Showing posts with label 2006. Show all posts
Showing posts with label 2006. Show all posts

Friday, August 16, 2019

Trading Places by Sauvik Chakraverti


A teenage wasteland by Sauvik Chakraverti


Need to de-school society

Need to de-school society by Sauvik Chakraverti

Dr. Parth Shah, president of the Delhi-based Centre for Civil Society in his entertaining critique of Amartya Sen’s stand on government and State as educator of the masses, wrote that a government which cannot be trusted to produce food (by cultivating fields) surely can’t be trusted to produce education, which entails cultivation of minds. That’s why nobody is willing to pay bribes for admission into government schools. Some private schools extract donations and bribes because the licence-permit raj has blocked supply. Unshackle the enterprise of educationists, and there will be enough private education for all.
Socialists like Sen, who plead for a major role for the State or government in education, do so on two grounds: equity and standards. Both pleas are based on false premises. A state that spends hugely on higher education, leaving little for primary schooling, cannot be said to be serving equity. As predicted by public choice theory (which is still not taught at the ‘elite’ Delhi School of Economics), the education budget is hogged by the middle class and the rich, who consume higher education. The poor, whose children need just a little primary education to get going, get naught. So, the equity argument isn’t valid in the current Indian context.
Next we need to address the standardisation argument. Can you imagine anything worse for the minds of children than bureaucrats approving conditions for the promotion of schools and colleges and even universities, mandating courses and syllabuses, listing ‘approved’ textbooks, fixing tuition fees and doing all the other things standardisers advocate? Will this not lead to the politicisation of knowledge? Will we not create an Orwellian ministry of truth? Like ISO certification, the private sector is quite capable of setting standards, as the privately promoted computer education firm NIIT has proved. But NIIT is still not ‘recognised’ by the Central or state governments.
Contrary to official dogma, education is one area in which there should be experimentation. Young people learn music, sports, dance, art, cooking, driving and computers (outside school) from private entrepreneurs. Thus, there is widespread variety and choice and acceptable standards over which both students and parents have control. Therefore there is negligible teacher absenteeism in such courses.
This is the pointer to the future. If, as Rabindranath Tagore had dreamed, India becomes a country “where knowledge is free”, education would be a competitive enterprise over whose products consumers would exercise complete sovereignty. If poor parents want their children to learn English, as in fact most do, competitive entrepreneurs would sell them short courses, as many are already doing. If they seek other kinds of knowledge, the market economy will step in to provide it, either by studentship or apprenticeships. In such a market economy, a child from a poor family can choose a ‘calling’ and obtain knowledge relevant to that vocation. Specialised in this manner — as a beautician or tattoo artist, electrician, mason, plumber, motor mechanic, receptionist, chef or cartoonist — all poor children can seek honest survival in the urban market economy. They can be ‘rationally ignorant’ about everything else.
To understand ‘rational ignorance’, take for example, a musician. If he is adept at playing his chosen musical instrument, he has no need to learn anything else. If he wants a car, engineers build it for him, a chauffeur drives him around, and mechanics keep it in good repair. If he wants a grand house, architects design it for him, masons build it, and interior designers furnish it aesthetically. If he wants gourmet food, he hires a chef. And so on. As far as the musician is concerned, all he knows is how to play one musical instrument well. About everything else, he is rationally ignorant.
The notion of ‘rational ignorance’, which is the key to understanding how free markets use specialised knowledge, implies that children don’t need to spend long and boring years in school that mete out generalised knowledge. Armed with a pocket calculator and only two R’s, children from every household can begin to chase big dreams. We need to de-school society if we truly have the interests of poor children at heart. Instead, we have submitted, without even a murmur of protest, to the education cess: the state as the ‘cultivator of minds’.
A noted philosopher once remarked: “Whoever is the master of education is the master of mankind.” Our socialist state wants to be the master of education as a means to a much more sinister end — control of our minds.
The situation is critical. It demands that parents wake up to their own responsibilities. A video recording of Pink Floyd’s The Wall about how education is ‘thought control’, should be compulsory viewing. As for compulsory reading, I strongly recommend Prof. James Tooley’s The Enterprise of Education, a 38-page booklet from Liberty Institute, New Delhi, which analyses the Indian experience of state controlled education.
(Sauvik Chakraverti is a journalist and author of Antidote: Essays Against the Socialist Indian State, and its sequel, Antidote 2: For Liberal Governance, both published by Macmillan)

Monday, October 11, 2010

DEVIL'S ADVOCATE: Gandhian Violence

DEVIL'S ADVOCATE: Gandhian Violence by Sauvik Chakraverti


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Whereas Gandhi advocated non-violence, his followers have always utilised violence in order to promote their leader's ideas of a good society.

For example, in Gujarat, where Gandhi came from, violence is still used by the police to enforce the prohibition of alcohol.

Gandhi's hatred for alcohol has meant that, all over India, the excise officialdom has obtained political sanction to entangle the retail trade in alcoholic beverages in a labyrinth of red tape, all of which is enforced with violence.

