future in gold and silver - and this includes bank deposits.

If this is achieved, each Individual will be able to accumulate capital - the pathway to civilisation. Simultaneously, the pseudo-economists captaining the Pirate Ship of State will find their power to endlessly fund themselves at public expense suddenly withdrawn. They will be forced to adjust their own conduct. They will be "limited" - at least in the "economic" sense.

Collective statistics on the "national economy" are dangerous in the precise sense that all publicly held lies are dangerous. Capitalism is inside your own head, with you as the planner and proprietor - the ultimate decision maker - of what is your own. Since the future is uncertain, all your actions will be "speculative" as you try to store value, or invest speculatively in enterprise. The fact is that the pseudo-economists of the "national economy" are making things difficult for you - not only by inflationism, but by its inevitable consequence, the increase in uncertainty that results, the endless booms and busts.

Capital is a mental category, Capital is Private Property, and Capitalism is therefore all about Private Economies - billions of them. Capitalism has nothing to do with the false concept of "national economy" - which forms the principal false public education that the pseudo-economists from Nude Elly's Raisina Hill regularly engage in.

The Drunken Judge... and other creeps

"The hanging judge was sober, he hadn't had a drink," sang Dylan - but this Supreme Court judge must have been punch drunk, on some cheap hooch, that too, for a sonofabitch who ought to have been hanged, along with all his accomplices, got let off. I am speaking of Dara Singh who, in 1999, more than a decade ago, murdered the Christian missionary Graham Staines and his two little boys in the most grisly manner - by burning them alive. 

The lower court had sentenced him to death, but appeals to higher courts went to judges who were high as well - on hooch.

Dara Singh and his gang are part of the Bajrang Dal - an off-shoot of the BJP. This dastardly crime is "political."

The judgment is political as well - for the news contains the following extract from the verdict:

Dara Singh's intention was to teach a lesson to Graham Staines about his religious activities, namely, converting poor tribals to Christianity.

And what about the two little boys, both under the age of ten. Burnt alive?

Thus, there is a "lesson" in this creepy judgment: Hindoo goon-squads are free to kill Christian missionaries.

There are other creepy stories about the creepy BJP as well - like how their Chief Minister in Karnataka is facing prosecution on serious charges of corruption and nepotism. The Governor has sanctioned prosecution - and the creeps have resorted to rioting and arson in protest!

There is another creepy story about how the BJP "youth wing" are planning a march to Srinagar, Kashmir, to hoist the national flag in the centre of town on Republic Day. The locals don't like this flag - and the BJP cadres are all outsiders, wanting to force the flag upon them. The flag, anyway, is the flag of the CONgress. In tiny Switzerland, every canton flies its own flag. There are 26 cantons - and 26 flags. The BJP claims its flag-hoisting is about "patriotism." I think patriotism by force is as creepy as creepy can get.

There is creepy news about the CONgress too today - and this is about the Youth Congress. The story reveals how most of their leaders are criminals, or involved in criminal activities. As the proverb goes, "A fish rots from the head." At the head is the Great Educator.

While creeps abound in the system, so do cronies - none greater than Rahul Bajaj. He is one of India's richest men - and now a Rajya Sabha MP. He is also chairman of the Confederation of Indian Industry (CII), a club of protectionist manufacturers. Today, he has contributed the lead article in the ToI. Titled "Just Path to Development," the article concludes in favour of continued rule by the creeps:

In the final analysis, India's growth process under a democratic government is a sustainable, humane and just path to development.

Bajaj the billionaire businessman and industry body head doesn't say that the only path to economic development lies in an economic institution - The Market. He believes that this path lies in a political agency - The State - an agency over which he wields considerable influence, an influence that has made him very rich. But I must insist that this State cannot be called "sustainable, humane and just." The Budget is certainly not "economically sustainable"; there is nothing "humane" about Army rule in Manipur and Kashmir, or State Police raj in Chattisgarh; and as for "just," we just spoke of the drunken judge who let the murderer Dara Singh off.

