The real apes

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

The real apes

Dhoti-clad vernacular politicians often accuse us, who read, write, speak, sing and even dream in English, of ‘‘aping the West’’. However, their own core ideas and practices, like ‘‘socialism’’ and ‘‘democracy’’, are also Western imports. Who are the ‘‘real apes’’?

Liberalism is essentially an English idea, stumbled upon by a brave people who needed to place their King under legal restraint. In 1215, King John was forced to sign the Magna Carta. This, the ‘‘First Statute of the Realm’’, by placing the King under the Law, secured for the people precious liberties, enshrined in Law. The English were the first people ever to possess a signed Charter of Liberties.

An important liberty obtained that early was the ‘‘freedom to trade by land and sea’’. Another liberty taken from the King was the freedom to run towns independently, thereby enabling the rise of local self-government. The then Lord Mayor of London, William Hardel, was standing by with his hands on his sword-hilt while the hapless King John signed the charter.

These ideas of ‘‘liberty under the law’’ and ‘‘rule of law’’ (as against ‘‘rule of man’’) gave each Englishman ‘‘stability of possessions’’: his life and his property were secure, and, with these, he was at liberty to engage in the great game of trade in order to improve his condition. Freedom and Justice have remained the highest English political values ever since, their gift to the world.

Liberalism, more than anything else, gave England the Industrial Revolution, making her the first nation to graduate from feudalism to capitalism. The word ‘‘revolution’’ is misleading, suggesting, as it does, a sudden event. In reality, capitalism began steadily emerging from under feudal covers as early as the 14th century. The East India Company was set up in 1600. Without democracy, without bureaucracy, without legislation, the English possessed Justice: ‘‘stability of possessions’’ and liberty, without which capitalism cannot work.

When the Peruvian economist Hernando de Soto says Third World people need property rights in the 21st century if they are to discover the ‘‘mystery of capital’’, we can fathom why England jumped ahead of the rest of the world, blessed as she was with ‘‘stability of possessions’’ from as early as 1215 AD. Under the common law, every Englishman was secure in his property and his contracts, giving England the lead. It was this same liberalism and common law that was exported and brought modern capitalism to many parts of the world: America, Australia, Canada, and Japan, among others.

Hernando de Soto’s book is sub-titled Why Capitalism succeeds in the West and not in other parts of the world. Political culture is largely to blame. In India, we do not even have a vernacular word for ‘‘liberty’’ in the English, legal sense of habeas corpus. For us, government is ‘‘hukumat’’ or ‘‘raj’’, both suggesting absolutism. Our idea of politics is Machiavellian: what we call Chanakyaneeti. We bow and scrape before any and every tin-pot authority. Liberty under Law has never been a part of our political consciousness. Even when we supposedly fought for freedom and won it, and then gave ourselves a constitution, we created a centralised state while also depriving ourselves of both property rights as well as liberty. Our cities and towns have no local self-government worth speaking of.

That is, instead of an English Charter of Liberties, we gave ourselves a constitution suited ideally for tyranny. We never displayed the courage of the English, nor did we possess their moral convictions, when we allowed Indira Gandhi to nationalise anything she could lay her hands on. We became a nation in awe of power and sought political pull in order to survive. We lost our morality; we became slaves. A nation that worships power has no use for liberty. We lost the freedom thousands of martyrs died for.

Jawaharlal Nehru and Mohandas K Gandhi were both lawyers trained in England. But the nation they founded was never blessed with the legal liberty of the English. Instead of importing liberalism, Nehru imported two other ideas that grew in England in the late 19th and early 20th centuries: socialism and democracy. These ideas swiftly destroyed liberal England. They destroyed large swathes of the world, including India.

Nehru once said that he was the last Englishman to rule India. History will judge that he was just an ape of the English, possessed of the English language and not much else. If Macaulay had dreamed of creating a race of Indians ‘‘English in spirit’’, he failed miserably in his attempt. For the political culture of the Indian is something that knowledge of the English language could not change: witness the swift path Nehru took to install himself at the commanding heights. See how his grand old party has degenerated into Ceasarism and rank sycophancy. Note that in Britain, the Fabian socialists had no aspirations of hitting the ‘‘commanding heights’’: their idea was to begin with municipal affairs. Marxism had no impact in Britain although Marx lived and wrote there.