Then there are the ideas of khadi and swadeshi. Gandhi's preference for homespun cloth meant that the government used violence and force in order to promote one kind of cloth at the expense of another.

India's blooming textile industry was made into a bonsai using state violence. As far as swadeshi is concerned, the customs department enforces this idea of autarky.

If any citizen returns from abroad with goodies and gadgets, these armed personnel of the Gandhian government use force and violence in order to deprive the citizen of his rightfully acquired properties, or to charge him a hefty fine if he wants to take them home.

An enormous amount of violence continues to be perpetrated in order to promote Gandhian ideals. This very Gandhian violence is best exemplified by the currency note, which has Gandhi's photo on it.

Even up to fairly recent times, eminent businessmen became victims of violence on the part of an enforcement directorate empowered to ensure that these notes of the Gandhian government could not be privately converted. Gandhian violence is a very real phenomenon.

It exists because Gandhians have never understood the purpose for which a government is constituted. To Gandhians, and this includes all Congressmen, government exists to do 'good things'.

This fatal flaw in their thinking occurs because their master didn't realise that any government is but a monopolist in the use of legitimate force, and that the crucial question political science must answer is to what ends this legitimate violence must be used if it is to remain legitimate.

Since Gandhi and the Gandhians never considered this question, they continue to use violence towards illegitimate ends. Gandhianism lies at the root of bad government.

Monday, June 7, 2010

Forget the WTO; Concentrate on Trade

Forget the WTO; Concentrate on Trade By Sauvik Chakraverti - January 12, 2006 12:00 AM

The failure of WTO talks in Hong Kong wasn't difficult to predict. It has been obvious for some time that vested interests have hijacked the original agenda. Instead of free trade, influential voices are promoting a different message: poorer WTO members should seek to export everything, but import nothing.

In the face of such a bald illogic, perhaps we should reiterate a simple fact: just as we produce in order to consume, so we export in order to import. And just as consumption is the most important aspect of our visit to the market, so imports are the most important part of international trade.

Developing countries, led by India, whose people are poor in part because they have been unable to import for decades, are waiting for EU concessions on agriculture before allow them to open their markets. Many have criticized the EU's intransigence on the issue. And they should. But many others, quite rightly, have asked developing nations to look at Hong Kong's example of unilateral free trade and draw important lessons from it. Indeed, developing countries like India should proceed forthwith to free trade unilaterally -- even if the US and EU continue with protectionism and subsidy of agriculture.

Unilateral free trade is a very good idea for a huge country such as India. If subsidized grain enters the market, poor marginal farmers, subsistence agriculturists and day laborers get cheap food. They will move away from subsistence farming as grain will be cheaper to buy in the market. They will move 'from subsistence to exchange', in Peter Bauer's words, and integrate themselves with the urban exchange economy. Instead of grain, Indian farmers will produce fruits and vegetables or even flowers -- solid cash crops. And this benefit will be paid for by US and EU taxpayers.

Indian farmers are also consumers. Farmers should look not only at what crop they will sow or where they will sell it, but also at the more important question of what they will buy with their money. The personal possessions of every poor Indian will record a quantum jump -- and this is the only true measure of the 'wealth of nations'.

People trade, not nations

So why is this so difficult to understand? On a simple level, trade talks of any kind -- multilateral or bilateral -- are doomed to failure because they occur between nations, while it is individuals who actually trade in the market. When individuals trade "reciprocity'" is meaningless. We never make it a point to buy from those who buy from us. A butcher does not go to the tailor who buys his cuts. He simply sells his cuts and goes to the best tailor that his money can buy. Buying and selling are independent decisions, and we seek benefit in both -- but separately. When reciprocity does not exist between individuals, what hope can there be to find it between nations?

In view of this argument -- and the dismal hijacking of the WTO by other political interests -- one is tempted to propose a radical solution: the WTO should be abandoned altogether. Nations and their governments will only get in the way of trade and cause economic losses all around. Each privilege they grant a few producers will in turn be a punishment that will rain down on the majority of consumers. If India opens up its borders to trade unilaterally, the developed world will benefit too, and the global recession that looms will have a softer impact when it arrives. Thus, the entire world stands to gain if more poor nations adopt free trade unilaterally

Indians should see their 2000-mile long coastline as a huge, unutilized economic asset. With free trade, great trading cities will mushroom all along the twin coastlines. Both Hong Kong and Singapore prospered because of their harbors. In China, it is the coast that is taking the lead. The same will happen to India if trade is made freer.

Fifteen years of 'liberalization' have convinced Indians of the need for free markets. Those who want free trade are upset that WTO talks are stuck. They have long endured protectionism at the hands of the Indian state. To these people, my message is: don't expect free trade as a result of government initiative. The government will only try to sell favors and Indian businessmen are notorious favor-seekers. Call for free trade as a removal of all state interference in the global market. That is, call for unilateral free trade. The rest will fail to follow at their own peril.

