Generally speaking I hate the phrases such as ‘true so and so’ or ‘perfect so and so’, but its important that people who support free market understand what and how a market player works. Imagine if you are a football fan, you support your football team, you probably know all the rules of the game, but since you haven’t played the game yourself you just don’t feel it exactly how a football player feels.
You know that if the ball leaves the emarkated boundary then the opposite team gets to throw in the ball from that point on the boundary, but what you don’t know is what does the player really have to go through or consider when he gets that chance in order to win.

Similarly its very important for people who support freedom, liberty and capitalism to understand the operations of a market player. we all are drilled about how to use state as a solution for everything, if there is a possibility that the car manufacturers might make an unsafe car, our statist upbringing immediately kicks in and tells us the statist solution, “Lets have the govt make car safety regulations, after all the govt’s only valid job is to protect life, liberty and property, so that seems to be a proper justified role”, but the truth is this statist solution always causes more problem and deaths than its equivalent free market solution. You will be only and immediately be able to see how undynamic and faulty this solution is when you manage to think like a market operator, rather than a government beaurecrat.

This is why to understand the market and support it properly its important to train yourself in the most important of market’s operations, buying and selling of means of production(aka trading stocks). I know a lot of us are very excited about stock market trading, and those with good money might already be in the market, but if you jump in directly with real money in the market then you might get turned off very quickly by successive losses. That is my I strongly suggest trading with virtual money on real stocks as long as possible. Those who are impatient to start as soon as possible please scroll down to the bottom of the document to click on the best virtual trading website, and join it, but I would highly suggest to read the rest of the article because I attempt explain stock market and its function in as less boring possible.

Stock Market

A stock market in a capitalist society is the brain of the market. Remember that in the most basic level a capitalist society like USA differs from a socialist society like Cuba because the former has a stock market. The whole concept of a socialist society is based on non-private ownership of means of production, and stock market is a place to trade the ownership of means of production.
Lets say if the city of London has a requirement of oranges, city of Tel Aviv has a huge infrastructure to produce those oranges then that means that there is an opportunity to supply oranges to the city of London from Tel Aviv. Any company having the infrastructure, or which starts to establish an infrastructure to buy oranges from Tel Aviv and supply it to London, is doing the right thing, and stock market investors would start appreciating the means of production of this company. The stock price of this company would go up, which means a better credit line for the company and more money flow. This will enable the company to invest in a bigger infrastructure and transport more oranges from Tel Aviv to London.
Similarly, if a company is in the business of producing cup cakes, and a report comes which concludes that having cup cakes is really really harmful to your health, this clearly means that people will now start buying less cupcakes, so the stock owners of that cupcake company will sell their shares, resulting in undervaluing of the stock price of that company(it won’t go down to zero unless company is really going bankrupt, there would still be some sales of cupcakes therefore stock price will just go down and settle to something less).
By correctly identifying the stock prices, the stock market investors earn huge profits in this process. If you come from one of the socialists or quasi-socialist countries like India, and Soviet Russia, you will realize that a stock market works a lot like the central planning commission, it moves resources and capital goods from one venture to the other. Where it needs less to where it needs more. In the above example if at the same time Coffee demand in USA is going down(and it receives huge amount of Coffee from Brazil), then a stock market will start depreciating the value of any Coffee company doing business from Brazil to US, maybe making it get rid of its now excess capital goods(such as cargo airplanes and crew), and the added capital flow to the orange company will enable it to buy more cargo airplanes and crew. In a central planning scenario this thing should have been done exactly be a central planner, where he reallocates the cargo airplanes, from import-export of coffee to oranges, from Brazil-US route to Israel-UK route.

Stock Market is not a casino or a horse racing game

It is shockingly disappointing that a large number of people believe that stock markets are nothing more than places where you gamble with your money. I recently found some individual on an economics chat room who had an opinion about everything, sounded quite smart, but when I asked him what does he think about Stock Markets, or if he thought Stock Markets served any utility or not. His answer was, “I think stock markets harm small businesses”. This is by far the dumbest thing I have heard someone say. Stock Markets are the brains of a market, without them, market cannot function. A casino is a place where everybody has equal odds, and you play for the fun of luck. A casino’s only utility is entertainment, but a stock market is far from being entertaining. But it would be very unfair to not realize why people think so low of stock markets.
The reason why people think Stock Markets are nothing more than Casinos because of the massive uncertainty in the markets. A lot of people invest a lot of money in the markets, and most of their odds are not better than winning on a roulette table. Also there are times when stock market rises at once and falls at once, you might wonder if Stock Markets are all about putting capital at the right method or venture of business, then how come in 2008, 2001, 1987, 1929, the stock market crashed at once. Or why is it that people treat it as gambling tables, after all most people just look at the technical trends, and follow them, most stock market traders don’t worry about the exact business model of a company.
The answer of all these questions comes down to single most important problem bugging all the ‘capitalist’ societies in the world, and that is the Fiat Currency. Due to high inflation, the prices of consumer goods rises really fast, and all the people who want to save their capital, find their capital depleting at a really fast rate. So people are forced to somehow try to keep up with rising consumer prices. Stock market provides some very high returns compared to say fixed deposits or other investment opportunities.
Similarly the massive amounts of regulations on the stock market creates this fog which makes it really hard for real prices to appear. For example short selling(selling without owning the stocks) has a huge set of regulations. Whenever market crashes the government steps in and makes short selling of the major stocks illegal. All this cripples the real functionality of a stock market, and most people end up losing a lot of money.

