In a free-society with individuals having complete self-ownership, (Capitalist society) the production of wealth vitally depends on division of labor, a system of production in which all the labor required is broken down into separate, distinct occupations. Obviously, each individual is free and self-responsible enough to decide at his own to what occupation suits him well and serves his self-interests in most proficient way. A society of free self-governing individuals essentially depends on each individual’s self-interest and his ability to exploit his own talent and efforts for fulfilling his needs, desires and self-interests and that makes rational-selfishness as the virtue of the free individual. Division of labor increases the amount of knowledge used in production in ratio to the number of specializations and sub-specializations involved in the process of production. Auto producers have different body of knowledge than that of petroleum, refinery producers, wheat producers have different set of knowledge from both of the previous, and further they have different set of knowledge than the farmers engaged in producing other foodstuffs, vegetable growers, or dairy farmers.
In a non-division of labour system like that of socialist system or the collectivist systems, self-sufficiency becomes the central motive of individuals as they acts as collectivist and self-interest is forgotten. The total capacity of society to incur and further develop knowledge decreases abruptly as all individuals engage in acquiring self-sufficiency by means of adopting and following the common set of wealth production.

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.

The term Human Resources gains its roots from the fact that human labour is the most necessary pre-condition for the production of Wealth. All such goods, which, man needs to produce for his well-being, prosperity and progress and as a thinking being he expend his rational faculty and physical labour or effort to produce them, are economic goods and all economic goods are wealth.
Naturally occurring goods such as air, sunlight, rainfall and wind are also material goods coming to us automatically, they do not need human labour or his thinking capacity to occur hence such material goods are known as free goods.
The land and natural resources are also wealth insofar as man has made them accessible and useable. An unowned barren piece of land is obviously not wealth until a person possesses it, work on it and transform it from barren land to a fertile, productive useable land. Obviously, it needs human labour and his intellect to turn that barren piece of land to a productive piece of wealth.
Wealth and Money
Wealth is not money, nor is it synonymous of monetary value. Money is the means of exchange of wealth and services. More wealth created in the form of commodities like sugar food-stuffs, clothing, automobiles etc without any increase in the supply of money is essentially more wealth, but no increase in the total monetary value, thus it results in lower prices or deflation¹. Similarly, more money can exist without increase in wealth that happens almost everyday in the system of fiat currency, where the supply of money is decided by the wishes of government, the result of such fraudulent acts is increase in commodity prices an hence inflation². Fiat currency is fraud, as the common individual never gets equilibrium between the total wealth produced and total monetary value present. Further frauds are the terms like GDP, or National Income etc as they indicates the amount of money and has no connection with the wealth accumulated or goods produced. Fraud is essentially a form of initiation of physical force; any such government controlled fiat currency is essentially depriving the common person of the freedom he deserves. Yet, money is an essential commodity of a free-society as it helps in provision of free exchange and mutual dealings between individuals, to apply impartiality and better co-relation between wealth and money, 100% gold standardized currency³ should be used and monopoly of government on supply of currency and gold should be eliminated.
Self-ownership and Wealth
A free society providing sovereignty to every individual is essentially based on the principle of non-initiation of violence, as Ayn Rand said,

“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 [↩]

