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

Can India achieve richness?

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

Is India really growing rich?

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

Why India is growing rich?

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

Is Government Facilitating this Prosperity?

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

Conclusion:

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

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

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.
Conclusion:
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.
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1. Warren Hastings (1841), an essay by Thomas Babington Macaulay.” Columbia University in the City of New York [↩]
2. The Fall of Rupee, CRN India [↩]
3. 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 [↩]

A free society by definition is the society in which, each individual, i.e. the basic unit of the structure of society remains free to pursue his personal prosperity and happiness, where he is free to achieve his most using his talent and hard-work and saved resources. Obviously, such a society depends on rational pursuit of self-interest and provides full freedom for the individuals from the shackles of social responsibility or altruistic motives.
Often socialists claim that such a free laissez-faire capitalist society will turn out to be a system of dog race where no one will look for the poor, the impoverished an the depraved. Furthermore, socialists claim that for a poverty-free society, compulsory altruism is most necessary, where the producers and creators who can produce wealth, must be forced to pay for the living of the poor and depraved. All governments throughout the world follow such Robin Hood’s philosophy and rob the producers, creators, entrepreneurs and investors for the name-sake of welfare state by means of compulsory taxation, price control, Universal Equality Programs and other similar dictatorial techniques. Yet, the world suffer the problem of poverty as always and despite all the huge socialistic efforts by the governments whole round the world, situations never improves.

So what can help to eradicate the poverty?

As per World Bank’s estimates, 60% of Indian population was living in poverty in 1981, during the socialistic regime of Indian government.
Since 1991, India enjoyed the streams of economic liberalization and stepped towards the making of a free society. As a result, the current estimates of World Bank suggests that 42% of the total Indian population now live under the global poverty line of $1.25 per day (PPP). That is quite a big sweep.
Similarly, in China, since the far changing economic reforms and liberalization were made in the late 1970s, the growth fuelled a noteworthy decline in the poverty rate from 64% at the beginning of reform to 10% in 2004.
Obviously, the data suggests that economic reforms and liberalization is the key to the eradication of poverty. Before 1991, the government controlled almost all industries and production sectors of India but after that, step by step liberalization of industries from public sector to private sector took place and the OECD states the result in following words

Annual growth in GDP per capita has accelerated from just 1¼ per cent in the three decades after Independence to 7½ per cent currently, a rate of growth that will double average income in a decade. [...] In service sectors where government regulation has been eased significantly or is less burdensome – such as communications, insurance, asset management and information technology – output has grown rapidly, with exports of information technology enabled services particularly strong. In those infrastructure sectors which have been opened to competition, such as telecoms and civil aviation, the private sector has proven to be extremely effective and growth has been phenomenal. – OECD¹

Similarly, China confronted economic reforms and liberalization in 1978 and now, as of 2005, 70% of China’s GDP is in the private sector. The relatively small public sector is dominated by about 200 large state enterprises concentrating mostly in utilities, heavy industries, and energy resources.²

Free Market Entrepreneurship is the Key to riddle of Poverty

The examples of China and India clearly show that a free market based on Individual freedom is obviously a solution for the poverty in the society itself.
What impels an entrepreneur, investor, producer or creator in a private sector to remove poverty is not his “altruism”, rather it is his selfishness, his motive to produce and earn more, bigger profits. Yet for making profits, he needs to increase the productivity of the workers. As productivity of workers increases, the poverty reduces.
Social governmental constraints, regionalism, nationalism, license raj, price controls, taxes and subsidies etc only reduces the productivity of individuals and hence causes further poverty.
Examples of Entrepreneur trends eradicating poverty
While the politicians and government of Maharashtra is playing cards of protectionism, regionalism and linguistic discrimination by framing such ridiculous rule like permitting a taxi license only for those who can speak and write Marathi,³ the youth from North East is enjoying various job ventures in private sector freely in Indian metros. For their productive efficiencies, girls and boys from North East are in great demand for jobs in private sector as service providers, sales persons, mall, showrooms or boutique managers etc.⁴
This contrasting difference between the private entrepreneurs and government authorities is because of the fact that private entrepreneurs are motivated by the single aim of satisfying their customers in best possible and productive way for doing which, they need to come above any such linguistic, regional or religious discriminations. On the other hand, government and politicians have nothing to do with customer’s satisfaction or individual rights; what they look for is potential vote bank.
The Astaire Research suggests the hurdles in Indian economic reforms and progress in following words–

