Ban Communism

Ban Communism by Sauvik Chakraverti

Dec 29, 2005, 07.49pm IST Times of India

Communists despise private property and idealise commonly held property. But I'll bet Brinda and Prakash Karat don't share a toothbrush.

So let us conduct a "reductio" thought experiment as to what would happen in a city if private property were abolished and all property declared to be held in common.

Well, the first thing that would happen is that everyone would stop working. If someone needed something he would simply go to the house or shop where the object of his desire was located and demand it in the name of communist brotherhood.

Within a few days of the establishment of the communist fraternity, all shops would be stripped bare, as would be all the mansions of the rich. All economic activity would come to a standstill.

The redistribution of all property in the name of communism would lead to the "levelling down" of all the members of the commune.

Further, instead of the polite civilisation that existed previously, bound by the "natural law" of private property rights, the commies would soon descend to barbarism — snatch, grab, loot, scoot.

Observing markets easily reveals the natural law of property at work. When a fisherman returns from the sea, no one forcibly takes fish away from him because the ocean has not furnished him with a title deed to his catch.

No one snatches bananas from any of the millions of fruit vendors. Look at any big market and you will see thousands engaging in the great game of trade, respecting private property rights.

If this natural law was overthrown, man would be reduced to the status of ape. Indian commies do not practise what they preach to the level of the above 'reductio ad absurdum'.

They idealise some supposedly commonly-held properties, especially the state-owned industrial sector. However, these are all really "private properties" in the control of individuals or groups claiming to represent the public.

The minister's official bungalow is his "private property". We (sic) the people cannot enter it freely. The PSU is the minister's fiefdom.

Neither are "common property" in the sense that the term would be used for a public thoroughfare or a public park, which all can use. Thus, communism is so totally wrong, it should be banned.

http://articles.timesofindia.indiatimes.com/2005-12-29/edit-page/27849789_1_private-property-communism-brinda

Ban Communism

Communists despise private property and idealise commonly held property. But I’ll bet Brinda and Prakash Karat don’t share a toothbrush! So let us conduct a “reductio” thought experiment as to what would happen in a city or town if private property were abolished and all property declared to be held in common.

Well the first thing that would happen is that everyone would stop working. If someone needed something he would simply go to the house or shop where the object of his desire was located and demand it in the name of communist brotherhood. “How can you refuse me, comrade?” he would ask, “for we are all brothers now.” Within a few days of the establishment of the communist fraternity, all shops would be stripped bare, as would be all the mansions of the rich. All economic activity would come to a standstill. The redistribution of all property in the name of communism would lead to the “leveling down” of all the members of the commune. Further, instead of the polite civilization that existed previously, bound by the “natural law” of private property rights, the commies would soon descend to barbarianism – snatch, grab, loot, scoot.

Observing markets easily reveals the natural law of property at work. When a fisherman returns from the sea, no one forcibly takes fish away from him because the ocean has not furnished him with a title deed to his catch. No one snatches bananas from any of the millions of fruit vendors throughout India – except for cops and monkeys. Look at any big market and you will see thousands engaging in the great game of trade, respecting private property rights. If this natural law was overthrown, man would be reduced to the status of ape, snatching bananas instead of paying for them.

Indian commies do not practice what they preach to the level of the above reductio ad absurdum. They idealise some supposedly commonly held properties, especially the state-owned industrial sector. However, these are all really “private properties” in the control of individuals or groups claiming to represent the public. The minister’s official bungalow is his “private property”. Wee (sic) the people cannot enter it freely. The PSU is the minister’s fiefdom. Neither are “common property” in the sense that the term would be used for a public thoroughfare or a public park, which all can use. Thus, communism is so totally wrong, it should be banned.

http://articles.timesofindia.indiatimes.com/2005-12-29/edit-page/27849789_1_private-property-communism-brinda

Long Live the King

Long Live the King by Sauvik Chakraverti   

1 Jun 2005, 0014 hrs IST, The Times of India 

Multiparty democracy with universal adult suffrage is a very recent phenomenon in human history. Europe had Hohenzollers, Hapsburgs and Romanovs till the end of World War I. My point is this: Since libertarians believe in minimal government, what could be smaller than a king? Hong Kong and Singapore are prospering without democracy. Why can’t Nepal do the same? Adam Smith, writing in the mid-18th century, gave three tasks to the king: "The sovereign has only three duties to attend to: The duty of protecting the society from the violence and invasion of other independent societies; secondly, the duty of establishing an exact administration of justice; and thirdly, the duty of erecting and maintaining certain public works and public institutions". So, according to Smith, if the king looked after defence, justice and public goods, society would flourish like never before. If the king of Nepal can do these things, the poor people of Nepal will be free to generate wealth for themselves. 

