The purpose of politics

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

The purpose of politics

Politics, as a complex human activity, arose in the Greek city-states of old. Aristotle called it the ‘master science’, and indeed it must be, because whatever visions any people may have for their society are best accomplished through politics (rather than civil war). Aristotle criticized Plato’s Republic for this very reason, because the ‘philosopher-king’ nullified politics, ‘rendering a harmony into a mere unison, a theme into a single beat’. Without politics, the polis would cease to be a polis. There is politics, Aristotle said, because a polis is made up of many, many different members. The function of politics is to give voice to all these different constituents of a free polity, thereby accommodating them in civic life and creating civic order.

Successful polities are those wherein the political process secures this common goal of civic stability and order. What we in India have to wake up to is the stark reality that we inhabit a ‘democracy’ without politics as defined above. Nehru morphed into a philosopher-king occupying the ‘commanding heights’, centrally planning all economic activity. He claimed to be able to get even a lamp-post elected on a Congress ticket — and surely this cannot be called politics.

Indeed, India and Pakistan were founded on the inability to find a political solution to the rival claims of two ‘political parties’. The political situation has only worsened since: Pakistan and Bangladesh have jettisoned democracy, and in India, the only real alternative to the brain-dead Congress is the BJP with its fascistic Hindutva agenda – which is also a nullification of politics. What then is politics? And what is its true purpose?

Once again, let us turn to Aristotle. Politics arises, he said, simply because there isn’t one great leader with a perfect character and mind, a flawless being. The philosopher-king is a piece of fiction (as is, if I may add, Rousseau’s ‘general will’). For this very reason, whenever a civic community faces a problematic dilemma, many voices must be heard and many views taken into account. This is how the ‘master science’ of politics enables a civic community to make use of all the other sciences (like Economics) and weigh the rival claims of individuals, scholars and, finally, politicians. The objective is not only to accommodate all voices, but also to deliberate in public about the various ideas on offer, so that the civic community can decide upon the best step forward. It is at this last stage that the popular politician steps in. The task of the politician is to forge a moral consensus. As Bernard Crick says in his penetrating analysis of the nature of political rule: “The moral consensus of a free state is not something mysteriously prior to or above politics: it is the activity (the civilising activity) of politics itself.” He adds that “if war is the game of kings, politics is the game of free people”.

We have now arrived at the true purpose of politics, and the true objective of any real politician: which is, to forge a moral consensus in a civic community. It is only on this moral basis that elections are won, public offices are occupied, statues of political heroes are erected, and even the armed forces yield to political authority. That this authority cannot exist without an intellectual-moral basis is central to the idea of a moral consensus. In other words, as with Economics, so also with Politics, there exists an honest purpose. This should be fairly obvious to any elected legislator who votes to decide whether bills proposed will be made into laws binding on the community: surely, the immoral cannot be allowed to decide such questions?

I will not waste precious column inches telling my reader that ‘moral purpose’ is an alien concept in modern Indian politics, which is all about misusing power and accumulating spoils. My reader, I will assume, is more interested in knowing why this happened, and what the political way out is.

The root cause of our present discontents lies in our acceptance of themoral consensus that Nehru and Gandhi, and their Congress party, forged 60 years ago. The very idea of a strong, centralised state with totalitarian economic powers, which is what those of that generation collectively chose, lies at the root of all the public immorality that exists today.

The task before liberals, therefore, is to weld together a new moral consensus. The first part of it should consist of a commitment to politics, of accommodating all the various voices in any polis – as, for example, in Srinagar, Kashmir. This moral ideal of ‘political rule’ will yield more for every minority, who clearly lost out in the ‘secularism’ that the otherwise totalitarian Congress, with its ‘palace politics’, championed. It must not be forgotten that present-day Gujarat comprised over 250 ‘princely states’ before Nehru took over; a great many of these small states had Muslim rulers; and, during the terrible massacres of the Partition, nowhere was there greater peace than in Gujarat – simply because there were so many different ‘polities’. The era of big government must end; let a million flowers bloom.

