On Taxation In This Socialist-Welfarist-Inflationist-Interventionist Democracy – And The Free-Trading, Self-Governing CAPITALIST CITY: Part 1

The reign of Jawaharlal Nehru was called "license-permit-RAID-raj" in full - the RAIDERS referring to his tax collectors. We continue with this EVIL LEGACY - and taxmen raid like bandits (while private properties are not protected). This is precisely the "legal plunder" Bastiat warned socialism is all about - in The Law (1850).

About a century before Bastiat, when "common sense" prevailed, Thomas Paine wrote that taxation is "giving up a portion of one's property to obtain better protection of the rest."

Look around any and every PRIVATE RESIDENTIAL AREA in Delhi and you will find only PRIVATE SECURITY GUARDS performing this task.

Anyway, the "protection of life" surely comes before property - and the INDISPUTABLE FACT remains that over 1000 Indians die every day on our unsafe roads and streets.

Yes, the cops provide VVIPs with security. They "serve" their political masters for political purposes - and they are otherwise "lawless" themselves. There are surely more "encounter killings" (extra-judicial murders) in India every year than actual "convictions" of criminals in courts.

The cops are but an "armed monopoly" - and they can always withdraw their monopoly over armed protection, as during the 1984 massacres of Sikhs in Delhi, or even in Bombay the other year, when a handful of "terrorists" killed more than 200 people over two whole days. Then, newspapers showed pictures of brave citizens throwing stones at these terrorists; and while confirming the death sentence on the only terrorist who survived yesterday, the Supreme Court, as per this report, said referring to TOI senior photographer Shriram Vernekar and Mirror's photo editor Sebastian D'Souza:

"While dealing with the CST carnage, we must take note of two witnesses. Their evidence is extraordinary in that they not only witnessed the incident but also made a visual record of the event by taking pictures of the two killers in action and their victims.

By "taking pictures" the Supreme Court meant what photographers call "shooting." 

Obviously, an armed citizenry would have SHOT ALL OF THEM FULL OF HOLES WITHIN A FEW MINUTES.   

Thus, we in socialist India must think way beyond Thomas Paine's Common Sense - and that is, of "giving up a portion of our Property to a GUN DEALER in order to better protect our lives and properties."

Gun dealers, of course, like the rest of us, pay no taxes.

I call it "Robust Common Sense."

Sign up at Indian For Guns if you agree.




So, why should we pay taxes?

Well, the picture alongside is of the elaborate drainage systems found in Mohenjo-Daro by archaeologists - and, or so I thought, considering how the pot-holed roads of Bombay, Delhi and all the rest flood with every predictable monsoon shower, it might be a very good idea to "give up a portion of one's property" to prevent such flooding. 

It rains in London every single day - save a few sunny days in the summer. 

And Germans are often found complaining that in their country "when it doesn't rain, it snows." 

It pours in Hong Kong real hard regularly - and one travelogue I read said that when the flags go up to indicate typhoons are expected, citizens and tourists are officially advised to "take shelter in the bars." The bars are, of course, ordered to stay open 24-hours, till the typhoon subsides.

But in none of these places do roads flood up, nor do they disintegrate. 

Is paying some sort of tax for such storm-water drainage a good idea? 

Think about it.

The idea is to pay local taxes for local capital investments.

[Note: There are over 60 posts already under the label "Taxation."]





Having covered taxation, let me turn to the Capitalist City:

As I explained in a post some months ago, titled "Politics is 'The Problem' - and The Market is 'The Solution,'" whatever is universally taught under the head "Political Science" is, in reality, 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."

Thus, the institution of the Lord Mayor of the Olde City of London and their "honest civic corporation" is the finest historical example of how a Capitalist City ought to be run. This institution is older than the Magna Carta. This used to be the EPICENTRE of British "John Bull" Capitalism - where not only the Honourable East India Company, but also the Virginia Company (and many, many more) were founded and headquartered. 

This olde city, which used to be another "walled city," measures only One Square Mile - and its boundaries have NOT increased by even a square inch till date - yet, from this tiny area, British "John Bull" Capitalism "conquered the world" (with "merchant ships") and Pax Britannica "ruled the waves." Do read the excellent History of this institution pictured alongside.


