And So, Become Yourself

While hearing Graham Nash's classic "Teach Your Children" last night, one line stuck - a line that I had not paid attention to ever before:

And so, become yourself...

This morning, conversation turned to someone who graduated from IIT and joined the Indian Revenue Service, from where he recently retired. To me, it seemed the perfect example of "not becoming yourself." Because the economy was State-dominated during the 1950s, 60s and 70s, hordes of graduates in a wide variety of disciplines ended up as State employees. They embraced "collectivism" - and not Individualism, which is how you "become yourself."

Only in an open, free-market economy, where a vast array of opportunities exist, and a wide range of vocational choices offered, can you "become yourself"- you can become an actor, musician, dancer, painter, writer, etc. People like these are strictly individuals, who first find their own "calling" - and then proceed to learn and grow. Such people become themselves.

Thus, choosing your calling and then trying, for years and years on end, to learn and to excel - this is the pathway to "becoming." Interestingly, Ludwig von Mises uses this very word in his discourse on the "division of labour," a concept Adam Smith introduced in the first chapter of the Wealth of Nations. This is how wealth is produced in urban markets - when each specialises. When so many specialists produce such a diverse array of goods and services, society becomes wealthy - as consumers of all these. Mises added that this is not just about producing wealth; it is really about "becoming." In Human Action: A Treatise on Economics, Mises writes:

The principle of the division of labour is one of the great basic principles of cosmic becoming and evolutionary change.... Human society is an intellectual and spiritual phenomenon. It is the outcome of a purposeful utilization  of a universal law determining cosmic becoming, viz., the higher productivity of the division of labour.

So, there we have it. While Dr. Karl Marx waxed eloquent on how his communist society would lead to the "greatest creative flowering of the human race," nothing really creative emerged from the Soviet Union. Ditto for socialist India. However, in India particularly, things went much worse because of the Gandhian vision of "self-sufficient village economies."

Now, the idea of "self-sufficiency" is the precise opposite of the division of labour and market exchange. It goes against "a universal law determining cosmic becoming." The idea is insane. Villagers cannot survive without links to urban market centres - and it is here that the Gandhian idea was translated into policy, and for 60 years such roads have not been built. Not only that, modern personal transportation has also been denied for much of the time. Even today, when you travel in rural India, you see junk swadeshi vehicles - little phut-phuts and jugaaars on which masses of people are cramped up and bumped around from village to town and back.

Was Gandhi insane? Perhaps. But he was certainly blind to civilisation. Mises makes another point on the division of labour that all Gandhians need to note:

The fundamental facts that brought about cooperation, society and civilisation and transformed the animal man into a human being are the facts that work performed under the division of labour is more productive than isolated work and that man's reason is capable of recognising this truth.

The story of civilisation is of humans clustering together in cities - like Mohenjo-Daro - and not one of opting for self-sufficiency. When Mises says that "man's reason is capable of recognising the truth" that specialisation works to the individual's advantage, he points to our "sense of gain." This, the real "sixth sense," is what everyone employs while seeking out in what capacity he can most gainfully specialise in the urban market economy. One guy open a paan shop, another a chai shop, and so on. No one sits around and spins yarn for himself. Everyone produces for the satisfaction of others - their customers. The motto of the urban market is as in the Dylan song: "May you always do for others, and let others do for you."

It is an added fact that very little division of labour is possible in a small village - because there is no market. In villages, you have very few shops because there are very few people. On the contrary, markets are urban - because of the huge population. So you cannot "become yourself" in a village.

If you want to "become" an actor in Hindi films, for example, you must first move bag and baggage to Bombay - and life will not be easy because the city has been virtually destroyed by those blind to civilisation. Because of Gandhian "rural development" and panchayati raj, Indian cities have been utterly neglected. Villagers in droves have migrated to cities, overcrowding them all - but the authorities continue to dream of a rural utopia, where each will spin his own yarn (and dig ditches for The State). Meanwhile, in the cities, there is zero Liberty. The State does not allow you to become what you want to become - like, say, the owner of a hash cafe.