The second part of the moral consensus lies in an acceptance of Shubh Laabh: that the community considers profits competitively earned moral and honourable. The civic community is therefore deliberately opting for a way of life wherein survival is sought through market exchanges. The government then, and a vastly decentralised one at that, exists to act against the enemies of this natural order — and nothing more.

Politics is cherished, but also severely restricted.

As a footnote to rally liberals, I will add that all dissenters start out as isolated individuals. They succeed in gaining followers by continuouslyharping on and on about a great abomination, much to the disgust of the Anti-Noise Society. Elections are not even thought of; and such dissenters are often aware that their objectives may not be reached in their own lifetimes. So, my fellow liberals, let’s not tarry. Let’s begin a moral crusade, the true politics.

Building a merchant ship

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

Building a merchant ship

The history of Britain offers us examples of many excellent politicians, from John Wilkes who had the London mob on his side and became Lord Mayor, to Cobden and Bright who led the nation to demand free trade. Pitt, Peel, Gladstone, Disraeli and Thatcher were all superb politicians.

In India, on the other hand, the political organisation of the Congress has thrown up great leaders, who have tended to be more in the mould of statesmen than politicians. They worked towards making the Congress strong, making the government and the bureaucracy strong, and making local politics and local politicians weak. They themselves were elected solely because of organisational support; and none of them have ever commanded a ‘body politic’. It cannot be a coincidence that, in India today, neither the president and the prime minister, nor Sonia Gandhi, are politicians.

What then is a politician? Some answers emerge from an essay entitled In Praise of Politicians, arguably the only essay of its kind, penned by Samuel McChord Crothers, who served on the British cabinet.

In the essay, dated 1915, we are informed that, in England, ‘‘politics is the national sport’’. Further, ‘‘it is pre-eminently a gentleman’s game, and success gives real distinction’’. Crothers here is referring to the debates in the House of Commons, with the ‘‘thrust and counter-thrust of keen wit’’, which ‘‘furnish entertainment for the entire kingdom’’, and that the people follow with keen interest. This is possible in England because of its compact size, but not so in the US, he says, where, because of other, local distractions, the people do not follow politics as closely. The same may be said of India, where no one watches the televised debates in the Lok Sabha, and anyone who does so is quickly horrified. We are forced to accept that copied political institutions never work.

It is here that Crothers offers hope. The politician works on a ‘body politic’ - and this is a serious function. There are therefore serious politicians who attempt the task, and there are the quacks. The problem is that ‘‘we have only one name for all those who do business on the great waters, and are unable to distinguish between the merchant and the pirate’’. It is in this sentence that the solution for liberal politics in India lies: liberals must build for themselves a great, big merchant ship. Thereafter, the pirates will be easily identified and dealt with. With their socialism, social justice, crony businessmen, public sector and trade unions, our present lot of political quacks have converted the ship of state into a pirate ship. Liberals must never get aboard that ship.

Crothers asserts the open character of politics and politicians when he reminds us that the term ‘candidate’ comes from Roman times, denoting a person who appeared in public to vie for office, wearing a loose white toga to show the candour of his nature as well as to better display scars won in battle. He goes on to add that the real politician ‘rolls his logs in public’. This must be the motto of all politics on board the merchant ship. It is, after all, to practical politics that we must turn if we are to effect the changes we desire. This will require many great politicians. Only then will these quacks beat a hasty retreat.

