If you are a regular reader of RFL you’d know that this site hosts articles from a bunch of writers, each having their own understanding of what a free society could look like. Its impossible to predict how exactly things will take place in such a society, all that can be done is to use the science of human action and envision how would such a society might look like.
Last article published at RFL was an attempt by the author Sudha Amit to answer the questions asked by various people about the rapist and the rape victim in a free society. I agreed with the article overall but I would like to elaborate some of the points.
If you haven’t read that article, you can still read this one, but I recommend reading that article too.

The question generally asked is if in a free society a criminal is let free for a certain amount of money, then wouldn’t that mean rich people will keep on committing all crimes and walk free?

Proportionality of Crime

Before we proceed I must explain a very important concept of Libertarian justice system and that is “proportionality of crime and punishment”, that is any punishment must be proportional to the crime committed. It could happen that the victim wants to punish the criminal less than the proportional punishment, and that is perfectly acceptable, but if a victim punishes the criminal more than the crime committed, then the victim has now become the aggressor, and now the criminal has become the victim.
Take for example if Alice slaps Bob, and Bob breaks Alice’s leg as a punishment, then Alice has become a victim of Bob’s aggression. Similaly if someone trespasses on your property and you shoot them then you have initiated aggression against them.

Restitution Business

Another important aspect of Libertarian justice theory is that a victim first must be restituted for the harm done to him by the aggressor, and then the aggressor loses the same amount of rights as the amount of rights of the victim he violated. For example if I steal $10,000 from you, then first you need to get those $10,000 back, then I lose rights over my $10,000, so you will get $20,000 back. It is to be noted that you do not get double the money back, you just get your own $10,000 and then another $10,000 as a punishment for me.
Similarly if you poke my eye, and blind me by one eye, then you first need to pay me enough money to provide me with restitution, then you lose the right of your eye, and I will have a right to poke it out.

Rape Scenario

In the case of a rape victim and him/her rapist, first the rapist must provide restitution to the rape victim. That is to make the rape victim whole. Then the rapist loses his rights in the same manner he violated the rights of the rape victim, that is rape victim now has a right to either rape the rapist, or have him sexually violated in the same manner through someone else. The rape victim can fortfeit his right to a restitution and chance to violate the similar rigths of the rapist, but he can never force a bigger punishment than the crime done by the rapist.

By this principle if a rich man rapes a woman, the woman has a right to have the rich man pay her a restitution(the amount of will be determined by the courts), and get him raped(chances are she will pay someone to rape him). Nobody can force the woman to accept money in lieu of punishment of the rich man. If this rich man keeps on raping women, he will keep on losing his rights the same way. If a rich man kills someone then it (could be) gameover for him. If I were a rich man I wouldn’t rely on raping or killing people first and then silencing them with money.

Its possible that the rapist makes the victim an offer that she forfeits the punishment by rape of the rich man. But this offer could be a really large sum of money as there is no upper limit to it. If she demands all the money of the rapist in return of not getting him raped, and rapist really does not wanna be raped then he will have to give her all his money.

No rapist, no matter how rich can live life normally in a free society.

Prostitution and ‘Rape-restitution’

This is the most ridiculous idea that someone would suggest that there is a similarity between money exchanged for prostitution and money given as restitution of a rape victim. Its like someone is confusing stealing groceries with purchasing groceries. Prostituion involves voluntary exchange of sex and money. Rape and its subsequent restitution is not even an exchange. The money is being given as an attempt to restore the damage done to the victim, not for rendering services. Even if you rape a prostitute that is still a rape, and not an act of prostitution.

Conclusion

There are many misconceptions about how a free society will operate without the coercive apparatus of state, before any attempt is made to answer how this will happen one thing must be kept in mind by libertarians and voluntarists. If people really want some service and there is no initiation of aggression involved then the free society will have that service or facility. Once you establish that assumption, you acquire a firm ground from which other people cannot displace you by putting words in your mouth.

I would conclude by quoting a recent conversation I had with a friend who had doubts about a free society. After I explained him about the concept of private proeprty and a society of pure liberty he said: “What if your neighbor is beating his wife, then though its none of my business in your society but I wouldn’t wanna live in such a society?”, my reply was simply “What makes you think I would wanna live in such a society?”, after his shocked withered away I claimed, “Trust me in a free society I wouldn’t live in a neighborhood where people are beating their wives”.

Prostitution is considered as misdemeanour or a “lesser” criminal act in almost all United States except Nevada, where the state government allows licensed brothels.
The police investigate and arrest persons involved in prostitution, even FBI glorifies itself from time to time while fighting against interstate prostitution.
A proper examination and understanding of the activity of prostitution and its prohibition explains that prohibiting or il-legalizing prostitution is a wrong step causing wastage of resources, reducing the quality of life and the individual liberty in the society.

What is Prostitution?

Prostitution involves buying and selling of sexual services, it is simple act of mutual benefits between two consenting individuals without any compulsion.
Having sex is not a crime; exchange of money is also not a crime because there is nothing wrong or illegal in exchange of money between two individuals. So, why is it illegal?

Most of the critics against the legalization of prostitution usually claim that if prostitution is allowed freely, the strong evil men may force women to involve in prostitution.
Forcing anyone to do anything is an obvious crime, force or compulsion is simply against the individual rights of any civilized society, but prostitution does not involve any force or compulsion on anybody, it is simple exchange of money for the service provided with mutual agreement.¹

Sex as a Trade

People say that sex should be allowed only in marital limits and hence prostitution should be illegal. What people do not realize is marriage or a consensual love relation is nothing but transaction of love. If a man provides his girlfriend some precious gifts and in return she favours him with sexual affection, then it is no different than prostitution, similarly, a married woman providing sexual benefits for her husband in exchange of love and security of married life is nothing but trade of sex, transaction of love. What makes prostitution different from such love relations is the polygamous nature of prostitution. Thus, people opposing the demand of legalizing prostitution are not against the exchange of money for sexual services, rather they are against the polygamous nature of prostitution. Recent scientific researches show that it is quite natural for both males and females on biological levels to have a polygamous attitude and a desire to be in intimate relationships with many partners² and animals of other species also get involved in activities like prostitution.³

Prohibition never helps

The Constitution of United States stands firm on individual liberty stressing on freedom of speech, religion and trade. Thus, illegalization of prostitution, which violates the premise of inalienable right of Individual, is simply against the Constitution that confirms full freedom for consenting adults for having mutually beneficial agreements, relations and transactions.
Prohibition never helps though it causes wastage and corruption. Alcohol consumption was prohibited from 1920 to 1933 through Volstead Act, which made Bootlegging as an underground industry, home producers created whiskey and gin. The prices of alcohol skyrocketed in black market sales of alcohol because of heavy demand and corrupt governmental officers who surreptitiously helped the black-market⁴ . Government lost a huge amount of tax from bootleg alcohol and it became impossible to check the quality of alcohol thus produced. The unsafe alcohol caused many accidents. Government spending to prohibit alcohol consumption increased $4.4 million to $13.4 million annually. Coast Guard spent at an average $13 million per year to check the prohibition during 1920′s. Government thought that prohibition would solve many social issues but the result was just opposite. The criminal activities increased as a result of prohibition. The homicide rates increased up to 66% during prohibition.⁵
History teaches us that prohibition never helps, rather they increase wastage of useful resources and causes increase in crime rates. Prohibiting prostitution also leads to similar results.

