Hobbes' Mistake - The Rational Case For Anarchy by Sauvik Chakraverti

Hobbes' Mistake - TheRational Case For Anarchy by Sauvik Chakraverti

May 27, 2001, 04.32 PM IST

in his classic leviathan, written in 1651, the english political philosopher thomas hobbes established the liberal case for the state. he said that, without the `mortall god' of the state to hold us all in awe, society would disintegrate, there would ensue ``a war of each against all'' and life would be ``nasty, poore, brutish and short''.

Since then, liberals in the west have upheld statism - and have encouraged state-building in the third world. today, it is seen that almost all the states of the third world are predatory states, enemies of the people. they are huge kleptocracies which amass and then misuse economic powers and keep people poor. when libertarians talk of the need to do away with states and statism, we are accused, even by our liberal friends, of being anarchists. how do we defend ourselves from this charge? the fact is: thomas hobbes was wrong. very wrong. the following thought experiment will show how. carry a tray of ripe bananas before a group of monkeys. what will happen? the monkeys will snatch and steal all the bananas: the hobbesian war of each against all.

Now take another tray of ripe bananas and carry them to a place where there are no monkeys but lots of human beings: chandni chowk, connaught place, crawford market... what will happen? no one will steal your bananas. if they want your bananas, humans will politely ask whether you will offer them in exchange for money. homo economicus is a moral creature. because he has the ability to exchange, which the monkey does not, homo economicus does not snatch and steal. he has an inborn morality that respects property rights. in stark contrast, the constitution of india does not recognise property rights! now, hang around in the market a little longer and observe who are the monkeys amongst us. then you will see the policeman extorting goods for free; you will see the municipal functionary preying on urban commerce. these are the cutting-edge personnel of the predatory state. this clearly shows that: 1) the market is a secular basis of human morality; and 2) power corrupts. yet, it is important to note that thomas hobbes was a liberal. in leviathan he does mention that every man would very much prefer to rule himself.

We sacrifice some of our freedoms in exchange for the law and order that the state creates. the original cover illustration of leviathan shows a huge king-like figure wielding a massive sword. a little careful examination reveals that the body of the `mortall god' is completely made up of little people: the citizens. ``leviathan bears the body of the citizenry,'' hobbes says. in predatory states it is obvious that the sword of state is not borne by a `mortall god'. rather, it is in the hands of a huge monkey. and its body is not composed of the citizenry; rather, it is composed entirely of little monkeys. why should the entire third world continue to suffer this situation? will not absolute freedom - anarchy - be better? the word anarchy has a beautiful meaning: no ruler.

It does not mean chaos, as the enemies of freedom would have you believe. it means, quite simply, that the king is dead, and there are to be no more kings. all human beings are free and equal. there is no one to lord over us. there is no one with power. before dismissing this option outright, let us inquire into what forces within civil society will maintain morality and order in the absence of the state. under conditions of anarcho-capitalism - no state - all the people will seek their survival in the free market. statists believe that under such conditions robbery and thievery will ensue, but are their fears based on reality? after all, in a free market, cheating succeeds only in the short term. every capitalist knows that, for long-term success, he has to protect his reputation. that is why brand names and brand equity matter so much in assuring us of quality. only those who satisfy customers will succeed in the long run, and that is why morality will rule.

Secondly, in a completely free market, credit will go only to the creditworthy. unlike today, when political allocation of credit prompts many to not pay their dues, under anarcho-capitalism, everyone will realise that creditworthiness is something to be cherished and carefully nurtured. free banking will ensure more moral behaviour than politicised banking. thirdly, human beings, apart from being economic creatures, are also sexual creatures. this prompts them to raise families. without a state that will look after them in times of trouble, under anarcho-capitalism, the family will be the main source of support. families will be strong. children will be well brought up. this shows that there are only two secular bases of human morality: the market and the sexual union. not the state, which is a promoter of immorality.