Sauvik Chakraverti is a journalist based at the Centre for Civil Society in New Delhi He is author ofArticles Against the Indian Socialist State and For Liberal Governance.

The Illiberal Democracy of India

The Illiberal Democracy of India By Sauvik Chakraverti - February 27, 2006 12:00 AM

Indians often boast that theirs is "the world's largest democracy", but electoral politics in India offers the voter surprisingly little choice. The Indian voter can choose between the socialist, dynastic Congress party; the Hindu nationalist BJP; and the Communists. Tweedledee, tweedledum and tweedledumber. None of these parties is liberal in a free market sense. Currently, voters are stuck with the Congress party, which is stuck with Communists in a coalition.

At the last election, neither Manmohan Singh, the current prime minister, nor Sonia Gandhi, currently head of the Congress party, could generate a clear majority. As a result, the Congress is in office only with support from India's Communists. This support has meant that every liberal policy option is vetoed by the Communists, who decry the "crisis of bourgeois rule" in India.

But there is something more fundamentally illiberal in India's democracy than the current parliamentary arrangement. Indian liberals are legally barred from forming parties and contesting elections, because legislation has decreed that all "recognized" parties must swear by India's socialist constitution. This is reflected in legislation and has enormous consequences for the quality of electoral politics in India.

Take the current situation: in all other ways, the situation is ripe for a liberal, pro-market party. In the past 15 years the ordinary Indian has seen ample evidence of the benevolence of market forces and the malevolence of statism. For example, long distance phone charges have plummeted, as have airfares, as private companies have been allowed in. In areas like consumer electronics and automobiles, Indians now have quality, choice and low prices. A newly formed liberal party could have a go at translating this positive experience into electoral victory, if given a chance, and could thereby free the rest of the economy. But this would require the liberalization of the political sphere, through the repeal of restrictive legislation.

The failure to embrace markets has immediate consequences for social cohesion. As is commonly known, the inability of socialist policies to help the poor in neighbouring Nepal has meant that many have opted for armed insurrection, based on Maoist thinking.

Less well known, in many states of India in dense forests there are alarmingly frequent reports of "Naxalite" activity. The term is used to describe armed revolutionaries who routinely attack and kill police to carry away their guns. As with Peru's misguided Shining Path guerrillas, these rebels need to be weaned away from violence and ultra-left thought by liberals offering them market solutions, like property rights and free trade. If this does not happen soon, social decay will continue.

Liberalism also needs to be allowed to enter the educational system, hitherto exclusively the domain of Marxist professors. Westerners have hailed the current government's stress on education, but the real danger is that this education will consist only of socialist and communist propaganda.

If the political sphere is liberalized, then liberal ideas will float in the open, liberals will be heard, liberal policy options will be mentally weighed by the people -- and then only will the contents of state education be challenged. The liberalization of politics will lead to the liberalization of the mind of the average Indian.

Many years back a group of Mumbai liberals petitioned the courts, challenging the restrictive legislation that reserves India's democracy for the illiberal parties that hold sway today. This has been pending hearing for almost a decade. It is time pressure is built towards securing a speedy hearing of this petition. It is only through liberal politics that India's future can be secured.

Two Indias?

Two Indias? By Sauvik Chakraverti

March 15, 2006 12:00 AM

When in India, President Bush cited a range of initiatives for U.S.-India cooperation and touched on ideals the two nations should seek to work towards. Of course, the President has his own foreign policy goals to pursue and the ideas he described were noble. But he could have been talking about a different country. If we look at Indian foreign policy, its nuclear industry and the weak link between freedom and democracy, we can see how far India must go to match such lofty rhetoric.

Nuclear energy is a state monopoly in India and helping this sector strengthens the Government's hand in power generation. Indians are plagued by power cuts as a result of state intervention in this industry. Further, "safeguards" have little meaning in India where there are no tort laws. If there were a nuclear accident, no Indian would receive compensation. The Bhopal industrial disaster, for example, occurred in the mid-80s. Until now, precious few have received anything. Indians routinely die from building disasters, adulterated food and medicine and the like — but rarely receive any relief from the law of torts.

The President also spoke of cooperation on defense. Once again, this is a fine idea in theory. The President spoke widely of multi-role combat aircraft, helicopter gunships and other high-tech initiatives. The truth is that India's defense establishment is hopelessly corrupt. They continue wars where no wars are necessary. Rajiv Gandhi was charged with receiving kickbacks when Swedish Bofors guns were purchased for the Indian army. Recently, India's Defense Minister was implicated in a shameful scandal, when it was discovered that kickbacks were paid for purchases of U.S. coffins for soldiers killed in the Kargil war.