Legalization reduces crime rate

Prohibitionists suggest that legalizing prostitution may increase crime, but the facts say opposite. Serious crimes, such as rapes, homicides, robbery, kidnapping are noticed to be increasing because of prohibition. Countries that allow prostitution as legal activity do not suffer from high frequency of violent crimes. Canada, France, Israel, Singapore, United Kingdom all allows prostitution and all have lower crime rates than the crime rates in US.⁶
After being charged with a sex-crime, a woman faces the social stigma and she becomes unemployable and hence forced to get involved with further criminal acts. Once she is jailed, it becomes impossible for her to gain any other means of living and that enforces her to work as prostitute for longer than they otherwise would. The experience of jail further makes women prone to get involved in other serious crimes.
When police bans brothels, motels or other places where prostitution might generally be practiced, prostitutes find themselves forced to work in neighbouring streets and hence spoiling the neighbourhood. The dangers for prostitutes also increase many folds and they find themselves unable to care for health and safety precautions. Such prostitutes can easily be soft target for serial killers and sociopaths.
Better way is to legalize prostitution in certain areas of cities where the prostitutes and their clients may work in safe environment.
Other criminals who consider prostitutes and their customers as easy target to rob, blackmail, or rape also remains unchecked. Many a times, even the corrupt police also engage in corrupt exploitation of prostitutes. Thus, the criminals realize that prostitutes or their customers are most unlikely to report to police and that provides them an incentive to commit crimes against such people.
If prostitution is legalized, such people would not flinch from reporting any criminal activity against them and that will reduce crime rate.

Legalization promotes health care

Prohibition causes health hazards. Because of laws against prostitution, most of the prostitutes often find themselves forced to involve in unsafe sexual activities. They cannot go for medical help too because of the fear of police. Prohibition on prostitution thus increases the probability of unsafe sex and the spread of sexually transmitted diseases like syphilis, gonorrhoea, Chlamydia and herpes. If prostitution is legalized, the prostitution can be monitored and medical facilities can be provided to them and that will control the spread of such diseases.
A public health review of World Health Organization⁷ states:

“In Kenya, where the importance of chancroid in HIV transmission was first described in the late 1980s, interventions targeting sex workers and STD patients were implemented. Reported condom use by sex workers has since increased to over 80% in project areas and the incidence of genital ulcers has declined. Chancroid, once the most common ulcer etiology, now accounts for fewer than 10% of genital ulcers seen in clinics in Nairobi, Kenya.
In Senegal, HIV prevalence among pregnant women has been below 1% for more than a decade. A strong multisectoral response, an effective STD control programme and early legalization of prostitution have been credited for this low level. Special clinical services, for example, offer regular examination and treatment for registered sex workers. Not only has there been a significant decline in STD rates among sex workers and pregnant women between 1991 and 1996, but genital ulcers are also no longer common and chancroid is reportedly rare.”

It is very reasonable to legalize and regulate prostitution and medically monitoring the sex-workers and hence providing a safe environment to their client. Legalizing prostitution will also encourage the sex-workers to learn more about health issues, and ways of prevention. Canada, France, Denmark, Israel, Singapore and many other countries that have legalized prostitution have much less number of people living with HIV AIDS and the number of deaths due to HIV when compared with the records of US.

Legalization of Prostitution and Social Condition

The societies that have allowed prostitution as a legal activity are providing much better social environment for the individuals. Countries like Canada, France, Denmark, Israel etc are spending much more of the percentage of their GDP on education and health-care than what US government spends. The suicide rates in such countries is also lesser.
Legalization of prostitution promotes individual liberty and privacy; it also provides a way for the poor to alleviate their situation. In a free society, it makes no sense for the government to dictate people, specially the poor one that they cannot take money in exchange of the service they are willing to provide freely. Legalizing prostitution will also promote the privacy of individuals about their intimate relations and it will reduce the stigma the sex-workers suffer.
Prohibition on prostitution causes a lot of wastage of resources. The law-enforcement bodies that devote a lot to monitor the prohibition on a harmless activity in between consenting adults can be used for better works and prevention of serious crimes. That will certainly help the society to reduce the crime rate and establish peace. Legalization will also reduce the police corruption and dangers of underground industry and provide safety for the sex-workers against organized crimes.

Conclusion: Prostitution is such an activity that harms nobody. Legalizing prostitution will serve the society in better way because that will tend the police to direct their efforts towards preventing and solving actual crimes which involves clear exploiter and victims and that will help the cause of justice. Legalizing prostitution will also help in improving the health care and social condition of United States.

http://couplewriters.blogspot.com/

1. Reason for Liberty, Discussion on the issue of Prostitution on Objectivistic perspective
2. Dr. James J. Hughes, Monogamy as a Prisoners Dilemma: Non-Monogamy as a Collective Action Problem
3. A New York Times report, on a recent scientific research signifying that even monkeys get involve in money transaction for sex, that is Prostitution.
4. Nancy Nixon, Nancy Nixon discusses over the effects of Prohibition on Alcohol during 1920 to 1933
5. Mark Thorton analyzes the policy of prohibition on alcohol consumption during 1920′s, stating that Alcohol Prohibition was Failure, Mark Thorton
6. Crime Statistics in Canada, 2006, Canada Government
7. Bulletin of the World Health Organization, Bull World Health Organ vol.79 no.9 Genebra 2001, Richard Steen