In brief:

The title "Lord" was not given to the Mayor by the King. It was given to him by the citizenry - in the 12th century. It was said of these "fierce Londoners" of yore by William, the Norman Conqueror, that "they will have no king other than their Lord Mayor."

The Lord Mayor has never received any salary. On the contrary, his most important public function has been to "astound the King of England with his wealth." Kings were just "warlords" - and they needed taxes. These wealthy merchants astounded not only their king - but foreign merchants as well - by living it up in great splendour during office, by hosting lavish banquets, and also by travelling abroad as the "grandest public functionary in all Europe." All these expenses were met by the Lord Mayor from his own, personal account. Thus, this has never been an "office of profit." On the contrary. So many have refused even when elected that, referring to the very heavy fines imposed on them, it is said, "Mansion House (the official residence) was built for those who wanted to be Lord Mayor out of the pockets of those who did not." Two anecdotes:

In 1415, when young Henry V wanted to battle the French at Agincourt, he had to pawn his jewels with the wealthy London merchants. Thus, at the public function held in the City to wish victory upon him and his longbowmen, the then Lord Mayor was seated immediately to the monarch's right - and from then on, in the official protocol, the Lord Mayor of London is "second only to the King." Another of those "establishments that nations stumble upon, which are indeed the result of human action, but not the execution of any human design."

Second: When Bartholomew Rede was Lord Mayor, the history books record that an Italian approached him at one of his grand banquets offering to sell him a precious gem. But the Italian made the mistake of adding that the King of England could not afford it. Rede bought the stone, ordered his servant to grind it into powder, put the powder into his glass, and pour wine into it - which he knocked back in one great swallow. He then addressed the Italian thus: "Speak honourably of the King of England, for thou hast just seen one of his subjects drink 1000 marks in one quaff."

The governing ethic of this Olde City has always been "mind your own business." Only the Lord Mayor could not do so - for he had to look after public affairs during his tenure in office, which has always been just ONE YEAR. Everyone else had to mind his business. Beggary was DISCOURAGED in the old days, while enterprise was not only free (there being no legislation) it was always encouraged. Of course, there were private charities - and most wealthy merchants bequeathed one-third of their wealth to their City. 

This is GENUINE PHILANTHROPY - and not the "false philanthropy" of socialist welfarism financed through inflationism.

As far as Money & Banking are concerned, the Worshipful Company of Goldsmiths (the first bankers) continue to perform their traditional annual ritual of "Testing the Coinage" - but Lord Mayors no longer attend. The history books tell of many honest goldsmiths of yore who stoutly opposed the founding of the Bank of England and its monopoly over note issue. This was between 1688 and 1690 - so over 150 years before Peel's disastrous Banking Act of 1844, which only worsened matters.

Lord Mayors of London in the old days took the lead in education themselves, with their own money. It was one of them who built the school in Stratford-upon-Avon where Shakespeare would later study. A widow of another Lord Mayor built Radcliffe - the old women's college in America. Another Lord Mayor coined the expression, "The 3 Rs" - referring to Reading, Writing and Arithmetic, which is all that kids had to study then, and thereafter acquire their chosen skills through (paid) apprenticeship with one company or the other. "Children were busy" those days. Contrast this with the following extract from a news report about the latest decision of our socialist Union Cabinet:

"I am very happy that the Cabinet has given its nod to completely ban child labour and is trying to harmonize it with the Right to Education," said National Commission for Protection of Child Rights chairperson Shantha Sinha.

Sudha Shenoy was dead right when she said about poor kids in countries like ours, referring to "life expectancy" in slums: 

"Where life ends early, it must begin early."

Freedom - not this BOGUS EDUCATION.

The INVIOLABILITY OF PROPERTY - and no more of these BOGUS RIGHTS.

Over 50 percent of the residents of Delhi live in slums without property titles. Today, the socialist authorities are talking about "regularising" some 1800 "illegal localities." And I once read that almost 50 percent of the Delhi Budget is spent on "education."

What do we pay taxes for?

 

Since we have already given up on Thomas Paine's Common Sense, preferring the more "robust common sense" of ages past, let us now turn to the Magna Carta of 1215 AD - and what it said about taxation:

Chapter 12 of the Charter declares: “No scutage or aid [taxes] shall be imposed in our kingdom except by the consent of the common council of the kingdom” – which became the rallying cry of democracy: “No taxation without representation”.