So who are guilty of ‘‘aping the West’’ uncritically? At least those of us who espouse classical liberalism can plead ‘‘not guilty’’. On the other hand, it is the communists and the socialists who hold power in a parliamentary democracy based on the Westminster-model; they follow Western procedures in Parliament and court. The key English values of Liberty and Justice are nowhere to be found in India. It is they who have ‘‘aped the West uncritically’’.

Mankind has always learnt by imitation, ‘‘the sincerest form of flattery’’. When two old civilisations meet, one strong and dominant, the other weak and clueless, the latter must learn the survival skills of the former. The Greeks, the Romans and the English all exported their ideas and ideals. India today is a nation adrift because we aped English institutions and English ideas only in the formal sense. We now need to embrace that great English idea: Liberty. But then, liberty needs to be fought for. Liberty needs courage. Are we capable of another Freedom Struggle? If not, we are doomed.

The writer is the author of Antidote: Essays Against the Socialist Indian State, and its sequel, Antidote 2: For Liberal Governance

Bureaucrats and chairocrats

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

Bureaucrats and chairocrats

The profession of the bureaucrat has fallen into deep disrepute lately, and this is an international phenomenon. In academic circles he is increasingly viewed as a ‘‘budget maximiser’’, solely responsible for— and benefiting from — fiscal deficits, worldwide. In large swathes of the developed world, New Public Management is being implemented, in order to de-bureaucratise and bring economy and effectiveness into government expenditure.

In India, the top officialdom comprising the Indian Administrative Service (IAS) and other such constitutional bureaucracies lord over vast budgets but accomplish little of worth to society — not even functional streets and traffic order. In daily parlance, the word ‘‘babu’’ has come to replace the word ‘‘officer’’.

This is in sharp contrast to the high esteem that bureaucrats have possessed for millennia — from the mandarins of Ancient China to the ‘‘minutely just, inflexibly upright’’ personnel of the ICS, all the way to the Prussian officialdom Max Weber so admired. Bureaucrats today are viewed as a not so benign feature of a body politic. Why have things come to such a sorry pass? Some ideas emerge when we examine the life of Carl Menger, founder of the Austrian school of economists, who was a bureaucrat.

To understand the bureaucrat in Menger, let’s go back to the mid-19th century when the Hapsburgs were ruling Austria-Hungary and democracy existed only in the USA and France — the former successfully, the latter in a great deal of turmoil. In France, then, Frédéric Bastiat was writing that his ideas of free trade and laissez-faire would not make the state weak; rather, the state would emerge stronger if it stuck to just its basic role of protecting life and property. Bastiat lost the battle in democratic France; but, in imperial Austria, he would have found a sympathiser in Menger, whose bureaucratic instinct had led him to discover why markets should be free.

Menger studied political economy as part of his doctorate in law before opting for the imperial civil service. Here, he served first in the press department of the Austrian ‘‘Ministerratspräsidium’’, an office of high prestige in the Austrian Civil Service. One of Menger’s first duties was to write surveys on the state of the markets for an official newspaper, the Wiener Zeitung. In the course of his research, he found that real world markets differed greatly from what his professors had taught him. This led him to write his Principles of Economics (1871). As the Nobel laureate Friedrich Hayek acknowledges, ‘‘what constitutes the peculiarity of the Austrian school and provided the foundations for their later contributions is their acceptance of the teaching of Carl Menger.’’

This brings me to the crux of the matter: How could it be that a bureaucrat founded a school of thought made up of the greatest opponents to bureaucratic meddling the world has ever seen? The answer lies in the ethical values of traditional bureaucrats. The highest ethical value of a traditional bureaucrat, something Max Weber had emphasised, is ‘‘impartiality’’. It was this value of ‘‘impartiality’’ that powered Menger to develop ideas that would not have bureaucrats playing favours with businessmen, but let the market free. Justice would prevail, along with prosperity. Menger practiced what Bastiat preached.

In his Principles Menger also outlined a theory of the origin of money which showed how money was spontaneously born out of trade and not created by government. This singular and lucid contribution to our understanding of money has had a profound effect on all Austrians – right up to the present day.

In 1892 Menger was appointed to the Austrian Währungs-Enquete-Commission to discuss the currency. He asked for a return to the Gold Standard and outlined the step-by-step process by which this could be accomplished. The Hapsburgs were famous for the soundness of their currency because of the soundness of their economists: the word ‘dollar’ is derived from the ‘thaler’, a pure gold Hapsburg coin that was the most preferred coin in the early days of America.