A Balance of Payments crisis in 1991 pushed the country to near bankruptcy. In return for an IMF bailout, gold was transferred to London as collateral, the Rupee devalued and economic reforms were forced upon India. That low point was the catalyst required to transform the economy through badly needed reforms to unshackle the economy. Controls started to be dismantled, tariffs, duties and taxes progressively lowered, state monopolies broken, the economy was opened to trade and investment, private sector enterprise and competition were encouraged and globalisation was slowly embraced. The reforms process continues today and is accepted by all political parties, but the speed is often held hostage by coalition politics and vested interests. – India Report, Astaire Research⁵

Another example of entrepreneurs helping the cause of eradicating poverty is the success of entrepreneurs like Vikram Akula⁶ or Irfan Alam.
Irfan Alam an MBA from prestigious IIM-Alhmedabad is the founder and chairman of the SAMMAAN Foundation. His enterprise innovated for the help of the millions of Rickshaw pullers across the country. Most of them are illiterate and poor. Over 90% of them are farm workers who migrate to cities for want of employment at home. They hire rickshaws for which they pay owners Rs 30 to Rs 40 per day and end up with a pittance for themselves.
He managed and persuaded banks to finance rickshaw-pullers. His enterprise SAMMAAN designed rickshaws that can put on hold newspapers, mineral water bottles and other such small items for sale if the passenger needs them. These rickshaws also carry advertisements and the pullers get 50% of the ad revenue, the remainder going to SAMMAAN.
Thus apart from the fare, the rickshaw-puller also earns from the ads and the sales. Gradually they become the owners of the rickshaw after re-paying the bank loan in instalments.
Irfan started off with 100 such rickshaws in 2007. Today, over three lakh rickshaw-pullers from across the country are registered with SAMMAAN. While 10,000 and odd are pedalling the special rickshaws, the process is underway to benefit others.⁷
Conclusion: It is the selfish motive of the entrepreneurs to make profits that entails the solution of poverty. As the governments will start to leave the market and society free of their dictatorial regime, the society itself will reduce the poverty to minimum.

1. “Economic survey of India 2007: Policy Brief”, OECD, pdf [↩]
2. China is a Private-Sector Economy, Economist Fan Gang points to a 70% share of GDP now in private hands, but he acknowledges that much improvement is still needed [↩]
3. Want a taxi permit in Mumbai? Read, write Marathi, Mumbai: The Maharashtra government framed new rules for taxi drivers to get permits in Mumbai. [↩]
4. North East Youth ride high on Reatial Boom, The Economic Times [↩]
5. “The India Report”, Astaire Research. [↩]
6. Vikram Akula, CEO and Founder of SKS Microfinance [↩]
7. Obama invites Bihari Entrepreneur to entrepreneur summit, The Economic Times [↩]