The solemn oath to ensure justice lay at the heart of mediaeval kingship in England and France. The same was true for the rulers of the Indian princely states. In the book, Lives of the Indian Princes, the Maharawal of Dungarpur makes it clear that justice was a prime value to Indian princes. He is quoted saying: "I was head of theexecutive and head of the legislature. As far as the courts were concerned, there were practically no pending cases — and that was a characteristic feature of the Indian (princely) states". The king of Nepal can recruit good judges from the international skills market.Simultaneously, if he declares unilateral free trade and the judges preserve property rights, the Nepali people will realise they don’t need democracy and party politics. Instead, they will seek their sustenance in the free market and their security and justice under their monarch. With free trade and property rights under the rule of law, Nepal will gallop from feudalism to full-fledged capitalism. The lure of Maoist ideology will fade as free markets and the resulting prosperity kick in. Then, democracy can be ushered in. Democracy now is a bad idea. 

The writer is a regular freelance contributor.  

http://timesofindia.indiatimes.com/articleshow/1156865.cms

Employment Guarantee a Hoax

Employment Guarantee a Hoax by SAUVIK CHAKRAVERTI

 Posted: Aug 06, 2005 at 0000 hrs IST The Indian Express

The UPA government, with an eminent economist at its head, is attempting to perpetrate an economic hoax on the nation under the pretext of guaranteeing employment for one and all. This hoax can be unraveled at four levels.

First, is the government there to see that everyone is gainfully employed? In the bad old days of socialism, the state did emerge as the nation’s biggest employer. It still is. Even today, one in every fifty Indians is employed by the state. They perform not a single task well, and society would be much better off if the state did not employ such a huge army of ne’er-do-wells. It would make far more sense for the government to cut down its flab, cut down its expenses, and perform the tasks expected of it efficiently, employing far less people. In a free market economy, people are expected to generate wealth for themselves either through kaam or dhandha. They are not expected to survive on alms from the state.

Second, anything the government does must be paid for by taxes. If the government pays money to A in order to employ him, then it takes the money from B, who is already employed. This is the ‘‘zero-sum game’’ of the politician (and his economic advisers): B loses while A gains. If the government did not tax B, and let him spend his own money, then B’s private spending would generate as much employment as government spending, if not more, considering that a lot of money is lost from the government’s ‘‘leaky bucket’’. Thus, government spending generates fewer jobs as compared to private spending. The government is an agency that taxes and spends; it does not create wealth. It cannot create wealth. If the government employs hordes of daily wage earners in public works, what is of relevance to the tax-paying citizenry is the public works, not the employment. Public works like roads and bridges are required by the people, yes, and the aim should be to build good roads and bridges; not shabby roads and bridges with the aim of employing as many people as possible.

Thirdly, as industrious individuals, we do not seek to maximize work; rather, we seek to maximize production. So should the nation. India and all Indians would be better off not by working more, but by producing more. Increases in productivity are what we should be pursuing, not increases in work: the sweat theory of value! Indeed, increasing productivity is the only means of raising the wages of the poor. Our productivity today is extremely low. For example: a truck covers 250 miles a day on Indian highways; they do more than 800 miles in the rest of the world. Productivity increases occur when more is produced given the same time and effort. These productivity increases would occur if we revamped our transportation system and employed the latest technologies in whatever we seek to do. Then, every Indian would earn more, by producing more with the same time and effort.

Fourthly, the government is actually a destroyer of jobs because of the innumerable restrictions and bans it imposes on the people. 75,000 dancing girls have just lost their jobs in Bombay. Will they spin and weave in rural India, or work carrying stones for road-building works? Restrictions imposed on economic activity in India are an enormous hindrance. We are ranked 122 in the World Economic Freedom Index, bare notches above the ‘‘economically repressed’’. We would be far better off if the state were to get off our backs.

The socialists and communists who make up the UPA government should give up the idea of guaranteeing employment, and public opinion should be garnered in this direction. All that India needs are complete economic freedom, free trade, property rights under the rule of law, and sound money (freely tradeable money without inflation). Apart from that, we could do with good roads and clean cities and towns. In such a scenario, the state will be minimalist, with only one task to attend to: going after the bad guys while leaving the rest of us alone. In such a ‘‘haven of freedom’’, poor Indians will survive far better than they do today, even by selling peanuts, for they will not have their surpluses stolen by the petty kleptocracy. The government will not guarantee employment; rather, it will guarantee a free and fair business environment. That is what the country needs of the state in a free market system.

The writer, a journalist, coloumnist and an author of books, can be reached at: sauvikc@yahoo.com 

http://www.indianexpress.com/oldstory.php?storyid=75729

India Needs FDI In Retail

India Needs FDI In Retail by Sauvik Chakraverti 

25 Oct 2005, 0000 hrs IST, 

Foreign direct investment (FDI) in retailing is opposed by many. Under the A B Vajpayee regime, it was disallowed because a vocal lobby of Hindu traders spread the fear that it would spell doom to small shopkeepers. 

