A panel of “experts” appointed by the Government has recommended raising fuel prices.  The panel, headed by Kirit Parikh,  recommended a hike in domestic LPG by Rs 100 a cylinder and PDS Kerosene by Rs 6 a litre. It is not certain that what the panel called for will be implemented. Rangarajan Committee and the Chaturvedi Committee reports in the past went unimplemented.  Many newspapers reported that the panel is for deregulating fuel prices. It is not at all evident that a Government orchestrated hike in prices would be a genuine deregulation. If these goods are underpriced, certainly, the hike would be a welcome move. A hike in prices will certainly reduce fuel subsidy burden.

The findings of the panel, it is said, will be unpalatable to the government battling inflation. An increase in fuel prices, however, can’t cause a general rise in prices. Only an increase in money supply would lead to “price inflation”. If fuel prices rise, people will cut down consumption of fuel or other goods. There will not be an increase in aggregate demand. There will be no “cascading effect on food prices”. When subsidies to maintain low fuel prices are removed, the prices of other goods might come down. It will also reduce the fiscal deficit. (A subsidy of over Rs 71,000 crores was given in 2008-2009, at the expense of the innocent, long-suffering tax payer.) Price controls, needless to mention, are not a solution to price rise. Government enforced price controls to deal with price rise, as several economists have noted, is like “trying to hold down expanding pressure in a boiler by manipulating the needle in the boiler’s pressure gauge”.

Unfortunately, in India, the prices of fuels and fertilizers are administered by the Government. It should be obvious that no bureaucrat has the necessary information to set the prices of these goods. Lacking profit-loss signals, the prices set by the government would only be arbitrary. It is true that sometimes the market sets the price higher or lower than necessary to clear the market, but no one has the wisdom to correct these discrepancies. The market, left to itself will set this right. If fuel prices are higher than justified, it will send out the signal that it is profitable to produce fuel. More people will enter the market. The supply of fuel will rise. This will bring down the prices. If fuel is priced lower, producers will get the signal that it is not profitable to produce it. Some producers will leave the market. Soon prices will move towards a level which will clear the market. The market is self regulating.

It is important to recognize how the profit mechanism coordinates the market if we are to understand the harmful effects of price controls. Usually, price controls are thought of as a way to curb excess profits. But, in the market there is a tendency towards equalization of profits in all sectors. No sector can be more profitable than any other in the long run. If a sector is more profitable, there will be excess investment in two forms. One, more people will invest I the sector. At the same time, people already involved in the sector will plough back the “excessive” profits.

Government price fixing has harmful, unintended consequences. If the government sets the prices below the market level, there will be chronic shortage. Such a policy fails to take in account why prices are higher. Prices can be high only when there is an increase in money supply or a decrease in supply of goods. Price controls do nothing to cure inflation, which is purely a monetary phenomenon. When prices are set low, less people will produce the goods and the shortage becomes more problematic. The product disappears from the market, and there will be immense pressure on the Government to raise prices, if it is to cure the shortage. If the Government sets the price above the market level, it would lead to unsaleable surplus.

It is true that if the Government gets out of the price fixing business, there would be a sudden rise in prices. It might be painful to most people. But such short term pain is much better than the chaos price controls create. Shortages and unsaleable surpluses are just two such consequence of price fixing. There are several other consequences. Price controls create black markets. Customers become a menace to sellers. The quality of service comes down tremendously. People will have to resort to means of production which are expensive. There will be hoarding and delays in production. People will waste time standing in queues and searching for products. Price controls lead to further controls, and may ultimately lead to socialism, which will entirely wreck the economy. In short, Government price fixing creates chaos.

Read more on it “Reason of Price Rise and Consequences of Price Control“

Her bones are brittle. Her skin is like ‘papier mache’ stretched over a skeleton. Her wrists are twisted inwards; her fingers are bent and fisted towards her palms, resulting in growing nails tearing into the flesh very often. Her teeth are decayed and giving her pain. Food is mashed and given to her in semi-solid form. She is in a persistent vegetative state.

She has a right to live, should she be punished for that right? How human is it to force her to suffer all the pain regularly? Does the “right to live” include the “right to die”?

The right to Live

In 1948, the Universal Declaration of Human Rights, adopted by the United Nations General Assembly declared in article three:
“Every human being has the inherent right to life. This right shall be protected by law. No one shall be arbitrarily deprived of his life.”
One must understand that “right to life” just like any other right, is not an inalienable, rather it is a subjected of the liability of the right holder.
It is not only an axiom underpinning the concept of freedom, but rather the necessary means to fulfill man’s ethical requirement to achieve a life in accordance with his nature. That ethical requirement derives first of all from the fact that we are living entities facing, like all living entities, the fundamental alternative of existence or non-existence, life or death. By our nature, our specific capacity to deal with that alternative is reason volitionally applied to action. If one chooses to pursue the alternative of death, questions of first principles are moot. If one chooses life, then life becomes one’s goal and the standard of all values.
The complex and spontaneous nature of our lives requires us to identify those values we must seek in the service of our life and order them into a code of values to guide our choices – i.e. an ethics. The primary precondition is the freedom to exercise autonomy over the application of reason and action in the service of our life. Thus, the right to life and our need for freedom is based on what we are – on the fundamental nature of man.
The moral right to one’s life is not a social/political right. It is that which in principle is right for any individual in the context of his own life. When and if an individual chooses to live among other men and interact with them over the long run, he needs to preserve his ability to live by his moral rights. Nothing can prevent him from doing that except physical force or the threat of force, so, above all, his primary social need is the absence of coercion so he may apply reason and action to production and voluntary trade. Yet, what if a person does not want to be with others, he does not want to live anymore? Is he the soul owner of his life, is he the only decision maker for his own life? Yes, he is free, he is no one’s slave. That is why, human dignity and his self-ownership, his sovereignty is considered even above the right to his life.
A man surely possesses an inherent right to a dignified life and by virtue of this right; he certainly is the sole decision maker of what to do with his life. Society, as a cumulative function of many free individuals is a positive human structure to help the man to attain and enjoy the right to his dignified life, the society cannot dictate the terms of dignity or life to any person and it is his decision to be made, free of any social, political or legal coercion.
Thus, in a case of an individuals like Shanbaug, if she prefers to end her miserable and painful life, it is her decision to be made. She is the sole owner of her life and she inherently owns the right to end her life too.