The two major political propagandas of Indian political parties are “Education for All¹” and “Electricity for everyone at every Village”. Despite all the technical advancements government failed to provide electricity for every village of India, not only that, government failed to provide incessant electricity to any city too. India suffers acute electric shortage. Most of the cities suffer brownouts. Generally, any common city or town of India suffers electric cuts for 4-6 hours daily, while some more industrial cities and towns of India (like that of cities of Uttar Pradesh) suffers acute blackouts for even 12 hours a day.
It would be nothing new to stress again that it is impossible for any government to ensure and provide anything like “Free-education” or “Free-electricity” as citizen’s rights in any condition. As it is impossible, governments are bound to fail to meet such promises.
The Destruction of Power Sector under Government
We have seen how the price controls destroys the power of market and producers to supply the required commodity to meet the demands and hence creates shortages². In order to neutralize the effect of price control, government thus tends to exclusively control certain sectors of production completely under the monopoly. As government controls the production and supply of electricity thoroughly in India, it may be assumed that the price control on electricity may not affect the supply because it is the government only, that is producing and supplying electricity and hence government may provide electricity sufficiently at controlled lower prices or even at no price at all. As a matter of fact, government even tries to provide free-electricity for various purposes, yet government suffers acute shortage of electric power and hence fails to meet the demand of electricity. The natural law that price controls brings shortages works even in such exclusively government franchised production sector.
Role of inflation in electric shortages
If there is no inflation and government is providing electricity at lowest minimal prices, government often fails to gain any profit over the power sector and hence suffers acute financial deficits to increase the production of electricity to meet the required demand. Even the minimal possible price for electricity certainly remains much higher than the prices that would have prevailed in free market because not only the electric sector suffers any vital competition to increase production and decrease prices; it actually prohibits any such effort. All efforts to increase production are surmounted by the increase in demand.
If there is a genuine inflation rate, the cost of production of electricity keeps increasing, while the government and regulatory bodies either refuses to increase the price of electric power or allows only insufficient increase in prices. As a result, power sector suffers losses and deficits and ceases to grow rapidly and increase production because it gets no profit to save and invest in further production. Hence, government is forced to provide subsidies and capital for the power sector to keep producing from the compulsory tax collected. As a result, the citizens are forced to pay much higher price for the comparably insufficient and menial electric services than what they would have been paying for much better and sufficient electric services in free market. As the power sector under government regulations remains in deficit and suffer losses, it fails to replace worn-out equipments and service lines at higher prices due to inflation and that increase wastage and forces power sector to actual decline.
Corruption in power sector
Because of the natural losses and deficits in power-sector, government is forced to pay the required amounts to keep the production of electricity from the budgets of compulsory tax collected. This enforces a certain corruption where the more hardworking and able persons who are obviously making higher incomes, are forced to pay much higher prices for the power-sector (or any commodity/service under government monopoly), while the lazy, dishonest and incapable ones are getting the same services of electricity at much lower prices, often at no price at all. This obviously is acute corruption that forces every citizen to actually accept corruption in his own demeanour. As any consumer realizes that he is actually paying much higher prices for the electricity in form of various taxes he is forced to pay than the others, who are paying lesser taxes, he feels cheated, and that increases the tendency of consumer to steal electricity. Often consumers tend to tamper the electric meters and other ways to actually use more electricity and pay less. This seems to be genuine too because they are already paying much higher prices in form of other compulsory taxations. Often, because of controlled prices of electricity people over-consumes and hence waste the electricity. Overall, the power sector is forced to keep suffering great losses, insufficient amount to keep increasing production, to replace worn-out equipments, supplying lines, and almost no amount for development, innovation and inventions to reduce wastage and increase production. The amount that could have been used to increase production of electricity is wasted upon creating better meters to prohibit stealing, which seems impossible because in a way, stealing becomes necessary to reduce the already forced corruption by the government on citizens.
As government is forced to pay for the power sector through the budgets and compulsory tax collected, the amount that could have been used for progress in other sectors is wasted upon the already suffering power sector and that decreases the overall progress.
Will the Nuclear technology reduce the scarcity of power?
It is assumed that nuclear technology may increase the production of electricity and hence reduce the shortage, but it is not possible because the nuclear technology is a replacement for thermal and hydroelectric production. Thus, at one hand the production of electricity will be increased, at other hand, it will be decreased too while the basic reason for the shortage of electricity, that are government monopoly and regulation, price control and inflation, will remain unanswered.
The solution for the acute power shortage India is facing is to reduce the regulation and ultimately culminate the monopoly of government on power sector. If private bodies are allowed to invest in power sector freely with property rights, the production of electricity will increase manifolds; the wastage in supplying electricity will reduce to minimal. Because of competitive free market, the price for electricity will tend to decrease and that will promote the private electric service providers to increase the reach their facilities to more and more consumers at much lesser prices.
Furthermore, the producers and investors, in order to increase their profits will keep investing in innovating and inventing ways to increase progressive technology and production of electricity. As consumers will get their desired electric services at the genuine prices, the tendency to steal electricity will be reduced to minimal and that would further decrease the wastage to much extent.
Conclusion: The new 123 deal is hugely insufficient to solve the shortage of electricity in India. Indian government need to privatize the power sector and let the investors and entrepreneurs to invest in innovative ways and technology (including nuclear technology) to increase production of electricity and hence decrease the actual price of electricity for the consumers.

