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The number of Indian families earning about $4500 to $22000 (Rs2,00000, Rs10,00000) per anum, which constitutes the middle class as per the World Bank’s definition of middle class in 1995-96 was 4.5 million, the number of such households grew to 0.7 million in 2001-02. Now India has 28.4 million such families by 2009-10. One can say that the Indian families are growing rich, from poor or deprived families; they are traversing towards the middle income group range. Irrespective of the higher inflation rates, one can justifiably state that the number of high-income households in India has exceeded the number of low-income households and similar is the assertion of National Council of Applied Economic Research (NCAER).¹

Can India achieve richness?

The first issue is about the term India, how can a geographical region grow rich? Individuals in that region may surely gain prosperity but the region in itself is not able to achieve richness. Another issue is, even if India represents its people and not the geographical region, then how can a group or collective society or state grow rich? To grow rich is a Human Action,and a Human Action can be performed only by individual actors, only individuals possess ends and goals and the means to achieve those goals. A group or a collective society or a state cannot act, it even cannot decide. In fact a society cannot exist without the actions of individual members² .” This certainly means that “India growing Rich” is a metaphor. India cannot grow rich, it cannot be poor, what is being said is that the number of individual families that are now in a richly or prosperous state is increasing. Obviously, it has nothing to do with the society or state or country that is represented by India. Yet, it certainly has a lot to do with the freedom individuals have in the Indian society and how is it influencing their person conditions.
This follows that although a society cannot exist independently without the actions of Individuals, the individuals and their actions can be affected by the society, state or country. That is, if a person in India or his family is growing rich, it is but obvious the result of his hard work and talent, but if a person is living in dire conditions, one of the many reason behind it can be the restrictions or the influence of the society or country he is living in. But how can a country restrict anybody from being rich or poor? Since country cannot act, it cannot restrict, nor can a society restrict. Yet, the “government” representing a society or community or country can surely restrict the individuals it represents. Yet again, what is government? It is a group of some individuals that take decisions and enforces their decisions and policies over the population of their state. When someone says that “government act” what he means is to say that certain individuals are in a certain relationship with other individuals and act in a way that they and the other individuals recognize as “governmental’³ .” The issue is very important to understand. To explain it further, take the issue of tobacco. Indian government pays farmers to grow tobacco; on the other hand, it forces all the companies selling tobacco products to include anti-smoking, anti-tobacco-chewing advertisements on their products. Both actions are contradictory, one may say government should make up their mind and take a consistent action. The thing is, government has no mind, it cannot think, it cannot act. Rather, there are individuals, politicians, judges, bureaucrats, etc. who thinks and take actions.
Thus, even a government cannot act; ultimately the individuals only can take actions; only individuals can have ends and the means to achieve those ends.

Is India really growing rich?

While talking about NCAER results, Martin Ravallion suggest that all these estimates by NCAER far exceed the likely number of people in India who are not poor by US standards. At the start, he simply ignores the importance of Purchasing Power Parity (PPP) and blatantly states that “I will not say that someone has entered the Western middle class until the person has reached the US poverty line”⁴ . Obviously it is not so easy to understand that a person cannot buy a Reynolds’s ball pen in Rs 5 (approximately $0.1) but one can buy the same ball pen in India at that price. Irrespective of that fact, one cannot say that NCAER’s research is free of errors.

Why India is growing rich?

Now when I have explained that India cannot grow rich, Individuals and their families certainly can grow rich if government (some other ‘individuals’) may not restrict them, I should talk about the current phase of change in the status of individuals in Indian sub-continent. Why are Indian individuals enjoying this progress? Are the new generation of India much better, intelligent or harder working then the individuals of subcontinent before 1991? What has caused this economic progress? Is it the government (the group of ‘ruling individuals’) that has brought this progress?
The fact that India (Indian government, a few individuals who thought they could decide the fate of all individuals in India and who did) deprived itself of many free market benefits for more than 40 years during the Cold War while it flirted with political “neutrality” between East and West, but sought to build much closer economic ties with the Soviet Union. It is only since the collapse of the U.S.S.R. that Indian government started realizing its failure and allowing individuals to act for their prosperity by their own.
The question is, if government is allowing individuals to act for their own prosperity, is it doing any good? Or was it bad when government (or the group of some individuals) restricted individuals to pursue their prosperity and happiness? It is undeniable fact that with the emergence of free market and libertarian approach in Indian sub-continent, Indian individuals are now much freer to think about their ends and to act to achieve those ends. Since they can think for their prosperity and they can act to achieve it too, they are becoming rich.

Is Government Facilitating this Prosperity?

All the welfare and redistribution attempts of Indian government failed in 1991 and it accepted the defeat of Nehru’s centralized socialistic system. After 1991, India accepted the path of decentralization and government started shedding the so-called responsibility of making Indians prosperous and rich. Privatization is the name of mantra; freedom is the message of prosperity.
Obviously, a government (set of ruling individuals) can hinder the progress of individuals, they can legally and coercively ban, restrict and punish individuals from trying to get rich by legislating some senseless national laws, social contracts etc. But when a government realizes its failure and starts decentralizing, allowing individuals to live at their own, then one cannot say that it is the government which is facilitating the prosperity of individuals.

Conclusion:

Individuals in Indian sub-continent are certainly growing rich, they are now freer and hence more able to grab the opportunities to use their mind and act to pursue their goals, their happiness and hence they are rich. No governmental group or political party can take the fame of making Indians rich. On the other hand, Indian government should be blamed for keeping Indian individuals under poverty for so long. With the current pace of anti-state trend in Indian sub-continent, as India will enjoy more privatization, decentralization, free market, economic, religious and political freedom, Indian individuals will attain more freedom.
These facts strongly suggest that all the welfare and income redistribution talks of Indian socialistic groups are futile. Lesser governmental control on individuals means lesser poverty, No governmental control over Individuals means No Poverty. Poverty will vanish in a no-government-state.

1. Times of India, August 1, 2010, India has more rich people than poor now
2. Murray Rothbard, “Man, Economy, and State”, Auburn, Ala.: Ludwig von Mises Institute, 2004, pp. 2–3.
3. Murray Rothbard, “Man, Economy, and State”, Auburn, Ala.: Ludwig von Mises Institute, 2004, pp. 2–3.
4. Martin Ravallion, January 2009, The Developing World’s Bulging (but Vulnerable) Middle Class, The World Bank Development Research Group

Defining recession is not an easy issue specially when there is no widely approved definition for recession. Newspapers and popular business tabloids suggest that recession is a period of general economic decline that causes and results in decline in the Gross Domestic Product of a country for two or more consecutive economic quarters of a financial year. The conventional associated indicators, causes or results of recession are considered to be a decline in stock market figures, dropping realty sector prices, and a steep rise in unemployment rate. Yet, the definition does not emphasize on any such consequences and hence it cannot be termed as a universal definition of recession. Furthermore, with this definition of recession that depends on two quarters of financial year, it is very difficult to mention the exact point of time of the beginning of recession and it is impossible to suggest what was the actual cause of recession. That is, recession remains a mystery.

Is USA is under recession?

Right since January 2008, a liquidity crunch was experienced by the non-financial companies and individuals and that resulted in job cuts. The average job loss of USA for the eight months was 81,900 job cuts per month by September 2008, during the last four months, it was 483,500 per month. Unemployment rate caused consumer spending to fell by 3.8% in the three quarters of 2008 and in fourth quarter it fell by 36% below the final quarter of 2007.Hence, the National Bureau of Economic Research’s Business Cycle Dating Committee declared that the US economy is in recession since January 2008¹ .

The mainstream economists and media pundits suggest that the cause of a recession is the tight money policies and raised interest rates by the Central government that results in liquidity crunch and causes job cuts, declining consumer spending and hence a recession² . They thus support that stimulating the economy with easy money, governmental loans, huge stimulus packages and lowering interest rates may help the economy in bringing the boom again. The idea suggests that the Market cycles of Boom and Burst originates from the central bank action of expanding the money flow in the market and contracting it. They suggest that proper stimulus packages and government spending over the common welfare programs can easily sooth the situation by allowing more currency to float in the market. Plus, they suggest that such common welfare spending also help in improving the life of standards of common populace.

Failure of Obama’s Stimulus Packages

The idea of mainstream economists is absolutely flawed and this can be easily seen with the failure of the economic stimulus given by the Bush government and supported by the new government of Obama.

It should be clear that a Burst or a recession occurs because there was a boom in market. A boom obviously is the period when an economic sector is unnecessarily provided easy loans, higher profits and more support by the authorities and central government to cause high rise in prices that creates a false demand in the market and causes inflation. That is, the downturn, or the depression or the recession is exactly because of the Central bank, not because it started tightening the financial sources, rather it is because of malinvestment initiated by previously created credit resulting from central bank³ . Mainstream economists also suggest that the market will recover and the prices will inflate again if further easy money is provided through government spending, ridiculously huge stimulus packages and other similar tactics. They believe that by doing so, the stock market will again start rising high. Yet, with all economic stimulus provided, stocks as a broad group are down since last ten years⁴ . That is, economic stimulus and credit policies of Central bank failed since last 10 years.

It is also important to understand the reason of liquidity crunch. A liquidity crunch occurs only when the present amount of money in the market, which is nothing but a means of exchange, is malinvested in those sectors that are facing false demand or boom. Since the money was malinvested in supplying the false demand, it gets trapped. Lenders don’t get their loan back and they suffer liquidity crunch. Thus, the reason of a recession is the easy credit policies by the government and central bank that causes Boom in the market. When the wrong policies of the government and central bank fail, the market suffers recession.

Recession is not the problem, it is the cure of the problems of Malinvestment

Thus, recession can be defined as a cure to the ill-policies of government and central bank that caused boom in certain sectors such as housing market. Because of that boom, easy credit policies, subsidies, easy lending and many other government and central bank caused factors, the prices soars to extreme high and causes inflation and money gets trapped in malinvestment. As the recession acts as a cure to this situation of extreme falsehood, it starts decreasing the extent of false demand and tries to bring the market to its actual true situation. The prices start declining and the economy starts recuperating from the illness of false heights.

Since recession itself is the cure of problems of malinvestment that were caused by the government and central bank’s ill easy money and credit policies, it cannot be cured by further stimulus. The stimulus will only sustain the recession for longer periods until all the malinvestment is not neutralised and the economy comes in a situation to achieve sustainable growth⁵ . The idea can also be substantiated with the expectations of Housing economists who expect that over the next 10 or 20 years, the prices in realty sector may start rising again on an average, but that rise won’t be as much as the average rise was during the past decade⁶ . Obviously, because of easy money and mislead credit policies caused a boom in housing market and created a false demand that consequently resulted in unsustainable boom. As a neutralising phenomenon, the market forces caused liquidity crunch to cure the malinvestment. Until the malinvestment will not neutralise, market will not gain sustainable growth. Stimulus package can only delay the time for achieving the sustainable growth. The stimulus also failed to provide any help in improving the job market, the unemployment rate is still 9.7% in the month of May 2010⁷ , while it was 6.9% in 2008⁸ .
Now with the problems of liquidity crunch still persisting, even the retirees are looking forward to find jobs⁹ . The situation shows that expensive stimulus may also push US towards the same fate that the Greece government and public are suffering right now.

Robert Lucas supported the idea of Ben Bernanke to reduce the interest rates¹⁰ . Every sane minded person will support the idea. In fact, the government or the central bank should not have the power to decide or dictate the interest rates. Interest rates should be decided by the free market proponents freely as per the time requires and permits. Yet, till how long will the central bank and government let the market enjoy the falsehood of stability on the basis of stimulus, what will happen when the central bank and Obama administration will look forward to take the stimulus back? Only then the market will again step forward towards curing the malinvestment caused by bad credit policies and only after that cure the market will be in a position to attain a sustainable growth.

1. William A. Strauss, 2009, Economic Outlook Symposium: Summary of 2008 results and forecasts for 2009, Chicago Fed Letter
2. John P. Cochran, Austrian Business Cycles, Plucking Models, and Real Business Cycles, Austrian Schollar Conference, Auburn, Alabama
3. John P. Cochran, 2001, Austrian Business Cycles, Plucking Models, and Real Business Cycles, Austrian Schollar Conference, Auburn, Alabama
4. E.S Browning, 2009,After the Collapse, Guarded Hope for ’09, The Wall Street Journal, January 2, 2009
5. John P. Cochran, 2001, Austrian Business Cycles, Plucking Models, and Real Business Cycles, Austrian Schollar Conference, Auburn, Alabama
6. James R. Hagerty, 2008, The Future of Home Prices, The Wall Street Journal, December 2, 2008
7. TradingEconomics, May2010
8. William A. Strauss, 2009, Economic Outlook Symposium: Summary of 2008 results and forecasts for 2009, Chicago Fed Letter
9. Kelly Greene, 2009, There Goes Retirement, The Wall Street Journal, March 1, 2009
10. Robert E Lucas Jr., 2008, Bernanke is the Best Stimulus Right Now, The Wall Street Journal, December 23, 2008

Libertarianism is about Individualism

The fact is that Libertarian philosphy relies heavily on individual, and individual action. Numerous times this question is asked me, and this question is the single question which will determine if you are truly libertarian or not.
If you can save 100,000 individuals by killing one individual(who is not guilty of murder), is it ok to kill him to save 100K other individuals?
If you answered the above question as no, its not ok to kill one to save 100 thousand other individuals, then congratulations you are a libertarian. If not then you are possibly liberty-curious, statist, left-libertarian, Fascist-libertarian and every other possible flavor of libertarianism, but just not libertarian.
I don’t have a lot of space to explain a big answer to this question, but a short defense is, that if you truly are facing the delimma of killing one to save 100K others, you got more problems to worry about than if you should stick to libertarianism or not.
Libertarian philosophy differs from other philosophies because it is the only philosophy which values individual so highly. Every other philosophy is essentially some or the other form of collectivist ideology. This distinction is very important because almost every mainstream ideology in US can claim to be ‘libertarian’, because liberty is a very seductive word in America.
Once you establish this unique identifier about liberty, the most logical question which arises in the debate above is, if you are so much for individual responsiblity and actions, how can you not see that the person who gave the contract merely offerred a choice to the assassin. The choice was:
a) Take $100K from him and kill his wife
b) Do not take $100K and not kill his wife
Remember, a choice is a choice, not a compulsion. If contractee has compelled the assassin in some or the other way that is he left him no choice, and by that I mean if he was coerced to commit the assassination then the assassin is not guilty of murder here the guilt lies completely with the contractee. But offerring money to someone isn’t coercion. If someone offers you money for doing something wrong, no matter how much that money is, this is in no way coercion.
If the assassin wanted, he could have not accepted the money and not committed the crime. The person who offerred him the money merely made a proposition to him.

“But wouldn’t this promote a lot of contract killings?”

One may argue that if we let the people hiring assassins get off the hook wouldn’t this create a huge market for assassins and assassinations? First of all this is a utilitarian argument, so the answer must be utilitarian too. The fact is that since people who hire assassins are getting off the hook, they have absolutely no incentive to keep their mouth shut about the murder. The individuals hiring the assassins(if they don’t feer ostrecization) can now go on the television and claim who killed person X. This essentially reduces the supply of assassins to the market. They are much more in trouble now because they will be solely responsible for the murder now, where as their employer for whom this job was done walks free even blabbering about the crime.
So yeah even though there is more incentive for people to higher assassins, there is much less incentives for assassins to be assassins. Like everything else in utilitarianism we just cannot measure what will be what. Therefore we must rely on the principle, and that clearly dictates that if a person had a choice to not do that act of aggression then we expect him to not do that act of aggression.
In a society of pure liberty as an individual its your responsibility to not aggress against other individuals, and if someone convinces you otherwise then its only your fault, nobody else in the world will be responsible for actions you committed.
Someone may make a point now that although they agree that the person who commits the crime must be responsible for his actions, but why are we not holding the person who caused the crime, responsible? Isn’t his crime in this case “Creating the situation which caused the death of an individual”?? The answer is very simple, you are just describing his action into the most guilty way possible, but all this individual did, when broken down to it, was to offer a choice to another individual. That was his action, and unless providing choices to individuals is a crime in your viewpoint, this guy is not guilty of anything.

