Education provision by a failed State

Education provision by a failed State by Sauvik Chakraverti

EducationWorld June 08 | Education World

Every activist in indian education suffers from a ‘delusion of knowledge — the notion that the socialist State, i.e. government, is in possession of knowledge that the poor need to succeed in life.In reality, the State is itself based on failed knowledge. Economic liberalisation was resorted to in 1991 after half a century of socialism, precisely because of knowledge failure. And it is only because of ‘liberty that Indian society can now access various fragments of knowledge that were previously unavailable. Now we have modern automobiles, mobile phones, plasma TVs and the like because we allowed knowledge developed abroad to flow into the country. The State-promoted IITs have been operational since the early 1960s but this knowledge wasnt available in India. The State-owned IIMs are of similar vintage — but there were hardly any business enterprises to manage then.

On the other hand, the poor have traditionally been in possession of various fragments of knowledge — but are denied entry into markets by repressive legislation. Poor girls can sing and dance, but the socialist State has outlawed nightlife. Tribals in the jungles of central India distill stimulating mahua liquor from an eponymous flower, but they cannot sell it. Tapping toddy and fermenting it is specialised knowledge. Last year Karna-taka reported a bumper toddy season — but nowhere on Bangalores swanky Brigade Road will you get a glass of toddy. The north-east is poor and underdeveloped; but boast great music bands there. But these bands cannot perform in heartland states because of State-imposed restrictions.

These are all examples of real, hard knowledge going waste. And ironically the State, which is responsible for this waste, wants to teach. If establishment educationists shout in concert, an education tax is immediately imposed. But the ‘planned flow of knowledge from State to the poor never happens, and it never will. The minister in charge of education is a Nehru family loyalist. As such he will teach Nehruvian socialist propaganda. And his loyal educrats will dictate what private institutes will teach and meddle with what they want to teach.

Thus, for the immediate benefit of the poor, and for the immediate spread of real knowledge, liberty is essential. Just as the public has benefited from foreign car companies entering India, so we will benefit from foreign universities setting up shop here. And just as the poor benefit from freedom, so will the national knowledge pool if anyone with a fragment of knowledge can set up shop and teach to whoever is willing to pay for it. The problem which requires resolution is that of transmission of knowledge from one who has it to another individual who wants to acquire it. The market alone can solve this problem. The State has no ‘collective pool of knowledge. Indeed, the socialist Indian State is a naked propagandist, and all its attempts to secure ‘uniform standards in education have only resulted in the uniform teaching of untruths.

Therefore, the Union ministry of human resource development — actually ministry of human resource destruction — should be shut down. Every educrat should be fired, and all schools and colleges freed from government control and supervision over curriculum as well as certification. Private edupreneurs can then compete for testing scholastic competence and issuing certification — as with SAT, IB or the ISC.

What about poor kids in such a scenario? If they learn how to use a calculator, to read, write and speak English, to type on a keyboard and use a computer, to operate a mobile phone and send SMS, and how to drive a car, they will have all the basic knowledge required for success in the contemporary world. I am positive that private for-profit as well as non-profit efforts can easily transmit these fragments of knowledge to them in a manner that is efficient in terms of money as well as time.

Poor kids need to enter the workforce early. for them, 12 years of school is a massive waste of time. The basic knowledge they need, as outlined above, can be transmitted to them by private edupreneurs, cheap and quick. Thus, there is no role for the State in education either for the rich or the poor, in primary, secondary or higher education.

I conclude with what the great French economist Frederic Bastiat (1801-1850) who was also in active politics, wrote in his election manifesto over 150 years ago: Education is also bound up with the same fundamental question that precedes all others in politics: Is it part of the States duties? Or does it belong to the sphere of private activity? I believe that government is not set up in order to bring our minds into subjection, or to absorb the rights of the family… If you want to have theories, systems, methods, principles, textbooks and teachers forced on you by the government, that is up to you; but do not expect me to sign, in your name, such a shameful abdication of your rights.

Indeed, as Bastiat stressed academic monopoly of the State can only work if the State is infallible. In a nation of widespread State failure, the very idea of government infallibility lies in tatters.

(Sauvik Chakraverti is an author and journalist, closely involved with Indias liberal movement)

Relevance of Frederic Bastiat

Sauvik Chakraverti SPEECH AT THE RELEASE OF

“THE ESSENTIAL FREDERIC BASTIAT”

We are gathered here to honour the memory of a man whom the world forgot, but at its own peril.

 

Frederic Bastiat and Karl Marx were contemporaries, but it was Marxism that attracted half the world, including India, while the Liberty that Bastiat upheld was sacrificed at the altar of socialist equality and statism.

 

Unfortunately, when false theories of society are put into practice, horrendous consequences inevitably follow. This does not happen immediately, but in the course of a few decades it slowly becomes apparent that something has gone very wrong.

 

This is the position that much of the world, including India, is in today. The former Soviet Union and its East European satellites have all abandoned their past beliefs, as has Communist China. Marx is seen by everyone in these countries as a false prophet. At such a moment of time, it becomes pertinent to place before our fellow-Indians the writings of a man who, 160-170 years ago, flew the flag for the other side: classical liberalism, free international trade and free markets, justice and the rule of law, and individual claims to private property. The world has lost more than a century chasing wrong ideas. Let us lose no more time; let us study Bastiat instead of Marx; and let us strive for that harmonious world of natural liberty that every educated European and American believed in between 1700 and 1850.

 

Frederic Bastiat died more than 150 years ago. To read him is to appreciate the fact that people like me cannot be called ‘neo-liberals’. There is nothing ‘new’ about liberalism, which has deep classical roots. Rather, socialism and communism are ‘new’ ideas, as indeed are ‘social democracy’, trade unionism and the welfare state. Mankind seems to be ruled entirely by new, previously untried ideas. Let us therefore turn back to old, tried and tested ideas. These have worked in the past, and only these can work in the future. Bastiat’s writings represent the hallowed traditions of liberalism – a belief-system so old that it deserves the title ‘classical’.

 

What makes us all very proud of this volume we are releasing here is the sad fact that almost no one today has heard the name Frederic Bastiat. This great man is almost entirely unknown in the country of his birth, France, a nation that took to socialism in such a big way that it ultimately lost its dynamism and became the ‘sick man of Europe’. When Margaret Thatcher told a Paris audience that her favourite economist was the Frenchman Bastiat, not a single person present could lay a claim to having heard of the man, let alone read him.

 

In my own case, as I have recounted in my foreword to this book, I first heard of Bastiat from a dentist – and this, after having studied Economics for over 20 years!

 

There are innumerable histories of economic and political thought, from John Kenneth Galbraith’s “A History of Economics” to Lord Eric Roll’s “A History of Economic Thought”, that make no mention of Bastiat. Newer editions of Heilbroner’s popular “The Worldly Philosophers” do mention Bastiat, but in passing. I sincerely doubt whether students anywhere in the world are exposed to Bastiat’s writings.