As far as the senselessness of India's security establishment is concerned, the 25-year-old war with Pakistan on the frozen wastes of the Siachen glacier is a good example. I was close to Siachen once: it was -40 degrees Celcius in the sun! If we auctioned off the entire area, no one would offer a penny for it. But India has been spending over 300 million rupees every day for over 25 years in this senseless war. When the war began, we were informed that the 'strategic' goal was to command the heights dominating the proposed Karakoram highway. (William Dalrymple's In Xanadu recounts his travel from Pakistan to China by bus over the Karakoram highway 10 years ago.) India would do better to build its own highway in the region than fight this war, but it may be that the defense establishment is merely interested in budgets, rather than any serious security concerns.

After all, over a million Indians are killed every year on the unsafe streets of India and millions more are seriously injured. Thus, the 'security' concerns of the Indian citizen are very different from those of the Indian state.

President Bush's speech in New Delhi spoke of the link between 'democracy' and 'freedom'. Again, these are laudable ideas. Yet, despite India being a democratic nation, the Economic Freedom of the World Index rates India close to the bottom and the U.S. close to the top. The title of Deepak Lal's book on India,A Repressed Economy, says it all. Indians were freer under feudal lords and even the colonial Brits than they are today. Feudal lords routinely fell in love with dancing girls; but dancing girls have been outlawed by legislative fiat today. Democracy and freedom doesn't always go hand in hand, and nowhere is this truer than in contemporary India.

Free trade between the people of India and the people of America is desperately important for average Indians. Indians would benefit from buying used cars, buses and trucks. Indeed, Indians would even buy insurance write-offs, which could be cheaply repaired in India. Americans would benefit from better prices for their old cars, and lower insurance costs as well. Taking the point further, Indians would also buy used refrigerators and television sets. Cheap American wine would also be a big hit, and yield public health benefits, for Indians are killing themselves with the hard liquor they are forced to drink today. There are a host of trading gains to be made, for the benefit of both ordinary Indians as well as ordinary Americans, which citizens on both sides are being denied. Instead, the corrupt and repressive socialist-communist Indian establishment — and its powerful bureaucratic elite — remain as strong as ever.

Wednesday, July 1, 2009

The flavour of freedom

The flavour of freedom by Sauvik Chakraverti

28 Jan 2006, 0000 hrs IST, The Times of India

Journalists are the first to defend the 'freedom of expression'. However, in reality, this is a completely meaningless right. Private property rights alone enable the freedom of expression.

Where these rights are non-existent, or flouted by the authorities, the freedom of expression disappears. To begin, let us take an example from my own life as a journalist. A newspaper just rejected one of my articles.

Can I complain that my freedom of expression has been violated? Certainly not! My freedom ends where someone else's property begins. The newspaper is the private property of its proprietor; the editor is his appointee.

They must be free to publish what they like on their property. However, this does not leave me 'unfree' or 'victimised'. Rather, I have the freedom to send my article to other newspapers, whose editors may take a different view.

If my article is still rejected, I could try to install it in the blogosphere. It is the existence of all these little, little pieces of private property that enable me to enjoy my 'freedom of expression'.


If all these private properties had not existed, and we had a monolithic state media, millions would find themselves with no freedom to express themselves, despite any 'right' granted by law.

Thus, journalists should not fight for the freedom of expression; rather, they should fight for private property rights. There is a lot at stake, especially if you value liberty.

I am upset at the manner in which the dancing girls of Bombay have had their freedom of expression violated by the legislators of Mumbai.

As one who enjoyed many an evening in these establishments, my mind can instantly conjure up the horrifying picture of hundreds of thousands of musicians, crooners, waiters, bouncers, cooks and bartenders losing their livelihood and, along with the dancing ladies, hitting the streets in order to survive.

Again, we must see that the only cure lies in private property rights being inviolable by the state. Thus, every dance bar is the private property of its owner or lessee with 'rights of admission reserved'.


Under the common law, even the king cannot violate the private property of an Englishman. Private property rights are a protection against the sovereign and his officials.

Each of these private properties is a sanctuary maintained by the owner where many a flower can bloom. The owners of these bars need to focus on the loss of their private property rights and secure them and that is the only way to secure the 'freedom of expression' of the dancers.

These swinging ladies, it must also be noted, are the owners of their own bodies and must be free to do what they like with their bodies within the 'private law' system operated by the proprietor of the establishment.

The audience, who have tickets, possess temporary property rights to be where they are. My reader can now sit back and dream of the limitless world of 'expression' that will open up if the state is kept out of private property.

We can have cabarets that challenge the Moulin Rouge. We can have XXX movie theatres for the sex-crazed. We can have access to all kinds of 'adult' literature andmagazines that are still banned in the Internet age.


Indians who want to model nude in any of these magazines will only have 'freedom of expression' if property rights are respected of the model, the studio, the photographer, the publisher and, finally, the magazine vendor.

Private property rights are not only the secret to discovering the 'mystery of capital', they are the key to liberty itself. People who believe in liberty do not succumb to the seductive lure of collectives.

To them, there is nothing called 'we': no nation, no society, no commune. There is only I, me, myself. I must be protected, along with my liberties and properties.