Current norms of Right to Life

India is considered as a free nation, a land of free individuals.
Freedom is so little understood in this “land of the free” that it is often confused with its opposite. The current example of Shanbaug is evidence to that prevailing confusion. The Apex court of India that negated the pleas of termination of pregnancy of mentally retarded girl resulting from a rape at Nari Niketan in Chandigarh and a similar plea from a Mumbai couple for terminating a diseased fetus³ , raised questions against the plea of Shanbaug to terminate her own life. The objection was obsolete and rhetoric. ‘‘Do you mean right to life includes right to die?’’
In no way a man’s right to dignified life can be alienated from his proper right to die. If the society or legal codes of society rule over the individual moral code of life, than it means that the individual is not free and certainly have no sovereignty, rather the individual is mere a subject of legal socio-political norms of collective society.
The Apex Court of India now has accepted the plea of Shanbaug to be debated at Supreme Court. The question is why should the Apex Court be considered as more powerful than the individual’s own right to self-sovereignty and Freedom?
Most probably, Apex-court may dictate a directive to discuss the provision of certain amendment in IPC to include the provision of Physician Assisted Suicide; they may subject it to a public constitutional debate. The Supreme Court may totally reject the plea to voluntary suicide too. Yet, if Apex Court accepts Shanbaug’s plea, as doctors have told her there is no chance of any improvement in her state, will it be any positive step towards Individual Freedom? Will the Supreme Court of Free India ever realize that Indians are not a subject of rule of Supreme Court or national government rather they are entitled to individual sovereignty and a dignified life?
To keep a will of a person to end his life under the decision of Supreme Court or under the will of physicians to decide whether to let a man die or not is a direct breach of “right to live with Dignity” confirmed by the Article 21 of Indian Constitution. By force-feeding Shanbaug and treating her, as a vegetative entity for the purpose of medical tests and experiments is not only unjust, it is highly inhuman. She is not a mouse or cat dependent on the will of physicians.
In case, if Apex Court agrees to let Shanbaug end her life “if Doctors permits her to perform Euthanasia”, than again it would be a breach of individual freedom of Shanbaug and her right to her life. She is certainly not a slave to those doctors whom Supreme Court may consider as the decision maker of who should live or who should be allowed to die.
Physician Assisted Suicide (PAS) is a mendacious issue; it confirms that the physician is principle and not the assistant, that it is the physician who will make the decision whether the person should be allowed to die. An assistant generally means the sub-ordinate that helps one in achieving his decision, but in case of PAS, the physician himself becomes the decision maker, the person superior to the patient. PAS simply empowers Doctors and not the individual to make a free decision for their own life. As a matter of fact, PAS is breach of right to life.

Economical Aspects of Euthanasia

Since last 36 years, government hospital is “force-feeding” Shanbaug, keeping her alive with permanent care, which technology has made an option in an overwhelming number of hospitalized cases. It is not the only case and it requires resources that someone must relinquish in order to make it possible. That is, Government is forcing a person to keep living miserably with no dignity against her will like a slave, while the same government is exceptionally unable to provide any proper medical treatment or help to millions of other Indians who often suffers health hazards and deaths because of lack of medical facilities. How proper it is to waste resources and money on simply forcing and enslaving a person who by her own will want to die, at the expense of misery and poverty of millions of other person who may need the welfare health resources desperately?
No matter how much Indian government spent on people like Shanbaug, they will remain vegetative and unwilling to live, they will keep suffering and feeling like encaged, enslaved, undignified things for governmental medical experiments, no better than rats and dogs. Obviously, we the tax-payers are being robbed for such inhuman acts.
In absence of government control over health care, the decision of life or death of Shanbaug would have been in her own hands. Had government not been paying for her hospital care, perhaps interested individuals would have been willing to contribute to her care. As long as private individuals were voluntarily giving of their funds to keep her alive, it would have been much more difficult for a court to order her feeding tube disconnected. However, because the state is paying for it, ultimately, life and death decisions is to come from a high arbitrary government power. Neither Shanbaug nor her close relatives have any say in that, they may keep pleading like miserable beggars for mercy and humanity to the Supreme Court.

Conclusion:

Right to a dignified life is a fundamental moral right that confirms the right to die itself. If right to life is left not as Individual freedom but as a subject of governmental legal whims of lawyers, magistrates and physicians, than it simply means that Individual is not free even to decide for his life, it would certainly be a breach of his right to life. Moreover, by means of coercive tax-collection and universal health-care, Government again breaches the individual’s fundamental right to dignified life at one hand; on the other hand, it is huge wastage of very limited and scarce medical resources.