 

In such an atmosphere of neglect it is indeed highly creditable that a think-tank like India’s Liberty Institute should take the lead and produce the first ever ‘essential’ Bastiat, a collection of his most representative as well as profound works. It is a boon for students, for journalists, and for all those citizens who take a serious interest in serious matters. I am confident that they will enjoy this book and be enlightened by it. Thereafter, it is hoped that they will all work to ensure that the memory of Frederic Bastiat never dies. I may add that if, after enjoying this sample of his works, they want to read every word Bastiat wrote, then www.econlib.org, the website of Liberty Fund, is the place to visit.

 

Allow me to proceed to a description of this book that we are releasing to the public and the press today.

 

A very valuable contribution to this book has come from Dr Detmar Doering of the Liberal Institute in Potsdam, Germany, who is himself a great fan of Bastiat. Without this detailed description of Bastiat’s life and times, this book would have been woefully inadequate. Now, the reader will get to know the real man: a frail orphan working in his grandfather’s shop in a port city, thereby getting interested in the economic and social effects of tariffs; setting up a self-study and debating society where such serious issues are discussed; becoming a justice of the peace; becoming infatuated with Cobden, Bright and the Manchester Free Trade Movement; as a political activist for free trade; as a journalist and pamphleteer; and finally as a parliamentarian. Bastiat was not an armchair philosopher at all. Thanks to this excellent contribution from Dr Doering, the reader of this volume will now get an authentic flavour of Bastiat, and the politically troubled times he lived in.

 

We begin Bastiat’s writings with “To The Youth”. I have chosen this piece to open his account because the youth are the future and the future is theirs in turn. If they believe, like Bastiat, in natural liberty, this country will surely change. India is a very young country, and the vast majority are young. It is to them that this book is dedicated. Allow me to quote the first paragraph:

Eagerness to learn, the need to believe in something, minds still immune to age-old prejudices, hearts untouched by hatred, zeal for worthy causes, ardent affections, unselfishness, loyalty, good faith, enthusiasm for all that is good, beautiful, sincere, great, wholesome, and spiritual—such are the priceless gifts of youth. That is why I dedicate this book to the youth.

This opening paragraph reflects Bastiat’s love for young people, and I am confident that this sincere love will be reciprocated. That is why I have chosen this as the opening essay.

 

The second essay on “Natural and Artificial Social Order” is important from a philosophical point of view, because it presents the old classical liberal belief that when all men are guided by legitimate self-interest, harmony reigns, and the whole of society benefits. I do believe that these two essays will have every young reader hooked. They will see why socialism is actually ‘sociopathic’, seeking to destroy the natural harmony of a people – a natural harmony that socialists despise, because they cannot understand it.

 

These two opening essays contain the germ of the classical liberal world-view, but with a clarity and passion that surpasses all previous efforts, including those by Adam Smith himself. Bastiat is easier to read than Smith, his examples from real life are infinitely superior, and for this reason he is far more convincing.

 

The other essays in Part One will only expand the reader’s understanding of the essential role of competition (competition is liberty and the absence of competition is tyranny), the nobility of the idea that each man is for himself and by himself (and not ‘all for one, one for all’ – which is socialism), and how to end all wars forever, by promoting trade between warring nations.

 

Part Two showcases Bastiat as a free trader, beginning with his justifiably famous “Candlemakers’ Petition” – a satire on protectionism in which the candlemakers of France petition their government to pass laws banning all windows because they cannot compete with the sun, which gives free light half the day. The reader will love Bastiat’s wit, so rare among economists, so much so that Economics has for long been called a “dismal science”. There is nothing ‘dismal’ at all about Bastiat’s prose. On the contrary, his writings possess an electrifying quality.

 

However, there are 11 more essays in this section on Bastiat the free trader, and all of them are equally worthy of note, beginning with his essays against ‘reciprocity’ in trade. No economist before him and no economist since has examined the notion of ‘reciprocity’ – and dismissed it as totally false and baseless. Bastiat stood for unilateral free trade. That is: Free trade without a WTO.

 

Of the other essays in this section, there is one called “Protectionism, or the Three Aldermen” which is in the form of a play in four acts. This exposes the corrupt politics of “import-substitution industrialization”, as well as the beggaring of society that inevitably results from its practice. I hope that in schools and colleges throughout India, students will enact this play.

 

Part Three of this book is entitled “The Genius of Bastiat”, and contains 3 essays on political economy, of which “The Law” is the most famous. Liberty Institute published “The Law” as a single monograph many years ago, and this timeless defense of private property is presented here once again, when in Nandigram and Singur the Communists are overriding the ‘just’ claims of the people to their own lands. Indeed, Bastiat begins “The Law” by saying how the law, under collectivists, becomes guilty of the very crimes it is meant to punish. The Law is meant to punish theft; but in Nandigram, Singur, and countless other cases, including the nationalizations of banks, coal mines, Air India, and insurance companies, it is the law that has been guilty of robbery. This essay is the work of a classical liberal whose interests went far beyond Economics, to the very soul of government, which is the law. In a nation like India, whose constitution does not grant the citizenry a fundamental right to property, this essay deserves to be widely read, if only to understand how dangerously false socialist and communist ideas of “collective property” (which is fiction) really are.

 

“What is Seen and What is Not Seen” is another work of sheer genius, but this time as an economist of unmatched perception. Bastiat begins with the example of a window-pane being broken by a hoodlum. He then proceeds to show how the fact that the town glazier now gets 100 francs to replace the window-pane does not mean that the town has benefited from this destruction of property, because the owner of the window has had to sacrifice the new coat he was saving for in order to pay for the replacement window. That is, the coat-makers loss of business (what is not seen) is the glazier’s gain (what is seen); but the town has ultimately lost, because property has been destroyed. This is a powerful essay against all kinds of wrong-headed ideas, from the widely-held belief that wars cause business gains because re-construction is required, to the hoax called ‘employment generation’ in India, where the same amount of employment would ensue if tax-payers spend the money themselves. It is noteworthy that the great American libertarian author and journalist, Henry Hazlitt, wrote his “Economics in One Lesson” based entirely on this essay of Bastiat’s. I am positive everyone who reads this essay will be thunderstruck by it. According to the Nobel laureate Friedrich Hayek, Bastiat deserves to be called a genius for this essay alone.

 

The short essay “The State” is satirical, but a work of genius nonetheless, in this instance as a political scientist. Bastiat begins by asking the citizenry, all the ladies and gentlemen present, to relate their favourite ideas on what should be done for the country’s benefit – and it invariably turns out that all their ideas involve a huge role for the State. This will ultimately lead to a situation, Bastiat says, when the State becomes ‘that fictional entity by which everyone tries to live off everyone else’. Bastiat then calls for a State whose only role is the administration of Justice.

 

Finally, in Part Four, we present Bastiat’s personal manifesto as he sought to be elected to parliament in 1846. It is a remarkable document because it reflects the parliamentary programme of a liberal. Bastiat wanted government to be ‘confined to its limits’ and he even opposed State education (because the State would teach false theories). He also wanted an end to the French colonization of Algeria. I hope all aspiring ‘representatives of the people’ benefit from reading this, as do those who might elect them. This manifesto has been recently unearthed by Jacques Guenin of the Cercle Bastiat, and is appearing in a book for the first time.

