Shut down HRD ministry!

Shut down HRD ministry! by Sauvik Chakraverti

Shut down the union hrd (human resource destruction) ministry. The ministry is manned by propagandists of a failed experiment in state socialism. It has ensured there are no genuine knowledge workers in the entire education system, except bureaucrats. Its supervision of schools, colleges and universities should be revoked.

Dismantle all licensing requirements for education institutions. The education sector urgently needs to be set free. This will facilitate entry of competing private firms offering short courses that equip young people for vocations or professions, be it plumbing or baking into the education sector. The three R’s can also be easily taught, especially using computers.

Free the student community. In schools, colleges, universities and B-schools across the country students receive state-sponsored ‘education’. Such education churns out limited types of economic actors: bureaucrats, managers, accountants, lawyers, doctors, engineers. In the emerging free market economy, young people will find profitable niches as DJs, VJs, even tattoo artists. The burden of formal education — especially state-sponsored education — is inimical to creativity and intellectual freedom. 

Revoke higher education subsidies. Higher education is a privilege, not a right. Those who actually produce knowledge should be free to work, teach and sustain their respective schools of thought. Every such school should sustain itself on its own resources as it would be fatal to academic freedom to expect or receive subsidies from the state.

Moreover some Indian edupreneurs are venturing overseas. The Manipal Education & Medical Group has promoted state-of-the-art medical schools in Nepal and Malaysia, and the S.P. Jain Institute, a campus in Dubai. And most spectacularly, India-born Sunny Varkey who runs a dozen secondary schools in Dubai and the UAE, has acquired 13 independent schools in Britain and could well be the world’s premier edupreneur.

This urgent flurry of activity within the hitherto somnolent education sector has ensured that the vital importance of qualitative education has permeated down to the lowest income groups across the subcontinent — a development accentuated by the promotion of the country’s 517 urban benchmarked Jawahar Navodaya Vidyalaya residential schools in rural India (see EW cover story August). Simultaneously it has focussed public attention upon hitherto arcane subjects such as syllabus design and curriculum development and shifted national attention from ritual to real education. Suddenly paper degrees and qualifications are not as important as professional and life skills which school leavers and college graduates must acquire within their institutions of learning.

Therefore the newly emergent consensus that reform of India’s Macaulayan system of education based on rote learning and memorisation rather than development of problem-solving and conflict-resolution skills requires urgent attention. And even as several specialist committees constituted by the Union ministry of human resource development are currently engaged in the process, the public interest demands a wider ambit for the national debate on syllabus and curriculum reform. To this end, to meaningfully celebrate the 5th anniversary of EducationWorld, we deemed it incumbent upon ourselves to ask several educationists and industry leaders with proven commitment to improving the education system to write prescriptions for a renaissance of Indian education.

Inevitably, prescriptions for the reform of India’s patently languishing, if not terminally ill education system by dedicated educationists in diverse professions and vocations differ widely. However on some points there is a broad consensus. The reforms implicitly or explicitly endorsed by all the seven eminent respondents are:

Liberalise and deregulate the education system to encourage promotion of new schools, colleges, vocational and other institutions of higher education.

To a greater or lesser degree all the respondents are in favour of addressing the supply side of education to eliminate capacity shortages which are the root cause of the overwhelming majority of the hundreds, if not thousands, of rackets which plague post-independence India’s education system. The learned justices of the Supreme Court agree. In its historic 2002 judgement in the TMA Pai Foundation Case (8 SCC 481), a full bench of the court expanded the right of minorities to “establish and administer educational institutions of their choice” as mandated by Article 30 of the Constitution of India, to all citizens.

This development prescription is strongly endorsed by liberal economist and writer Sauvik Chakraverti. “The education sector urgently needs to be set free. This will facilitate entry of private firms offering short courses that equip young people for vocations and professions — be it plumbing, or baking — into the education sector. The three R’s can also be easily taught by them using computers,” says Chakraverti (see box p.39).