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Failure of Government

Often government is considered as obligatory for the working of a society, yet, the more perfect and free a society is, the less it needs a government to govern it. A free society obviously governs itself and provides enough free domains for each individual the right to self govern. All the specific laws of any society or country are basically the very natural laws based on the rational mutual self-interests of the individuals involved. All the laws of trades and commerce with respect to intercourse of individuals or different groups of individuals are based on laws of mutual and reciprocal self-interest. Individuals or groups of free individuals are tend to follow such natural laws of peace and prosperity not because of fear of any formal government, but because of the inherent mutual benefits and profits they are seeking for.
It is quite obvious that if a society is left free, and each individual of that society is provided complete freedom to pursue his progress and happiness, there seldom will be a need of any governing authority. Yet how often is the case where various operations of government destroy the natural peace and mutually beneficial state of free society?
If one look back at the riots and tumults that happened in India at various times, he will find out that government did not want any of those riots, but the government itself was the generating cause. Instead of consolidating the society, government divided it; it deprived the society of its natural cohesion and engendered discontent and disorder. That is, the government itself became the cause of chaos. The riots of 1948 were not because of any misgivings between Hindus or Muslims, both of them were living peacefully in India since hundreds of years, those riots occurred because of governmental want of divide and rule. The bloody conflict of Kashmir is not because of some Islamic group of militants, it is because of the want of two governments to control a peace of land and rule over the people living there. The militants of Punjab demanding for Khalistan were not inspired for any better cause of Sikh community, rather they were looking for making another coercive government, the 1984 riots against Sikh’s again were not because of any sect of society, but they happened because of the impulsiveness of government. The emergency period and all the killings in that period again were because of the government. The opening of Babri Mosque gate was obviously a political step of the government that infuriated the society and became the cause of Hindu-Muslim riots, Babri mosque was demolished because of aspirations of government, and whole society suffered the consequential riots and killings. The burning of Godhra train was again a consequence of the division that the government and the aspirants of government created and that became the cause to further Gujarat violence.
Overall, there seldom occurs a riot or act of violence within the free individuals of a free society, but whenever a self-imposed government intends to interfere within the society; it becomes the cause of riots, tumults, destruction and violence.
The various acts of government, tax-impositions, caste reservations, reservations based on religion etc ultimately divides the society and creates an environment of dissatisfaction an frustration that ultimately leads to violence in various forms and to avoid that, government again tend to divide the society further and deprive it of the natural strength and mutually beneficial state a free and self-governed society may achieve. The recent case of Telangana struggle is also nothing but an example of governmental act going sour, and the very infamous Mumbai riots against the people of UP and Bihar are also nothing but the ill-effects of governmental ill-policies and the war-mongering character of the political aspirants.
What good a farmer ploughing his land will find in leaving his peaceful pursuit of prosperity and happiness and going for a war against a farmer of other religion, state or country ploughing his own land? Why will a manufacturer of a certain religion, caste, state or country wager a war against the manufacturer of another religion, caste, state or country? Does any such war, riot or struggle adds up any acre of land for that farmer, does it increases the productive capacity of the manufacturer, does such wars and tumults and bloodshed increases the venturing probabilities of any entrepreneur or enterprise? No, it adds nothing for any common man, it do no good for any common folk, rather, all such wars, riots, strikes and tumults deprives them of their peaceful pursuit of happiness, their basic right of freedom and security. Though this reasoning is good for a society or a nation and its people to avoid and hate wars, and try to maintain love an peace to pursue their progress, yet it is not so for the government. A society earns nothing from divisions, wars, strikes, tumults and riots, yet a government earns a lot. War is the game of government and the nation and public are the pawns.
In spite of all these depressing and destructive acts of government, the individuals keep striving for their progress, for their living. No matter how high inflation may go, the poor man seeks out a way to feed his children. It is obviously a wonderful attribute of the society that in spite of being ruined and ruled by the government keeps providing enough aid for the individual constituent to survive the harshness and inhumanity of the government.

Society in every state is a blessing, but government, even in its best state, is but a necessary evil, in its worst state, an intolerable one. Thomas Paine

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

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

Society with an all knowing Superman

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

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

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

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

Is this society better?

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

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

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

Society with real life men

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

Conclusion

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

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

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

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

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

Who Decides the Prices?

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

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

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

Can Government decide and control the prices?

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

Reason of Price Rise and Consequences of Price Control

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

Solution of Price rise and Shortage

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

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

Cycle of profit motivated Innovations

To make profits above average and hence to be successful businessmen, entrepreneurs need to foresee changes in consumers demand before their competitors, to provide new improved products in the market ahead of their competitors or to cut the cost of production before their competitors may do that. Eventually, every innovation becomes general and the other producers and businessmen also either adapt the innovation or improve it further. Thus, the profits of the first businessman who introduced the invention decrease again. The only way for him and others to make higher profits again is to introduce further innovative improvements in the production and quality of products to satisfy the consumers demand at further lower prices. Thus, for any firm to continue making above average profits, it must frequently outrun its competitors and must act as an agent of continuous economic progress.
The competition for making higher profits increases the total production of market many folds and decreases the poverty of masses. A firm that brings upon an innovation in production increases its production, sales revenues and profits at the expense of the other producers who are not yet able to increase their production. Consumers shift to the products of that firm because it has better or equally good product to provide them at considerably lesser prices. The innovator hence makes outrageously high profits while other producers’ lower profits or outright losses compels them either to renovate and improve their production or to duplicate the innovation brought upon by the first producer. In a free-market, innovations hence, are not only necessary to make higher profits, rather they are necessary to make any profit at all, if no innovation and improvement, one may loose his business, profit and consumers totally. As the innovation becomes general, the total production of market increases manifolds, increased supply of products decreases the selling prices, and hence reduces poverty to great extent. Furthermore, generalization of innovation and decreased selling prices reduces the profit of producers and hence compel them to modernize, improve and invent further to bring more satisfaction for the consumers. The result obviously comes out to be in favor of consumers that may gain the better products at lesser prices and this is reduction of poverty. Thus, free market provides the profit impetus to innovate, improve production, and hence reduce poverty of masses. In addition, a special profit of innovation tends to disappear as the innovation become general and every other producer adopts them. In order to maintain higher profits, every producer who want to keep maintaining higher profits to longer periods need to repeatedly innovate and improve the production and hence bring down the poverty in masses.
In absence of freedom as the government regulates the market and bar down the profits, this impetus for innovation and invention decreases substantially and the consumers suffer poverty.