 

I conclude with a para from “To the Youth”, the essay with which this book begins. Here, Bastiat tells us who his real enemies are, and against whom he is writing:

Predatory men, you who, by force or fraud, in spite of the law or through the agency of the law, grow fat on the people’s substance; you who live by the errors you disseminate, by the ignorance you foster, by the wars you foment, by the restraints you impose on trade; you who tax the labour you have made unproductive, making it lose even more than you snatch away; you who charge for the obstacles you set up, so as to charge again for those you subsequently take down; you who are the living embodiment of selfishness in its bad sense; parasitical excrescences of faulty policies, prepare the corrosive ink of your critique: to you alone I make no appeal, for the purpose of this book is to eliminate you….

We too need to eliminate such ‘predatory men’ from our midst. And, more importantly, the erroneous ideas which prop them up, and which they disseminate – what with the ‘education cess’. My own book “Antidote: Essays Against the Socialist Indian State” (Macmillan India: 2000) argued that ours is indeed a “predatory state”. This is because it is based on wrong ideas – like socialism. It is because of this wrong idea that in India today, even the police are predatory, snatching away the surpluses of all small traders. This is how false social theories lead to barbaric governmental practices. There can never be any compromise with false theory. And, following that, there must not be any compromise with the predatory state, and its police, either.

 

It is noteworthy that one of Bastiat’s closest friends and allies was the economist Gustave de Molinari, who further developed and radicalized Bastiat’s ideas to a fully-fledged anarcho-capitalism, where even the “production of security” – i.e. police and judiciary – were to be privatized. If India is to be free, we must proceed beyond Bastiat. We must head for the private production of security that Bastiat’s friend Molinari was the first ever to contemplate. There is now a Molinari Society in the USA. Let us hope that Liberty Institute will publish an ‘Essential Molinari’ someday soon!

 

Thank you all for being here at the launch of “The Essential Frederic Bastiat”.

 

I wish you all a delightful as well as extremely enlightening read.

Road to the future

Road to the future by Sauvik Chakraverti, 
Saturday March 22 2008 18:21 IST

Street Smart:
Competition, Entrepreneurship and the Future of Roads
By Gabriel Roth
Transaction Publishers and  
The Independent Institute, $30  

Gabriel Roth is a libertarian with a passion for roads, that is, roads as private businesses. His earlier book Roads in a Market Economy (1996) revealed that Western nations had deeply erred by making roads into government monopolies funded through taxation and provided by politicians.

It offered capitalist nations the way out of this ‘Soviet-style roads system’.

His new book is a collection of brilliant essays by a wide variety of specialists on various aspects of roads. Bruce Benson, for example, a formidable authority on Law and Economics, has contributed two fascinating essays: The first on ‘eminent domain’, its misuse, and why it is really not required for road-building; and the second on the history of the 'turnpike trusts' of 18th and 19th century England, which were private efforts at building, maintaining and tolling roads. Indeed, the history of private roads in both England and America are recounted in this book, and there are many lessons to learn.

The essay on eminent domain is particularly instructive, since it dispels the false idea that roads cannot be built without invoking these authoritarian powers. This paves the way for a deeper understanding as to how businessmen can easily assemble the land required for such projects. The examples of the misuse of these powers in western countries tells us a great deal about the politics behind a similar misuse in India such as in Singur and Nandigram.

There are 20 essays in all and they present a wide array of issues and perspectives. John Semmens talks of privatising vehicle, driver testing and licensing and it becomes clear why better safety standards will be promoted if insurance companies, with a direct financial interest in safety, took over this vital function from a corrupt and useless government bureau.

Gopinath Menon, who teaches traffic management at Singapore’s technical university, has contributed an excellent piece on the city-state’s Automatic Road Pricing system and the history of its development.

This history confirms the old adage that ‘Rome was not built in a day’ and that traffic and transportation was always an area of critical focus for their government, right from independence in 1965. It is also time for our government to give up the ‘looking after poor’ bullshit and deliver knowledge-based solutions to traffic congestion and mayhem in all our cities and towns.

While each and every essay is noteworthy, those that deserve mention in this review are the two on city streets as ‘private sector public goods’ and the account of the Private Roads Associations of socialist Sweden, which provide and maintain a major share of that country’s rural roads. Rural roads are a critical area for India, as are city streets, and these essays are hugely illuminating.

Another essay that is extremely relevant to the Indian situation is on ‘the role of the private sector in managing and maintaining roads’. It is seen that ‘performance-based contracts’ with private firms are the best and cheapest way to maintain roads. There is an interesting story of how a US town paid $120 per pothole repair by traditional manual methods. When the performance-based contract was executed, the contractor found it prudent to employ a pothole-repairing machine that could be driven over the pothole, and which conducted an immediate repair for just $22. There is a photo of this machine. It is also mentioned that not repairing highways in time escalates costs hundredfold. One of the contracts cited contains the clause that, over every 10 kilometre, not more than three potholes of 15mm diameter should be seen: and where seen, they should be repaired in 48 hours. These are ideas India needs.

Gabriel Roth’s own essay, which opens the volume, ‘Why Involve the Private Sector in the Provision of Public Roads’ sets the tone for a learning experience on ‘the future of roads’ that can benefit many Indians dealing directly with this vitally important subject or indirectly interested in it, from infrastructure fund managers down to journalists covering roads.

Engineers can also benefit, and there is an exposition of radio-enabled ‘open road tolling’, by which tolls can be electronically collected on all roads, without requiring vehicles to stop.

As a libertarian myself, that too one with a passion for roads, I can only assert that I have myself benefited greatly from a study of Gabriel Roth’s Street Smart. I am happy this will be reflected in my writings on roads for many years to come. 

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Liberalism vs The Rest

Liberalism vs The Rest by Sauvik Chakraverti, 
Saturday March 22 2008 18:23 IST

Surely the first question any aspiring ‘representative of the people’ must ask himself is: What is the role of the State in a free (or democratic) society? To Raj and the Thackeray parivar, to Narendra Modi and the Sangh Parivar, to Buddhadev Bhattacharya and the communist parivar, just as it always was for the Nehru parivar, it seems perfectly apparent to me that their idea of State is ‘an institution that protects us from injustices, except those it commits itself’ (Ibn Khaldun, Muqaddima, circa 1350).

Coercion is their motto not because they are anti-democratic, but precisely because they are democratic. The process we call democracy in India is riddled with coercion. Anyone who runs a political party holds vast powers over all members; a political party is a power hierarchy based on ‘hegemonic relationships’. When politicians vote within democratic assemblies, each member must respect the orders of his ‘party whip’. The very term reeks of coercion. Then there is the Party High Command (or Politburo). Theirs is the ‘vote motive’. Or is it ‘rent motive’? Compared to these motives, the ‘profit motive’ is innocent: shubh laabh.