1. SC admits sexual assault victim’s plea to end her life, Times of India
2. Next Friend— a legal term used for a person speaking on behalf of someone who is incapacitated
3. The Issue of twisted Abortions, Reason for Liberty

Inflation

In order to hide the evil result of government interventions, it becomes necessary for the government to play with its own issued “Fiat Currency” to manipulate the illusionary GDP figures. As a result, poor people become further poor while government keep emphasizing on the increased GDP rates. When a common man asks, how is that possible that with increase in GDP, poverty is also increasing? He gets the answer that although GDP is increasing at a fixed positive rate (Indian GDP is supposed to be 7%); the prices are increasing at much higher rate. Government than stress that although Gross Domestic Product is appreciable, but inflation is the cause of concern. When government decides the prices and inflationary rate, why is it increasing? Terms like Gross Domestic Product or National Domestic Product has no meaningful relation with productivity of market. When government introduces new currency either by printing currency, purchasing bonds, manipulating interest rates, or by announcing bailouts and help packages, those who use the money at first (obviously, the rich), may get benefits, but the same money becomes the reason of Inflation (Price Rise) and Poverty. No government takes responsibility of Poverty though.

Minimum Wages¹

Minimum wage law is commonly known as the saviour of poor and unskilled minority workers. What are its real effects? Minimum wage law forces employer to pay workers no less than Rs80/- per day. At a higher wage, more workers seek employment, but the employer suffers loss of income and hence desires fewer workers to employ. It is simple, if price of sugar will increase, one will use lesser sugar, if price of labour will increase, one will wish to employ lesser workers. In addition, when one can employ a better and skilled worker at say Rs100, why will he employ an unskilled workers at Rs 80/-? That is, the chances of employment for the poor become further less and he is forced to absurd poverty. On the other hand, because of general decrease in will to employ people, even the skilled labour suffers unemployment. Without employment, unskilled worker never gets a chance to work and improve his skills. Thus, he remains without work with any chance to gain any skills. He may choose to beg or be a robber. Obviously, unemployment increases crime rate too, further causing problems to poor.
Thusly, Minimum wage law is compulsory unemployment, reduction in production and it is an incentive to crimes in society.
Furthermore, employers, knowing demand for employment is more, can afford to discriminate between workers. They may employ only the workers of their own caste or religion, as they will have to give Rs80/- to whosoever they employ. Thus, minimum wage law creates caste and religious tensions, hence further crime in society.

Government Health Care²

Government health care system is another such propaganda that is meant to help the poor. First of all, government controls the medical fraternity and education board of India and does not allow free market to produce medical practitioners in enough quantity to serve the ever increasing number of patients. Than, government makes the medical education so clumsy, time consuming, tough and costly that seldom youth want to be a medical practitioner. Again, government forces those “so less in number” produced medical practitioners (doctors, nurses, medical assistants) to work “involuntarily” in villages at least salaries for first few years, and hence makes the medical sector unattractive. With so less number of medical practitioners, the cost of health care reaches enormous heights. In addition, doctors employed at government hospitals suffer the pressure of extreme work-load and to reduce that, they start discriminating and ignoring the patients. Obviously, the poor suffers. Government try to help poor by subsidizing some common medicines. Thus, the profit of medicine production reduces and hence investment also reduces resulting in scarcity of not only doctors and equipments, but scarcity of most common drugs and medicines too.
Government hospitals cannot be maintained properly because of lack of incentive of profits and the natural competition to provide cheapest, best and trustworthy services to the patients. Hence, although poor may go to government hospitals, they seldom get any proper services and treatment. On the other hand, the richer government officials often enjoys the benefits of government hospitals while the common middle class men prefers to go to private clinics.
Overall, only the people of the poorest section that suffers lack of medical services because of Government intervention.

Higher Education

As explained above, Government has a unique fetish to control the Higher education sector. Universities and higher colleges get massive government funding via tax-payers. Seldom has a poor kid gone to higher education. On the other hand, among the rich, it is customary to graduate, no matter they many of them never learns anything and even if they learn, they never uses it ever. While the poor, because of government intervention in education sector, suffers even a scarcity of good and cheap primary education.

Denial to earn an honest living

Government surely causes poverty through its interventions in market, yet government let the poor to earn a proper living, Government is not stopping any poor person to work hard and make fortunes, is it? Yes, government strictly denies the poor to earn honest living by enforcing various barring laws like permits, licenses, regulations, bureaucratic hurdles, zoning laws etc. A rich person can simply bribe the government official and start making money through his business, a poor man even cannot get enough land to open his tea stall nearby a main road. He will have to bribe the police constable, the municipality officials and many more. Thus, by stamping out potential competition from small business, government serves the big business of rich people. On the other hand, the poor again suffers unemployment, as they can not pertain to self-employment. Thus, they find only two possible ways for them, either to be a beggar, or to be some sort of criminal.

Way to Oligarchy

Government control over market is the reason of all types of corruption. In a free market, if a person want to accomplish a project, he need to pay the exact price that the project will cost, not more, nor less. Under government, the person can simply bribe the politicians and bureaucrats to favour him by employing certain policies to reduce the cost of his project. Thus, government control over market always turns out to be oligarchic in nature where some politicians and rich businessmen makes a cartel to maintain the monopoly and control the poor public.

Conclusion:

As one can see, not only the aforementioned government interventions but any form of government intervention in market destroys the natural order and ability of the free market to reduce poverty and create peace and prosperity. By means of cost control³ , government actually increases the prices of necessary commodities while production and supply reduces vastly, hence further causing poverty.
Whenever in whatever way government intervenes with market, it creates chaos resulting in wastage of scarce resources, unemployment, and reduced productivity. As a matter of fact, although politicians propagandize their political motives as to help and serve the public and poor society, the government actually is the worst enemy of poor and whatever way it intervenes with Market, it does so just to hurt and inflict poor further.
Hence, in order to really help the poor and let India progress, government needs to leave the Market Free. As free market will reduce the employment rate to zero, (human labour is scarce resource) productivity will increase and poverty will reduce.
No person able to produce and earn a good honest living will choose to be a criminal or beggar.
That will surely reduce the extremes of poverty and hence will reduce the crime rate too.