   
All Englishmen went about armed then - "dirk in belt," as has been written - and they forced their "unjust ruler" to sign this Charter. They appointed a "Committee of Barons" (24 in all, among whom was William Hardel, then Lord Mayor of London) to "lead the nation in revolt" if the hapless King John failed to keep his promises, as he had solemnly signed.   



We now come to the CRUX of the problem: the word emphasised above:

REPRESENTATION.

What exactly is "representative government"?

They "represent" us and our interests in which areas?

Do they represent the "vast majority"?

Or even "the nation" - as when the new "democratic" heads of India and Pakistan meet?

Did we ask them to "represent" us by being charitable to the poor on our behalf?

Do they "represent us" when they officially state that their purpose is to "transform society" by FORCE - as with Nehru's "socialistic pattern" or with Gandhi's "forced sobriety"?

Does "representation" mean "legislation" - imposing news laws binding on the entire citizenry by FORCE.

[NOTE: Lawyers at the helm. Only lawyers become judges. Only lawyers teach law. And one such socialist lawyer is currently Education Minister!]



Recommended readings:

1. My brief essay on the Lord Mayor of London titled "One Square Mile of Liberty" in this online publication dated 2007.

2. As a study in contrast, this "poison pen" in today's Mint, by a "bureaucrat-professor" from Jawaharlal Nehru University - a "tax parasite" himself, arguing in favour of his ilk, while pretending otherwise.


CONCLUSION:

There is a great difference between the "business of businessmen" - which is "the creation of wealth through consensual trades" - and the "monkey business" of our socialist-welfarist-inflationist The State today, because of whom "real interest rates are negative," and the Government of India's MINT earns (sic) "negative seignorage."

Thus, a "business daily" called Mint ought to undertake a very serious re-think as to what it publishes as "Opinion." 


[Note: You can read Part 2 of this post here.] 

The UGLY "Vote Motive" - Explained With Particular Reference To Socialist, Welfarist, Inflationist, Interventionist, And Protectionist India: Take #7

As the title of the little book by Gordon Tullock pictured above indicates, the author's purpose is to reveal the many dimensions of "self-interested behaviour on the part of State personnel, both elected as well as appointed."

This little book is well over 30 years old now - and is available as a free download here, from the Institute of Economic Affairs, London. The introduction on their website to this latest edition states the following:

In this classic introductory public choice text, Gordon Tullock analyses the motives and activities of politicians, civil servants and voters. Government 'servants' can most likely be assumed to be pursuing their own interests, just like those in the private sector, although, given the coercive power of the state, the effects can be far from benign. The incentive structures present within public institutions mean that government action may well fail to improve economic welfare and frequently has results different from those intended. The application of the 'economic theory of politics' effectively undermines the market failure approach to government policy-making, which relies on the assumption that benevolent and far-sighted governments are capable of clearing up the failings of private markets.

While this very old work looks at Western "liberal democracy" - and I do recommend it to my readers - in this post I will focus on what is really happening in "Socialist, Welfarist, Inflationist, Interventionist, And Protectionist India," widely hailed as the "world's largest democracy," despite the FACT that coercive State interventionism continues in the area of "population control," which means they desire a "smaller democracy."

What is supremely IRONIC is that this coercion is occurring in Kerala - where 100 percent literacy has been achieved long ago, and whose skilled and trained workforce continues to migrate en masse (thereby reducing the population), sending home most of their earnings, upon which the province survives. 

Why is there this mass migration of the young and the skilled from Kerala? Because of communism - and the consequent absence of opportunities to create wealth in The Market. No "economic freedom" - because of their government. 

This only serves to confirm that all the "actions" as well as all the "propaganda" from this The State is aimed at directing public attention to "imaginary problems" - while the real problem is this The State itself, something to which I drew my reader's attention to only yesterday.

The best example, in socialist India, of "self-interested behaviour on the part of State personnel, both elected as well as appointed" is from the area most basic to the usually accepted notions of "legitimate State functions" - and that is the "Providing Speedy Justice" and the "Maintenance of Law and Order."