Raj Thackeray is ‘political’ in that he seeks to represent a majority. He is the leader of a ‘recognised’ political party and has powers over ‘party cadres’. This is true of all political parties. It is because of this that Roberto Michels propounded his Iron Law of Oligarchy in 1915: “Hierarchical political parties can never yield a classless, socialist society,” he wrote. “Where the instrument is hierarchical, how can classlessness result?”; adding, most accurately, “socialism will fail at the moment of its adherents’ triumph.”

The politics of Thackerayism, Moditva, Buddhadevism, Lalooism, and Nehruvianism are all ‘legitimate’: these recognized political parties swear by ‘socialism’, as defined in the Constitution of India and their party constitutions. But the reality of hegemonic power relations within each party hierarchy should wake us up to the fact that the way we are headed is not the classlessness of socialism, but something diabolical. It is aimed at taking control of the dysfunctional State, which provides access to further coercion, through legislation, through taxation, and through manipulation of the police and the administration. Never will we attain Socialist Equality if we continue with this socialist democracy. Oligarchies will rule. Chaos will follow.

In vivid contrast, Liberalism begins with voluntary co-operation in markets. Voluntary exchanges in the market order must be free, we believe. We therefore oppose legislation on ‘victimless crimes’ like gambling, prostitution, and ganja peddling. To us, coercion is an actionable tort, and a grave matter. We dream of a coercion-free natural order. That is why our ideal State is a provider of Justice. Nothing else.

This is Liberty under Law. It yields Freedom and Property, not Equality. To liberals, socialist ideas of Equality are a dangerous deception. The highest political values of liberalism are Freedom and Justice. Yet, we are barred from political participation while Raj Thackeray is legit. “Fair is foul and foul is fair,” as Macbeth’s witch put it. To grasp the amount of coercion that Raj Thackeray has unleashed on a poor minority, recall that 50,000 north Indians have fled Maharashtra since he began flexing his Maratha muscles.

Unveiled threats are also coercive. As they were not countered by immediate and stern State action, they were deemed imminent by all concerned, who fled.

What would happen if liberals took over? Whom would we throw out? This is relevant given that politicians place before the voter their own idea of a ‘class enemy’. To Raj Thackeray, north Indians are the enemy. To Modi, it is non-Hindoos. Who are the enemies of Liberalism?

The enemies of liberalism are all those who coerce the rule-following citizenry. Today, apart from some recognised political parties, the biggest profiteers from arbitrary coercion are the police and the taxation bureaus. A liberal government’s first task will be to bring these coercive bureaus to heel. The police must protect petty traders. Taxation must be linked to services provided. Today, taxation is arbitrary and excessive like those on civil aviation, which transfer business to the unsafe railways. Tolls on ‘notional highways’ are double-taxation, as we pay dedicated road taxes on automotive fuels. As we pay the taxes, proper highways must be built as 'freeways'. The excise department must be stripped of licensing powers, so the business of alcohol retailing can be free. The customs department must either be abolished, or a small ‘revenue tariff’ should be levied on select, bulk imports. A minimalist State requiring minimal taxation: that is the liberal ideal.

Where masses are poor, taxation must be lighter still. If liberals come into positions of authority, the police, the excise, the customs, the income tax will feel the heat. And that’s a promise.

To conclude: There is hope for liberalism as we do not require coercion for the fulfillment of our political ideals. As other political creeds require coercion, they are doomed to failure as there is an limit beyond which none will submit to authority. For this crucial reason, liberalism is destined to prevail over all competing political visions. It is only a matter of time. 

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Curse of false philanthropy

 Curse of false philanthropy by Sauvik Chakraverti 

Government philanthropy based on notions of social justice is just show-business--false and theatrical. 

The idea of philanthropy has undergone enormous change in the last 500 years. Then, a man who had made his fortune would donate some of it to a public cause. Today, there are professional charities that collect funds on a huge scale. Their fund-raising activities are carefully choreographed and they pay celebrities huge amounts for endorsements. This is philanthropy as show-business. And then, of course, there is government philanthropy based on notions of “social justice”. This is also “show-business”—in the precise sense that all is false and theatrical. 

During classical times, philanthropy was rightly considered noble. It is on record that the Mayors of London, who were among the wealthiest men in the kingdom—each, without exception, richer than their King—routinely donated one-third of their estates to public causes. The legendary Dick Whittington, who served thrice as Lord Mayor, built almshouses for the poor, a college for secular priests and Guildhall till today has a paved floor and glazed windows with his name on them that are his bequest. He gave libraries to Guildhall and Greyfairs. He also built a public toilet known as Whittington’s longhouse in Vintry Ward, which had two long rows, each with 64 seats, one for men and the other for women, built over a gully which flushed into the Thames with every tide. Whittington’s longhouse was in use till the 17th century. 

Even Adam Smith, who entered the scene much later, and who famously said that “we get our lunch not from the benevolence of the butcher, the baker and the brewer, but from their self-love”, understood well why human beings are philanthropic. In a sadly neglected work, A Theory of Moral Sentiments, Smith said that sympathy was a “moral sentiment” present in each one of us. We sympathize with the poor, so we are naturally inclined to help. But do we know how to help? 

The moral sentiment of sympathy is being exploited: by beggars, by charities and by governments. 

A true classical liberal among “development economists”, a man who studied poverty in Asia and Africa deeply, was the late Peter Bauer. In his 1961 classic on Indian planning and development, Bauer made the penetrating observation that widespread beggary on the streets of India and Pakistan is not a sign of poverty; rather, beggary persists because the dominant communities in both these countries, Hindus and Muslims, respectively, believe they earn spiritual merit by offering alms. In these very countries, there are no Sikh, Parsee or Jain beggars. It would seem that we are all steeped in the moral sentiment of sympathy. And our philanthropy has negative consequences. How then can we truly “help” the poor?

While my reader ponders over this vital question, allow me to shift the discussion to government “welfare”. Government netas and babus never donate their own money. Nor do they collect voluntary donations. Theirs is, by their own admission, “redistribution”: They forcibly tax the rich to give to the poor. But it doesn’t end there. They then print money and spend on “social justice”. India’s huge budgetary deficit has much to do with “helping the poor”. In reality, the poor are paying the “inflation tax”. This is “false philanthropy”. 

Classical liberals understood well the evil of inflation. Unfortunately, the Keynesians of our times have obscured this understanding. Keynesians are still talking of government deficits as a “stimulus”. They love their “welfare state”. Yet, their paper money is just a “property title without property” that is “legal tender” in all exchanges by which “real” goods and services can be obtained for the paper notes. Thus, an increase in paper property titles without any increase in the real goods and services produced can only lead to a redistribution of real wealth. Those who get to spend the paper notes first, gain. Those who get to spend them last, lose. Inflation is a tax on the poor, on savers and on all those with fixed incomes. This is no way to “help the poor”. This is a falsity; this is certainly not “philanthropy”. Nor is it “welfare”. It is, of course, “redistributive”, but in the opposite direction of that which theneta claims it to be. It takes from the poor to give to the rich. 