Rahul Bajaj lives in Poona (Pune), where his factories are also located. I have been visiting this city for many decades now, and have witnessed, with deep sorrow, its rapid deterioration with every visit. What was once a quaint little town where retirees built their little bungalows, Poona is now a hell-hole. The leading citizens of this city couldn't care less - and the long-time CONgress MP from Poona is none other than Suresh Kalmadi of CWG mega-corruption fame. Bajaj himself sits in Parliament in Nude Elly - cultivating political influence. It is noteworthy that in his article praising India's centralised democracy, he says not a word about civic freedom, about local self-government in cities and towns. Instead, he devotes an entire paragraph to praising panchayati raj in villages:

Participatory governance is most evident in local self-government at the village level, termed 'panchayat'. Across the country, several hundred thousand panchayats represent local voters, develop plans for social and economic development, manage funds and undertake projects. As per the Constitution of India, they are able to directly work in 29 demarcated areas. A key feature is that the government has mandated one-third of panchayat members to be women, with the result that one million women have been thus empowered. Initially viewed with suspicion, women panchayat members have taken up the development agenda in a committed manner, relevant to their own particular electorates.

Perhaps Bajaj should be asked to quit city living and migrate to a village. And become a panchayat pradhan. Poona - like all the other devastated cities and towns throughout this vast sub-continent - needs a good Mayor, that's for sure.

Do read the entire article by Bajaj, CII boss, and laugh out loud at all the bull it contains. It is nothing but pure bull - from beginning to end.

There is more bull from ultra-rich Indian businessmen in the news today. Fourteen of them have penned an "Open letter to India's leaders" - on which Shekhar Gupta, editor of the Express, has devoted his weekly column. It seems, quite predictably, that the Open Letter lacks guts. Gupta says:

Of course you could fault the signatories of this open letter for being unwilling to wound and petrified (perish the thought, actually) to strike. That is why the letter, signed by some of our most respected and powerful citizens, is so unspecific in what it is complaining about, or the actions they want taken in redress. It is full of platitudes...

This cannot be called Capitalism. But then, we remain a socialist country - and India's super rich like it that way. Another super-rich Poona businessperson is named as signatory to this Open Letter in this news report: Anu Aga of Thermax. Interestingly, she is also involved in CONgress politics in Nude Elly, as a member of the National Advisory Council that advises Sonia Gandhi to spend billions funding a "right to food." She too is not bothered about the deterioration of her own city. Does anyone in Poona, however poor, require food from The State in Nude Elly? Or do they manage just fine? But Aga's mind is on some remote village in the boondocks. Or maybe she too is cultivating political influence like all the others.

Among the signatories to the Open Letter is a former Governor of the Reserve Bank of India, Bimal Jalan, who was a Rajya Sabha MP as well. The report concludes with these remarks attributed to him:

Take inflation. We have been told for several months that it will come down but hasn’t. Then we were told that the government is not responsible for inflation. So, it is difficult to find out which is the cause and which is the effect.

Bimal Jalan has served two full terms as Governor of RBI. He received his "education" at Oxford and Cambridge - and has authored half-a-dozen books on the problems and prospects facing the Indian economy. He has not heard of the "quantity theory of money"! Or he is bullshitting. Interestingly, Wikipedia mentions that the 1000 rupee note was introduced during his term - and that is a sign of inflation. The RBI caused it. It is for this very reason that coins below 1 rupee have been recently withdrawn. There will soon be a 10,000 rupee note, I bet, and a 100 rupee coin too - while RBI governors will mouth "platitudes" like the one above.

The creepy thing about the inflation being perpetrated is that it creeps along slowly and steadily - 8 per cent, 10 per cent, 12 per cent - and is not noticed. It is "creeping inflation." Creeps are perpetrating this. As Ludwig von Mises pointed out:

The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy.

That is, inflationISM is going on - deliberately. It is sneaky, immoral, cruel and anti-democratic. I have an earlier post on this that I recommend.

The news report on the Open Letter that Bimal Jalan, Anu Aga, and others have signed, addressed to "India's Leaders," is titled "India Inc. for Tough Governance." But the signatories are all weak! They want cha(m)cha manmohan s gandhi to take "tough decisions"! Like what? Hang a bunch of murderers, maybe? Give the hangman some "work," eh, chacha? We can't have hangmen hanging around, can we?