Crothers insists that ‘‘one who would represent a commonwealth must realise what a commonwealth is.’’ He goes on to say:

‘‘A commonwealth is not only big, but, at least in relation to its own citizens, it must be thought of as honest. Dishonesty is the attempt of a part to obtain what belongs to another part or to the whole. But it is hard to conceive of the whole as engaged in a deliberate robbery, for it has no one to rob but itself… The self-interest of a commonwealth is but interest in the common weal, and against this there is no law. We may think of a commonwealth as a huge and honest personage who means well, but has never made himself fully articulate. He manifests his more permanent ideas in laws and customs and social usages; but in dealing with the events of the passing hour, he must employ interpreters. Like Nebuchadnezzar, he has his soothsayers, and Chaldeans, and magicians to interpret his dreams. They have long been with him, and are skilled at reading his habitual thoughts. But sometimes it happens that the huge personage has a new dream and has forgotten what it was. Then he calls his soothsayers, but the wise men only shake their heads. If he will kindly describe his dream they will tell him what it means. Which learned indecision makes the huge personage very angry. So he seeks out someone who has dreams of his own, whose soul has been stirred by vague forebodings of impending change…

‘‘The hero in politics is one who has convinced the people that he possesses this higher prudence. They recognise him when he separates himself from the crowd of petty politicians, by sacrificing a small advantage that he may seize a large opportunity. He is the man they were looking for; they hail him leader, for he is the one who ‘all alone stands hugely politic.’ The master-strokes of policy have been made by such men.’’

Such a politician, Crothers adds, ‘‘must know the value and the limitation of organisation’’. This is precisely where all the ‘statesmen’ of the Congress failed. The failure of the organisation of the Indian state (the bureaucracy) closely mirrors the failure of the Congress party (another organisation) to retain its hold on the electorate. The Nehruvian dynasty could think big because they were in command of both organisations. And the electorate always delivered a verdict that made the country a ‘one party dominant system’. That age has passed, and the limits to political organisation (and therefore its command over bureaucratic organisation) have been exposed. There is sufficient scope, therefore, for genuine civic politics.

The liberal politician, knowing well the limits to organisation, must be a man of the streets, of the people, and one who ‘‘moves in magnificent masses careless of particulars’’. We in India need many such politicians on the side of liberalism. It is hoped that this essay will be of utility to them.

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

A politics to end politics

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

A politics to end politics

Before saluting ‘democracy’, it might help if we understood ‘politics’, the stuff democracy is made of. The great Fabian socialist, Professor Bernard Crick, in his In Defence of Politics, takes us through the civilised life in an ancient Greek polis in order to understand that ‘‘politics are the public actions of free people’’. This quote from Sophocles’ Antigone is illustrative:

Creon: Can any voice but mine give orders in this polis?

Haemon: It is no polis if it takes orders from one voice.

Creon: But custom gives possession to the ruler.

Haemon: You’d rule a desert beautifully alone.

The civic politics that Crick idealises is an activity that is public, open and free. This should ring warning bells in our minds, since ‘politics’ in India occurs behind closed doors, and is ‘palace politics’ — a contradiction in terms. We have political organisations and they have their personnel, but these are ‘yes men’ — like Sitaram Yechury. They are not ‘free people’. Their politics has little to do with civic issues and they never uphold civic virtues. Instead, their organisations demonstrate political strength by assembling rural masses in the cities: rent-a-crowd politics.

Crick asserts that, instead of supporting democracy, as most people do, it would be better to defend politics — ‘‘for it is a more precise thing than is commonly supposed; it is essential to genuine freedom; it is unknown in any but advanced and complex societies; and it has specific origins only found in European experience.’’

Here, Crick issues another warning: free, civic politics originated in Europe. The Hindi word for politics is rajniti, which translates into ‘the ethics of kingship’. We do not have a word for politics as a human activity that occurs in cities as different opinions vie for public space. In European cities there is the public sphere with pubs and cafes — the busy haunts of men, where people meet. Revolutions have centred on them. It is from all this that the free press evolved — to keep citizens informed in democracies based on free, civic politics.