That is, for libertarians, the only true purpose of both the law and the state: To preserve and protect individual rights and individual liberty.

The state violates private property rights, as with nationalisation and taxation — it only plunders. We need to strengthen private property rights. Therein lies capitalism and liberty.

The writer is an economist.

Wednesday, June 17, 2009

Go to Pot

Go to Pot by Sauvik Chakraverti 

20 Jan 2006, 0000 hrs IST, 

Devprayag lies north of Haridwar and Rishikesh, and the great thing about the place is that there are no pilgrims at all. But it must be an even holier place, because here the Alaknanda and Bhagirathi meet, and it is only thereafter that the river assumes the name Ganga.

At the confluence, I was met by a solitary priest. He asked me if I wanted to offer a puja, and I agreed. I tossed some grains of rice and some flower petals into the Ganga and said some mantras.

I then paid the priest some money. That is when I decided to perform 'an experiment with truth': I inquired of the priest: "Panditji, main is pavitra sthaan mein ek chillum peena chahta hoon.

Aap kuch intezaam kar saktay hain?" Translated: "Respected priest, I would like to smoke a chillum at this sacred spot.

Can you make the necessary arrangements, please?" The priest immediately turned to some caves higher up the mountain slope and shouted, "Bhoothnath! Oi Bhoothnath!" Soon a tall sadhu with dreadlocks emerged.


The priest told him to get me the needful and within no time Bhoothnath and I were blowing chillum after chillum at the extremely sacred spot. The priest kept sitting by himself in peaceful contemplation while Bhoothnath and I smoked.

The point is this: Cannabis has always been an integral part of our culture, unlike alcohol. If I had decided to open a bottle of beer at the confluence, no doubt the priest would have thrown both me and the bottle into the Ganga.

There are no words for "Cheers" in any Indian language. There are a thousand salutations to Shiva used when lighting a chillum.

It is a shame that our democratically elected legislators have outlawed the one way of getting high we can truly call Indian. It starkly demonstrates the break between state and civil society.

It is as absurd as the German parliament passing legislation outlawing beer. Cannabis is non-addictive, unlike tobacco or alcohol. Making it illegal is absurd.

So let us all call for a repeal of this repressive, unrepresentative legislation that assaults our own culture. Branded cannabis will deliver better quality than what is available underground. And tourism will hit the roof.

http://timesofindia.indiatimes.com/articleshow/msid-1378353,flstry-1.cms

Friday, May 29, 2009

Market Justice

Market Justice by Sauvik Chakraverti 

7 Apr 2006, 0000 hrs IST, 

The gross miscarriage of justice in the Jessica Lal case is symptomatic of the fact that Indian socialists have an extremely warped notion of the role of the state.

To liberals, the only role of the state in a free society is to go after the bad guys. Our socialists have allowed the criminal justice system to go to seed because to them this was never the most important aspect of the state's functions.

Unlike the state, the market is deeply interested in keeping us alive. The biggest firms in any market economy are insurance companies and they want their clients to live long and keep paying their premia.

These big firms can effectively substitute the state's justice system. Insurers today protect us from fire, theft, accidents, natural disasters and the like. To this must be added aggression.

If we pay premia for aggression insurance, we will be much more secure. How would a case like the murder of Jessica be handled then? Under free-market capitalism, Tamarind Court would not be an 'unlicenced' bar: There would be no licences at all.

Thus, the Ramanis would insure their premises, and the insurance company would insist they hire a good agency for private security. These private guards would ensure that a man with a gun is denied entry.

Whereas the police only reacts after a crime is committed, with insurance there would be a great deal of crime prevention.

If an armed assailant still obtained entry, and then murdered someone, these guards would be responsible for apprehending the assailant and handing him over to the insurance company.

The insurance company would first pay the family of the victim to the extent of the full sum assured. It would also pay the owners of Tamarind Court.

Then, it would exercise its rights of subrogation and make monetary demands on both the assailant as well as the private defence agency that failed to keep the premises secure.

These cases would be brought before a private arbitration agency, whose decision would be binding. The assailant would have to pay a lot of money to the insurance company, the victim's family and her employers.

Instead of the state meting out 'punishment' in the name of 'society', this would be 'justice' to the actual 'victims' of the tragedy. 

Sunday, April 26, 2009

The realpolitik of India’s ‘new deal’

The realpolitik of India’s ‘new deal’ by Sauvik Chakraverti 

Posted: 2006-07-12 00:00:00+05:30 IST
Updated: Jul 12, 2006 at 0000 hrs IST

Instead of discussing Professor Moriarty’s nonsensical economics on “employment guarantees”, we should consider what the true purpose of this massive expenditure really is. After all, Professor Moriarty is no fool. In this connection, it is useful to look back at when the socialists running France in Bastiat’s time (1840s) established national workshops to enforce the “right to work”.