Some will say that the free market cannot exist without supporting institutions. this is true. there must be courts and justice. but law is also an enterprise. today, the monopolistic state courts system is hopelessly clogged and does not deliver timely justice. further, it is based on the socialistic disregard for property rights, which cannot co-exist with the free market. we will need property rights to be enforced; we will need disputes to be settled or adjudicated. all this can happen easily under anarcho-capitalism.

Lastly, we will need some form of policing. this must be done because there will be a few thieves, rapists and murderers amongst us: a free society is not a perfect society. but, throughout history, such plunderers have come from outside the city, and the city people have always organised themselves for their own protection. today, in our cities of joy, entire communities get murdered with tacit state police support. tomorrow, with self-policing, we shall surely be safer.

The entire third world, comprising two-thirds of humanity, is suffering because of thomas hobbes' mistake. we must unitedly reject the notion of leviathan. statelessness and anarcho-capitalism will make us rich, moral and safe. we will all achieve our destiny. the path we must take is not to reform the state and its institutions, but to do away with them altogether. what is required is shifting the paradigm from nation-states to associations of free trading cities: limiting politics to the polis. in brief * predatory states amass and misuse economic powers * the free market promotes morality, the state immorality * self-policing makes humans safer

The Liberal Visions for India

The Liberal Vision, India by Sauvik Chakraverti

Liberal Times, August 2001

Indian liberals have a powerful vision of a prosperous India: 400-500 free trading and self-governing cities. This contrasts radically with the Gandhian-socialist vision of an India composed of self-sufficient villages. Watch out for liberalism in India.

Liberals in India have been going around for quite some time selling a ‘vision’ of a modern, ‘developed’ India. This is based on simple economics and, since it has brought us considerable support, let me begin by sharing it with this wider audience. I do believe that this has tremendous implications for South Asia, and indeed the entire developing world. India has been a leader of the developing world and has led it up the grossly mistaken path of statism. When India decides to change course, the entire developing world will be influenced.

The Liberal Vision for India

The basic economic truth is that all human beings are blessed with what Adam Smith called ‘a natural propensity to truck, barter and exchange’. The ability to trade is a gift from God. Little children engage in gainful trade: give me some of your chips and have a sip of my cola. No one has to be taught how to create wealth. All human beings are born wealth creating machines. We are all born to be rich. If there is poverty all around, it is because the State has placed innumerable restrictions on the free use of this ability. This implies that population is a resource, and that State policies are the problem.

Notion of Self Sufficiency

Because of this inborn ability to trade, human beings operate in the exchange economy of a market system. This enables them to occupy specialised niches in the market economy: butcher, baker, tailor, sailor and so on. No human being is ‘self-sufficient’. To do so would be economic suicide; and it is no wonder that, if you ask a class of kindergarten children what they want to be when they grow up, they will answer: "policeman, singer, dancer, actor, pilot" None will say: "I want to be self-sufficient." It goes against the basic logic of little children. Yet, the economic policies of this vast nation were based on the notion of self-sufficiency. India opted out of the international division of labour.

Free Trading Cities

Now, Adam Smith had said that "the division of labour is limited by the size of the market". Thus, there is greater division of labour in crowded cities than in sparsely populated villages. In a crowded city like Delhi, it is possible to be a Thai chef, run an institute for ear diseases, drive a taxi or be a receptionist. In sparsely populated Jhoomritalaiya, it would be difficult to even be a successful dentist. Thus, it follows that cities and towns are vital engines of wealth generation. And, that population causes prosperity: cities are crowded, and rich.

The statist, socialist vision of India that planners have been selling and pursuing for over 50 years is of an India of millions of ‘self-sufficient and self-governing villages’. As opposed to this, liberals believe India should aim to become a nation of 400 to 500 free trading cities. This causes, among our potential supporters, what Thomas Sowell called ‘a conflict of visions’. As Sowell said, a conflict of visions lies at the ideological roots of all political struggles.