1. Inhumanity of Minimum Wage law, ReasonforLiberty
2. Abolition of Cost is Cause of Corruption, A discussion about socialized medicines, Reason for Liberty
3. Reason of price Rise and effects of Cost Control, Reason for Liberty

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

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

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

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

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

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

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

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

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

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

Why Participation of Indian citizens in elections is reducing?

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

Destruction of Individual Causal Role in Democracy

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

Incompatibility of Democracy with Division of Labour causing Poverty

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

Cure of the Problem

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

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

Egalitarianism against Causality

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

Egalitarianism against Progress

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

Egalitarianism against Innovations and entrepreneurship

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

Egalitarianism resulting in Forced Economic Inequality

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

Free Economic Inequality versus Forced Economic Inequality

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

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

Division of Labour and Benefits of Talent

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

Division of labour and consistency with freedom

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

Karl Marx shouted that the source of the profits gained by the Capitalists is the exploitation of labor’s productive effort. He accused scornfully, the capitalists of looting the workers of their rightful share of the returns of their productive labor. So according to Marx, profits are nothing but the ‘surplus value’ that the capitalist with-holds from the laborer.

Much of this proposition could be dismissed as emotional outburst of an unstable individual, unless there was a ‘scientific’ discourse from the man himself, in his famous work ‘Das Kapital’ published in 1867.

Marx’s theory of value

Marx, like other Classical economists, recognized the two kinds of values of any commodity: use value and exchange value. Use value being the personal utility that the commodity used as a consumer good yields to the consumer; while exchange value being the value that the commodity commands in a trade exchange in the market.

Marx in his preconceived mindset to arrive at an ‘objective’ theory of value, tried to find similarities in the properties of commodities that traded at the same exchange value at some particular point of time. He finally concluded that commodities with the same exchange value had the same amount(hours) of labor involved in producing them, and hence exchanged on equal terms. Thus was born Marx’s version of the Labor Theory of Value.

The fallacy in Marx’s theory of value

Marx believed that if two commodities were exchanged for each other, they had something in common and Marx propounded that to be the amount of labor hours required to produce the commodities. Thus Marx proposed that people exchange commodities which had equal number of labor hours spent in producing them.

The basic fallacy here with Marx’s perception of trade relations lies with the conditions of trade, and the source of value of any commodity. The question to be considered with respect to trade is: why would people exchange commodities of equal value?

If Alice and Bob have eggs and apples respectively, and both value the commodity that the other person has the same as the commodity he/she has, why would either of the two want to trade with each other? The only way trade could happen in this case is only when Alice values apples more than eggs; and Bob values eggs more than apples. Marx’s theory falls into a pit!

The other even more basic question on which Marx’s theory turns out to be nothing short of absurdity is: why would people consider the amount of labor hours involved in producing a commodity while valuing it? The only consideration of a buyer is to consider the commodity’s personal use value to him, which is based purely on his subjective preference scale.

In addition to that there are many questions which Marx’s ideology does not want to answer. For example if there are only 10 eggs in the market, and there are 15 buyers(they all want 15 eggs in total) then which 10 buyers will have their demand fulfilled. In the market the prices of the eggs will go up, which will result in the top most 10 buyers who value the eggs highest will get the eggs. But under Marx’s theory of value since the eggs had some specific hours of labor involved in it, therefore they cannot have some arbitrary higher values. Marxians do not bother themselves with the fact that there are not sufficient eggs to fulfill the needs of every individual.

What Austrian economics offers?

Austrian economic theory, unlike Marxism, offers two important points for anybody to remember:

1) People exchange commodities with each other because they expect to benefit from the exchange. The only condition is that, the parties involved must value the commodity that they buy from the other person more than the commodity that they give up(or sell).

2) The value of commodity is based on the subjective valuation of the buyer. Commodities have no ‘objective’ value.

In our previous example where there aren’t enough eggs in the market, the prices of eggs will go up and only the 10 most highest payers of eggs will get those eggs. This helps in the production of more eggs. Because the prices of eggs went up, there is no more profit incentive to the egg producer to produce eggs, and next time bring 15 eggs in the market. But under Marxian theory of exploitation since only rich people are able to buy the eggs for higher prices, the whole economy looks like a conspiracy against the poor people.

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

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

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

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

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

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

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

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

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

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

“It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production.”

So according to Marx and Engels, capitalist economies suffer from an inherent trait of periodic depressions. They go on to explain further:

“Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property”

According to them, the root cause of a depression is too much prosperity. For better understanding of this subject, I would also like to cite the Marxian crises theory, which revolves around the concept of the falling tendency of the profits in capitalist economies. Marxist writers often use this in various ways to put forward their theory of Imperialism. However, I would restrain myself from explaining that here.

The basic premise of the overproduction doctrine is that a capitalist economy, as it gets more and more efficient with labor-saving machines introduced for the production of goods, moves towards a state of increased efficiency which leads to overproduction and that overproduction causes losses. Therefore the core reason behind the losses are overproduction and increased efficiency. Because of overproduction, there are no more profits in the economy, and hence the economy goes into a deep depression. So, it is the lack of profits which causes depression.