Government regulation is unable to provide impetus for economic progress

In a free market, the production and business is open to everyone. Even a penniless individual newcomer may start his new venture and bring upon innovative techniques of production to make profits. Those who have innovative ideas but lacks investment to implement can offer partnership to others who may invest in their ventures. A free market capitalist society provides enormous resources of investment for the new innovative ideas and that is absolutely impossible in a government regulated mixed socialist economy. In a free-market, where an innovative individual (though he has no money) need only to convince some of the financiers to invest in his innovative ideas, easily gets a chance to progress. In addition, the financiers keep looking and encouraging the innovators for making higher profits as that is necessary for them.
On the other hand, in a socialized government regulated market, the innovator need to convince everyone, a majority or at least a significant minority of his fellow citizens in order to implement his innovation. Even if he succeeds anyhow to convince the majority (most of whom have no idea of production process and innovation), he may not be able to get necessary finance because of government licensing system. Furthermore, while in a free-market he can have any preferable and most profitable agreement of partnership with the few financiers, in case of regulated market, he has no way to bargain for his individual profits as government confiscates his profits for the cause of the majority.
Thus, the government regulated system is such that no new innovator actually feels it profitable to devote his hardship and intellect to actually innovate, as he may never be able to make any high profits. In addition, even if some young innovator tries to bring upon innovation and improved changes, he may never succeed because of the bureaucracy, license raj, and political corruption. In such scenario, only a few already established corporatists that enjoys the government support may succeed in bringing upon any innovation an hence the common man always fails to make any fortune on behalf of his inventive innovation. Furthermore, as such system discourages any innovative improvement, the businessmen of such mixed economy regulated market not only suffers lack of increase in production, they are forced to adapt the already introduced innovation in other freer markets.
Once a friend asked me, why India fails in introducing any remarkable innovation or invention in market? The answer lies here; Indian market is not free enough and hence is unable to provide the required impetus necessary to bring any inventive innovation to increase production by itself. Another friend complained that in India people tend to copy or duplicate others innovation rather than engage their energies in innovating techniques further by themselves. The complaint may be true, and the reason is only that. Government actually hampers any impetus for innovation, while the world market forces Indian producers (the government supported corporatists) to duplicate the innovations brought upon by the entrepreneurs and innovators of other freer markets.
The more freedom a government institution provides to the market, the more innovation and invention that market brings upon to the civilization. Even Indian government realized this fact after 1991 and hence adopted the process of disinvestment and freeing up the market. As the Indian market, producers and individual innovators will get more freedom to make use of the profit impetus of free market, they will experience their increased potential to bring upon major innovative inventions in every sector of production and general life.
Individual Freedom is the mother of progressive innovation and that is necessary for civilization to be free of corruption, poverty, wastage of resources and scarcity.

1. The cure of Poverty is increase in productivity of Individuals of society, Population, Poverty and Productivity

The Socialized Medicines

The idea behind socialized medicines is the forced economic equality³ of citizens, i.e. no matter you have earned money, you cannot have any better medical treatment than the lazy person who never thought of earning and saving for his medical security. Thus, the socialization of medicines is not only the abolition of causality of individual efforts and his earnings; it is abolition of the cost in spending of income.
As visits to doctor are free to individuals while the taxpayers collectively pays for them in socialized system, each individual realizes the benefit of his visit to the doctor, while millions of taxpayers pays for the visit. Obviously it is an insignificant amount, thus every individual is encouraged to take advantage of the system without considering the wastage. As a result, the number of visits to doctor increases abruptly. The absence of cost to the individual patient results in an enormous increase in the medical tests, hospitalization and surgeries performed, most of which remains unnecessary and that adds to the cost of system furthermore, also the system requires a huge bureaucracy to administer it and that further increases corruption and the cost to the collective. The result of the system is simply to raise the fees of doctors and medical facilities and to create scarcity of hospital beds and doctor’s time. The redundant medical tests and surgeries performed often delays the meeting of genuine needs of the patients and many a times, it becomes impossible for the patient to actually get the required treatment.
To solve out these problems, government thoroughly bureaucratize the medical field by controlling the doctors’ wages and price control of medicines, government also restricts doctors from practicing freely. Ultimately, the profession of doctor and medicines becomes unattractive and unprofitable and the talented individuals prefer not to opt for it. That further creates scarcity of efficient doctors. As government has no rational way to determine the necessary treatment in any individual case, the doctors starts denying the necessary treatment for the people, thus increases corruption.

Socialized System against Advancement of Technology

As the total cost of the medical care for the collective populace becomes unbearable and beyond the budget of government and scarcity of doctors, researchers and practitioners also increases the problems, government eventually starts opposing the advancement in medical technology. Any new technology, such as implantation of artificial heart proves to be major threat to the government’s budget. The free market incentives that work to reduce the cost of such new technologies before it may become available to the common mass are absent under socialized system. As government in no way can afford providing such technology to the masses freely, it actually starts opposing and restricting in advancement of new medical technology.
Furthermore, government deliberately excludes many categories of medical procedures ranging from cosmetic surgeries to bypass surgeries in order to contain the collective price of the Universal Medical Care System. Thus, people who could have afforded such medical procedures for their own help by their own money in free market are denied to have such facilities in socialized system.

Increase in Bureaucratic Corruption

As the Free Health Care System results in enormously increased demand of services and scarcity of doctors, medical facilities, hospital beds and resources, the medical sector becomes the free zone for political and bureaucratic corruption. As politicians and government official realizes that government cannot satisfy the demand of citizens, they start taking advantages of the situation through bribery, frauds and corruption. In order to contain the spending on collective medical care of whole populace and to increase the profits of the corrupt politicians, bureaucrats and government officials’ including doctors, government begins denying and prohibiting necessary medical procedures too to the common person. Not only the medical advancement is reduced and opposed by government, it also starts denying medical services to those citizens whom the government considers as only marginally valuable to the nation, such as infants or aged. As aged and infants does not pay any additional tax to the government budget, while their necessary demands of medical are high, they suffer neglect. On the other hand, government keep increasing taxes on the taxpayer citizens on the name of trying to provide necessary treatments for the poor, old and infants. Thus, the same socialized medical system that begins with an aim to provide funds for medical care of poor, infants and aged, turns out to be a sacrificial citadel for them.⁴
To believe that there can be something like “free lunch” is a great mistake. If government promises for free lunch, no one should be surprised to find out that it increases malnutrition and starvation. He may find himself on short rations of government in order to have fund for those whom the government considers more valuable than him on social and political priority. Thus, such socialized free-health care, or free-education for all, or free-lunch, food, water for the poor and underprivileged often proves to be phoney, corrupt and inefficient. Yet, government keep propagandizing such issues and programs just in order to keep its hold on political power and vote bank of the masses. Ultimately, all this increases extreme corruption in the system, and poverty and scarcity of resources and services for the masses. In order to reduce and ultimately remove the problem of corruption in India, Indians need to realize the irrationality of collectivism and to abolish it instead of abolishing the causation and cost of individual earning and living.
Huge number of such socialized programs including Universal Medical Care, Education for All, food for all, minimum wage rates and employment for all run by government in India are the actual cause of extreme corruption that we Indian suffers.
The POTUS Barack Obama and his Democrat comrades are also trying to push such forced economic equality on US citizens by means of luring the citizens and propagandizing such socialized programmes of Universal Health Care, Public education for all and many other such programmes. Obviously, their motive is to gain political mileage and promising vote bank to maintain their ruling power. Yet, the American citizens should realize the irrationality of such collective systems and prefer not to be the victim.