Anyone for more State education? In any case, the IITs taught "science," not "technology." Nothing remotely technological ever emerged from an IIT. All the technology we now possess to augment our lives is coming from MNCs. Similarly, IIM Bangalore was set up in the bad old days to produce managers for State-owned enterprises.

Liberty and the Free Market - only these can allow each of us to "become" what we want to become. And if you want to become an economist, I suggest Human Action to start off with. Of course, this treatise has never been part of the curriculum anywhere in the world. I discovered it and studied it deeply because I wanted to "become" a thorough Austrian economist. I recommend it to all my readers. You must study Economics yourself because otherwise you will have to depend on "experts" - like Manmohan and montek. That this has been great folly is now a proven fact.

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.

Hindu Terror? Or Terror On Hindus?

Last night, I was reading about two libertarian journalists of England in the 1720s - "The Indepent Whig" was their brand - and was quite struck by the strong anti-clericalism. It was quite clear then that the church and churchmen had to be put in their place; that religion was a matter of private conscience; that churchmen must not be allowed civil powers; that tolerance should prevail; and - this is a point they emphasised that really hit: Tyrants destroy religion.

Early this morning, at the tea shop, I encountered two elderly sadhus. Quite naturally, we began discussing bholay ki booti. One of them managed to unearth a little bit. We smoked. And then we talked some more - about the historical fact that the use of this herb is a very ancient Hindu tradition. We spoke of tobacco and alcohol - how they are abundant, and widely used. They said they were bound for a nearby ashram - and it is rumoured here that this ashram has BJP money in it. This state is ruled by BJP poster-boy Narendra Modi. That too, for quite a long time. But is this Hinduism? Or is this tyranny calling itself Religion?

After our cup of tea, I set off to Rajpipla, the nearest town, on a motorcycle. It was great fun being on a bike after a long time, zipping along empty, winding country roads, amidst lush green fields. Rajpipla is where the Maharajah of this area lived - till 1947, after which the IAS took over. I checked out his palace - must have been quite grand once. The view from the rear was fantastic - fields, jungles and hills beyond. No human habitation. I saw the State High School that the Maharajah had established in 1920 - and it is still quite magnificent. Also the college and the hospital. Passed an equestrian statue of one of the maharajahs - but the area is not being well-maintained. The town itself is quite a shambles. I drove through the markets, lined with shops, shops, and more shops - but no cafes, restaurants and (most certainly not!) bars where one could grab a small beer. The Maharajah had built a grand European Guest House in his time. Must have been possessed of a great bar, I'm positive.

I saw quite a few very old buildings in ruin. I wonder why. Rent control? Property disputes? I did not see any pretty, well laid out residential area. There are many slums. The internal roads suck.

Passed the ancient clock tower the Maharajah had built - a "public good" at a time when few owned watches. Of course, the clock no longer works! 

Inquired of an auto-rickshaw driver whether I could acquire some ganja. He obtained a bit for me - and, as everywhere in urban India, the stuff turned out quite bad. Bhoonsa maal, as the people say.

Inside the Maharajah's palace, there is a small Hindu temple. I wonder whether ganja was prohibited here before 1947. I sincerely doubt it. I'm positive opium must have been openly sold too.

So let's forget about "Hindu terror," shall we? What is really happening is "State terror on Hindus" - like sadhus.

What is the BJP's Religion?

I found an answer in Tehelka yesterday - an article on the destruction of 56 Christian churches in Karnataka by Bajrang Dal types. (And how the judge inquiring into it has a pro-BJP bias.) 

Today, I will read more of "The Independent Whig" on tyranny and its effects on religion.I shall cull some good quotes and post them for my reader soon.

This Gujarat Village Ought To Be A Town

I am now living in a remote village on the banks of the Narmada in Gujarat. Opposite are fields. Bullock-carts ply on the road. There is one tea shop, and one pushcart selling (excellent) samosas and pakoras. My host runs a healthcare NGO, offering free medical care to the villagers.