We can see why every Austrian economist since has championed ‘‘sound money’’ – and why Hayek demanded the ‘‘de-nationalisation of money’’ when governments in the 20th century had taken their monetary meddling too far. It is also ironical that it was America that pulled down the Austro-Hungarian Empire after WW1 in their desire to spread democracy. And look what democracy has done to the US dollar, just a plain paper fiat money as it is today. America is where ‘‘budget-maximisation’’ has played havoc with the treasury – and top departmental heads are all ‘‘political appointees’’, so they are not bureaucrats in the traditional, apolitical sense. Traditional bureaucrats gave policy advice; they would never expend their intellectual energies running huge departments with massive budgets.

Another great Austrian, Ludwig von Mises, also understood bureaucracy and its limitations well. He wrote a slim, eponymously titled volume enunciating the differences between ‘‘bureaucratic management’’ and ‘‘management for profit’’. He opposed socialists who wanted to bureaucratise everything, warning that this would mean a graveyard for talented youth. The Austrian in Mises stood very firm to the teachings of Carl Menger.

If India has produced such a bureaucrat, it is Deepak Lal. After a stint in the foreign service, followed by a doctorate in Economics from Oxford, he worked for the planning commission — only to realise that this method of resource allocation cannot work. Ever since, he has been loudly advocating free markets. His latest book, Reviving the Invisible Hand, which deserves to be widely studied, calls for a liberal international order. However, in a recent interview, he regretted the fact that his former colleagues opposed economic reforms. In his view, IAS bureaucrats are quite keen on keeping their hands forever on the levers of power, and are stalling reform.

The word ‘‘bureau’’ refers to the desk upon which the bureaucrat does his work. Socialist democracy has turned the IAS into ‘‘chairocrats’’, where what matters is the chair and not the desk: kissa kursi ka. Different chairs have different black market values, and these are auctioned. The bureau doesn’t matter, for the work on it is never done.

Such a bureaucracy cannot be fundamentally shaken without the motive force of a powerful, charismatic politician: Weber had recognised this. If India is to change, we need charismatic free marketers in politics. Just as Nehru put his charisma behind socialism, we need political charisma today in favour of free markets. Only then will ethics inform the IAS.

The writer is the author of Antidote: Essays Against the Socialist Indian State and its sequel, Antidote 2: For Liberal Governance

End to central planning

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

End to central planning

O a central planner, the problem is simple: resources are ‘given’ and these have to be ‘allocated’ according to known ‘priorities’.

However, to those who believe in free markets, the problem is different. Resources are not ‘given’ to any one mind. The resources themselves, and the knowledge of their potential alternative uses, are entirely scattered amongst the populace. The solution, then, is to allow each individual perfect liberty with which to carry out his own plans regarding consumption, investment, saving and so on, completely outside government control. Instead of Manmohan, Montek & Co, let’s have each citizen as a free planner of his own economic life: one billion free individuals as purposeful economic agents.

Note that this dispersed and disaggregated individual planning is instrumental in getting us all our daily needs. Fruits and vegetables are abundantly available to us because the decisions to grow, to wholesale, to retail and to buy are all separately taken by millions of free individuals. No one mind planned how many mangoes will be bought or sold in any market or at any price. Individual orchard owners, individual wholesalers and individual retailers took independent, competitive decisions based on their own plans. Hence mangoes are abundantly available.

If there had been a Ministry of Mangoes, we wouldn’t get any, because a single mind cannot obtain the ‘knowledge’ required for the task. Central planning fails for precisely this reason: we don’t get roads, electricity and water because all these are being planned. With free markets, all these would be abundant as independent businessmen made independent investments and attempted to supply our needs. This is already visible now, when phones, cars, motorcycles and scooters are abundantly available: these were scarce under planning. As Milton Friedman cautioned: ‘‘If you give the Sahara Desert to the government, there will be a shortage of sand in five years.’’ As another Nobel laureate, Friedrich Hayek warned, ‘‘Where governments plan, the private plans of citizens fail.’’

The sheer marvel of the free market is that it enables us to use resources and knowledge without any conscious mind controlling it. The market mechanism and the price system that guides it are not of human design and do not need human guidance. (They could do with more human appreciation of their wonder and indispensability!) They enable us to extend the span of our utilisation of resources far, far beyond the control of any single mind. The marvel of the free market enables us to solve the problem of resource allocation without the need for any conscious direction. We can throw out government planning. Further, the price system provides the necessary inducements to each individual to do desirable things like using resources ‘economically’ (like save on petrol when prices rise) without anyone having to tell him what to do. For this understanding, humanity owes a great debt to Friedrich August von Hayek.