1. A discussion on Indian Health Care Problems, Indian Health Care–an Overview
2. The Myth of Complete Education, Education for All
3. Egalitarianism creates Forced Economic Inequality amongst the citizens that proves to be more drastic than the natural inequality of free system, Freedom Versus Egalitarianism
4. Socialized system turns to Common Minimum Program, The story of Socialism, Public Welfare and Brain Drain

Uniformity of Profit

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

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

Benefits of Natural Anarchy

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

Ills of Interventionism and Central Planning

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

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

Burden on Consumers

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

Poverty and Unemployment

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

Price Control and decrease in productivity

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

The Only Possible Solution

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

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

What is the difference between a dead or unconscious body and a living man?
One may say, it is the conscious, and that would mean that consciousness is life.
To be conscious means to be aware, so awareness or consciousness of what makes a man living? Consciousness of his needs to maintain and further his life and the consciousness to find out the ways to fulfil his needs actually makes a man living. That is, life is consciousness of needs, or desires.
Now the needs of a man or his desires are infinite. Man desires this, that, and something else again, also life is such a weave that to attain a desire and save it, he has to sacrifice some other of his desire. You can not eat your cake and have it too. If you desire for a house, you will have to pay the price for it, your desire to have a plenty of floatable cash will be sacrificed. You can eat a cake after paying say Rs10 for it; you sacrifice the desire to keep those Rs10 in your pocket.

Intellect

So what is that, which helps a man to decide which of his desires is to be sacrificed and which desire he should fulfil? One may say his intellect helps him decide which desire is more important, so does the intellect of a man masters his life.
Intellect of a man is his tool to estimate and understand the relative importance of various desires of his present and the future. As intellect is his only tool, it cannot be his master, rather it is his slave on whose loyalty, the success of his life resides. How his intellect does helps him find which desire is more urgent and needs his attention more and which desire he may sacrifice?
He uses his intellect to be aware or conscious of the varying degrees of urgencies of his desires. If a man does not have desires, he cannot have intellect too, because he will not have any need or purpose of intellect, even if he has some intellect he will never improve it nor will use it. He thinks to solve problems he faces in fulfilling his desires, if he has no desire, he has no problem and hence he does not need to think.

Throughout his life, he remains enmeshed between the struggles of various desires, and he tilts towards that desire which is most necessary. Like, a child may desire to play cricket today, while he has to face his mid-term exams next morning, as he wishes to gain good marks in exam, he may decide to abort the plan of playing cricket this evening. An elderly man wishes to buy a luxury car, so he decide to sacrifice some of his spending on some other of his desires to save money to acquire a car, a son wishes to buy a house, but he sacrifices his desire to own a house to save money for the desire to provide cure to his sick mother and so on. Ultimately, consciousness of desires is life, intellect is the tool of life and Desires themselves are the actual master of the man’s life.

“I“

Now one may say, desires are not the master; rather he himself is the master, or the master is I or me, or myself. How can one define “I”? What is “I”?
“I” actually represents totality; it represents a person’s body, intellect, mind, memory, imaginations and his desires in total at a given moment as a single unit. Without his body, he cannot define “I” he cannot remove his mind while defining “I” too and so on. When one say, “I” am running, he mean that his legs are running, carrying the rest of his body, his brain, intellect and memory with them, when he says, “I” am thinking, he means his intellect is thinking, his eyes are not thinking, his ears doesn’t think and so on. Similarly, when one say, “I” decide to do this now, what he means to say is, the urgency of that desire to be fulfilled is maximum at that moment relating to other of his desires. He decided that by experiencing the varying intensities of the desires he is aware of, his desires rules his decision, he uses his intellect as a tool to understand the order of the desires and then he acts in accordance with his desires to fulfil them. So, saying “I” rule myself is equivalent to saying his desires masters him.
Desires can be good, can be bad, a man can have desire to help others, a man can have desire for welfare of his family, or his locality, or his city, his country or whole mankind, he can have desire for love, prestige and self-respect, in all cases, it is his own desire to achieve which, he uses his intellect, thinks and acts, and hence in any case, he depends on his self, his desires, he remains selfish, his own desire becomes his motivating force.

Will and Will Power

Sometimes, people create a mystical illusion of spirituality by stating that to overcome your desires is the way for emancipation, or freedom. They further suggest that one may overcome his desires by the virtue of his “will” or “will-power”.
So what is will or will-power?
Actually, “will” is the synonym of the desires itself. What people ignore is the fact that to overcome one’s desires itself is a basic desire of his and that is his will.
What is the difference between an animal and a rational being? All animals follow their impulses, so do the rational being, yet there is a difference. An animal does not have the rational ability to be conscious of the varying degrees of his desires, he lacks the tool to signify the various desires and dignify the most important or rational one. On the other hand, a rational being have that tool to perfect his sense or conscious of the varying degrees of his impulses or desires. A savage is slave to his immediate impulses, he will not save for old age, and he will not think for better life (or improved conscious of desires and varying degrees), he has no tool to do so. While a rational being has that tool, so he thinks and relates, he experiences which desire is most important, or rational, and properly makes a plan to achieve it.
What happens when the intellect of a man fails to signify the rational degrees of his desires? In such situations, he often commits mistakes of varying degrees, and is vulnerable to undesired complications, because he has to pay the price of each of his desire. His life becomes a chaos.
Nearly all of his desires follows the same trend, he has to pay for a desire by sacrificing some of his other desires. For his desire of emancipation, heaven, spiritual pleasure, knowing the omnipotent etc, he sacrifices his other materialistic desires. That is, will, or will power indicates the exact desire, which that particular man has decided to be strongest for himself at a given moment with the help of his intellect, hence, will is synonymous of desire, and will-power is synonymous of the power of the desire, which masters the man at that moment.