Like all of the other major industrialized countries, India also have a Universal Health Care System¹ run by the state and central government. The governmental hospitals provide health care to the masses at the tax-payer expense. Most important drugs are often provided free of charge. Obviously, on papers, nothing can seem any better than the universalized health care system. Universal Health Care system is the proposed health care facility for all the eligible residents of a political region, and the costs of the treatment and care are borne by the government funded program, that is by the tax-payers money.
Somehow, government establishes the idea that the health care is a sort of fundamental right for the citizens and it is governmental duty of the system to provide health care facilities; obviously, the tax-payers need to pay for that duty.
In 1981, there were approximately four medical practitioners per 10,000 citizens, in late 80′s that number fell to 3 medical practitioners per 10,000 citizens. One can assume that as a reflex of population increase. In late 90′s there were approximately 10 hospital beds per 10,000 individuals.
The abysmal data further deteriorates when one look at the geographical distribution of medical facilities and hospitals. Uttar Pradesh, with a 1991 population of more than 139 million, had 735 hospitals as of 1990, while Kerala, with a 1991 population of 29 million occupying an area only one-seventh the size of Uttar Pradesh, had 2053 hospitals. The data suffices the evidences of failure of the government planning of health care system.
Yet, it would be wrong to criticize or blame the government for the failure because it is not the failure of government itself; rather it is the failure of the corrupt idea that health care is some sort of fundamental right. It is the failure of our own perception that there is a need of a governing body to regulate our most personal orders of life.
Here is a proposal for improvement.
>The major problem of Indian Health Care System is the terribly low number of medical practitioners’ available for the citizens.
In order to improve and increase the number of available medical experts we need to eliminate all licensing requirements for medical schools, hospitals, pharmacies, and medical doctors and other health-care personnel, that is, we need to industrialize the health care sector. There is a huge demand for medical professionals, yet Indian government is not able to provide them, the only reason is the governmental regulations. Once such regulations are removes or eased out, their supply would almost instantly increase, prices would fall, and a greater variety of health-care services would appear on the market.
One may ask that without any governmental regulating body, how will it be possible to discriminate between an eligible and efficient medical practitioner and a “Neem Hakim”?
The solution is within the market premises; competing voluntary endorsement agencies would take place of the compulsory government licensing. Obviously, these endorsement or accreditation agencies would be run by the same social organizations and NGO’s that keep promoting the causes of citizens and society welfare.
Why would a medical college or hospital look for any such accreditation or certification from a NGO?
The health care providers will look for such accreditation if they believe that such recognition would enhance their own reputation, and that their consumers care about reputation, and are willing to pay for it.
Furthermore, as there won’t be illusion in the consumers mind that there is any thing like “national standard” of health care, they would be more cautious, will increase their search costs for better facilities and make more discriminating health-care choices, and that trend would further the need of the health-care providers to have some certification from some reputed NGO to bank on that.
Won’t the Health-Care Providers bribe the Competitive Endorsement Agencies and corrupt the market?
Governmental licensing system is already corrupt, the only problem is, there is no other way out to get rid of the corruption. In a free market, once a health-care provider commits a mistake, it would loose its market. In addition, the certification provider agency will also loose its reputation and credentials to provide any further endorsement.
> The other major problem of the Indian health care system is the huge prices of medicines and medical devices. Would the free market be able to cater all those costs? Will the medicines be further costly due to the lack of governmental subsidies?
Governmental subsidies are not the solution for the high costs of medicines and medical facilities. The solution is to eliminate all governmental restrictions on the production and sales of pharmaceutical products and medical instruments that currently hinders innovations and increases costs.
In absence of governmental interference and restrictions, costs and prices would fall and a wider spectrum of better products would reach the consumers faster.
The free market would force the health care providers and the consumers to act in accordance with their own risk assessment. The competitive drugs and medical instruments manufacturers and sellers, in order to safeguard themselves against product liability cases and also to increase their customer belt, would provide increasingly better product descriptions and guarantees.
>The other important issue in the Indian health care market is the presence of alternative health care facilities such as Ayurveda and Unani herbal medicinal practices. Should government restrict or ban someone like Baba Ramdev or private institutes like Patanjali Ayurvedic Hospital services? Should government devote further more resources and tax-payers money to scientifically verify the validity of Ayurveda and Unani medical practices?
In reality, governmental interference always causes deterioration, corruption and wastage.² The market itself provides checks for any such stream of medical practices. Any such institute that stands on its own credentials and the reputation it gains within the consumers’ belt itself remains enough self-cautious and answerable. The free market would obviously promote the alternative health care systems freely to innovate and invigorate.
>Another issue in the urban Indian health care sector is the rising prices of the medical insurances. The solution is the deregulation of health-insurance industry.
Insurance agencies can provide insurance against the events over whose outcome the insured has no control. Since a person’s health or lack of it lies within his own hands, many of the health risks are basically uninsurable. Furthermore, for the insurable health risks also, better pooling system free of governmental restrictions should be provided. Because the current system (which obviously is a huge failure) is only partly concerned with insurance, rather it is more concerned with the corrupt idea of Universal free medical facilities for all citizens, it restricts the right of the insurer to refuse or to exclude any individual risk as uninsurable, and the industry cannot discriminate freely amongst different groups’ risks.
This is a case where egalitarianism holds no worth. Health-care insurance is a case where discrimination is justified and necessary. As for example, anyone can have heart problems, but the risk with an alcoholic consumer are surely much more than the risk with a non-alcoholic consumer. Obviously, the non-alcoholic consumer should not be pooled in the same group of the alcoholic consumer, the insurance agency should discriminate the two consumers and the heart health risks involved with the two on the premises of one being alcoholic and other being non-alcoholic.
Deregulation of health insurance industry will remove such discrepancies.
Deregulation of the industry means to restore it in an unrestricted manner. It means to allow the insurers to offer any possible contract whatsoever for the consumers, to include or exclude any risk, and to discriminate among its consumers to pool them in different groups based on any criteria including their hereditary conditions, health habits and addictions. In deregulated health insurance market, the uninsurable risks would lose coverage and the individuals will become further more cautious. The variety of insurance policies for the remaining insurable risks would increase and prices will fall drastically. The most important thing is, the individual responsibility of the consumer in health care will gain more emphasis and that would provide an environment for better habits and proper living attitudes amongst the citizens.
We have further discussed this particular issue of health insurance here –³
India has a huge demand of medical services and as discussed earlier, governmental restrictions cannot supply the much required services.
Until the governmental restrictions are not removed, the health-care system of India will have serious problems and we, being the consumers will suffer those problems. Furthermore, we being the tax-payers will keep paying for the same problem