Crick issues yet another warning: for ‘‘although politics is a pearl that cannot be valued, to overvalue it would be to destroy it altogether’’. Once the Lord Mayor, the two Sheriffs and all the Aldermen had been elected, the rest of the citizenry went back to their shops and spent the rest of the year ‘‘minding their own businesses’’. It was the unfortunates that got elected who had to handle public matters and whose businesses suffered as a result. In London you were fined heavily if you refused to be Lord Mayor. It is said that Mansion House, the official residence of the Lord Mayor of London, was ‘‘built from the money of those who did not want to hold the office, for the benefit of those who did’’.

Another lesson to learn is that there should not be any great spoils to reap if politics is to be kept pure. It is only from good politics that a good politician can emerge.

Crick asserts that free, civic politics is based on a ‘‘recognition of restraints’’ — that all the differences in the polis must be accommodated. The idea of a cosmopolitan city is such. With mass democracy as a means to offices of spoils in a centralised, socialist government, and a palace politics of political organisations devoid of civic roots, it is quite clear that we Indians have got the idea all wrong. The man to blame is Allan Octavian Hume, the ‘founder and father of the Indian National Congress’, who took upon himself the task, in the 1880s, of creating a means by which educated Indians could participate in British government — and thereby learn whatever was necessary in order to take over control someday.

Hume created a ‘political organisation’: he did not encourage thousands of educated Indians to participate in civic politics on their own steam. The INC that Hume created was firmly liberal in its early decades. The organisation gained brand equity and was then hijacked by socialists towards rebellion. In 60 years of power it has degenerated into a very peculiar kind of political organisation, for neither Sonia Gandhi nor Manmohan Singh are ‘politicians’. It has not achieved its goal of creating a ‘socialistic pattern of society’, and has succumbed to the ‘iron law of oligarchy’.

A ‘power elite’ rules India. We will never be equal. We can, however, fight to be free.

The idea of a ‘politics to end politics’ gets support from a liberal: Anthony de Jasay, whose Before Resorting to Politics offers us the path by which ‘‘politics can be compressed to a vanishing point’’. After all, the market came first, and will always be first. The ‘recognition of restraints’ so vital to civic politics occurs first in markets, where we happily trade with strangers. As cities grow, we live among strangers too. And we learn to accept differences. Jasay tells us why even ‘good politics’ is largely unnecessary: ‘‘it is man as a social being who has the least need to resort to politics, precisely because he commands the difficult civic skills and virtues of voluntary cooperation, of finding bargained solutions, of maintaining valuable conventions and keeping free riding within tolerable bounds… It is these skills that atrophy and vanish when politics takes over.’’

Politics as a means to using government action should be resorted to in only exceptional cases. There should be a list of what the government must do, and also a list of what it must not do — with no discretion whatsoever for the politician.

We in India need to embark upon ‘a politics to end politics’. We need political rule over our cities, and this should be our first goal. But this free, civic politics should be circumscribed to the basics (garbage, roads, police) and in each cosmopolis the citizen should find himself in perfect liberty to engage continuously and relentlessly in the processes of capitalistic exchanges. After all, the ancients said that the Four Ends of Man are dharma, artha, kama and moksha. Let us not add ‘politics’ to the list.

The writer is the author of Antidote: Essays Against the Socialist Indian State and its sequel, Antidote2: For Liberal Governance

Raising the civic sword

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

Raising the civic sword

They lie when they say that we follow the ‘Westminster model of democracy’. British parliamentary democracy cannot be understood without a deep comprehension of the ancient institutions of local self-government upon which it is based, the oldest of which is the Lord Mayor of the City of London, the ancient city of just one square mile dating back to the Londonium of Roman times, which still maintains all its ceremonial traditions and is possessed of its own police force: the ‘Bobby’ of metropolitan London is not allowed within. The City of Westminster, which lies well outside the boundaries of this ancient City of London, did not exist when Henry Fitzalwyn was elected the first Lord Mayor of London in 1189.