What kind of “right” is that, anyway? Work is disutility. Workers need “rights” to the fruits of their labour—which free trade alone can deliver. Further, anyone who signs a contract to work has an “obligation” to work, while it is his employer who has a “right” to make the worker perform as per contract.

The proliferation of useless rights, including “human rights,” is a marked feature of socialism. These rights are supposedly legal entitlements to things that the state must provide. In this connection, Anthony de Jasay’s Before Resorting to Politics makes a useful read, for it establishes the case for “liberties” as against “rights.” With liberties we are free to achieve our individual ends, requiring nothing from the state via “politics.” The politicisation of life, especially economic life, will cease. Jasay’s little book offers the world the pathway to total freedom, ridding us of that great curse, politics, in which Professor Moriarty excels.

When I compiled a collection of Bastiat’s best essays, I invited Professor Detmar Doering to contribute a foreword. In that foreword there is this nugget about socialist France: “Among the things that went wrong was the establishment of state-run “national workshops” to enforce the “right to work.” These never really served their purpose, nor were they intended to do so. Rather, they allowed the socialists to organise support on the streets to threaten dissenting voices with violence.”

This indeed must be the true purpose of Professor Moriarty’s scheme. To understand how “politics” in India works, and how far removed it is from the “politics of the polis” Aristotle wrote of, I recount the story of a visit I once paid to Jaipur. I had to deliver two lectures there, but a problem cropped up because the then prime minister of India, Atal Behari Vajpayee, also arrived in the city to address a “political rally.” Because of this event, it was difficult for me to reach the venue of my second lecture; further, many prominent citizens who were supposed to show up could not do so.

Hundreds of trucks and buses poured into Jaipur from the surrounds carrying Vajpayee’s supporters into the city. This huge assemblage of rural folk into cities in order to demonstrate political strength is a marked feature of India’s “politics”: rent-a-crowd. In Jaipur that day, the citizenry stayed put in their homes, and the streets were deserted. As Professor Parth J. Shah remarked, “it seems like Chenghiz Khan is in town.” Indian “politics”, “democracy” and “government” are very far removed from the Picket Fences of republican USA.

 

 The Congress party has always bought support from individuals and groups
 Its ‘politics’ is based on ‘social justice’ and all kinds of ideological nonsense
 Not only the ‘cost’ but also the ‘opportunity cost’ of such politics must be noted

 

Indeed, the curse of “politics” combined with “socialism” and “democracy”, based on the evil “ethic” (sic) of “redistribution,” has made the Indian state a purely clientelistic affair. The Congress Party, which ruled India almost uninterruptedly since independence, has done so by buying support from individuals and groups, thereby converting the “ship of state” into a “pirate ship.”

(Even I was once propositioned by the head of the Indian Council for Social Science Research: “How can we co-opt you?” An indecent proposal, if ever there was one.)

The Congress flag, which became the Indian flag, should be looked upon as “skull and crossbones”: the pirate’s flag. This flag started flying high after the introduction of “democracy” in local government by the British in 1919. One of the subjects transferred to the democratically elected thn was “education.” Philip Mason’s excellent book The Men Who Ruled India (in British times) says that the district collector felt his authority violated when the Congress flag flew atop the local schools. Professor Moriarty made his entry then, and he is still very keen on “educating” Indians: behold the “education cess.”

Thanks to this Congress “politics,” based on “social justice” and every other kind of ideological nonsense, every Indian city lost its civic character, and hoodlums ruled the streets. When Indira Gandhi was assassinated, Congress hoodlums took over Delhi and killed thousands of innocent Sikhs in revenge. It can therefore be easily concluded that the “realpolitik” of Professor Moriarty’s “employment guarantee scheme” is actually to hire more hoodlums in the cities.

I conclude this essay by offering some idea of the cost of this bizarre, horrendous, corrupt and nonsensical politics in this miserably poor country. In the latest budget, the total amount of resources allocated under social welfare and subsidies amounted to 1 trillion (or 1 lakh crore) rupees: this is the equivalent of spending 1,40,000 rupees per day, every day, since the birth of Jesus Christ. This, while the per capita income barely touches 10,000 rupees.

The opportunity cost must also be noted, for this politics is the reason why there are no roads in India. We Indians can’t sing “Hit the road, Jack” to the politicians who practice this politics, (though we would like to), for there is no road for them to hit! They campaign in rural India in helicopters. Professor Moriarty runs public enterprise (and doggedly refuses to privatise) in a planned economy devoid of public goods!

Holmes once said, “Rule out the impossible; whatever remains, however improbable, is the truth.” The truth is that this is a predatory state. It must follow that no parent should allow his child to be educated by Professor Moriarty.

(To those who never read Arthur Conan Doyle: Professor Moriarty was the biggest enemy of Sherlock Holmes.)

