On Taxation In This Socialist-Welfarist-Inflationist-Interventionist Democracy – And The Free-Trading, Self-Governing CAPITALIST CITY: Part 2, Take #2

This is in continuation of Part 1, and the headings below are to be read in continuation with the same in the earlier post.

Nehru:

It is in this evil legacy of Nehru that the roots of our “Predatory State” lie.

Its predations began with colossal capital consumption – that is, all the useless big dams and steel plants, financed through “deficits,” leaving nothing for genuine capital investments in essential urban and rural roads, and highways. There has been almost zero expansion of the nationalized Indian Railways since Nehru’s time till today.

Of course, private automobile ownership was more or less impossible throughout this ghastly era – and well into his daughter’s reign. Even scooters came with a 10-year waiting period.

Because of State Socialism, capital consumption has marked each and every State-owned industrial undertaking – Nehru’s “Soviet model” – and these continue to the day, as for example with Indian Railways, all the State Electricity Boards, and also their telecom company BSNL.

Air India, the State-owned banks that need “recapitalisation,” coal mining, and insurance were “nationalized” by Indira Gandhi – “legal plunder” marked by ENVY, and these continue to consume capital.

All this is our “common loss.” It is the inevitable result of State-worship and the idolization of “collective property” – which is a GREAT FICTION, as I pointed out in this old column.

A “commonwealth” is where each carefully tends to his own, private property, his own “private economy.” When each and every Individual does so, and most succeed, the wealth of the whole keeps increasing.

It all begins with “private capital accumulation,” through private savings and investments, and private enterprise.

Commonwealth requires Liberty and Property – while “common loss” is its very opposite, when One Great Leader, with his Socialist Party apparatchiks, and their hired bureaucrats, will own everything and run all the factories – and then, according to their “theories,” it is they who will “produce wealth” for the rest of us, all “workers and peasants” seeking the promised land of Equality.   

COLLECTIVE MADNESS, if you ask me.

Today, the socialist regime is expanding towards “welfarism” – which is nothing but more capital consumption, for everything handed out as freebies through welfarism is neither saved nor invested.

Since this welfarism is being financed by inflationary means, the poor masses are actually being “cheated” – the value of their savings, their precious capital, is being constantly eroded – while wealthy borrowers are gaining.

This is “economically unsustainable.”

It is the highway to “de-civilisation” – and it shows.

If this is “democracy” – then what it really means is “representation of tax parasites by tax parasites.”

This is very far removed from the original slogan, “No taxation without representation.”

So we had “India is Indira” Gandhi – who never created wealth herself – winning elections with her empty slogan, “Garibi Hatao,” which translates to “Remove Poverty.”

It requires the private creation of wealth to accomplish that – which means Liberty and Property – and certainly not all that the arch-socialist Indira Gandhi did: which is enlarging the role, powers, and also the “deficit budget” of her The State.

Liberty means “freedom from the State.”

And the Inviolability of Private Property means a constitutional limitation that prohibits the government and its functionaries from transgressing all such properties – prohibiting “nationalization.”

We have kept on going the WRONG WAY – towards de-civilisation, tyranny, and worse. Even today, Parliament wants to forcibly “acquire land” they do not own: UNLAW!   

Thus, paying taxes – and meekly surrendering to thuggish tax “raiders” – in a “kleptocracy” such as this is senseless; and cowardice, to boot.

Of course, the UNLIMITED CONSTITUTION OF INDIA confers upon our socialist-democratic The State UNLIMITED POWERS as well as an UNLIMITED BUDGET – so it is very much “part of the problem.”

Remember: Nehru, Gandhi and Patel were all socialist lawyers, same as Kapil Sibal, Education Minister today, a very “loyal” CONgressman.

So, what can be said about Swaminathan Aiyar's latest column advocating "high royalties" for the "allocation of coal blocks" to mining companies? Will coal mining remain profitable, then? And whatever happened to the idea of Private Property - that which made the California Gold Rush peaceful, without any State "allocating" anything. The "registering of claims" was based on the "homesteading principle," and even rights to water (for washing gold) were privately owned. He remains stuck in the great fiction of COLLECTIVE PROPERTY, which is socialism. 

He wants prospective coal mining forms to pay these "high royalties" - but does not ask WHY should be pay taxes? For what?

On Indian cops:

Cops in India today are devoid of all legitimacy. More a “public nuisance” than a “public service.” They work “against the people” – same as their political masters.

Hence the huge amount of propaganda now emerging in Bollywood films and on television channels – whether by glamourising the “phony war” between ISI and RAW, or serials like Crime Patrol and CID. Our real security threats are on the streets. And our real predators, too.