In order to debunk this Marxist proposition, we need to understand what causes profits to exist in the market. I will explain how profits never cease to exist in a non-stationary economy where consumers’ preferences and production conditions change so often. I will start of by quoting Austrian economist Ludwig Von Mises from his famous work ‘Human Action’:

“Profit is not related to or dependent on the amount of capital employed by the entrepreneur. Capital does not “beget” profit. Profit and loss are entirely determined by the success or failure of the entrepreneur to adjust production to the demand of the consumers. There is nothing “normal” in profits and there can never be an “equilibrium” with regard to them. Profit and loss are, on the contrary, always a phenomenon of a deviation from “normalcy,” of changes unforeseen by the majority, and of a “disequilibrium.”

What Mises says here is that the origin of profits (and losses) is due to the “disequilibrium” phenomenon. So how does this “disequilibrium” phenomenon actually express itself like in a real economy?

Suppose that a market is dumped with millions of tonnes of potatoes much more than the consumer’s desire to purchase. This causes the market gets cleared only when the prices decrease to a large extent. This might lead to immense losses to the farmers, but can these losses caused by the overproduction in one sector of the economy cause a recession? The answer is no.

Lets go further and ask, does this overproduction in any way lower the average rate of profit in the economy. Again no, it doesn’t. The partial overproduction in a particular sector of the economy leads to partial underproduction in some other sector of the economy. Like in our example, the overproduction of potatoes means that the equipments and labor that were used in growing potatoes could have been used better in some other sector of the economy.

How would this show up in the price levels? The prices of the commodities that are underproduced(because of employment of resources in overproduction of potatoes) will rise proportionately and lead to higher profits. The losses that are made in the sector where overproduction causes havoc is compensated by profits in the sectors where commodities are underproduced. In simple words potato farmers will be making huge losses and the wheat, rice, barley farmers will be making huge profits.

This is what Mises calls a “disequilibrium” phenomenon. The market always moves in a direction to minimize this disequilibrium, but almost never reaches equilibrium because of various factors like the change in consumers’ preferences, natural causes etc.

Having explained the basic misconception, I would also like to deal with such speculations which contemplate the possibility of an overproduction in every sector of the economy. People argue overproduction everywhere could lead to losses everywhere completely wiping out profits from the economy. But there is no need to worry, the market has answers again. An overall overproduction everywhere in the economy still doesn’t set the “disequilibrium” that exists between the preferred quantities of various goods into equilibrium. Here one needs to understand that people’s needs are humongous and can never be satisfied. The market can only try to provide the proportionate quantities of various commodities according to the consumers’ preferences. Profits (and losses) are nothing but the signals that guide producers to adopt to the consumers’ preferences, and they never would cease to exist.

Being a Socialist up till a few months ago, I spent countless hours figuring a way out to enable a central planner to somehow manage to order the exact amount of production required to satisfy the maximum demand for the maximum people, and I did reach onto some complicated unrealistic solutions, but nothing beats the simplicity and realism of the Free Markets.

Venezuela is currently suffering from severe shortages in the supply of various goods, in particular rice. The nation reminds us of the erstwhile USSR in this aspect, as it does in many other perspectives. Only that direct physical force against the masses has not been let loose yet. Venezuela has been reeling under the impact of shortages in the supply of various goods since 2003, and now the crisis has hit rice supply as well. Keeping up with propaganda records, Chavez has launched a propaganda tirade against private suppliers. He has accused private suppliers of hoarding supply of rice. There could be a certain element of truth in it, suppliers could indeed be hoarding supplies to a certain extent. But that’s definitely not where the fundamental problem lies. The causal problem of this crisis lies in price-controls which have grown in size ever since 2003.

I will first explain the economic basics of prices, and then lead into the cause of shortages, inflation and hoarding.

What are prices, and what do they say? The price of a product simply shows how much money you should give up to obtain it. Then, what do you prices say? And why do prices of commodities change so often in markets? The answer is, people are willing to give up different quantities of money for the same homogeneous product at different points of time. This might sound vague, so lets get on with an example.

You are given 3 bags of rice. You have a particular preference scale based on your individual liking, and it shows those immediate needs that you would like to satisfy with the three bags of rice. The first immediate need that you fulfill with a bag of rice is to feed yourself. So, the first bag of rice goes to feeding yourself. You decide to use the second bag of rice to make some cakes. The third bag goes to feed your pet dog. This explains your preference scale. Your highest valued purpose is to feed yourself, followed by making some cakes, and finally feeding your dog.

Now imagine, you have only two bags of rice, and you are to decide what among the different uses of rice you are going to sacrifice. Since you have feeding your pet dog the least important of all uses, you decide to let your dog starve. Now suppose your neighbor has some extra bags of rice in his kitchen and he is ready to sell it to you for some money. How much would you be ready pay for that extra bag of rice which you would use now to feed your dog? You would see if the utility (or use) you gain from that extra third bag of rice is more than the utility you attach to the money you pay to your neighbor for that extra bag. Lets assume you would probably pay $2 to get a third rice bag from your neighbor, and you use it to feed your starving dog.

Lets further assume now that you have only one bag of rice. So you would have to give up on both feeding your dog as well as making tasty cakes. Now again, your neighbor has an extra bag of rice. How much would you be ready to pay for that second bag of rice? The same kind of reasoning as used earlier applies here as well, you would buy the second bag of rice only when the utility you achieve by buying it is greater than the utility you attach to its price. Perhaps you’d be ready to pay $5 to get the second rice bag from your neighbor, to make some cakes.