One of the most curious decisions of the Nobel Prize committee was making Hayek share the 1974 Economics prize with the high priest of central planning for Third World countries, Gunnar Myrdal. The Indian government then hugely felicitated Myrdal, bestowing on him the Jawaharlal Nehru award. Hayek was entirely ignored by Bharat Sarkar. Why?

Gunnar Myrdal believed that the poor people of the Third World were hopelessly so, unable to take rational economic decisions in the market and therefore in need of these decisions being taken for them by an ‘intellectual-moral elite’: central planners. Expertise made them an intellectual elite; and their immunity to the profit motive that guides businessmen made them a moral elite. Myrdal believed that central planners of Third World countries like India were Platonic Guardians. The masses of ordinary people were illiterate and irrational, or just plain stupid.

If Gunnar Myrdal had ever stepped into any Third World market, he would have seen there that the poorest people scout around most energetically to get the best deals. Poor people bargain hard — while the rich get easily conned! Like all socialists, including Amartya Sen, Myrdal believed that angelic superminds served the state while the people were dumb and dumber. Myrdal supported central planning; Amartya supports education: both believe that ‘knowledge’ exists in the state and that the ignorant people are in need of this knowledge. The state should plan the economy; the state should educate the people. The state is a fount of knowledge.

Today, it is time to recognise the fact that it is this socialist state that is ignorant. Our shoddy public administration proves it. Its ‘education’ is but propaganda: What else is the subject called ‘Indian Economics’, by which the young are forced to study every 5-Year Plan ever made, from the 1st to the 11th?

On the other hand, the people of India are a huge economic resource: they include some of the ablest trading communities in the world. Indians own almost every corner-shop in Britain. (And Napoleon called the Brits ‘a nation of shopkeepers’!) We don’t need this ‘education’. We don’t need this ‘planning’. We need free trade, property rights, and liberty under the rule of law. Nothing else.

Oops! My mistake. We also need roads. Our planners never built any. Yes, while free trade will enable most Indians to buy cheap second-hand cars, we will need massive public investments in rural and urban roads. Highways and expressways can come from the private sector, for which purpose the state-owned highway monopolist, NHAI, must be corporatised and forced to compete.

To conclude, India’s official economists have got the problem wrong, hence their solution is wrong too. The problem is how to best utilise widely dispersed resources and knowledge. This task is best left to free individuals in a free market. Shut down planning. Unleash a billion planners.

The writer is the author of Antidote: Essays Against the Socialist Indian State, and its sequel, Antidote 2: For Liberal Governance, both published by Macmillan India. He can be contacted at sauvikc@epmltd.com

The scourge of math

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

The scourge of math

The other day, I brightened up reading a newspaper story, which said that with liberalisation, Economics courses are being exceedingly sought after in Indian universities. However, I was immensely saddened to read that admissions are being granted only to those with proven abilities in advanced math. Actually, the great economists who advocated free markets – Adam Smith, Jean-Baptiste Say, Frederic Bastiat, Carl Menger, Ludwig von Mises, Friedrich Hayek, Murray Rothbard, Peter Bauer – never used math. Indeed, they strongly opposed and openly ridiculed mathematical analyses of economic events.

The rise of mathematics and statistics in Economics rests on the idea that the methods of physics should be used in the social sciences. However, the two are completely different. Physicists can experiment and, when they do, find ‘constants’ in Nature (like the force of gravity), which they can accurately measure. These ‘constants’ then allow for accurate predictions.

Unlike them, economists cannot experiment, and there are therefore no ‘constants’ in Economics. The laws of Economics indicate ‘tendencies’: they are ‘if this – then that’ laws, whose predictions are qualitative, and not quantitative. There is no scope for measurement just as there is no scope for experiments.

Take, for example, the law of demand, which says that, for any given supply, if demand increases, price will rise too. No mathematician can actually measure the ‘elasticity of the demand curve’ and correctly predict the future price after a given surge in demand. Both measurement and prediction are doomed to failure as the matter is an ‘extremely complex phenomenon’ affected by many, many forces, including many ‘non-economic’ ones.

The future price of French wine is also affected by the results of negotiations at the WTO – a non-economic factor. If these negotiations succeed, and French wine can be freely sold all over the world, and a demand surge is expected, the fact remains that none of the other innumerable variables that enter the scene, from the weather in southern France to tastes and preferences in India, can be measured.