Freedom

So if the desires inevitably master a man, what is the freedom¹ ?
Freedom (self-governance) signifies no restriction on the man to use his tool, his intellect to decide what desires he need to fulfil. Freedom is his natural right and necessity to lead a better life. His freedom is to be lead by his desires with the help of his own conscious (intellect) freely. It is his natural right because naturally, he has to pay for every of his desire to fulfil. Therefore, if he commits a wrong or irrational, he certainly pays for it, if instead of saving his desire of peace, security and honour, he let the irrational desire to rule him, he commits the crime and he pays for it, by loosing the social security, his rights, his freedom and so on. Without freedom, he cannot use his intellect properly, and that would restrict his progress, and reduce his thinking capability, his evolution and hence, freedom is his most urgent desire.
Conclusion: Man is essentially a set of desires, his life is his consciousness of the varying degrees of his desires, his intellect is the only tool he possess, to distinguish the rationality of varying desires and chose the appropriate action, his will, or will-power is the exact desire he feels to be fulfilled at any particular moment, and his freedom is his most urgent desire. Overall, its nothing, but only desires, and no one can be free of desires, as to be free of desires itself is a desire. On the other hand, a dead or unconscious body certainly have no desire or consciousness of desires. More complicated the sets of desires a man feels, more improved he becomes, his conscious evolves, his intellect sharpens and this is evolution² of desires.

1. Meaning of Freedom, ReasonForLiberty
2. Moral Degradation of Modern Society or Moral Evolution, ReasonForLiberty

The system of such society, where the man is free to govern himself cannot interfere in the life and realms of neither an individual’s life nor it can dictate the rule and terms for the possible mutual agreements and dealings. Such a system represents a free market society where each and every man is free to govern himself and is free to use all his potential and talent to live, work hard and earn and pursue his happiness.
It should be clear that freedom strictly means economic freedom along with political and religious freedom, because without economic freedom, freedom neither can be defined nor it can be explained. Thus, in a free society that provides sovereignty for every individual and a harmonious atmosphere for having mutually beneficial contracts, any individual or a group of individuals representing the government will not have any sort of interference in the economic sector, that is, the government will not interfere in education, agriculture, health-care, public services, industries and other productive activities, the government will not control the money supply and create the business cycles of booms and busts. Government would not enforce quotas and reservations, provide taxes and subsidies, rather it would be left free for the market ruled by the individuals and their mutually beneficial agreements because that is their right, right to govern themselves and decide for themselves freely.

In true sense, in a society that promises complete sovereignty for the individuals to self-govern, there would hardly be any need of government, as the individuals would be governing themselves, they would be free and responsible enough to look for their individual and mutual self-interests.
The right to self-govern, the right to be free doesn’t mean that there would be a superior entity in form of government providing free education, free health-care, free food for everyone, that would not be freedom, rather it would be slavery.
The right to self-govern strictly means the right to be responsible, responsible for one’s own life, progress and happiness, owing nothing for anybody else.
A free man cannot demand quotas and reservations or subsidies; a free man would not pay any price too for his living and pursuing his honest life. A free man on the other hand would be vigilant, honest and hardworking enough to earn his own rightful living, his own health-care plans, he will decide what to learn and how, what to grow and produce and he will have the right to decide to sell his products or services to others and get the mutually agreed prices. He will have full freedom to work and make his fortunes for which he would not need any license. In a free society, all individuals will have equal freedom to use their talent, mental caliber, physical capacities to make wealth, but the results of their endeavors will depend on their caliber and standard of their efforts. A free society cannot be the society of equals; rather it would be rationally based on the division of labor, that is, the system in which the individuals lives by producing, or helping to produce, just one thing or at the most a very few things, and is supplied by the labor of others for the far greater part of his needs for which he pays rightfully. The prices of the goods he produce and the goods he needs to fulfill his needs will depend on the marginal utility of the goods.

Such a society would be free from the “irrational self-interest” as it would be thoroughly dependent on the rational sense of self-interest with complete freedom for all individuals to pursue their “rational self-interests” freely that is their won’t be any governmental interference in the market to provide special privileges, quotas, reservations based on religion, caste or sex, there won’t be any government subsidies, price supports, tariffs, licensing laws, exclusive government franchises, labor-union privileges, immigration quotas and the like.
Freedom is a natural right, as the responsibility to be self-dependent is natural. Self-dependence means one will not be demanding anything from anyone else or even the government, rather he would be working to earn for it and as he would earn it, it would be his right to enjoy his earning.

Licensing system, state governed education system, state governed currency system and state backed paper-currency, reservation and quota policies, health-care policies, subsidies, price-control, tariffs and like all comes as the physical force against the individual as all such acts are strictly the acts of fraud. In a free system, an individual would have complete security from such governmental frauds.
In the current system, the representatives of the majority decides for the individual, and individual remains a slave for the majority law, paying for it and obeying it, this is not freedom.
We, the children of our ancestors who fought for the independence considering the right to self-govern as every individual’s birthright, actually have forgotten the real sense of freedom that is why we consider ourselves free and accepts the current form of government to rule over us. We never got that right to rule ourselves to decide for our own hard-work and its consequences, rather our ruler and the system of ruling changed and we remained under the slavery of government, interfering in the market and our lives as it wished. We did get the right to choose our ruler to govern us as in form of democracy and political freedom, but we never got the right to govern ourselves, that is, we never got the freedom for which our ancestors were fighting.
It is the time for us to be responsible, to assert that we as individuals are capable of responsibility and freedom, of fidelity and endurance and courage, that we not only can distinguish good and evil but we can individually choose good from evil as it would necessarily be in our interest, that we strictly do not need government to rule us, to tell us what we are capable of and what we are not. It is the time for us to resist the control of government over the individual and call for the sovereignty of the individual and his inalienable natural right to govern himself to pursue his self-interest and happiness.

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

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

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

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

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

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

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

One of the strongest arguments used by the Intellectual Property(IP) supporters is that patents promote innovation, and the strong counterargument by the IP opponents is, that patents stifle innovation, and that once patents are removed we will have more innovation, considering the fees which will not be spent on securing patents and hiring patent attorneys. The reason why I used the term ‘strong’ and ‘strongest’ because both the sides acknowledge that there is some weight on the argument of the other side. The question is, overall do patents promote innovation or will removal of patents promote innovation? To analyze the arguments, we need to perform small though experiments.

Society with very strict IP Rights

To exaggerate the observation, we need to consider a radically different society. Lets presume a society(say on the planet Mars) where every intellectual property is tangible like real property. For example, if you discovered a specific way to cover your body with a cloth(say you made a Shirt) then the only way I can also wrap myself with a cloth in that way is by taking your permission, otherwise it will be stealing, because then you will not be able to wear shirt the same way. If I discover a new term say ‘liberty’ then anyone who wants to use that term, must take my permission(usually granted for a specific fee) or else you will devoid me from using that term and it will be just like the theft of real property.