Gujarat is very different from other parts of India because here the British did not rule directly. Rather, local princes ruled. My nearest town is Rajpipla - which was a 13-gun salute State ruled by a Rajput Maharaja up to 1947. My history book says the State of Rajpipla used to measure 1518 square miles - so this village must have fallen within its realm. After Sardar Patel threw out the princes, the IAS took over - and Gandhian panchayati raj. 

I am pointing this out because I have stayed long in French Pondicherry, in Portuguese Goa, and in may parts of India that were under direct British rule. This place is very different. Further, this is Gujarat - that is, Gandhi's own Gujarat. This is a Gujarati village, under panchayati raj.

The other day, I borrowed a motorcycle and checked out the place. Turns out that this is quite a well-populated village - but very poor. The village stretches over a few kilometres, and there are a few, extremely narrow side roads leading this way and that. I checked them all out. Lots of houses, about 200 or so, many just mud huts. All piled higgledy-piggledy. No real shops. Perhaps half-a-dozen tiny stalls. No local economy at all. What was noteworthy is that there has been no "development" of riverside property, keeping in mind the fabulous view. Indeed, on the motorcycle, I could not even find an approach to the river!

Having lived so long in Goa, where the Portuguese established municipalities in such places - and where tourism has yielded rich dividends - I could muster up an alternative vision. In my mind, this "village" ought to be run by a local municipal board, providing basic services like roads and streets, footpaths and drainage, and garbage removal as well as street-lights. A small central market area could be established, and tourism could be actively promoted - along with the development of real estate on the riverside. If retirees from Baroda and Rajpila moved here, if tourists came to enjoy water sports, the views and suchlike, if a promenade was built along the riverbank like the Strand in Calcutta or Pondicherry's Beach Road - and if there was Liberty! - this place would become a flourishing small town. The economy would diversify to a great extent. Life would be much better for everyone here.

Yes, there is agriculture: bananas, papaya, sugarcane and other crops. Lots and lots of cattle - the principal wealth of most people. There is a school - from which I could hear the sounds of patriotic songs of the "freedom struggle" as I walked past. There is even a college. There must be NREGA ditch-digging going on. There must be other kinds of "welfare."  But these don't really make an economy - that is, a local economy capable of sustaining a small town. Panchayats never think of how a town can be built. Or what an urban, diversified economy is all about.

Thus, it appears quite plain to me, top-down central planning has failed - and the bottom-up panchayati raj has failed too. What we really need are local institutions that use local knowledge to diversify local economies so that their full potential can be attained - and these potentialities include real estate and tourism.

I was sitting last evening in the local desi sharaab "pub" - a large hut in a large hutment, poverty everywhere, and my thoughts turned to Goa. I told the old crone who was running the show about life there - about Liberty, and about tourism. I told her that riverside property could be worth a fortune if Liberty prevailed and tourists were attracted. They were all watching Bollywood song-and-dance routines on a large colour TV. I told her about live music and dance. And then I trekked it back to my abode - darkness everywhere, not a single street-light, bright stars, a thin crescent moon. Only one word to describe the lives of poor people here: Misery.

I thought of the colour TV in the hut - and the Janis Joplin song came to mind. If Liberty prevailed, if a local municipality got things right - perhaps this old crone would ride a Mercedes-Benz too, I thought. And smiled to myself.

Tomorrow, I plan to check out Rajpipla in the daytime and write about it in the evening. Stay tuned.

The Horrendous Prohibition In Gujarat

I have spent a week or more in Gujarat, supposedly one of India's richest and best governed states. I am currently preparing a monograph-travelogue which I will place online when complete. In today's post I would like to focus on the tyranny of alcohol prohibition here. This is surely the result of Gandhian zeal and misplaced morality - but it continues under the BJP regime of Narendra Modi. My observations indicate that the effects of this policy are truly horrendous. 

