Drugs, Crime, Legislation - And The "Fragmentation Of Knowledge"

The two previous posts were against legislation: first, on Aamir Khan's TV programme on "domestic violence," in which he propagandised in favour of State action via legislation and consequent police intervention; and second, on legislation being the root cause of UNLAW in both the drugs trade as well as the current international money and banking crisis.

In the first of these posts, I made the following statement:

Legislation is but a means of "social engineering": they find some "problem" or the other in "free society" and pretend to solve it by - what else? - creating and empowering a BUREAUCRACY. 

Indeed, Aamir Khan is at it again - this time addressing a Parliamentary Committee on why "regulators" ought to protect small manufacturers of "generic drugs," in the interests of the poor, of course, who are assumed to be incapable of buying good, branded medicines, but are the biggest market for branded shampoos and mobile phones and what not. So, we will have a super-duper Indian FDA-type bureaucracy - because of legislation.

Now, what will happen if a generic drug is fake and causes harm? Without a brand name, no one can be sued! The solution to fake medicines - a very big problem in India - is torts; in which case the liability will fall upon the retailer. The retailer will then have to be careful about which manufacturer's stuff he stocks and sells.

Note that unbranded masalas do sell - but branded ones are preferred only because the brand guarantees quality. Brands - and not State regulators - are in the best interests of all, including the poor.

Quality is best guaranteed by brands - because they value their reputation, which is what "brand equity" is all about. Further, standards of quality are also best checked and certified by private firms that specialise in such services - like Bureau Veritas, as with the ISO 2002 and all that.


This is simply not an area for any State action whatsoever. What has the State done to the "brand equity" of Air India? Think! What about IAS, IPS, et. al.? Any brand equity in the State at all? CONgress, BJP, et. al.?

In the second post I discussed how little thought goes into legislation. I closed the post with a long quote from Bastiat in which he says, among other things, that socialists have converted parliaments into battlegrounds for "spoils" - very far removed from the battleground of competing ideas and principles they are supposed to be in theory. It can no longer be "representation of the taxpayer" when, as Bastiat put it:

[The socialist] principle has placed these words above the entrance of the legislative chamber: "Whosoever acquires any influence here can obtain his share of legal plunder."

Bastiat used two expressions that ought to be immortal to describe socialism in practice: legal plunder, and false philanthropy. The former referred to their disregard for private property, as with "nationalisation." The second referred to their grand schemes of "redistributing wealth" and funding "welfare." Of course, both these evils are multiplied in the modern, Keynesian world, with the State able to "create paper money," and even bank credit, at will.

Do read Bastiat's brief The Law, written in France of the 1840s, around the same time that The Communist Manifesto was published. When I first read it, I told everyone I met that this little book had "exploded a hundred light-bulbs in my head"! There is also an Indian edition available from Liberty Institute - with my foreword. It dates back to the early 1990s.

Having said that, today I would like to draw attention to the fact that legislation implies the "centralisation of knowledge." Indeed, State "education" is the same. But the REAL WORLD is most definitely not like that. What we SEE in the real world is that the specialisation which a "division of labour society" is all about is accompanied by a phenomenon that Hayek termed "fragmentation of knowledge": each and every specialised trade operates with a little fragment of knowledge of its own. Thus, when we trade goods and services, we also trade the knowledge that goes into each of these. The barber, the butcher, the whatever - this phenomenon is universal. The 'jack of all trades, master of none" - well, I'd say he is our IAS "generalist administrator." IPS, too. No IPS officer knows a damn about traffic management, for example. All "generalists."

Hayek's essay, "The Use of Knowledge in Society," can be read here. It shows how "central economic planning" can never work - but the arguments apply equally to centralised education as well as centralised legislation, or "law-making."

The alternative to legislation is a "private law society," and the following has been extracted from my column in favour of such a legal system:

The other method of arriving at law is through the decentralized actions of individuals in markets. In this method, each of the two persons in a dispute engages a private scholar in law to argue their respective cases before an impartial judge. These private scholars—lawyers—scour through the books for past decisions in similar cases. Here, the law is not “made”; it is “found”. The law always comes from the past. Very rarely does a judge set a “precedent” by which the law advances a small step.

However, under public law [which is legislation], all law is “new law”. Legislatures manufacture such spurious new laws every day. This is “democratic tyranny”—and it plays a crucial role in imposing not only socialism, but also bureaucratization, both inter-related phenomena. It is through coercive legislation that socialist governments attempt to direct all economic activity. It is “subordinate legislation” that empowers all the bureaus. This is how tyrannies are multiplied; how liberty is lost.

This expression: "Law is not 'made'; it is 'found'" is surely the most important legal truth for the entire world to know today, where "democratic tyranny" has become the norm. If this is true of India, it is equally true of Britain, and also of the USSA, where they are all "born to be jailed" today, as I put it in this recent post.

Thus, democracy is not liberty; it is not freedom.

Freedom is "private money."

[I also have a post titled "The Real Plunderers" in which I have a long - and very important - quote from Hans Sennholz's Money and Freedom. Well worth a read today.]

Freedom is nothing if not the Inviolability of Private Property, which means no more "legal plunder."

This implies that Freedom is not the "false philanthropy" of welfarism funded by Keynesian inflationism.

And Freedom is "private law." Not legislation.

So, let us once again look at the US-UN sponsored "War on Drugs," which uses legislation to CRIMINALISE something so completely innocent as smoking a chillum.

And then, let us look at anything and everything "consensual" - in which no one is hurt in any way - and which are all similarly CRIMINALISED by legislation: from gambling to prostitution to homosexuality to whatever. This is all the "moral posturing" of the busybody politician, and it is this that Bombayites are currently up in arms against - the "morality police." Legislation empowers bureaucracies - always remember that. And altering or amending legislation requires "politics"! Everything is politicised. Private law means zero politics - and that means an orderly society.

Torts are the answer to the modern "criminal justice system" - which doesn't work, and is nothing but tyranny and brutality, anyway.

The must read on this is Bruce Benson's The Enterprise of Law: Justice Without The State.

I have discussed why torts are better than legislation in the first of this series of posts, while opposing Aamir Khan's statist propaganda on "domestic violence." I am glad to see that this post has gained much popularity.

So, what is democracy today? It is but what Bastiat saw so clearly a century-and-a-half ago:

[The socialist] principle has placed these words above the entrance of the legislative chamber: "Whosoever acquires any influence here can obtain his share of legal plunder."

And do read the one and only biography of Frederic Bastiat by George Charles Roche III titled A Man Alone. The title refers to how he voted in the legislative chamber - the only man who had imbibed the correct PRINCIPLES, and stood by them.

The biographer was a US Marine officer before he switched to scholarship. He was a friend of Lew Rockwell, founder of the Mises Institute, and Lew was involved in the publication of this excellent biography.

It is available online as a Google Book - which means it must be out of copyright. I hope someone publishes a hard copy in India soon, in which case I would be honoured to contribute a foreword.

PS: This post is continued here.