While discussing about the legal system of a free society, we often mention private legal firms and jurisdiction to take care of petty criminal incidences along with hard core crimes that may occur in such a free society where there is no government or aggressive authority to suppress Individual Freedom.
However, I have found that most of the supporters of democratic governmental systems oppose the idea claiming that such a free system will destruct itself and individuals will actually lose any available freedom in absence of state ruled jurisdiction and policing system. Often they mention hypothetical examples of sexual offenses and oppose the idea that a sexual offender can actually remain free in a free society if he makes an agreement with the victim and pay the agreed amount of money as fine to the victim and corresponding private security firm/s to which the victim and culprit have registered.
They feel that it is an obnoxious idea because if such monetary penalties are allowed for sexual cries, then no rapist will ever attain any serious punishment as they will victimize poor girls and boys for their criminal lust. The poor victim, being poor, will opt to compromise for a handsome amount of money and will not demand any physical punishment or jail term for the culprit. Such opposition occurs because of the common biasness against sex workers. People often feel that prostitution or selling sex for money is bad or immoral and hence they feel it should be avoided. Now if in a free society, the rapist is allowed to remain free of punishment for meager monetary payments, then it would be a direct support to prostitution. If the rape victim accepts money for being raped, then it is no rape, it is simple prostitution.
It is hard to convince people about the moral soundness of prostitution. They won’t believe that sex is an art and sexual acts are art form. When a woman performs sex to fulfill requirements of a man or when a man perform sex to fulfill requirements of a woman, then they actually perform work and for that work, they are entitled to ask for payments.
However, there certainly is a difference between a rape case and a case of prostitution. A prostitute initially agrees for serving or entertaining man or men with her sexual art. Oh well, it is not necessary that every prostitute should be highly skilled in sexual art. Yet, she demands money for whatever sexual satisfaction she provides to her clients. On the other hand, a rapist is not a prostitute, she was never ready to be used for sexual pleasure by her rapist and at least she was not ready for that when she was being raped.
Since the rape victim is not a prostitute and she was not ready for being sexually used initially, she has a right to demand for a jail term or physical punishment for the rapist. What if the rapist doesn’t agree to accept physical punishment or jail term and insist for monetary fine? He may succeed in making a compromise with girl. If the girl accepts monetary fine, then she cannot say that she was being raped. If she accepts monetary payment/fine for being raped, she is no different than a prostitute. I guess any woman will accept monetary fine for being raped rather than forcing physical payment or jail term for her rapist.
Impostors of fake morality may oppose my guess, but the real life supports my idea of accepting monetary fine or punishment for rape victims and allowing rapists to remain free. Recently, the Supreme Court of India allowed three rapists to enjoy freedom and removed all charges against them after they won an agreement with the rape victim who asked for monetary fine from culprits in place of prolonged jail term for them.
The rapists were initially awarded with a jail term of 14 years. Justices Markandeya Katju and Gyan Sudha Mishra maintained the conviction of the three rapists and said that the sentence of 10 years stood reduced to three-and-a-half years, the period of imprisonment already undergone.
The court further directed the convicts, who had raped the victim in Ludhiana on March 5, 1997, to pay a fine of Rs 50,000 each. Now since the three rapists have already suffered three and a half years of jail term, they have been freed.1
I don’t think anyone will now criticize the poor rape victim who appealed in the court to reduce the jail term for her rapists and to allow her to take monetary fine from each of the rapists. Obviously, it was her right and she made good use of it.
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.
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.
- Times of India, August 1, 2010, India has more rich people than poor now [↩]
- Murray Rothbard, “Man, Economy, and State”, Auburn, Ala.: Ludwig von Mises Institute, 2004, pp. 2–3. [↩]
- Murray Rothbard, “Man, Economy, and State”, Auburn, Ala.: Ludwig von Mises Institute, 2004, pp. 2–3. [↩]
- Martin Ravallion, January 2009, The Developing World’s Bulging (but Vulnerable) Middle Class, The World Bank Development Research Group [↩]
It is probably an often thought question, but rarely answered correctly by most of the people. What makes a country like India poorer than a country like say America? I have tried to answer this question since I was a kid, then as an adult.