The Solution

What should you do if you are someone who is interested in stock markets, and who has found the life of a stock market very fascinating? Or you could simply be a capitalism enthusiast who wants to understand the brain of the free markets. Or you think its an evil thing that companies are liable only to their stock holders(there is a big surprise waiting for those who think so).
The solution is simple, start trading in stock markets, but without using real money. There are some very good virtual stock market softwares available, but my personal favorite is Wall Street Survivor. Its a web based stock market game, and it allows you to invest in real stocks and real prices but by using virtual money and virtual portfolio. I really like it because it allows you to create a variety of portfolios in the same account(say you want to try to parallel strategies at once without complicating things too much, for example I have two portfolios on guessing which would be the next bubble, and I invest in two industries, keeping the portfolios separate).

Before I go on let me warn you this, virtual stock trading will not enable you to make money in real stock market, the only way you can learn to make real money in real markets is by investing in real, but there is something very important virtual stock trading will help you learn is to get rid of the initial quirks new investors face. Let me put it this way, if you practice on a virtual stock trading account, it will help you not make huge losses new investors make(purely because they are unaccustomed to the ups and downs of the market).
Most people lose money in stock markets when they start into this thing because they don’t have this investor’s mentality. They just go with their feelings, and the moment they make a little bit more money they go crazy with the power, and end up losing not only the profit they made but their initial investment capital too. Some sitcoms(Seinfeld, King of the Queens) captured this roller coaster experience new investors face beautifully in their series. Overall it goes on something like this, you invest, you make some good profit, then you hit a losing streak and you end up at 50% loss of what you started with. In real life that’s when most people bid stock markets good bye, but if you stick through this experience you have just managed to achieve some stability and a great experience which will help you in making profits at a later stage.
I practiced with all sorts of stock market simulators for over 2 years before I dealt with real money, and I have tried all sorts of markets, stock markets, options markets, futures trading, forex markets, and overall my conclusion is(and its only applicable for me), that I should only put a very small amount of money capital into the markets. I should never do technical trading(technical trading is when you trade only on the basis of prices, and nothing else, business model doesn’t matter), stick with options(you can do options trading in Wall Street Survivor). It has helped me to learn and understand futures and most importanly Options(which are a bit complicated). Thankfully I am now as comfortable with options as I am with stocks themselves.
So use the above link to sign up on Wall Stree Survivor(https://wallstreetsurvivor.com/), and start playing. If you want to add me as buddies on WSS, send me a mail at renegade.division+wss@reasonforliberty.com and I will add you.

I wrote this ‘controversial’ article Was Gandhi a Libertarian? last month which had many positive and belligerently negative responses from the readers as well as the other RFL team members¹². The question which came up again and again(Gandhi was asked this during in his lifetime as well), which I unfortunately couldn’t answer satisfactorily. In fact I haven’t seen anyone answer that question satisfactorily. The question is, how would Gandhian philosophy help the Jews in Nazi Germany. What could have Jews in the Nazi Germany have done consistent to Non-violence principle to deter Nazis.

This argument seems to be like the lynchpin of Gandhian philosophy. Gandhi himself wasn’t very informed of the situation in the Nazi Germany. So even his own answer is not sufficient in my opinion. Upon being asked about the Nazi persecution of Jews, Gandhi answered:

If I were a Jew and were born in Germany and earned my livelihood there, I would claim Germany as my home even as the tallest Gentile German might, and challenge him to shoot me or cast me in the dungeon; I would refuse to be expelled or to submit to discriminating treatment. And for doing this I should not wait for the fellow Jews to join me in civil resistance, but would have confidence that in the end the rest were bound to follow my example. If one Jew or all the Jews were to accept the prescription here offered, he or they cannot be worse off than now. And suffering voluntarily undergone will bring them an inner strength and joy [...] the calculated violence of Hitler may even result in a general massacre of the Jews by way of his first answer to the declaration of such hostilities. But if the Jewish mind could be prepared for voluntary suffering, even the massacre I have imagined could be turned into a day of thanksgiving and joy that Jehovah had wrought deliverance of the race even at the hands of the tyrant. For to the God-fearing, death has no terror.³

This answer is very unpopular in the western world. Gandhi is called anti-semite(try typing the terms Gandhi and Jews in your favorite search engine and see what shows up in results). The question almost always asked is “How do you think Jews in Nazi Germany should have followed the philosophy of non-violence, the Jews were slaughtered in millions without any resistance anyway. In fact the task of the Nazis would have been much more easier had they just gone to the gas chambers peacefully”

I really had to think a lot about the possible solution of this issue. What I came up with was simple, the person who asks the above question actually doesn’t really understand Gandhian method. He confuses Gandhism with non-violence, but it is really important to differentiate between the two. Not all non-violence is Gandhism. Nor all civil disobedience is Gandhism. If few people want to bring Socialism(which is an inherently violent philosophy) through non-violent civil diobedience, they may or may not succeed for a short period of time, but in long term they will fail, because they are not being a Satyagrahi.

As I wrote in my previous article on Gandhian philosophy, what Gandhi managed to do was to remove the the color of righteousness from a morally wrong aggressor. If a thief steals something from someone, and then tries to be all non-violent when the person tries to take back his property through violence, then that’s not Gandhism. This is why Gandhi coined the term ‘Satyagraha’, because civil disobedience does not capture the essense of Gandhian philosophy.

Lets come back to the original question, what could Jews have done as they were standing in front of the gas chambers, consistent with the Gandhian philosophy. The answer would be NOTHING. They could not have done anything as they stood in front of the gas chambers, that is not the time to become Gandhist, its just too late. Then what is the right application of Gandhian philosophy in case of Jews in Nazi Germany? The answer is simple, the Jews in Germany should have done Satyagraha long before they were shipped to the concentration camps.

What Jews should have done is the moment Hitler gave the order that the Jews must stop owning all the businesses, the Jewish businessmen should have done Satyagraha against it. The moment the government took away the guns from the people in Nazi Germany they should have started Satyagraha against it. The moment Hitler ordered all the Jews to get registered and move to the ghettos the jews should have started Satyagraha against it. There are two possible outcomes of this situation:

1. The German government backs out and allows Jewish businessmen to continue doing businesses, allow people to own guns, give up trying to register and move Jews to ghettos, which solves our problem but is highly unlikely, knowing what we know about the history.
2. The Germany government orders shooting of the Jewish Satyagrahis or forcefully ship them to the concentration camps.