Hard-working people must wake up to the fact that their moral sentiment of sympathy is being exploited from all sides: by beggars, by charities and by governments. But most importantly by governments. And among the world’s governments, none more than by our own government of India. In every international forum, this socialist state lays claim to being a monopolist on poverty. But the fact is that it is entrenching this poverty. It loves poverty for perverted reasons of its own. 

So what do we do? First, let us wake up to the reality. Let us call for an end to all this false philanthropy. Let us not give too generously to beggars either. Let us also make the call for liberty so that the state cannot stand in the way of voluntary exchanges. In that liberated market order, let us appeal to all the people—especially the poor—to work, to produce, to exchange; in other words, to engage in “self-help”. And let us put an end to inflationism. The liberal mantra is: free trade, sound money and property titles. With these and self-help, all can survive. For those who fail, let there be genuine philanthropy. State welfare based on paper money is a curse. 

Bauer once wrote these telling words: “Poverty indicates just one thing—the absence of economic achievement.” He then went on to add: “Economic achievements are made in markets.” So let the market really be free. Remove all obstacles. Poverty will vanish on its own. 

Sauvik Chakraverti is an author and award-winning columnist. He blogs at www.sauvik-antidote. blogspot.com. Comment at theirview@livemint.com 

http://www.livemint.com/2008/12/02222217/Curse-of-false-philanthropy.html

Do we need socialism?

Do we need socialism? By Sauvik Chakraverti

Socialism was inserted into the preamble of the Constitution in 1976. It infiltrated into the Representation of the People Act, by which all political parties are made to swear by socialism in order to be eligible to participate in the electoral fray. At stake is the idea of a truly liberal party based on individualism and private property -- the very antithesis of socialism. A liberal party opposed to socialism must be allowed to attract the mind of the smart Indian voter, writes Sauvik Chakraverti in the New Indian Express

A constantly moving target is difficult to shoot. But shoot it we must. I refer to the word ‘socialism’, which was inserted into the preamble of the Constitution; and the subsequent infiltration of this term into the Representation of the People Act, by which all political parties are made to swear by socialism in order to be eligible to participate in the electoral fray. At stake is the idea of a truly liberal party based on individualism and private property -- the very antithesis of socialism.

 

But what is socialism? Is it the ‘commanding heights of the economy’ that Nehru ascended? Is it the empire of PSUs that no party wants to privatise? Is it the contempt for private enterprise and private property? Apparently, it is none of these things anymore. The Supreme Court has found yet another definition of socialism — a definition that has serious implications for our future. If this new definition goes unchallenged, socialism will be perpetuated; simultaneously, liberalism will be barred.

On January 9, 2008, while dismissing a petition challenging the legislation that makes it mandatory for every ‘recognised’ political party to swear by socialism, the Chief Justice of K G Balakrishnan, asked counsel Fali S Nariman: “Why do you define socialism in the narrower sense as the Communists do? Why don’t you go by the broader definition… which mandates the state to ensure social welfare measures for all the citizens… as a facet of democracy?”

There is an ever-present danger with Supreme Court: that it will act in ways that preserve the government, of which they are a part. Indira Gandhi called her judges ‘a committed judiciary’, and it seems they are indeed still committed to her political ideals. An entirely new judicial definition of the dreaded word has been established: one that ‘mandates the state to ensure social welfare measures for all the citizens, as a facet of democracy.’ Justice Balakrishnan wants ‘welfare for all the citizens’ — but that must be over-enthusiasm for his cause. What he probably means is welfare for the really deserving poor.

Classical liberals of 18th and 19th century Europe and America would be horrified by the idea of a ‘welfare state as a facet of democracy.’ To them, the great idea wasLiberty for all — especially the poor. It was held that people are diversely gifted and only in a liberal, free market order could each find his ‘just deserts.’ And since that is a competitive struggle for all, along with Liberty came Self-Help. Samuel Smiles’ eponymous volume was a classic of its times, selling 20,000 copies in its first year alone. Self-Help was kept next to the Bible in every Victorian home, an aspect of Victorian morality all too easily forgotten today, thanks to welfare statism in the west, and its culture of dependency. (Incidentally, Liberty Institute has republished the book in India.)

Liberty and Self-Help were the two pillars of classical liberalism, especially among the poor. That is why the first ‘mass movement’ in British history was the one for free trade in the 1830s, led by Richard Cobden and his Manchester Free Trade League, in which the working classes eagerly participated. Socialism was not even on the horizon then.

The ‘welfare state’ is a product of the 20th century, that too, after the second World War. It has indeed become a ‘facet of democracy’ in several western nations, but not a good facet. The welfare state is the darling of ‘tax-borrow-print-and-spend politics’ that is funded by Keynesian fiat money, that sustains a vast ‘spending bureaucracy’ and subsidises an underclass that is increasingly work-resistant. Yet, even in these countries, there are parties and political leaders that oppose welfare statism — like the Tories did under Margaret Thatcher. In a truly liberal order, it is unthinkable that every party must swear by the welfare state. But the situation in India is far worse, and there are good reasons to believe that the Chief Justice’s conception of a good society, if ever allowed to come into fruition, will spell disaster for the nation and its people.

Writing in the 1950s, the great dissenting development economist, Peter, Lord Bauer, said that widespread beggary on the streets of India and Pakistan is not a sign of poverty; rather, it exists because the dominant communities in both these countries, Hindus and Muslims respectively, believe they earn spiritual merit when they offer alms to beggars. In the very same countries there are large communities like the Parsees, Sikhs and Jains who practice charity differently among themselves — and produce no beggars. A ‘welfare state’ of the kind contemplated by the learned CJI would cause beggary in India to multiply thousand-fold.

What is the best way to help the deserving poor? When I ask this question during seminars, I offer students three choices: First, take direct action and give alms to every beggar you come across. Second, pay taxes to the government and ask the government to help the poor. And third, donate to a good charity organisation like Mother Teresa’s and ask them to use that money to help the poor. Even kids of Class 5 decide that the third option is the only doable one. To liberals, charity must be private.

In India, what keeps people poor are stupid policies — and all these policies are the product of ‘socialism’, however defined. The new definition will lead to the perpetuation of our ‘spending bureaucracy’, without any benefit to the poor. For real progress, Indianeeds the classical emphasis on Liberty and Self-Help —and well-directed private charity.

If an example of an Asian country is required that prospered immediately upon embracing these principles, it is Japan after 1868: the Meiji era. Samuel Smiles’ Self-Help was translated into Japanese then, and widely read. It convinced the ordinary Jap that with Liberty all he needed to add was sincere, individual effort. And every Jap worked hard; their work-ethic is the stuff of legend. The populous little nation flourished and became an inspiration for all of Asia. The Japs have never embraced socialism. It is still Liberty and Self-Help in the Land of the Rising Sun.

If India is to regain her lost glory, socialism must be dumped and her people encouraged to help themselves. Indians are known to be hard working. The new definition of socialism offered by the CJI is patronising and impractical; and it will not lead to the ‘welfare’ of the poor. A liberal party opposed to socialism must be allowed to attract the mind of the smart Indian voter.