The modern-day tourist to London is bound to see the entire agglomeration as one huge city. He will see the Palaces of Westminster, where the House of Commons sits, and think this is London. Few will undertake city tours to discover the ancient City of London that lies deep within, where both the economic epicentre of Britain as well as the political epicentre of English local self-government are located. Its traditions and privileges date back to early feudal times, when democracy was unimaginable. Long, long before Britain had a prime minister, London had its Lord Mayor. The title ‘lord’ was not given by the King; it is how the citizenry have always addressed their mayor, who upholds the Civic Sword within the city. Till today the King of England cannot march his army through the ancient City of London without the permission of the Lord Mayor. Whenever the monarch visits the ancient city, the Lord Mayor meets him at Temple Bar where he ceremonially surrenders the Civic Sword and allows the monarch in. Within the city he is therefore ranked second only to the King.

As already mentioned, the ancient city maintains its own police force. It is an example of civic independence that tells us a great deal about how political liberty was obtained in England by merchants, thereby enabling the transition from feudalism to capitalism well before democracy of the Westminster-type.

The year 1189, when Henry FitzAlwyn took office as the first Lord Mayor of London, is 26 years before the Magna Carta. Richard the Lionheart was an ‘absent king’, always away on crusades. On one of these he was captured and held to ransom. It was FitzAlwyn as Lord Mayor who raised the money to pay the ‘King’s Ransom’. The merchants were rich. They were not political clients. They headed an honest ‘body politic’ in their own right.

In 1189, constitutional progress, in the form of the Magna Carta, had not begun. Yet, the principal walled city of England obtained the liberty to conduct its own affairs. This was reaffirmed in the Magna Carta wherein Clause 13 gave London the liberty to trade freely by land and sea, and to maintain its ancient traditions and customs. These liberties played a crucial role in the furtherance of England’s commercial culture and the development of a ‘body politic’ within feudal covers where civic government was bourgeois.

History bears this out. Rowland Heyward, Lord Mayor in 1598, chaired the meeting held to discuss the formation of the East India Company. Sir John Swinnerton, Lord Mayor in 1612, was one of the founder members of the East India Company in 1599, and the Company’s offices were initially located in the house of Christopher Clitherow, Lord Mayor in 1635. Most Lord Mayors during the days of the Empire were on the boards of firms like the East India Company, the Muscovy Company, the Levant Company, the Merchant Adventurers, and all the various other firms that had opened to trade with the Far East, the Middle East and the new colonies of America. The Virginia Company, for example, could only succeed because a Lord Mayor, Sir Humphrey Weld, ventured seven ships.

The ‘Glorious Revolution’ was yet to come, and when it did, in 1688, and the new monarch imported from Holland called a ‘Convention Parliament’, the Corporation of London, with its Lord Mayor and all the Aldermen, sat in the House of Commons as a separate estate of the realm, the only body in the country to be possessed of constitutional government. This was the beginning of parliamentary government and, though ‘democracy’ was still a foreign word, capitalism had kicked in real hard. All because of ‘civil government’ — the title of Locke’s treatise of 1690.

The tourist in London should go into the old City to search for Guildhall, the ‘parliament of shopkeepers’ that has been annually electing a Lord Mayor, two Sheriffs and 50 Aldermen for over 800 years. If he is lucky to be there when a new Lord Mayor is elected, he will see him parade in his ceremonial finery, preceded by a Swordbearer holding aloft the Civic Sword. It is in these traditions that the keys to political liberty and capitalism lie. Our Lok Sabhas and Vidhan Sabhas are modeled after Westminster; they are meaningless without Guildhalls in every city and town, each electing its own mayor. Civil government means upholding the Civic Sword. This is the prerogative of a mayor.

Do note that these Lord Mayors were neither clients of the state nor underlings of any political party. They were always among the richest men of the realm. Many lent vast sums to the Crown. To be Lord Mayor was never to hold an office of profit; indeed, upholding the Civic Sword meant personal financial loss, as one could not ‘mind one’s business’ during this period, and one was also obliged to host lavish hospitality at one’s own expense. Thus, ‘panchayati raj’ is nonsense. Poor villagers will always be political clients. For real local self-government and capitalism, India needs mayors of the ‘London model’.