Lets see, most people might answer to that question as “India is poor because it lacks so and so
“India is poor because it lacks infrastructure western countries have”, or
“India is poor because of lack of education among people”, or
“India is poor because its very corrupt, and it has politicians who manipulate people etc etc”.
The problem here is simple, almost all these answers are effects, India does not have the infrastructure of western countries because India is poor, it doesn’t need that infrastrucutre, you cannot spend Rs 500 million per year on a road which brings per user cost is Rs 5,000 per month, and the average salary of people using that road is Rs 10,000 per month. Why not? Because if you did build a luxury road like that for people this poor, you are wasting resources more than you are creating them. When India becomes richer better infrastructure will follow, even if govt is the only entity building it, they will have more money to spend on infrastructure. You cannot create prosperity by creating one effect and hoping other effect will follow.
Similarly, the stuff about Indian people being educated, well if you are going to work on a construction site for all your life(someone has to work there), there is no point in spending so much money on your education which could have gone towards creating more job opportunities for you. By trying to create this effect, by educating 100,000 workers who will be working on manufacturing all their lives, and then ending up with having jobs for only 60% of them isn’t really a better outcome.
A bit matured people who understand how things worked, they will come to the conclusion that India is poor because it has less money than America, therefore India is poor and America is richer. But then that was incorrect too when you will find out that Indian govt has the power to print any amount of money possible. Why can’t Indian govt print more money, give some to everyone and make everybody richer. Apparently its not that easy as it may sound, when money supply is increased, prices of commodities rise soon thereafter. So even if poor people are given a lot of money, that will just raise the prices of the various commodities they might buy thereby bringing them back to same level of poverty as before(more or less).
I know a lot of people who know the correct answer to the question stated in the title. India is poorer than US because it has less capital than latter, and capital isn’t the same thing as money.
What is Capital
So the question comes, what is ‘capital’ and how is it different from money? To understand it we must understand first what is money. Money is nothing but a medium of exchange, we don’t really intend to consume money, we only keep money because everybody else accepts it and then we can acquired the final resource which we really intend to consume.
Capital is essentially any commodity or goods, or even service, which is used to hold value across time. In simple words, if you do not consume a good or a commodity, but only keep it for later consumption then that good serves as capital. Because in most of the cases we keep money for the future consumption therefore money is the most common form of capital, but if you bought a car which you intended to start using only 2 years later then that car is your capital(although I don’t see any reason why you would want to do that, but that’s beside the point).
When I say India has less capital than US, what does that really mean? Does that mean Americans can defer their present consumption more than Indians can? If we look at savings rate of both the countries, Indians can definitely beat Americans savings rate hands down, so shouldn’t that mean Indians must have more capital than Americans? The truth is, America has a lot more capital buildup than India, therefore despite of not deferring a lot of their present consumption for the future one, they can still manage to create more ‘future resources’ than India.
For example an American family may only save 10% of their savings for future or invest 10% of their income for future, but because the total amount of capital they have is much more than an average Indian family which might save about 40% of their income, their capital results in more consumer goods than what an Indian family’s capital results in.
Simply put, in order to be as rich as America, India will have to accumulate as much capital as America has. Artificially achieving the same literacy rate as US by govt spending will not make India as rich as US, because people won’t have as many jobs to do. Building an infrastructure through government spending will also not make India as rich as US as it won’t be worth spending so much on infrastructure when there isn’t enough capital to put that infrastructure to proper use.
This may be a very simple thing to say, because its like saying ‘in order to be rich you need to acquire a lot of bank balance’, which sounds like common sense, but in this case its like most people seem to think that if you take thousands of dollars of loan for education, you will automatically become rich, or if you buy a bigger house, you will become automatically rich.
How do we build up more capital?