[The traditional expression, "maintenance of law and order," is based on the PRESUMPTION that the free, market society is already possessed of a "natural order" - and only those who "disturb the peace" should be dealt with by the authorities. Today, with so much interventionist "democratic legislation" outlawing so many consensual trades, another term is used, one that reflects the paradigm shift that has occurred: "Law Enforcement." This term, of course, reveals complete ignorance of the vital difference between "law" and "legislation."]  

First: The central State has employed over 200 battalions of "para-military forces"  - while the Constitution says "Law and Order" is a "State subject."

[In this connection, do read George Reisman's column arguing most persuasively for "Gun Control - On the Government's Guns."]

Second: The inability of the socialist courts system to settle their long-pending caseload, itself caused by interventionist legislation - which increases litigation and disputes, from which lawyers gain. And only lawyers become judges.

We as a nation are suffering precisely from the "highest degree of disorder" that Adam Smith warned of - because of interventionist-legislation.

Which means nothing other than the fact that it is our The State itself that is the problem - as I explained in full yesterday.

Further, in another post, I explained why "Justice, Order, Law, Prosperity, Civilisation, And An 'Open Society' – All Require The Inviolability Of Private Property."

Socialism and communism are about COLLECTIVE PROPERTY.

Capitalism, Liberty, Prosperity and all good things are about Private Property, Individualism, and Individual Rights.

Now, we as a people - over 1 billion strong - face a CHOICE:

On the one hand, we could go on FEARING lawlessness and disorder - and go to this very same our The State to "do something."

In which case, there will soon be 500 battalions of para-military forces in their employ - or even 1000 of them. Very big BUDGET for the bureaucrats.

There will be 100s of more courts established and hundreds of thousands of more judges recruited as well - Big Budget once again.

But the root cause of all this disorder is interventionist-legislation - which comes from this socialist-democratic State.

On the other hand, we could opt for the INVIOLABILITY OF PRIVATE PROPERTY, which results in a "natural order" because it liberates all "consensual trades" from State intervention and coercion. Since all these trades are consensual, this implies there are NO DISPUTES at all. No disputes means ORDER. I have explained it all here.

We could add to these Sound Money and Free Banking based on Property and Contract - which will lead to private capital accumulation, the basis of civilisational progress.

We could add to this the liberty to keep and bear our own firearms - and ourselves SHOOT AND KILL any "terrorists" who might dare to cause trouble in any city or town where everyone is armed.

Remember: This is why the Swiss could stay out of both World Wars, and none dared to invade their territory.

Having said all that, allow me to now turn to what exactly this "world's largest democracy" is all about:

First: Who really elected Manmohan Singh? The people of Assam? Then why has he not bothered to even visit this province now - when there is so much trouble there?

Second: As usual, Parliament is to be disrupted because of the Comptroller & Auditor-General's report on the corruption in the award of coal block to private and public mining firms. So, within Parliament itself, there will be no "debates," no "persuasion" - which means there will be no "politics" either. All that will occur is empty "sloganeering" routed by the media: "sound-bytes."

Third: ALL CORRUPTION that is being reported is only on account of COLLECTIVE PROPERTY - the socialist-communist ideology that The State should own everything, while the people own nothing. The spectrum, coal,  iron ore (a BJP scandal), forests (under the administration of the Supreme Court), Air India, the Electricity Boards, et. al.

Thus, socialism - and the socialist Constitution itself - are part of The Problem.

Democracy ought to mean "we rule oursleves," which ought to mean "liberty," and further, the "diffusion of power" - not its CENTRALISATION.

I will now repeat the anecdote on how schoolkids in a little town in Chikmagalur (a district that one returned Indira Gandhi to Parliament) said they would much rather prefer to elect a good, Mayor for their tiny town in such beautiful natural surroundings - that was a complete SHAMBLES under panchayati raj:

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 other words, we need URBAN LOCAL SELF-GOVERNMENT - that is, REPUBLICANISM. 

Thousands and thousands of free-trading and self-governing cities and towns.

Each running its own affairs, with its own resources.

CIVIC INDEPENDENCE!

  

I will now conclude:

"Socialist, Welfarist, Inflationist, Interventionist, And Protectionist India" is a nation ruled by a centralised State that has an UNLIMITED BUDGET along with an UNLIMITED CONSTITUTION.

This has led to CLIENTELISM.

And to what is best called "clientelistic legitimacy." 