“What if I hold a gun on your head and make you commit murder?”

This is a very valid question, if someone holds guns on your head, you do not have a choice in this case, as you were coerced to do that action. Here the person who held the gun on your head is the guilty and responsible party for the murder. To solve this issue, the courts should follow something which I call as ‘weapon doctrine’, if you have no free choice then you were merely a weapon of the crime, not the criminal himself.
* If someone holds a gun on your head and make you do murder, you are weapon.
* If someone holds a gun on your wife’s head, and makes you commit murder, again its a bit difficult to determine if you are a weapon or not but the chances are you are.
* If someone mixes poison in your food and instead of giving you anti-dote asks you to commit a murder, you are a weapon.
* If you consume poison somehow, or someone gives you the poison but the person giving you the antidote and asking you to commit a murder in exchange has nothing to do with you getting poisoned then you choosing to kill, is only your responsibility, not theirs. In this case you are not the weapon.
* If your boss asks you to kill someone otherwise get fired, and you do it, then you are not the weapon.

There cannot be a state or state like entity in a society of pure liberty

The last point above opens up a pandora’s box in terms of the consequences of this principle. You killing someone because you were ordered to do so, or you were merely doing your job, is now a non-sequitor, because it doesn’t matter who gave you the order, they are just not sharing the fault here with you. The biggest concern here is, “If the person who gave the orders is not responsible in any way for the action his employee committed then that means you will let Hitler walk free?”, well the answer isn’t simple because I am sure Hitler would be guilty of a lot of actions he actually did do, but simply speaking, yes Hitler will not be held responsible for the actions his soldiers committed.
This maybe be appalling to many people(and possibly the reason why its so hard to convince libertarians on this issue), but the truth is, by establishing this level of atomic guilt, you are ensuring that Hitler will find it impossible to get soldiers to work for him who are simply rationalizing all their henious acts as ‘I was just doing my job’.
This isn’t even the last of the arguments, this simple principle guarantees that the basic structure of any private defense organization(PDO) in a free society would be such that its the individual responsibility of each employee that the orders given to him are just orders and are not aggressing against any individual.
For example: You are a PDO employee whose task is to apprehend criminals, you get an order that a guy named John Marshton has killed someone and he must be arrested for it, and if he resists then you can use deadly force because he deserves to die for that crime.
Your problem: If this guy turns out to be innocent, your boss is in no way in any problem, its you and only you who will get punished. Since your boss doesn’t share the guilt in this possible act, he may not be so careful with his decision.
Your solution: You now must personally make sure that there is enough evidence against this guy and he did commit that murder. So you do not just get ‘orders’ from your employer, but you get the full case file, you get the verdict of the trial, the whole proceedings and you find out that the guy under all definition of the word ‘guilty’, is actually guilty.
This assuring of the guilt is emulated in our current system as ‘arrest warrant’, the police officers cannot randomly start arresting people, a judge issues an arrest warrant against an individual after looking at the evidence and reasons against him and police officer then relies on it to arrest someone. Although the similarities end there. Arrest warrants can be issued for anything, and it still isn’t the same thing as the document or file detailing all the evidence against the individual. The only reason I made this parallel so that those who are worried about the lack of the ‘greatness’ of a our current legal system where there are arrest warrants and search warrants.

Anarchist Search Warrant

Here is the interesting part of the article, many people ask me the question, ‘In a free society if an individual runs and hides to a property(or his own property) where you are not allowed to enter, or any PDO is not allowed to enter, how will this guy be captured?’
Many people envision a statist kind of solution that somehow PDO’s will be allowed to enter a property, otherwise it would cause a lot of lawlessness in the society. But this solution breaks down really fast, because it isn’t really a libertarian thing. Its really a very simple question to answer, that is if you strictly adhere to the above mentioned principle of extreme atomic guilt theory(EAGT), then you will realize that no individual would want to aggress upon another indivdual merely because it was his job or he received orders from someone else.
Basically each individual who works for the PDO, for him to possibly aggress against another individual, he must ensure it himself that its not an initiation of aggression. For example, if your PDO has rendered the verdict that person X is guilty of murder and you have seen the whole proceedings and agreed with the conclusion then you can pursue the guilty individual with the use of deadly force.
The reason why any PDO would want to go through this way because if that individual turns out to be not guilty and he has been aggressed upon then the PDO employee would be held liable for all crime of initiation of aggression and (most probably) by contract PDO would be required to pay for restitution. A search warrant or an arrest warrant essentially in this case is a release document from the insurance organization claiming that all individuals involved in this act of aggression have seen through all the evidence and testimonies and concluded that the individual is guilty. Remember this overseeing of the case and trial isn’t the same thing as the trial itself(well I am hoping that this is more expeditated and faster than a trial), its merely going through the evidences and arguments and concluding that the verdict was accurate. If they do not feel it was accurate they have a right to excuse themselves.
This insurance requirement ensures that the least amount of property rights violation is done by the company, and least amount of damage payment is required.
In case of a false documents and testimonies, it will be liability of the individual who created the false documents and testimonies, for example if a person testified that he saw X enter that building, and this testimony becomes the basis for a verdict which renders X guilty, but later it turns out that he perjured, then in this case the actual individual who committed the act of aggression ended up being only the weapon of the crime and the crime was committed by the person who perjured.
Similarly if the judge took the bribe and falsifies the proceedings to alter the verdict to be guilty(or otherwise), will be the solely guilty individual for the aggression committed over the falsely convicted individual, not the PDO enforcer who looked at the records and proceedings and like any just man agreed with the judge’s conclusion.

No state or state like entities can be created

The biggest concern of people who consider Anarchy as an option is that in a free society the best private defense organization will rise and end up becoming a monopoly which is essentially a state-like entity. The truth is that a society of pure liberty, which follows this principle will realize that the formation of state or state-like private defense organizations is not possible, because we have eliminated the concept of soldiers. If you join a private defense organization which asks you to take away property of an individual because he stole it, then its your responsibility to ensure that its really stolen, and not blindly follow their orders.
Imagine this scenario, you join a Private Defense Organization which aims to act as a government, they already have 85% of the market share because they were so good at their job. Your boss, now asks you to go and raid a warehouse owned by your biggest competitor, you now must ask the question to him about why should you do such a thing. If he shows you the proof that the warehouse contains stolen property, and like any rational and just man you are unable to consider that proof to be sufficient to consider it as a stolen property then you must not follow the orders. If you do follow the orders then when the justice will be served only you will be held guilty for that action, not your boss will go free.
So think again, even if you want to joing an organization and become the state, why would you want to be the foot soldiers, nobody who is not a foot soldier or doing the actual acts of aggression in your organization will ever be punished.
The implications of this are huge, organizations who aim to become an entity like state will find it impossible to get people who would commit acts of aggression for them. Some people would still be willing to do it but their fees would be really, really high.
Just to be thorough, lets imagine an organization which is fully comprised of individuals who are willing to follow the orders about initiating aggression against others, after all its possible. What is not possible in this society is for this organization to become as big and powerful as we earlier expected the best PDO to become.
Finally, if an PDO who has a share of 85% of the market suddenly gets a change of conscience one day and realizes that they must now become the government, will soon find out that they may be the most powerful militant organization, but they do not have that 85% market share anymore, and it will be reduced massively as soon as people realize that this PDO is willing to commit aggression against them. The remaining honest private defense organizations will get an influx of new subscribers, and new money to expand their operations. In the stock market the prices of the rogue PDO will plummit, and the honest PDOs will rise.
This may still not be sufficient to completely defeat the rogue PDO but if we follow the extreme atomic guilt principle we will find that the chances of above scenario happening are really low, so low that we can even say that a society of pure liberty which follows true and pure principle of individual responsibility will find that principle acting as a deterrent against the formation of state or state like private organizations.

There are Two Constructions of Libertarianism as set up by Chandran Kukathas in Libertarian Papers Vol 1, 11 (2009). One of these is a world in which there is complete freedom of association—the right to give up your libertarian right for the moment to whatever is yours in order to live in a statist or communal society, which can end up a world where we have many property rights violations, like those born into such communities who are not shown the way. The other is authoritarian propertarianism–self-ownership protected against those who would take it from you; meaning immoral agents barricading the knowledge of your libertarian rights from you.

The second one, which Kukathas calls the “Union of Liberty” would require a codification of Voluntaryist law, or, what it means to actually live within the framework of libertarianism. There are a lot of obvious problems with this construction, namely, that we are talking pretty much about giving a sovereign rule making body search warrant powers over the whole of the society in order to protect property rights, possibly routine or based on anonymous claims. This can turn into a lobbying opportunity for people who would like to force their definition of Liberty onto others.

The more metaphysically bankrupt side of this proposition though rests in its misunderstanding of language. To have a group of people, the Commission on Standards for Liberty, usurp the most intimate part of us: our brains and as a social species: our form of communication, in the name of the principle of self-ownership is beyond comprehension and lacks an understanding of language, the mind, and I believe some fundamentals about what spontaneous order really means.

As we have seen it said a thousand times before, one thing that freedom means is the freedom to make mistakes, to mess up and learn from them, but to do it on your own terms. Understanding the Rothbardian idea that selling yourself into slavery is literally impossible, there is nothing within a non-free community that lives within a larger free society that is actual immoral or a negation of self-ownership. For as we do not believe in positive rights, we cannot say that people have a right to understand their autonomy or a right to know their other options anymore than we can say that people have a right to good housing or health care. Ideas as such are not an economic goods because they are in super abundance and their content can be duplicated ad infinitum without taking away from the original “owner.” This means any person is free to them at any time, but this does not mean there is a moral obligation to present the ideas to somebody to evaluate them by their own standards.

So, there is a two-fold problem with this literal monopolization of defining the term liberty as in, a certain firm will be barring others from entering into the service that they provide, which is interpreting the word that the whole of society rests on.

First, we see a demand made on every individual about the way in which they have to spend their time and empty the contents of their brain: if you are a communist and you have a child, it will be “mandated” that you give them full knowledge of the other politoco-economic social structures that they can be a part of.

Secondly, that it is also telling people how to use language. Language, being the most essential social and mental tool, is one of the main things we need to safeguard against any attempt at one agency having ultimate control over. The easiest way to demonstrate how individualized language is would be to use a strong word: LOVE. Many people will look at this and think of Hollywood romantic, others their family, other people will think about a real, knowledgeable love and still others just think pain.

Another case in point about how language can be used to manipulate us is from what some people consider one of the highest philosophical “social contracts” that have ever been created: the US Constitution. Trying to put limitations on a government through the use of words is a futile attempt because like every part of the Universe, words are a constantly evolving constructions and because almost anything in this world can be used for good or for bad, it will move towards whichever we allow it to. As in all things, the diversification allowed for in the individualized method is what leads to great competition and cooperation and the least infringement on one’s personhood.

So, on the other side of the coin, why is it that it is more “libertarian” to allow for unfree societies to exist in a free world?

If there is one thing that propagates the state more than anything else, it is the compulsory schooling that we have, that teaches children how to become good citizens instead of good people. Why is this so damaging? Because what they are doing is taking away the children’s ability to think for themselves which is so very essential to our soft-bodied species.
If there is one force fighting against the state, then that is people’s ability to obtain the information that they want and need even though the state doesn’t want them to have it. There is a wealth of people who want this information because if your spirit is not broken, you are born with the ability and the craving for self-direction.

If anarchocapitalism is based on the idea that men are more good than bad, and that we have the ability to control ourselves and weigh out the cost benefit of any situation that is within our control–that is, having to do with ourselves and our property–then to dictate that people must learn this or that thing, that people must believe in things this way and be saved from their own ignorance, is a total 180 from what it is that we are supposed to stand for from a moral perspective.

We trust in markets because we trust people to do what is best for them. To say that people must be given this information in order to choose what is right for them instead of allowing them to follow their true hearts and minds, to not trust people to know what is right for them even in the face of adversity and oppression, is in absolute opposition with stated principles. The only way we can have a libertarian society come to fruition is to educate those who will listen, reach out to those that haven’t a clue, and to accept when people do not agree with the position. We do not force our position, we do not demand it be followed.

I would also muse that whatever technology a non-capitalist society came up with to block the incoming of information, capitalists could overcome that because of the greater organization and the profit motive.

As long as other communities are not aggressing against us, there is absolutely no moral or logical justification for enforcing our interpretation of liberty on them.

Do we want better technology, superior products and services that are more effective?

Human desires are infinite and so is his potential. We want better medical services, information technology, better telecommunication services, better heating and cooling devices in our homes and office rooms. We desire better toothpastes, toothbrushes, better hair oils and shampoos, better and more verities of food, wine, better cleaning products, better cell phone, better ipods, better televisions, better laptops, better internet, we all want better and improved.
It is our want that drives the market to innovate and provide new technologies, services and products.
We want better and faster vehicles, satellite phones, and internet access. We need clean and filtered water, we need lifts and elevators, we need homes, we need security we need better services, we want more options.

Consumerism makes it possible. We are receiving everything we wish for and the market is providing them. Free market is nothing but a group of billions of people working together with free will, innovating and inventing further for the improvement, free market is also a system that joins billions of people together, yet provide full freedom for each individual to live for himself, at his own conditions with his own efforts. Nobody is pulling legs of other to rise higher. Market competition is nothing but a constant try of innovators and entrepreneurs to learn and satisfy the hearts and minds of consumers. Consumers are undoubtedly the kings of free market.
It is all consumerism, to desire better and to have full freedom to make one’s dream come true.
The socialists call it devilish, they say people do not need improvement, they say materialistic quest for making life better is futile. They say all this improvement in standards of life is waste. They ignore the real effect of all these changes. While blaming consumerism and crying anti-consumerism songs, they just hide away the evidences of improvement in human conditions.

Since the start of civilization, wise people are trying to search a self-sustaining system that may serve the common person rather than just the aristocrats and the rulers.
Free market is the quest for that riddle. Free market provide the system through which, the billions of unplanned desires and wants, billions of unorganized and independent economic choices succeeds in creating a self-sustaining system of production and provision to satisfy and serve everyone.
Now socialists, anti-consumerists decries against this system, they say consumerism provides too much for too many, they say it is not necessary and it is wastage. They say people does not need these things, they are mere senseless materialistic wants.
The question is, are the consumers buying those things that are not required? Who dictates the difference between a need and a want? Some religious guru, or some socialist dictator?