Get real, dudes. Forget about Nude Elly. Fix your own cities and towns. And fight for freedom - not "tough governance," whatever that means.

"If I were a rich man," sang the street-sweeper Alfred Dolittle - and a happy song it was, too. I'm glad I am not rich. Better to be poor and kicking ass than one of these super-rich ass-kissers.

The Real Plunderers

Our Supreme Court, the "committed judiciary" of the CONgress, has accused tax dodgers who have stashed their wealth abroad of a very grave crime - "plunder of the nation." Complete nonsense, of course. A tax dodger cheats The State and not the nation - and, since this State cheats everyone anyway, this is really a "good thing," for it preserves Capital for future investments. Everyone benefits from these future investments - goods are produced, jobs are created, and what not. If our The State had got hold of this money, it would have been "consumed": NREGA, CWG, etc. Capital consumption makes everyone poorer. It is the road to de-civilisation. God bless the tax dodger.

Yet, there are forces at work that are in reality plundering the nation - and these are the forces of inflationism. Speaking of inflationism, one writer made a powerful comment the other day:

Never in the history of Man has so much been stolen from so many by so few.

He was referring to the US Fed. Gold was $20 an ounce when the US Fed was established in 1913. It is over $1300 an ounce now. It is not that the value of gold has risen; rather, it is the value of the US Fed's paper dollar that has depreciated. All those who saved in dollars have lost. The US Fed has, because of its privileged position as the issuer of the world's reserve currency, "exported inflation" all over the world. Plunder of the World! So, let's play it again, Sam:

Never in the history of Man has so much been stolen from so many by so few.

The USSA also has a Supreme Court. But theirs too is a "committed judiciary" - committed, that is, to the notion of "legal tender." The idea of legal tender is an idea of "State money" that is FORCED upon the people, to be used in each and every transaction. It is legal tender that enables universal plunder. If State force is not used, everyone would refuse the depreciating currency and use others of stable value. Like gold. Or silver.

Below is a very brief history of how the Supreme Court of the USSA committed itself to State money and legal tender. This is from Hans Sennholz's Money and Freedom, a monograph published in 1985. Sennholz was another of the many gems to emerge from Ludwig von Mises' New York seminars. Here is Sennholz on legal tender in the USSA and the dubious role played by their Supreme Court:

The legal tender evil has come to the United States in periods of, and in the name of, national emergencies. Between 1775 and 1779 the Continental Congress issued some $241 million of currency to finance the Revolution. It did not itself declare the bills legal tender, but urged the states to give them legal tender standing. The states complied without demurring.

Depreciation of the Continental paper dollar set in as early as 1776. To derive any purchasing power from its issuance, the Congress printed Continental dollars faster and faster. Its first issuance amounted to a mere $2 million of bills of credit; in 1779, government printing presses turned out $140 million. By 1780 the specie value of the Continental dollar had fallen to three cents, and was still declining. Congress resolved to print no more money, and to finance its expenditures by other means, only when the cost of printing notes was almost higher than their value. By that time, the people refused to accept any Continental dollars, which in the end forced the states to repeal their legal tender laws.

During the Civil War, the Lincoln administration issued some $450 million of Treasury notes and granted them the quality of legal tender. A series of legal cases reached the Supreme Court between 1868 and 1870. The Court promptly ruled that legal tender provisions were unconstitutional. While more cases were pending, Congress raised the membership of the Supreme Court from seven to nine; President Grant, making the appointments, selected only those justices known to favour the constitutionality of legal tender, thereby creating a preestablished majority for legal tender. It was a foregone conclusion therefore that the Court would uphold legal tender legislation.

In 1933, the federal government expropriated the people's gold coins and bestowed legal tender force on all Federal Reserve notes and US Treasury currency. In every case brought before the Supreme Court, the justices confirmed the money powers claimed by the government.

On June 5, 1933, a Joint Congressional Resolution voided gold clauses in all contracts, public and private. In 1935, the Supreme Court acclaimed and approved the Resolution. In the words of Chief Justice Hughes, "Parties cannot remove their transactions from the reach of dominant constitutional power by making contracts about them." With a stroke of a pen, the Court permitted every debtor to defraud his creditors, and granted government the privilege of robbing its creditors under the pretext of paying them - all in the name of the Constitution.