Lets first take an example of Robinson Crusoe who got stranded on an island. He catches fishes everyday from 8AM to 5PM and eats them. Since he just landed on the island, he catches these fishes by hand and he is able to catch 25 fishes everyday. Since Crusoe came from a modern society he realizes that he can build a net, and that will enable him to catch a lot more fishes. Unfortunately, he also realizes that he cannot just blink and wish a fishing net, he must build it, and making a fishing net requires 5 days of his work. The problem in front of Crusoe is that if he starts to work for 5 full days to build that net, then he won’t be able to catch any fish therefore he will starve to death.
Crusoe in this scenario faces the problem of lack of capital. He needs capital to sustain himself until he extends the structure of production(that is from using only hands to catch fish, he uses hands to build a fishing net, which he uses to catch fishes. He realizes that by building that fishin net he will be able to catch 300 fishes everyday.
So Crusoe has 2 options, he can either:
a) Consume only 20 fishes everyday, and store the 5 unconsumed fishes; Keep on doing this for 20 days, which will accumulate him 100 fishes, which are good enough for him to sustain himself for five days he won’t be able to work.
b) Catch only 20 fishes each day and spend that extra time in building the net, so he will be spreading his 5 days of work, over 20 days.
In either of the two cases Crusoe has deferred his present consumption of 5 fishes everyday so that after he builds the net he is now able to produce and consume a LOT more fishes everyday. He can either catch 300 fishes and maybe consume them all, or make more dishes out of them, etc etc, or he could continue to catch only 25 fishes everday, work less and have more leisure time, and spending the remaining time in working on art, literature, maybe music etc.
India is exactly like Crusoe without the fishing net, and America is exactly like Crusoe with a fishing net. Because its easier for America to produce a lot without giving up a lot of present goods, America has a lot of time to spend on art, literature, music, etc. This is the exact reason why American atheletes and sportsmen win so many medals in Olympics, they have the disposable income and time to train themselves for sports, whereas in India we still spend most of our time catching fishes by hand.
In order to build more capital, you require two things:
a) People should be willing to put a lot of present goods for later consumption
b) When they put their present goods for later consumption, nothing should reduce or steal away their capital from them
The first task isn’t really that difficult for India, since we already have high savings rate. The second task is actually the most difficult task in India. You may ask, why? The answer is simple because the way we understand reality, we don’t think people should be allowed to accumulate capital.
Let me elaborate what I meant by nothing should reduce or steal away the capital from people who are deferring their present consumption for future. In the above example of Crusoe, lets say Crusoe’s fishes got rotten because they weren’t stored properly, so his capital has been destroyed, now to achieve the same earlier result he will have to build his savings again.
Take another scenario, lets say Man Friday, is another cast away, who drifted to the other part of the Island, he also catches fishes by hand, but he is able to catch only 10 fishes because he is not that good with catching fishes. When Crusoe was saving 5 fishes everyday, Man Friday decried that Crusoe was being unfair and hoarding fishes, also Crusoe being more dexterous with fishing, must feed Man Friday some of his fishes. So everyday Man Friday raids Crusoe’s extra fishes and consumes them in the name of making the society more equal. In this case again Crusoe’s capital has been depleted, and he will never be able to build that fishing net, and although Man Friday and Crusoe will be a bit more equal, they will remain poor. In fact soon Crusoe will realize that he has no incentive to really starve himself by 5 fishes, so he will either consume all 25 fishes or will catch only 5 fishes each day.
So how does capital get depleted, or stolen away, or reduced from the person who is building it? The answer is simple, because the way most Indians think, and always thought, was that we cannot allow one man to have all the wealth of the society, even if he built it all. So we like Man Friday in the above example, continously rob Crusoes of the Indian society, through taxation, which ‘we’ consider perfectly ‘justified’, or through a fiat currency and fractional reserve banking system, about which most of us don’t even care, its left for economics students who were educated by the western economists who don’t even understand how capital works.
What ends up happening is that we never grow rich. It was only until 1991, when Indian economy was liberalized and a lot more capital accumulation was allowed, and since then we have seen a LOT of economic progress, but still most people do not see or understand the function of capital, for them, capital means something to do with capitalism(which is technically correct, capitalism is a system where capital reigns means of production), and under capitalism ‘rich grow richer and poor go poorer’.