We don’t have to worry about the first outcome, so we will just discuss the second. There are some historical facts you must know about the Nazi Germany, at that particular time nobody in the world knew about the concentration camps. These gas chambers and concentration camps were not publicly known until the war ended. The only news about such atrocity were regarded as mere rumor and war gossip. When Hitler forced Germans to give up their guns, it wasn’t foreseen by anyone that he is disarming the Jewish people in some diabolical plot to eventually have his ‘Final Solution’. I am not saying that the Jews walked gladly into the concentration camps, but all I am saying is had Jewish businessmen not followed the Nazi instructions, had Jews not given up their guns so gladly for the ‘peace’ in Germany, had the Jewish people not registered and moved to the Ghettos, but instead refused to follow the orders from the exact point where they were living their lives exactly how they wanted, they would have been able to expose the Nazis WAY EARLIER, and that exposure would have been the most effective thing to do to fight against the Nazis.

When the news spread about how the Nazis shot 500 Jewish businessmen because they refused to stop owning businesses, or that they sent 1000 people to places from where they were never seen just for refusing to turn over their weapons, or that German soldiers shot 20 families inside their homes in Warsaw who refused to move to the ghettos or registered, this would have uncovered the truth of the Nazi Germany. This would have shown Jews what was coming up for them. A lot of jewish people would have still died, no doubt about that. In fact I can’t even say if more jews or less jews would die in this scenario, either way the number of people killed by the Nazis would have been much much less. It would have mobilized people against the Nazi Germany. Remember, Nazi Germany did not look as monsterous as it looks now to us. Imagine Nazi Germany just as Germany who is invading its neighboring countries without all the holocaust stuff. This is what Allies thought they were fighting during Second World War.

Conclusion

Gandhian philosophy is not applicable for the Jews already standing in front of the firing squad or gas ovens. The correct application of Gandhian philosophy is on the day when the German government first aggressed against them, when the German government wanted to take away their guns, when the German government wanted to them to move to ghettos, when the Germany government wanted them to move to concentration camps. As the aggression of Germany government increased against the Jews, the time to do anything slipped away with every new aggression. We are facing the same situation here, we trade our liberties for temporary security or peace. The UK government orders every citizen to give up their guns, and the British follow the orders, after all who wants to risk getting arrested, so people fool themselves that this will help in maintaining law and order, what they are doing is laying the ground work for another possible Hitler. Yeah the current UK government may not do anything like what Hitler did, but trust me, the new Hitler will not be racist(it won’t be Nick Griffin of British Nationalist Party, it won’t be the Klan association in US, and it won’t be Bal Thakarey in India), whomsoever it would be, you wouldn’t be able to expect him.

Today US government is installing checkpoints across the border to look for illegal immigrants. Indian government is creating a national database of all citizens and every citizen have an ID card. Whatever reasons given for these things, however rational these actions may sound, the fact is you are giving up your liberties! Once you have given up your civil liberties they are much more difficult for you to get them back. Do not give in to evil! Lets say you live in India and you think we cannot allow Indian citizens to have guns otherwise we will have a gun culture like we have in America (where our kids are shooting each other in schools). The thing is, if China attacks in India again or any foreign government for that matter, tries to disable our government and military, we will lose so many lives and property that few disturbed kids shooting each other will sound such a fair deal to the possible resistance Indian citizens could have done to a foreign invasion.

1. Was Gandhi a Libertarian – II – Author: Unpretentious Diva, Dec 8 [↩]
2. Gandhigiri and Libertarianism – Dec 10– Author: Unpretentious Diva, Dec 10 [↩]
3. 26 November 1938 (The Collected Works of Mahatma Gandhi vol. 74, p. 240) [↩]

The society considers income inequality as a curse upon itself. In a general argument between a ‘Capitalist’ and a ‘Socialist’, or a ‘Liberal’ and a ‘Conservative’, generally the Socialist/Liberal individual accuses free market or Capitalism of creating economic inequality in the society. A general example given is of US society where top 1% of the people own 40% of the wealth in US(or a variation of the statistics). This makes the people who stand for free market and capitalism generally go on a defensive by either attacking the statistics, or by comparing the worst person in a ‘seemingly’ capitalist society like United States being better than most average or well rich individuals in a seemingly socialist or an equal society like North Korea and Cuba.

My point here is not to argue whether the statistics is correct or not or to argue whether poor people in United States are better than poor people in Cuba, but to see whether ‘inequality’ is a negative attribute of a society on its own.

Society with an all knowing Superman

Imagine a society where there is one human being which knows each and everything. Consider him as knowledgable as God. He knows how much exactly its going to rain or snow, how much wheat is going to be produced, how much metal is there in a gold mine, and when its going to become uneconomical to dig more gold. He knows everything, if you ask him what is the best job you could do, he could even tell you that. He has all these information of the time till he dies.¹ In a free market society this man will end up owning everything in the world. There will be no investors in the stock market but only him, he could plan the resources in such a way that it gives him maximum profit. He pulls out capital from a oil company exactly when the oil extraction will not be economical anymore and invests in alternate energy. He shorts the shares of the companies the moment its CEO tries to be dishonest or to cook the books. He bursts the bubbles and lifts up the recessions by investing in such time. Overall he owns everything in the world. Everybody works for him now.