My sincere advice to the Indian citizenry is that they SEE REALITY instead of getting their minds further destroyed by such “reel life” propaganda. 

Try and register an FIR and you will SEE what “crime patrol” and “CID” are really all about.

And do read this news report of TODAY on how the Crime Branch of DELHI POLICE has extorted Rs. 30 million - obviously from the criminal. 

Armed with reams of legislation outlawing a very wide range of “consensual trades,” the cops today are engaged only in reaping the benefits of “selective legislation enforcement” – very far removed from their original purpose of “maintaining” a civic order that was PRESUMED to be already in existence, which is why the “Bobby” of London has always been unarmed.

Indeed, Professor Bruce Benson’s excellent History of how this “criminal justice system” EVOLVED in England – The Enterprise of Law: Justice Without The State – reveals that among the Anglo-Saxon tribes of yore, all “crimes” were but “crimes against the individual” (and his properties) and these were TORTS. The tortfeasor had to financially compensate his victim. This was JUSTICE – as “restitution” for the VICTIM.

I have an old column on why such a system would be far better in India today – where the “criminal justice system” established by the British State in 1861 does not work.

Benson reveals that the English began moving from “crimes against the individual” to “crimes against the king” because of greedy Norman rulers who were broke, and who declared many acts as “disturbing the King’s peace” solely for the purpose of raking in fines as financial compensation due to them under the tort laws of old, thereby increasing their revenues. Herein lies the root of the current British “criminal justice system” – of which the unarmed London “Bobby” came as late as 1829.

[Yet, even then, there was very little legislation – and with Cobden, Bright and Gladstone, classical liberalism ruled right through 19th century Britain. There was liberty, and property was “sacred” – as this editorial from an English newspaper of that age testifies.]

Professor Benson’s book pictured above thus provides us with vital HISTORICAL EVIDENCE of a pre-existing “natural order” – further proof of the horrendous error in Thomas Hobbes’ Leviathan.

Hobbes was actually a “failed mathematician.” His book had absolutely no impact among Englishmen of that Cromwellian age.

On the other hand, it was John Locke, a few decades later, who did – and who was a “prophet” to HEIC personnel in India, during the centuries before Haileybury.

“Where there is no Property there is no Justice,” wrote Locke in 1691. These words guided the HEIC from 1700 to 1800, when Haileybury was established to add “classical liberal political economy” – which is laissez faire – to the minds of their recruits.

All justice as well as civic order have been lost by following socialist-communist “ethics” in Law. These have been worsened by “socialist-democratic-interventionist legislation” – and what we are now suffering from is this Hobbesian Leviathan, a nightmare if ever there was one.

Thus, liberties are not lost all at once. They are lost bit by little bit, with the true History of the past being “shrouded” by “court historians” and even “pseudo-historians” who are ignorant of praxeological theory and profess “theories of history” of their own invention, guided by “political” motives.

With both History as well as Theory confounded, the reality of the human condition, the faculties of the trading human mind, the factors that make for human cooperation, peace and order, the causes of the progress and demise of civilisations past – none can be accurately comprehended. False doctrines rule. Reason is corrupted – replaced by demagoguery and sloganeering:

“India is Indira.”

“Garibi Hatao.”

“Property is Theft.”

“Workers of the World – Unite!”

The list is endless.

What is utterly DISGUSTING under these circumstances is the emergence of “moral policing,” as in Bombay recently, something I also observed on one of the pro-cop propaganda serials on TV last night – and that is, cops condemning the “sexual morals” of the youth.

The ancient philosophy of the “Four Ends of Man” – dharma, artha, kama, moksha – makes it clear that “economic morality” comes before “sexual morality,” and is the “BIGGER MORALITY.”

Republicanism means nothing if the citizens of such free cities are not armed themselves, and fully prepared to defend their city from external as well as internal foes.

Thus, in Republican Geneva, the coat of arms on the cannons atop the ramparts of the walls of the old city is The Coat of Arms of the City of Geneva.

Bombay got so badly hit by a handful of “terrorists” only because the citizenry has been deliberately unarmed by legislative fiat – and the authorities waited and waited for two whole days and nights for “commandos” to be flown in from Dilli Door Ast.

(Though I am positive that the Maharashtra Armed Police must be having many battalions stationed within the city, or nearby. Why was this “armed monopoly over protection” withdrawn?)

Recommended reading: Gustave de Molinari’s essay on “The Private Production of Security” (1849). Molinari was closely associated with Frederic Bastiat – and this was published in their Journal des Economistes, of which he was Editor-in-Chief then. I do believe it is the very first essay of its kind.