A society with more capital takes care of its poor better
Lets look back at the previous example of Crusoe, had Man Friday allowed Crusoe to build his net, Crusoe would have been able to produce a lot more fishes everyday, and then Man Friday could then provide Crusoe with some other services, in exchange for his fishes. Lets just say all Man Friday is good at is dancing, and creating stories and telling them passionately, since they both are stranded on an island, Crusoe might value this entertainment service a lot, so Crusoe works all day catching 300 fishes, and gives 100 fishes to Man Friday in exchange of Man Friday’s entertainment services.
Had Man Friday stressed on equality, all the way along, Crusoe’s net wouldn’t have been built, and Crusoe would have remained relatively rich(because he caught 25 fishes everyday and consumed 20), and Man Friday would have remained poor(because he caught only 10 fishes everyday and was able to consume only 15). Please note that in the society with more capital(ie, when Crusoe built a net), Crusoe was consuming 200 fishes everday, which is almost double of what Man Friday was consuming(100 fishes), and socialists decry that rich has gotten richer in capitalism and poor poorer, but Man Friday in the society with more capital is much more well fed and richer than Man Friday in society with less capital. This is exactly what we see in America and in India, a poor in America is still richer than even the average guy of India. All this is only facilitated if we stop believing in the redistribution of wealth and start allowing building up of capital.
India was one of the earliest issuers of coins since circa 6th century BC. Indians never used paper currency before 1770, when the Bank of Hindustan under British Empire. The General Bank of Bengal and Bihar, which was established by Warren Hastings1 , also issued paper currency in 1773. It should be noted that Indian currency is known as Rupees since long. Rupee is derived from a Sanskrit word “Raupya”, which means silver, the silver coin was always the currency of India. With the discovery of vast amounts of Silver in U.S and other European colonies, the relative value of silver reduced a lot in comparison to gold, that incident is known as “the fall of rupee”2 .
With the fall of silver in 1873, Indian Currency Committee suggested British India government to adopt for gold standard and in 1898 British government instead of adopting a Gold Exchange Standard, pegged Indian rupee with British sterling.
After Independence, Indian government started minting Indian coins (rupees); Indians thus never got a gold standard for representing their money
Now since last 63 years, Indians have so much used to the government issued currency, cycles of inflation and depression and always increasing price rise, that even talking about gold standard and private coinage seems to be impossible. Yet, since Indians were in habit of using private monometallic coins in past, it is imperative to discuss the issue of private coinage. Taking the premises of Freedom for everybody and the Self-Governance (Swaraj), which has been extolled by the Indians as a basic Mantra of life, let us examine the case of private currency carefully.
How the Private coinage will work?
The private coinage will work just like any other commodity (say mobile phones, or jewellery or wrist watches). Minters will produce coins of different shapes, sizes and weight according to the desires and demand of his customers. The free competition of the market will set the price of the coins of the minter. Second issue is about the trouble that the coins may create when weighed or evaluated at every deal or bargain. It is true that it would be difficult to evaluate the purity of gold coins every time a transaction would be made. To solve that issue, the minters will stamp the coins and guaranty the weight and purity of the coin. Private minters can guarantee the coins just like the government do. The profit will be, when government mints, there is no competition for government to be truthful, alert and honest, it is monopoly of government over minting coins, but when the private minters will guarantee their coins, their guarantee will weigh more because if the private minter will cheat, he will loose his market and consumers to other honest minter. Just like a government paper currency or coin holds the governmental promise to pay the bearer of that note an amount equal to the price of that paper currency or coin, the coin of private minters will also hold the promise from the minter that he would pay an amount of gold equal to be mentioned on the gold coin of his brand.