1. Universal Health Care system, Wikipedia [↩]
2. Separation of Science and State, Reason For Liberty [↩]
3. Indian Insurance System and Free Market., Reason For Liberty [↩]

The government is all set to stage a platform for the debate over gay rights in the Indian parliament.¹
Often people complains that the homosexuals and the activists supporting them are corrupting India with “evil western culture”, and their complaints get some strength because of the fact that US is also going through similar sort of debates over gay rights in US with the president Obama in a mood to support the homosexuals strongly.
It can be true that the gay right movement in US inspired the Indian activists, but can we say that it is the western culture, which is corrupting India?
Jessica Thompson answers it well in her blog at Times of India. ²
Obviously, it is not about corrupting India, it is about amending a wrong.
The article 377 simply makes homosexuality an unnatural act and thus illegal and that is wrong.³
Removing the article 377 will let many homosexuals live freely without any fear of blackmailing. Yet the real issue is not just to decriminalize homosexuality, but it is to recognize the individual’s right to be homosexual if he wants to.
The disturbing thing is the fact that gays do consider government’s approval to marry as necessary. According to the Hindu Marriage Act, 1955, any marriage between two Hindus performed as per the common customs of that community of one of the two partners is legally valid. No license is required to marry, and most heterosexual Hindu marriages in India today takes place by religious rites alone, without a marriage license and most of them are unregistered.
Most couples do not seek state recognition because it confers few or no benefits. Most couples seek the validation of family and community.
So basically, it is not the government, which need to recognize the homosexual behaviour, but it is the common society. On government’s ground, only the scrapping of section 377 of IPC is enough.
It is not as if Indian society does not recognize gay rights at all, there are several female couples in rural areas and small towns have received this validation. Yet, homosexuality is not widely accepted. Furthermore, even though Hindu community is not as vehement opponent of Gay rights and homosexuality, Muslim community, Christians, totally oppose any trend of homosexuality, and even now, when government is going to debate over article 377, concerns have been voiced by some Christian and Muslim religious groups against the step.
So the question arises, should Indian government interfere in the matter of gays anymore than the scrapping of section 377 totally?
I do not recognize government or any other authority giving license for couples, be heterosexual or homosexual to marry, I do not recognize any essentiality for a governmental marriage certificate. Rather an enforceable contract will do better job than any marriage certificate provided by government.⁴
Therefore, here are some points for which I denounce any governmental interference in gay matter other than to repeal article 377:
The call to remove article 377 means to decriminalize homosexuality, it is reasonable and essential, but what do gay rights mean? Gays doesn’t need government to allot them any right or license to marry, even heterosexuals doesn’t seek one, further it doesn’t help by any means, gays and lesbians need validation of their families and friends rather than the government. Even if the families do not support their marriage, they do not need to seek governmental license, as many heterosexual couples also marry against their families wishes, not all of them are arranged, some girls marry after eloping too. Yet that is not the major issue, the problem lies behind these lines. As I explained that gay rights activists are more or less influenced by the US gay movement, we can expect them to follow the same suit. Once you involve government with gay rights, it no longer remains a socio-cultural issue; rather it becomes a socio-economic-political issue.
It would not be hard for the gay rights activists and the government to recognize that gays are oppressed minority and hence they need specific protections and that will cause larger economic consequences. Will it be punishable to discriminate against gays?