The Liberal Vision and Recent History

The urban vision of India’s liberals is strongly supported by recent history, which saw to the building of all our major cities, and innumerable ‘hill-stations’. It is easy to see that liberalism and a commercial spirit powered this urban boom, without which India would be much poorer today. Indeed, the greatest success story of British India was urban development.

In a letter that survives, dated 1717, the Directors’ of the East India Company advised their Governor at Fort St. George (which developed to become Madras, now renamed Chennai): "Make your settlement a mart for all nations, that being the way God Almighty of old promised to make Jerusalem great." This was 60 years before The Wealth of Nations was penned.

Cities and Hill Stations

Because of their belief in the simple logic of commerce, the British pursued urban development that led to the building of many great cities and countless hill-stations. Independent India has only seen to the destruction of these cities and towns, and the mindless pursuit of ‘rural development’: the bread, butter and jam of the politico-administrative spoils system.

If we study the development of the hill-stations in British times, a peculiar pattern emerges: they were all linked to a major city. The Simla-Mussoorie belt was linked to Delhi; the Darjeeling-Shillong belt was linked to Calcutta; the Poona-Mahabaleshwar belt was linked to Bombay; and Ooty and the Nilgiri hill-stations were linked to both Madras as well as Bangalore. They were satellite towns. And they could be so only because of transportation links: Darjeeling had its hill-railway before Japan had its first train.

Primacy and Urban Overcrowding

The centrally planned socialist Indian state’s policies have, for 50 years, neglected roads. (They also did not promote car ownership.) This has caused the British-built primary cities to bloat and led to the underdevelopment of satellite towns. A typical 250 km journey out of bloated Delhi to, say, Dehradoon, will take one through several major towns: Meerut, Modinagar, Khatauli, Muzaffarnagar and Roorkee. Because the road barely exists, these towns are crippled; and all in-migration focuses on the city.

Primary City and Satellite Towns

Urban geographers call this phenomenon ‘primacy’: where the primary city becomes over-important since it lacks sound transportational links within the domestic urban hierarchy. Thus, we have ‘overcrowding’ - which is not the same as ‘overpopulation’ - and the cure lies not in condoms, but in roads and car ownership. These will lead to the development of satellite towns and the decongestion of primary cities. We have to only follow the British pattern of building hill-stations and India can become, through sound transportational links, a nation of 400 top-class urban areas. The transportational design required is one of ‘hubs-and-spokes’: treat every primary city as a ‘hub’ and develop ‘spokes’ from it. Along the spokes, build the satellite towns.

Protectionist Policies of the State

Unfortunately, the socialist State is yet to get its act together when it comes to the roads infrastructure. And the socialists, with their preference for protectionism, have practically banned used car imports - something that would be a boon for all Indians, deprived of wheels for over 50 years. These protectionist policies are so perverse that they are now protecting multinational car companies operating in India!

With free trade, and aggressive urbanisation, India will be a rich country. If we re-write our Constitution to respect property rights, slums will disappear as rent control will be deemed unconstitutional. This perverse law is the only cause of slums and slumlords. The socialists insist on keeping this law; liberals wish to create a vibrant market for cheap rentals.

The Government of Cities

Socialist India has, for 50 years, pursued the path of Panchayati Raj: institutions of village self-governance. Of course, they have done so without much heart, and hence, without much success. The liberals, on the other hand, stress the need for sound municipal organisation to run each of the 500 free-trading cities.

Socialist India has also been run bureaucratically, and this has led, as public choice theory predicts, to massive budgetary overruns. The future requires us to get rid of bureaus in the provision of public goods and services, and have all the cities and towns run by minimalist administration, based on the principles of the New Public Management. Garbage collection - a major problem - can be contracted out. Primary education - a crying need - can be provided by voucherisation. And so on.

Principle of ‘Subsidiarity’

If we institute the principle of ‘subsidiarity’, there will be very few tasks left to a central authority. This will take the spoils away from politics and administration, and India will finally have honest, knowledgeable and respected politicians and administrators. The central authority of India will be but the collective representative of an association of free trading cities - something like the Hanseatic League of old. It will not be a nation-state: the kind that dominated the world the entire 20^th century.