I am living in a village on the banks of the Narmada. I asked around - and sure enough, I obtained a bottle of IMFL whisky for 400 rupees. I bought beer twice - cans of Kingfisher (strong) for 100 rupees each. I also tried a couple of shots of desi sharaab at 10 rupees a glass - and awoke at 3 am feeling a little sick. In my wanderings, I encountered drunks twice, both drunk on desi. So the plain fact remains: This prohibition is NOT working.

The newspaper carried a photo from Ahmedabad, of a road-roller destroying thousands of bottles of liquor seized by the State Police. To me, it looked like the destruction of wealth. If that liquor had got sold, businessmen who sold them would have been possessed of the means to demand all non-competing goods on the market (Say's Law). Thus, it is not just the booze business that has lost; all other businesses have lost too. Wanton destruction, after all, is bad for society.

Another implication follows from Say's Law: that is, if those who buy prohibited booze at literally prohibitive prices had been able to obtain their pleasures at free market rates, they would have saved money - and that money would have been spent on other goods. Once again, all other businessmen lost.

The public health consequences of this tyranny are equally obvious: since most people are drinking desi sharaab, their health must be suffering. When I say "most people" I do not include only "the poor": the taxi driver who brought me here from Baroda said he drinks 30 rupees worth of desi every evening. He added that the bottles have no label.

As the one who holds aloft the Ganja Leaf Flag, I made some inquiries about my favourite high too. I was told to trek it to an ashram a few kilometres away. There, I smoked two chillums with some sadhus - but the stuff was no good, and even the sadhus complained!

Most people here smoke bidis. Many more perhaps chew tobacco. I was shocked to see a boy of about 12 or 13 buying a packet of gutka and stuffing his mouth with it.

I met a top-notch criminal lawyer who supported the policy of prohibition, saying it had "cleared the atmosphere." Of course, he would think so - for the more legislation that is passed criminalising voluntary exchanges, the more criminal cases there are for lawyers like him.

In another age, Gujarat "fought for freedom" - the Dandi March, etc. Where has that Freedom gone?

The Antidote Blog Needs Your Support

This blog has been surviving for three years or so on nothing more than love and fresh air - and my passion for the Philosophy of Liberty. In these three years, readership has grown considerably, and many a reader has written in to encourage this effort. That too has kept me going. The break in blogging over the past 10 days resulted in quite a few letters inquiring as to whether all was well with me, for such long breaks have never ever occurred in the past. When I finally resumed yesterday, a comment came in from a reader who calls himself Greenleaf, which has been published, that began thus:

welcome back.. was afraid you had discontinued this blog permanently. you are the only libertarian voice here and Indians need to understand the concept of liberty. 

Comments such as this sure gladden my heart.


However, the sad truth is that for financial reasons I am unable to continue. Royalties from my published works have not been coming in for many years now. One newspaper has even refused to pay for a published column! My attempts to publish newer works have not succeeded. Perhaps sinister forces are at work - forces from within The State. 


There are others who provide public services of this kind - like Wikipedia or LewRockwell.com - who depend on donations. The Antidote Blog must do so too.


So, if you think this little lamp of Liberty is worth supporting, do write in. I need some big donors - for building an office-cum-residence, equipment, transportation and communication, books, etc.


The battle that lies ahead will be a long one. There are simply too many errors to be demolished. This will take time. This is particularly true of India - where widespread poverty has had the tendency to make "educated" people support strong State action. Of course, as I witness every passing day, this has only made the poor poorer.


Liberty!


I hope some of you will actively support this blog in its efforts to spread this beautiful idea.

For The Poor, End Capital Consumption

The debate over the best possible way to get our The State to "help the poor" is getting curiouser and curiouser, with many an argument being made in favour of "direct cash transfers." Give them cash, they say. Print more funny money and give it to the poor. The very idea is ridiculous, but it is being propagated by many eminent persons - like Professor Raghuram Rajan, formerly of the IMF and now with Chicago University. In an interview with Shekhar Gupta, editor of the Express, which took place in Davos, Switzerland, where the socialist World Economic Forum meets regularly, Professor Rajan says:

I think the whole lesson from other countries is that, eventually, you want to empower the poor. You don’t want to use the food distribution system as a job creation mechanism for the distributors. If you want to empower the poor, give them cash. And if you want to give them cash, give it to them directly, in an identifiable way. 