Section on Mohenjo-Daro:

The picture shows “private dwellings” – and it must be presumed that all the proprietors of these private dwellings contributed towards the construction and maintenance of the elaborate drainage system of this Ancient City – these “public facilities.” They are “capital investments.” They are part of the “commonwealth.” A city is nothing but “fixed capital.”

Why pay taxes?

Indian cities and towns today are also overflowing with GARBAGE – and this can easily be cleared efficiently by competent and competing private companies.

There is a photo feature on uncollected garbage in Bangalore in the print edition of Mint today – and they mention the Karnataka State Pollution Control Board, which is empowered with legislation to “clean the air” and all that. But it is such filth in the capital of this province that spreads disease and drastically reduces the life expectancy of the poor; in particular, their children.

I also read a news report the other day that the Central Pollution Control Board, headquartered in Delhi, in all the decades of its existence, has not initiated any action – not even once – on the filthy Yamuna that flows through this city. The State owns this river, after all.

So, the question remains:

Why pay taxes? 

Whereas it makes sense for the free citizens of a city who own properties therein to contribute resources towards investments in public facilities such as stormwater drainage and the like, and in ensuring civic hygiene and cleanliness, the question that arises in today’s context, when Liberty and Property have both vanished, to be replaced by Tyranny and Corruption, is whether we pay taxes to be RULED, to be “ordered” to do this or that, or not to do this or that, and whether this “legislative dictatorship” deserves to be called “representative government.”

The root of “legislative dictatorship” lies in the deliberate distortion of the meanings of important words – in this instance, confusing “law” with “legislation.”

It is a HISTORICAL FACT that while parliaments have been called regularly to “vote on taxation” since the early 13^th century, the flood of legislation in Britain occurred only after 1905 – by which time the old Liberal Party had folded up, to be replaced by the socialist Labour Party.

All that “socialist-democrats” seek to achieve requires legislation – thus, in Britain, this Labour Party saw to the passing of the Trades Disputes Act of 1906, which legislated powers to trade unions; powers that were completely antithetical to the Common Law (like using aggression and force with impunity). As one eminent Law Lord of that era commented, what this Act achieved was “violent surgery on the body politic.”

This violent surgery on the body politic is responsible for the tyrannies of the “criminal justice system” all over the world today – for this is how from “no taxation without consent” we have moved to a situation in which we are prosecuted and punished for not obeying legislation to which we have not consented. As I discussed the other day, the enforcement of such legislation is nothing but “violation of private property”; and thus, legally speaking, analogous to RAPE.

Why pay taxes?

In the old days (in England, France, and other parts of Europe) before “mass democracy” and its consequent competitive “bribing the voter” ethic (sic) that has resulted in this “race to the bottom,” local taxes were paid only by those who owned properties worth above a certain value. Thus, the votes of the poor masses did not matter; only those of propertied “electors” did. Since they paid all the taxes, they were “represented.”

With socialist-welfarist mass democracy, representation has come to mean that of those who receive “benefits,” as well as the BUDGET-MAXIMISING bureaucratic agencies required to distribute these benefits and “entitlements” among them – as with the Food Corporation of India, the Public Distribution System, the education bureaucracy, the health officialdom, et. al. The “self-interest” of these voters and bureaucracies combine with the self-interest of the socialist politician – and all of these coalesce into the UGLY, modern Vote Motive.

Recall what I wrote about the Lord Mayor of London yesterday: He received no salary. Rather, his public duties required him to spend lavishly from his own resources. This was never an “office of profit.” Beggary was discouraged – while trade and enterprise were encouraged. There was no “tax parasitism” at all. Nor any “political parties” – till the “politicization of economic life” that followed “parliamentary sovereignty” after 1688.

Till then, there were only all these “Worshipful Companies” – and their number kept growing. Every member of these hundred and more companies was a businessman – “minding his own business.”

The only “politics” of the institution they had established before the Magna Carta was keeping the King out of their city. That is, CIVIC INDEPENDENCE.

What would you rather have in your city? A thousand companies? Or a few dozen "political parties"?

[Note: There are many other such histories of course, of Hansastadtae like Hamburg, Lübeck and Bremen, and of Freireichstadte like Frankfurt-am-Main – but I have been unsuccessful in obtaining English translations of these so far. Ditto for the history of republicanism in Switzerland – as with Geneva – though I was fortunate to have visited this city, and even tour the country a fair bit.

Hamburg sounds particularly interesting: It continues to call itself Hansastadte – and remains an independent State of the German Federation. Margit von Mises was born and raised here, and her memoirs begin with her early life in this free city. I was rather intrigued to find that the wealthy businessmen of Hamburg, at least in her time, followed “English customs and habits.”] 