Sennholz concludes with the fond hope that some day in the future "five other justices will read the Constitution and arrive at a different conclusion."

Legal tender allows The State to issue paper notes monopolistically and force them upon the people. This permits inflationism - which is "legal plunder," for it allows The State to appropriate private wealth without the consent, or even the knowledge, of those who are plundered. Through the issue of more and more currency notes fresh off its presses, The State can buy up all the goods and services it needs, and finance all its political schemes, from war to welfare. This funny money is the "root of all evil" - for it finances The State. Hence, the tax dodger does well to preserve his own Capital. Black money is good money - preserved from The State. On the other hand, it is funny money that is bad money - produced by The State, and forced upon us as "legal tender": monopoly.

Every single monopoly - of the past as well as the present - has been imposed on the people through the misuse of State force. Free markets can never ever result in monopoly. Tell your Economics professor that - and point to the funny money as evidence.

There is only one way out of this: The spending of The State must be drastically slashed. No more subsidies. No more doles. No more bailouts of "misproductive" PSUs like Air India. No more "re-capitalisation" of banks. No more "overstaffing" in the bureaucracy.

And, most certainly, no more "welfare."

Niranjan Rajadhyaksha, editor of Mint, seems to have finally arrived at this conclusion. He has just written that all this is welfare championed by Sonia and cha(m)cha manmohan is backfiring - because it is being financed by inflationary means:

The motives behind the schemes to provide guaranteed jobs and food cannot be questioned. But the road to hell is often paved with good intentions. These schemes will push up food prices and also harm public finances.

I completely disagree with Rajadhyaksha's assertion that the motives behind all these welfare schemes like NREGA "cannot be questioned." They can - and they must. If the motive is to win votes, it is backfiring because of inflation. But should politicians be allowed to spend so recklessly, jeopardising the future, in order to purchase votes?

Rajadhyaksha writes of the "Rangarajan panel" that has tendered advice on the matter: the advice being to "water down" all the welfare. It turns out that C Rangarajan chairs the Economic Advisory Council to the Government of India - and, like chacha himself,  this Rangarajan is a former Governor of the Reserve Bank of India. Funny money men to the rescue of The State!

The inflation currently raging also shows that the "cabinet reshuffle" of today is total and complete nonsense. What is required is slashing the number of ministers down to three or four, and no more. What chacha manmohan has done is to INCREASE the number of ministers!

Our chacha is a peculiar "economist" in that he has no desire to "economise." He wants to go on increasing State expenditure. He wants to employ more and more "tax parasites." The more the merrier. All aboard The State. No inflationist has ever cared about the limitations of the Budget. This is the evil of legal tender, which is nothing but legal plunder.

As for our Supreme Court - we have just seen how in the USSA, the Montesquieu doctrine of "separation of powers" between the executive, the legislature and the judiciary was rendered meaningless. The same holds true in our case. When justices are appointed by politicians, no separation of powers is possible, and everything is politicised. Our Supreme Court and all the High Courts "play politics" regularly - socialistic politics, that is - as in the recent case pertaining to the Representation of People Act, which disallows all non-socialist parties from the fray. In my post on that biased and unjust decision, I wrote that the Supreme Court was being "patriotic" - that it too was being "loyal" to the CONgress, its hoary dynasty, and its "socialism."

As far as funny money is concerned, our Supreme Court has been an accomplice. Recall the Foreign Exchange Regulation Act (FERA) - and the Enforcement Directorate, the "delegated despotism" it established, the vicious Rottweiler of The State? FERA was never struck down as unconstitutional. But then, everything about socialism is "legal plunder" - like nationalisation, land acquisition, and, of course, inflation.

Judges are supposed to be "learned." But no socialist has ever been learned. The Supreme Court's blindness to real plunder, and its patently false accusation against the tax dodger, finds an echo in this column by the Communist Party politburo member and Rajya Sabha MP, Sitaram Yechury, a product of Delhi's Jawaharlal Nehru University. Writing on inflation, this communist (who is ideologically trained to despise Private Property) writes:

It is this speculative trading that is relentlessly pushing up the prices of all essential commodities, particularly food prices.