If any mathematical economist could actually predict the price of French wine next year, he could get extremely rich by buying it this year. But the truth is that all of them are poor, employed in government bureaus (and universities), from where they feebly attempt to predict ‘growth rates’ (as though an economy is a ‘living organism’). Yet, they fail even at predicting government expenditure for the next year: a variable that should be under their employer’s direct control.

The London magazine, The Economist, conducted an experiment recently in which 16 garbage collectors and 16 econometrists were asked to predict growth and inflation for the next year. The embarrassing result was that the garbage collectors fared better, armed with nothing but intuitive reason, than professional econometrists with all their sophisticated mathematical models and fast computers.

This should come as no surprise to those economists who have for long been asking their colleagues to reject math as their method. The tragedy is that, while the idea of ‘quantitative economics’ is being abandoned all over the world, it continues to rule Indian academia, wherein most professors are government employees. For them, government planning of the economy (and not free markets) is the main object of study.

Planners use statistics while allocating resources. P C Mahalanobis, who masterminded Nehru’s Second Five Year Plan, was a statistician. Statistics and mathematics are the tools of ‘central economic planning’. But statistics are only historical records of economic events. If accurate, their interpretation requires sound economic theory. As Jean-Baptiste Say put it: ‘‘The study of statistics may gratify curiosity, but it can never be productive of advantage when it does not indicate the origin and consequences of the facts it has collected; and by indicating the origin and consequences, it at once becomes the science of political economy.’’

The subject of Economics needs to exit the fictional nonexistent world constructed by the mental gymnastics of statistical and mathematical models, and return to the individual, the ‘forgotten Man of the social sciences’, and see how he acts in a given social reality. That is, the method of Economics needs to be ‘subjective’ and ‘individualistic’: a study of human action. Economists need to theorise on how the individual acts in the market process. Maths and stats are of some use as tools in examining historical events, but that is all. The body of economic theory must be based on logically developed axioms, thereafter, adding the element of time to make ‘process analysis’ of the market.

I see no hope of a fundamental change in the academic orientation of the teaching and study of Economics in India as long as the socialist Indian state conducts most of this education. A school of Economics in the private sector is the only answer to this sorry state of affairs, whose biggest victims are really the students. Some of the brightest minds that leave school are attracted to the study of Economics. Today, with the millstones of math and stats around their necks, they slog a lot but understand little. They are victims of socialist education, as their teachers are the intellectual bodyguards of socialism and central economic planning. If liberal economics is to be studied and taught here, it will require private effort.

The other great tragedy is that the rocket science of mathematical and statistical Economics is comprehensible only to the rocket scientists themselves: the intelligent layman cannot comprehend an iota of what is written in their books and journals. When laymen fail to understand Economics, they can scarcely vote intelligently. Yet, every human being needs a good economy to survive in. Failure to understand how the economy works means failure as democratic citizens. Fortunately, there are some good books available today for the education of laymen. These are available from both Liberty Institute as well as the Centre for Civil Society.

The writer is the author of Antidote: Essays Against the Socialist Indian State, and its sequel, Antidote 2: For Liberal Governance. He can be contacted at sauvikc@epmltd.com

A teenage wasteland

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

A teenage wasteland

I was a teenager when I first heard Roger Daltrey cry ‘‘teenage wasteland’’ and it sent a chill down my spine. The teen years were the best years, and it seemed to me I was just wasting them in a formal education that was totally removed from the real world and got more complex and un-understandable by the day. I dropped out and started life as an entrepreneur. It is this early experience that has been invaluable to my later life. Today, my son has finished with high school and has almost finished with his teens. I write this for him and those of his generation, so that many will get out of this useless education and the chasing of worthless degrees, and step into the real world out there and earn their own keep.

Babur conquered Samarkand when he was just 13. As a Timurid prince, it had always been a cherished dream, for Samarkand had been Timur’s own capital. Babur had inherited Ferghana from his father, but when two successive rulers of Samarkand died within six months in 1496, Babur made his first career move. The conquest of Samarkand was his first in an illustrious career. The early age at which Babur accomplished this is worth noting, for it fits in neatly with the ‘‘when life ends early, it must begin early’’ theory. The life expectancy of a Timurid prince those days was short. Babur conquered Delhi at the advanced age of 43, with his young son Humayun as a general sent in advance to secure the Lodi treasury at Agra. It was a very young Humayun who obtained the Kohinoor diamond for his father. Babur died 4 years later, at just 47. I am 48 myself.