This article was published in the New Indian Express, on 16 February 2008. Please read the original article here.

Author : Mr Chakraverti is the author of Antidote and Antidote 2, and a columnist.

http://www.indefenceofliberty.org/story.aspx?id=967&pubid=681

Holmes rolls in Goa

Holmes rolls in Goa by Sauvik Chakraverti

Sherlock Holmes and his assistant Dr Watson holidayed in Goa recently, enjoying a few days of r&r. After a leisurely walk along Palolem beach, Holmes remarked: "Watson, it seems perfectly apparent to me that tonnes of ganja gets smoked in Goa every day. This calls for a deeper, private investigation" writes Sauvik Chakraverti in his Antidote column in The New Indian Express on Sundays.

Sherlock Holmes and his assistant Dr Watson holidayed in Goa recently, enjoying a few days of r&r. After a leisurely walk along Palolem beach, Holmes remarked: “Watson, it seems perfectly apparent to me that tonnes of ganja gets smoked in Goa every day. This calls for a deeper, private investigation.” 

Dr Watson, as is his wont, was slow to get the point. “How can you arrive at such an outrageous conclusion after just one short walk, Holmes?” he demanded to know. “Why, you have not even unsheathed your famous magnifying glass!” 

“Elementary, my dear Watson,” said Holmes. “Perceive the loads of rolling papers that are sold in all the little shops here, in five kilo jars. You don’t need a magnifying glass to spot this singular, vital clue. So much paper means so many spliffs, which means so much ganja — simple arithmetic. Tell you what, Watson, let us score some ourselves and smoke it. You know, when in Rome etc. And anyway I haven’t brought my cocaine along, anticipating trouble with this foreign police.” 

Deprecating Holmes’ sense of adventure, Watson nevertheless agreed. The duo headed for the closest cigarette shop. Holmes bought a pack of king size Rizlas. The little shop had over 500 packs in stock. Holmes, in a conspiratorial tone, asked the shopkeeper where he could get some ‘stuff’ to smoke in his Rizlas. The shopkeeper pointed to a young Goan lad in a Bob Marley T-shirt, leaning casually against a coconut tree. Very soon the deal was done, and Holmes obtained a goodly quantity of fine ganja. The two hastened to smoke it. 

“Time me, Watson,” commanded Holmes as he began the tedious preparations that go into rolling a spliff: cleaning the grass of twigs and seeds, preparing a nice ‘mixture’, making a roach, and then finally doing the spliff. 

“Twelve minutes precisely, Holmes,” said Watson, as Holmes lit the spliff and inhaled deeply of the sweet smoke. “Let me now count how long it takes to smoke it.” This turned out to be three minutes. The duo, now suitably stoned, strolled into a beach shack and ordered some beer to tackle the inevitable ‘cottonmouth.’ The shack had some chairs on the sand facing the setting sun. The colours were breathtaking, the soft reggae music emanating from the shack was elevating, and the cold beer was heaven itself. Of course, Holmes’ mind was still ticking away on the ganja question. 

“Watson, the plight of ganja smokers distresses me. Twelve minutes to roll what takes three minutes to smoke. What a criminal waste of Time! All roll, roll, roll and no rock at all! We must therefore arrive at an assessment of not only the total sales of rolling papers and the total quantity of ganja smoked, but also the total amount of time spent hand-rolling. Let us down our beers and proceed to the first step: evaluating the only visible clue we have — rolling papers. How many packs of rolling papers are sold here every day? That is the question.” 

Very soon, the two were back in the shack, Watson bearing his notepad. More beers were ordered and Watson pulled out a calculator. The statistics on rolling began to roll. 

Twenty little shops selling 100 packs of rolling papers every day added up to 2000 packs sold per beach, per day. Assuming Goa has 20 beaches like Palolem, that means 40,000 packs of rolling papers sold every day in Goa. Now, a pack contains 50 leaves, which means 2 million spliffs are rolled in Goa every day. Hand-rolling them takes 24 million minutes or 4,00,000 man-hours. At two grams of ganja per spliff that adds up to four tonnes of the stuff consumed daily in Goa. Holmes and Watson were both flabbergasted at the implications of what their very ‘private investigation’ had uncovered. They paid for their beers and continued on their stroll. Holmes was lost in thought, almost oblivious of his enchanting surroundings. 

“Watson,” said Holmes, “let us visit the website of Rizla and try and find how many rolling papers they sell annually worldwide. This could give us an exact understanding of this ‘crime’ that the whole wide world revels in.”

The two trooped in to a cyber café on the beach, but the data could not be obtained. Rizla maintains all such information as trade secrets. But they did find a long history of the company, which has French origins but is now owned by Imperial Tobacco and headquartered in the UK. It must indeed be a very big business to attract Imperial Tobacco to it. And Rizla was just a market leader. As Holmes and Watson discovered, there were many other brands available, with keen competition between papers made of hemp and Rizla, whose papers are made of rice. However, they could not obtain any hard data on the international rolling paper industry. Disappointed, but not beaten, our heroes re-emerged on Palolem beach. 

The sun had set, the moon was out, and all the shacks had their pretty coloured lights on. They walked into one of them and ordered more beer. Holmes began to roll another spliff. The evening proceeded slowly, more beers were drunk, more spliffs were smoked, and a fine seafood dinner followed. Holmes then summed up his thoughts: 

"Watson, my good man, if Goa represents even 5 percent of the world market for rolling papers, this means 40 million spliffs are smoked worldwide every day. The total time spent hand-rolling them is 8 million man-hours – every day. Total ganja smoked worldwide every day is 80 tonnes. This is an astonishing discovery. If ganja was legal, big spliffs would be made by machines, as cigarettes are today, and 8 million man-hours of hard labour saved." 

"Why don't you write a column for The Times on this when you return to Baker Street, Holmes," suggested Watson kindly, knowing that his friend was exceptionally perturbed at his findings. "You would shake up the authorities." 

"I most certainly shall," Holmes replied, adding, "and could you please roll a joint for us now. I am too stoned to roll, but very keen on a last smoke." 

Watson did the needful, as a dutiful 'joint secretary' would. 

Holmes patiently waited the full 12 minutes; he then lit the joint, inhaled, exhaled, and raised the toast: "Here's to machine-made spliffs someday soon, so the whole world can chain smoke them." 

"Amen," said Dr. Watson.

This article was published in New Indian Express on 01 March 2008. Please read the original article here.

Author : Sauvik Chakraverti is a columnist, and is the author of Antidote

http://www.indefenceofliberty.org/story.aspx?id=1014&pubid=725

Liberalism versus the Rest

Liberalism versus the Rest by Sauvik Chakraverti

There is hope for liberalism as compared with all other political ideologies only because we do not require coercion for the fulfillment of our political ideals. Since all other political creeds require coercion, they are foredoomed to failure because there is an limit beyond which none will submit to authority. For this crucial reason, based on an appreciation of the limits to coercion as well as a principled understanding of the legitimate use of coercive powers, liberalism is destined to prevail over all competing political visions. It is only a matter of Time, writes Sauvik Chakraverti.