The question which comes now ‘Is this a terrible society to live in?’, or ‘Is there something wrong with this society?’. Initial reactions would be, ‘Of course, this is a horrible society to live in, one employer and he owns everything. You can never become rich in this society. He will be consuming everything.’. But give it a little bit more thought. What this guy has managed to do is eliminate the risk from the society. There is no risk. When you start a business, you see a demand and you see a supply, and you hope to match the supply and demand and hope to undertake the leftover of that operation. In this society, all demands which can be met by supplies are already been met by this guy.

People of city A want a train to the city B, but they don’t really wanna pay enough money which facilitates the operations of a train, so they use buses instead. The day people of city A get enough fed up and decide that they would be willing to pay enough money for a ticket of this train, this Superman sends his men who start to build a railway line between city A and city B. Sure Warren Buffett, Bill Gates, and all the successful Stock market Investors and businessmen would not wanna live in this economy, but common people like you and me are much better off in this city than we are in our current situations.

Imagine there are no shortages of wheat and rice, because this Superman who has the insight of demand/supply fluctuations always buys/sells the wheat and rice in such a way that maximum people are able to buy maximum amount of rice all the time. Imagine there is no stock market crash which proceeded 9/11 because this guy has already smoothed it out. Imagine no real estate bubble because when people overvalued the houses, this guy shorted them.

Is this society better?

You see the reason why the people of this society would be so much better than our current society because there is no risk in this society. Sure someone might say that you can never dream of starting a business and becoming a billionaire, well don’t forget this is a hypothetical society where we are presuming this superman knows everything. We dream over the possibilities. We don’t dream that we will go to school tomorrow, because we are pretty sure we are going to school tommorrow like every day(though we may dream of NOT going to school tommorrow for the possibility of a rain storm or something). Imagine it to be like this, on a roulette table, some people win and some people lose. If you told everyone the outcome of the game, the people who lose will never play the game, and the people who will win, now have nothing left to win from. Roulette is a zero sum game and real life is not, but in our example, if you play knowing that you will lose, you still lose and nothing changes(lets say you decide to run an airplane service from City A to B whereas they don’t really wanna pay that much, so now you lose all your money by investing in it). If you are correct on your entrepreneurship decision, and you wanna run a railway line from City A to B, you will be either beaten to it by the super investor and your train will run in a loss, or if you are really lucky you may beat the super investor to it.

Even if he lived in a socialist society, you will have to make him the central planner, performing the same functions as he did in a free market economy².

The point is that although this society may not be as thrilling to live in as our current society, it will have a lot less poverty. Except for that superman guy everybody else would be more or less equally rich.

Society with real life men

In our society there is no such human being who knows each and everything about the economy. Nobody can really be that accurate, so that situation is highly unrealistic. But it tells us something, it tells us that inequality of wealth isn’t really a objectively bad or good thing. Sure if in North Korea if Kim Jong-Il is the richest man and his family owns everything and everybody else is terribly poor then that sure is a bad kind fo inequality, but for economies with private ownership of means of production(countries with stock market), if the stock investors are the richest people then that isn’t neccessarily bad thing. It would be a bad thing if they made all their money through government coercion, like being a politician’s relative who knows which property will be picked up for Olympics stadiusm etc etc.

Conclusion

Inequality figures on their own are completely useless piece of infromation. They don’t convey any information. Someone supporting equality, or someone being egalitarian³ as in someone desiring an equal society does not say anything about them. Although whether someone supports use of violence(like supporting welfare and income redistribution schemes) or just social movement for voluntary charity is a completely different issue. Most economists in America support income redistribution and welfare programs.⁴ General trend was that the more elite institution they were affiliated from the more they supported redistribution. In an earlier article I explained why Hollywood is so leftist⁵, probably the similar mentality affects the economists.

1. I am cutting the example short so that it does not complicate the article, so imagine him knowing everything about the future till the day he dies. [↩]
2. Except theoretically he cannot plan everything in the society, so he has to choose, and you must incentivize him in some or the other manner to perform his task. Even in the free market society he has limited time so he had to choose between planning the resources by trading in the ownership of these capital goods, and spending leisure time. The huge profits ensures that he tries his best to utilize himself from most important to lesss important decisions. [↩]
3. Was Gandhi a Libertarian II – By Unpretentious Diva, considers Gandhi as an Egalitarian, an accusation author considers sufficient enough to be considered as a negative attribute. [↩]
4. In a 2003 poll of 1,000 economists, a majority of polled economists favor “redistribution”,safety regulations, gun control, public schooling, and anti-discrimination laws. They voted Democrat:Republican by 2.5:1 [↩]
5. Why is Hollywood so Leftist? – by Renegade Division, RFL [↩]

Contrary to what a lot of people in west think about India and Gandhi, I know that not everybody in India likes Gandhi. In fact I grew up hating Gandhi because I was so much indoctrinated in statism that although the State tries its best to preach Gandhism, the obvious disjunct between being loyal to a state and being Gandhian pacifist makes no sense. Its really a funny thing that on 2nd of October each year, the government celebrates Gandhi’s birthday and Gandhian philosophy by prohibiting sale of liquor all across the nation, you might as well celebrate Valentine’s day by hanging all the intercaste lovers, Buddha’s birthday by drinking animal blood, and Channukka by saluting to Hitler. Even more funnier fact, recently someone filed a public interest litigation in the Supreme Court of India, requesting to make insulting Gandhi illegal and any individual who insults Gandhi be thrown in prison. People just don’t understand what Gandhian philosophy is all about.

Now when I finally understood the libertarian philosophy and the principle of non-initiation of aggression, the question which really bugs me is how do we get the liberty which we so much deserve. Its impossible to physically fight the state, its so big, and not just that, it has the most legitimacy that even though they could do the worst things to the humanity, it will all be seen in the good light of justice. I have been closely following the fight for achieving liberty in our lifetime going on in New Hampshire by the members of Free State Project. Its because of my desire to figure out the most effective way to fight the state, I have been forced to reconsider Gandhian philosophy in a new light of libertarianism.