Not just Britain, the story of western civilistion is one of cities and towns run by mayors. The trend began in Rouen in France in the 11th century, England followed, and then came the Germans. The common factor was that the monarch lived outside the cities, constantly on the move between his various, closely-guarded castles. The mayor lived within the city, and was well known and respected. Europe for a brief time experienced a civilization of free trading cities without monarchs and nation-states, the Hanseatic League — an enterprise that centred around German cities like Lübeck and Hamburg, both of which still call themselves Hansastädt or Hansa City. (Hamburg is also a full state in the German federation). I saw three flags flying atop the impressive and very old mayoral building in the heart of downtown Frankfurt-am-Main,: the flag of the European Union, the flag of Germany, and the flag of the City of Frankfurt. The future of the Indian Union should be such.

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

A natural order exists

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

A natural order exists

There is a ‘natural order’ around us. This order is easily visible when we visit crowded commercial areas in densely populated cities. In Delhi’s Chandni Chowk, Bangalore’s Brigade Road, Tokyo’s Ginza, London’s Oxford Circus or Singapore’s Orchard Street the visitor does not find posses of armed policemen ‘maintaining order’. The order exists on its own. Homo Economicus is a ‘rule-following animal’. He obtains desired objects by following unwritten rules that have been learnt over generations. The study of these rules is the task of both the subject of Law as well as that of Economics. It is a tragedy that super-specialisation means there are very few who study both subjects today – as Adam Smith and scholars of his generation had done.

The fact that a natural order exists independent of any single human will is important for all governments to note, for it is evidence of a deeply ingrained commercial ‘culture’. Since culture is something that has evolved slowly over many generations without any government controlling it, as have language, money and morals, it is a towering achievement for any civilisation to be possessed of a deeply ingrained commercial culture. For this is the means by which savages have tamed their instinctual urges and submitted themselves to the rigorous discipline of obeying the ‘rules of the game’.

The natural order in a city is evidence of civilisation: trading with strangers and living among them is human action that lies ‘between instinct and reason’, as Hayek put it. It is evidence of a change in human nature, with the instinct to snatch being replaced by the ‘natural propensity to truck, barter and exchange’. Simultaneously, life in a small tribe of known faces, all following a common purpose, has made way for rugged individualism, following one’s own ends and purposes, serving strangers and being served by strangers in turn, while also being in ceaseless competition with them. No single will commands the order.

This natural order makes the task of government relatively simple. If, on the other hand, the natural affairs of men resulted in a war of each against all, as was Thomas Hobbes’ paranoia, the task of government would be impossible. The proper understanding and comprehension of this natural order, then, is the first task of government. A government that understands this order and supports it gets an ally.

Note that this natural order does not exist in Srinagar, Kashmir, where there are armed soldiers posted every five yards. What the ‘government’ is doing there is a question that needs to be asked. Ditto Baghdad. How do the citizens of Srinagar and Baghdad get their daily needs met? What about Kabul? Should we first set up a vibrant market-place in these cities or should we try and install a government first – and a ‘democratic’ one at that? There is an interesting account of a British colonial civil servant in Baluchistan who, when faced with two warring tribes in his district, got them to assemble in neutral territory and trade peaceably with each other. Such civil servants (who invoked the market) were infinitely wiser than the diplomats who conduct international affairs today with brute military might.

Good government is therefore based on the realisation that the society it seeks to serve is already a self-ordering one, possessed of ethics and rules that make a complex, competitive and impersonal market order possible. Through the market, every possible societal want is satisfied, almost entirely without recourse to either civil or criminal law. The market is the process by which humanity survives. A good government is one that preserves and protects the market order. A bad government operates as a predator on the market: it has the ‘evil eye’.