What this term means is that no "functions" are performed - not even "Justice" or "Road Safety," for that matter - and only client after client argues in favour of all they are doing, and even for them doing more!

These clients include:

All the "appointed personnel" - who pursue turf- and budget-maximisation. That is, more legislated powers, and more funds, of course.

As with welfare and the PSUs.

As with the cops and the courts - as just discussed, and I will add more on them below.

As with all the "quasi-federal" State governments, even more dysfunctional, almost all of them broke, requiring funds from the Centre. A bank report that just reached me says, "The consolidated fiscal deficit of India's states increased to 2.7% of GDP in FY10/11 (up from 2.3% average in 2004-08), resulting in a general government budget deficit of 7.6% of GDP."

As with the Armed Forces - for the real dangers to our security and safety lie elsewhere, and their solution does not require any Armed Forces Special Powers Act anywhere, nor any electrified border fences, nor any coast guard to "protect sand," nor new fighter aircraft, either. Read on - and I will explain further.

As with all the "protected domestic manufacturers" - who use the indirect force of the GUNS of the Customs Department to LOOT consumers by keeping out competitors who would serve the masses better. "Competition is Liberty, while the absence of competition is Tyranny," wrote Bastiat. This is not just cronyism; it is far worse - FASCISM.

All this explains why this dysfunctional State requires FORCED MASS MISEDUCATION.

The "education bureaucracy" - and all the "bureaucrat professors" - BLIND students to reality.

And this is why this The State of ours must rely on Goebbels-style PROPAGANDISING - even to their own recruits - and also through manipulating media content and planting their "moles" everywhere in the free press, who masquerade as "journalists."

This further explains why it must go about snooping and spying on the citizenry - and if things continue thus, we will soon be a POLICE STATE.

THE WORST TYRANNY IMAGINABLE! 

Which is precisely where they want to head - what with computerising citizen information and data (on the PRETEXT that this will aid their "phony welfarism"). 

In my book, if a free society, businesses must be able to keep their secrets - which is how Swiss banking succeeded. This means the "Right to Privacy," itself a derivative of Property.

And all "public functionaries" must be open and transparent - without any "official secrets" whatsoever.

Today, socialist demagogues are going on and on misleading the gullible masses about how India will get rich by "bringing back black money stored in Swiss banks." 

The TRUTH is that India will obtain all the Capital in the world in its own banks if they were secret as well - and if the money and banking system was fixed to be honest.

Black money is NOT the problem; rather, the problem is EXPROPRIATIVE TAXATION. This is justified by socialists - but it ends up making the poor poorer, for if the rich can save and invest more, the poor gain. Taxation only goes to all the "tax parasites" of The State.

Thus, all this snooping and spying for some perfectly phony "national security concerns" is best done away with. Just more turf- and budget-maximisation by bureaus and bureaucrats of the Central State. 

The real "security concern" we ALL face is on our horribly unsafe roads and streets, where over 1000 Indians DIE EVERY SINGLE DAY. 

The solution: Privatise all arterial roads and streets, and all highways - and then ensure VICTIMS of road accidents find relief through financial compensation in TORTS.

This is what I THINK.



Feel perfectly free to think for yourself - even to decide to ask this our The State to "do something" or the other to fix something or the other. 

But before you do so, do read my post asking you to BEWARE of such ideas.

Yes, there is this our The State - good-for-nothing, if you ask me.

And there is the OTHER WAY.

Beware! For The HEALTH Of This Dysfunctional Socialist State Lies Precisely In Disorder – In Financial Chaos, Internal Rebellions And Uprisings, In Scaring The People About “Terrorist Threats," External Foes, And In WAR As Well - Because Every “Opinion Maker” Will Then Invariably Ask For These Creators Of Chaos And Disorder To “Do Something.” None Will Insist They STOP Doing ALL They Are Doing – That All Solutions And All Order Require Only That LIBERTY Prevail, Under “Private Law”

The “Economic Miracle” That Is Hong Kong:

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.’”

LAISSEZ FAIRE!

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 Lesson:

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.

RADICAL CHANGE.

As I just said, the Philosophy of Freedom is fully developed today.

We will never "stumble."

We will ROCK STEADY - from here to eternity.