Antidote

Surely the first question any aspiring 'representative of the people' must ask himself is: What is the role of the State in a free (or democratic) society? To Raj and the Thackeray parivar, to Narendra Modi and the sangh parivar, to Buddhadev Bhattacharya and the communist parivar, just as it always was for the Nehru parivar, it seems perfectly apparent to me that their idea of State is 'an institution that protects us from injustices, except those it commits itself' (Ibn Khaldun, Muqaddima, circa 1350).

The reason behind this eclipse of reason is not difficult to find. Coercion is their motto not because they are anti-democratic, but precisely because they are democratic. The process we call democracy in India is riddled with coercion. Anyone who runs a political party holds vast powers over all members; a political party is a power hierarchy based on 'hegemonic relationships'. (Business hierarchies are 'contractual'.) When politicians vote within democratic assemblies, each member must respect the orders of his 'party whip'. The very term reeks of coercion. Then there is the Party High Command (or Politburo). Theirs is the 'vote motive'. Or is it 'rent motive'? Compared to these motives, the 'profit motive' is innocent: shubh laabh.

Raj Thackeray is 'political' in the sense that he seeks to represent a majority. He is the leader of a 'recognized' political party and has powers over 'party cadres': they follow his orders. Now, this is true of all political parties. It is because of this very reason that Roberto Michels propounded his Iron Law of Oligarchy way back in 1915: "Hierarchical political parties can never yield a classless, socialist society," he wrote. "Where the instrument is hierarchical, how can classlessness result?"; adding, most accurately, "socialism will fail at the moment of its adherents' triumph."

The politics of Thackerayism, Moditva, Buddhadevism, Lalooism, and Nehruvianism are all 'legitimate': all these recognized, hierarchical political parties swear by 'socialism', as defined not only in the Constitution of India, but in their party constitutions as well. But the reality of hegemonic power relations within each party hierarchy should wake us up to the fact that the way we are headed is not the classlessness of socialism, but something diabolical. It is politics without principle, based on coercion. It is aimed at taking control of the dysfunctional State – which provides access to further coercion, through legislation, through taxation, and through manipulation of the police and the administration. Never will we attain the ideal of Socialist Equality if we continue with this socialist democracy. It will always be arbitrary coercion. Oligarchies will rule. Chaos will follow.

In vivid contrast, Liberalism begins not with coercion, but with voluntary co-operation in markets: the natural order of natural liberty. Voluntary exchanges in the market order must be free, we believe. We therefore oppose legislation on 'victimless crimes' like gambling, prostitution, and ganja peddling. To us, coercion is an actionable tort, and a very grave matter indeed. We dream of a coercion-free natural order. That is why our ideal State is but a provider of Justice, whose only role in a free society is to act against those who disrupt the market order with their unjust actions. Nothing else.

This is Liberty under Law. It yields Freedom and Property, not Equality. To liberals, socialist ideas of Equality are a dangerous deception. The highest political values of liberalism are Freedom and Justice. Yet, we are barred from political participation while Raj Thackeray is legit. "Fair is foul and foul is fair," as Macbeth's witch put it.

To grasp the enormous amount of coercion that Raj Thackeray has unleashed on a very poor minority, recall that at least 50,000 north Indians have fled the state of Maharashtrasince he began flexing his Maratha muscles. Why did so many run for their lives?

Unveiled threats are also coercive. Because these threats were not countered by immediate and stern State action, they were deemed imminent by all concerned, who fled. Specific provisions of the Indian Penal Code outlaw political hate speech of the kind Thackeray delivered; but then, the Indian police is itself rooted in arbitrary coercion, and is the very anti-thesis of the 'rule of law', thanks to 60 years of socialist misgovernment.

So, what would happen if liberals took over? Whom would we throw out? This is relevant given that all these politicians place before the voter their own idea of a 'class enemy'. To Raj Thackeray, north Indians are the enemy. To Modi, it is non-Hindoos. Who then are the enemies of Liberalism?

The enemies of liberalism are all those who coerce the rule-following citizenry. Today, apart from some recognized political parties, who must be defeated by State action, the biggest profiteers from arbitrary coercion are the police and the taxation bureaus. A liberal government's first task will be to bring these coercive bureaus to heel. The police must protect petty traders, not loot their surpluses. Taxation must be linked to services provided. Today, taxation is arbitrary and excessive – like those on civil aviation, which transfer business to the unsafe railways. Tolls on stretches of our 'notional highways' are double-taxation, as we already pay dedicated road taxes on automotive fuels. Since we pay the taxes, proper highways must be built as 'freeways'. Similarly, the excise department must be stripped of all licensing powers, so the business of alcohol retailing can be free. Further, the customs department must either be abolished (like octroi), or a small 'revenue tariff' should be levied on select, bulk imports. A minimalist State requiring minimal taxation: that is the liberal ideal.

Where masses are poor, taxation must be lighter still. If liberals come into positions of authority and responsibility, it is not the Muslim or the Bihari who should fear for his life – but the police, the excise, the customs, the income tax: these coercive bureaus will feel the heat. And that's a promise.

To conclude: There is hope for liberalism as compared with all other political ideologies only because we do not require coercion for the fulfillment of our political ideals. Since all other political creeds require coercion, they are foredoomed to failure because there is an limit beyond which none will submit to authority. For this crucial reason, based on an appreciation of the limits to coercion as well as a principled understanding of the legitimate use of coercive powers, liberalism is destined to prevail over all competing political visions. It is only a matter of Time.

A version of this article appeared in the New Indian Express, on 23 March 2008. Please read it here.

Author : Mr Chakraverti is the author of two volumes of Antidote (Macmillan Publishers)

http://www.indefenceofliberty.org/story.aspx?id=1053&pubid=763

The Intelligent Woman's Guide to Capitalism

The Intelligent Woman's Guide to Capitalism by Sauvik Chakraverti

The suffragettes fought for the vote and got it. Yet, despite years of voting, millions of women remain poor. The vote is obviously not enough. Women must therefore think hard as to where their true interests lie. Free trade, sound money, private property, liberty under law, production for exchange in urban markets and the consequent rapid urbanization of India – it is with these that all women can prosper. When they do so, men will gain too, because there is a law in Economics that says: When any good is sold it creates the demand for all non-competing goods and services, writes Sauvik Chakraverti in his blog, Antidote.

(With apologies to George Bernard Shaw, who was a Fabian socialist and wrote a very popular "Intelligent Woman's Guide to Socialism.)

Till fairly recently, both economic as well as political activity were the reserve of men. Thus, women had to depend on men for everything, and this led to subjugation.

Fortunately, better days are here. The suffragettes fought for the vote and got it. Yet, despite 60 years of voting, millions of women in India remain backward and poor. The vote is obviously not enough. Some, like the socialist economist Amartya Sen and his protégé Manmohan Singh, say they need “education” – from the government. But prosperity is delivered by markets, and the government of India is scarcely a lamp of learning. Women must therefore think hard as to where their true interests lie. Only then can they campaign for the right policies.