People against the idea of private currency will say that it would increase the chances of frauds. Same people never object to the miserable record of the governmental frauds, swindles and mismanagement. Every time the government issues stimulus to a particular industry, or forgives the loans of some conglomerate by explaining that it is working for social profits, the government actually is committing a fraud against the general public. Every time a person faces the devaluation of his savings in governmental currency because of extreme price rise and inflation, it is the example of regular fraudulent and untrustworthy behavior of the government regarding paper currency issuance and minting coinage. In case of private minters of gold coins, the chances of inflation and abrupt price hikes will lessen to minimum. More over, the free market competition for consumer satisfaction, the various minters will compete to be more honest and better customer service providers. The more a particular private coinage minting agency will be honest and better product and service provider, the more will be its consumer base and profits. Thus, in free market private coinage system, the competition for profits would be competition for honesty and consumer satisfaction. In addition, the problem of fake currency will also be eliminated because each private coinage agency would try to defend their brands by their own and the government also will be able to devote all its energy to safeguard the private minters against duplication and fake currency. In case of private coinage, one can trust that the government will prevent and punish frauds. The integrity of private open market operators cannot be discarded in favor of government monopoly, because in case of monopoly, there is no need for the government to be honest, but in case of private free market operators, to be honest is prerequisite for gaining any profit and healthy share of consumers.3
Furthermore, whole market works on guarantee of standards. A medicine store sells a tablet of aspirin of mentioned weight and dosage, a butter seller sells packed butter slices of mentioned grams of butter. The buyer trusts these guarantees, and they prove to be true. In a case when a person buys a product with a certain warranty and guarantee and somehow the product fails to prove the standard mentioned, than in most cases, he gets a replacement for the ill-manufactured product. That is, even if by mistake a product of a company fails to fulfill the standards demanded by the customer and provided by the manufacturer, then either it pays back the money of the customer or replaces the product with new and better one. Market of mobile sets, or laptops or packed meat, butter or cheese, or other things does not fail even though government does not hold a monopoly on any of the products. Thus, we can trust that the customers of a private minter will be safe against any possible fraud because of the presence of other competitors of the minter in market. The minter’s customers themselves will be keenly alert about the weight and fineness of the coins just as they remain while buying and using other commodities.
The problem of wear and tear of currency
The current government regulated currency, paper notes and coins holds no worth in themselves apart from the governor’s pledge to pay the bearer of the note or coin, a definite amount of money. The value of money obviously keeps going low and lower because of inflation and price rise. Along with this, the paper currency issued by government often suffers wear and tear causing further loss of money. Most of the governmental coins are eroded or torn out and government keeps forcing the usage of same old notes and coins. The old rag-tagged coins and paper notes are to be considered of the same value as of a fresh note or coin. By doing so, the government actually forces a certain type of price control over the old paper notes and coins and provide them the equal price as that of newer notes and coins. Because of this, the older coins and notes are overvalued, while the new notes and coins suffer undervaluation. All this amounts to nothing but mal-investment. Everybody loves to circulate the older worn out coins and paper currency while they have a tendency to keep newer notes and coins safe.
Consider the case of free market where minting of coins is not a monopoly of government. Assume that there are gold coins of 10grams well circulated in market. After a few years of constant usage, the coins may suffer wear and tear and lets say that they weigh only 9 grams of gold after 10 years (assume). In a free market, a coin that has been reduced from 10 grams of gold to 9 grams will not be overvalued and it will gain only the price of 9 grams. Obviously, nobody would like to use the 9 grams coins at the price of 10 grams of gold, hence the worn out coins will be driven out of the market, or they may be used at reduced price. Thus, nobody would be deceived by the forced insistence of overvaluation to the older coins. This will avoid malinvestment. To solve out the problem of wear-tear of the coins, the private coin minters can either set a time limit on their stamped guarantees of weight or agree to provide a new coin in exchange of every old coin with reduced weight. Thus, there will not be any compulsory standardization of currency, which is a feature of monopoly of government.
Since long governments have tried to control the currency circulation in market so that they can restrict and control the progress and prosperity of citizens. Yet, from time to time, private bankers have issued their own minted coins (Know more about Private Coinage and Good Money)) . The gold standard with privatization of issuing currency and minting coins will not only end the monopoly of government over currency, which is the major reason of acute price rise and inflation, but also it will avoid any chance of fraud as the free market will tend the virtue of more honest and better services for gaining more consumer base and high profits. In addition, if coin minting is privatized, the government can also try to serve the public by ensuring security against any sort of fraud. In any case, privatization of currency would be a much better option than the monopoly of government over currency.