Now lets go further and assume that you have no rice bags with you. And again, your neighbor has an extra bag to sell. This time too you’d buy the bag of rice only when the utility you gain from the rice bag you buy is greater than the utility that you attach with the money that you spend to buy it. Now, you would be ready to pay almost anything to buy that bag of rice from your neighbor, and that’s because the utility you attach with the bag of rice is your life itself. You would have to starve without that bag of rice.

We have now seen three instances where the price offered to buy an extra bag of rice varies, quite drastically in fact. Economists explain this as the “law of diminishing marginal utility”. Marginal utility of a commodity is the utility that you gain (or lose at times) from an additional unit of the commodity.

This explains why prices change at different moments in the market. When there is excess supply of a commodity in the market, people would have the liberty to use those commodities for less valuable goals, like how you used the third bag to feed your pet dog. So they are willing to pay only low prices. On the other hand, when there is deficit in the supply of a commodity, people are strained to obtain sufficient goods. They are forced to cut down on their frivolous expenses, like your preference to feed your pet dog. The price of the commodity in this case is high. This explains how prices are set in a market.

What the market does is it rations the goods that are available to the most immediate needs by raising prices when supplies are constrained. So, high prices enables everybody to satisfy their most intense immediate demands, while restricting them from using further units of the commodity towards less intense needs.

So when supplies are inadequate, the price of the commodity increases to make sure that the commodity is diverted towards the most urgent needs rather than being wasted in satisfying less intense needs. This means that suppliers would gain lots of profits.

The suppliers then invest this extra revenue to expand their production in order to gain more profits. Note, monopolies might restrain from producing more to maintain current profits, but they won’t be able to do it for long, until competing firms sensing profits enter the business to produce more of the commodity. This increase in supply would cause prices to go plunge. So high prices leading to high profits are market signals to encourage increased production. And this is how the free market deals with the economic problem.

Governments on the other hand have a very different way of dealing with high prices due to insufficient production of a commodity. They deal with the economic problem with price ceilings. The Government sets arbitrary prices to commodities whose prices are “too high”, and it thinks the problem is solved. But that’s exactly where the problem starts. The lower prices leaves no profits to be gained or even sends firms right into losses, and that discourages firms from increasing production. Witnessing lower prices, consumers demand more of the commodity than they would at the genuine free market price level. That is like, if a sack of rice were available for just 50 cents you’d probably buy hell a lot of rice bags and waste them for weird reasons. We have in hand a very critical situation, production of the commodity plunges due to decreasing profits or outright losses, but at the same time people are demanding more of the commodity. This leads to shortages.

This is what is being experienced in Venezuela because of price controls imposed by Chavez’s government.

The other fact to remember is that price controls which are imposed initially on a a few commodities are spread to other commodities as well. In fact governments are forced to spread the price control regime because of their initial mistake of controlling prices of a few commodities. Why does this happen? When the price of a commodity is arbitrarily set low, people are encouraged to demand more of the commodity but since there is not sufficient supply available, goods are sold to people on a first come first serve basis. This could have a very important side-effect. The supplies do not get diverted to the most intense needs because those customers whose demand for the product is extremely important is prohibited from bidding higher prices for the commodity.

So when such needs are not satisfied, consumers search for alternative goods to buy. People who failed to secure rice because of the shortages would try to buy wheat which is not controlled by the government’s price control regime. As more people who failed to get rice start bidding for wheat, the price of wheat skyrockets. And now the government steps in again to impose price controls on wheat as well. And thus, the price control regime keeps spreading and turns into a universal price control system, with no kind of free market pricing to guide production and consumption.

Now coming to the problem of hoarding. First reason why some people hoard supplies is because they are unsure about the availability of future supplies due to chronic shortages. The second type of hoarding is carried out by speculators who expect a higher price for the product in the future when the price control regime collapses, or they might sell the supplies in the black market at prices higher than the government set arbitrary ones. It must be realized that the problem of hoarding is definitely not the cause of the shortage, it is a minor side effect of the real culprit–price controls.

The Venezuelan economy is in the mud, and the price control regime is spreading all over the economy. The system is bound to collapse and cause serious problems to the Chavez government. It should also be observed if Chavez does a Stalin here, to use force against his own people. Reports emanating from Caracas already show the seizure of rice processing units, and also the spread of the price control regime towards other goods like meat, sugar ad other goods. Just another case of price controls bringing disaster.

Venezuela will not be able to reach Socialism because Socialism is an impossible theory, it demonizes the same tools by which pro-Free Market economies achieve efficiency in distribution of resources and satisfies the demand of the market. In the name of achieving more Socialism Hugo Chavez keeps on grabbing more and more power, and this is causing Venezuelan people to lose their Liberties.

This was starkly exposed in the `socialist calculation debate’ of the early decades of the 20th century which involved waring minds (of economists) belonging to hostile camps. The capitalist camp was headed by economists from the Austrian School, most notably: Friedrich August von Hayek and Ludwig von Mises; the Socialist camp was represented by Oscar Ryszard Lange and Abba Ptachya Lerner. This article serves the purpose for purporting the essential ideas of Capitalism and the grave shortcomings of Central planning.

The fundamental feature of the Capitalism is the price system, with profit motive and economic competition as it’s inseparable soul. The price system is thus the most ingenious component of the market economy, so invincible that socialist economists of the 19th century trying to apply the labor theory of value to determine the prices of commodities (based on the amount of `socially necessary labor’ required to produce a commodity) accepted their defeat, and adopted the market pricing system, after all the price system is nothing but an expression of the subjective preferences of market players. In simple words, demand and supply forces determine the price of a commodity. Commodities do not have any magical value in themselves.
This was the essential outcome of the marginalist revolution.

