Errors in Economics – and errors in Law – both are FATAL to civilisation – and since my Daily Business Noose is riddled with both these fatal errors, this post shall re-state the sources of order, as well as the sources of disorder, so as to give my reader the clearest picture ever given on these vexing issues that plague humanity today.
Economics – better called "Catallactics" – or "The Science of Exchange" – is about how human beings – and human beings alone – not just “survive” – but actually “flourish” – which is the reason why errors in both thinking-and-doing in this sphere are FATAL to the cause of civilisation.
Law – well, good Law protects all and preserves the Natural Order – hence, errors in Legal Philosophy are even more fatal, and actually cause The Highest Degree of Disorder. This is precisely what is occurring worldwide today – which is why absolutely clear thinking on this matter is required to inform and educate Public Opinion.
My Daily Business Noose – well, their lead editorial is about central banking, the setting of “administered interest rates” and the question of “fiscal discipline” – and ALL THREE pertain to what ought to be termed “malgovernment.”
Their root cause, in the ultimate analysis, in the same ol’ MISEDUCATION – which serves to perpetuate errors – and then, what is even worse, keep on-and-on confounding Public Opinion by refusing to “hit the nail on the head” – the only way by which we can well-and-truly, once-and-for-all, NAIL THE ERRORS.
My Daily Business Noose also has a “Quick Edit” – and today’s is on “legal order” – as a response to the Delhi gang-rape – arguing in favour of “better policing” and other such fanciful ideas that are so completely divorced from reality that it no longer remains a “laughing matter” – and calls for a BRUTAL RESPONSE.
This, I shall surely provide – later in this post – but do think about the ridiculousness of such editorial opinions:
The same Centralised State that is the cause of not one, not two, but three sources of ECONOMIC CHAOS –
Well, this same Centralised State is now expected to “better police” ALL OUR URBAN AREAS – in ALL of which this very same centralised State, with its centralised Urban Development Ministry, its Urban Planning, and its Urban Land and Development MONOPOLIES has DESTROYED!
POLICING? – well, what about DEATHS ON OUR URBAN ROADS?
I gotta say it b’coz I gotta say it:
WHAT THE FUCK?
I have only recently explained why, because of our “trading human minds,” we are all “born to be rich, born to be just, and hence born to be free as well” – so I trust I need not reiterate those arguments. Instead, I shall proceed further from what was stated earlier.
Hayek was in SERIOUS ERROR – only because he did not ever possess Epistemology – when he said we human beings are “rule-following animals”; and then, to confound matters further, asserted that when we exchange – instead of plundering; instead of snatch-and-grab – these actions of ours lie “between instinct and reason.”
On the contrary!
It is precisely REASON – all these “logical categories in the trading human mind” – Property, Subjective Value, Arithmetic, Time, Capital, Income and all the others that follow from these – it is precisely these that enable us to “reason why” we GAIN from “consensual trades.” All the “good things” then follow – specialisation and the division of labour – itself powered by the DIVERSITY of human abilities – followed by “human association” based on Comparative Advantage – and then on to settlements, to cities and towns, and to civilization itself – and ALL OF THESE EVOLVE NATURALLY – their growth being “organic” – or “unplanned” – their “rules” being UNARTICULATED, even – until, finally, someone – a sage, or a prophet – “Finds The Law” – and then, ARTICULATES this – thereby enabling Justice-for-All to prevail.
If John Locke was considered a “prophet” by the covenanted civil servants of the Honourable East India Company – who did NOT require any Legislation at all – then it was surely because of his assertion that:
Wherever there is No Property, there is No Justice.
And even if we go through the first Books of the Old Testament till we come across the Prophet Moses and his Ten Commandments – we find that the Jews – for whom he is the First Prophet – were already flourishing within an advanced Market Economy, within a Civilisation, with a very highly diversified degree of specialisation and the division of labour, with its fragmentation of knowledge, and with everything else that follows.
Quite obviously, if we apply the correct praxeological theories and its epistemology to this “History” we find in the Old Testament – leaving aside all the bothersome “metaphysical speculations” – we are forced to accept the FACT that all the pious and hard-working Jews in Egypt at the time of Moses had for aeons been following the Eternal Law of the Inviolability of Property (as well as Contracts); and that their First Prophet’s Command, “Thou Shalt Not Steal” was perceived as a Just Command – within all their “trading human minds.” They “loved the law.”