On Justice, Order, Law, Prosperity, Civilisation, And An “Open Society” – and How All Of These Require The Inviolability Of Private Property

Before I begin, let me do a quick recap of points just covered in recent posts:

First, the quote from Adam Smith in which he talks of how Legislatures can cause “the highest degree of disorder.” For my reader’s convenience, the entire quote is pasted below. The earlier post in which this quote appeared is here.

The man of system... seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chessboard. He does not consider that the pieces upon the chessboard have no other principle of motion besides that which the hand impresses upon them; but that, in the great chessboard of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably and the society must be at all times in the highest degree of disorder.

Second, my post of yesterday titled “Why Rape Is Universally Condemned, And What This Universal Condemnation Of Rape Implies Towards A Correct Understanding Of "True Justice" - or Why Socialist Constitutions, Socialist Supreme Courts, Socialist Legislatures, Socialist Lawyers, Their Bar Councils, And Their Monopoly Over Legal Education Deserve The Very Same UNIVERSAL CONDEMNATION."

I will now continue on this theme:

Justice is “an attribute of individual conduct.” It is NOT something that comes from The State or any government; on the contrary, a system of justice exists only to ensure that whenever unjust actions are committed by any individual upon another, the victim is duly compensated. So, when a “wrong is righted,” Justice is done. This means “restitution” – not “retribution.”

The FACT that most people act justly is clearly evidenced in each and every overcrowded, bustling bazaar throughout India, where the unlettered throng to buy and sell millions worth of goods every single day without any “crimes” being committed, without any “paperwork,” and without any “policemen” in attendance to “maintain order.”

This “natural order” is PROOF of the fact that Property is a “mental category,” and it is this mental category that gives us all a “sense of justice.”

Thus, every unlettered passer-by recognizes the wares displayed before a street vendor as rightfully belonging to him, and if he desires some portion of these, he must arrive at a consensual exchange of properties.

This is the SOURCE OF ORDER – which is CONSENSUAL TRADES.

The fact that these are consensual means there are NO DISPUTES – which is ORDER.

It becomes obvious that legislative interference in the natural order is the source of “the highest degree of disorder” that Adam Smith wrote of.

The task of the true “social scientist” is not to legislate order to achieve some imagined “perfection”:

"Every collectivist assumes a different source for the collective will, according to his own political, religious and national convictions." Ludwig von Mises, Socialism

On the contrary, the true social scientist is required to merely “articulate” the laws that people are already following, like Property, Contracts, and Torts – which have come from the past, unlike legislation, which is always “new law.”

The laws of Property, Contracts, and Torts are all are being naturally followed – and the true social scientist is one who believes “laws are found, not made.”

I have already discussed Property as a mental category. Contracts are nothing but promises – as with debts. We regularly incur many debts in the market without paperwork – because the trader recognises our “creditworthiness.” To affirm, “One’s word is one’s honour” is very old morality – and it has naturally evolved into written contracts.

Paying compensation for damages accidentally or unintentionally inflicted upon another or his property is natural as well – for example, when a minor road accident occurs, and the fellow who caused it financially compensates his victim. That the assembled inquisitive crowd quickly disappears gives proof of the fact that all thought the act of compensation meant “justice had been done” and a “wrong had been righted.”

This is precisely what a “private law society” is all about.

Justice!

And ORDER.

Property, Contracts and Torts PROTECT individuals and all that is theirs, well into the FUTURE.

This is how the “mystery of capital” is solved.

This is how capital accumulation can go on and on till eternity, upon which civilisational progress depends.

Other extremely important gains for all of humanity that ensue from such a natural and “naturally legal order” are LIBERTY and PROSPERITY FOR ALL.

The inviolability of Property obviously means each is the King of his own Castle; that each farmer is perfectly free to grow whatever he likes on his own field; and that each shopkeeper is free to stock his shop with whatever wares he chooses.

This liberty also implies that each is free to defend himself and what is his from intruders – and if he has posted warnings to such intruders, he will not be liable for damages in torts in case he causes injuries to those who disregard his warnings and trespass.

Further, when each is perfectly free to sell whatever good or service he may choose to, to anyone who will be willing to purchase them voluntarily, then each and every Individual who succeeds in doing so – the chances of success are at their maximum with liberty, of course – will be possessed of the means to demand all other non-competing goods and services on the market. Market demand will be at its peak.

I trust I do not need to elaborate on how sound non-inflationary money will ensure private savings and investments will also be at their peak.