The Honourable East India Company Service (HEICS) also recruited the very young. Henry Vansittart arrived in India at the age of 13. As did Sir John Malcolm, who settled the Maratha territory. At his interview in London, one of the Directors of the Company asked Malcolm, playfully, ‘‘Why, my little man, what would you do if you met Hyder Ali?’’ To which the little man replied, in his thick Scots accent, ‘‘Sir, I would drraw my sworrd and cut off his haid.’’ He was immediately selected.

The great Charles Metcalfe arrived in Calcutta as a boy of 15. After the Mutiny had been suppressed, he was in charge of Delhi at just 27. In this capacity he acted as Governor-General for 2 years and it was said that he made a better Governor-General than his successor who arrived from London, Lord Auckland. When the Company started training its recruits in Haileybury College, the lower age limit was 15. If MNCs in India start recruiting at such an age and impart in-house training, many bright young teenagers would be saved from the BA-MBA ‘‘paper chase’’. The HEICS recruits not only conducted business, they also administered vast territories, raised taxes, provided justice, built roads and canals, and conducted systematic surveys of the land. Today’s MNC recruits have a much easier job. Recruitment should be early in life.

Of course, Babur and the HEICS chaps were ‘‘educated’’ in the deep sense. Babur himself trained his young cousin, Haidar, aged just 9, ‘‘in the arts of calligraphy, reading, making verses, epistolary style, painting and illumination… such crafts as seal-engraving, jeweller’s and goldsmith’s work, saddlery and armour-making, also in the construction of arrows, spear-heads and knives… in the affairs of the State, in important transactions, in planning campaigns and forays, in archery, in hunting, in the training of falcons, and in everything that is useful in the government of a kingdom.’’ HEICS recruits came from boarding schools where they were taught liberal humanities (John Locke was their prophet), classical philosophy and history, games and sports and later, at Haileybury College, the rudiments of political economy. If all this could be imparted to a 15-year old then, it must be possible to do so even sooner today.

What our school system does today is prolong adolescence. In my time, school ended at Class 11. Today, it is Class 12. Then comes the mandatory BA (for everyone must be a ‘‘graduate’’). However, neither the Class 12, nor the BA, lead to any occupation, profession or vocation. There is therefore the need to study even further. I have met numberless 24-year-olds who are still ‘‘students’’, hence unemployed, unmarried, and dependant on their parents. They also have no experience of the real world. They are ‘‘old adolescents’’. This must end.

In a poor country, where life expectancy is low, schooling must be brief and meaningful. It must equip a very young person to flourish in the global free market: to ‘‘find a calling’’, and seek knowledge relevant to that calling. The young, through short courses, can learn even medicine. Parth Shah of the Centre for Civil Society studied pharmacology before shifting to Economics. He often says that 90 per cent of Indian diseases are common infections that can be treated by paramedics who study just two years. Instead of chasing engineering and medical degrees, it would be better for the young if they could practice and learn on the job.

Paramedics of today will study more later. And engineering trainees in engineering firms will grow with their firms. Remember, we had IITs and IIMs in our socialist heydays, and little job creation or useful knowledge resulted from them. Socialist India was low on technology and the economy was moribund, so there were very few business opportunities for trained managers.

Let us also not forget that the free market economy offers innumerable ‘‘callings’’, far more than the doctor, engineer, babu, lawyer, banker, accountant limit set by the socialist education system. There will be VJs, musicians, fashion designers, models, photographers, admen and copywriters, chefs and bartenders, journalists, sportspersons, go-go dancers, tattoo artists and, above all, zillions of entrepreneurs. Such a world will require disaggregated, de-homogenised, compartmentalised, and un-uniform schools of knowledge, very different from the high schools of today.

The writer is the author of Antidote: Essays Against the Socialist Indian State, and its sequel, Antidote 2: For Liberal Governance. He can be contacted at sauvikc@epmltd.com.

Real histories, please

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

Real histories, please

The entire fuss over the ‘correct’ History book for schools reveals one wretched truth: that History, as a subject, is dead in India. After all, real History begins with those chronicles – like those by Herodotus or Thyucidedes – which were not written by court-appointed historians. The very idea that there can be one ‘correct’ history is as absurd as a Ministry of Truth. Also, great historians like Gibbon and Macaulay were considered such because their ‘histories’ sold in the market. The same firm that published Adam Smith’s Wealth of Nations published Gibbon in the very same year, but Gibbon outsold Smith. Macaulay’s history, similarly, was a bestseller, a bible for liberal Whiggism.