1. Education For All, Reason For Liberty [↩]
2. Reason of Price Rise and Consequences of Price Control, Reason For Liberty [↩]

Jungles and forests are the backbone of a society not only because of their economical importance, as they are natural wealth, but also because of their importance in maintaining ecological equilibrium. Trees and forests help in formulating the seasons, they acts as cleanser of the air surrounding human society and help in maintaining ground water levels and water cycle too.
According to the latest state of forests report of the Forest Survey of India the actual forest cover of India is 19.27% of the geographic area. Literary, India has to meet the needs of 16% of the world’s population from 1% of the world forest resources. The same forest has also to cater for the 19% of the world cattle population. The figures themselves signify the abysmal position and point out the extreme scarcity of forests and the need for proper conservation of forest wealth.

Cause of Depletion of Indian Forests

Often it is said that increasing population is the main reason for forest depletion, yet it is a false idea. The major reason for the loss of Indian forests is the government.
Despite the fact that forests are the basic natural resources for the economical activity, Indian government since from the start, keeps full control over the Indian forests without providing any private initiative and free market incentives to preserve forests and solve out the problem of scarcity.
During the 19th century, the British government confiscated most of the Indian forests to rob them for their imperial needs. After independence, Indian government took the robber’s position and stated Indian forests as public property under the conservations of government. In 1952, some well-intentioned politicians recognized the importance of forests and declared the new forest policy aiming at maintaining 1/3rd of India’s land area under forests. Yet, just like all other governmental interventions¹ , this initiative also proved to be futile and results came against the intentions of preserving the forests. Until 1976, the forest resource was seen as a source of earning money for the state and therefore little was spent in protecting it or looking after it and then Indian forests became a playground for political briberies, corruption and mismanagement of Indian forest ministry and department. At one hand, the government has the mighty resource in its hand to extract the wealth from it without proper procedures for recognizing the prices in accordance with profit or loss, on the other hand, government applies confiscatory taxes on citizens for maintaining the forests. Result comes out to be wastage of resources, burden on citizens and further depletion of forests.

Why Government cannot preserve Indian Forests?

Government systems are simply redundant and incapable of protecting Indian forests because such system of forest conservation lacks the incentive to preserve the forests while cutting trees down definitely provides the short term profits. Corruption in the aim of government authorities to preserve the forests is obvious as no individual has any means to feel the direct responsibility to conserve them. As nobody own any property rights on forests, nobody cares for them, on the other hand, people keep using the forests to fulfil their needs. Common person uses forest wood as basic fuel and cattle grounds while the executives often uses them for commercial wood and coal and none ever think of maintaining the equilibrium between usage and production of forests. Furthermore, a person cannot use his owned land for commercial forestation because he is not free to make profits from commercial forestation. The government authorities fail in protecting and preserving the forest because of lack of labour, security techniques while negligence, bribery, and corruption remains the basic ill of all such public resource ministries and departments.