PRIVATISATION MEANS NO MORE TAXES:

In Part 1, I did suggest paying taxes for stormwater drainage as in Mohenjo-Daro. Today, let me suggest the way out:

If we in India privatize all arterial roads and streets in cities and towns, the new owners of these, if liable for damages suffered by road users from flooding during rains, will surely install the required stormwater drainage systems on their own – and maintain them as well.

The Lesson: The more that is PRIVATISED, the less is required to be funded through coercive means such as taxation.

Thus, “political economy” means a local civil government that requires very little taxation to perform its limited functions, thereby ensuring that citizens can keep almost all of their wealth for themselves.

Further, when there are no bureaucratic agencies to “implement” or “enforce” anything, no “rules and regulations” – a “private law society” – the private costs of both maintaining such agencies as well as complying with their directives are entirely eliminated.

This implies MAXIMUM LIBERTY – and MAXIMUM PRIVATE CAPITAL ACCUMULATION as well.

This is the Highway to Civilisation.

The old adage prevails:

The government that governs least is The Best.

Lastly, to return to Thomas Paine’s Common Sense:

In the very same paragraph where he says taxes are “giving up a portion of one’s property in order to obtain better protection of the rest,” he adds the following exception for those who suffer injustice and tyranny from their governments:

And that is, by paying taxes to such unjust and tyrannical rulers, they “furnish the means by which they suffer.”

Of course, this no longer holds – and Keynesian central banking with its fiat paper money system has enabled governments to “create money and credit out of thin air.”

No “democratic” government in the world today is dependent on taxes and taxpayers. Which is also why “representation” has become a farce. Legislative interventionism has corrupted democracy even further.

These are the reasons why “Liberal Constitutionalism” has become meaningless – so what can be said of “Socialist Constitutionalism”?

  

Section on Lord Mayor of London:

For the first five to six centuries since the inception of this institution, almost all the wealthy merchants who held the position of Lord Mayor of London started off poor, migrating to the City from the countryside, usually younger sons who would not inherit anything, and who worked up the economic ladder slowly but surely, acquiring the necessary knowledge and skills, earning a reputation for excellence, business acumen, wisdom, public concern, and honesty as well.

The Lord Mayor upholds the Civic Sword within the City – thus, the King of England cannot march his Army through the City without his permission. Indeed, even the unarmed “Bobby” of the London Metropolitan Police (established by Peel in the late 1820s) cannot enter the old City. It was only a few years after Peel’s policemen came into existence that the Old City set up its own police force – under their Lord Mayor.

This is what CIVIC INDEPENDENCE means.

This is the “Discovery of Freedom” that Rose Wilder Lane wrote about (though in the American context) – and it is only this that led to Global Capitalism emerging from just “One Square Mile of Liberty.”

The City of London, even in the old days, practiced free maritime trade – and one description of the River Thames in the 13^th century says it was “a forest of ship masts.”

On the Lord Mayor of London being the “grandest public functionary in Europe”: 

While in Amsterdam, I visited the city’s wonderful Historische Museum, where one of the paintings that struck me was of the Grand Ball hosted by the Mayor of Amsterdam for the visiting Lord Mayor of London in the good old days.

Addenda on East India Company Governors of their first coastal cities in India:

The HEIC began with Madras, then came Calcutta, and only thereafter Bombay. In the old days, very senior and carefully selected men were appointed by the Honourable Court of Directors in London as Governor of each of these cities. Thus, the cities came first, and received the greatest attention.

Further, as would be expected from a company headquartered in the Olde City of London, HEIC governors of these coastal cities lived and traveled in great pomp, luxury, style and splendour – so as to astound local rulers and merchants alike with their wealth, for which they received a special allowance. They attracted the wealthiest to invest in their cities, to trade freely, and to build grand properties – which would always be protected, they assured them, under unchangeable English laws.

These HEIC coastal cities OUTCOMPETED other cities and towns within India by offering wealthy migrants – first, protection of property under unchangeable English Law; second, liberty to trade freely across land and sea; and also a better “quality of life.”

But it was the unchangeability of English law, particularly the protection of Private Property, that mattered most to Indian merchants who migrated to these English coastal cities to trade – for whatever they had known to be “Law & Justice” under all previous rulers had always been arbitrary to the extreme.

Contemporary English observers commented that these “nabobs” of the HEIC lived and traveled in greater style than the King of England himself – not that the Lord Mayor of the Olde City of London, right under the King’s nose, didn’t.

It is only because of this envy that quite a few of these “nabobs” faced persecution when they returned to England – from Clive and Hastings right down to the final and disastrous takeover of the territory by the Crown (that is, by Parliament).