To understand how ‘history’ is arrived at, let us take the example of my wanting to know the ‘history of yesterday’. To know this, I consult two general newspapers and one pink paper. The editors, who are the ‘historians of yesterday’, do not put down ‘all the facts of yesterday’ for me to read. From a ‘universe of facts, they select a handful. The three newspapers, my history books, are not identical: otherwise I wouldn’t need three of them.

But, after scanning through them (I don’t read every printed word) I get some idea as to what happened just yesterday. If I need to know more, I can always switch on the TV or the radio.

Thus, to know just the ‘history of yesterday’ requires more than one source. To inquire into ages long past must require much, much more. The fact is also that to really know the history of civilised Man one has to spend time and money and consult hundreds of sources. Knowledge cannot be obtained for free: even the time spent on it has an ‘opportunity cost’: I could have been earning money instead of studying one ‘history’ or the other. There is no reason to believe that one cannot survive extremely happily while being totally ignorant of History: Henry Ford believed that ‘‘History is bunk!’’ and he survived pretty well.

The very first question, then, is: Why study History at all? Arnold Toynbee’s answer, in the foreword to his mammoth A Study of History (note the word ‘study’): ‘‘When one is studying the present and the past, to turn a blind eye to the future would be impossible, and, if it were possible, it would be perverse.’’ Historians study the present and the past. And they do this with an eye on the future. The single government-approved (Ministry of Truth) history book will never perform these functions for our young. No ‘court historian’ ever spoke the truth. They will kill the subject of History (which should be ‘histories’) and also kill the minds of our young.

Personally, and in opposition to Henry Ford, I really enjoy studying ‘histories’: emphasis on the plural. On Babar & Co, I find Bamber Gascoigne’s The Great Mughals , a fantastic read with lovely colour plates. On the British period, Philip Mason’s The Men Who Ruled India is a book I recommend to all. Mason was ICS: a district officer first and foremost, not a secretariat man. In History, as in Justice, it is important to hear both sides. That is why we have two ears: audi alterem partem. The view of ‘court historians’ we all know. Let us now hear the other side. In Mason, we learn how the Indian National Congress was set up by AO Hume writing personally to some of the brightest students of Calcutta University, and we learn what great promises the INC showed in its early years. We will then be able to see the INC from the other side, as it slid into socialism, nationalism, and revolt. We will also get a robust critique of key British players, from Clive and Hastings to Auckland and Curzon.

Another fascinating book, The Lives of the Indian Princes by Charles Allen and Sharda Dwivedi, offers a panoramic view of the rulers of the 600 plus ‘princely states’ that owed their loyalty to the ‘paramount power’ (the British Crown) and were swallowed up by Patel. And allowed to be swallowed up by Mountbatten, Attley, et al, in violation of signed treaties. These two books will give the reader a sharp image of the kind of men who ruled India not so long ago, while also providing a great contrast to those who rule over us today. Keeping an eye on the future, we will be able to consider how we can get men such as these to govern India tomorrow.

John Keay’s history of the spice trade and that of the East India Company are also excellent reads for those with their ‘eye on the future’: global capitalism. While studying these, I also found it necessary to read into players and events in Victorian England, inquiring as to why the liberal project, which burst on to the world with Cobden, Bright, Peel and Gladstone, and across the Channel with Say and Bastiat, collapsed by the turn of the century. In this context, Murray Rothbard’s history of economic thought was a great help. As was B R Tomlinson’s economic histories of India during the Raj and thereafter.

I stayed a while in Mangalore, and was told of the existence of a history of the city – but couldn’t manage to lay my hands on it. No college library had it. Until I finally found a copy in a bookshop in Goa! I think students of history in Mangalore should first study the history of their trading city before studying any other ‘history’. All this can only happen if teachers, parents and students unitedly campaign for the closure of the HRD ministry and all its bureaus controlling and directing ‘education’. Then, real histories will be studied and taught – to inquiring minds who want to know the past, while studying the present, with an eye on the future: a tall order indeed. Real histories will also be written, and the market (not the ministry) will decide which is the best, and which our children should read.

The writer is the author of Antidote: Essays Against the Socialist Indian State and its sequel, Antidote 2: For Liberal Governance

Knowledge: why less is more

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

Knowledge: why less is more

Before paying the education cess willingly, we Indians need to see how wealth is created in the market economy and how knowledge is used and developed therein. If we do so, we will discover that state education of this kind will actually harm the poor. They will waste our money, many years of their own lives, yet emerge with no useful knowledge. Instead of optimism, enthusiasm and economic independence, they will be left hopeless, ignorant and dependant.