Necessity of Privatization of Forest Resources

Trees are nothing but long-term crops and forests are similar to farmlands of those long-term crops. The forests necessarily need human endeavour for their proper growth and conservation. As human endeavor is necessary for protection and growth of forests, they are not free resources rather they are economic commodities and means of production, that is, forests are wealth and hence need to be subject of private property rights. Privatizing the forests will reduce the unbridled felling of trees because the private owners will have the responsibility to safeguard their property. The private owners will safeguard their forests with utmost sincerity and honesty because the protection and preservation of their forests will be profitable to them.
A farmer safeguards his farmland and crop because his crops are the basic means of his earnings and well-being, similarly, the private owners will have proper incentives to maintain the equilibrium of forests. At one hand, they will use the forests for commercial benefits, while they will have to maintain the growth of new trees to keep up and increase their personal earnings and profits. Entrepreneurs will not only look to provide enough derivatives from their owned forests to the market, they will have to innovate ways to increase the productivity and proper care for the maintenance of the forests.
As forests are not only scarce resources, they are scarce products of human endeavour too, the demand of forest and forest derivatives will naturally increase the supply and that will necessarily mean the increase in area and density of forest land. More and more people will become interested in forestation and attaining profits and the competitive market of forestation and forest conservation will provide ample opportunities of improvement in technique of forest protection and growth and security. Entrepreneur will look forward to convert the available wastelands to profitable forests by planting commercial trees, shrubs and herbs. As market forces will recognize and establish the importance of various trees and products of forests, the various species of trees will be preserved according to the degrees of profitability in their growth and protection and that will provide a completely planned, progressive and profitable system to conserve trees and forests.

Will Partial Privatization Help?

Partial privatization is the process of government to apply private enterprises for protecting and growing forests on contract basis while the authority essentially remains in government hand. Such government interventions often prove out to be futile because of the short term of contracted property rights. If the private contractor of a forest knows that he may earn the benefits of the forest only for a limited time period (say five years) he will certainly look to decrease the amount of spending in growing and preserving the trees and forests, rather he will look forward to attain maximum profits of the existing trees and forests by exploiting them irrationally. It will be no different from the complete authority of government over forests while it will increase the possibilities of corruption and negligence in maintenance of forests.
Conclusion: The incapability of government control over forests to conserve them is beyond any doubts, partial privatization of forests will also fail to provide better results. The only way to conserve trees and forests is to let the private initiative and free market introduce the incentives of profits in forest management and growth of trees. Privatization of forests will not only reduce the cutting of trees for their rational usage, it will provide incentives for planting further trees and new forests. Property rights on forests will increase the endeavours of individuals in preserving and growing the forest land.

1. Irrespective of their supposedly good intentions, interventionists through their planning of mixed economy results in chaos and exact opposite results to their interventions, Mixed Economy or Interventionism [↩]