SAUVIK CHAKRAVERTI is an alumnus of the London School of Economics and former senior assistant editor of The Economic Times. Currently Chakraverti is the convenor of the Liberal Study Group, Mangalore.

Need to de-school society

Need to de-school society by Sauvik Chakraverti

Education World September 06 | Education World

Dr. Parth Shah, president of the Delhi-based Centre for Civil Society in his entertaining critique of Amartya Sen’s stand on government and State as educator of the masses, wrote that a government which cannot be trusted to produce food (by cultivating fields) surely can’t be trusted to produce education, which entails cultivation of minds. That’s why nobody is willing to pay bribes for admission into government schools. Some private schools extract donations and bribes because the licence-permit raj has blocked supply. Unshackle the enterprise of educationists, and there will be enough private education for all.

Socialists like Sen, who plead for a major role for the State or government in education, do so on two grounds: equity and standards. Both pleas are based on false premises. A state that spends hugely on higher education, leaving little for primary schooling, cannot be said to be serving equity. As predicted by public choice theory (which is still not taught at the ‘elite’ Delhi School of Economics), the education budget is hogged by the middle class and the rich, who consume higher education. The poor, whose children need just a little primary education to get going, get naught. So, the equity argument isn’t valid in the current Indian context.

Next we need to address the standardisation argument. Can you imagine anything worse for the minds of children than bureaucrats approving conditions for the promotion of schools and colleges and even universities, mandating courses and syllabuses, listing ‘approved’ textbooks, fixing tuition fees and doing all the other things standardisers advocate? Will this not lead to the politicisation of knowledge? Will we not create an Orwellian ministry of truth? Like ISO certification, the private sector is quite capable of setting standards, as the privately promoted computer education firm NIIT has proved. But NIIT is still not ‘recognised’ by the Central or state governments.

Contrary to official dogma, education is one area in which there should be experimentation. Young people learn music, sports, dance, art, cooking, driving and computers (outside school) from private entrepreneurs. Thus, there is widespread variety and choice and acceptable standards over which both students and parents have control. Therefore there is negligible teacher absenteeism in such courses.

This is the pointer to the future. If, as Rabindranath Tagore had dreamed, India becomes a country “where knowledge is free”, education would be a competitive enterprise over whose products consumers would exercise complete sovereignty. If poor parents want their children to learn English, as in fact most do, competitive entrepreneurs would sell them short courses, as many are already doing. If they seek other kinds of knowledge, the market economy will step in to provide it, either by studentship or apprenticeships. In such a market economy, a child from a poor family can choose a ‘calling’ and obtain knowledge relevant to that vocation. Specialised in this manner — as a beautician or tattoo artist, electrician, mason, plumber, motor mechanic, receptionist, chef or cartoonist — all poor children can seek honest survival in the urban market economy. They can be ‘rationally ignorant’ about everything else.

To understand ‘rational ignorance’, take for example, a musician. If he is adept at playing his chosen musical 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. If he wants gourmet food, he hires a chef. And so on. As far as the musician is concerned, all he knows is how to play one musical instrument well. About everything else, he is rationally ignorant.

The notion of ‘rational ignorance’, which is the key to understanding how free markets use specialised knowledge, implies that children don’t need to spend long and boring years in school that mete out generalised knowledge. Armed with a pocket calculator and only two R’s, children from every household can begin to chase big dreams. We need to de-school society if we truly have the interests of poor children at heart. Instead, we have submitted, without even a murmur of protest, to the education cess: the state as the ‘cultivator of minds’.

A noted philosopher once remarked: “Whoever is the master of education is the master of mankind.” Our socialist state wants to be the master of education as a means to a much more sinister end — control of our minds.

The situation is critical. It demands that parents wake up to their own responsibilities. A video recording of Pink Floyd’s The Wall about how education is ‘thought control’, should be compulsory viewing. As for compulsory reading, I strongly recommend Prof. James Tooley’s The Enterprise of Education, a 38-page booklet from Liberty Institute, New Delhi, which analyses the Indian experience of state controlled education.