One’s desperate need is fulfilled by Other’s want for Leisure

The fact, which makes the free market sustainable, is “the need of a person is fulfilled as a resulting effect of fulfilment of other’s want. That is, wants and needs are interlinked in a free market.
A common example of this fact is, the Shiksha India program run by Confederation of Indian Industry¹ . CII is a non-governmental and non profit organization managed by Shiksha India trust. Shiksha India works closely with schools and institutions across India and helps promote use of technology for making teaching-learning more effective. To run such a non-profitable organization, money is collected from a free market strategy of advertisement. Various products of industries, which are a part of CII, provide donations for Shiksha India Trust. In return, they use the motive of Shiksha India as an advertising strategy.
The common advertisement they propagate is

“Support Shiksha, lead a child to the path of education, Buy large packs of Tide, Ariel, Pantene, H&S, Rejoice, Vicks VapoRub, Whisper, Gillette Mach 3 Turbo, or Pampers, & lead a child to the path of education.”²

The advertisement simply suggests that the more you consume, the more poor kids get proper education.

Consider another example, a person’s child is badly sick, he is trying to get her to a doctor. The urgent clinic is open until late night; the neighboring drug store is also open. The desperate father goes out; get the proper medicine and gets in, to save his daughter. There is nothing phony demand in this entire act of saving a child’s life.
However, the urgent clinic can remain open late because its office is situated in a dense mall with low rents and higher access. The medicine store is open late night because cosmetic store, bakery, bear bar, sports shop, a swimming pool, a hotel facilitating late night parties and discotheque also share the area where the medicine store is situated. All of these stores are selling superfluous things. They pay rent too. The owner of the mall would not have made that place if those less desperate needs were not to be sold there. That is, the want of leisure and pleasure of other people became the reason for the prompt and urgent health-care of that child. Some of the Indian cities are experiencing development, socialists call it redundant, Indian villages does not have such superfluous stores, they do not have proper schools and hospitals too.

The demand of public for the non-essential wants became the background of hospital facilities for the needful.
The same is the case of luxury goods such as mobile phone. Mobiles were meant to be available for the rich alone. It was not an essential demand it was a luxury good. Only the rich could use them. The innovators created cheaper versions; the capitalists increased the production and made it affordable even by the middle class and lower middle class person, now even the poorest of Indians is likely to have his mobile phone.

Quality of life improved even for the poorest person. He is more resourceful now and able to earn more.
Some people believe that quality of life does not matter, for them; equality of life is better idea. The question for such people is, why not the poorest should get easy access to vast grocery stores, medical stores, better food, technology, and other not-so-essential luxuries? Consumerism helps the facilities, better services, and technological comfort to reach to the poorest strata of society. Consumerism actually reduces poverty. In addition, the better quality of life provided by consumerism has its own importance. It is natural right of the people to have freedom to choose and buy market products, as they want. Free market provides this freedom to the consumer, the people. Free market keeps providing better technology and products at cheaper rates, and this ability of free market is driven by the motive of consumerism.

Better quality of life has improved the average life of people too. The average life of women and men in 1900 were 48 and 46 years respectively. Now, the average life of women and men consumers is 80 and 77 years respectively. Obviously, consumerism is serving consumers. Infancy death rates dropped hugely because consumerism brought better medical help and vaccines. Death toll due to epidemics reduced to great extent. Overall consumerism is serving humanity to lead human for better, more comfortable and more satisfactory quality of life.

Conclusion:
Either those who oppose and criticize consumerism are misled or they have some evil motives against the developing humanity.
http://couplewriters.blogspot.com/

1. Welcome to Shiksha India, a CII Initiative in association with CRY
2. Shiskha India in association with CRY, 2006 report, Shiksha India CII

“I worry that in resolving this financial crisis perhaps we are sowing the seeds of the next crisis…next crisis could be a currency or a fiscal crisis,” Subbarao said.³

India is no new to the threat of extreme debt and bankruptcy. India faced the similar situation in 1990 when Indian government was forced to accept liberalization. Obviously, nobody would like to have a repeat of 1990 fiscal crisis. Yet, it is a possibility. To reduce that risk, Indian government strictly needs to control its expenditure and reduce the burden of welfare state, that is, government need to disinvest further.

The Fiscal Crisis of Euro Zone

The evidential repercussions of governmental expenditures and debt burden on the Euro zone countries are a matter of thought for financial world. The crisis began in Greece and is expanding to Spain and Portugal. It would be foolhardy to believe that the crisis will constrain itself to the weaker economies of Europe alone.
In 2008, when Pakistan faced bankruptcy due to its fiscal debt, economist warned that Ukraine, Kazakhstan, and Argentina could also slide into a downward spiral towards bankruptcy, and to that list, now we have added Greece, Spain and Portugal. Ex-IMF chief economist Simon Johnson openly stated that the UK should also be considered in the category of nations at the verge of bankruptcy because of huge governmental fiscal deficits.⁴ There is no reason to doubt the ex-Chief economist of IMF because of the fact that the euro-zone governments are predominantly welfare states with extreme high fiscal deficits year by year. The budget situation in all European countries is extremely weak with no hope for a manageable budget any soon. The government obviously provides huge welfare benefits for the citizens in shapes of free-education, Universal Health Care systems and other socialistic patterns that obviously increase huge collective wastage of resources produced by citizens.
Simon Jones said, “They seem to show no awareness at all that much of Europe is facing a serious crisis and it’s not limited to Spain, Greece and Portugal, it’s also going to include Ireland. I think Italy is also very much in the line of fire. There’s a very serious crisis inside the Euro zone.”
The only way for these economies to avoid the situation of bankruptcy is to reduce their fiscal deficit to minimal and that is possible only by reducing the governmental expenditures, i.e. by restricting government to very limited or no power to interfere with market.
During the Global Meltdown, when the government of major countries were announcing “economic stimulus” for the market, socialists were claiming how the Market is unable to be free and needs governmental help. I mentioned how the Economical Stimulus are not a Cure it is Venom⁵ . The current situation throughout the world is evidential proof for that opinion.
The world is still to learn a simple fact that there is no such thing as a Keynesian free lunch, that government does not produce anything, and whenever it robs individuals of their wealth for the purpose of welfare of society or nation, such crisis evolves to brutalize every individual.

US, the most powerful Borrower

Larry Summer once asked in US Congress “How long can the world’s biggest borrower remain the world’s biggest power?”⁶
The question signified its strength when Moody’s Investors Service cautioned that the triple A credit rating of the US could not be taken for granted.
For its grandeur position as a citizen friendly government providing them free gifts, entitlements, subsidies, stimulus, educational helps, Medicare, Medicaid and other social service programs, US government keeps borrowing money from Fed by issuing T-bonds. President Obama has also dreams of Universal Health-care and Free Education for US citizens. Further government need funds to keep its worthless and terrorizing schemes of War on Terror. The unaware citizens feel good and strong at such governmental gestures and politicians keep on playing with the future of citizens, burdening them with further huge debts, announcing further social programs like Universal Health care and free education. The current national debt on US is around 13 trillion. President Barrack Obama signed ceiling of $14.3 trillion public debt on February 12, 2010. The yearly Public debt chart shows that US debt never decreased and it will always keep on increasing.⁷
Renowned economist, editor of Financial Times and author of “The Ascent of Money: A Financial History of World” Professor Ferguson stressed that

The long-run projections of the Congressional Budget Office suggest that the US will never again run a balanced budget. That’s right, never.⁸

Such huge national debt increases the fears of default and currency depreciation, and an immediate hyperinflation that push up real interest rates. The higher interest rates drag down the growth further while the private sector also suffers the burden of debt. In addition, to pay back and avoid bankruptcy, government tries to increase revenues by confiscating private property, increasing taxes that in turn dilapidate the private sector completely causing extreme unemployment, poverty, food crisis, riots and complete chaos.
According to International Monetary Fund, the developed countries need to manage their fiscal deficit within a decade in order to avoid defaults. Worst condition of nations under debt is of Japan and UK, than Ireland, Spain, Greece and at sixth place, is US.
Conclusion: The economic stimulus proved out to be venom; the western countries are now in a deep fiscal crisis while India and China are facing the huge inflation problems. The collective welfare statist ideology is wrong at its base and the world need to understand that the only cure for the Market is Freedom from any sort of Governmental interference.
With such huge debt burdens, the governments now need to heed the libertarian urge for free market. Governments need to restrict their welfare programs. There should be no government interference in market. Governments now need to work for reduction of expenditures and reduction of debts.

1. India Apr-Dec fiscal deficit at $66.9 bln – govt, Reuter India
2. ‘High fiscal deficit, biggest risk to India’ Anjalika Bardalai, senior editor/economist, Economist Intelligence Unit.
3. Next crisis could be related to currency or fiscal: RBI, D Subbarao, Governor of RBI
4. The UK should be seen in the same category of countries as Greece and Spain, who are facing severe debt problems, a leading economist has said, Ex-Chief Economist of IFA
5. Economic Stimulus is not Cure, it is Venom, RFL
6. Larry Summers’ killing Question on US Fiscal Deficit, NYTimes
7. United States public debt, Wikipedia
8. Professor Ferguson,
   A Greek crisis is coming to America, Financial Times

What is a Right!

The term “Rights” is a moral political term, Right is defined as a definite course of behavior of Individuals in a society that is sanctioned, proper, allowed, a privilege to be respected by all others and if anybody violates any individual “Right”, he is wrong, immoral, unsanctioned, evil, a criminal.
Now, if education is a right, then anybody arguing that Education cannot be free, education cannot be a privilege, education cannot be a right is obviously a criminal, an evil-doer, and that creates a certain anomaly, a serious contradiction with the term Right. As per the viewpoint of Individual sovereignty and free citizenship in a society, our only rights are the rights to life, liberty, property and pursuit of happiness. That is, we are not born with a right to a trip to visit Taj Mahal, or a dinner at Hotel Taj or a cosmetic surgery or a degree in aeronautical engineering. Why cannot we have such rights? We cannot have such rights because the Individual Rights in a free society does not impose any obligation on other people except that of a negative obligation to leave the individual alone, to not to interfere with his life, to not to exploit his Rights. The Individual Rights guarantees you the freedom and chance to work and put efforts for what you want, rights are not to be given to you without any effort by somebody else. That is, you do not have a right to be fed, to be clothed, or to have a house, a car, an AC etc. Although, you have proper right to work and earn your living but you also have complete freedom to use your earning according to your wishes, you have a right to pursue your happiness. More clearly saying, one has the right to act and to keep the fruits of his actions, to produce and to keep his products or to trade them to others if he prefers. However, he has no right over the actions and products of others, except on the terms of which they voluntarily agree. That is, we all have a right to have a mutually beneficial deal voluntarily. Similarly, the right to the pursuit of happiness guarantees you the freedom and right to act to pursue your happiness and to be happy, to keep the results of your actions. It does not guarantee that other people will make you happy or will try to make you happy. If one’s desire for something imposes a duty on others to satisfy his desire, then the others have no choice in their life. They are merely slaves. One’s right to happiness at the expense of others means that the others become rightless slaves. Your right for anything at other’s expense means that the others become your rightless slaves.

The Immorality of Current Politicians

Just in order to gain a vote bank, politicians distorts the meaning of right. They say that you are entitled for something because it exists and you want it. You do not need to work for it or earn it; government should provide it to you. The question arises, from where will the government get it? What will the government do to the free individuals and their individual rights to make it possible to shower free gifts, free lunch, free education, free health-care etc on you?
Let us assume that tomorrow, government and politicians assert that you are born with a moral right to hair-care and that government will benevolently provide free hair-care services for all those who want it. Haircuts and shaving would be free. Some people will show up everyday for a new hair-style, eye-brow setting, beard and mustache setting, government will keep showering the governmental hair-saloons with more and more governmental funds collected by taxing middle class citizens. Every bald man would love to come to the governmental hair-saloon to have a hair seeding and implantation. Nobody would be bald and there will be as many hair styles as there are citizens in India. Government will govern the profession of barbers and they will make huge incomes, every second person would like to be a barber, there would be competitive examinations for Indian Barbers Services (IBS). The government will pay for all expenses. Obviously, there will be government schools and colleges providing specific training, certificates and degrees for professional barbers. Government will install a huge administration for the maintenance of the hair-cut sector. The dishonest barbers will make huge profits and so, will the honest one. They will work and spend like mad, trying to satisfy every second person’s desire regarding his hairs, which certainly can be a millions worth specific hair care and services. The budget will start going out of control, government will suffer the pressure to provide enough budgets to maintain the proper services for hair-care. Corruption will rise , soon government will start providing directives regarding hair cuts to control the budget, government will limit the number of barbers, the time spent for one hair-cut, government will start licensing an permitting only certain type of hair cuts, taking away the individual’s liberty regarding his own hairs. Government will start limiting the number of hairs a barber can split, the number of razors a barber can buy. There will be inspectors to check the corruption in governmental barber shops, there will be a new department just to keep records of barbers in a definite constituency and the profession of barbers will be thoroughly red-taped.
It is the case of education. Government controls the education sector and tries to establish education as a right. Obviously, government fails to provide any sort of education to the masses and whatever education it provides always remains way below the required standards. Also, government doesn’t produce the required resources for the provision of free lunch and free education, so who will pay for all that?
The rich people are very few in India and even if government snatches away all the property of the top 100 richest families of India, it cannot sustain the expenditures required for free education. So, who will pay for that? It is us, we poor and middle class people who pay as slave for the government’s immoral desire to provide free education through the taxation system. By stressing free education as a right, government makes all Indians as the slaves who are obligated to pay for the governmental education program without questioning anything about it. By befooling us by the term free education as an individual’s right, government robs us of our very basic right to earn and to hold the fruits and results of our work and efforts. Government taxes us and takes away our hard earned money an in return; we get nothing but a highly imperfect education system. There are no free lunches, but there are lunches being paid for by somebody else.
Conclusion: Rights does not confirm anything freely available for anybody at the expense of others. By terming education, or health-care, or free lunch as individual’s right, politicians try to enslave the public and rob them of their very basic individual right of life, liberty, property and pursuit of happiness. In a free society there can be only the right to live freely, to work and earn freely, to enjoy the produced an earned property freely and to pursue one’s happiness by furthering his efforts and results of his efforts freely. Other than the man’s free will, he has to earn everything honestly in a free society, no other one, not even government is obligated to feed, or cloth or educate him freely.