However, a group of economists–namely the “market socialists”–persisting under the auspices of Polish economist Oscar Lange refused to bow down (except for their acceptance of the revelations of the marginal revolution), in fact they were immensely excited about prospects of their own system which could allow for central planning of the economy. These economists proposed a hybrid system – adopting the pricing system of the capitalist economy and also the `goodness’ of central planning. They seriously believed they did it.

The “market socialists” proposed the arbitrary fixing of prices of consumer goods and allow supply and demand to match at some given price. They were able to explain their system with temporary success:
if the prices were fixed too high, goods would stay unsold on the racks of stores; and if prices are fixed too low, shortages would result. The planning board would fix the prices on a `trial-and-error’ basis to determine the `clearing-price’ of the market, and the economy will be on it’s feet.

So far so good, or is it? It didn’t occur to them that they created the body of their economic system without a soul–the absence of private ownership of the means of production–until Austrian economist Ludwig Von Mises came up with his seminal work, “Economic Calculation in the Socialist Commonwealth” in 1920. Mises pointed out that without private ownership of the means of production, in other words, without competitive bidding from various private players for the ownership of capital and land, there was no way to rationally ascertain the prices of the various higher-order goods (capital and land).

This further means there is no scope for profit-loss calculation, and there ends any dream of rational allocation of resources under centrally planned socialism. The acquisition and usage of capital
resources in a centrally planned economy are merely `internal transfers’ within a single body since the State is the only owner of capital goods.

Oskar Lange who talked about such a system himself found convenient to copy the prices of a Capitalist system, than to follow his own suggestion, when he was made a member of Polish Central planning commission. As the famous joke goes, two socialist leaders are discussing their plans to bring Communist revolution all over the world. One of them suggests “well we can convert the whole world into Communism, but lets leave one capitalist country as Capitalism. Lets not convert Hong Kong into Socialism”, the other socialist replies, “Well Comrade what are you talking about? We must convert the whole world into Socialism, and get rid of all the Capitalist oppression, why leave Hong Kong”, the other socialist replies “Well we gotta copy the prices from somewhere.”

For those who did not get the above joke, without a Market system, its really impossible for anyone to rationally allocated the resources in a Society. For all you know you can start creating iPods made of gold covering, and use all that gold on the iPod, rather than making its circuit out of it(which makes much more sense, since gold is a better conductor of electricity). By having a price system you will realize that its not worth making an iPod out of pure gold because of high prices of gold, and less market price of iPods, people are not willing to pay for a gold iPod, also gold can be better used for something else.

Profits and losses play a very vital role in the market system. Profits in a sector indicate that the commodity (or service) in question is of use to the consumers (and hence demanded by them);
losses mean the reverse, that is, the commodity (or service) in question is not of much use to the consumers (and hence not demanded). Because of the absence of economic calculation socialism would lead to massive wastage of resources since the planners would be left groping in the dark to know which sector of the economy is in immediate need of a particular higher-order good.

Some mathematical economists have tried to ascertain arbitrary prices to capital goods by analyzing the price of consumer goods that are produced using the capital good. But such indirect measures have shown no scope of accurate determination of the prices of higher order goods.

1. Socialism, Welfare, Braindrain, Reason for Liberty

“It is a deep fear of the responsibility and risk of having to make one’s own decisions and accept the consequences, with no ultimate authority to appeal to for guidance and to blame in case of failure. This is the reason for such cries as “We must have strong leadership in this time of crisis,” “We need new and better leaders,” and “God, give us a leader “.

People who fear responsibility find it easier to call for leaders, even when those leaders may become tyrants, than to accept the risk and effort of looking for solutions to the problems that beset them.
Upon examination, such people usually prove to be suffering from a deficiency of self-esteem—lacking a sense of personal efficacy and worth, they feel a sneaky, uncommitted doubt about their ability to survive in a world where they will never be provided with the unearned. Those who persist, in spite of all evidence to the contrary, in believing that totalitarianism makes a nation strong are revealing a sneaky admiration for dictatorship. Such an admiration springs from a psychological dependency which cannot conceive of having to be free and thrown on one’s own uncertain resources.”
We are now getting to the other part of the problem-Why people are attracted to men with a dark side. Men have always had a fascination for the dark. They had worshiped fire and thunderstorms. As long as there are rejecting or tyrannical parents, people will have a fascination for such men. They want others to treat them as they were treated as a child. It is a severe mental disorder. It is an addiction, worse than any narcotic addiction or alcoholism. Nothing good can come out of such a relationship. Masochism is all there is behind this perversion. Some turn to the other side of the coin warding off their pain and tender feelings as weaknesses.
Camille Paglia, another female writer, who is known as the Ayn Rand of 90’s in her writings, find fault with abused women as they are weak; that they might be enjoying it covertly. I am not to question the merit of her argument, which could be right or wrong, as the case might be, but it is no coincidence that Paglia; Rand are Nietzschean’s. It is also, not a coincidence that Nietzsche, who believed in eliminating all weaknesses and tenderness, was a German. It was the brutal parenting in Germany, in those days, inspired by many writers including Shrebers, which created a Hitler, and many men who would march to his tune. Hitler, who was afraid of his father, too believed in rooting out all weaknesses and instilling cruelty. So, did his humiliated followers. Pseudo-strength and cruelty, they thought would let off their secret shame. It didn’t!