We should realize that gays do not represent any different community, rather they are amongst us with specific sexual nature, homosexuality is individual behavior and not group behaviour, and hence we cannot treat homosexuals as minority.
Some enjoys smoking; it is behavior, some other do like neither smoking nor smokers. What if government announces smokers as minority?
Since homosexuality is behavior, it is not readily apparent. If a lesbian goes for a job interview, the interviewer has no way to recognize her as a lesbian. Homosexuality is often kept a secret for varied reason as it is matter of personal sexual life, even heterosexuals keep their sexual life a secret, and hence homosexuals cannot be discriminated. Yet, if government intervenes and tries to help out gays by not only removing section 377, but also, by making some anti-discriminatory law against gays, it will cause situations of real discrimination. To experience true “discrimination,” a gay job applicant would have to go the job interview and proclaim his homosexuality: “I’m gay; any problems?” If government intervenes, not to hire this person would be an actionable offense. Now that is not necessary, is it?
Furthermore, it is not government’s job to decide on what accord a person can appoint an employee and on what account he can deny giving him a job.
As for example, if a Hindu does not want to keep a Muslim house cleaner, it is his choice.
Also, if government is ready to be the agent of gay liberation movement, why will not it announce some sort of quota for gays?
In first place, government has no moral authority to announce any quota or special treatment for any group based on religion, caste, or sexual preferences as governmental reservation never helps. Rather employers should have the freedom to discriminate in favour of gays with favoured treatment, quotas, or by installing an all-gay work force if they so desire. Similarly, employers should be free to impose a no-gays-allowed policy.
Some insurance company may decide giving special helping policies for gay couples making specific pools of insurance for them, while some other insurance company may decide pricing higher on insurance for gays or may deny spousal health insurance to gay couples.
Furthermore, if government intervenes and supports gay rights considering them as minority or second citizens, things may go awry. How will such gay rights be regulated? One would need to count the number of known-homosexuals in a given company/agency to make sure they are proportionally representing, otherwise some Mandal commission will further increase the % quota for gays and will monetarily penalize the company. May be employers will have to give bonuses to employees who announces themselves gay. May be next time, there will be specific seats for gay students in IIT and IIM entrance examinations.
One should realize that government interventions in socio-cultural trends seldom helps, rather it creates skewed situations.
Conclusion: One should support the removal of article 377 as it is against Individual liberty, homophobic and irrational, no government can decide what is natural and what is unnatural.
Yet Homosexuals cannot be treated as secondary citizens or minority inviting government to intervene and confirm gay rights, it would be a mistake causing further governmental oppression on Individuals, it will be further against free market.

1. Parliamentary Debate over Gay Rights, Times of India [↩]
2. Gay rights not a Western Idea, Jessica Thompson [↩]
3. Artificial Vs Natural, Reason for Liberty [↩]
4. Dowry-The other facet, Reason for Liberty [↩]

Even in the modern day India, Mahatma Gandhi and Jawaharlal Nehru are considered as “Gods”. Any attempt to criticize them is met by denial and hatred. I remember that years back, when I made a case against the socialist policies of Nehru in my college hostel, every one of them present there turned emotional. They argued that India is a poor country, and hence need intelligent planning, to which Nehru made significant contributions. Their response was similar to what you would get from sulky children when you point out that their parents could be wrong. “Breaking Free of Nehru”, by Sanjeev Sabhlok, a resigned IAS officer, flies in the face of such an attitude. Sabhlok is one of the very few Indian authors I have read who has a reasonably good understanding of Free Market Economics. He points out with extreme clarity and precision that the legacy of Nehruvian Socialism has done incalculable harm to India.

