Politics is “The Problem” – and The Market is “The Solution”: Take #2

What has been universally bandied about for about a century or so as “Political Science” is NOT a science in the precise sense that Austrian Economics most certainly is. This is because we all possess a “natural propensity to trade” – and the Austrian Method is rooted in our trading minds.

[I have fully described this method in a manner that is accessible even to schoolkids in my For Civilisation, Against Politics: Arguments for an Intellectual-Moral Revolution, which can be accessed online from the right-hand bar.]

While even pre-kindergarten kids trade toys and stuff amongst themselves, we humans do NOT posses any natural propensity for politics, hence a “science of politics” is impossible. What is called Political Science is nothing but History – a study of the Ancient Greeks, of constitutionalism, and so on. Hobbes, Locke, Rousseau, Machiavelli, Chanakya – these are all historical texts, written in a certain context. As for Plato’s Republic, it is a figment of the author’s imagination. And it is absurd to call what Plato has imagined therein a res publica.

The LSE opened shop in 1905 – as the London School of Economics and Political Science. And their “science” was but “scientific socialism” – something that Harold Laski infected innumerable impressionable minds with, who then went on to cause a Third World epidemic.

This so-called “Fabian” socialism saw full endorsement from a host of British “intellectuals” – which means none were political philosophers in their own right – ranging from George Bernard Shaw, to HG Wells, and George Orwell, of course. They popularized these ideas in their novels and plays.

Orwell’s later writings, like Animal Farm and 1984, saw where socialism might be headed. But Harold Laski the Professor remained in denial – as I have discussed in a previous post. Shaw penned The Intelligent Woman’s Guide to Socialism. My brief rejoinder – The Intelligent Woman’s Guide to Capitalism – can be found here.

Modern “public choice theory” is also not “political science” – rather, it is an analysis of modern western democracy using economic self-interest as its basis. As in Gordon Tullock’s classic The Vote Motive.

There is nothing remotely “scientific” about socialism. It is neither “rational” nor is it “legal.” Property is a “mental category” we all possess – which is why a perfect "natural order" prevails in all our bustling bazaars, where very few are “educated.” 

Collective property is a hoax – as I have discussed recently. And collective responsibility is another. If we add to these the “national economy” nonsense, then collectivists have nothing left.

Nationalisation is “legal plunder;” and welfare is “false philanthropy” – to use the immortal expressions of Bastiat, in his simply mind-blowing essay The Law.

In fact, if ever all property in a city were declared to be “collectively owned,” chaos would immediately ensue, and all shops would be LOOTED. 

The mental category of Property is the source of “natural order.”

Property is older than Law; for which reason Law could be articulated by “moral leaders” only because Property already existed, and for long. The Book of Proverbs in the Old Testament contains many warnings against “moving an ancient boundary stone.”

Trade is possible only because property is understood mentally – because it is properties that are exchanged. Children possess this mental category – which is why their language while trading toys and stuff employs possessive pronouns. Language is older still; and much, much older than the written word.

Thus, COMPULSORY State education by SOCIALISTS is not “welfare.”   

It is PURE EVIL.

In classical times, before the loaded term “political science” was invented, they talked about “political economy” – and this was a subject rooted in Whiggism and classical liberalism. The emphasis was on laissez faire economics – and the sole political purpose was to MINIMISE the government, in both its taxation as well as its functions.

But socialist pseudo-scientists only MAXIMISED these. The British “nanny” welfare state was a creation of Lord William Beveridge, Director of the LSE in the 1940s. 

And then came Keynes – and made the Budget “unlimited.” Which meant unlimited welfare.

So it is this pseudo-science, combined with the politics of competitive mass democracy, that has caused our current mess – unlimited State, unlimited Budget, unlimited Legislation, and unlimited Politics as well. An “unlimited Police” has also resulted – which is why America, once “the land of the brave and the free,” is now where they are “Born to be Jailed.”

Nehru, who aped the USSR, and his daughter Indira, who went many steps further in establishing a tyranny, did much worse, and the end result is that we now have POLITICS everywhere. It is not just the “politicization of economic life” that Peter Bauer warned us about, it is the politicization of sport, even. 

The administration, the police, the judiciary – there is the nasty smell of politics everywhere. 

We have a socialist constitution that does not secure our properties – and gives the State it has established a role in anything and everything. 

Thus, unlimited State, unlimited politics, unlimited budgets, unlimited taxation, unlimited borrowings, unlimited legislation, and an unlimited and completely “lawless” police as well.

If we had opted for a free economy in 1947, and its corollary – minimalist government – things would have been the other way around.