For those who went to public schools in America, perhaps you can remember being excited your first day. Although anxious, I was invigorated by the idea of learning, of getting away my mothers knees, being turned out into what seemed like a vast new world of unlimited opportunity where I would learn how to be an adult, how to discern good information from bad, and how to use my faculties to become the best person I could be. I was excited to prove myself to the world and to myself, to know all of my colors, letters and numbers, and whatever came after that. At this age, school was what you expected it to be.
What occurs though when you get into the more “advanced” stages of learning where you have to learn critical thinking skills? When you begin to notice the disparity between some children and others? When it is easy to discern whose is of intellectual strength and who is weaker? Or else, who has mathematical ability, who has language ability, spatial, athletic? Out of necessity, as always happens when people are forced into association, you are all put in the same group: the middle. You are taught to a T how to be exactly mediocre in all aspects of the general “liberal” education that is purported in schools. If you are not good at interpreting metaphors or absorbing literature, too bad. You will learn to be, or else fail, or put in remedial classes where you will then be ostracized by your classmates. If you are excellent at this task, too bad. You will be forced to slow down your reading, to stop challenging the author, to stop abstracting from their words. Or else, you will be put into advanced classes, where you may again be cast out by your peers.
To modify a Rand sentence, public schooling sells “Mediocrity boastfully [impressed].” You may not get ahead if your classmates may not, because you are making them feel bad.¹ You will hurt their confidence. If you need more help in a subject, you may either work hard to understand something you cannot grasp, decide to fail, or ask for extra help and opena world of criticism—and school children are ready to be mean-spirited.
What does this do to the relationship that man may have with their fellows? It seems to me to breed animosity. Hatred of those dissimilar from you, not necessarily because their differences, but because their ability or lack thereof is put upon you as a standard which is not your own and which you could not or would not want to live up or sink down to. You are constantly being either pushed back or thrust forward by those who have other talents and understandings than you do.
Now, public education is a multi-fold problem. Aside from the fact that we are plundering some to give to others, which propagates malice between those who must pay taxes in order to provide for these schools, who may very well disagree completely with their educational philosophy, and who also could lose the opportunity to send their children to schools with which they do agree because of the taxes so inflicted; you also have a brand new generation, learning to regard their fellow man as people who will always be working to put the brakes on their progress or who will try to get them to move into uncharted territory which they do not understand.
In a system of private schooling, not only would children be allowed to advance as quickly or as slowly as they needed, but teachers would also be able to cater to individual capacity, or else to that type of learning which was the intent of the school set up. If you are attracted to technology, why should you not be allowed to focus your studies on this so that you can become the best at it? If your interests most lie in the study of social affairs, why should you have to study so many maths? If you respond better to audio stimuli than to words on a page, should not a teacher be allowed to facilitate this so you can learn to the best of you ability? This is impossible in the current system. There is such a wide degree of varying interests that the best a teach can do is come to the highest possible consensus between one child to the next; and further, to the highest consensus between Federal, State and Local laws mandating certain standards.
In private schooling, even if schools were set up only for certain purposes, i.e., the study of mechanics, or of fine arts or of law, it is not as though you would not know other people’s interests existed. Surely, persons in your family, or neighborhood kids, would be going to a different school that utilized their natural propensities. You would learn be constantly striving to fulfill your potentiality, and you would also understand from a very young age that people are naturally different, but that this is of great benefit to you. The division of labor² would become apparent at such a young age, and you could understand what sort of important role this plays in the organizing of all life, of every industry.
Why, it is so absurdly asked without a thought, are children today so angry? Why the school shootings, and the misanthropic attitudes? Why the higher rates of suicide, the self-mutilation, the fights, the drugs? It is blamed on music or whatever other scapegoat is most convenient at the moment. Does anybody ever stop to think that the inherently anti-social institutions enforced upon so many children may have something to do with the anti-social feelings they then have? For how many generations, or how many years, do you expect a person to be forced into fraternity to people with whom he cannot relate, and still feel it an honor to deal with other men, as it ought to be?

1. It is a common trend going on these days. School children commit suicides because of the “oppressive school system”. It is “Oppression” that some students get higher marks while some fails. Thus, there should be a grading system. Anybody getting 80% and above, should be graded A+. Alas! So, there is no incentive for a student to master a subject and gain 100% marks. Even if he gets 80%, he will be at the top. In addition, he can never fail. It is the making of mediocre.,ReasonForLiberty [↩]
2. Division of labor, ReasonforLiberty [↩]

The theme of a democratic government unalterably remains as Government of people, by the people and for the people. Democracy provides a government that is subject to the will of people, yet the fact is it submerges the power of an individual to decide for his life in the colossal mass of the voters. The Individual citizen becomes insignificant with no authority to govern his life, and no say in the policies decided by government. Thus, the assertion of socialists supporting the interventions and regulation of government in market, that “the government is still controlled by us” becomes a mockery.

Why Participation of Indian citizens in elections is reducing?

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

Destruction of Individual Causal Role in Democracy

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

Incompatibility of Democracy with Division of Labour causing Poverty

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

Cure of the Problem

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

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