But this Law was “found,” and not “made”; it was merely “articulated” – and herein lies the difference between Law and Legislation.
Today, as One Very Wise Man put it the other day, the Golden Rule is:
Thou Shalt Not Steal – except by Legislation!
Let us now proceed to the lead editorial bemoaning all the ECONOMIC CHAOS afflicting the poverty-stricken Indian masses – one-and-a-quarter BILLION of them – and the questions raised therein concerning, first, “fiscal discipline”; and second, “administered interest rates.”
Both concern "Actions of the State.”
The first of these is nothing but a Failure of Constitutionalism – not just here, but also there, and indeed EVERYWHERE.
The second follows from the first – for the Legislation establishing this central bank (in 1934) with its monopoly over the issue of “legal tender funny money” was aimed at enabling UNLIMITED BUDGETS in the first place; and the “cartel of member-banks” upon which these administered interest rates are IMPOSED are simply a CONSEQUENCE of the first error – which is a LEGAL, and hence, a MORAL ERROR.
The only questions that arise are:
What is MONEY?
What is INTEREST?
And, what is CREDIT?
If these are HONESTLY answered then ALL THE SOLUTIONS become crystal clear:
Legally define the MONEY in terms of the precise weight and fineness of a HARD COMMODITY – and thereafter, leave everyone FREE to CHOOSE whatever “media of exchange” they wish to accept in market exchanges, because these MUST be “consensual.” Any FORCE in this area is UNJUST – precisely because all consensual trades are Just.
Second, the private, competitive business of banking – it is to be governed by FREE CONTRACTS – all of these being INVIOLABLE – and there are but two essential kinds of contracts involved in this business: Deposit Contracts, and Loan Contracts, to which we can sub-divide the former into Demand Deposits and Term Deposits.
Once this free and competitive private business of banking is governed by the Eternal Law, each private banker will have to – perforce – “adjust his own conduct.” He will have to take his own, independent decisions on his own “reserves”; he will have to take his own, independent decisions on “fiduciary media”; and as far as “interest rates” are concerned, whether for deposits or for loans, these will be, as in all free markets, COMPETITIVE.
There will be “order” – without any “design” to that order.
And it follows that if there is CHAOS today – it is only on account of this DESIGNER.
Let us now proceed to the issues raised in the Quick Edit in my Daily Business Noose of today – about “better policing” of URBAN AREAS and all that.
Once we have found Legislationism as the “Source of the Highest Degree of Disorder” – utilising not just epistemology, praxeological theory, but also History to arrive at this conclusion; a conclusion we have “proved-beyond-doubt” in the case of ECONOMIC CHAOS – then, the case for Justice-for-All on the basis of the very same Eternal Laws that were “found and not made” is rendered even stronger, particularly in India, given the Historical Fact that the Honourable East India Company managed perfectly fine for centuries WITHOUT any POLICE FORCE to back its “civil government” – which is how Londoners, and the rest of Merrie Olde England, managed as well then – the Indian Police Act of 1861 and the Indian Penal Code of 1863 both being Acts of Crown-in-Parliament – then the inescapable conclusion we must arrive at is the very same as that which we have arrived at in the case of ECONOMIC CHAOS:
ABOLISH the Indian Police!
ABOLISH ALL LEGISLATION!
Including the Arms Act!
I do not wish to repeat arguments presented already – all in very recent posts – but one particular post of quite-some-time-ago that my reader shall surely find “interesting” is this one: “The King is Dead! Long Live the Market! Memories of Amsterdam.”
In conclusion, all I wish to ADD to previous discussions on these matters is the following:
REASON – embedded in the “logical categories of the trading human mind” – gives us a “sense of economic gain” – which is why we prefer all these “consensual trades” based on “indirect exchange” involving “media of exchange” that have also EVOLVED – “gained currency” – these “consensual trades” are the CAUSE as well as the SOURCE OF ORDER.
These “laws of thought” propel our “actions” – towards JUSTICE!