The Future of Village India

At a recent talk to farmers belonging to the Shetkari Sanghatana - a free market farmers’ movement - I ‘sold’ our urban vision and was promptly asked what this had in store for our farmers. I replied that the development economics literature abounds with stories of village India being full of ‘marginal farmers’ and ‘landless labourers’. These people are all supposed to be engaged in ‘subsistence agriculture’.

But the fact is that subsistence agriculture is not the division of labour. It is self-sufficiency - and hence, economic suicide. Those who are stuck in village India in such conditions would be better off migrating to one of the 500 cities we will build and participating in the greater division of labour possible there. Village India is poor because more and more people are sharing a pie that is steadily shrinking: the share of agriculture in GDP is under constant decline. Prosperity lies in more and more of those marginalised in agriculture shifting to the towns.

Rural-Urban Migration

This is something the socialists have never encouraged. At the 1998 Economic Editors’ Conference, the then head of our Planning Commission, Jaswant Singh, said that his greatest desire was to see that no villager would move to a city! My audience liked the idea of moving to cities. Their only question was: Why can’t we have free immigration worldwide?

If India pursues the liberal path, and aggressive urbanisation is accompanied by massive rural-urban migration, Indian agriculture will no longer be the kind it is today. Nor will there be any need for ‘land reforms’. The only role of the State will be to enforce property rights: something that is not being done properly today.

Relations with Neighbours

The 400-500 free trading cities that will comprise India in the near future will all be self-governing. This will allow tremendous diversity. We will have towns like Haridwar where it is illegal to eat meat or drink alcohol, but it is perfectly legal to smoke hashish. In keeping with the spirit of diversity, residents of an urban area should be allowed to make their own rules as they go along; the central authority need not interfere.

In such a scenario, taxation will be a local subject; and the cities will compete for citizens on the basis of public goods offered at specified tax rates. Those cities that offer better services at lower rates will attract citizens and taxpayers; those that are badly run and expensive on the purse will see decline. That is, local funded by contributions from the member cities.

Free Trade and Free Immigration

In this proposed arrangement, it is difficult to expect the member cities to fund something like statist diplomacy. It would be better – and cheaper – to practice free immigration and allow the neighbourhood to adjust to the changes that will be sweeping India. Without an India that is an empire, or a hegemony, neighbouring states will be quick to see their future in the free trade and free immigration policies that India’s free trading cities will employ. The whole of South Asia will be peaceful, and prosperous – and the rest of the world will wonder at us.

Happy Co-existence

It is also important to note that the Hindu-Muslim question has dominated politics in the region for much of the last century. Liberals hope this new millennium will be different. We believe Hindus and Muslims can coexist happily in a free market. Hindus were the first to note the beneficial effects of Adam Smith’s ‘invisible hand’ and say Shubh Laabh: profits are auspicious; and the Prophet Muhammad, peace be upon him, was a free trader, as was his wife Khadija. Islam is the morality of honest traders, not soldiers. If we stress this basic commonness between Hinduism and Islam – that they both believe in a free market - both communities can happily co-exist, and the entire region can be peaceful.

Urban Trends and Globalisation

The world is 50 per cent urbanised today: 3 billion urbanites. This is expected to peak at 85 per cent within 50 years - living on just 7 per cent of the Earth’s land. India is lagging behind at 30 odd per cent urban, but the richest states of India (like Maharashtra and Gujarat) are close to the world average. What is powering today’s urban boom is globalisation - and the future lies in excellent, globally connected, free trading cities: the hubs and spokes of the global economic system that is emerging.

World Market and World Factory

Along with urbanisation, countries like India will also see massive industrialisation - only if they get their infrastructure working. Today, unlike the globalisation in the 18^th and 19^th centuries, industrialisation is not restricting itself to the ‘core’ of the world economic system. Instead, the West is witnessing ‘post-industrialisation’ and smart companies catering to the world market are moving their production facilities to places where the economics makes sense. The world is not only the market; the world is also the factory.