The author begins by clearly stating that this is not a book about blaming Nehru. He doesn’t question the allegedly “good” motives of Nehru, and is of the opinion that he was an honorable man. It is not the ends Nehru had in mind he questions, but the means he used to achieve them. He takes for granted that not many would argue against helping the poor. Using violent coercive means to achieve this end, however, produces the exact opposite result. This should be obvious. Nothing good was ever done through coercive means.

Sabhlok, who served the Indian Government for eighteen years, knows from his own experience that such policies breed corruption, poverty and inefficiency. He remembers an IAS officer who joined with him in 1982 saying that his “sole objective in joining the service was to make money”. He was once asked by a young man whether he moved to the Assam cadre from Haryana cadre as more money is to be made in Assam. In all the years he served the Indian Government, he didn’t come across a single officer who even compares with the public officials he met in Australia, where he works now. I don’t have to quote extensively from his work. Everyone knows these facts.

I find it really sad that Sabhlok’s attempt to set up a liberal political party in India didn’t succeed. India badly needs politicians who have studied political economy from a Classical and Austrian point of view. India, needless to mention, has never known the concept of liberty. Even when our freedom fighters and other politicians used words like “freedom”, they never clearly understood what it really means. A hampered market economy was the intellectual default. This wouldn’t have happened if people who know better had spoken up for the cause of Individual liberty. And that precisely is what books like “Breaking Free of Nehru” do.

I have, however, several differences with the book. I would like to mention it here. I don’t think Nehru’s motives were good. I think we should be really careful when branding the motives of a person as good, when the end result is chaos. Good-By what standard? We should remember the words of Ayn Rand-“Do not ever say that desire to do good by force is a good motive. Neither stupidity, nor power lust is a good motive”.

The author says that, in India, there was forceful expropriation of property and land in the manner of Robin Hood. Several thinkers, including Ayn Rand and her followers, have made this mistake. Robin Hood, in my opinion, was actually a good guy. I shall quote the philosopher Tibor Machan: “Often it is Robin Hood who is held up as the role model for justifying taxation: Didn’t he “steal” from the rich to “give” to the poor? Well, not, not really. In the original version of the legend, Robin Hood did just the opposite: He stole from those who stole from the poor and returned the loot to the rightful owners. In those days the upper classes, from the king to all his cronies, routinely engaged in extortion. They disguised this, however, with the phony claim that everything belongs to the king and his cronies. Yes, monarchs and those who rationalized monarchy spun this fantasy and managed to sell it to the people that they where the rightful owners “of the realm,” that they had a “divine right” to rule us. This way when the bulk of the country went to work on the farm or wherever, they had to pay “rent” to the monarch and his cronies.”

Like the author, I don’t think that progressive taxation is compatible with Capitalism. It is true that marginal utility of money decreases with increase in wealth, and a rich person cares far less for a thousand Rupees than a poor person. However, this doesn’t contradict my position. There is a limitless need for wealth. The total utility of the wealth a person has should go on increasing so long as wealth has any positive marginal utility to him. There is a need for more wealth so long as additional wealth has any marginal utility. Progressive taxation would only undermine savings and capital accumulation. Taxation is completely incompatible with Capitalism. There is also the Inherent immorality of taxing Peter to pay Paul.

There are some statements in the book, which libertarians like me can’t agree with. Freedom, the author says, is good, and anarchy is bad. I can’t disagree more. Anarchy is the logical end result of total freedom. Anarchy and Capitalism are fully compatible. There is no justification for a bunch of robbers to take money forcefully from you and providing you services, forbidding that you buy from others. All services, including defense and security services could be provided by private individuals. Government is in fact a criminal organization which robs murders and drafts the citizens in a particular geographical area.