- Warren Hastings (1841), an essay by Thomas Babington Macaulay.” Columbia University in the City of New York [↩]
- The Fall of Rupee, CRN India [↩]
- Know more about the evils of Monopoly of government in Market and currency read What Has Government Done To Our Money by Murray Rothbard, One may listen the whole book and save the audio link here [↩]
Consumerism is the principle of Free Market, which states, “free choice of consumer should rule the market, or, the consumer decides the economic structure of the society“. Producers and providers bring their products to the market and make it certain that consumers, the public, may gain enough knowledge about their product so that, if the consumer decides that the particular product is good, they may buy it.
To spread the knowledge of their product, producers advertise and apply proper marketing strategies. The consumer remains free either to accept the product and buy it, or to reject it at certain price.
Now days, producers are delivering good attractive services, better comfortable products and advanced technologies in the market. Some people claim that all this advancement is redundant and nobody needs it.
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.
Either those who oppose and criticize consumerism are misled or they have some evil motives against the developing humanity.
- Welcome to Shiksha India, a CII Initiative in association with CRY [↩]
- Shiskha India in association with CRY, 2006 report, Shiksha India CII [↩]
It would be an interesting research if made over the pattern, overtime, that Bollywood movies have illustrated individuality and portrayed the relation of individual and society. Obviously, just like any other form of art, the movies also depicts the appropriate nature and situation of the society of that era but some art forms not only depicts the current situation of society, but also succeeds in providing a new trend a new idea for the society to be leaded and made practical, and such movies becomes the masterpiece. Objectively speaking, Art is a careful re-creation of reality according to an artist’s metaphysical value-judgements. Obviously, that selective re-creation is not meant to depict the things as they are, as Aristotle said that fiction is of greater philosophical importance than history, because “history represents things as they are, while fiction represents them as they might be and ought to be.”
Movies, being the indisputably strongest medium of art, if meant to show the things, situations, people and individuals as they ought to be, then they become the leading force of change in society and strengthens the values of individuality.
Current trend of Bollywood movies
With the liberalization of Indian economy, the civil liberalization is also gaining strengthen and bollywood flicks are portraying the essence and importance of liberty quite well. Ashutosh Gowariker and Amir Khan portrayed the inhuman nature of taxation in the movie Lagaan while Mani Ratnam portrayed Abhishek Bachchan as “Guru” struggling for economic freedom against socialistic governmental odds. The contemporary artistic subjects were merged with the colours of popular cinema and very odd individualistic tales like Tare Zameen Par and Black gained huge success. Such flicks obviously provide a sense of liberty in the individual to seek for his own freedom, his strengths, and his right for living with honour of independence. One can say that bollywood is providing artistic masterpieces depicting the importance of individual liberty and issue of individualism and in the same league, the two big movies of 2009, “Rocket Singh the salesman of the year” and the hugely successful “3 Idiots” confirmed that now Indian society is ready to appraise the libertarian attitude and the Indian youth is daring enough to raise the issues of collectivistic problems and is ready to denounce them, to fight against them. Even “Rang De Basanti” portrayed the current depleted morality of society and the struggle of youth against the social political tyrants, yet it was full of anger, violence, frustration and exhaustion. One may not group “Rang De Basanti” with the other Bollywood films of libertarian approach.
Rocket Singh, while struggling to maintain his honest behaviour and ethical strength, manages to portray the basic factual difference between the corrupt corporatism and honest capitalism. So meaningfully and with such an ease, the movie establishes the golden rule of free market, “consumer rules and honest producer wins”. The movie also clarifies that to win over the evil, one does not need to pick up the violent means, nor one need to be evil by himself, Rocket Singh and his band of rebels tells us that ultimately honesty and hard work is a sound business decision. The movie suggests that irrespective of corporative and governmental corruption, if market is allowed to be a free space for the mutually beneficial dealings and agreements between people, producers, service providers and the consumers, than the most honest, prompt, hardworking and innovative one will gain maximum success, that is, a free market ultimately provides the required moral environment where honesty pays and dishonesty causes suffering and losses. While the boss of Rocket Singh robs him of his own company based on free market principle, consumers forces the villainous boss to learn the better way and accept the path of honesty and hard-work and ultimately, he goes back to Rocket Singh to accept the defeat of evil, wrong and immoral.