India has skilled labour, and the English language is widely understood. It can be a manufacturing destination of choice in the global economy. The infrastructure is the only limitation. With good roads and ports, abundant power and water, and plenty of good cities and towns, India can emerge not only as a trading force, but also a manufacturing power. The only difference now is that the manufacturers will not be protected.

Killing Predatory States

The vision above, which liberals in India are selling aggressively, is based on the urgent need to finish off the predatory states that have brought the entire Third World to ruin. These states have been supported by the United Nations - they are all members - and they have received monies and advice from international bodies. The vision that drove the international community was one of a world divided into nationstates, each a prison for its citizens. Here, they suffered bad government and misgovernance. Here, flourished a kleptocracy. This occurred largely because standard ‘development economics’ literature upheld a strong role for the state in the development of poor nations.

Limited Government

Today, development economics has undergone a revolution thanks to the works of Lord Peter Bauer, Deepak Lal and Julian Simon. Today, it is seen that very few things are needed to make the Third World at par with the First: free trade, sound money and property rights. This requires limited government: a government whose powers are limited by constitution in order to provide a leading role to civil society. This intellectual revolution is sweeping the Third World, and it is undoubtedly true that huge political change will follow.

Predatory States: Kleptocracies

The states of the Third World are largely predatory states: kleptocracies. The socialist Indian state is no different. It makes cars but does not build roads. It pursues ‘rural development’ but does not connect villages to the nearest city or town by a good motorable road - thereby creating, sustaining and preserving the ‘rural-urban divide’. And, of course, it’s policies deny affordable wheels to its citizens. It restricts trade at every level. And the petty bureaucracy of police and municipal functionaries prey on the unorganised, informal sector of hawkers and street vendors. It is because of states like this that masses of humanity remain poor.

The majority of the world’s poor reside in India. Getting rid of poverty requires getting rid of the state. Nothing less. When we no longer have a nation-state, we need not belong to the United Nations, and the rest of the Third World can learn from us. The collapse of the Soviet Union changed the whole of East Europe. The collapse of Indian socialism will change the entire Third World.

Getting There

Today, one of the blots on Indian democracy is that liberals are denied the right to form political parties and compete for votes. It is imperative that liberals form a party and actively campaign against this restriction. Liberalism in India has a powerful vision that attracts widespread support. Compared to us, the legal parties spew out the same old dead socialist rhetoric. And they have no vision. And there is simply too much corruption.

Liberal Parties and Think Tanks

Today, there are some fledgling liberal parties in South Asia - all supporting a dynamic free market in the region so as to enable prosperity. It would help if India too had such a party, and this party could have relations with the other liberal parties in the region. In India, although liberals do not have a real political party, they have a few ‘think-tanks’ and these are doing commendable work in public education and policy advocacy. Indeed, it may even be said that these think-tanks have succeeded in creating the intellectual climate for liberalism. They have unearthed and nurtured a vast amount of liberal sentiment that lies beneath the surface of Indian society; and all that is required today is the formation of a party to carry this sentiment into political reality. I do believe that the next few years will be crucial. Watch out for India’s liberals. They are out to change the world as we know it. "

Hobbes' Mistake - The Rational Case For Anarchy

Hobbes' Mistake - The Rational Case For Anarchy by Sauvik Chakraverti

Published in the Times of India, New Delhi, Saturday, May 26, 2001

In his classic "Leviathan", written in 1651, the English political philosopher Thomas Hobbes established the liberal case for the state. He said that, without the 'mortall god' of the state to hold us all in awe, society would disintegrate, there would ensue "a war of each against all" and life would be "nasty, poore, brutish and short". Since then, liberals in the West have upheld statism - and have encouraged state-building in the Third World. Today, it is seen that almost all the states of the Third World are predatory states, enemies of the people. They are huge kleptocracies which amass and then misuse economic powers and keep people poor. When libertarians talk of the need to do away with states and statism, we are accused, even by our liberal friends, of being anarchists. How do we defend ourselves from this charge?