“I will give you a talisman. Whenever you are in doubt, or when the self becomes too much with you, apply the following test. Recall the face of the poorest and the weakest man [woman] whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use to him [her]. Will he [she] gain anything by it? Will it restore him [her] to a control over his [her] own life and destiny? In other words, will it lead to swaraj [freedom] for the hungry and spiritually starving millions?
Then you will find your doubts and your self melt away.”
- One of the last notes left behind by Gandhi in 1948, expressing his deepest social thought.¹

We all have seen and read it at the very first pages of any of our school text books. We have been taught of that amulet so deeply as some Vedic Mantra, Ayat of Quran, Gospel of Bible or words from Guru Granth Sahib. It has been our religion, our mantra, the Mahatma Gandhi’s Talisman.
Have we ever realized its essence? Or have we been indoctrinated of the Gandhi’s talisman through our school text books, obviously authorized by the government boards of education?
Since our school days, Gandhi Ji inspires us all to think before we act, to check our words before we speak them, to control our senses before we see anything. We have been taught, not to see bad, not to say bad nor to do bad. Yet, we have never been allowed to decide what is good or what is bad, for Gandhi ji and most of the enlightened ideal leaders never accepted us to be intelligent enough to decide for our own self whether something is good enough to say, or do or see. We are obviously not entitled to decide for our own self, whether something is good enough to do, we are not enlightened and free enough to realize the narrow difference between good and bad. Hence, we need help to conjecture what is good to do and what should not be done, and Mahatma Gandhi’s talisman obviously is the key to our help.
Gandhi ji says that some act or something is good or aesthetically beautiful only if it is beautiful enough for all.² If whatever you do is good for you only, but it is not good for others, or all, it can not be said good. Majority cannot decide good or bad. The idea of good or bad, is essentially relative. Something can be good for one, but bad for others, and if the majority is authorized to decide what is good, than obviously, the minority is forced to accept it as good, without any option to oppose that. Hence, Gandhi certainly was not exclusively supportive of the Majority rule; obviously, he was not a supporter of enslavement of minority against the majority rule. He was proponent of the freedom and savior of minority against the majority. That is why he supported the idea of organized anarchy

“The State represents violence in a concentrated and organised form. The individual has a soul but as the state is a soulless machine, it can never be weaned away from violence to which it owes its very existence”. — Mahatma Gandhi³

Yet, was Mahatma Gandhi supporting the idea of freedom of the individual, the smallest minority, to decide for his self and his pursuit of good and happiness?
Was Mahatma Gandhi an existentialist, individualist, supporter of Individual rights and ability to be free and independent to rule and decide for his own life? Was Mahatma Gandhi a Libertarian? No, he was not, his idea of “organized anarchy” constitute a meaningful government and bureaucracy.
Based on Indian ethos and values, Gandhi added some powerful features for containing consumption and promoting social justice and equity. These are:
1) Village governments in which the village assembly controls resources and decision-making;
2) Decentralised production systems to curb distress migration to urban centres;
3) Self-sustaining local economies providing resilience to regional and global economic turbulence;
4) A low expense clean election system;
5) National governments accountable to local governance as a check against arrogance of the state;
6) Industry as trusteeship of the people, reinvesting in production of goods and services and not indulging in ostentatious consumption; and
7) Religions integrated as a positive force at the grassroots level.⁴
Gandhi was not a Libertarian; rather he was a socialist, a deep rooted supporter of the philosophy of Kant, the very basis of Marxism and Socialism. He was not an Individualist, nor he was supporter of Lockean law of homestead and property rights, he was not capitalist. Yet, he did not want the majority to rule over government and dictate for what is good or what is bad. In a sense, Gandhi was Minarchist, yet was he an Objectivist?
Who if not the majority elected government be the dictator for the individual to learn and act for what is good or beautiful for all?
According to Gandhi ji, materialism was corrupt and despicable thus, he was against the theory of capitalism, which gains its roots from the Lockean principles of Property rights. Gandhi ji also supported Marxism and defined class competition as the evil of society, he was a radical egalitarian and hence he considered the theory of Division of Labour as a poison to society.
According to Gandhi ji, one should not be self-righteous, self-dependent and self-interested while performing any action, rather, before acting, one must consider whether his act would be of any good for the poorest, weakest person one knows. That is, no one should be free to decide for his own pursuit of happiness, rather he should consider and chase the happiness of the poorest and weakest person one knows. Gandhi ji dreamed of the rule of weaklings and deprived, where the stronger and better workers, producers, creators are willfully subjected to serve the weakest, most depraved person one knows. Obviously, Ahimsa was his second most important mantra, as he knew that stronger could not be enforced to serve the weaker by means of violence, rather it could be done only by means of democratically renouncing self-interest, self-reliance, selfishness. Gandhi ji was the saint of selflessness. He wanted every one to devote his life willfully and peacefully with utmost devotion, for the improvement and goodness of the weakest of the person by means of Trusteeship⁵ .
Argumentatively, if every one becomes as spiritual as Gandhi was and determines to be selfless, always willing and acting only to serve the good of the Most poor and weak person he knows, it would be very easy to make the dream of Egalitarianism to be true. If every strong and better person were working willfully to fulfill the good of not his self, but of the poorest person, the materialistic, capitalistic, or individualistic difference between the stronger or weaker would be nil. For this, he proposed the idea of Trusteeship⁶ .
Gandhi ji’s Talisman, which we Indians have been indoctrinated throughout our student life, is actually the mystical potion of spiritual socialism that tends everyone to willfully and peacefully accept his duty to serve the poorest person one knows. Gandhi ji simply declined the importance of Individual life, and his right to pursue his happiness, his good, rather he inspired everyone to willfully accept the servitude of the weakest person one knows and to devote his actions for the goodwill of the poorest person.
Here comes the undeniable hypocrisy and psychological illness. How can one be selfless? How can one devote himself to think before acting, not his good, his profit, but the good of the other, the poorest? Gandhi ji’s talisman becomes a psychological poison for an individual because he naturally is selfish and tends to serve his own good. Gandhi ji’s talisman enforces him philosophically to consider himself a wrong-doer.
Conclusion: Gandhi was a Radical Egalitarian⁷ , his philosophical idea was socialism, yet he was a supporter of anarchism and opposed majority rule of state government. He was proponent of Non violence, yet, he wanted to destroy class differences and hence Division of Labour and capitalism but peacefully through spiritual indoctrinations. If capitalism and Individual freedom can be sacrificed for the cause of socialism, than one may call Gandhi a libertarian, otherwise he was not a Libertarian.

I am inviting those people who consider themselves as owners today to act as trustees, i.e., owners, not in their own right, but owners in the right of those whom they have exploited.
Supposing I have come by a fair amount of wealth—either by way of legacy, or by means of trade and industry—I must know that all that wealth does not belong to me; what belongs to me is the right to an honourable livelihood, no better than that enjoyed by millions of others. The rest of my wealth belongs to the community and must be used for the welfare of the community. Mahatma Gandhi⁸

1. Gandhi’s talisman
2. A tribute to an unlimited legacy, Gandhi’s concern for individual welfare lead him to distinguish between man’s basic needs and human acquisitiveness. As a result of his democratic temper, Gandhi argued that a thing could be considered beautiful only if it could in principle be made available to all. Tested against that principle, the Mont Blanc pen is a moral and aesthetic failure. Why Mont Blanc Pen is a moral and aesthetic failure? because not “ALL” can afford it.
3. Realizing Gandhian Democracy, People First India
4. Realizing Gandhian Democracy, People First India
5. Gandhi ji on Capitalism, Socialism and Communism, Applied Gandhi
6. Gandhi ji on Capitalism, Socialism and Communism, Applied Gandhi
7. Freedom Versus Egalitarianism, Reason for Liberty
8. Gandhi ji on Capitalism, Socialism and Communism, Applied Gandhi

“Concentrated power is not rendered harmless by the good intentions of those who create it.” -Milton Friedman

One may wonder what the great economist Milton Friedman was thinking while he uttered those words. May be he was thinking of the ill-effects of price controls and how does price control¹ causes shortage and hence excruciating conditions for the most poor men of society. He might be thinking of the ill-effects of socialized medicines², or may be he was thinking about the irrationality of minimum wage law and the manner that the very intention of improving the living conditions of poor workers actually condemns many to acute poverty and unemployment.
Minimum Wage Law in India
In 1920, Mr. K.G.R Chaudhary took the initiative by setting up boards in different industries to determine the minimum wages³ . It must be recognized that in those days, the British government held total control over all of the Indian industries and law bodies and Mr. Chaudhary was an agent of British Government. The idea clearly was not at all to improve the living conditions of Indian workers whom the British government considered as slave; rather it was to pacify any possible insurgencies. It was a British government’s vicious trap to divide and rule the Indian youth and workers for their own profits. At one hand, they were luring the industrial workers by the assumingly better living conditions they were promising to provide; on the other hand, they were simply crushing out any chance by native businessmen and entrepreneurs of British India to be a successful. That initiative also created a rift between those Indians who were engaged in the British government controlled industries as they were being lured for a better life and the other portion of youth that was not working for the benefits of British government. This political step obviously divided the Indian youth and workers and hence decreased strength for struggle of freedom.
After Independence, the new democratic government of India set-up a “Committee for Fair Wage” in 1948 to provide guidelines for wage structure through out the country, it was the beginning of Minimum wage law in India. Were Indian leaders, who are assumed to be the fathers of Independent India such fools that they failed to realize the vicious trap of British Government and hence established the poisonous minimum wage law, or were they simply following the steps of British government (being the new rulers of India) to keep the policy of Divide and Rule?
Consequences of Minimum Wage Law
The rate of unemployment is directly proportional to the overload of labour cost over productivity. Minimum wage law that forcefully raises the costs of unskilled and inexperienced labour and thereby increases the labour cost, while decreasing the productivity, certainly raises unemployment, also as no one can employ a worker at a wage below the minimum wage forced by the law, the unemployed youth fails to get any chance for employment (as it would be illegal) and hence suffers extreme poverty. Often economists ignore the fact that minimum wage law actually causes unemployment and poverty because of the shear fear of politicians and rulers, who just for making their vote bank keep exploiting the poor lot.
Consider a case of a private primary school engaged in providing elementary education to the poor kids of a society. The owner of the school is obviously not a rich person, he is managing the school to earn a living and in return, he is providing job for teachers he employs and a well-managed system of education to the kids of the society at affordable student’s fees. He cannot increase the student fees to that level at which parents would find it difficult to send their children to his school. Initially, he engages 10 teachers, 2 clerks and 4 menial workers at an average salary of Rs 1000-Rs 1500 per month. In September 2007, the national minimum floor wage was increased to Rs 80 per day (that is Rs 2400 per month) for all scheduled employments from Rs66 in 2004, to Rs 45 in 1999, Rs40 in 1998 and Rs 35 in 1996⁴ .
That is, the school owner is actually doing an illegal act by giving lesser salary to the ten teachers he has employed than the salary, which government has admonished to be given to the teachers (workers). Obviously, the teachers would be happy if their salary were increased from Rs1000-Rs1500 to Rs2400 per month, it would almost be double. If government forces the school owner to give the dictated salary to all his employees, he will certainly find himself unable to give that amount to his employees and hence he will be forced to trim the number of teachers, clerks and helpers to half. That is, if government forces the minimal wage law on the school owner, he will simply remove 5 of his teachers, 1 of the clerk and 2 of the menial workers.
That would increase the salary of remaining 8 employees but will certainly throw the unfortunate other 8 people in poverty and unemployment. They will hardly find any other job because all other employers will also suffer the similar inhuman conditions of lack of money to employ the job-seekers.
In case of teachers, the school manager has option to choose the best of the teachers and remove the average or below average teachers. In case of the clerk and the menial workers, he simply does not have such a choice because almost each of his employees is similarly skilled and efficient in those works. So how would he decide whom to remove and whom to keep as his employee? He may choose to employ those, who agrees to sign at the pay slim as admonished by the government, while taking lesser salary in turn of his favour to keep them at job, that is, he would be tempted to promote corruption. Otherwise, he may keep the workers of his caste or religion while removing the workers of other caste or religion. That is, the minimal wage law will force the employer to cause hatred based on religion or caste.
On the other hand, because of lesser teachers, the burden on each to teach the students appropriately will be increased, their working hours may increase. Government can certainly admonish another law to restrict the maximum working hours for employees. In that case, either the teachers will start ignoring the students, or the school owner will have to remove some of the students to balance the workload of teachers. The owner of the school will also suffer losses because he simply cannot increase student’s fees (government can admonish against that) because if he does so, the parents by themselves will feel to remove their children from school and hence stopping their education. At any further increase of minimum wage of the workers, the poor section will suffer further. Thus, the final sufferers of the inhumanity of minimum wage law are always the poor, the workers, the consumers and the producer.
Conclusion
Minimum wage law not only increases unemployment and extreme poverty but also, it increases tensions anger in between the various sects of the society based on religion and castes or race. It promotes racism, poverty and shortage.
It would be wrong even to think that the founders of India were fool enough to miss the true nature of minimum wage law, yet they kept following the British policy of divide and rule just to keep their political vote bank strong enough while the poor public is bound to suffer. Such inhuman policies are necessities of government to exist, hence government and politicians often lure the poor public by misguiding them and pretending that the politicians are with good intentions and want to help the poor, the reality is, government exists on the principle of violence, exploitation and robbery and enslavement of poor citizens.

1. Consequences of Price Control, Reason for Liberty
2. Abolition of Cost is cause of Corruption, Reason for Liberty
3. Minimum Wages Act India, Government of India
4. Minimum Wages Act India, Government of India

Who Decides the Prices?

The price of a commodity depends on its demand and its supply. Demand and supply being the amount of commodity the buyers are prepared to buy and sellers are prepared to sell, at all prices.

If supply is constant, The higher the price of a commodity, the lesser is its demand, the lower the price of a commodity, the higher is its demand.

As the speculators and sellers reduce the price of their commodity, the demand of that commodity increases. People obviously are willing to buy more shirts at Rs20/- per shirt and they will buy lesser shirts at price of Rs40/- per shirt. Since the lower price increases consumers, speculators and sellers tend to decrease the price to the minimal possible value so that they can outcompete the other speculators and sellers. Most of the consumers will opt to buy from that seller who is asking the least prices and hence, that seller will make maximum profits. Obviously, a speculator cannot decide price for his stored commodity any less than the actual cost of that commodity plus cost of its storing and his share of profit.
Thus, it should be clear that speculators could not decide the price variation of a commodity as price is directly proportional to the demand of consumers. A speculator or a seller may merely speculate the increasing or decreasing trends of the demand of a commodity and adjust the supply of commodity by either storing it or flooding the stored quantity of the commodity in market in accordance with their share of profit.

Can Government decide and control the prices?

Speculators cannot decide and control prices because they cannot force anybody, they cannot use violence against anybody. So, if a speculator decides to sell stored commodity at higher prices, he will loose his consumers, as they will have choice to go for that speculator and seller that provides the commodity at lower prices.
Yet, government can decide and control the prices because government do not need to look for the supply of a commodity, on the other hand, government works under the pressure of vote banks. In order to obtain maximum of the vote bank, government can actually decide the prices of various commodities lower than the cost of production and storage of those commodities. That is why, just in order to gain maximum vote bank, government can promise to sell wheat or rice at a price of Rs2/- per kg, or even at free of price. This is absolute corruption and fraud because the cost of production of any commodity or service is always higher than the price dictated by the government and hence government always works at loss that ultimately burdens the poor consumers, voters. Government can control the prices too because it has monopoly on violence, government can force all speculators and sellers to sell the product at the dictated prices; it can illegalize speculating and selling and may control selling services completely by collectivizing the market. Government can jail speculators, sellers and dealers if they do anything against the monopoly of government, government can kill them too by means of police force.
Obviously, government has no responsibility or need to look for the quantity, quality and supply of the commodities of which it dictates the prices because the basic means of government income is confiscatory, compulsory taxation. Yet, when supply of a product reaches too much lower and the demand increases too much higher, government succumbs under the pressure of demand and supply and resorts to increase the prices, that again creates havoc for the consumers.

Reason of Price Rise and Consequences of Price Control

In order to hide its irresponsibility and fraud, government often suggests that the reason of price rise is population explosion and scarcity of products. Yet, it is again a myth. It is true that Indian population increased almost 4 times since 1947, yet the thing to be noted is, Indian production increased 100 times (or more). So comparably, production is too much more in relation with present population than what it was in 1947 in relation with the population of 1947.
Price rise is direct consequence of Inflation¹ . As government has monopoly on printing fiat currency out of thin air, it keeps increasing the fiat currency. As a result, the purchasing power of citizens increases. Since the purchasing power of consumers’ increases, their demand also increases and it exceeds the quantity of available supply.
Whenever the quantity of demand of consumers’ increases than the quantity of supply the producers and sellers can provide, the situation of shortage occurs where the consumers are willing to buy, but the sellers and suppliers cannot provide, they have nothing to sell.
Such situations creates tensions within the society and may erupt in violence as every consumers suddenly comes to realize that although they have fiat currency, they have no wealth, they have been robbed and they are poorer than what they were years before. To avoid such situation, government feels forced to increase prices of commodities because price rise actually solves out the problem of shortage. At higher prices, demand of consumers decreases and tends to come closer to the quantity of supply available in market. Yet again, government may loose vote bank because of price rise, hence it resorts to price control again.
Price control is again a fraud and creates chaos in market. Due to lower dictated prices, demand of consumers remains high irrespective of the supply and that increases wastage of scarce products causing shortage. As production and supply never meets the demand of consumers in such scenario, the consumers suffers.

