Hong Kong in the 1940s was poverty-stricken, overflowing with poor refugees, their broken shanties everywhere.
What did the British colonial administrators do that made this economic miracle “happen”?
As an excellent John Stossel documentary on the benefits of “economic freedom” showed – in which he compared Hong Kong, the USSA, and Calcutta – all that the Brits lording over Hong Kong did was:
“They just sat back, drank tea, and let the people ‘get on with it.’”
Thus, UNILATERAL FREE TRADE – thereby taking advantage of their excellent deep-water port.
PRIVATE MONEY – without any central bank. Just a “currency board” that allowed HK$ to be issued by two private banks as per their deposits of US$, which were then tied to gold.
EASY TAXES – a low, flat rate tax, for their “minimalist government” did not require much, and the people were poor, anyway. This allowed Private Capital Accumulation to grow.
MINIMAL PAPERWORK – as Stossel showed, it takes 15 minutes to register and obtain permission to set up a new business in Hong Kong, while the same takes 3 months in the USSA, and 2 years in Communist Calcutta.
NO WELFARE – it would have required higher taxes; and for poor people, economic freedom was considered best, simply because the poor themselves would work hard to create their own private wealth.
NO GOVERNMENT STATISTICAL BUREAU – and I will explain why shortly.
Hong Kong today:
One of the world’s wealthiest places.
Highest per capita ownership of Rolls-Royce cars, far higher than socialist Britain, its erstwhile colonial master.
No shanties – high-rise apartments for all.
This, despite having the world’s highest population density – with over 2,50,000 people per square kilometer in downtown Kowloon.
Today, the Red Chinese in-charge of this tiny island which even imports all its requirements of fresh water, say, “One country, two systems” because the chances of any “planning” ever being attempted here were effectively sabotaged by the wise Brits who refused to establish a Statistical Bureau.
No statistics means no planning, of course.
The more a government “works,” the worse things get for the people.
As the old adage of the Whigs and all the "classical liberals" goes:
“The government that governs least, governs best.”
Thus, what is happening in socialist-protectionist-interventionist-Keynesian-inflationist-welfarist India today is nothing but turf- and budget-maximisation on a colossal scale - which is PARASITISM and PREDATION by the State itself. I have discussed this in detail in previous posts, of which this is the most detailed. There are also 204 posts under the label "Predatory State."
Today, let me turn to the "opinion makers" among us.
1. I quoted the following from a Times of India lead editorial in my post of the other day:
The central bank's ability to lower rates to revive growth is limited, as is the government's scope for fiscal expansion given the widening fiscal and current account deficit. RBI rightly says the way to stimulate economic activity without pushing up inflation is to adopt a strategy that promotes reforms-based resource mobilisation involving cuts in government spending on subsidies in order to reallocate funds for investments.
Note the emphasised portions - that very-Keynesian idea that State spending via fiscal expansion "stimulates economic activity": the idea that the State must "do something."
We may contrast this with a quote from the prime minster's recent speech at Rio that I had included in an earlier post:
Like other countries, we too allowed the fiscal deficit to expand after 2008 to impart a stimulus. We are now focussing on reversing the expansion.
Remember colonial Hong Kong - NO CENTRAL BANK!
No possibility of any fuckin' fiscal expansion whatsoever.
2. There is a column in Mint today titled "Reforming India's Banks" by Renu Kohli, who is a New Delhi-based macroeconomist; and a former staff member of the International Monetary Fund and the Reserve Bank of India. The word "macroeconomist" means "Keynesian." Thus, the subtitle of her column reads:
Indian banks, chiefly public ones, seriously need recapitalization.
Why? Obviously because they have accumulated too many bad debts on their books. Why have they doe that? Because of POLITICAL CONTROL.
And what did the Brits in colonial Hong Kong do?
Well, for one: They did not even attempt to control private banks.
Kohli is a regular columnist with Mint - and do read my comment (under the pseudonym "Naturalorder") on one of her earlier pieces, subtitled "Manmohan Singh has done well to flag currency stabilization and strengthening the balance of payments as his topmost tasks." Our socialist The State cannot even balance its own accounts! With private money, there is no "balance of payments" or "balance of trade" that any government needs to be bothered about. Each trading individual has to manage his own "private economy." That's how the entire ballgame works - for each and every private, trading individual.
3. There is another column in Mint today, by Niranjan Rajadhyaksha, one of their editors, in which he looks at the data and points out that "high inflation, negative real interest rates, slowing growth and policy drift" are making Indians prefer "physical assets" like gold and real estate to "financial assets" like equity, mutual funds and so on. He cites a report in The Economic Times to the effect that "gold smuggling could be on the rise because of the gap between global and domestic prices thanks to the new tax on gold imports introduced earlier this year." These taxes were introduced in this year's Union Budget - and I called it "High Treason." Thus, the fact that some savers are still investing in bank fixed deposits - despite the "negative real interest rates" Niranjan writes about - only goes to prove that this socialist-Keynesian-welfarist-inflationist The State and its banks are THE PROBLEM. It is they who are DESTROYING PRIVATE CAPITAL ACCUMULATION.
So, let's think like colonial Hong Kong; or, better still, a vast sub-continent comprising 1000+ such Hong Kongs - which is REPUBLICANISM.
1000+ free trading and self-governing cities (and many times more such towns as well).