(Sauvik Chakraverti is a journalist and author of Antidote: Essays Against the Socialist Indian State, and its sequel, Antidote 2: For Liberal Governance, both published by Macmillan)

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)

Road to Liberty: Markets Alone Reward Diverse Knowledge Forms

Sauvik Chakraverti, Sep 4, 2004, 12.00am IST

Socialists insist education will help the poor. Actually, millions are poor not because of ignorance, but because of socialist law. Unlettered tribals in the jungles of central India, for example, know how to distil mahua but laws prevent them from selling it. Millions of poor coastal Indians know how to climb the palm tree, harvest the juice, and brew toddy. They are poor because laws prevent them from selling the fruits of their traditional knowledge. In Sri Lanka, toddy is touted as the national drink and sold in tetrapak. No toddy is sold on Brigade Road, Bangalore: Excise law.

Similarly, millions of unlettered Indians know how to sing, dance and play musical instruments. But they languish in poverty because the socialists have outlawed nightlife. The poverty-stricken north-east is full of potential rock stars. Arun Shourie showcased many great north-eastern bands in Delhi recently but where do they perform, given all the restrictions on opening bars and clubs, serving alcohol and so on? In Mumbai, entrepreneurs have invested in thousands of dance bars which fork out crores in taxes, but cops routinely raid bars and arrest these girls who are just trying to earn an honest living with skills they already possess. In Maharashtra, legends recount the Peshwa Baji Rao's deep love for the dancing girl Mastani. Today, poor Mastani would be in jail or in a municipal school! Tamasha is an ancient Maharashtrian form of ribald popular entertainment, but it has been legally crushed, and the papers report that tamasha artistes today survive as mistresses of corrupt local politicians. Mujra is banned in Lucknow.

In America, black slaves made it big in music. New Orleans produced Satchmo and hundreds of jazz and blues stars not because of education, but because of liberty: The liberty to earn an honest living.

The socialist emphasis on education also demonstrates complete ignorance of how knowledge operates in the market economy. Main Street, Pune, is a busy market. Walking around, you find hundreds of small bakeries that turn out a dazzling array of breads, buns, biscuits, rolls and so on. There are scores of small jewellers, tailors and

expert darners. Many tiny establishments make picture frames. There are Irani, Parsi, Chinese, tandoori and continental restaurants. Budhanis is famous for its potato chips. There is a popular home-made softy ice-cream joint. There is a vada-pau stall that always has crowds of customers. There are bhelpuri and chaat-wallahs. A group of acrobats perform for passers-by. The street is lined with hundreds of shops selling diverse products ranging from footwear to sarees, from electronic goods to kitchenware. This is what Friedrich Hayek called the division of knowledge: Every economic actor is operating with distinct know-how.

Important implications follow the Hayekian view of knowledge. First, that central economic planning can never work, because knowledge cannot be centralised: What cannot be known cannot be planned. The socialist central planner, Hayek said, suffers from fatal conceit: He does not see the wonder of knowledge, and thinks he knows it all. It is because of knowledge failure that there are shortages of everything that is planned, from roads to power. There are no shortages in the market economy.

Second, Hayek showed how knowledge and education are entirely different things. Hayek found much of the knowledge used in the market economy to be inarticulate and uncodifiable. The bakers, tailors, expert darners, and bhelpuri-wallahs of Main Street possess this kind of knowledge. This shows the limits of formal education as a means to economic achievement.

Formal education churns out certain types of economic actors only: Bureaucrats, managers, accountants, doctors, lawyers and so on. The vast majority of successful economic actors get their knowledge elsewhere. That is why VJs, DJs, sports-persons, fashion models, and hotel chefs earn more than professors of economics.