Today, “rural employment” welfarism is politicizing village India. Factionalism and violent conflict – these are the fruits of such “competitive politics.” As during the Partition of India.

Further, all the “political parties” of India show “loyalty to a leader” – and never ever do they display “loyalty to a political principle.” I have written on this perversity of theirs here.

The politics of welfarism financed through inflationist means is nothing but PARASITISM on a colossal scale. 

Classical liberals encouraged “Self-Help” – the title of Samuel Smiles’ masterpiece of 1860, and he was one of those “moralists” of Victorian England. Just as Adam Smith was Professor of Moral Philosophy; and in his politics Smith was a “staunch Whig.” 

Smiles’ Self-Help was an “international bestseller” – which shows what people read those days. In Victorian homes, this book was kept right next to the Bible.

With all this parasitism enmeshed in the Unlimited State, it is no wonder that Hans-Hermann Hoppe is calling for a “new class war” – between the producers and the parasites.

Welfare states are what are crashing all over the EU.

Which is why I advised my readers very recently to “jump off the airplane.”

Hard money, self-help, a free market, private property rights, political economy – these are the tried and trusted old ideas of the Whigs and the classical liberals that Europe as well as all the Anglo-American nations forgot.

However, it was in Germany the other year that I found a sticker in the libertarian magazine Eigentumlischfrei saying:

Politik ist nicht der Lösung

Politik ist das Probleme

Translated:

Politics is not the Solution

Politics is the Problem

In which case, Eigentumlischfrei ought to have added a third line to their sticker:

The Market Is The Solution.

The politicians of all the member-states of the EU cannot solve the problem of the Euro.

Only The Market Can.

Now, as I said, political science is nothing but History – and after searching far and wide, I found the perfect historical example of a Purely Market Society possessed of civic independence: the Corporation of the Olde City of London, with its Lord Mayor, an institution that is over 800 years old. You can find an essay on this “One Square Mile of Liberty” that was the epicenter of John Bull Capitalism for centuries in my Natural Order book on the right hand bar.

It is a far better example than the republicanism of Geneva that Adam Smith admired.

All I would like to include here are three facts about this ancient institution:

First, that the title “Lord” was given to the Mayor by the citizenry, and not the monarch.

Second, that this has never been an office of profit. On the contrary, the Lord Mayor was expected to spend huge sums of his own money in order to show off to the King the wealth and the splendour of his office and the great City he represented. Many of those elected have refused office for this very reason – and they were heavily fined. Which is why it is said that Mansion House, the official residence, “was built for those who wanted to be Lord Mayor out of the pockets of those who did not.”

Third: the Lord Mayor upholds the Civic Sword. This is what keeps the State – or the King – out of all civic affairs. This is why John Bull Capitalism happened in this tiny one square mile of liberty. The “Bobby” of Metropolitan London cannot enter this Olde City. The City is Free!

So, once elections were over, every single resident returned to “mind his own business” – while the Lord Mayor could not, during his one year term.

No “political parties” compete in these elections, for the citizenry has always been organized into “worshipful companies”: of grocers, fishmongers, mercers, vinters, goldsmiths, and so on. There are over a hundred of these now.

All in the Market – and very little politics.

For the internationalization of this approach, we have the historical example of the Hanseatic League. That is, a worldwide economic association of free trading and self-governing cities. Law is united – nothing else.

As Mises wrote of the ideals of classical liberalism in his Nation, State and Economy:

Liberalism, which demands full freedom of the economy, seeks to dissolve the difficulties that the diversity of political arrangements pits against the development of trade by separating the economy from the state. It strives for the greatest possible unification of law, in the last analysis for world unity of law. But it does not believe that to reach this goal, great empires or even a world empire must be created.

Thus, the source of order is Law – which comes from the hoary past – and not Legislation, which is new getting newer every day, and which is divisive as well, because it is rooted in “politics.”

The Anglo-Saxons of old lived free, enjoying their privacy, each the king of his own castle, secure also in all his contracts, and sure of relief in torts in case he was injured even accidentally by anyone else – only because of the “common law.” Burgeoning legislation is a very recent phenomenon.

I myself champion a “private law society” – on which I have a column here. It means the same as the common law of old: Property, Contracts and Torts. Further, each dispute judged on its own merits with both sides represented by their own lawyers, before an impartial judge. Such judges can be available in the free market easily – and when both sides agree on a judge, he will be surely be impartial. There are “Rent-a-Judge” companies in California that provide such services.

Private law also solves the money and banking problem we currently face – for money is then Property: coins of gold and silver. And free, competing private banking can safely exist under the laws of Contract, whether these be “demand deposits” or “time deposits,” or “loans.”