Wealth is created in the market economy through specialisation. When there are tailors, carpenters, farmers, fishermen and so on, each produces a ‘marketable surplus’ for the consumption of others. These surpluses make society rich. A journalist like me, who only produces words, has a car, television, food, drink and clothes – my ‘wealth’ – because these are the surpluses of other specialised people.

What is often missed is that this process of specialisation, which political economist Adam Smith called the ‘division of labour’, is accompanied by a simultaneous ‘division of knowledge’. Each specialised economic actor, be he a dentist, journalist or restaurant chef, operates with his own specialised knowledge. This has important implications.

If we look at an isolated Robinson Crusoe, his need for knowledge is enormous. If he wants to eat fish, he must know how to catch it, gut it and cook it. He must know how to fell a tree, make planks, and build his house. He must look after his cow, feed it and milk it. He must know how to grow his own food. And so on. Thus, the more isolated one is, as with a villager, the greater the amount of knowledge each individual requires in order to survive.

The obverse also follows: the more specialised and integrated the exchange economy, the less the knowledge required of any individual. He just needs to know his own field of specialisation well. For everything else, he can happily rely on the knowledge of others. For example: a musician. If he is adept at his instrument, he has no need to learn anything else. If he wants a car, engineers build it for him, a chauffeur drives him around, and mechanics keep it in good repair. If he wants a grand house, architects design it for him, masons build it, and interior designers furnish it aesthetically. As far as he is concerned, he knows how to play one musical instrument well. About everything else, he is ‘rationally ignorant’. He needs to learn nothing else.

The most obvious implication of this ‘division of knowledge’ in the exchange economy of the free market is that the hugely diversified ‘generalised’ (and politicised) curriculum of Indian schools is actually harmful for the prospects of the young, and especially so if they are poor. Even the 3 R’s of reading, writing and arithmetic can be brought down to 2 R’s today, thanks to cheap electronic calculators. Thus, a kid who has no interest or talent in math need not study it at all – and yet survive pretty well.

Instead of general schooling from the state (with a free lunch thrown in with a biased history book: feeding bellies, poisoning minds), children need to learn specialised skills of their own choosing, with which they can flourish in the market. The government can never even know this vast array of possible skills, forget teaching them. The task can only be done by the market: indeed, this is how our software techies learnt their stuff. In the market, either through paid tuition or apprenticeship, a poor kid can learn anything he sets his heart upon. Rather than wasting 10-12 years on an ‘education’ of zero market relevance, children trained thus will be able to stand on their own feet at a very young age. This is crucial in a poor country, where life expectancy is low. As economist Sudha Shenoy says: ‘‘Where life ends early, it must begin early.’’

Second, free trade is an essential means to knowledge. If there had been free trade since 1947, our mechanics would have learnt much more about cars and motorcycles. Without free trade, but with state-sponsored IITs and IIMs, we Indians did not gain an iota of real, usable knowledge in our socialist heydays. For example: all the IITs and IIMs could not produce a good car. Thus, state education in a closed economy is a recipe for total disaster.

Third, a free market must be ‘free’ if all of societal knowledge is to be used. Poor people already possess lots of knowledge today that is denied entry into the market – from Mumbai’s dancing ladies to all the toddy tappers on our coasts. Poor people know exotic recipes that can help them flourish only if street-food explosions occur in our cities.

Children, especially those of the poor, need to be told that they do not need long, arduous and boring years in school. Rather, that they should select avenues in which they want to specialise and seek the knowledge relevant to those fields from the market. This will give them enthusiasm and optimism. The search for knowledge will not seem an enormously uphill task, driving many today to suicide. Further, they must be informed that specialisation is maximised in cities and towns, where the high population makes for a big market: you cannot be a taxi driver, plumber, Thai chef or musician in a sleepy village. They should see India’s future as urban: that Gandhi’s rural utopia of self-sufficient villages is actually economic suicide.

The state will never teach them these things: even in 12 years of school. State education will make them ignorant and dependant. They will never achieve their full human potential. Thus, as with everything else, so too for knowledge, we must turn to the benevolent market. The education cess must be strongly opposed.

(Sauvik Chakraverti is the author of Antidote: Essays Against the Socialist Indian State, and its sequel, Antidote 2: For Liberal Governance. He can be contacted at sauvik@epmltd.com)