The question in front of us is, how do we fight the mammoth in front of us. The problem isn’t only on defeating a powerful enemy, but how to eliminate a righteous enemy. Of course the state isn’t right, but it has the color of righteousness. The people believe it to be right, and just people believing that state is being excessive doesn’t solve our problems, or motivates people against the state. There are many people who believe in conspiracies regarding US government behind the 9/11 attacks, but if you ask them if should we eliminate state or eliminating the state would be a good idea to solve the problem of an evil force from our lives, most of them will answer “No, we just need to CHANGE the people in the system”.

We all realize that even if we had bigger guns than state, we could still not kill the spirit of the state, it will rise again. People would want to recreate the state. So we get this feeling that the state cannot be defeated with violence, and using violence against the state sounds like the worst possible method to fight it, but then the libertarian philosophy comes into the picture which says that its acceptable to respond to aggression with (same amounts of)aggression and not many of us really believe that if a robber comes to our house and wants to rape your wife, then allowing him to rape your wife and then turning your daughter in too, will change his mind in any way.¹

We realize that responding to a common thief with aggression makes sense, but responding to state with aggression does not make any sense. How is that? Is this an inconsistency with the libertarian philosophy(which suggests responding violence with violence as a just solution) or with the philosophy of pacifism(which suggests responding violence with non-violence).

When I reconsidered the Gandhian philosophy I realized something very important something which the Indian society and the government greatly distorts about his philosophy, that Gandhi used these philosophy against a similar environment. He was fighting a mighty British Empire which had ruled India for over 150 years until then. There were Indian soldiers in British Army, fighting FOR the government against their own people. Contrary to what we might believe, it wasn’t until 1930² that people in India made an official declaration of getting rid India of British Rule, until then it was all about home-rule or more autonomy. Until 1930 people the idea that India can be completely independent on its own was too far-fetched and radical.

The Indian people are generally very peaceful, and the call to everyone to raise weapons against the British government would not have gathered many people behind you.
What Gandhi managed to do was, he declared that he would not raise a weapon against any individual, because of this, he gained a upper moral status against the British Government. The British rule in India wasn’t really like the current US occupation in Iraq and Afghanistan, but more like current US occupation of South Korea and Japan. People continued to live their lives, do business being unaffected by the foreign army, living under British law, courts, using roads, and railroads built by British Empire. In fact India got independence in 1947 and until 1st Jan 1930 they weren’t even fighting for completely independence. I must point it out that Gandhi had been fighting the British Rule in India since 1915, before the official declaration for complete independence, Indians were merely fighting for a self-rule, like Libertarian Party and Republican Party striving for a Small government(and call for complete independence being equal to call for no government).

When Gandhi declared that he would not commit violence against any individual, leave alone British government, he made himself more righteous than the British Government. If British Government orders to shoots a violent revolutionary, its soldiers would readily comply, they will follow the orders because in their own head they are thinking that they are preserving themselves, if they don’t shoot this violent revolutionary he will shoot them. So in their own head, it becomes a very easy decision to make. On the other hand, when the government gives the order to shoot someone like Gandhi, they don’t want to shoot a guy who would not harm an ant. Even if someone DOES end up shooting Gandhi, one fallen revolutionary may raise 10 more revolutionaries, but one fallen Gandhi, raises 1000s of people to take his place, because most people do not sympathize with the violent revolutionary, even if they do they rationalize it as he chose the path of gun, and he was shot down by a gun, but when Gandhi, a guy who chose to never commit violence, is killed by the state, then people realize that nobody is safe, there must be something greatly wrong with the state.

The British government never tried to kill Gandhi, because they understood it pretty well that if they did it, their empire will lose all its legitimacy, and the only way a few handful people can rule millions of people is through legitimacy(or the color of legitimacy).

So what is the guiding principle here, how do we establish consistency between being Gandhian and being libertarian. It all comes down to a simple principle which makes Gandhian non-violence consistent with libertarianism. If the aggressor’s right and wrong are twisted around, his polarities are reversed, if what you consider right is wrong for them, and what you consider is wrong is right for them, then there is no way you could win against them by responding to their aggression with more aggression.

Just consider it for a minute. If a thief tries to steal something you own, he knows he is committing a crime, he is trying to acquire something he does not own. If you punish him for his crime or acquire restitution, then that would be a possible way to deal with that thief. But if a government employee comes to your property to take away your house for non-payment of property taxes, he thinks he is just following the orders, and he is the righteous individual, you are the aggressor against the society by not paying your property taxes like everybody else.

If you try to punish that government employee, by trying to take away his property, him and his peers will just come after you because now its a matter of their own life and property, and they will commit more aggression against you.

If a cop tries to arrest you for some made up victim-less crime and you shoot him back, you don’t defeat the state, his son, his wife, his friends will all see him has a brave martyr shot by some violent drug dealer in the line of duty. His son would want to grow up and become like him. On the other hand, if you are a non-violent person like Gandhi and all you did was stood in front of the police station and tried to smoke some marijuana, first of all no officer would shoot you, but if some officer DOES shoot you, he ends up taking this huge guilt over his conscience whether he really stands for a right thing or not, similarly his family will see him as a murderer and not a brave police officer who shot a pacifist marijuana drug user. Even if nobody understands what you really stand for, the first question a cop’s wife would ask, ‘what wrong thing was that guy doing?’, ‘Was he selling marijuana?’, ‘Was he making profit by selling drugs?’, ‘Was he threatening your life in any way?’, and they see what really happened, nobody would really respect that cop in long term.

You will realize that Gandhi was a libertarian(there are many other libertarian things about Gandhi, but he wasn’t a statist), who mastered the art of fighting the aggressor with convoluted morals. We the contemporary libertarians have managed to figure out that the State is the aggressor, but what we have not managed to figure out is how to fight this aggressor. Everything Gandhi did, was against state. Every Gandhian principle becomes libertarian if you consider it a libertarian principle applicable against an aggressor with twisted right and wrong.