Solution of Price rise and Shortage

As price rise is result of Inflation and government’s monopoly on printing currency² , the solution of price rise obviously is a denial of fiat currency and acceptance of 100% gold standardized currency and end of government monopoly at issuing currency³ . The increase in supply of such money would always be ineffective and small and would be limited by the high costs of mining additional quantities of gold.
Price rise became a chronic social problem because government replaced the Gold standard of currency by unworthy paper currency whose quantity can be raised without limit and without cost. There is no other solution for this chronic problem.
In addition, the problem of shortage and all the frustrations, corruption and violence attached with it is because of the government control over prices. In order to avoid any shortage of any commodity in market, it is necessary for government to leave the market and pricing system free of any interventions and let the producers, sellers, speculators, hoarders and dealers take care of the pricing system.
Speculators and hoarders saves the consumers from shortages by speculating any change in the trend of demand and supply and adjusting the prices to that level at which, the demand of consumers decreases or increases to the equalizing levels of the available supply.
When demand is higher and supply is less, speculators increase the prices and hence decreases the demand to equalize it with the supply and hence saves the consumers from the frustrations of not being able to buy, and thus avoids any wastage and shortage.

1. Story of Money, What Causes Inflation?
2. Story of Money, What Causes Inflation?
3. Fiat Money Versus Gold Standard, Privatization of Currency

Solving the Shortage of Grains

To understand this, let us take the case of an unexpected flood or drought in an Indian region (say Bihar, or Andhra Pradesh). Because of drought, the production of wheat will be reduced (let us say it reduces by 1/12th of the average wheat production in an year). Obviously, because of the shortage in production, the price of wheat is expected to rise after say, 6 months. The enterprisers looking for making higher profits will speculate this expected price rise and will start storing the wheat at the current lower prices to save it to make higher profits in future by selling the stored wheat at higher prices.
Their speculative storing of wheat will result in a raise of current price of wheat, as there will be lesser wheat available to be sold to consumers, and the enlarged quantity of wheat for future will reduce the future prices of the wheat.
Because of current higher prices, the consumers will also start accommodating themselves to the shortage of wheat by reducing the consumption of wheat and checking the wastage. This thriftiness on behalf of consumers will allow them to sustain the time of absolute scarcity of wheat and that will further reduce the expected future price of wheat. Thus, at one hand, speculators will increase the current prices of wheat by storing it for future sales at higher prices, on the other hand, the increased available quantity of wheat for future and the thriftiness of consumers at present will reduce the expected prices of wheat in future. As a result, the maximum possible increase in price of wheat at the period of most scarcity will also be not very much more than the current price of wheat plus the storing and preserving charges of the wheat by speculators.
In absence of speculators, as most of governments illegalizes speculation for price control, the consumers will never realize the actual shortage of wheat because there will be no sign of scarcity by means of price rise and will continue consuming wheat as normal. On the other hand, although the stored wheat will satisfy the demand of consumers for first 11 months, there will be no wheat left for the next 12th month of year as the total wheat produced is already less by 1/12th of the average required for an year. Such a situation will not only make people suffer starvation but will also fail to reduce wastage when it could have been. In addition, it will provide further chances of bureaucratic governmental corruption.
The profit motive will also alleviate the situation of famine and scarcity by means of another natural force of free market that tends to equalize the price of a commodity at all places. At a time when Andhra Pradesh or Bihar is suffering famine and food shortage, the dealers at other parts (say Uttar Pradesh, Punjab or Tamil Nadu) will seek higher profit rates by selling their stored wheat to the consumers in Bihar or Andhra Pradesh. This will result in a slight increase in price of wheat at the local markets while the increase quantity of wheat available for Bihar or Andhra Pradesh consumers will reduce the unexpected rise in price of wheat at markets there. Thus, the shortage of wheat at a region will be spread to whole India and hence will reduce its effect to minimal, all will share the increase in price of wheat, and that will reduce any extra burden on the consumers of famine suffering area to negligible.
The speculators cannot store the wheat for more than a period of 12 months as by that time, the new crop of wheat will arrive in the market and that will reduce the price of wheat to normal.

Issue of Oil Shortage because of Corrupt Oil Barons

The same principles of free market will also tackle any unwanted situation in the market of crude oil and petroleum or any storable commodity.
In the previous post, while discussing the Market Anarchy² , one of my friends raised the issue of Oil Barons, asking what will happen to free market if the Arab Oil Barons tries to control the market because of their influence on oil production.
Let us assume that all Oil Barons of Arab makes a union and tries to control the free market by imposing an artificial scarcity of crude oil (although this is impossible because reducing supply of oil will reduce all income of those oil barons as they have no other means of profitable production).
The speculators of free market will certainly foresee the future shortage of oil and will maintain their oil storage to make higher profits. That will obviously increase the current prices of available oil and hence will introduce the thriftiness in consumers, making them more able to sustain the period of oil shortage. Consequently, it will reduce the chances of unexpected increase in price of oil at extreme periods too.
On the other hand, Indian free market will also tend to increase its oil production to make higher profits. In addition, profit motive will tend the oil producers of other nations (like USA or Russia etc) to sell their oil to the Indian market. That will obviously tend to spread the scarcity of oil through out the world and hence will assuage the problems of Indian market. Hence, although the economy of India and actually whole world, will suffer a comparable loss but that would not be of any considerable degrees. On the other hand, Oil Barons depend only on oil production, their loss at not selling the oil will be huge and directly pointed towards them, and that will break their union.
Conclusion: A free market inadvertently safeguards itself against any sort of scarcity of any commodity by means of the profit motivated market forces. As speculators guard the market and hence the well-being of consumers as true and honest soldiers (as their vested profits and interests are strictly attached with the consumers), the free market necessarily remains free of any discrepancy in the prices of any commodity.
Even the administrators of mixed economy have realizes the power of forces of free market that is why Indian government issued allowance of speculations over wheat few months ago³. Certainly, it is a positive step towards the Free Market.

1. Cultivating Famine, Reason for Liberty
2. Issue of Oil Barons, The Market Anarchy
3. Ban of wheat futures lifted, Speculation allowed, Economic Times

Uniformity of Profit

Naturally, every body works to gain profits, everybody lives to sustain and comfort his life, profit is the only motive for a free individual to put up his endeavours in production and prosperity. Yet, the laws of natural anarchy also ride profits and that is the Uniformity of Profit principle. The principle suggests the natural tendency of a free-society towards establishing a uniform rate of profit on capital invested in all the different branches of production, be it steel production, grains production, oil industry, the shoe business or whatever. Profit, obviously is the difference between the sales revenues and cost of production.

The reason for such tendency of natural uniformity is the profit seeking nature of the free-individual. Investors prefer to earn higher rates of profits on their investment rather than the lower rates. That is natural, rational behaviour of man to seek maximum possible profits. Thus, other things being equal, wherever the rates of profits are higher, investors tends to invest their additional wealth, and wherever the profits are lower, they tend to withdraw their previously invested capital from those production sectors. The additional investment that thus reaches to any high profits providing production sector tends to reduce the rate of profits in that sector.
This happens because the additional investment increases the production and hence supply and availability of the products and that brings down the selling prices of the product. As selling prices reaches closer to cost of production, profit rates comes down. On the other hand, the production sector that initially was providing lower profit rates suffers lack of investment and hence lack of production and supply, which throws the prices of the products of that sector higher. As the selling prices increases, the profit rates of that sector also increases and hence, that production sector again becomes the higher profit providing sector. This rolling up and down of investments in various production sectors tends to bring equilibrium where the rates of profit in various production sectors tends to be uniform.

Benefits of Natural Anarchy

In a free-society, as the profit rates tend to be uniform, every sector gains enough investors. As every investor is driven by his profit seeking nature, he remains alert about consumers demand and that reduces the chances of malinvestment and hence over-production or under-production. The natural anarchy thus provides a balance between the production of all the essential products for our life and progress. Anarchy not only prevents but also remedies the mistakes of over-production or under-production if committed. If at the threshold of a high profit-rates providing sector, investors commits mistake of over-investment, it tends to over-production that decreases the rates of profit and hence further investment reduces resulting in lesser production and hence providing the necessary cure to the mistake.
Because of individual freedom and uniformity of rates of profit, each sector not only gains enough investors, it also gains enough human resources in form of workers, specialists, managers, entrepreneurs and inventors and that leads to over-all increase in rate of production leading to reduce poverty and scarcity at all fronts.
As natural anarchy tends to bring the uniform rates of profit for investors, it tends to bring uniform rates of earnings, wages and increments to the producers, workers and innovators involved in various sectors of production and services and hence establish a developed division of labour. Since, the free-society tends to bring uniformity of profits and earnings, the ills of economic inequality tends to reduce to minimal¹
because of which, class clashes, casteism, racism, and other sorts of irrational discriminations are reduced and that brings the environment of natural freedom for each individual being free to use his talents and endeavour to pursue happiness by earning it honestly and freely. Thus in a free-society, natural anarchy tends to bring happiness and progressive increase in production of each individual.

Ills of Interventionism and Central Planning

The government by means of central planning or interventionism often dislocates the harmony of free-market and hence breaks the chain of progress bringing chaos to the society. In presence of government interventions in forms of subsidies, taxation, prohibitions, licensing etc, the profit motive looses its essence, and instead of learning and leading the way of natural profit seeking tendency, investors are forced to invest based on government’s dictatorial interventions. This dependence reduces the investors’ incentive to invest and hence causes lack of investment. In absence of profit motive, neither the government, nor the investors by themselves get any chance to check the threshold of investment and production and that causes loss by means of malinvestment resulting in over-production in some sectors and under-production in different. Also, by means of subsidies, stimulus packages and forced production, government creates bubbles of boom that tends to burst ultimately causing malinvestment that results in loss of production, lack of investment, depression, scarcity, wastage of resources, corruption and unemployment. As the government interventions destroy the division of labour, society suffers lack of freedom, extreme differences between classes, casteism, discriminations and overall underproduction that bring in problems of poverty.
Conclusion: In a free-society, market follows the laws of natural anarchy and that provides freedom, progress, prosperity and increase in the productivity and profits of the free-individuals tending to solve out the social ills if present along with preventing and curing the economical mistakes by means of profit motive that works as a thermostat or the invisible hand to guide the society towards cumulative production and provide the individuals means to pursue their happiness honestly and freely. Government interventions prove to be fatal, destroying the profit motive that is the only possible means of checking the malinvestment, over-production and under-production. This results in economic chaos, making the birth bed for various social-ills by destroying the division of labour.²

1. Economic inequality based on freedom of individuals to exploit their own intelligence and talent is significantly less visible than the economic inequality that results because of forced planning or government coercion. The fact is greater freedom results in greater prosperity of whole society and less extreme width of economic inequalities, Freedom Versus Egalitarianism
2. Division of labour is the essential aspect of a free, prosperous and ever improving progressive society, Division of Labour

Burden on Consumers

In an economic system as long as only certain means of productions are controlled by the government or municipalities, the nature of market economy determining economic activities remains unchanged. The Government owned sectors and ventures must fit into the market mechanism of market economics while buying raw material, equipments, labour, and as sellers of goods and services. They are subject to laws of market, as they need to attempt for profits, at least to avoid losses.¹ When government intervenes to eliminate this dependence on market by covering the losses of such enterprises with subsidies or bailouts out of public funds the losses shifts to somewhere else and subsidies are raised by collecting confiscatory taxes. However, the burden of the taxes affects the citizens, not the government collecting the tax.
In a free market, where the market laws either purges out the failed enterprises incurring losses and replace them with other enterprisers to provide better products and services, or force those enterprises to improve their working, production and management, the problem solves out by itself as the malinvestment in enterprises incurring losses gets a reality check. Yet, because of government interventions in mixed economy, such check is impossible as the government keeps promoting the failure by punishing the citizens, burdening them with superfluous taxes and wasting thus collected wealth in failed or meant to be failed enterprises and services in the form of bailouts and subsidies.² In absence of check, these enterprises, instead of improving and curing themselves, keep fomenting further and causes further burden. The government interventions at one hand, supports malinvestment in the failed or mismanaged enterprises, on the other hand, government punishes the profitable private enterprises by further cutting out their profits by means of corporate taxes. As the profits of private enterprises reduces, their rate of progress and production also decreases, causing retardation in progress of citizens.

Poverty and Unemployment

It is a fact that the only way to reduce poverty is to increase the productivity of individuals.³ However, the interventionists’ suggests that government can raise the standard of living of the common man partly at the expense of entrepreneurs and capitalist, and partly at expense of common citizens. They suggests restrictions on profits and equalization of incomes and fortunes by reservations,⁴ confiscatory taxations,⁵ lowering of interest rates by fiat money policy and credit expansion and raising the standards of living of workers by the enforcement of minimum wage rates.
As subsidies and taxation decreases the productivity of workers and the system, the results of interventions comes out exactly opposite to what government intends to achieve so. Fiat currency brings upon cycles of inflation and the arbitrary lowering of interest rates, credit expansion results in depression, and the random minimum wage rates restrictions than creates mass unemployment.
In a free market system, the wage rates are fixed by the interaction of demand and supply, at a level at which all those willing to work can finally find a job, and thus the unemployment remains temporary only as there remains a continuous tendency of the free market to remove the unemployment. However, with government interventions in form of fixed minimum wage rates, things changes. When the government fixes wage rates above the normal rate that could have been fixed by the free market, the potential of market to provide employment decreases that causes unemployment. Furthermore, as the wage rates are fixed in general, those, who looses their job because of fixed minimum wage rates, fails to find another job and their unemployment is prolonged. Thus at one hand, government intervention may increase the income of some workers, at other hand, it forces some other workers to suffer unemployment and hence no income. Also, because of minimum wage rate laws and thus produced unemployment, productivity of enterprises reduces to great extent causing further poverty and unemployment.

Price Control and decrease in productivity

Interventionists further support lavish spending on behalf of government; they support arbitrary low prices for consumers’ goods and high prices for agricultural products. The lavish public spending by government further excruciates the situations. If the government provides funds required by taxing the citizens or by borrowing from the public, it abolishes on one hand as many jobs as it creates on the other, most of the times such jobs created prove to be unproductive and hence are similar to malinvestment and wastage of resources. If commercial banks finance the government spending, it means credit expansion and inflation, further causing grounds to depression, loss of productivity, malinvestment, unemployment and poverty.
Price control is another asset of interventionists through which they actually intend to help the common man but ends in hurting the common man to much extent. Government believes that the price of certain consumer commodity (say wheat) is too high; it wants all poor consumers to be able to have more wheat. Thus, it resorts to price fixing and fixes the price of wheat at a lower rate than that prevailing in the free market. As a result, the marginal producers and dealers of wheat, now incurs loss. As no individual farmer, producer or businessperson can keep producing at a loss, these marginal producers stop producing wheat, the dealers and sellers stop selling wheat in the market. They start using their resources to produce commodities not controlled by arbitrary price fixing (say soya been, or onion). As a result, the quantity of available wheat in market reduces significantly, and hence now, not only poor but also everyone suffers the lack of supply of wheat. The government thus is forced to borrow money from public to buy wheat from other producing countries. On the other hand, the extra supply of other commodities reduces demand and causes further resource mismanagement and wastage. If, in order to keep price of wheat fixed, yet not let the producers to suffer losses, government decides to control the prices of commodities necessary in production of wheat, the same story repeats itself, and ultimately, the end result of price fixing comes out to be deficiency of all productive units, producers, wastage of resources and means of production and overall deficiency of products causing poverty and starvation.