The fact is: Thomas Hobbes was wrong. Very wrong. The following thought experiment will show how. Carry a tray of ripe bananas before a group of monkeys. What will happen? The monkeys will snatch and steal all the bananas: the Hobbesian war of each against all. Now take another tray of ripe bananas and carry them to a place where there are no monkeys but lots of human beings: Chandni Chowk, Connaught Place, Crawford Market... What will happen? No one will steal your bananas. If they want your bananas, humans will politely ask whether you will offer them in exchange for money. Homo Economicus is a moral creature. Because he has the ability to exchange, which the monkey does not, Homo Economicus does not snatch and steal. He has an inborn morality that respects property rights. In stark contrast, the Constitution of India does not recognise property rights!


Now, hang around in the market a little longer and observe who are the monkeys amongst us. Then you will see the policeman extorting goods for free; you will see the municipal functionary preying on urban commerce. These are the cutting-edge personnel of the predatory state. This clearly shows that: 1) the market is a secular basis of human morality; and 2) power corrupts.


Yet, it is important to note that Thomas Hobbes was a liberal. In Leviathan he does mention that every man would very much prefer to rule himself. We sacrifice some of our freedoms in exchange for the law and order that the state creates. The original cover illustration of Leviathan shows a huge king-like figure wielding a massive sword. A little careful examination reveals that the body of the 'mortall god' is completely made up of little people: the citizens. "Leviathan bears the body of the citizenry," Hobbes says. In predatory states it is obvious that the sword of state is not borne by a 'mortall god'. Rather, it is in the hands of a huge monkey. And its body is not composed of the citizenry; rather, it is composed entirely of little monkeys. Why should the entire Third World continue to suffer this situation? Will not absolute freedom - anarchy - be better?
The word anarchy has a beautiful meaning: no ruler. It does not mean chaos, as the enemies of freedom would have you believe. It means, quite simply, that the king is dead, and there are to be no more kings. All human beings are free and equal. There is no one to lord over us. There is no one with power. Before dismissing this option outright, let us inquire into what forces within civil society will maintain morality and order in the absence of the state.


Under conditions of anarcho-capitalism - no state - all the people will seek their survival in the free market. Statists believe that under such conditions robbery and thievery will ensue, but are their fears based on reality? After all, in a free market, cheating succeeds only in the short term. Every capitalist knows that, for long-term success, he has to protect his reputation. That is why brand names and brand equity matter so much in assuring us of quality. Only those who satisfy customers will succeed in the long run, and that is why morality will rule.


Secondly, in a completely free market, credit will go only to the creditworthy. Unlike today, when political allocation of credit prompts many to not pay their dues, under anarcho-capitalism, everyone will realise that creditworthiness is something to be cherished and carefully nurtured. Free banking will ensure more moral behaviour than politicised banking.


Thirdly, human beings, apart from being economic creatures, are also sexual creatures. This prompts them to raise families. Without a state that will look after them in times of trouble, under anarcho-capitalism, the family will be the main source of support. Families will be strong. Children will be well brought up. This shows that there are only two secular bases of human morality: the market and the sexual union. Not the state, which is a promoter of immorality.


Some will say that the free market cannot exist without supporting institutions. This is true. There must be courts and justice. But law is also an enterprise. Today, the monopolistic state courts system is hopelessly clogged and does not deliver timely justice. Further, it is based on the socialistic disregard for property rights, which cannot co-exist with the free market. We will need property rights to be enforced; we will need disputes to be settled or adjudicated. All this can happen easily under anarcho-capitalism.


Lastly, we will need some form of policing. This must be done because there will be a few thieves, rapists and murderers amongst us: a free society is not a perfect society. But, throughout history, such plunderers have come from outside the city, and the city people have always organised themselves for their own protection. Today, in our cities of joy, entire communities get murdered with tacit state police support. Tomorrow, with self-policing, we shall surely be safer.