In this society every time a couple gets married, in addition to gifting them various physical products like a coffee maker or a toaster, people gift licenses to various recipes, as making a recipe without the prior permission of its creator will be theft. To write a book on the various topics, the publisher has to clear every possible term for its license. If you want to use the term ‘liberty’ and its definition is ‘the condition in which an individual has a right to act according to his or her own will’, then either need to get license from the creator of the term liberty(which would be the current descendents of John Stuart Mill), or you need to coin your own term which should be different from ‘liberty’ but convey the same meaning, like ‘liberty22’ which defines as ‘the condition in which an individual has a right to act according to his will without infringing on the rights of less than 5 million people’. Now presuming that your lawyers are able to defend this term as different from ‘liberty’, it basically conveys the same intention to the readers as the term ‘liberty’.

You will realize that in this society, there are a million different food recipes, a million different languages, billions of terms and words in languages, millions of different clothing items. As you can see this society would have much more ‘innovation’ than our current society, after all we only have a few 100 recipes in any cuisine, only a few hundred thousand words in any language, and if someone coins a term, it is used for so many things.

The truth is, that we can all see that although this society will have a very wide variety of innovation, it will suffer from two things, first the poor people will be devoid of so many things, the poor people will not be able to build efficient houses, because they cannot buy the licenses, they cannot eat variety of dishes, the poor kids will have to arrange for a lot more money because the education will be so costly. Secondly, although this society will have a lot more ‘variety’, we can see that it will lack the advanced technologies. For example, there will be 200 different types of semiconductor devices, but instead of having a million devices created out of one semiconductor device(like transistors) we will have only a few hundred different types of electronic devices. We will have hundreds of different words for describing ‘gravity’, but very little number of people who actually understand advanced concepts because they are using their brain cells to store 100 different terms for gravity, rather than 100 advanced usages of gravitational force.

Society with no IP Rights

Lets presume a society with no concepts of intellectual property, in fact there are no property rights at all as everything is intangible like information. If you have a loaf of bread then to give it to me all you need to do is show it to me, and I will close my eyes, wish it and I will get my own loaf of bread. If I like your lawn mower then all I have to do is close my eyes, wish it and I will be able to conjure it to me.

Its obvious that there will be a loss less starvation in this society, all we will have to do is conjure food for the poor people and they will be able to eat. If you need an computer or a television you just have to wish for it and you will get it. The only thing scarce in this society will be the time, that is you just have to do the work of choose what you wanna wish for and then you move on to enjoying that product.

What will happen to the innovation in this society? Its obvious that there is no incentive to do so many variety of things. There are no factories to mass produce a product, this means that the only job people do is either consuming the products, or invent new products out of their own need to do something different. The houses will all look the same, except for the rich people who would still wanna spend some money to have their houses look different(which will be immediately copied all over by poor people if they are given an access to their houses).Every product in the society will basically be the same except they will be personalized by each individual according to their own taste.

The development of technology in this society will be quite straightforward. There will be rarely two kinds of alternate technologies, for example if a cell phone is developed then all the other cell phones will be only personalized forms of this cell phone, until a stage is reached when personalization of personalization pass through hands of a geek who tweaks it to an iPhone, and so on. The biggest force behind the innovation in such a society will be a human need for variation. People want variations in their lives. Every technology in this society will be achieved through humans who voluntarily want to give their labor into developing something new, when they know they are not acquiring monopoly on the usage of that technology or property. An iPhone-like phone in this world may or may not be developed, we don’t know. But we do know that if it is developed no single company has to spend millions of dollars in developing it. The question ‘who will spend millions of dollars to develop a product without patents’ will never arise. There are no products in this world, there are no corporations producing these products, because they don’t really have to.

Vertical vs Lateral Innovation

There is clearly some reduction of innovation and some increase in innovation in both a society with patents and without patents, but none of sides(the pro– and anti– IP people) seem to realize this. There are no clear definition of what kinds of innovations are promoted by patents and what kinds of innovations are not. So lets define these two innovations, Vertical Innovation, and Lateral Innovation.

Vertical Innovation is when a new product is innovated based on merely a small amount of added new technology, for example adding the facility of watching videos on an MP3 player, or adding a new metal on an alloy best suited for making railway tracks which now reduces its ability to expand and contract in heat and in cold, or creating an AIDS vaccination by using the results, effects, and formulas of 10 different immunity vaccines.

Lateral Innovation is when a new product is developed which provides same functionality as a previously existing product but it tries to achieve that in a different manner. For example a new motorcycle is developed which uses fluids load-balancing(just making it up) for more stability because a motorcycle is already developed and it is patented, or a new type of Fan is developed which is embedded in a box because the regular fan is already developed and patented.

Patents only promote Lateral Innovation, and allow very slow vertical innovation, on the other hand a non-patent society promotes vertical innovation and allows very slow lateral innovation. Is either of them better than the other? Well the truth is, although you could make an equally strong case for the need of lateral innovation(or even a mixture of both by promoting a limited patent system), you cannot argue about the fact that a non-IP rights society allows its products to be reached by more and more people. If lateral vs vertical innovation was the only point of debate then there is literally no reason to choose one over the other, but the truth is, we live in the world of scarcity. We have property rights in tangible things only because if I create a loaf of bread, only one person can consume it, so its necessary to exclude others from consuming that loaf and give its ownership to its creator, but if that loaf of bread could be copied and distributed among millions of people and thereby satisfying the hunger of all those men, then forcing exclusion of other individuals from consuming it is just inhumane.

Its true that if you put your labor into an idea then you should be allowed to consume the fruits of it, but the only reason why you put that much labor into that idea(or innovation or discovery) is because you were excluded from using someone else’s labor. Intellectual Property is a classic solution created by the problem itself, just like everything else in the world done by the government.

American experiment with Prohibition
In 1919 after public demand, the constitution of United States was modified to ban the sale, manufacture, and transportation of alcohol for consumption as 18th Amendment¹. Women groups such as Women’s Christian Temperance Union, had been pivotal in bringing about national Prohibition in the United States of America, believing it would protect families, women and children from the effects of abuse of alcohol.

The proponents of Prohibition had believed that banning alcoholic beverages would reduce or even eliminate many social problems, particularly drunkenness, crime, mental illness, and poverty, and would eventually lead to reductions in taxes. Until 1920s the Mafia groups were only limited to illegal gambling and thievery but after the prohibition there was a massive scope of profits in the black market. So the organized crime rose in America.

The situation became so bad that the lawmakers repealed the 18th Amendment in 1933 by 21st Amendment which made alcohol and liquor legal in US again.
Organized crime lost almost all its profit of the black market when alcohol was made legal in 1933.