The Only Possible Solution

Irrespective of their supposedly good intentions, interventionists through their planning of mixed economy results in chaos and exact opposite results to their interventions. The middle path between the good (capitalism) and bad (socialism) proves to be an ugly vice (mixed economy).⁶ There is no alternative to totalitarianism than liberty, there is no possible profitable planning for freedom and common welfare than to let the market system work freely, There is no other means to attain full employment, rising real wage rates and an always improving standard of living of the common man than private initiative and free market.⁷

1. Refference::Planned Chaos, Ludwig Von Mises
2. Burden of debt and loss, Reason for Liberty
3. Population, Poverty and production, Reason for Liberty
4. Such Interventions creates Forced Economic Inequalities, Economic inequality based on freedom of individuals to exploit their own intelligence and talent is significantly less visible than the economic inequality that results because of forced planning or government coercion, Freedom Versus Egalitarianism
5. What really are Taxes, Reason for Liberty
6. Laissez-Fairre Free market capitalism is right, communism, socialism, collectivism is wrong, and the Mixed Economy system is Evil., The Middle Vice!
7. Refference::Planned Chaos, Ludwig Von Mises

Why Participation of Indian citizens in elections is reducing?

In a democracy¹ if a majority of voting population ranging from several hundreds to several hundred millions (depending on level of election –Municipal, state, or national) vote against an existing policy, the policy will likely be changed, replaced or aborted. That does not mean that electorate controls government. As far as an individual citizen is concerned, he has no control over the democratic majority government. For example, in the government controlled retirement savings account and pension policies, if an individual wishes to use his earned savings to pay for the home he want to buy, he must wait until tens of millions of other citizens agrees to join with him to bring about a change in policy to make it possible. He would have to wait for very basic decisions to be made, if a set of parents in a village decide to have a school in their village where their children may get elementary education instead of going to another village 10 miles away, they may be forced to wait until whole majority voters of the city municipality under which the village comes, may decide to make an elementary school in that village. An Individual cannot decide to speculate and accumulate stocks of commodities to ascertain future profits, he cannot decide what prices he can demand from the consumers for his own products, he cannot decide to free a certain sector of production of varied levies and taxes (and subsidies) until he may not gain the approval of big chunk of voters.
If a set of intelligent voters want to restrict government monopoly over printing of fiat currency² , they will have to wait until whole populace of the country realizes the basic flaw in fiat currency. An individual by his own cannot decide what wages he may give to a worker, he cannot decide whom he should consider poor or whom he should provide voluntary charity or benevolent help as all relief funds are controlled by the majority rule government and so on. Since an individual electorate have no significant control over government bribery, corruption and frauds are common illnesses of democracies.
As people are realizing the fact that government control under democracy means collectivization of power and hence is a violation of Individual liberty and freedom of choice, that majority government robs the citizens of their power of self-governance and self-responsibility, they voluntarily become uninterested in political elections as they know that their mere voting is in no way capable of bringing about any progressive change.

Destruction of Individual Causal Role in Democracy

Democracy destroys the causal role of an individual. Instead of being the cause of his own success, well-being, and development, he becomes dependent on the majority rule, as until the majority will not agree with him, he cannot act upon his decisions and choices. The destruction of Individual causal role in his life signifies the violation of Individual freedom.
Individual freedom and his right of self-governance are the basic requirement for a definite progressive and developed system of division of labour³ . Thus, democracy robs and reduces the power of an individual to be the cause of varied economic achievements, success or failure.

Incompatibility of Democracy with Division of Labour causing Poverty

It is an established fact that the prosperity and productivity of a society hugely depends on the progressive division of labour. Collectivism in any form (feudalism, communism, dictatorship, democracy, socialism, theocracy etc) is incompatible with “division of labour” as such systems do not recognize importance of freedom⁴ , self-ownership and property rights. It destroys the individual causation and creates “forced economic inequalities”. Collectivism demands that everyone think and act as a unit and provides no space for the vast differentiation and individuation of the knowledge on which the division of labour resides and hence any collectivist society suffers lack of production, retarded process of development, poverty and wastage of human labour, it kills hard-work, honesty, genius and talent.
In a socialist bureaucratic system (like that of former USSR or China) the specialized dictators represented by “central planners” controls all the resources and means of production, as irrespective of their specialization, they lacks knowledge in compared to the knowledge pool provided by free society under division of labour, they never achieves enough rate of progress and suffers impoverishment, poverty, injustice and unhealthy conditions for the common man. In a democratic socialist system (like that of India), situations are even adverse as the specific set of specialized dictators is replaced by the ignorant, unspecialized masses representing majority rule. When such system tries to provide a systematically regulated division of labour, it results in contradicting partial planning under the head of different ministries trying to control different sets of productions and that further provides economic chaos, corruption, bribery and further partial slavery of individuals making them to suffer poverty and extreme scarcity of wealth.

Cure of the Problem

Since the fall of Soviet Union, India is gradually turning from collectivism towards principles of self-ownership, individualism and division of labour, and hence the standards of living is improving, of Indian society are also improving. As the Indian government is adopting disinvestment procedure and providing freedom for market and individuals, the proficiency of labour is increasing. The progress itself is a validating example of the fact that government interventions in market cause poverty, reduction in production and impoverishment of citizens while individual freedom, and property rights of means of production brings progress, prosperity and bettering living standards of citizens. Thus, the cure is definitely freedom of citizens establishing a free society in India, that is Limited government system, where the only purpose of government remains to safeguard individual freedom, property rights, restrict initiation of force and to provide justice, and peace by providing a democratic system controlling police and law bodies, strictly maintaining the principles of non-initiation of aggression, self-ownership and property rights, and all means of production including roads, railways, natural resources etc be privatized.
Private security and arbitrary third party justice system would further reduce the role of government only to provide security against external dangers in form of national defence, it would be further move towards anarchocapitalism⁵ establishing individual right of self governance and self-responsibility.
It is a basic fact that government monopoly in any form including limited government system represents partial slavery to some order and incurs poverty⁶ and destruction of wealth and means of production, for progress and betterment of citizens, freedom lovers advocates Anarchocapitalism⁷ rather than government limiting individual freedom.

1. The Impasse of Democracy, voting is not a solution, it is a killer
2. Fiat currency Versus Gold Standard, Privatization of Money
3. Division of Labour, Productivity and Prosperity of Labour
4. Freedom, meaning and importance
5. Defending Anarchy, Reason For Liberty
6. Population, Production and Poverty, Cure of Poverty
7. Defending Anarchy, Reason For Liberty

In the case mentioned above, If I am a customer of Reliance Defense Company, and you are a customer of Tata Defense company, our dispute would first be set for arbitration in the court of the plaintiff (I)-which means: a court of, or patronized by Reliance Defense company. If the defendant (You) is found innocent, the matter has come to an end. If you are found guilty, then the arbitration would run in the Court of Tata Defense Company. If that court too finds you guilty, you would be punished. If it finds you innocent, the arbitration would move to an appeals court. The decision of the appeals court would be respected. If a person (defendant) refuses arbitration, the arbitration would be held in the court of the plaintiff, and the decision would be binding. So, a person who didn’t commit a crime will not refuse arbitration in normal cases. If he disagrees with the decision, he can take the case to his court, or a mutually consented appeals court. It is rational to assume that if the defendant and the plaintiff are customers of different Defense Companies, these Companies together might decide the court in which the arbitration would run. The courts would try to be as honest and objective as possible, as their profits depend on the number of cases they receive for arbitration. People won’t deal with dishonest Insurance companies, or their customers, as no sane person would want to be taken advantage of. So, a dishonest Insurance company would soon find it deserted by almost all its customers. An Insurance company which patronizes poor courts too would be soon deserted by its customers.

Wouldn’t Defense Companies battle?

Battles could be ruled out for two reasons.
1) Wars are costly and would result in high Insurance premiums. Most customers would desert Insurance Companies with high premiums.
2) People won’t deal with the customers of warring defense agencies as they would lose in any case. As of it, the customers of the warring agency would be forced to patronize another Insurance company, if they want to get into contracts with other people.
A court too should be honest if they want more cases handed over to them. What if a rich person bribes the court of Insurance company? If that is the case, most people won’t use those courts and Insurance companies. Nothing like that happens in the case of Government courts. People are forced to use them, even if they don’t trust them.

Fraud under Anarchy

Fraud would be kept at minimum as Defense Companies would lose their profits if they don’t. If a defense company engages in fraud, most of its customers would desert it, as people won’t deal with the customers of such a defense company, as they don’t have a legal recourse in case of crimes.

Poor under Anarchy

It is often argued that poor will be defenseless under Anarcho-Capitalism. However, the argument completely lacks sense-For several reasons.

1 ) It is very unlikely-nearly impossible that there would be extreme poverty as of now under anarchy.

2 ) Under the present system, a rich person can easily bribe a bureaucrat or a judge and get his things done as bureaucrats and judges are not risking their own funds. A private judge is risking his own funds and profits, and he would lose his income or profits if he isn’t honest or objective. It is very unlikely that bribery is going to work.

3 ) Customers would desert courts which have a poor reputation.

4 ) Insurance companies selling defense wouldn’t patronize corrupt courts as, if they do, their customers would patronize another Insurance company. Such a court would be soon out of business. Nothing like this happens under statism.

5 ) One might argue that public courts can work with proper regulation. It will inevitably founder upon these questions-Who regulates the regulators? What is the incentive? How does such a system make profit and loss calculations? Without profit-loss calculations, how does one know whether job is being performed well or not?

6 ) As Roderick Long has pointed out, “any court that got the reputation of discriminating in favor of millionaires against poor people would also presumably have the reputation of discriminating for billionaires against millionaires. So, the millionaires would not want to deal with it all of the time.”

7 ) Under anarchy, the media won’t have to spend most of its space on politics. They would divert more of their energy to exposing corrupt institutions and extraordinary achievements of men. People won’t deal with customers of dishonest defense companies, and these customers will be forced to move to another Defense company.

8 ) A rich person who commits a crime would suffer from boycott by his clients and customers when insurance companies reject him. Such a boycott affects the rich more than the poor.

9 ) Even if a poor person can’t afford to file a case, he can sell that claim, or part of that claim to a rich person. Such a system existed in Iceland. That would make sure that eventually, all sorts of criminals are punished. One can’t commit a crime against a poor person and go unpunished. If someone murders a poor person, the person who has homesteaded the estate of that poor person can file a case and get compensation.

Do Anarchists assume a change in human nature?

No change in human nature is assumed here. We, libertarians don’t take a rosy view of human nature. We see human nature rightly, and admit all its flaws. Three things have to be pointed out
1) If you believe human nature is flawed, you have to admit that the politicians and bureaucrats chosen by these flawed creatures too would be of that sort, and there would be no excuse for state action.
2) A change in human nature is not necessary for libertarian anarchy to work.
3) People with power lust are more likely to rise to the top under statism. The state attracts all kinds of rascals.

What libertarian anarchy does is that it leads to a system in which criminal acts are hard to perform. It also punishes those who resort to such acts in a just manner. Under the present system, a judge has no financial incentive to be honest and objective. He has only a moral incentive. Under anarchy, he would have both financial and moral incentive. Ask yourself which system will deal with criminals better.

Why Anarchy?

Almost every major problem mankind faces can be traced back to the state. The state drags innocent people into war. Involuntary unemployment results when a minimum wage law is passed and labor union coercion is sanctioned. Price controls result in shortages. Protectionism leads to poverty and wars. High prices and poor quality products result when Government monopolizes certain industries. Taxation prevents capital accumulation. Credit expansion leads to inflations and bubbles. Some estimates say that there were nearly 262 million deaths caused by the Government in the twentieth century. In the light of all this, I see no reason for a person who loves humanity to support the state. It should be obvious that in any sector, monopoly is bad. How do statists get around this fact? In any monopoly, there is an incentive problem. There is no incentive to provide better service at a low cost. It is not just that. There is no way to know whether the service is provided in the best possible manner in the absence of competition.

Isn’t voluntary taxation better?

Voluntary taxation is a contradiction in terms. Taxation implies that money is collected at the muzzle of a gun. How could it be voluntary? Lets forget the definitions for a moment. Voluntary taxation is defined by minarchists as, people are not coerced to pay their taxes. People are free to pay their taxes. But this sheer aspect doesn’t make the taxation voluntary. If an area milkman forces every other milkman to stop selling milk in your neighborhood, and then says ‘you are free to buy milk from him, by your own volition’, is that really voluntary, or are you forced to buy milk from him because he has eliminated all the possible options using force. Lets say you say ‘I want to raise my own cow and make my own milk’, to which the milkman forces you to do it. Although he is allowing you to pay him voluntarily, he is forcing you to seek anybody else’s services thereby making it involuntary taxation. The problem with minarchy isn’t just that state collects its revenues using coercion. State prevents anyone from competing with it.

Why do minarchists make an exception for defense, law and police? Some minarchists believe in the Non Aggression Principle. Why don’t they apply it to the case of Security? How monstrous is it to forcefully extort money from a person maintaining the pretense of protecting him? It could be argued that these are public goods and can’t be provided privately. But, this argument was refuted several times. In the past, most of the roads and lighthouses (Public goods theorists usually point out the case of light house. Ronald Coase has pointed out the fallacy. Light house owners charge people for using the harbor) were privately owned. By 1800 there were over 60 private road companies in the United States and by 1830 they had built over 400 private “turnpikes” (highways). Out of 46 Lighthouses in England in 1820, 34 were privately owned. There was privately produced law in the ancient Ireland and medieval Iceland, for instance. And several thinkers have envisioned how libertarian anarchy would work- and it sounds perfect.

Why do I want to impose anarchy on people against it?

Some argue if people don’t want Anarcho-Capitalism, imposing it over them would be violating their freedom. If you tell a thief to not rob from your house, will you be imposing your views on him? If someone takes your money by force, gives you stale food, forbidding you from buying food from anyone else, is that right or wrong? If you tell that person to not do it, will you be imposing your views on him? Will you be violating his freedom? That precisely is what Government does. It forcefully takes money, gives poor quality defense, and forbid us from buying the service from private organizations.

Is human nature consistent with anarchy?

State is a relatively new institution. Mankind has lived hundreds of thousands of years without a state. If so, is it true that human nature is not inclined to live under a state? How come we are living under a state then? Slavery and serfdom existed for a long time. Doesn’t that mean slavery is consonant with human nature? If so, how men got out of it? Obviously, when people realized the advantages of co-operation, people shifted to the present system. When people realize the advantages of anarchy, they would move into such a system. No change in human nature is required. Blaming human nature for being flawed doesn’t make any sense. People are mostly corrupt under the present system as people respond to incentives. Under statism, men have every incentive to be corrupt. To say that anarchy won’t work as human nature is flawed is tantamount to saying that capitalism won’t work as most people are poor. A person who makes such an argument fails to understand that it is precisely the lack of Capitalism which made the people poor.