All Justice lies in “consensual trades.”
And all laws are nothing but the Eternal Ones: Property, Contracts, and Torts.
In any such “private law society” each and every “legal dispute” that comes before any “learned and impartial judge” – and such judges most definitely need not be a State Monopoly; they need not be bureaucRAT-judges at all; which means that they must COMPETE within an overall Enterprise of Law – will be “judged on its individual merits.”
Justice – it must be MINUTE.
As in taking a magnifying glass to pore over each and every separate dispute.
The Happy Tidings I wish to bear on this Happy Day – in the Hope of a Happy Future ahead – is that when all consensual trades are Free, ex ante Justice will prevail, there will be close-to-zero legal disputes, and the Natural Order will rule. All the “good things” will happen.
Some Last Thoughts – since we are discussing URBANISATION:
We cannot predict – hence we cannot “design” – the overall “pattern” of human settlements across a vast sub-continent.
Let us therefore leave this to LOCAL KNOWLEDGE, LOCAL CAPITAL, LOCAL CAPITALISTS, LOCAL Property Owners – which is what REPUBLICANISM is all about.
The Ultimate Res Publica – well, it is one of Limitless Diversity Without Unity – it a an Open Society, or a Catallaxy, open to STRANGERS from anywhere and everywhere – which is why the Diversity is Limitless – what is also called COSMOPOLITANISM – and, just as the “cosmos” is one of Individual Stars in an “order without design” – as is Pristine Nature, in fact, if we understand our Darwin – so, too, is the Catallaxy, the vital difference being two-fold:
First: Human trading actions are “purposeful” and involve not only REASON, but also WILL – which is what differentiates humans from the stars of the cosmos, which are “inanimate” and must obey the Laws of Physics; and also separates them from all the other creatures of Nature, whose behavior is “instinctual”;
Second: Catallactic Competition is NOT the Darwinian “survival of the fittest” – on the contrary, it is beneficial-to-all, especially as BUYERS and CONSUMERS – but even for all producers, all that catallactic competition does is best called “grading” – not according to “merit” but according to “consumer choice,” which is why professional sportspersons earn many, many times more than professors! – but also, just as the “best” bottle of wine sells alongside the “worst” plonk, just as the “star” of the stage or the screen performs without destroying either the life or the prospects of crooners in a small, local bars - everyone survives! - not just the "fittest" - because catallactic competition is not a "game" - this very serious "business of life" is NOT a "winner-take-all" kind of GAME at all.
Indeed, these “inequalities” are equally BENEFICIAL – and anyone who “starts small” – as everyone must – with good, hard work, with dedication and perseverance, and with a “little-bit-of-luck” sometimes – can climb to the “dizzying heights” of fame and fortune. Samuel Smiles’ Self-Help tells of hundreds such – in the old days – but even in modern times, whether we look at The Beatles or any of the new billionaires of high-tech – it reveals but the same story that Samuel Smiles told – a subject upon which Peter, Lord Bauer has also written most tellingly, in an essay on Britain today, titled “Class On The Brain.” On himself, in his maiden speech in the House of Lords, he made the proud claim of having risen “from peasant to peer in one generation” – the word “bauer” means “peasant” in many continental languages.
We have a Proud History of New Port Cities on both our coasts – of innumerable “hill stations” as well – of plantations and plantation crops, all “cash crops” – and we have this Very Recent History of their Complete Collapse.
During the Proud History there were some 700 different “sovereign entities” within this sub-continent - the overwhelming majority of them “native” – plus some competing “foreign” ones as well – Portuguese, English, French, and even Danish.
It was an ENORMOUS OVERALL ORDER – without design!
So, “Let History Be Our Guide.”
"The Study of the Past without an Eye on the Future is Impossible – and, if it were Possible, it would be Perverse."
I raise a Toast to the Future.
Down the Hatch!
To which I must add:
So, sheriffs – worldwide – get my drift.
You fuckers better start singin' "Knockin' on heaven's door."
Here's to Civilisation!
No more "political parties"!
And only the kind of PARTIES required for The Pursuit of Happiness!
Such as the Great Symposium Socrates attended!
Beyond the break of dawn!