The author makes a case for Government regulations quoting an example of a coal miner working under dangerous conditions. However, it is not at all evident that there is a need for a Government to ensure safety for the worker. In case a worker dies in a free society, the Insurance Company of the employer would have to compensate the employee’s family. Insurance companies, hence, would have a policy to make sure that its customers ensure safe working conditions, as their profits would depend on it.

Another point where I disagree with Sabhlok is on social security and public funded education. We libertarians don’t want the poor to starve or children to go without education. Quite the contrary! We believe that the society would deal with these issues in a better manner in the absence of Government coercion. Under Capitalism, people who deserve such aid would not be many and could easily be taken care of by private organizations and voluntary charity.

All said, I highly recommend this book to anyone who wants to understand Individual liberty in an Indian context. Also visit his Freedom Team Of India website, and consider joining the Freedom team.

There is a strong common ground among the Libertarians and Communists and that is Open Source movement. Communists do not accept “Intellectual Property” rights such as copyrights and patents as their general rejection of any kind of property rights. Libertarians do not accept “Intellectual Property” rights because they refuse to acknowledge “Intellectual Property” as any kind of property at all, and copyrights being an artificial monopoly created by the government.

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.

Lets say if you somehow had the psychic ability to be able to predict the future demand and supply of wheat, say up to 6 months to 1 year in future. How do you think you would be able to use this ability to do good in the world? You could go to all the wheat farmers and tell them how much the future supply and demand of wheat would be, so the farmers will now be able to produce wheat more in accordance to how things are going to be at the end of the wheat season.

If the supply is going to go down considerably(say because in Southern India its going to rain a bit too much thus destroying the wheat crop), the wheat farmers will be geared up to produce more wheat that season to compensate for the fall in supply thereby fulfilling the demand of the market. Thereby benefitting both the consumer and the farmer.

Similarly if its going to rain pretty well and it will result in sufficient harvest, the farmers will produce less, put less money on the crop and it will create a bountiful harvest.

Wouldn’t this foresight into the future going to help the poor farmers. Unfortunately we face two problems in realization of this scenario.

1. You don’t have such a psychic ability.
2. You cannot just convince the farmers out there that what you are telling them is true

That is, there is no such psychic ability possessed by anyone who can predict the future demand and supply with accuracy. The closest to such a prediction you can come to, is to study weather, study the crop cycles, study the soil, and then make an educated prediction. Even when you are able to make such a prediction you face the problem of convincing the farmers. Why should farmers believe you who says that there will be a shortage of Wheat coming harvest season, or believe me who says that there will be an abundance of wheat this harvest season. There must be a solution to this problem.

I bet the way most Indians are educated to think will think of a centralized government solution of this problem. One possible solution which was given to me by someone really smart went something like this:

Govt should organize a national level exam(on the scale of IAS-Indian Administrative Services exam), to find out the most intelligent soil, agriculture, wheat scientists and form a group which will then issue advisories on how much wheat the farmers must produce. This committee must be kept away from the political pressures, and must be paid very highly so that we are able to attract the most intelligent IITians-Agro scientists etc etc.

The problem with the above solution is, that it simply is the worst possible solution of the problem, it is so bad that its just going to worsen the problem. As long as the “National Advisory Committee” gives good recommendations its good, but when they will screw up which will happen more often than not, its going to create disaster. Plus it is actually no different than the Central Planning we have followed from Independence till 1990s, I am sure that gave us some amazing results. Also it basically excludes 99.99% of other people who could have been right.

So what’s an alternate more efficient solution? Wouldn’t it be better if every individual can take part in this process of prediction the wheat prices in future? Not only anyone wishing to take part must be able to take part, it should work more efficiently than handing out the power to a few individuals. It must penalize the participant if their prediction turns out to be wrong, and must give more weight to the prediction of an accurate individual.

The system would basically allow the farmers to sell wheat at a fixed price on a future date. That is if a farmer is producing wheat for the harvesting of June 09, and currently it is Jan 09, then he must not worry about the uncertainty of the wheat prices in future. Someone must assure him the price he is going to get.

Ladies and Gentlemen, presenting Commodity Futures.