In a previous post on why this centralised, socialist Constitution must go, I had recounted the following anecdote:
I once lectured at a tiny, little town nestled in the Western Ghats of Karnataka, for schoolchildren, on the differences between socialism and capitalism. This tiny town was quite a shambles - and, since it was in the district of Chikmagalur, which once returned Indira Gandhi to Parliament, I posed a question to the kids: Would you rather elect a good mayor for your town, or would you prefer to go on electing people to "represent" you in Dilli Door Ast? All the kids unanimously chose the former - without any hesitation.
In this connection, I found the following, extracted from a recent article by Ron Paul on the US Constitution - in particular how they have lost their way by confusing "freedom" with "democracy" - well worth drawing the entire world's attention to:
The problem is that democracy is not freedom. Democracy is simply majoritarianism, which is inherently incompatible with freedom. While our Constitution certainly features certain democratic mechanisms, it also features inherently undemocratic mechanisms like the First Amendment and the Electoral College. America is a constitutional republic, not a democracy. Yet we've been bombarded with the meaningless word "democracy" for so long that few Americans understand the difference.If we intend to use the word freedom in an honest way, we should have the simple integrity to give it real meaning: Freedom is living without government coercion.
In India, because there are numberless "political parties" - all devoid of any "political ideology," of course - the public vote is "fractured," and elections are inevitably won with minority support. The passing of legislation requires the support of even smaller minorities. The "majoritarian ethic" of Hindutva is reminiscent of the Partition - and it is no ethic at all, for what matters for liberty and property are INDIVIDUAL RIGHTS. I have only just discussed that this means the INVIOLABILITY OF PRIVATE PROPERTY.
But Ron Paul's candid admission that the USSA has gone wrong with its constitutionalism - and thereby lost all its freedom - gives credence to what I have often quoted from Adam Ferguson's An Essay on the History of Civil Society (London, 1767):
“Nations stumble upon establishments, which are indeed the result of human action, but not the execution of any human design.”
Yes, nations and people do "stumble upon establishments" - and that is History, all these unique, non-repeatable events and the characters who made them happen. How did the English "stumble upon" the Magna Carta in 1215 AD - that which made them a "free people"? How did the Londoners of old "stumble upon" the idea of setting up their own "civic corporation" under a Lord Mayor from among their own "Worshipful Companies"? And so on.
However, the very GOOD NEWS today is that we no longer need to "stumble upon" anything any more - for the Philosophy of Freedom has advanced so much that it is what ought to be called FULLY DEVELOPED today.
Thus, we do not need any constitutions any more to "grant" us Property Rights as such. Today, we need to view property as something that arises from Liberty - and is then transferred by contract, which is "private law."
Thus, all properties possess a "claim to title."
Which is really how nomadic herdsmen, shepherds and cowboys looked at it.
This is also "the origin of the common law."
And it is what "homesteading" is all about, based on the Lockean Principle of "mixing one's labour and capital with the original natural resource."
The English never had any "written constitution."
Further, in a "private law society" that is free from all legislative interventionism, there is no need for any Supreme Court to ponder and decide on the "constitutional validity" of parliamentary acts through any "constitutional judicial review" either.
I conclude with some comments on this Indian Express editorial of yesterday in which the editors praised the "wisdom" of the current Chief Justice of India, who was on the record for his views on the "fundamental right to sleep" we are all now blessed with.
First: There cannot be any "right to sleep" without Private Property first. Thus, if you go to sleep in a movie theatre, the usher will surely wake you after the show is over and ask you to leave because your temporary property right on that seat has expired, and a new possessor of that right is about to stake his claim.
Ditto if you sleep off in some Late Night Bar and they announce "closing time" whenever.
I once dozed off during an editorial meeting - and was woken up by one of my colleagues because, while I did have the right to occupy a seat in that conference hall at that time, I did not have the right to sleep there. I also could not smoke in that space.
However, in January, 2012, in Delhi, I did doze off in a "public park" one afternoon, for the winter sun is so pleasant for those who, like me, enjoy a siesta. But a COP woke me up! Thus, the only solution is to PRIVATISE all these "collective properties."
On another afternoon, a few days later, these cops shooed me and some friends out of a dhaba for "drinking in a public place." I pointed out that the dhaba belonged to its rightful owner, who had welcomed our custom, had provided us with glasses and fresh water, and had taken our order for lunch - and this was very much PRIVATE PROPERTY. But he remained adamant - and, once again, coercive State force was misused on me. This time also hurting some of my friends, as well as a friendly, neighbourhood dhaba owner.
Who is "teaching law" in this country?
Socialist lawyers, of course!
And it shows.
In a world where private property is not violated - but defended - where all consensual trades are free, there are NO DISPUTES, no disorder, and if ever any unjust acts are committed by anyone upon another, the victim must be compensated for these damages. This is ALL that is required of The Law - and there has never ever been any "exact administration of justice." However, in a free market for legal services - and all lawyers start off competing for clients - judges will earn their REPUTATION just as anyone else does. Competing firms offering legal services ought to be far better than this MONOPOLISTIC socialist legal system - which does NOT work, anyway.
Thus, there is nothing we Indians need to be "conservative" about.
There is nothing worth "conserving" in this socialist State.
Let's think RADICAL.
As I just said, the Philosophy of Freedom is fully developed today.
We will never "stumble."
We will ROCK STEADY - from here to eternity.