The writer, a former police officer, is the author of Antidote: Essays Against the Socialist Indian State , and its sequel, Antidote 2: For Liberal Governance, Macmillan India.

http://www.financialexpress.com/news/the-realpolitik-of-indias-new-deal/170815/0

Wednesday, January 14, 2009

Company towns

Company towns by Sauvik Chakraverti 

Date:Aug 21, 2006; Section:Editorial; Page Number:18  The Times of India 

The UPA government’s clearance to private firms for the setting up of over 100 Special Economic Zones (SEZs) has raised loud objections from those who are otherwise defenders of free markets. Noted columnist Swaminathan Aiyar warned that this is a “real estate scam” in the making. A lead editorial in The Times of India echoed his view.

    It is easy to surmise that the transfer of land to these private parties will involve corruption. Each SEZ requires between 25,000-35,000 acres of land. Since they are not buying this land outright, but getting it via the state, politicoadministrative corruption must be expected. However, this is in the nature of a onetime pay-off. That is the full extent of the “scam”. Thereafter, each of these private parties will own vast stretches of land that will have to be developed by them and converted into real estate. They will all have to then compete for buyers. Indian society will have much to gain when this happens.

    There will be an additional 100-plus new cities and towns where Indians can choose to live. These private developers have to mandate only 25 per cent of the land for export-processing purposes. The rest of the land can be developed for the market: Housing, shopping, schools, parks etc. Citizens who choose to shift to any of these areas will definitely be able to find a better quality of life than they do in present-day urban India.

    What is important for the future is that these SEZs remain full-fledged “company towns”, maintained and administered by their developers/promoters, with neither “democracy” nor “bureaucracy” having any say in their internal affairs. Without any “elections”, without the IAS-IPS combo, these 100-plus new towns will mimic the “princely states” of British India: Areas where “sovereignty” is local, while the “suzerainty” of the “paramount power”, the Centre, is formally observed. There were over 600 “princely states”: We can have thousands of such “company towns”.

    There will be a gradual decline of India’s “metro” cities, as more and more people “vote with their feet” and shift to these attractive and functional new towns. This is what happened to Murshidabad, the Nawab of Bengal’s capital, when the Brits built Calcutta. There will be a huge opening up of urban space, with vastly improved choices, and the “government cities” of today will face an exodus. The new “company towns” will blossom.

    It is, therefore, important to view these SEZs as purely real estate projects instead of export processing zones. Only mercantilists see economic advantage in promoting exports. Real economists see economic gain in two-way trade, with imports mattering more than exports. There is thus nothing to gain by treating exports favourably. On the other hand, there is a lot to gain from quality real estate development on a massive scale which is really where the private players intend to make their money.

    It is the government’s intentions and motives that are questionable, not those of the private developers. If there is a “scam”, then the needle of suspicion should point to the politico-administrative apparatus of the state. The private players should be deemed innocent of any ulterior motive. As with all competitive businessmen, they can only gain by serving their customers better.

    Two points need attention. First, there is no reason why FDI in real estate should not be invited in at this stage. Real estate development is an industry in its infancy in India, with little expertise, and not too deep pockets. Everybody from ITC to Manikchand (of “gutka” fame) is in the real estate business. If people like Donald Trump, for example, could invest here, there would be better choice, and consumer interests would be better served. There would be added competition in the market for buying vacant land too, leading to better prices for those selling land.

    Second, the state’s misuse of “eminent domain” must end. Even firms like Infosys have acquired land via the state. Eminent domain should not be used to give land for private purposes; its use should be restricted to “public goods” like public thoroughfares and parks. “Land acquisition” by the state for private businesses, for private mining, for private toll highways and the like should end.

The writer is an economist.

 

http://www.karmayog.org/library/html/libraryofarticles_815.htm

Tuesday, December 30, 2008

False Currency

False Currency by Sauvik Chakraverti

3 Mar 2006, 0000 hrs IST,

When a bad king of yore 'debased' his currency by mixing some 'base' metal with the gold in his coins, he and the officials of his royal mint acted as counterfeiters. 

The 'false' coins were then used to take over 'real' properties of his subjects, and finance his banquets, palaces and wars. The same is done with currency notes by modern-day governments, but the process is far more insidious. 

A currency note is, in truth, a 'property title': The note is supposed to entitle the note-holder to obtain, from the issuer of the note, on demand, 'real' money in exchange for the note. 

However, each and every central bank in the modern world issues notes that are irredeemable. Even the 'mighty' US dollar is not convertible into anything. 

Thus, all the governments of the world today use 'false' money to take over 'real' resources. In effect, then, all the governments in the world are guilty of acting in the manner of counterfeiters. 

All the currency notes issued in the world today are 'property titles without property'. As this false money pervades the global market, the rich get richer while the poor get poorer. 

The immediate effect of currency debasement is that those who first get to use the 'new money' buy up resources at current prices. 

First users of the 'new money' are politicians, bureaucrats, government contractors and those 'crony' businessmen who get generous loans from banks. Those who lose most are those who get to use the notes last: The poor, and those who save. 