Liberty matters much more than all the education the socialists can impart. Liberty means free trade and open borders. Liberty means there are no restrictions placed on economic achievement and it is this freedom that empowers the poor to enter the market, not education. Liberty beats education in another important way, for education requires us to pay a new tax, while liberty is free, requiring only that repressive laws be repealed and meddlesome, corrupt bureaus be shut down. So why have almost all educated Indians agreed to the education cess?

Perhaps their education made them forget liberty. In 1215, when the Magna Carta was signed, Englishmen were all quite illiterate, but they instinctively valued liberty: Every freeborn Englishman is the king of his own castle. Thus, we see the birth of constitutional democracy and the birth of capitalism. The merchants of cities and towns

extracted from King John constitutional liberties to self-government and trade by land and sea. The richest livery companies in London then were those of the fishmongers, grocers and fruiterers because they sold what everyone consumed. The merchants of England's cities and towns comprised the commons. But in every Indian city today, people in these basic trades have their surpluses robbed by parasitic state personnel. How can we believe we are a true constitutional democracy when we don't have liberty?

Unleash Tiebout forces

Unleash Tiebout forces by Sauvik Chakraverti

EDITORIAL, TNN Apr 4, 2002, 01.46am IST The Economic Times

A survey carried out by this newspaper has ranked hyderabad as the cheapest indian city to live in, and mumbai the most expensive. delhi follows a close second. What this means is that your salary goes further in hyderabad than anywhere else: on the same salary, if you live in mumbai, your monthly expenditure goes up by a whopping 87 per cent. Therefore, salaries are necessarily higher in mumbai. If this continues, the city will get outcompeted eventually by market forces. Goods manufactured in mumbai will cost more than goods made in hyderabad. When cities compete, and when citizens 'vote with their feet', a phenomenon occurs which economists call the tiebout effect. charles tiebout had solved the 'public goods' question in a rather unique manner. He said that if mobility could be assumed, then, cities and towns would compete with each other on the basis of public goods provided and their costs as measured by taxes. People will flock to cities where taxes are low, and where public goods are excellent. They will abandon cities where taxes are high and where public goods are not provided adequately. It is this competition, and not local democracy, that will yield functioning municipalities. In the indian context, the depressing truth is that public goods are undersupplied everywhere. mumbai is so expensive only because of high housing costs. This is because of archaic land laws like the land ceiling act and rent control act as well as undersupply of a critical public good: roads. With good roads into the surrounds, more land would be colonised, and prices would fall. This is already happening in delhi. With accretions to the available stock of housing occurring in noida and gurgaon, real estate values in posh south delhi have collapsed by 40 per cent in the last two years. Of course, even in delhi, if roads to satellite towns were excellent, prices would have crashed further. This is the line indian cities and towns must pursue. The focus must be on functioning, competitive municipal organisations. They must treat citizens as customers. in this scenario, those cities that provide the best services and quality of life at the lowest cost will see more 'customers' — and hence more development. Bad cities will gradually see decline, as businesses, factories and people shift out. The greatest benefit of this approach is that we, the citizens, will no longer be viewed as a 'population problem'. We will be viewed as customers.

The Liberal Visions for India

The Liberal Vision, India by Sauvik Chakraverti

Liberal Times, August 2001

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

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

The Liberal Vision for India

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

Notion of Self Sufficiency

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

Free Trading Cities

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

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

The Liberal Vision and Recent History

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

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

Cities and Hill Stations

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

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

Primacy and Urban Overcrowding

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

Primary City and Satellite Towns

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

Protectionist Policies of the State

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

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

The Government of Cities

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

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

Principle of ‘Subsidiarity’

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

The Future of Village India

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

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

Rural-Urban Migration

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

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

Relations with Neighbours

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

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

Free Trade and Free Immigration

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

Happy Co-existence

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

Urban Trends and Globalisation

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

World Market and World Factory

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

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

Killing Predatory States

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

Limited Government

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

Predatory States: Kleptocracies

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

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

Getting There

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

Liberal Parties and Think Tanks

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