J D Rockafeller(American businessman) wrote at the end of the prohibition era:

When Prohibition was introduced, I hoped that it would be widely supported by public opinion and the day would soon come when the evil effects of alcohol would be recognized. I have slowly and reluctantly come to believe that this has not been the result. Instead, drinking has generally increased; the speakeasy has replaced the saloon; a vast army of lawbreakers has appeared; many of our best citizens have openly ignored Prohibition; respect for the law has been greatly lessened; and crime has increased to a level never seen before.

As it turns out that people get more drunk, and the mafia becomes more stronger. This experiment of banning a perfectly legitimate commodity fails pretty much everywhere.

1950s-80s Gold and Import restrictions in India

Bombay had the biggest underworld in India, because that’s where the import of the prohibited items came to from the rest of the world. Dawood Ibrahim, Haji Mastan, Chota Rajan, Chota Shakeel, they all were smugglers(illegal importers) in the starting. Then police started hunting them and they started acquiring more and more weapons, powers and became more and more brutal.

Mumbai underworld mostly imported gold, western watches, weapons, drugs and electronic items. The huge profit margins created by the cheap gold prices outside India, and artificially increased prices in India, helped them hire the whole Police department for themselves. They kept politicians in their pocket. Now since import restrictions are gone, the underworld has been decimated, and the police inspectors take false credit for encount killing the underworld. The truth is, if the smuggling business was still profitable(that is India was still not liberalized) then these same cops would have been on don’s salaries.

Coal Mafia of Bihar

Although not exactly an example of a commodity trading ban, it explains how govt creates lawlessness by facilitating only the lawless people do trades of some commodities. Bihar the most mineral richest state of India(by Bihar I mean current Bihar+Jharkhand), and it has India’s largest coal, but you cannot mine coal freely, you cannot own the coal mines, and all the coal mines must be owned by the government. The government then contracts it out to the various private organizations. Since there is no individual claiming the ownership of the mines, this results in private individuals and government officials digging coal and selling it in black market. Govt orders their police officers to hunt down the peaceful businessmen who would have provided the coal in a more peaceful and consistent manner to the market, soon there are only organized criminals left in the business of coal mining. Because of the manipulation of market there is a huge arbitrage opportunity, and these Coal mafia organizations acquire power to own the police and the state government.

From Wikipedia page on Coal Mafia² :

The state-owned coal mines of Bihar (now Jharkhand after the division of Bihar state) were among the first areas in India to see the emergence of a sophisticated mafia, beginning with the mining town of Dhanbad. It is alleged that the coal industry’s trade union leadership forms the upper echelon of this particular arrangement, and employs caste allegiances to maintain its power. Pilferage and sale of coal on the black market, inflated or fictitious supply expenses, falsified worker contracts and the expropriation and leasing-out of government land have allegedly become routine. A parallel economy has also developed with a significant fraction of the local population employed by the mafia in manually transporting the stolen coal for long distances over unpaved roads to illegal mafia warehouses and points of sale.

This is a clear reason behind the failure of a mineral rich state such as Bihar.

Sandalwood smuggler Veerappan

Again we repeat the same story as in Bihar coal mines. Only the govt wants the rights to be able to cut the Sandalwood forests for its Sandalwood(which has a huge price in International Market). There is no private property rights over the sandalwood forests of Kerala, Karnataka and Tamil Naud. Because no individual owns these forests, and there being a huge profit margin for anyone who wants to cut them and sell them in the International Market, many independent illegal sandalwood smugglers and wildlife poachers sprung up. Soon the government had them arrested or killed for such activities. This lead to the rise of the most brutal bandit of those jungles, Veerappan. Veerappan earned $22 million dollars from sandalwood and $2 million from killing some 200 elephants for their ivory. He killed around 180 men in his lifetime.

Although Veerappan was very much liked among the local people, the situation could have been worse. Had these forests owned by private individuals, and if there were no restrictions on the trading of Sandalwood, Ivory and other animal products the forests wouldn’t have eroded that fast, and Veerappan would not have been born.

Drug prohibition in United States

Currently in USA there is a massive demand of drugs, but the govt puts severe restrictions on it. This demand has to be fulfilled from somewhere. Initially local drug dealers tried to fulfil the demand, but Drug Enforcement Agency(DEA) agents with their M16s and sophesticated technology hung the drug dealers, but irrespective of how much money they spend on fighting it, it just increases the profit margins of some of the most lawless people.
There is a brutal war going in Mexico right now.³
Mexican drug cartels which supply drugs to United States and Canada, these people have assault rifles, military-style semiautomatic rifles, hand grenades, and a variety of other military weapons.

This is what you give birth to when you try to restrict peaceful transactions like trading drugs, gold, watches, sandalwood.
The point I am trying to make here is, that Indian govt achieves great advantage when it keeps all the power in its hands, and blames the corruption of its components on the individuals placed on those positions.
You can keep on replacing the Train Conductors for next 1000 years but you still will not be able to have honest train conductors as long as they have the power of monopoly and free market’s competitive forces cannot touch them.
On the other hand, you eliminate the monopoly of Dept of Telecom(DoT) and you suddenly have honest linemen who refuse to accept bribes(I have tried bribing BSNL employees them they didn’t take it).

The solution for liquor deaths is not stricter punishment for those who are caught in the trade(as the Chief Minister of Gujarat Narendra Modi has suggested), but to remove all the restrictions on consensual acts between adults. There isn’t a single commodity in the the market which should be banned from trading or restricted in any way. The usual response to this suggestion is “Should we follow every policy based on the fear of the growth of Mafia?”, the answer of this is Mafia is organized criminals, they are essentially businessmen who grow based on the profits they acquired by peforming the transactions the government tries to prohibit everyone from doing. If that profit goes away, the mafia becomes weak. If that profit increases(because the government prevents more and more people from doing it thereby increaseing the profits by killing off the supply), Mafia becomes stronger and stronger.

There is no possible way to prohibit something by the use of force. The only way by which something can be prohibited successfully is to convince people to give things up voluntarily. The best example of that kind of prohibition is non-usage of beef in India and pork products in Islamic countries.

1. Eighteenth Amendment to the United States Constitution
2. Wikipedia entry on Coal mafia
3. http://en.wikipedia.org/wiki/Mexican_Drug_War

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

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

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

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

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

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

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

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

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

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

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

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

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

Conclusion

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

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

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

1. Indians are world’s greenest, Times of India
2. Indian Power Sector, Wikipedia
3. Indians are world’s greenest, Times of India
4. Global Warming is cooling down to ice Age, Reason for Liberty
5. China, Communism, Corruption and Earthquakes, Reason for Liberty
6. The Catastrophe lovers want to return to Dark age, Reason for Liberty