Today, even West Bengal chief minister Buddhadeb Bhattacharjee, otherwise "market-savvy", and not very Hindu, opposes FDI in retailing. Perhaps a little economic analysis of retailing, especially in poor countries, will clear the air. 

To start with, let us take an astonishing statistic (and this is an industry statistic, and not the handiwork of any government bureau): 70 per cent of shampoo sold in India comes in little sachets. This reveals a lot about the nature of the market, especially in developing countries, and is something that Lord Peter Bauer noted a long time ago. 

The distributional chain, of which retailing occupies the final position, is engaged in "the breaking down of bulk": Goods leave the factory gates in containers (bulk) while the final customer departs with just a little sachet from the retailer. 

Now, as Lord Bauer observed, this process of "breaking down bulk" is inordinately long in developing countries because most people buy their needs on a daily basis, being unable to invest in buying a month's groceries at one shot. 

Lord Bauer, who pioneered the study of what we now call the "informal sector", noted how in India people often buy loose cigarettes. In Africa, he found, even matchsticks are sold loose. 

He reported on the armies of small traders that cater to the needs of the poor so well, and he marvelled at how statisticians never mention, in their reports, how millions and millions of small traders exist in rural areas: They over-report "agriculture". 
Retail supermarkets, the world over, shrink the distributional chain. They buy in bulk and sell cheaper than small retailers, thereby passing off significant economic gains to the consumer. 

They make the distributional chain economically efficient. But there are strong reasons to believe that in India, they will not be able to mine what C K Prahalad called "the gold at the bottom of the pyramid". 

While big-time retailing will definitely succeed in India, and bring with it great benefits to middle and upper-class consumers (and associated spin-offs like real estate development), the armies of small traders who "break down bulk" even further to cater to the numberless masses will continue to thrive. 

Supermarkets will typically cater to car-owners who buy up a month's supplies at a time. They will buy big bottles of shampoo, cartons of cigarettes, and big sacks of rice. The small traders will sell products in little sachets, loose cigarettes, half-a-kilo of rice, and so on. Their numbers will flourish and grow. 

Even in rich nations, small traders manage to compete very effectively withsupermarket chains. In London, almost every "corner shop" is owned by an Indian. We are the shopkeepers to "a nation of shopkeepers"! It does not behove a nation of such splendid shopkeepers to fear foreign supermarkets. 

The upshot of it all, of course, is that for the nation to progress, efficiency gains in distribution are a must. Inordinately long distributional chains make trade slow, expensive and cumbersome. 

As India progresses, it is vital that this chain sees shrinkage. What could very well work in the interests of both the small traders as well as their poor customers are wholesale supermarkets, like Bangalore's Metro Cash & Carry, which caters to small traders and has therefore located its sprawling stores outside the main city. 

Such wholesale supermarkets will enable small traders to increase their margins and also pass on some of their gains to the final customers. 

The distributional chain will shrink, but not at the cost of the small traders. Rather, it is the inefficient wholesalers and sub-wholesalers who will see a loss of business. Wholesale supermarkets will be able to mine "the gold at the bottom of the pyramid": but their product mix will vary immensely from retail supermarkets. 

In either case, in all our cities today, wholesale markets are invariably in parts of the "old city": Congested and inaccessible. The real estate development that will accompany FDI in retail as well as wholesale trade will make it possible for a redrawing of city maps, with all these supermarkets sprouting all around the periphery. 

This process of rebuilding the civic architecture around which urban commerce works will give us a golden opportunity to get things right for once as far as city trade and traffic management is concerned. 

We can learn lessons from Seoul, where wholesale supermarkets stay open all night, enabling small traders to come in from the surrounds after the evening rush and depart with their wares before the morning rush hour. 

If at all the government is genuinely concerned about "small traders", then it should implement policies that make them invulnerable to the hafta brigade that milks them of their surpluses. Like every other Indian, they too need the state off their backs. 
The writer is an economist.

Long Live the King

Long Live the King by Sauvik Chakraverti 

1 Jun 2005, 0014 hrs IST, The Times of India 

Multiparty democracy with universal adult suffrage is a very recent phenomenon in human history. Europe had Hohenzollers, Hapsburgs and Romanovs till the end of World War I. My point is this: Since libertarians believe in minimal government, what could be smaller than a king? Hong Kong and Singapore are prospering without democracy. Why can’t Nepal do the same? Adam Smith, writing in the mid-18th century, gave three tasks to the king: "The sovereign has only three duties to attend to: The duty of protecting the society from the violence and invasion of other independent societies; secondly, the duty of establishing an exact administration of justice; and thirdly, the duty of erecting and maintaining certain public works and public institutions". So, according to Smith, if the king looked after defence, justice and public goods, society would flourish like never before. If the king of Nepal can do these things, the poor people of Nepal will be free to generate wealth for themselves. 