Gandhi said “If someone slaps you, don’t slap him back, but turn the other cheek around”.  Imagine it to be like this, “if a cop slaps you, don’t slap him back, but turn your other cheek around”.
Gandhi said “Hate the Sin, Love the Sinner”, imagine it to be like “Hate the State, Love the Statists or people who form the State”.

When I first started understanding these things, there were many things which did not make any sense, but over the time it all made sense. For example, there is a common objection that Gandhi was anti-technology and materialism, the truth is, Gandhi held those positions because these rules were only applicable to soldier against aggression. The state relies on punishing you by throwing you in a prison and devoiding you of all materials, if you devoid yourself of those materials, the state has left with no recourse to punish you in any way other than to come out of the cloak of morality and openly aggress against you(and like the cop who shot a peaceful marijuana protester in front of the police station) and lose all the morality and respect it claims, or to just let you go(like the British did) and let you build more people against the system.

Contrary to what you many people think, Gandhi only ran his non-cooperation movement for less than 2 years(out of his 30+ years of Satyagraha), he ended the movement in the middle long before he achieved his goals because a bunch of protesters in a small town in India, burnt a police station and many cops in it³. By cancelling the non-cooperation movement he became immensely unpopular among the extremist revolutionaries because right when the movement was going so strong Gandhi ended it. When this incident was portrayed in a Bollywood movie, this caused people watching this movie to chant anti-Gandhi slogans at the end of it. It didn’t make any sense to me, but now it does. What Gandhi did was, he took away any, and by that I mean ANY accusation British could bring upon Gandhian followers as being violent people.  If Gandhi had allowed the movement to continue and allowed more incidences of violence to go on, then that would have made the British government a good incentive to violently deal with all the people taking part in the non-cooperation movement. The wikipedia page of Chauri Chaura says “Many modern historians view the Chauri Chaura incident as a minor episode of violence, which while regrettable, did not merit the cancellation of a nation’s demand for political freedom.”, its a sad thing that most modern historians do not understand the core reason behind the philosophy of non-violence.

Gandhian philosophy of non-violence is not for weak people, but surprisingly this is a common viewpoint that Gandhian philosophy worked because it gave weak people a weapon to fight with, it is not true. Gandhian philosophy of non-violence and Satyagraha isn’t a weapon for weak people, its a weapon by which strong people eliminate the legitimacy of a powerful aggressor.

Ahimsa is the highest ideal. It is meant for the brave, never for the cowardly. – Mahatma Gandhi

1. Gandhi said that if someone slaps you on one cheek, turn your other cheek around and make your enemy realize how he is doing the wrong thing. [↩]
2. It was in 26 Jan 1930 when in Indian National Congress and Nationalists resolved that they will achieve a complete independent rule in India. Purna Swaraj declaration. Until then most of the political parties favored a dominion status for India, like South Africa, Australia, Canada, Irish Free State, New Zealand etc [↩]
3. Chauri-Chaura, Bihar [↩]

There is a hot topic of discussion going on a local radio show¹ regarding why there is a stereotype about Indians being so cheap(in America). As usual this is a mess created by the government, and the belief among people that laws have magical power of doing soemthing.

The reason why Indians are considered cheap in countries like America, because Indians bargain a lot. Even in India you will realize that you have to(I said ‘have to’ becase we know its not a choice) bargain, and if you don’t bargain then you are being ripped off. The reason behind this is simple, the prices in India are marked by a higher offset than they optimally should be at. The price of every commodity anywhere is determined by its supply and demand. But in India the printed price is always a bit higher than the actual price should be.

Why are prices in India printed higher than they could be really sold at?
The culprint is the Indian law about ‘Maximum Retail Price’. In India there is a law which says that every product’s price must be printed on it as a Maximum Retail Price(MRP), which must include all the taxes(local, state or central). The problem is that all taxes are different. Some places taxes are more than other places.

• Central sales tax – by the union government
• State sales tax – by the state.
• Entry tax – by the state.
• Luxury tax – by the state.

No producer really wants to produce a product for only one town or locality, mostly they want to mass produce the products for the whole state or whole country. So what they are forced to do is to take the highest tax rate, and add that price and print it all over the products. Because of this, every product is having a higher price than the acceptable profit.
For example if say the state of UP has a higher state sales tax(7%) and state of Bihar has a lower state sales tax(2%), for a product intended to be sold in both Bihar and UP, and which costs Rs 100/–, the producer is generally forced to print Rs 107/- on it. Although that product has an accurate price in UP, in Bihar, the retailers would make profit for any sale above Rs 102/-. So the retailers in Biahr are able to sell the product for cheaper than the printed price. Therefore generally you have to bargain and heckle to bring the prices down, and they will be brought down if do the right bargaining.

Almost everybody in India(especially people in small town who have lower taxes) grows up to learn to bargain everything because every printed price is wrong. Now the question arises, couldn’t people just finally figure it out that in the town of Nagpur every price is 7% less(which given enough time they will figure it out). The issue here is, that every retailer has a different cost price of bringing the product into his shop. In America(where there are no MRP laws) a packet of Raman noodles could be brought for 69 cents in a campus store, and 35 cents on an off-campus store and for 12 cents from walmart. That simply means that cost to walmart to bring the product to their store is much lower than an in-campus store bringing that product to their shop(generally because in-campus store deals with more middle men than Wal-mart).

The same thing goes with any retailer in India. In a small town a small grocery store owner in the middle of sub-urbs will give less bargaining than wholesale shops on the other end of the city. Since the cost price differs, you will get a different bargain on every shop, therefore you must bargain at each shop to find the correct price of a product.