Minarchy isn’t sustainable

There is no empirical or theoretical evidence to prove that a constitutionally limited government is sustainable. Government power has increased steadily in countries like United States and Britain. Tax experts like Irwin Schiff has pointed out that according to the law and constitution of United States, taxation is illegal. He is in jail now, and his book “Federal Mafia” is banned. That’s not an aberration, but the result of a limited Government. I admit that Anarcho-Capitalism was not the dominant form of social organization for the large part of human existence. But so wasn’t democracy or a limited Government. These are recent developments. The limited Government in United States broke down after 8 decades as of a civil war-But it took 1000 years for the near Anarcho-capitalistic system to break down in Celtic Ireland, and 290 years in Iceland. Who do minarchists support democracy and a limited Government then, when it is obvious that anarchy is far more workable?

How can one support Anarcho-Capitalism when it was never practiced anywhere?

It is true that pure Anarcho-Capitalism was never put into practice anywhere. However, that can’t be an argument against anarchy. A person who invents an electric bulb doesn’t have to prove that there were electric bulbs in the past. A new invention, innovation or theory is something which crushes all existing conceptions. It is unprecedented. I think this should be obvious and it makes no sense to argue against it.

Empirical Evidence for Anarcho Capitalism

Anarcho capitalism was not practiced in most parts of the world for most of the human history. However, there were societies which were really close to Anarcho-Capitalism. There was the law merchant in the past, as Bruce Benson has pointed out. Such a system has worked in Iceland, Celtic Ireland, American old west, British colonies in North America, Rhode Island, Albemarle, and Pennsylvania. There is a lot of historical evidence to prove that these societies worked really well and had sophisticated legal codes. Crime rates were strikingly low. In Celtic Ireland, it lasted for nearly thousand years. It was a civilized, advanced society as there was no Government administered justice. Even when these societies collapsed, it was not due to extreme anarchy, but due to contradictions in the anarchistic structure. Iceland is a classic example, where chieftains were granted more power, and religious issues led to a civil war.

Further Empirical Evidence: Present day Somalia

Somalia hadn’t a central Government since 1991. Yet, it has an efficient telephone system and mobile phone network, which is far better than that of its neighboring countries. The same is true of the electricity system. The situation is Somalia is much more peaceful than it was under the Government, and hence it is easier to do business there. There is a clan system which enforces contracts, though there isn’t a monopoly Government to enforce law. There was an improvement in 14 out of 18 development indicators after the collapse of the state in Somalia. One indicator was the same, and the other one, GDP, was blown up by the Government during its rule. Peter Leeson points out that “Under statelessness life expectancy in Somalia has grown, access to health facilities has increased, infant mortality has dropped, civil liberties have expanded, and extreme poverty has plummeted. In many parts of the country even security has improved. In these areas citizens are safer than they’ve been in three decades.” Even World Bank Economists like Tatiana Nenova and Tim Harford admit that things are getting better in Somalia. These Economists aren’t anarchists by any stretch of imagination.

Egalitarianism against Causality

Causality is the very base of success or failure thus, in a free society; economic equality emerges as the outcome of different individuals performing different degrees of economic causation. Opposition and abolition of economic inequality thus, is obviously against all connections between an individual’s hard work and the result of his efforts, it is abolition of causality in incurring of income by the individual.¹
In a group of ten people determined to share equally all the income earned by them if one of the person works harder or innovates a way to increase total earning by X amount, his increase in personal earning will merely be 1-tenth of X. If the group consists of 100 people, his increase will be 1-hundreth of X, and if the group is as big as 1 billion, his total increase in earning will be 1 billionth of X. Obviously, it would be such an insignificant amount that he would never get any incentive of all his hard work. It is also to be noted that in such egalitarian society, no significant connection can exist between what an individual produce and what he or any other particular individual receives. That is, even though the total amount of group would be increased by X amount, the overall increase in each individual’s income would be insignificant. Thus, egalitarianism destroys ability of many individuals to achieve progress and development that are of any significance to anyone.

Egalitarianism against Progress

Any compulsion on an individual to improve his own family’s life only insofar as he improves the life and standard of everyone else in the society or country make all of the society or country impoverished. Egalitarianism would certainly provide incentives to not to do any work or improvement as after doing all hard work, an individual will get a meagre increase of 1 billionth in his personal income, if he won’t do any work, his meagre reduction in personal income would be 1 billionth, again an insignificant figure. Thus, increasing one’s production would not be of any significant benefit for anyone and decreasing the work would not be of any significant loss to anyone. Hence, everyone would have an incentive to do nothing.
Equality of income obviously is against freedom² as it is “forced labour” because it eliminates the earning of increment in income as an incentive. If people are to work without the incentives of profits, the only way to make them work is using force. Other than income or profits, there are positive incentives for work, such as the enjoyment of the work itself. Yet, as a matter of fact, most of the jobs are such where the incentive of enjoyment of doing work is closely related with the incentive of income. No one makes bricks, sweeps streets, clears drainage system, makes shoes, mines coal or even work as a CEO of a company for the enjoyment of work without considering the significance of income. Even in artistic works like painting, singing or writing, the pleasure of doing work only would not be sufficient to induce amount and quality of work that can be induced in free-society providing income incentives for doing work.

Egalitarianism against Innovations and entrepreneurship

There can be exceptional cases of individuals able to achieve significant results in the improvement of whole society. A great scientist, innovator or businessperson can increase the production and incur the development so greatly that whole country, in fact whole world can perceive the benefits of his success. Yet, such exceptions do not provide any possibility for the practicability of egalitarianism. The scientist achieves the intellectual satisfaction of making his discoveries and that is the highest achievement for him, but inventors do require the prospects of sufficient material gains in absence of which, they will not devote the time and effort and would not go through the expenses necessary for making an invention, discovery or innovation possible. Often entrepreneurs actually implement the works of scientists and innovators to actually cause the benefit of masses. Businessmen invokes scientists and inventors to work and invent by investing in the research works and promising incentives, they search out and perfect the inventions.
Entrepreneurs will not be investing in any research if there will not be incentives to make a fortune on behalf of their work and investment, furthermore, if the businesspersons were not allowed to accumulate wealth, they would hardly be able to invest anything for researches, development and inventions. Thus, the basic of great minds actually being able to work and produce any significant amount of development in common persons life is very much dependent on the presence of economic inequality, in absence of which, that is in an egalitarian society, the innovations and inventions would be extremely difficult or rare.

Egalitarianism resulting in Forced Economic Inequality

Often as the failure of bringing egalitarian ideal in practice, socialist regimes results in bringing forced economic inequalities within the society, which is obviously inimical to progress and economic production. Such inequalities results in because of governmental actions such as taxation, subsidies, licensing system, special privileges, quotas and reservations etc. Government’s establishment of such inequalities results in depriving the producers of a significant part of their incentives to work and produce, furthermore, actions like quotas, reservations and licensing system obviously violates the freedom of individuals to produce, hence reduces the production significantly bringing in poverty and chaos. Other governmental acts like corporate taxes etc. appropriates the income of producers and thereby decreases their capacity to invest in production and developments. Such arbitrary economic inequality produced thus deprives the producers of possibility to produce anything by means of monopolistic restrictions against their entry in various streams of production. On the other hand, by giving special privileges, licenses, quotas and reservations to others, government rewards non-producers or less-efficient producers. All of this results in economic chaos. Same things happen in feudalistic systems. The forced economic inequality based on government coercion results in economic destruction.

Free Economic Inequality versus Forced Economic Inequality

Economic inequality based on freedom of individuals to exploit their own intelligence and talent is significantly less visible than the economic inequality that results because of forced planning or government coercion. This is because of the fact that economic inequality based on economic freedom serves to raise the standard of living of all, As a result, in a free society, even the poorest individuals enjoys and consumes substantially increasing quantity of wealth. On the other hand, in feudalistic or socialist regimes, as the very basic power of production and development is reduced to significant degrees, the width of economic inequality becomes too much visible with the poorest suffering starvations and penury while the officials, bureaucrats and politicians enjoying material wealth.
Before 1991, when India accepted the path of liberalization, Indian society was suffering with extreme forced economic inequalities where the standard of living of common man was substantially low graded. With the induction of liberalization movement, not only the production and development of Indian society increased, but also the standard of living of common man also improved significantly. This exactly was the result of loosening the force economic inequality trends and letting the inequalities develop freely, which obviously are less visible.
In further freer societies such as United States, an economic inequality that is based on economic freedom and capitalism are further less visible. The fact is greater freedom results in greater prosperity of whole society and less extreme width of economic inequalities.

1. An explanation of this phenomenal truth is here “The story of Socialism, Public Welfare, and Brain Drain”
2. Meaning of Freedom

Division of Labour and Benefits of Talent

A division of labour system provides enough space and incentive for the individuals occupied in different sets of knowledge of specialization and sub-specializations to devote all their human intellect and efforts to not only use the current knowledge but also to discover, invent and innovate new ways and knowledge to increase production. Division of labour enables a society to use the benefits of geniuses to the maximum extent, while it provides maximum incentive for the genius to use his intellect in development, innovations and entrepreneurship. In a collectivist society, this is not possible, as the genius in such societies, along with other common individuals, must devote most of his time in attaining self-sufficiency first. In India, some decades ago and even at present, division of labour is not definitely present; most of the young students devote their time to achieve degrees from governmental education system in order to gain some or any sort of job in government or private service sector. Hardly anyone devotes his intellect and abilities to any set of specialization of knowledge based on his interest and abilities. Hardly anyone think of devoting his time in research works and furthering knowledge, hence, Indian society lacks innovators. That doesn’t mean that Indian society is or was incompetent of innovations and inventions in present or past, the lack of it only represents the partial slavery imposed by the collectivist system and socialist government under which, the genius amongst the collective is wasted upon. Even if some genius struggle such situation and still manages to radiate his intellect, he never gains the full essence of his own efforts and hence is lost due to the lack of incentives.
In a free society with division of labor, geniuses are able to devote their time to science, invention, organization and direction of productive activity of others and thus instead of being lost in obscurity, they becomes Einsteins, Darwins, Brails and Fords. In a free society not only the genius but everyone is enabled to concentrate on the kind of work he is best suited and that promotes his self-interest based on his intellectual capacity and body endowments. Hence, such a society helps the individuals with rare talents in music, arts, sports, medicines, engineering, etc. In absence of division of labour, along with productive geniuses, such people with specific talents to be athletes, or painters, writers, philosophers, actors, sculptors, musicians, surgeons, engineers etc often lacks enough opportunities and are forced either to forget about their specific interests and talents, or to pursue their talents and suffer poverty and scarcity of opportunities. Since division of labour provides enough opportunities and complete freedom for the innovators, inventors, developers and directors of labour, such a free society necessarily provides enough space for machinery usage and modernization of process of production, also, it provides complete freedom for the genius and common producers to use the resources with utmost efficiencies hence increase the wealth production manifolds. Division of labour increases the efficiency of learning process in connection with production by making education and communication and all activities concerned with transmission, storage and development of knowledge into specializations. In a free society with individual sovereignty, individual may remain unemployed only because of his own choice; otherwise, market provides enough opportunities for the individual to engage in any productive process or service to earn self-dependency. Such few, who by nature lacks any potential to attain self-dependence (naturally disabled or victims of accidents etc) can easily attain benevolent support from the free individuals of the society in attaining self-dependency. As a free-society essentially represents most beneficial conditions for wealth production under division of labour, individuals in such society prospers with ease and further their life in the pursuit of their happiness.

Division of labour and consistency with freedom

Private ownership of the means of wealth production is the fundamental pre-condition of the pursuit of self-interest. Division of labour essentially depends on private ownership of means of production, which is based on the nature of gains of free division of labour. The most important ones are the multiplication and transmission of knowledge and benefits of the talented. The rational idea of private property ownership comes out from the fact that individuals possess unique independent minds, which permits and necessitates them to have separate independent knowledge and to make independent judgements, decision, and act on them with his separate independent calibre. In a free society every individual gains from the fact that other people possess knowledge that he does not and an intelligence separate and often much greater than his own. To maintain maximum benefits, it is necessary that others be able to acquire and apply their knowledge in production on their own initiative with perfect decision making freedom, without having his approval, orders, permissions or license, as he would be certainly unable to give in any rational way as he necessary lacks the knowledge and intelligence that would be required to make such decisions. To act, work and produce, people must possess material means of actions and production, In order for them to act independently from one another, they must possess wealth independently from one another that is there must be private property, including private ownership of natural resources and other means of production. Private property rights are essential condition for proficient production, prosperity and more importantly individual freedom as it provides maximum space for efficient usage of resources in virtue of producing wealth hence eradicating poverty of masses.
A libertarian society provides property rights in order to provide peaceful, justified, conflict-free and productive usage of resources. Unlike human body, external bodies and natural resources are not directly controlled by one’s will and initially they are unowned. In order to provide a rational, conflict-free rule of assignment of property rights, a libertarian society prefers the Lockean law of homestead that provides the relevant objective link of appropriation that is the transformation and using of the previously unowned resource. This approach provides the relevant objective motive of justice as the first user of a previously unowned resource naturally have a better claim than the second or consequent users. This is pertinent with independence of Individuals as the first owner of the resource can definitely let others to possess the resource for production at some rent or dealing for a period, or he may completely sell-off his property rights to other. The relevant question in such situations is not that who possess the resource; rather it is who the owner of the resource is. As explained earlier, a natural resource is not wealth until a man uses his talent and labour to make the resource productive and useful for the men, as the first user transformed that unowned resource into wealth making it possible to be used for the benefits of men, he naturally is the reasonable owner of the resource and deserves complete property rights over it. Obviously all the consequent wealth produced by the help of that resource is also inadvertently the rightful property (in fact, the results of his labour and intellect) and he holds complete right over it. In case, he suffers lack of talent to use the resource to maximum beneficial extent, he obviously gains the chance to sell-off his property right freely to other individual interested and able in using that resource proficiently. Such a system essentially provides justice and peace as it avoids any specific conflict, it is based on reason as the first user of the resource definitely posses a far important link with the resource than the later users. Once the first comer sells his property right to others, he naturally abolishes any objective link with that resource, wealth or property. Self-ownership and property rights essentially provide complete freedom for individuals to possess and accumulate wealth and further produce it freely and hence abolishes the common norms of partially slavery under government in the form of compulsory taxation, fiat currency, licensing system, censors, bans and criminalization of acts that in no way involves any aggression of a man by other.

“So long as men desire to live together, no man may initiate — do you hear me? No man may start — the use of physical force against others.”