The solemn oath to ensure justice lay at the heart of mediaeval kingship in England and France. The same was true for the rulers of the Indian princely states. In the book, Lives of the Indian Princes, the Maharawal of Dungarpur makes it clear that justice was a prime value to Indian princes. He is quoted saying: "I was head of theexecutive and head of the legislature. As far as the courts were concerned, there were practically no pending cases — and that was a characteristic feature of the Indian (princely) states". The king of Nepal can recruit good judges from the international skills market.Simultaneously, if he declares unilateral free trade and the judges preserve property rights, the Nepali people will realise they don’t need democracy and party politics. Instead, they will seek their sustenance in the free market and their security and justice under their monarch. With free trade and property rights under the rule of law, Nepal will gallop from feudalism to full-fledged capitalism. The lure of Maoist ideology will fade as free markets and the resulting prosperity kick in. Then, democracy can be ushered in. Democracy now is a bad idea. 

The writer is a regular freelance contributor.  

http://timesofindia.indiatimes.com/articleshow/1156865.cms

Employment Guarantee a Hoax

Employment Guarantee a Hoax by SAUVIK CHAKRAVERTI 

Posted: Aug 06, 2005 at 0000 hrs IST The Indian Express 

The UPA government, with an eminent economist at its head, is attempting to perpetrate an economic hoax on the nation under the pretext of guaranteeing employment for one and all. This hoax can be unraveled at four levels.

First, is the government there to see that everyone is gainfully employed? In the bad old days of socialism, the state did emerge as the nation’s biggest employer. It still is. Even today, one in every fifty Indians is employed by the state. They perform not a single task well, and society would be much better off if the state did not employ such a huge army of ne’er-do-wells. It would make far more sense for the government to cut down its flab, cut down its expenses, and perform the tasks expected of it efficiently, employing far less people. In a free market economy, people are expected to generate wealth for themselves either through kaam or dhandha. They are not expected to survive on alms from the state.

Second, anything the government does must be paid for by taxes. If the government pays money to A in order to employ him, then it takes the money from B, who is already employed. This is the ‘‘zero-sum game’’ of the politician (and his economic advisers): B loses while A gains. If the government did not tax B, and let him spend his own money, then B’s private spending would generate as much employment as government spending, if not more, considering that a lot of money is lost from the government’s ‘‘leaky bucket’’. Thus, government spending generates fewer jobs as compared to private spending. The government is an agency that taxes and spends; it does not create wealth. It cannot create wealth. If the government employs hordes of daily wage earners in public works, what is of relevance to the tax-paying citizenry is the public works, not the employment. Public works like roads and bridges are required by the people, yes, and the aim should be to build good roads and bridges; not shabby roads and bridges with the aim of employing as many people as possible.

Thirdly, as industrious individuals, we do not seek to maximize work; rather, we seek to maximize production. So should the nation. India and all Indians would be better off not by working more, but by producing more. Increases in productivity are what we should be pursuing, not increases in work: the sweat theory of value! Indeed, increasing productivity is the only means of raising the wages of the poor. Our productivity today is extremely low. For example: a truck covers 250 miles a day on Indian highways; they do more than 800 miles in the rest of the world. Productivity increases occur when more is produced given the same time and effort. These productivity increases would occur if we revamped our transportation system and employed the latest technologies in whatever we seek to do. Then, every Indian would earn more, by producing more with the same time and effort.

Fourthly, the government is actually a destroyer of jobs because of the innumerable restrictions and bans it imposes on the people. 75,000 dancing girls have just lost their jobs in Bombay. Will they spin and weave in rural India, or work carrying stones for road-building works? Restrictions imposed on economic activity in India are an enormous hindrance. We are ranked 122 in the World Economic Freedom Index, bare notches above the ‘‘economically repressed’’. We would be far better off if the state were to get off our backs.

The socialists and communists who make up the UPA government should give up the idea of guaranteeing employment, and public opinion should be garnered in this direction. All that India needs are complete economic freedom, free trade, property rights under the rule of law, and sound money (freely tradeable money without inflation). Apart from that, we could do with good roads and clean cities and towns. In such a scenario, the state will be minimalist, with only one task to attend to: going after the bad guys while leaving the rest of us alone. In such a ‘‘haven of freedom’’, poor Indians will survive far better than they do today, even by selling peanuts, for they will not have their surpluses stolen by the petty kleptocracy. The government will not guarantee employment; rather, it will guarantee a free and fair business environment. That is what the country needs of the state in a free market system.

The writer, a journalist, coloumnist and an author of books, can be reached at: sauvikc@yahoo.com 

http://www.indianexpress.com/oldstory.php?storyid=75729