Let me first explain you the concept of Futures contract. In finance a futures contract is a standardized contract to buy and sell a standardized quantity of commodity at a future date at a market determined price. The price is determined by the instantaneous equilibrium between the forces of supply and demand among competing buy and sell orders on the exchange at the time of the purchase or sale of the contract.

In simple words, if I am a wheat farmer, and you are a wheat price speculator, buy the wheat from me now, which will be delivered to you on a future date when the harvest occurs. If you think in the future the wheat price is going to be $700 per quintal, then lets sign a contract where you pay me $700 per quintal, and I will deliver to you wheat on that future date. If on that future date, the price of wheat is $700 or more, you make profit, if its less than $700 then you make loss. In either case the headache from my head of worrying about the future wheat demand is gone. My work as a farmer is now to simply grow wheat, and not worrying about the trading of the wheat.

This is a much better way to discover the future prices of any commodity compared to putting the burden on the poor farmers, or to give the task to one elite intelligent group of Oxford graduates. In this way anyone in the market can take part in the price discovery of the commodities. The risk of wheat prices plummeting has been taken off from the farmer, and is handed to the guys who are more focused on the task of predicting the future prices. If they succeed they make the profit, and they will trade even more futures and become larger contributor in the price discovery. If they fail they will be penalized for making the wrong prediction.

Futures trading is not new to the world. In fact from wikipedia entry on Futures:

The origins of futures contract can be traced to Ancient Greece, in Aristotle’s writings. He tells the story of Thales, a poor philosopher from Miletus who developed a “financial device, which involves a principle of universal application.” Thales used his skill in forecasting and predicted that the olive harvest would be exceptionally good the next autumn. Confident in his prediction, he made agreements with local olive-press owners to deposit his money with them to guarantee him exclusive use of their olive presses when the harvest was ready. Thales successfully negotiated low prices because the harvest was in the future and no one knew whether the harvest would be plentiful or pathetic and because the olive-press owners were willing to hedge against the possibility of a poor yield. When the harvest-time came, and many presses were wanted all at once and of a sudden, he let them out at any rate which he pleased, and made a large quantity of money.

In the modern times, Futures trading has been around in America for over two centuries. In 1848, the Chicago Board of Trade (CBOT – the world’s first modern futures exchange) was formed. In India the futures trading has been going on with some big government support since 2002. In terms of trading volume Mumbai Stock Exchange is world’s largest stocks and futures trading exchange.

Since my article is focused for Indians and I am using Wheat as an example, let me talk a bit about two major Commodity exchanges in India(there are more than 20 overall).

1. National Commodities and Derivatives Exchange(NCDEX) – Wiki – A regulated online commodity exchange based in Mumbai.
2. Multi Commodity Exchange of India Ltd(MCX) – Wiki – An independent commodity exchange based in Mumbai with 84% of Market Share in 2008.

Lets take an example of what a Wheat futures contract specifications in India consists of.

http://www.ncdex.com/product/Agro_product.aspx?comm=WHE

Name of commodity – Wheat
Ticker Symbol – WHTSMQDELI
Unit of Trading – 10 Metric Tonnes (That is one contract deals with 10 metric tonnes of wheat)
Quotation Price – Rs per Quintal (This means that if you read the price of Wheat contract Rs 830, it means that on the delivery date market thinks the price is going to be Rs 830 per quintal).

Tick Size – 20 paisa (that means the price of Futures contract can go up and down by 20 paisa or more.

Delivery center – Delhi (once the Futures contract expires you can take the delivery of the contracts from Delhi delivery center)

There are many other things involved with trading commodities, the details of which are out of scope of this article. The conclusion I wanna put in is that Grain futures trading can be a very powerful way to actually serve the people, to help the poor farmers by taking the risk off their hands, as well as make a living while doing that. There are tremendous risks involved with futures trading and you might lose all your capital in it. So instead of trying to become all out commodity trader, try to hedge your wealth with a real job.

Before you become any kind of trader I would suggest you to read this book by Nicholas Taub:
http://en.wikipedia.org/wiki/The_Black_Swan:_The_Impact_of_the_Highly_Improbable