Thus, civilization will proceed at FULL GALLOP from here to eternity.

Before getting into what an “Open Society” is all about, allow me to now digress on some aspects of the mental category of Property in the trading human mind, since these have not been covered in earlier posts.

First: There is a vital difference between the “territoriality” of some animals and this mental category of Property embedded in the “trading human mind” – for the latter gives us all a “sense of gain,” which is why we “cooperate” and specialize in the division of labour, and survive by “serving the needs of others,” our customers.

Thus, we crowd ourselves into cities, we accumulate capital, and we build civilization – while the Alpha Male of any animal species survives in “self-sufficiency” on whatever “prey” may come his way, keeping out all other males of his species. They do not cooperate; we do. Theirs is the “law of the jungle” in which only the fittest survive.

Ours is not “survival of the fittest”; on the contrary, it is the “survival of all.” Market competition does not kill the relatively unfit – so, while the best singers and dancers may earn millions on cinema, television and live concerts, lesser beings can happily survive by performing in small bars, if Liberty prevails, of course.

A second – and very important – fact is that the “sense of gain” we possess is not just of monetary “economic gain”: we sense the gains of market cooperation through voluntary exchange based on specialization in two other ways.

First: We realize that cooperation in markets means we need to labour less individually, as others perform specialised labours for us.

Second, and more importantly: Each individual also realizes he needs less “hard knowledge” to survive.

Thus, a good guitarist in a modern city needs to know nothing else about anything, while a rustic villager requires to know the crops and the seasons, the pests and the predators, the building and repair of hutments, the care of animals and livestock, and so much more.

The more advanced the market economy gets – especially with the “international division of labour” in this modern age of high technology – the less we need to labour individually, and the less hard knowledge each of us needs as well.

It is completely against reason, therefore, that schooling has been regularly extended – from 10 years in the case of the generation preceding mine, to 11 in my case, to 12 years now. It is the “overburdening” of young minds. Anyway, almost everything is quickly forgotten after the examinations. It is but the exploitation of monopoly power by the State’s “education bureaucracy.”

And now, let us discuss the “Open Society.”

A successful market order is based on nothing but RUGGED INDIVIDUALISM, and has nothing to do with “group identities” like a “tribe” wherein each has to follow the orders of a Chief; or any “joint family” in which a Patriarch or Matriarch commands the rest; or a “community” – be that of shared religion, language, or race, led by some Great Leader, a Führer.

In the free market order, each Individual is responsible for his choices – and his gains or losses – to himself. He requires no permissions from anyone - which is precisely what LIBERTY means. 

This is what Modern Capitalism is all about – the highest degree of Liberty, which means “freedom from all coercive acts by one’s fellows.”

“Each man for himself, each man by himself” is the motto of each free citizen of such a city.

This is Individual Rights, Individual Liberties, and Individual Responsibility.

The Great City is “cosmopolitan” – open to the world. This open, voluntary market arena where COMPLETE STRANGERS interact peacefully and gainfully is best termed a CATALLAXY – and I have written a brief column explaining this word and all it implies that I recommend.

Goa, for example, exhibits such characteristics – for they welcome tourists from all over the world. There are Hindus, Christians and Muslims in Goa – and perfect harmony prevails.

Tourism is the WORLD’S BIGGEST INDUSTRY.

And the HAPPIEST one, too.

“The more the merrier” is the motto of such open, cosmopolitan cities. To survive by “serving complete strangers” implies OPENNESS.

Trade and tourism – or internal discord, and external wars. You choose.

But to help you decide for yourself, let me remind you of the socialist-communist motto, “All for One and One for all,” as in the ridiculous assertion that “India is Indira.”

CONgress sycophants went about sloganeering thus during the Emergency: when all the “nationalizations” occurred, while a billion people were PROPERTYLESS; when her State forced sterilization of the citizenry; and when the State Trading Corporation went about purchasing old, imported cars from “diplomats” who were being transferred out, only in order to reap huge profits from rich Indians to whom these old, imported cars would be auctioned. This was the giddy height of TYRANNY as well as STATE SOCIALISM – when the State owned everything, even what it did not own; and when the State ran all businesses, while the people couldn’t. Indira Gandhi grew up on her father’s Discovery of India – a history book.