It is not true that women did not “produce” or that they were “ignorant” in the centuries gone by. All over the world, women cooked delicious food, kept homes clean, and managed household budgets. In India, women produced pickles, papad, chutneys, butter, ghee and so many other wonderful things. Tribal women still produce alcoholic drinks like mahua, handia and apong. But all this was for “self-consumption”. These were not produced for “exchange”. If all these are produced for exchange in the market economy, it would become evident that women indeed possess a great deal of useful “knowledge” – even without formal education. They are not ignorant.

Thus, the first step towards the liberation of all women lies not in the vote, nor in “education”; rather, it lies in the freedom for all women to participate in the exchange economy of the market with whatever knowledge they may possess or choose to acquire. Indeed, pickles, papads and chutneys are very big businesses today. Street food is another. Entertainment is a multibillion dollar industry now and traditionally women have always been proficient in music and dance. Rather than the vote, which is “political freedom”, or government education, which can seriously damage the mind, women today should strive for the Liberty to engage in economic activity, which is Economic Freedom. This is a term not found in the lexicon of the socialists.

At the outset, let it be clearly understood that Gandhi got it all wrong. His ideal of “village self-sufficiency” means economic suicide for both rural men and women; but more so for women, because if their men are poor, women are poorer still. Self-sufficiency is production for use; capitalism is production for exchange. If rural women produce surpluses for exchange, they will discover that the markets in which they can find sufficient customers are invariably located in cities and towns. Stuck in a sparsely-populated village, a woman might sell two jars of pickles. But if she took her output to a crowded city, she might sell a hundred kilos of the stuff. Thus, villages, self-sufficiency and “rural development” must be ditched in favour of urbanization: hundreds of free trading cities and thousands of such towns, instead of millions of self-sufficient village economies. Women must produce for exchange in urban market centres. This is my Lesson # 1.

On to Lesson # 2: As far as politics and government are concerned, what these must be able to provide women is Liberty Under Law. Nothing else – no “sops”, no “reservations”. There must not be any politically imposed restrictions placed upon women (or men) when they go to the urban markets. It is here that we find the critical problem that many, many women face in our cities: that the Law does not give them Liberty; rather, the Law is an instrument of coercion. This applies not only to women street vendors and petty traders, but also to women performing artistes, right through to women working in professions like tending bars and serving food and drink. Indeed, although we in India have a huge film industry, we do not possess a “nightlife” industry – where lakhs of women could find gainful employment. There isn’t a Moulin Rouge in any Indian city. Nor are there any casinos. Even bars are strictly licensed, and entertainers are discouraged by the “entertainment tax”. These are areas where women are usually employed en masse, at least in the western world. In our own land, the nautch-girl was a fixture of the Mughal court; she was there in every city; even the British were entertained by her; but our modern-day democracy has thrown her out – and this is repression via legislation. So my Lesson # 2 reads: Fight for Economic Freedom – the liberty to engage in consensual capitalistic exchanges that hurt neither buyer nor seller.

Now, the difference between primitive “production for self-consumption” and capitalistic “production for exchange” is that the latter requires Capital as “investment”. With capitalism, we have “roundabout methods of satisfying wants”. For example, till fairly recently, all yoghurt produced in India was in the home, consumed inside the home itself. Today, we have big companies producing yoghurt. Instead of a woman milking her cow and preparing the yoghurt – which is “direct satisfaction” – we now have the “roundabout” method of companies buying humungous amounts of milk from lakhs of cattle-owners, transporting them to distant factories in big trucks, making tonnes of yoghurt and packaging it, transporting these to shops, advertising these offerings, etc. This “roundabout” method is Capitalism – and this requires capital to invest. My third lesson is on how women can save the capital necessary to invest in capitalistic enterprise.

At the basic level, we save if we spend less than we earn – and this is something every intelligent woman understands full well. (Though Lord Keynes didn’t: but that’s another story.) But there are two factors that erode our savings: taxes and inflation. It is in the interest of all women to campaign for lower taxes (so oppose Manmohan Singh’s “education tax”) and for an inflation-free currency. Inflation is a hidden tax. As the value of the currency falls, so does the value of one’s savings. The gainer is the borrower who takes a loan today and pays back many years later when the money has lost much of its value. The government also gains. Thus, women should understand inflationism and oppose it: Low taxes, balanced government budgets, sound money – these are policies that will allow millions of women to save and invest, and engage in Capitalism. Whenever a finance minister announces a “budget deficit” or another populist giveaway, all Indian women should cry “Foul!” This is my Lesson # 3.

Fourth: Capitalism is based entirely on private property (socialism exalts “collective property” – like the steel plants Nehru built). The unwritten law of any market is that the goods arrayed before a vendor belong to the vendor. If we want some of them, we must strike a bargain and make the exchange, whereupon the ownership rights are reversed. Now, imagine what would happen in the market if the Law said that bread belonged to all, and all were free to consume it: communism. The result would be there would be no bread offered for sale in any market. There would be wheat, flour, chappatis – but no bread. The “natural law” of private property cannot be dispensed with without causing immense economic dislocation.

What properties do women need? Women are homemakers: they need homes. Homes are the most essential private properties. Since all cannot afford to buy them, they rent. But what happens if the Law says that the actual owner of the house cannot raise his rents to market levels and cannot evict tenants who refuse to pay what he demands? As in the case of “collective bread” above, the result would be that rental housing would not be offered on the market. Prospective tenants would not find rental housing. They would have to stay in slums. This is what is happening in every Indian city today. Yet, every bai in Mumbai would have decent rooms on rent if all legislation on “rent control” was repealed. Slums would disappear. I hope my readers will now instruct their bais to take to the streets in opposition to rent control. This is my Lesson # 4.

Finally, what good is the money earned if there is nothing much to buy with it? – as in our socialist heydays. Women are great shoppers. They love shopping. And they have the nose for the best deals. What good can these excellent noses do if foreign products are left out? Free trade is in the interest of all shoppers – so that they can purchase, with their hard-earned wealth, the best goods the world has to offer. So campaign for free trade as an essential component of Economic Freedom – the freedom to engage in consensual capitalistic exchanges with foreigners. This is my Lesson # 5.

 

Free trade, sound money, private property, liberty under law, production for exchange in urban markets and the consequent rapid urbanization of India – it is with these that all women can prosper. When they do so, men will gain too, because there is a law in Economics that says: When any good is sold it creates the demand for all non-competing goods and services. Thus, when a woman sells a tonne of papad, she will possess the means to buy a good car – manufactured by male engineers.

And even we men will prosper.

This article was published in the Antidote blog on Wednesday, June 18, 2008. Please read the original article here.

Author : Mr Chakraverti is an economist based in India. He writes on his blog http://sauvik-antidote.blogspot.com

http://www.indefenceofliberty.org/story.aspx?id=1329&pubid=1087