3 Idiots is yet again a masterpiece of Amir Khan. The movie is said to be based on the novel Five Point Someone yet, after watching one may thought of a laughing, rollicking Howard Roark represented as Rancho and a babbling, confused Peter Keating represented by Chatur Ramlingam (Silencer)1 . It is an exquisite story of a man from nowhere, who wanted to learn and create, who wanted to produce and who loved himself and his work. It is a lovely story depicting the win of a morally strong character who wanted to live for himself according to his own standards, who needed nobody’s sanctions and who inspired others too to live by their own standards. Rancho as Phunsukh Wangdu seems no less than a Roark who won over all odds to be what he wanted to be and to do what he wanted to do in exactly the same free rational and honest way he needed to be.
For some, these movies may seem like fairytales or impractical, yet they show the heights of individual freedom and its importance that Indian youth needs and the success of the current trend of movies confirms that Indian society is passing through a huge change in the mindset where the individual will seek for liberty and will fight for it intelligently and peacefully, to gain the freedom of his soul to establish his existence at his own standards, confirming that I, the Individual needs no sanctions, that “I need no warrant for being, and no word of sanction upon my being. I am the warrant and the sanction.”
On the same libertarian trend, Shahrukh Khan and Kajol’s latest flick My Name is Khan also portrays a simple libertarian fact that collectivism is evil and collectivizing individuals is greater evil, as SRK said in one of his interviews for promoting the movie—
We are only trying to say that there are only good people and bad people. There are no good Hindus, bad Hindus, good Christians, bad Christians. Either you are a good person or a bad person. Religion is not the criterion, humanity is.” SRK
Collectivism is not the criterion, individualism is, Individual is.
Another movie “Wake up Sid” depicts the quest of person searching for his existence, rationales, aims, setting his goals and winning over them.
Movies are the mirror of society and more than that, movies are a strong way of propagating the right rational idea. With the current libertarian approach of Indian movies and arts where the art forms with their fictional attributes are depicting the things as they might be and ought to be, one may say that Indian society is progressively improving and is set to accept and evolve as a free society looking for further establishing Individual freedom, his quest for his existence, happiness and letting him win his way against all odds of collectivism.
- Howard Roark is the central character of the epic novel, the masterpiece of Ayn Rand, the Fountainhead Peter Keating is another character of same book, there’s a movie based on the novel with same title The Fountainhead [↩]
Indian government declared Education as a fundamental right for all Indians on 1st of April 2010. Was it a fool’s exercise on the April Fools day? It seems so.
By staging education as a fundamental right, government obviously insured a very well crafted vote bank issue based on altruism that will keep the ruling political parties in good colours. Political parties will not only gain votes over the issue, rather the government will also gain a further seemingly appropriate cause to rob the wealth-producers by means of taxes to implement all the required infrastructural development programs for the fulfilling of the dream of “Education for All”. Certainly, that will provide a vast canvas for further scams and swindles in the infrastructural development sector. Thus, for the political parties with their political motives, education as a fundamental right looks pretty good. There will be many new government schools that will provide governmental jobs for many Indians in education sector. The problem is will the new schools overcome the failure of the already existing governmental schools?
What about the drop-out rates?
There is a governmental school within the range of 2-5 KM near almost every village or slum of India, that is, lack of governmental schools is clearly not a big issue.
The problem is not about the children who never attend school. Such students are separate and very fast diminishing category. About 50% of children who join up in Class I drop out by Class VIII and that can be suggested as the major problem.
Despite all the mid-day meals and similar programs, governmental schools fail to keep the children intact with their governmental education. Now no matter whether government declares it a fundamental right or necessity, if the parents and their children simply do not prefer the idea of investing their time in such governmental schools, than this idea of education as a fundamental right will remain only a paper exercise that will never be a reality, although the governmental robbers will keep robbing the middle class of India and will burden them with more and more taxes to facilitate the education for all those who does not want that education and are certainly not interested in it.
