India chose an open political system which was based on constitutional rule in 1950 and, though belatedly, an open economic system in 1991. We need to nurture both so that the republic flourishes over the next six decades.
Under current circumstances, two points need to be added:
First, that our great and illustrious prime minister, Chacha Manmohan S Gandhi, has nothing to do with democracy. He lost the Lowk Sabha elections from South Delhi over ten years ago and never contested popular elections again.
Second: inflationism is a negation of democracy. This is a point Ludwig von Mises, champion of sound money and enemy of inflationism, always emphasized. A government that engages in inflationism deceives the public about the true cost of its measures. Indeed, if these true costs were openly aired, the people would never ever vote an inflationist party into office. Chacha is an inflationist – and no democrat. We are fooling ourselves – and he is fooling us.
Thus, the basic contention of the editors of Mint, that “while we have protected the process of democracy, we have deeply violated its spirit,” is a hundred per cent valid. The question then arises: Where do we go to from here?
There are no ready answers to such a question. However, what must be recognized is that we must focus on two priorities: first, that the law should matter most, for we don’t want lawlessness. Today, it is the arms of the socialist democratic Total Chacha State that are “lawless” – and this is a negation of constitutional government. Our only hope, then, is in a “private law society” – the subject of my last column. We need to protect ourselves and our properties under private law – not only from criminals, but also from the lawless Chacha State. Private money becomes essential for the purpose.
Second: We must nurture the open economic system that we partially ushered in during the 1990s. An open, competitive, free market must rule the roost here. State socialism must go.
What is the “classical liberal” Misesian vision of a free society?
Lew Rockwell answered this question admirably in a speech delivered recently in Houston, Texas. Do read the full text carefully. Towards the end, Rockwell defines freedom thus:
[By freedom] I mean a social or political condition in which people exercise their own choices concerning what they do with their lives and property. People are permitted to trade and exchange goods and services without impediment or violent interference. They can associate or not associate with anyone of their own choosing. They can arrange their own lives and businesses. They can build, move, innovate, save, invest, and consume on terms that they themselves define.
What will be the results? We cannot predict them, any more than I can know when everyone in this room will wake up tomorrow morning, or what you will have for breakfast. Human choice works this way. There are as many patterns of human choice as there are humans who make choices.
Rockwell goes on to ask whether such a state of freedom will result in order or chaos. He firmly rejects Hobbesian paranoia and categorically asserts that order is the natural result of a system of social co-operation based on the extended division of labour. This is something we Indians must know to be true. In all our city markets, order prevails naturally – while the cops are invariably predators. Our Total Chacha State does not exist to promote social co-operation, harmony and order. On the contrary! The only means of ensuring co-operation between strangers in crowded cities is the market, the “catallaxy.” We erred grievously when we threw out the market and installed The Chacha State at the “commanding heights.” Such a socialist democracy only politicizes economic life – as Peter, Lord Bauer consistently pointed out while referring to the étatist regimes of the Third World, like India. Such politics is deeply divisive, causing disharmony and disorder – and economic losses all around. And widespread corruption, to boot.
Our polity is a mess. There is much to think about.