Freedom is based on Non-Initiation of Aggression axiom that no man or group of men may aggress against a person or the property of any person. A human body is the natural border of the individual thus; using the body of another without his or her consent is aggression against him and hence is impermissible. This definitely confirms the idea of property rights in one’s body, that is, each person is the owner of his body; he has the right to control his body, to decide whether or not he consumes alcohol or narcotics, use his body for prostitution⁴, joins an army, becomes a farmer, decide to be a mother or to abort a child and so on. One should understand that wealth is not necessarily property possessing market value, for example, various legal rights and licenses provided by government, like liquor license, patents, stocks, bonds, copyrights etc⁵, do possess market value and are property, but they are not wealth, rather they restricts the production of wealth. Similarly, in a society allowing human slavery, the number of slaves does indicate property, but slaves are not wealth. Such property, which is not wealth, indeed destroys the wealth; slavery in any form thus, destroys the wealth, as it provides no incentive for production.
Thus, human are property but they are not wealth; also, human labour is the most essential requirement for production of wealth. Hence, for unrestricted production of wealth and hence prosperity, it is a necessary condition that all individuals remain free owning themselves, because only than they will gain the full incentives of their expenditure of intellect and labour in the production of wealth and material prosperity.
The societies that do not consider man free enough to have complete property rights on his body restricts his freedom to use and decide for his body by means of partial slavery. Such societies do maintain that each person has some “limited rights” to his own body, yet not complete rights. Society or government acting as such society’s agent- has some right in a citizen’s body too, in other words, the government owns the citizen in some way and the citizen is partially a slave to the government. This partial slavery is implicit in government laws prohibiting individual freedoms like censors and bans, state prohibitions or illegalization and state actions like taxation, conscription, fines, interest rates and price control etc confirms the nature of partial slavery imposed by the government on common citizens.
A libertarian believes in complete self-ownership, hence complete self-governance and thus self-responsibility, on the other hand, non-libertarians aka statists, socialists, communists and collectivists of all streams supports and advocate partial or complete slavery.
As it is incontestable that slavery in any form (complete or partial) definitely restricts the production of wealth, hence imposes scarcity, poverty and suffering on human, it is quite clear that the more a society is free, the more it is prosperous, progressive, peaceful and secured. Thus, to be prosperous and progressive, a society essentially needs to provide the citizens full freedom and that is possible only by means of asserting complete self-ownership to the individual.
Self-ownership and consistency with freedom
Since human labor, natural resources and wealth all are scarce, it is extremely essential for any political system to assign ownership rights on humans and external resources. Socialism and other collective systems assign limited ownership rights on individuals while they assign whole property rights to the state and government. As in India, individuals are partial slaves to the government and there are no specific property rights for the individuals.
A libertarian society on the other hand, strictly favours self-ownership to the individual completely. In order to avoid conflicts, property rights should be assigned to that seeker amongst others who provides the objective of ownership and a definite link between the owner and the subject owned. In case of human body, it is direct link between the body and the person, the objective of self-ownership is definitely freedom to pursue self-interest and happiness, thus the principle of self-ownership is thoroughly rational. No outsider (not even government) can deny this specific link between the individual and his body as the outsider itself expects the same right of sovereignty for itself. Thus self-ownership essentially avoids any conflict and hence it provides the best and most proficient way to attain justice, peace, prosperity and hence civilization. The principle of self-ownership hence, is essentially consistent with freedom as no one except the individual himself can have right over his body and hence he is thoroughly responsible for his body and all his acts, if he initiates aggression against the free domain of other individual by means of initiation of violence such as assault, sexual attack, fraud, killing etc, he becomes the criminal and is a subject of appropriate punishment.

1. Falling Prices is the cure of Deflation
2. Cause of Inflation: Story of Money and what causes Inflation
3. Fiat Money Versus Gold Standard, Privatization of Currency!
4. Prostitution: Legal or Illegal
5. Copyrights: Legal or Illegal

I understand that not all Libertarians reject IP rights, but this article is not another debate about the rationality and morality of copyrights and patents because we have had those debates in past (For copyrights, and Against copyrights arguments).

Speaking for myself I do not stand for the Intellectual Property rights, because I believe that acquiring the so called “intellectual property” does not devoid a person of his labor. The only thing that person is devoid of is opportunity to earn the money he could have made using the government awarded artificial monopoly on the information. Information should be free to share and without any kind of physical coercion or threat of coercion. This is why Open Source movement represents an important front of Libertarianism. Why would companies like Microsoft, RIAA, MPAA, Penguin Publishers, Barnes and Nobles support an Libertarian society when their business is clearly enabled by the Government’s coercion. Currently software, music, and books piracy is the most successful civil disobedience movement against the government’s aggression on your property rights. It has nothing against the creators of the content which is shared against it, but it is a very successful backlash from the market to demonstrate that copyright as a model is a complete failure.

Open Source

Coming to the issue of Open Source, it is a way by which market can actually demonstrate that these information related services can be provided to the people without requiring the institutionalized aggression of the government. The seeming success of Open Source software movements which have pushed the successful Operating Systems such as Linux, Web Browsers and Email clients such as Firefox and Thunderbird, and a Web blogging platform like WordPress on which this website currently runs is a clear demonstration of success of Open Source movement.

Skip to ‘The Linux Paradox’ if you know what Open Source means
Open Source is a belief that a software should be first of all be free(as in freedom and not as in free beer) to be modified upon, to be rebuilt upon, and to be distributed. Open Source in fact literally is a very restrictive term applicable to softwares because they have a source code from which a binary code can be generated which can be distributed to the end user, and opening the source code means providing the source code of the software too, to the end user and giving him full freedom to modify it in any way, rebuilt his own software and distribute it freely without any restrictions. But over the time Open Source movement also comprises attempts to allow a book/music/song/lyrics/images/movies to be distributed freely and modified upon. Technically this branch of open source movement is called “Creative Commons” movement, under which anything is free to be modified, edited, used for commercial purposes or non commercial purposes(or a combination of these things).

To make any software into open source currently you must claim a copyright on the source code and then release it under many of the numerous open source compatible licenses(most famous being GPL), and distribute its source code with the binaries of the software.

The Linux Paradox

Now lets talk the real stuff. I am going to mainly focus on Linux but these things are equally applicable to any open source software. I am coining this term “Linux Paradox”, to imply the paradox which currently Linux faces in terms of its development and its adaptability. Any Open Source software heavily relies upon the industry acceptance, that is if everybody in the industry is using the open source software, then there is no way a proprietary software can beat it, because no single individual in the industry has to contribute it all in its development. For example if a fully developed software like Linux was to be developed from scratch by a company then it would take millions(even billions) of dollars in its development. But since Linux has the labor of numerous programmers and companies, there is almost no cost to build something similar with additional features from scratch.

When Amazon had to develop an OS for their ebook reading device Amazon Kindle, they did not have to write an OS from scratch purely for that purpose, rather they just used Linux kernel 2.6 and build their own features around it or modifying into it. Similarly when Adobe had to launch an IDE(Integrated Development Environment), a programming editor for their new Flex technology they didn’t have to develop something from scratch rather they just made a plugin for an already famous open source IDE called Eclipse(although its a shame that they made Adobe Flex Builder closed source).

It becomes difficult to beat Open Source software when it has the same starting point as any other proprietary softwares, but when it comes beating an already established industry accepted software like Microsoft Windows, its penetration into desktops is about 1%. Most of the people who despite of having the technical caliber to deal with any issues arising with desktop Linux, or who might benefit more by using Linux do not use Linux because of many applications or device supports they might need which they can only get from Windows.

Since the market acceptance of Linux is really less, most application developers and device manufacturers do not bother supporting Linux, and since they don’t support Linux, the users don’t use Linux thereby market acceptance never rises.

This is my friends a paradox. The paradox is not only there for Linux but for any Libertarian movement where you wanna remove the government’s aggression. The paradox being, that a Libertarian movement which an actually benefit more number of people, just does not get acceptance because the general public is currently being benefited from the government’s aggression.

Even if you start your own private police force tomorrow serving only the people who want to take your services voluntarily, you will not be able to get many clients, because since most of the people still go to the state police, even the most avid supporters will have to go the state police. One very good example of “Linux Paradox” will be the Free State Project in the coming time.

The Communists

In this issue I don’t really have much against the communists, except that they have hijacked the Open Source movement and turned it into a non-profit-non-monetary movement. By communists I don’t really mean the believers of worker’s paradise as proposed by Karl Marx, but it represents the people who believe that Open Source software movement means there should not be any demand or requirement of money from the part of the programmer. In simple words that if any programmer who works on an Open Source movement talks about money, he is immediately shunned. It is a common practice in the Open Source world that the only way you can actually contribute to an open source software is by actually coding the software(or provide bug reports, usage statistics etc etc). Anyone who donates money must do is if they are using the software for commercial purposes and making money off it.
Because of this culture, most of the non-programmers out there feel like they cannot do anything to actually contribute to the Open Source software. If they really like a software, they must learn to program, then understand the code and then contribute to it.
If you like linux you can jump in and program on it. If you cannot spare the time to program(or do not have the required programming skills) you can take part in reporting the bugs, providing support to other users etc etc. If you cannot even do that, then you can just stand by and just use the software and promote it as much as possible. Because of this most large commercial software companies don’t even look at Linux because they know that there belongs the group of the people who are least inclined to pay for the software.

The Libertarians

The Libertarians here are referred as the people who actually understand the meaning of freedom, non-aggression and have right economics principles. The Libertarian definition of an Open Source is, any software which is free from the use of physical coercion period. In simple words, if a software is developed without the help of any physical aggression(that is without using any copyrights, patents, anti-trust lawsuits etc etc) and if it does not use any form of aggression to distribute or to make money then it is a legitimate form of Libertarian Open source software. Of course this excludes taking copyright for the purpose of preventing government aggression against itself, and then releasing it as open source.(That is you may distribute a software under no copyright, but then that means if someone else claims copyright on it, they can prevent further distribution of that software, that is why the initial copyright is required).

The Libertarian concept of Open Source software is division of labor. That is, not everybody is a programmer to work on the every software they actually use, just like not everyone is a farmer, barber, baker, yet they wanna use the services of a farmer, barber, and a baker. If you like a piece of software, its true that you can use it without paying anyone anything, but if you wanna contribute your labor into the software, you can do that by donating money(or in other words by buying the labor of the core programmer on that Open Source software).

Take for example if you like a piece of open source software, and you wanna work on it, or contribute to it, but since you are not a programmer yourself, what you can do is donate the amount of money you make in the number of hours you wanted to donate. For example if you are a wheat farmer and you earn $25 per hour, and you wanna contribute 5 hours worth of labor to that software then you can give $125 to the open source software, and it will be used to buy the labor of a more apt programmer.

The best pieces of Open source software are managed by an individual or a limited group of people working full time, than a 1000 people working 2 hours a week. On the top of that if this Open Source development is done by hiring programmers to work full time from a country which has a cheaper labor costs like India or Philippines then your labor can be even more usefully converted in programming man hours.

The best example of this is an Open Source Software called Ardour (a digital audio workstation) which is an amazing piece of software for working on creating sounds and music. There is a full time programmer working on it, and his salary is about $54K per year($4500 per month), and although you can take part in the programming, the whole project is best dealt by that individual, so he invites donations from the users on a monthly basis. About 267 people have already committed to give about $2150 on a monthly basis and as of today(30th of May) he has met 95% of his monthly goal which is pretty good.

If this model can actually be copied by other Open Source softwares this could be really a great boost to non-properietary software models.

Solution

Take for example if you wanna give 2 hours every week working on your favorite open source software application. Then you should put down that time(say the last two hours of friday, i.e. your last weekday), and you put on a button like this:
Working for Open Source(click on it to buy it, the proceeds go towards the running of this website),
and you work your same job, except the amount of hours you put in your job wearing that badge you give earnings from that time to the lead programmer of the open source project you wanted to work on.

If you are an insurance salesman, it cannot be expected that you program for the Operating System you use, but at the same time the proprietary software developers make you pay for the software using coercion irrespectively. Because of that the proprietary software will always have an edge on its competing open source software. But by a clear understanding of division of labor the Open Source movement can benefit a lot.

Those who do not wanna watch it, its an investigative report on Chennai private colleges where Taliban-style rules were enforced on the students. There is so much segregation among guys and girls in those colleges that Americans are going to be reminded of the Jim Crow laws era when blacks and whites were made to attend school separately.

This did not come to me as news, I had friends from those universities who told me about these things years ago. I went to a much more liberal private college so all those things came as a big shock to me. I was told that if a guy was found talking to a girl, he was fined(not always through money, but through social service etc etc).

Contrary to the natural reaction(which would be appalling at the horror of these policies), my topic is different. Considering the fact that all the colleges covered were Deemed Universities(they don’t receive any funding from the government, but only have accreditation from the government regarding their course work), that is they are private colleges, it begs the question, would free market serve Taliban and enforce Talibani rules if its participants demanded things that way? Would salons refuse to cut beards? Would private roads refuse to allow cars with female drivers in them? Would a private pond owner refuse to allow Buddhists to drink water from their pond?

The answer to all these questions is a shocking YES. The truth is, for all theoretical purposes, it is clearly possible that the Market would serve those things. There can be salons which refuse to shave men, private roads where women are not allowed to drive, and ponds which do not serve Buddhists, blacks, or the lower caste people. Just like in Chennai Deemed universities do not allow their boys and girls to mix socially.

But to understand why it is so, we must first ask the question, are any of these an act of aggression against anybody’s private property rights? Second question is, if it is not an act of aggression against private property rights of any individual, is it any kind of moral violation of an individual’s right to equality(if not right against his liberty). The answer to the first question is clear, when a salon refuses to employ its employees and its property to be used in a manner they don’t deem fit, when a private road does not deem fit to allow a certain type of individuals to use their property, when a pond owner does not allow the people of a certain religion, race or caste to use his property, none of these actions are a violation of anybody’s private property rights. In fact the whole point of “property” is to restrict non-owners from using the object against the wishes of the owner.

If I can prevent you from entering my house without actually violating your rights in any manner, how come by not allowing you(a black guy) in my saloon a violation of your rights of any kind.

Similarly when the Chennai private college owners refuse to allow their male and female students to mingle with each other, its their private property rights to enforce any laws they deem fit. If the parents do not think that their kids should be brought under this rule they are free to take their kids out and put in a more liberal college. The only place where this kind of rules would be private property rights violations if parents were forced to pay for these colleges through taxation and they had no choice.

In addition to that, the college cannot beat the students, or physically punish the student in any form for any kind of non-aggressive violation, because the body of the student is his property, irrespective of where it is located. Colleges have full rights to fail such a student or kick him out from the college for violation of their rules.

Second question which I asked earlier whether it is some sort of moralistic violation of an individual’s right to equality, well the answer is, that there is no such thing as universal “right to equality”. I might be a barber who promises right to equality to all my customers, but that does not mean everybody must be obliged to do the same in a free society. A white supremacist should be equally free to serve only white customers.

In a liberal(and free) society there will be standardized label adopted by the companies, claiming to be “equal treatment business establishment”(that is they serve all customers equally), and liberal minded customers would flock to businesses bearing such labels. Just like there will be “Whites Only” labeled restaurants who would shoot in their foot by not serving all the non-white customers, and white liberal customers.

What is the Market’s nature against such discriminatory institutions?

Market forces clearly work against the discriminatory institutions. The road owner refusing to allow women to drive through his road is directing all that traffic to other road owners. Since private roads will operate on subscription basis, families with women drivers will have even their male drivers using the non-discriminatory road networks, clearly damaging the male-drivers only road owner.

Similarly a college institution which pops into Chennai which puts no such Talibani restrictions on their students will attract all sorts of liberal students. The conservative schools must find other ways to actually attract the market. For example in America private catholic schools are more desirable even among the non-Catholics because of their performances. Also if you are a liberal, there is no more liberal school than the public schools in America. So all the Market demand for a Liberal school is crunched in by the public schools, therefore most of the good private schools in America are run by conservative Catholics.

Conclusion

If a newspaper editor refuses to publish your opinions, it is not a violation of your constitutional “freedom of speech” or “first amendment” rights. There is no right to equality on private property, because guaranteeing a right to equality means violating the right to liberty. Only one of these can be upheld at a time.

The market serves its participants. If there are enough number of irrational individuals who wanna follow their own irrational way of life, the market will serve them without prejudice. It may be an issue of rationality vs irrationality, but it is not an issue of Libertarianism.

About the above mentioned Chennai colleges, they will have more to worry about in the coming years when they will realize that Gay and Lesbian rights movement get huge support from their colleges.