At this point, let us recall the title of John Locke’s famous work of 1690: Two Treatises on Civil Government. The term ‘civil government’ has many deep implications. The word ‘civil’ has its root in ‘civilisation’ and ‘civitas’ (which means ‘city’), and is related to ‘civility’, ‘civil service’, and ‘civil society’. In this path-breaking book, which laid the foundations of many free societies, including the USA, Locke says that:

‘‘Men being by nature all free, equal, and independent, no one can be put out of this estate, and subjected to the political power of another, without his own consent. The only way, whereby any one divests himself of his natural liberty, and puts on the bonds of civil society, is by agreeing with other men to join and unite into a community, for their comfortable, safe, and peaceable living one amongst another, in a secure enjoyment of their properties, and a greater security against any, that are not of it. When any number of men have so consented to make one community or government, they are thereby presently incorporated, and make one body politic.’’

In England in Locke’s day, the notion of a ‘body politic’ was old hat. Many English cities and towns had independent government then. The Corporation of London (the one square mile) was by then over 500 years old, possessed of strong, independent traditions. Because of these institutions of ‘civil government’, under the covers of feudalism, capitalism had long emerged: the East India Company was almost 100 years old when Locke wrote. London was the headquarters of capitalism then. The city was governed by ‘civilians’ (businessmen). No account of the ‘Westminster model of democracy’ is complete without an exposition of the robust ‘bourgeois’ institutions of urban local self-government upon which it is based.

It follows that India’s centralised, bureaucratised and socialist democracy can never deliver the ‘civil government’ John Locke wrote about. In India, the concept of ‘body politic’ does not exist, not even in Rae Bareilly or Amethi. We have what may best be called ‘party government’, and since party functionaries control the bureaucracy, these babus cannot be called ‘civil servants’: they are partisan, and their lamentable tendency is to prey on the market. And our political parties are themselves largely made up of criminals, not ‘civilians’. The socio-pathology of our political parties requires study.

I will, however, conclude on a note of hope: Our deeply ingrained commercial culture, and the natural order it brings about, is our greatest strength. The natural ‘rules of just conduct’ which we follow in the market must make up our basic law, immune to amendment by any legislature of any majority whatsoever. Indeed, our legislatures must be ‘bound by a law they did not legislate’: A Charter of Liberties. We must also see to the installation of powerful Mayors, each at the head of an honest ‘body politic’, to run cities and towns independent of higher authority. If we embrace free trade unilaterally, our poor people will gain irrespective of politics. In subsequent columns I will explore these issues further. Stay tuned.

The writer has authored Antidote: Essays Against the Socialist Indian State, and its sequel, Antidote 2: For Liberal

Riches for the poor

Guest Columns by Sauvik Chakraverti,

The Newindpress on Sunday, 2007-2008

Riches for the poor

I raise just one cheer for Grameen Bank and its founder Muhammad Yunus getting the Nobel Peace Prize. It must be admitted that advocacy of microcredit in poor countries is a considerable advance from the idea that has dominated development economics for the last 60 years: that the governments of poor nations should receive copious amounts of foreign aid. It was that great dissenter, Peter, Lord Bauer, who said foreign aid meant money transfers 'from the poor of rich countries to the rich of poor countries’. Bauer was honoured with the Milton Friedman Prize for Advancing Liberty by Cato Institute. This biennial prize carrying a purse of a whopping $500,000 has become the liberal alternative to the Nobel Prize. After Bauer, the Cato prize went to Peruvian economist Hernando de Soto, whose book, The Mystery of Capital, has raised an important point about poor people in poor nations. And that is: the poor possess property; what they do not possess is legal titles representing these assets, which could be used as collateral.

In various interviews, Yunus has maintained that he started the Grameen Bank to give credit to the poor because the existing banks refused, saying the poor are not creditworthy: in other words, they have no collateral to offer. His own approach was to extend small loans based on ‘trust’. That these small loans are profitably invested in small businesses is testimony to the entrepreneurship latent in poor people. However, this manner of operations by a ‘bank’ cannot ever unlock ‘the mystery of capital’. If the poor had legal titles to lands and buildings they owned, regular banks would vie with each other to lend them money. Only then would the ‘capital’ in ‘capitalism’ happen in poor nations.