In my view, the only way to "empower the poor" is to disempower The State. 

Liberty!

Particularly, no more funny money.

Professor Rajan of Chicago U gives the examples of Mexico and Brazil as places where the poor have been empowered via direct cash transfers from their states. Methinks poor Mexicans would be happier and much better off with the Liberty to grow and sell marijuana (the Mexican word for ganja). Brazilians, of course, would be much better off with sound money.

There is a lead editorial in the Express today that joins Professor Rajan's cause - without naming him. Instead, two chief ministers are named as in support of the idea, one of them being the chief minister of Delhi!

In complete and total opposition to these views, let me state an economic truth:

The ONLY way to raise standards of living in poor countries where population is growing is to keep on accumulating and investing Capital such that the per-head amount of Capital invested keeps on rising.

That is, capital accumulation leads to civilisation while capital consumption causes de-civilisation.

All "welfare" is about consumption - not investment. All welfare causes capital consumption. Welfare funded out of inflation is even worse. 

On the other hand, roads are Capital investments. Whereas highways, expressways and "truckways" must be private, rural and urban roads must come from taxpayer funds.With good roads into the rural surrounds, and the spread of automobilisation, urban India will spread out and "develop" the countryside. The lives of all Indians will improve - both rural folk and well as urbanites will benefit. Living conditions will improve for all. Urban overcrowding will end. This is particularly true of DELHI - and it is shocking to read that the chief minister of this city is supporting the idea of cash transfers.

None utter the word Liberty either. They say "empower the poor." They have legislated away all our liberties. Will continued inflationism and welfare "empower" anyone other than The State?

No, siree. End funny money. End State borrowing. End PSUs and their losses, which "consume capital." Shrink The State itself. Cut taxes. Laissez faire. Liberty. These are the prescriptions of the real Science of Economics.

In defence of my dissenting views, here are some words of Ludwig von Mises, from his brief essay The Historical Setting of the Austrian School of Economics (PDF here):

The unpopularity of economics is the result of its analysis of the effects of privileges. It is impossible to invalidate the economists' demonstration that all privileges hurt the interests of the rest of the nation or at least of a great part of it, that those victimized will tolerate the existence of such privileges only if privileges are granted to them too, and that then, when everybody is privileged, nobody wins but everybody loses on account of the resulting general drop in the productivity of labor. However, the warnings of the economists are disregarded by the covetousness of people who are fully aware of their inability to succeed in a competitive market without the aid of special privileges. They are confident that they will get more valuable privileges than other groups or that they will be in a position to prevent, at least for some time, any granting of compensatory privileges to other groups. In their eyes the economist is simply a mischief-maker who wants to upset their plans.

When Mises warns of the "general drop in the productivity of labour" that will result from privileges, he is re-stating what I wrote above: that capital consumption is no way to raise living standards. In the final analysis, capital must be saved and invested (by private people), capital must also be freely imported, and productivity of labour must rise. Only this can raise wages. 

Goods and services must be produced - by private entrepreneurs. When these goods and services are produced (and finally sold), this will create demand for all non-competing goods and services. That is, when a chap sells ganja, he is possessed of the means to demand other goods on the market - except for ganja, which he will obviously not demand. 

This is Jean-Baptiste Say's Law of Markets - which Keynesians misteach as "supply creates its own demand," thereby making their students believe that the supply of funny money raises "aggregate demand." This is the greatest nonsense ever. Spreading the funny money around will spread poverty. It will reduce demand. It will stifle economic growth and development. It will cause more and more ruinous capital consumption. Oppose this nonsense - in the name of the poor. For the sake of the poor. Put an end to this "false philanthropy" - which is the hallmark of socialism.