There is thus a 'transfer of wealth' from the poor to the rich, and from creditors to debtors, due to the step-by-step process of creeping monetary inflation.  

The world economy is headed towards a monetary crisis as the lead counterfeiter, the US Fed, becomes unable to cope with its 'twin deficits': A huge fiscal deficit combined with a huge trade deficit. 

This time, the blame should not fall on markets and speculators, the blame should fall squarely on central bankers. As we inch towards global capitalism, we need to ditch the false ideas that created central banking (and the IMF). Then only can a true capitalism arise and leftists be put permanently in their place. 

http://timesofindia.indiatimes.com/articleshow/msid-1435777,flstry-1.cms

Tuesday, November 11, 2008

Need to de-school society

Need to de-school society by Sauvik Chakraverti

Dr. Parth Shah, president of the Delhi-based Centre for Civil Society in his entertaining critique of Amartya Sen’s stand on government and State as educator of the masses, wrote that a government which cannot be trusted to produce food (by cultivating fields) surely can’t be trusted to produce education, which entails cultivation of minds. That’s why nobody is willing to pay bribes for admission into government schools. Some private schools extract donations and bribes because the licence-permit raj has blocked supply. Unshackle the enterprise of educationists, and there will be enough private education for all.

Socialists like Sen, who plead for a major role for the State or government in education, do so on two grounds: equity and standards. Both pleas are based on false premises. A state that spends hugely on higher education, leaving little for primary schooling, cannot be said to be serving equity. As predicted by public choice theory (which is still not taught at the ‘elite’ Delhi School of Economics), the education budget is hogged by the middle class and the rich, who consume higher education. The poor, whose children need just a little primary education to get going, get naught. So, the equity argument isn’t valid in the current Indian context.

Next we need to address the standardisation argument. Can you imagine anything worse for the minds of children than bureaucrats approving conditions for the promotion of schools and colleges and even univer-sities, mandating courses and syllabuses, listing ‘approved’ textbooks, fixing tuition fees and doing all the other things standardisers advocate? Will this not lead to the politicisation of knowledge? Will we not create an Orwellian ministry of truth? Like ISO certification, the private sector is quite capable of setting standards, as the privately promoted computer education firm NIIT has proved. But NIIT is still not ‘recognised’ by the Central or state governments.

Contrary to official dogma, education is one area in which there should be experimentation. Young people learn music, sports, dance, art, cooking, driving and computers (outside school) from private entrepreneurs. Thus, there is widespread variety and choice and acceptable standards over which both students and parents have control. Therefore there is negligible teacher absenteeism in such courses.

This is the pointer to the future. If, as Rabindranath Tagore had dreamed, India becomes a country "where knowledge is free", education would be a competitive enterprise over whose products consumers would exercise complete sovereignty. If poor parents want their children to learn English, as in fact most do, competitive entrepreneurs would sell them short courses, as many are already doing. If they seek other kinds of knowledge, the market economy will step in to provide it, either by studentship or apprenticeships. In such a market economy, a child from a poor family can choose a ‘calling’ and obtain knowledge relevant to that vocation. Specialised in this manner — as a beautician or tattoo artist, electrician, mason, plumber, motor mechanic, receptionist, chef or cartoonist — all poor children can seek honest survival in the urban market economy. They can be ‘rationally ignorant’ about everything else.

To understand ‘rational ignorance’, take for example, a musician. If he is adept at playing his chosen musical instrument, he has no need to learn anything else. If he wants a car, engineers build it for him, a chauffeur drives him around, and mechanics keep it in good repair. If he wants a grand house, architects design it for him, masons build it, and interior designers furnish it aesthetically. If he wants gourmet food, he hires a chef. And so on. As far as the musician is concerned, all he knows is how to play one musical instrument well. About everything else, he is rationally ignorant.

The notion of ‘rational ignorance’, which is the key to understanding how free markets use specialised knowledge, implies that children don’t need to spend long and boring years in school that mete out generalised knowledge. Armed with a pocket calculator and only two R’s, children from every household can begin to chase big dreams. We need to de-school society if we truly have the interests of poor children at heart. Instead, we have submitted, without even a murmur of protest, to the education cess: the state as the ‘cultivator of minds’.

A noted philosopher once remarked: "Whoever is the master of education is the master of mankind." Our socialist state wants to be the master of education as a means to a much more sinister end — control of our minds.

The situation is critical. It demands that parents wake up to their own responsibilities. A video recording of Pink Floyd’s The Wall about how education is ‘thought control’, should be compulsory viewing. As for compulsory reading, I strongly recommend Prof. James Tooley’s The Enterprise of Education, a 38-page booklet from Liberty Institute, New Delhi, which analyses the Indian experience of state controlled education.

(Sauvik Chakraverti is a journalist and author of Antidote: Essays Against the Socialist Indian State, and its sequel, Antidote 2: For Liberal Governance, both published by Macmillan)

http://educationworldonline.net/index.php/page-article-choice-more-id-698