He wants to ban all forward markets. He sees traders and businessmen as evil - the cause of inflation. He sees State power as the solution. He wants Parliament to pass another nasty piece of legislation banning voluntary trades. In reality, speculation lessens volatility and fluctuations in prices; it does not exacerbate them.

Yechury is a Marxist - but, unlike Marx, he is also a Keynesian. He wants to "represent the workers" - but he also wants to cheat them, through inflationism and "legal tender."

The judges of our Supreme Court are of similar "thinking." Unlearned.

Democracy Is Done For

Hans-Hermann Hoppe's Democracy: The God that Failed is perhaps new, but Ludwig von Mises predicted this god's demise long back, when he wrote thus, in 1940, in Bureaucracy:

Representative democracy cannot subsist if a great part of the voters are on the government pay roll. If the members of parliament no longer consider themselves mandatories of the taxpayers but deputies of those receiving salaries, wages, subsidies, doles, and other benefits from the treasury, democracy is done for.

The question to ask is: Who or what do you "represent"? In India, it is undoubtedly true that our Great Leader, cha(m)cha manmohan s gandhi, represents "those receiving salaries, wages, subsidies, doles, and other benefits from the treasury" - and these include Air India. As far as the taxpayers are concerned, chacha's only desire is to screw them further - education tax, VAT, GST, and, let us never forget, the "inflation tax." Of course, he himself has never been "elected by the people." He lost the Lok Sabha elections from South Delhi - and entered Parliament by the back door (Rajya Sabha: "indirect election") from Assam, of all places for a Sardar. He represents Sonia Gandhi alright - but does she "represent" Rae Bareilly? Or is this some kind of "pocket borough"? No one represents the taxpayers - although the rallying cry of democracy used to be "no taxation without representation." 

In India, no one represents any city or town either. I was mortified to read that Jairam Ramesh, Central State minister for the environment, has ordered the demolition of the Adarsh building in Mumbai - while he himself is a Rajya Sabha MP from Andhra Pradesh. Who represents Mumbai? Certainly not Sharad Pawar, either. What is the point in electing MPs and sending them to far away Nude Elly to represent "the poor"? And that too, falsely.

Of course, the poor are being cheated. As Mises said, what Lord Keynes was really doing was "cheating the workers." But it is Keynesian funny money that has really destroyed democracy, for it has provided the means necessary to fund all the giveaways of modern, pseudo-democratic states. With unlimited funny money, those in charge can buy all the support they need -  not only in Parliament, but also in academia, and in the media. Crony capitalists are surely less harmful than crony academics and journalists.

Now for the good news: All this funny money will end in the near future. I have just read a very interesting confidential report prepared by a prestigious financial advisory that says, among other things, that "the Euro is finished." And Europe is where the "welfare state" comes from. The report says Germany is headed for a "constitutional crisis." The report says lots of things about the US dollar and Ben Bernanke - none of it very new to those who regularly read LewRockwell.com. At least the USSA has Ron Paul - and I wish that man well. I read that inflation is raging in China - thanks to their great big "stimulus" in 2008.

What the report predicts is that there will soon be a huge political backlash against funny money. I pray for that day to come soon. Limited government must mean limited by the Budget - that is, tax revenues. No more funny money. No more borrowing. No more "inflation tax." No more "buying support." Represent the taxpayer faithfully - or fuck off!

The report I referred to berates all the crony academics who are all invariably Keynesian - like our chacha. After reading the report, it struck me that "higher education" is what has really destroyed minds - all over the world. Consider the Englishman of medieval times, lamenting the inevitability of "death and taxes." Wouldn't this fellow laugh out loud if someone told him that his sovereign, while spending his revenue, was providing a "boost to aggregate demand"? Wouldn't this fellow think it inconceivable that, with his taxes, his sovereign would "help the poor"? 