Remember: the long, blameless – and even glorious – reign of the Company, which began around 1605 and lasted till 1857, was accomplished without any Police.

On the other hand, the FIRST THING that the British State did after taking over India is passing the Indian Police Act in 1861. And the Indian Penal Code the following year. The politicians in the House of Commons and their bureaucrats in Whitehall thereby increased their powers of appointments and associated patronage – and their budgets, too. Taxes increased for Indians – and tyrannies as well. Another huge bureaucracy was established.

Note: Within just 90 years the British State was forced out of the Indian sub-continent.

But the decline started as early as 1883 (with blatantly racist legislation), and the downhill rush in 1905.

The British State could not “handle” India for even 20 years! 

Why?

Because the government that governs the most cannot last.

So we can see 1947 as inevitable – though not the horrors it entailed, almost all of which still remain with us. Like this State Police. And “politics based on religion” – extended now to the endless “hostilities” between the State of India and the State of Pakistan. Unsurprisingly, Jinnah was a lawyer, too.

[As was Abraham Lincoln, who completely destroyed the “federalism” of old America, establishing a centralized State. For him, as he himself put it, all that mattered was “The Union.” Republicanism is something else: free cities and towns.]  

On Representation:

 

Is central banking – and its corollary, centralized monetary and credit “planning” – a part of “representation”? How can it be – when it is the very means by which all democratic governments throughout the world have acquired the means to UNLIMITED BUDGETS.

I say it is nothing but “communism” in theory and practice – over Capital itself?

The news has it that the Finance Committee of Parliament, the Finance Ministry, and the Reserve Bank of India are at “loggerheads” over who is to blame for the economic disaster the nation is currently experiencing as also what should be done about it – but I do believe this is a mere “ruse” designed to further confuse an already confused, miseducated and misinformed people, for the three government entities named are “all in it together.” Like the “iron triangles” of Washington DC.

The only solution is an end to all this “national economy” nonsense; and an end to communist ownership of Capital.

Read my “The Case for Private Money.”

As also this recent post on how money and legitimate free, private and competitive banking will work perfectly well under Law.

Another post discusses “private economies” as The Other Path.

Education:

During the centuries of the HEIC’s civil government, Indian elites looked towards their new, European rulers for knowledge in “Western sciences” – which they felt were responsible for Western advancement, and which they wanted to learn, so as to advance themselves.

Thus, they wanted to learn the English language – and thereafter, acquire knowledge particularly in Western medicine and surgery, the Western sciences of physics and chemistry, and Western engineering.

The English language also enabled those Indians who were otherwise inclined to study English law, political philosophy, and the rudiments of political economy. It is these English-speaking Indians who joined the “classical liberal” Haileybury-trained AO Hume in setting up the Indian National Congress in 1885.

All these advancements have been completely destroyed by socialist politicians and their “education bureaucracy” during the past 60 years. They have combined to deliberately keep the masses backward; and as for the so-called “elites,” they have all been “brainwashed” by socialist propaganda in each and every elite school, college, and university, since it is this The State that controls their curricula.

Worst of all, by destroying English-language education, this The State has deliberately divided the vast sub-continent into “linguistically homogenous states” such that, today, the people from one province can no longer communicate with people from any other. Linguistic chauvinism in now another source of political disorder.

Political disorder caused by linguistic chauvinism is precisely what destroyed Sri Lanka - and in the same year, 1956 - when SWRD Bandarnaike passed legislation making Sinhala the official language. This started off the "Tamil problem" - which is yet to be solved, because we, too, have Tamil, Marathi, Telegu and, of course, Hindi chauvinism.

The Lesson: To ask anything of The State is to "politicise" the issue. Once politicians take over, conflicts become inevitable. This "politicisation of language" is but the result of "politicisation of education."

It is for this reason that we in India, instead of advancing towards civilization and civility, instead of embracing a “world language” that would not only unite our linguistically diverse people but also enable them to reach out to the world beyond our borders, our society has regressed in innumerable ways – by deliberate design.

In a completely free, liberated, private, competing, for-profit education market, this would never have happened.

But socialism is an “anti-social ideology” – as I have often pointed out, so this was inevitable. They politicise and bureaucratise EVERYTHING.

Socialists and communists are all actually SOCIOPATHS in the precise pathological sense that medical science uses this term. From Lenin and Stalin to Hitler and Mao to each and every one of Nehru’s “friends”: Nasser, Tito, Nkrumah, Nyrere, and Castro, of course.

Their rhetoric may have sounded attractive then, but the results are clearly visible today – the destruction of entire societies.