According to the National University for Educational Planning and Administration (NUEPA) total enrolment in primary classes (Class I to V) was 134.4 million in 2008-09. In Classes VI to VIII, the total enrolment had dramatically dropped to 53.4 million. Now, if government considers that education is literacy, than it is acceptable that primary classes will provide the required education as a fundamental right, but what if more than half of the total students decide not to study any further the primary classes? Will government force them to continue their “governmental schooling” until all do not clear out the VIII class?
The problem is not that parents do not have money to educate their children properly; the problem is the poor quality of governmental education. Governmental education actually provides nothing to an upcoming citizen rather it burdens them with heavy books and senseless exercises that will never help him by any means throughout his life. Even if every Indian becomes a well educated graduate, not everyone can become an IAS officer, some may prefer to be a barber, or a shopkeeper, or a gardener, farmer, or may be taxi-driver. As some prefer to be a doctors and engineers, some other may prefer to be peons and beetle shop owners, or snacks vendors or simply “chai-wala”. Now no school provides any fundamental knowledge about how to be a better “chai-wala” or a better “paan-wala” or a better barber, or a better street-sweeper. There are so many jobs that people may prefer to do rather than going and wasting their time in the schools to clear out the VIIIth class exam. Can Government Issue a law that no person can be allowed to work and earn if he is not VIII class pass? That is, one cannot work as a laundryman, or a barber, or home-helper, or a “bawarchi” or chai-wala or any similar minion works if he is not VIIIth pass.
The Right to Education Act covers children in the 6 to 14 years age group, precisely for the classes from VI to VIII. So may be the idea behind the right to “governmental education” is meant to abolish child labour.
However, that will be a fraud against the children who prefer to go for all those minion works that are never touched by school education. Why should a child work so hard and waste all his time in learning the maths, science and languages of VI to VIIIth classes when he knows that it will never help him to be a good barber or taxi driver? For him, better education would be to attend a barbers shop and learn how to cut hairs with ease and provide consumer satisfaction for the consumers. If a child is looking for maintaining a shop owned by his father, he will certainly learn educate himself much more in his father’s shop under the tutelage of his father rather than in a governmental school. For such children, if government forces them to attend schools up to VIII or Xth class, than it will actually be forced child labour for those children and they will not earn even a penny for that unwanted labour.
Market is the Best Educator
A doctor practicing medicines in market since last 5 years is obviously much more apt than a freshly graduated medical student is. The market actually teaches the medical student how to treat the consumers, how to fight the diseases and save the patients. School and college education provides the base, and market furnishes the education.
In case of a barber though, no college, no school provides any base for becoming a successful barber. One needs to go to a barbers shop and practice there. For a forthcoming doctor, if he attends school and than college, education helps in strengthening his base, but for a forthcoming barber, only the market, that barbers shop can provide the necessary education and practice. Forcing him to go to school to get “governmental education” will be similar to burdening him with child labour and disallowing him the “necessary education”.
Conclusion: right to education may prove to be a good vote gainer for the ruling parties in upcoming elections, it will certainly increase the vast canvas of governmental corruption and swindles and will burden the Indians with extra taxes, yet it will remain only a paper exercise meant to fool the public and that is why education was announced as “fundamental right” right on fools day. It is inappropriate and unnecessary to expect every child of age group 6 to 14 years to go to school because for many such children, governmental school education itself proves to be child labour, while the market provides them the proper necessary education they require and search for. Thus, if government does not make it compulsory for every citizen to be at least VIIIth pass if he wants to work and earn an honest living, it is impossible to expect the RTE to work any better than a paper exercise. But if government makes it compulsory, than education will not remain a right, it will become a torturous duty imposed by dictatorial despotic altruistic politicians, because than, the certificate of VIII class pass will become the necessary license even to work and earn an honest living freely. Most of the times, these politicians displays slavery in the colours of freedom and compels the citizens to buy their enslavement at the expense of freedom.