In America since there is no such(stupid) law, every shop owner puts his own price, therefore the correct price is printed on the product. There is no need to bargain in America. Most Indians don’t understand it, and therefore this stereotype emerges.

In one line, Indians are stereotyped as cheap because they heckle, they heckle because bargaining is the only way by which real prices can be discovered in India. This stupid government law must be scrapped, and people must realize that Bottled Water(like Bislery and Aquafina) costs more to a Railway Station shop(because of higher demand) than to a inner city store.

1. Curry Crackers [↩]

I was thinking about this the other day, about why is every major personality in Hollywood so leftist? Why is it that people who make a fortune on the Market just are so hypocritical and promote taking money from other people on the threat of violence? This was the conclusion I arrived upon that if you are a neutral individual in Hollywood there is no way you can turn out to be pro-Free Market.

Imagine if you are a rising Hollywood star. You made your first million. You rose from dire poverty/dire mediocrity, and you get a taste of wealth. You spend a lot of money, do things what you always thought you wanted to do. Maybe at this point you love the Market, or maybe not. Overall you just thank god for giving returns on all the (relative) poverty you faced over the years. Then you make millions more, and then millions more. Soon you are one of the most appreciated actors of Hollywood. You live in the limelight, and you never see anything bad.

You ponder over your life, and realize that you make all this money merely by showing up your face(or writing a story, or directing a simple movie) for a few hours on a screen. You don’t have to worry about doing anything wrong in your performance because it can always be covered up by a retake. You do good things or you do bad things you only get fame. If your sex tape gets leaked out, people don’t dump you and stop watching your movies rather they just come to your movie in an even greater numbers. You realize this and then you look at someone who is not that lucky to have happened to be born with that talent or that face. You do not consider that you could have actually worked this hard to achieve this success. The only thing which makes sense to you is that you are just too lucky than others. And this is how you see ever other hard working self-made billionaire entrepreneur. You believe that you must do something to help the unfortunate people out.

Hollywood people just happen to be the lucky people who have the face or the talent to provide us with that entertainment. Most of that earnings relies on the Govt-granted monopoly over information. Irrespective of what happens you will never find a leftist Hollywood star opposing MPAA or copyright, because they always know the effort involved behind making the movie. They just cannot ignore it.

Their whole world is basically made up of people who are the lucky people and those who are the unlucky people. Capitalism for them is just a system to reward the lucky people. They stand for all sorts of coercive redistribution of wealth and creation of big government laws not because they believe that some people have more wealth than others, rather some people have more luck than others. If a Hollywood star supports higher taxes, it is because he does not see the labor of wealth generation the entrepreneurs do. They just entertain people, so they believe businesses do not serve any utility to the people.

Similarly a lot of these things happen with the super rich billionaires, for example George Soros, Warren Buffett and Bill Gates. Bill Gates recently made a call for creation of a “Creative Capitalism” or “Compassionate Capitalism”, and it was a big blow to all the non-billionaire capitalists out there and it angered everyone considering he built his capital based on Capitalism. If now suddenly he wants creative capitalism or compassionate capitalism then he should start with making all Microsoft technologies open source.

The hollywood elites earn so much wealth that they now think they are just much more luckier than other people. It is true to a lot of extent, but then the problem is that they perceive every other hard working entrepreneur as much of a lucky individual as they are. There was one exception in Hollywood and that was Ronald Reagan who stood for lower taxes for rich people, because he himself never was super rich. He just was rich, before he could enjoy that super richdom he got enlisted in the US army and then he joined Politics.

In my earlier article about IAS(Indian Administrative Services) Officers¹ one of our reader made a comment² involving many questions which deserve some detailed reply. If you are a regular reader of this blog you will know the ridiculousness of these questions considering the number of times we have covered them. Yet I would like to dedicate this post to answer those questions. His questions edited for language and grammar.

Neerav Said:
You seem to be very strongly jaundiced against the government and India’s system of government controlled economy(finding it unethical to work for the government!!). So be it!
Me being a callow in the field of capitalistic economy or the open economy, can u please answer some of questions in order to enlighten me about “the only panacea to India’s problems-open market”? Please I insist!

It is called the ‘Free Market’, which means market operations without any interference from the government. That includes no regulations, no taxes, no subsidies, and no distortion of the market in any way or form.

1). Where were these business bazigars when over 100,000 farmers in India committed suicide in last one year?
(one cannot question IAS because they cannot decide whether to give a subsidy to farmers at all! they can only survey and ‘suggest’ how much to be given) and why did my philanthropic business friends exacerbated the wounds of these farmers by selling the agricultural products at such higher prices!
Even for dying these farmers had to use the pesticide the government is selling for free!
On the other hand there was a market crash on the Dalal street? The then finance minister had to jet to Mumbai to console the many businessmen who had just lost crores of ‘notional’ money. Since the fortune of a farmer has lesser zeroes, so their lives also became less important!

First of all I would want to point out that the reader has completely misunderstood my post about the uselessness of IAS officers. The reader thinks that IAS Officers are these Angels descended from heaven and they have been taught by the other Angels as their teachers in the IAS academy. These Indian Angel Services Officers perform social services, create hospitals for poor from their money, distribute clothes among poor people, and give anti-depression medicines to poor farmers to prevent them from committing suicide. Then the reader compares their benevolence with the lack of benevolence of businessmen in India. Even if the reader does know what IAS officers do he is comparing what IAS officers do not do with what the business man should have been doing according to him.

If 100,000 farmers died in India last year, how is it responsibility of the businessmen. What were the IAS officers doing? If its anybody’s responsibility other than the farmers themselves then its the responsibility of the IAS officers as they are the part of the government. Why didn’t the IAS officers spend millions of their Rupees to save these farmers? Clearly the reader expects the ‘business bazigars’ to spend that money from their pocket.