One of the greatest bestsellers of Victorian England was Samuel Smiles' Self-Help. Translated into Japanese in the 1860s, it fired the Japs in their catch-up with the West. In Victorian England, this book was on every bookshelf - right next to the Holy Bible. Samuel Smiles was a "moralist" - and the book tells the story of innumerable great men of humble origin who made in big in every conceivable walk of life. Allow me to quote the opening paragraphs:

Heaven helps those who help themselves is a well-tried maxim, embodying in a small compass the results of vast human experience. The spirit of self-help is the root of all genuine growth in the individual; and, exhibited in the lives of many, it constitutes the true source of national vigour and strength. Help from without is often enfeebling in its effects, but help from within invariably invigorates. Whatever is done for men or classes, to a certain extent takes away the stimulus and necessity of doing for themselves; and where men are subjected to over-guidance and over-government, the inevitable tendency is to render them comparatively helpless.

Even the best institutions can give a man no active help. Perhaps the most they can do is to leave him free to develop himself and improve his individual condition. But in all times men have been prone to believe that their happiness and well-being were to be secured by means of institutions rather than by their own conduct. Hence the value of legislation as an agent in human advancement has usually been much overestimated. Moreover, it is everyday becoming more clearly understood that the function of Government is negative and restrictive rather than positive and active; being resolvable principally into protection – protection of life, liberty and property. Laws, wisely administered, will secure men in the enjoyment of the fruits of their labour, whether of mind or body, at a comparatively small personal sacrifice; but no laws, however stringent, can make the idle industrious, the thriftless provident, or the drunken sober. Such reforms can only be effected by means of individual actions, economy, and self-denial; by better habits, rather than by greater rights.

Poor immigrants fleeing religious persecution in Europe built America - because of Liberty, and self-help. The socialist "New Deal" came only in 1933. There is no nation that has been built through doles from the State. Rather, many nations have been destroyed - like Sweden. The spirit of America has been destroyed by the Welfare-Warfare State of the USSA - and its paper dollar.

Interestingly, for Austrian school economists, the word "dollar" comes from a Hapsburg gold coin, the Reichsthaler - called "thaler" for short - which became the most popular coin in old America!

British India had no welfare at all - except during famines. Below is a quote from Charles Metcalfe - to whom we owe the institution of the Free Press - that says a great deal about these aliens who ruled our land so well:

Our dominion in India is by conquest; it is naturally disgusting to the inhabitants…. It is our positive duty to render them justice, to respect and protect their rights, and to study their happiness. By the performance of this duty, we may allay and keep dormant their innate disaffection; but the expectation of purchasing their cordial attachment by gratuitous alienations of public revenue would be a vain delusion.

What our socialist-democrats with all their funny money are doing is nothing but "purchasing cordial attachment by gratuitous alienations of public revenue." As far as the "positive duty to render them justice, to respect and protect their rights, and to study their happiness" they couldn't care less. Ganja, charas and opium were not illegal in British India - nor was the nautch girl. There were no parliaments passing legislation upon legislation - and none of the "delegated totalitarianism" of today. Rather, there was "happiness" - and Justice.

And then the CONgress took over. It all began in 1905, when Lord Curzon enacted the Partition of Bengal. Suddenly, the "majoritarian principle" - which is the principle of democracy - took over, with horrendous effects that continue till today. Nirad C Chaudhuri was a young man then, and he describes the ensuing chaos well in his autobiography:

Overhead there appeared to be, coinciding with the sky, an immutable sphere of justice and order, brooding sleeplessly over what was happening below. But that feeling vanished at one stroke with the coming of the nationalist agitation in 1905.

Note the word "agitation." Democratic "politics" in India even now is all about "agitation" - like Telengana. Again, CONgressmen are agitating for their own State. And the BJP-Shiv Sena are calling for a Mahasangarsh in Mumbai right now.

"Democracy is done for," as Mises said in 1940. Mises died in 1973 - the year I finished school. In 1974, I entered Delhi University to study Economics - and crony academics like chacha manmohan made sure we never read anything written by him. In any case, Mises was totally ignored in America too - as was Murray Rothbard, the most illustrious student from his New York seminars. The crony academics wanted to conceal the truth - and teach The Lie.

Yet, today, even without our willing it, it is the truth that is impossible to resist. The powerful politicians and bureaucrats, the central bankers and all the rest, might be possessed of State authority - but they cannot escape Economic Reality. The era of funny money will be over someday soon. And I wonder what will happen to Democracy.