This means Money & Banking Under Law – unlike a central bank issuing monopolistic fiat paper money while also creating credit out of thin air that has been established by legislation. These are not only fraud but also inflationary.

We can then have “prudent private banking” without any “lender of last resort.” That is, no “moral hazard.”

There is another essay on this important matter in my Natural Order book on the right-hand bar.

Chaos and confusion reign today – because of socialism and its electoral as well as legislative politics.

A completely free market, fully competitive, without any political or bureaucratic controls, rules or regulations, but under private law – this is what I believe in.

Regulation of the market through bureaucracies empowered by legislation is a very bad idea – and, as examples, we can look at telecom and insurance. In telecom, corruption has been enormous. But if “first come, first served” meant “homesteading” of the spectrum – and not auctions – the mess could have been avoided entirely. Moreover, the consumer would have benefited.

Similarly, insurance happens to be the finest invention of capitalist enterprise – because it reduces our risks. This was invented in London – in the Olde City – by Lloyd’s, as a means to reduce the risks of merchants who had sent their gold overseas and then waited impatiently for their “ships to come home” with precious cargoes. Sometimes, ships did sink. And the merchant was lost. Insurance thus preserved the capital of the risk-taking merchants. And Llloyd’s profited as well, because this is actually a very safe business.

When Indira Gandhi nationalized insurance, she wrecked the industry. And the risks of the people multiplied. In any case, long term “life insurance” in inflationist times is a losing proposition for the investor. As one wise economist told me some years ago, referring to life insurance in India, "They are stealing our lives, too."

Regulation is NOT what a free market is about. And most certainly not in insurance, which is entirely governed by contracts.

No regulator thought of creating Lloyd’s – a clever entrepreneur did, because of Liberty.

Today, insurance in India is marked by strange partnerships like Bajaj-Allianz, Tata-AIG, Max-New York Life, ICICI-Prudential, and so on.

These partnerships are FORCED - by the regulator, who is not much different from the RTO, who is similarly "captured" by the companies who provide the machines.

And what the FUCK do you think of our civil aviation regulator?

So, this is what a "free market" really means – free from all political and bureaucratic interference, and open to the whole world. 

The consumer is the King. 

All producers – of goods as well as services – compete to “serve” him.

Money is HARD.

Competitive private banking is under the laws of contract.

This is CAPITALISM.

What is called regulation today is nothing but “interventionism” – which means that others will try and mind your business for you, armed with legislation, of course. Politics everywhere. Bureaucracies, too. 

Mises predicted long ago that this would destroy “representative democracy” because legislators would end up preferring to represent special interest groups instead of their constituents. Do read all the posts under the label “Interventionism” sometime. 

Note the quote on the cover of Mises' book against interventionism on the left - in particular, how these "procedures" do not end up making people richer. On the contrary, they make people poorer. And we are a very poor country, anyway.


Thus, the best "automobile policy" is really UNILATERAL FREE TRADE - which is the best way to ensure maximum automobile ownership. Today, this is a very "liberalised" industry - but poor people cannot be expected to "buy brand-new foreign cars Made in India." The interventionism that our The State is practicing today aims at "creating local jobs," and "promoting domestic industrialisation" - but these are NOT going to result in every poor Indian being able to buy a car. Import duties on fully-built up cars, and on second-hand cars as well as crashed cars are astronomical - and this results in protecting producers, both domestic as well as foreigners who have performed the mandatory "tariff jumping."


The "wealth of nations" is but the possessions and properties of the people - and the best policy to achieve universal wealth is free international trade.


State intervention in free markets is HARMFUL - always, each and every time.

 

What is now happening now is actually FASCISM.

A very dangerous bunch of people are the "self-regulating professions" like doctors and lawyers. In both cases, they have obtained State patronage. Torts must apply to all medical negligence. And State-owned law colleges are an absolute no-no.


Having said that, the press can easily work under the same laws - and everyone will be protected in his privacy as also against libel. A press "watchdog" of the kind we have today in India makes nonsense of the legal concept of a Fourth Estate.

To conclude, I would like to say that I feel extremely fortunate to be a blogger on the Internet – that too, for about five years now, with almost 1500 searchable and labeled posts on the record. (The early posts were unfortunately not labeled.)

Global Fourth Estate!

In the bad old days of Indira Gandhi, when The Times of India was “an extension of the State,” and Girilal Jain, its editor, was known to be occupying “the second-most important position in India,” there used to be a little rag published by a brave man named Russi Karanjia that all those who thirsted for “real news” would subscribe to – and it was called Blitz.

I think my little rag ought to be called Blitzkrieg!

Blitzkrieg – Live on Planet Earth!

Donner und Blitzen

Rockin' All Over The World