Let me also add that these “diplomats” – as then, so now – are not “trade ambassadors.” They are all “politicking” – in the pejorative sense of the word. Among them, those days, were the “economist” John Kenneth Galbraith, Kennedy’s Ambassador to Nehru, who abhorred American “affluence” – so he must have loved our poverty.

Galbraith is particularly famous for declaring, “India is a functioning anarchy.” He must have been referring to the State-owned roads, and not to the shackles on each and every economic activity, including especially foreign trade. Imagine calling all-round STATISM "anarchy"? NUTCASE!

About the British High Commission in Delhi, Peter Bauer recounts how a senior British diplomat here, when asked about BR Shenoy, replied that he thought this brave “dissenter” against Nehru’s USSR-style “heavy industrialization under State –ownership” was “MAD.”

Was this the “Cold War” era or what?

Diplomats selling their own used cars to the State Trading Corporation – and not making any “diplomatic efforts” to free foreign trade and open borders!

What will the WTO ever achieve – other than endless “diplomacy” and this kind of “politicking”?

UNILATERAL FREE TRADE is the one and only way out.

Of course, there will be many pseudo-moralists, hypocrites, chauvinists, religious fanatics, and other busybodies who will object and stridently denounce all the diversity an Open and Free Society exhibits.

But in a “private law world” there is no legal coercion they can inflict. In any case, they should not be allowed to do so privately – which is why Liberty must be defended, by the very individuals whose liberties are being threatened.

All I would like to add in conclusion are the following:

Happiness is “subjective.” So MY Favourite Things need not be yours. But Liberty must prevail – and neither of us should be able to impose his preferences upon the other.

It is NO CRIME to injure oneself. To injure others is a Tort, of course.

Judging others based on pseudo-moral grounds is abhorrent – for example, a casino is truly one of the “happiest” places to visit. Here, everyone is happy even when losing money! So whoever insists “gambling is evil and immoral” does not know “the joy of gambling” – or, indeed, that all human choices are, in truth, gambles. More precisely, they are “speculative” – for the future is always uncertain. To opt for a career in medicine, for example, may not end up giving you either happiness or wealth.

The wide diversity and experimentation in lifestyles that occurs in Open Societies are essential for PROGRESS – while regress and stagnation lie in rigid orthodoxies.

Progress lies in EXPERIMENTATION – by PIONEERING INDIVIDUALS, who alter their lifestyles, discard certain traditions, customs and conventions, and adopt others, all because of openness to other cultures and their mores. These individualistic “breaks from tradition” are precisely what cause progress. It is they who are called “unconventional.”

It is exactly to prevent such openness and breaks with traditions that Brahmins forbade Hindus till fairly recently from “crossing the oceans” – and we all look upon this prohibition as RIDICULOUS today.

Similarly, for whatever reasons, the West no longer exhibits “Victorian prudery.”

Morality also EVOLVES – and is another of those institutions of society that are “the product of human action but not human design.” Rigid orthodoxy prevents anything new from happening – which means stagnation and even regression.

The tyrannical and even nonsensical orthodoxies of the Hindu Brahmins of the seventeenth and eighteenth centuries were only challenged by the British – as with suttee – and this led to movements for “Hindu Reform,” beginning with the Brahmo Samaj of Raja Ram Mohun Roy, the acknowledged “Father of Modern India.” A “Prarthana Sabha” soon followed in Maharashtra – a province now headed the other way, for that is what the “politics” of the BJP and the Shiv Sena are all about.

It is well said that the TWO GREATEST TYRANNIES that anyone can impose upon another are:

First: “This is for your own good.”

Second: “I speak in the Name of God.”

Taliban – they just beheaded 17 Afghan civilians, including two women, for dancing and partying, saying this is “immoral.” Will any society they "control" with their extreme and rigid "orthodoxy" ever PROGRESS - or will it REGRESS?

Do read the Babur-Nama to know what a fantastically LIBERAL society existed in Kabul during his years there - the 16th century. Seven languages were spoken - which is "internationalism" - and there were great PARTIES, wines as well as CHARAS were consumed, and poets were specially invited to recite their verse, which were highly appreciated by a "cultured" audience.

And we have the Vatican of old.

Below is a picture of Galileo.

So, THINK!

Which means THINK FOR YOURSELF!