The entire Third World, comprising two-thirds of humanity, is suffering because of Thomas Hobbes' mistake. We must unitedly reject the notion of Leviathan. Statelessness and anarcho-capitalism will make us rich, moral and safe. We will all achieve our destiny. The path we must take is not to reform the state and its institutions, but to do away with them altogether. What is required is shifting the paradigm from nation-states to associations of free trading cities: limiting politics to the polis.

http://ccsindia.org/ccsindia/people_sc_hobbes.htm

Caste and the Market Economy

Caste and the Market Economy by Sauvik Chakraverti

Antidote/

IT was my first day in London, my first visit to the 'developed' world. I had been invited to a pub in Leicester Square by a former girlfriend who wanted to show off her brand new husband.

So there I was, spending the evening with a completely estranged woman and a complete stranger.

The pub was quite full, but I managed a bar-stool, when suddenly there entered a handsome young man in a black suit accompanied by three extremely attractive young women.

They ordered drinks and, as luck would have it, I had to pass their glasses on to them, being closest to the bar.

I noticed that the pale yellow drink had a familiar aroma and inquired of the man as to what he was drinking. He said, "Pernod" and added that it was a French drink flavoured with anise (saunf).

This got us talking and the group and I exchanged pleasantries for a while. The conversation then turned to occupation. I said I was there as a student at the LSE.

The man said he was a 'sanitary worker'. I couldn't get what that meant and he explained: Every morning, he puts on his overalls, boots and gloves, gets into a truck, and goes about collecting garbage.

I understood immediately that the market could do more to correct casteism than any amount of state action. In my country this handsome young man would suffer caste discrimination.

In Margaret Thatcher's England he was entertaining not one, not two, but three lovely women in a pub in Leicester Square. An he was not drinking 'country liquor'; he was imbibing Pernod.

I must say that I learned more Economics living in London and observing life than I did in the classrooms of the LSE. When I lived in Hammersmith, I used to pass an undertaker's shop every day on my way to the tube station.

I used to think: In my country, this man would be a dom - the lowest of the low. I moved to West Hamstead and took up a room in a house run by an Indian landlady where many students stayed. Once a week, an English maid would come and vacuum the entire house and clean the loos. She came in her own car!

In New Delhi, anyone in such an occupational class lives in a jhuggi and does not even dare to dream of car ownership.

A recent television debate on caste featured a Dalit leader who kept talking about carriers of night-soil. Obviously, this is an urban phenomenon.

There cannot be such a caste in underpopulated villages. With open markets and urbanisation, this caste would prosper and get absorbed in the larger, more prosperous, and more cosmopolitan society. Very few people had flush toilets in the USA in 1900.

One good thing: the Dalit leader was making noises in favour of globalisation.

I suggest Dalit leaders get interested in the Economics of prosperity. We urban liberals dream not just of making India prosperous; we dream of making India obscenely rich.

The Dalits will gain enormously from open markets, economic freedom and urbanisation. As they claim, in their respective economic niches, a greater share of a rapidly growing pie, and as they mingle with caste anonymity in bustling metropolises, they will find the old caste equations disappearing.

This is already happening: at the TV debate, when the issue was opened up to the audience, many urbanites responded saying that caste was a factor that never entered their lives.

The socialist state's response to the caste question has been insincere.

Politicians have used the state's powers of patronage to promote clientelism.

By refusing to urbanise, and by throttling urbanisation, they have reinforced and perpetuated the 'rural-urban divide'.

There is thus an India where caste does not matter; and there is a Bharat where caste is the sole basis of identity. With free markets and urbanisation, India will take the lead.

Dalit leaders should also read Thomas Sowell's slim book: Preferential Policies: An International Perspective. It shows how reservations have destroyed societies.

And this, from an African-American scholar! In free market India, the state will be so small that reservations will be unnecessary.

Instead of the clientelism and tokenism that reservations represent, Dalits should opt for the prosperity that economic freedom will bequeath to them and the caste anonymity that will certainly follow urbanisation.