The word ‘capital’ indicates a measure of supremacy for the idea it embodies—as in ‘capital city’ or ‘capital punishment’. Both de Soto and Grameen Bank are talking about ‘capital’ for the poor. But while the Nobel laureate is in the business of loaning the poor extremely small amounts of capital, the Cato laureate is talking of regular, ‘macrocredit’: huge amounts of collateral-based capital for the poor to invest in capitalism. De Soto estimates that the total assets of the poor the world over are worth nearly $10,000 billion: all this is ‘dead capital’ without legal titles. In contrast, all the loans of the World Bank to date amount to less than $500 billion.

To appreciate de Soto’s point my reader has only to walk around any ‘unauthorised locality’ in his city or town. These extra-legal urban properties of the poor imply a life not just without legal title; this also means no legal address, and hence no legal way to get postal services, tap water, sewage, electricity and phone lines. This creates a ‘bell jar effect’: those lucky enough to have titles get capital; the unlucky ones don’t. The lucky few live within the bell jar; the unlucky ones outside it. De Soto advocates getting everyone into the bell jar. Grameen Bank is not speaking this language of capitalism.

De Soto’s book is subtitled Why Capitalism Triumphs in the West and Fails Everywhere Else. The example he has studied is the USA, where poor white settlers established homesteads, farms and ranches, laid claims to gold in California and so on, all within the ambit of laws protecting private property. Possessed of legal property titles, these poor settlers found in these titles something ‘representative’ of their property and their creditworthiness. These legal representatives of property—that is, property titles—empowered collateral security and unlocked the ‘mystery of capital’ for every single US citizen. It is this approach that de Soto advocates for poor nations.

My own research reveals that the existence of legal property titles (and this includes legal leases for tenant-farmers) under the common law in feudal England is the principal reason why capitalism emerged first in Britain. The primacy of the ‘law of the land’ was asserted as early as 1215AD in the Magna Carta, in the term lex terrae. It is simply because writ protection was granted to all properties, contracts and debts from the 13th century onwards that London’s Lombard Street became the world’s greatest banking center. The East India Company was set up in 1600, and its ventures could successfully raise capital only because the rules of the game were very good. Poor whites who migrated to the US, Australia, Canada and New Zealand founded capitalism there because they took the common law on property along with them. Poor people in poor nations need to be able to play the game of capitalism according to good, universal rules.

De Soto has investigated property matters in many Third World countries, from Egypt to the Phillipines to Mexico and Haiti. In Cairo, he found a total absence of property titles to real estate in the desert. In Haiti, which is as poor as Bangladesh, it was found that many important government buildings, including the official residence of the head of state, did not have property titles. Over 70 per cent of the people in these countries live outside the bell jar. Their properties possess no ‘representative titles’. These people and their properties lie outside the scope of capitalism.

In India, with 15 years of ‘voodoo liberalisation’, it has become abundantly clear that property is the name of the game. Private builders and real estate developers have drastically altered the skylines of every city. In villages close to urban areas, unlettered peasants have come to appreciate that their mustard fields have more value than they could ever have imagined. The socialist Indian state with a constitution that does not recognise private property rights as absolute operates a dual monopoly – on ‘legal’ land to build on as well as on roads that could colonise more land—and it is this dual monopoly that has caused urban land values to skyrocket. With good roads into the surrounds, land values in cities would come down, those in villages would rise, cities would decongest and ‘unauthorised colonies’ would not happen! This planned destruction of our urban habitat, which is the destruction of our civilisation itself, has made many of us owners of hideously expensive properties in hideous cities and towns. But the plight of the poor, without legal titles, is far worse. For their sake, we must champion property rights, the basis of capitalism and the very antithesis of socialism, which deifies collective property. Microcredit is just symptomatic treatment; property titles are the cure.

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

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