Anyways the reason why I did not really bother to answer the question is because of the questions being heavily loaded with rhetoric. What we need is private property rights on agricultural land. Farmers cannot easily sell their land to someone who could be better in producing wheat over a land of 10,000 acres. Just like we do not have a million cell phone companies in market, somehow we believe a million farms to produce food for so many people. All these rhetorics are raised by P Sainath and we have already responded to P Sainath here.

Famers die in Vidharbha

2) Wasn’t it the profit motive that actually RUNS the open economy was also the reason behind the cases like Bofors case or the cheap spare parts of MIG case(which killed many of our soldiers who unlike u and me go to war & try to keep us safe by working with the government)? If politicians were caught during the Tehelka case-who bribed them. THE OWNERS OF THE OPEN ECONOMY’!

The reason why a baker provides you with bread is not because he is benevolent upon you, but because he wants goods for himself like Clothes, housing, medical care, education for his kids which he cannot do all these things himself. So he specializes in baking bread for you. A tailor specializes in sewing clothes for people, a carpenter specializes in building houses for people, and all these people try to make profits because if a tailor does not make profit on his clothes then this means he spent more on buying cloths and got less for the clothes and soon he will become bankrupt and will be left with no money. I suggest you to read my article What are Profits? to read an explanation of the whole concept from me and the Importance of Economic Calculations to understand the necessity to do every operation to maximum profit.

Profit motive runs the free market. Government is not Free Market. Government tries to do things which are anti-free market like taking the monopoly on justice and defense system. When government has a monopoly over something, like providing defense to a large land mass like India, they will have the power to choose any private entrepreneur for supplying them with commodities, then the corruption is bound to happen. It is not the fault of the Bofors gun manufacturers that your politicians are corrupt. They are corrupt because you gave them all the power of monopoly. The Bofors salesman is still doing his honest job when he offers the politician a bribe.

If you really want the solution of corruption in defense sector I suggest privatization of defense sector.

3) Somebody blamed the IAS for the license raj. I agree with that person completely. But who is responsible for the Mafia raj?
let me answer this one!- it’s those business barons who want to control your open economy.

The government is responsible for Mafia Raj. IAS officers do not make decisions I understand that, but they are the enforcement arm of the Indian Government. His answer is clearly wrong because he doesn’t understand why Mafia exists. Mafia exists because there is a profit opportunity in the economy which was created by the government by banning the good people from making use of that profit opportunity.

Currently the good people of Reliance, Airtel and Tata are providing people with cell phone services, but if tomorrow the government bans cell phones from India, then that will give birth to a Mafia Raj in telecom industry. Since police with their weapons is chasing peaceful people who perform their business with peace, only the evil people with guns who could retaliate the police are left. Suddenly Chota Rajan will find it quite profitable to run the telecom companies, since people want telecom services, they will be willing to pay high amount of money to him, and these increased profits will allow the mafia people to bribe the politicians to safeguard them. The reason why we had Veerappan because the Sandlewood forest weren’t owned by any individual. Since police hunted down any individual who tried to do business in sandlewood, only the evil man with the gun was left to do the same. I hate to suggest you more articles but I spent a lot of time researching this one.

Prohibition Always kills more people than non-prohibition

4)What is wrong with United Nations that its surveys are saying that in the developed countries (i mean open economies like US and UK), the barrier is constantly increasing between the rich and the poor,that is, the rich (owners of the open economy) become richer and the poor become poorer.

Its a very misrepresented fact. Let me ask the reader this, if in one country almost everyone has a salary of Rs 1,000 per month and in another country 90% of the people have a salary of Rs 50,000 per month and 10% have a salary of Rs 10,00,000 per month, in which country people are better off? In the first country almost everybody has the same salary, there is no major difference between the rich and the poor, where as in the second country the rich is 20 times richer than the poor individual.

The truth is that the difference between the rich and the poor is as useless fact as the fact that in your school the class topper has 50 times more marks than the class loser. If in a class everybody got marks between 50-60%, is this classroom better than a class where the range is 5–95%? The fact is that some people work harder, and better than others. In the Capitalist economics the better workers keep on climbing up to managing more and more resources(unlike in an IAS exam where the more butts you kiss the more you progress), and they become more and more rich.

Take for example in America Warren Buffett manages billions of dollars worth of resources, there is no way an IAS exam could rightly identify his talent. There is no IAS officer who could do his job better than him. When you look at Warren Buffet you just see an investor, what we see is what he really is, he is a Capitalist planner who plans resources from his own money. He plans resources, his companies order glasses from one country, water from another country, mixes them and sells carbonated drinks all over the world.

If the reader want to be like Warren Buffet instead of some bureaucrat and if you really want to save some lives from those poor farmers who committed suicide then try to get into commodity futures. Help Poor farmers, speculate on grain Futures.

5) What is the motive behind the kidney scams and our poachers? isn’t it just profit?

Again, all the problems the reader is blaming on the profit motive are actually problems created by the government. The government has banned a market in organs. So only the evil people are left to serve such a huge demand. They serve it by performing these illegal activities. If he wants the kidney robberies to stop then allow free trading of human organs. Those who want to buy the organs will then legitimately buy it from the person who willingly want to sell it. Please read the Prohibition article I posted³.

He is blaming the profit motive as if it is something really evil. Remember something if we do not have profit we will not be able to survive. This is the exact reason why none of the socialist countries seem to be diong any good. This is the reason why Soviet Union had such a massive scarcity of every commodity. Why don’t we all eat in gold utensils? Because the economic calculation tells us that Gold could be better used somewhere else than to a less economical(or profitable) use such as having dinner.

1. Wanna be IAS Officers, read this, http://www.reasonforliberty.com/india/wannabe-ias-officers-read-this.html [↩]
2. Comment made by Neerav [↩]
3. Prohibition Always kills more people than non-prohibition [↩]