Many of you would have read of the merits of the superior culture of pre-World War I Germany. “Children were all disciplined and well behaved, as military cadets.” It is the very same culture which they praise, that paved way for a dictatorship. It was then believed that the will of a child is to be broken for him to be easily manipulated later. A child manipulated that way could be manipulated as easily, later, by an adult. She, in fact, would seek men who would be in control and manipulate her that way. She roots out her pain and humiliating imagining all these manipulations and abuse to be expressions of strength. It is such manipulations which makes things easier for Hitlers, Stalins; Saddams. Some learn the art from being once manipulated that way. It is worth noting that Saddam, Hitler, Pol Pot; Stalin all were extremely tortured as children.
It is the early idealization of parental figure, based on a faith-Which means: not based on any rational evidence, which is the very root of this neurosis. It is the belief that children should love their parents. It is the belief that one shouldn’t be true to oneself, but act on a sense of duty. All religions and variants of totalitarianism, including statism are based on such faiths: that some acts or emotions are good in, by and of itself, and that one should act against his own self interest. Such notions help them to repress what was done to them in their childhood. They imagine themselves to possess a love which, in fact, is only a vague apprehension they can neither define nor cure. What else is the path towards virtuosity? When it comes to their mind what was done to them, the only solution it would occur to them would not be to hate their parents, but to idealize their acts. The same happens to men in a dictatorship too. They try to evade their hatred acting it out on others, by torturing their own selves or seeking others who would do that job much effectively. How far they are from their true selves! They haven’t even the wits to know such behavior was motivated by power hunger, humiliation and revenge and not by any benevolent motive. Love, discipline and charity aren’t to be instilled by a sense of duty. The only solution is to have their hatred rightly directed. One would ask: What is to be gained by such hatred? My answer is: No one gains anything by faking reality. No one can oppose injustice giving moral sanction to it. It is much better to have that hatred directed rightly. It is much better to be true to one self. Does that mean one should act on it? Not necessarily!

“Human beings — any one of us, and our species as a whole — are not all-important, not at the center of the world. One of his supporters says “We are not interested in the utility of a particular species or free-flowing river, or ecosystem, to mankind. They have intrinsic value, more value — to me — than another human body, or a billion of them.”

Obviously, they have less value or almost no value for the human life, his freedom and sanctity. We change bulbs to fluorescent lights, did we considered the harmful effects of mercury on human? Yet, human life is secondary and sacrificial, first is environment, as if changing all bulbs to fluorescent tubes will conserve the environment. In fact, it also changes the environment. So we must feel guilty of using electricity too.
Recently, governments are stressing more on nuclear electricity plants; in order to banish coal based thermal electric plants. Obviously, it is for preventing the global warming, which is nonexistent because since 1998, earth is cooling fast. The question is, who will manage the nuclear wastes and how? Is CO2 more dangerous or nuclear wastes?
No individual want to give up his search for better life, more comfort and happiness. Thus, it is necessary for the socialist environmentalists to use the “guilt factor” as a tool to induce a forcible sacrifice on citizens. To rule over citizen, they need power, the political power of big government, where the government politicians and officials will “think” what is better for the individuals, as the individuals are all selfish and will hurt the earth, and those government officials and politicians are the great selfless social servants which need to rule over individuals and treat them as slaves to order ban and censor their lives. For all that big fraud of making human society slaves of some ruling sectors, they need big governments, higher organized socialistic set up of state. As Ludwig Von Mises put it up

“The planner is a potential dictator who wants to deprive all other people of the power to plan and act according to their own plans. He aims at one thing only: the exclusive absolute preeminence of his own plan.”

Yet, it is up to us to think rationally and better. What is the right way of life, forward progress or backward chaos, the return to Dark Age?
Should we look forward to search the corners of solar system outside the earth to expand our reach in order to gain better and more resources for the human individual development, or should we look back to give up all our progress and start going back renouncing human progress and loving the animalistic life?
Every poor want to earn better facility, electricity in his remote village and house, drinkable safe water, television, mobiles, Iphones, computers, fans air conditioners, everything, which the rich and urban life enjoys. To let the poor enjoy the richness of life is to let the human exploit the nature further and change the environment to extract more raw material and synthesize. We should understand that reduction of poverty is possible by only one means, by producing more. Equality of rich and poor by looting richness from the rich is not the aim, aim is to let the poor become rich and enjoy the best essence of life and keep innovating developing it, obviously by exploiting the nature.

“The difference between animals and human is that the animals change themselves for the environment, but the human change the environment for themselves”. Ayn Rand.

Update: A news worth mentioning, 93 year old man freezes to death after city limits electricity.

1. Gaia Hypothesis, Wikipedia Link
2. Environmentalist McKibben, “The End of Nature”

Isabel Paterson was of the opinion that most of the harm done on earth is basically by good individuals. They support wrong policies because they are well intentioned. They don’t wish harm on their fellow citizens. Unable to see the consequences of the ideas and policies they support, they bring greater harm than malicious individuals. It is true that most of the individuals are well meaning, at least on a conscious level. They stick to conventional morality. Ayn rand doesn’t seem to be completely unaware of this. Consider these words of her about the Twentieth century Motor company-

“We saw that we’d been given a law to live by, a moral law, they called it, which punished those who observed it—for observing it. The more you tried to live up to it, the more you suffered; the more you cheated it, the bigger reward you got. Your honesty was like a tool left at the mercy of the next man’s dishonesty. The honest ones paid, the dishonest collected. The honest lost the dishonest won.”

However, it is not true that the people who stick to the conventional moral code are entirely innocent. Their intentions were well expressed by these words of Rand:

“We weren’t so innocent either. We didn’t do it just because we believed that the drippy old guff they spewed was good. We had another reason, but the guff helped us to hide it from our neighbors and from ourselves. The guff gave us a chance to pass off as virtue something that we’d be ashamed to admit otherwise. There wasn’t a man voting for it who didn’t think that under a setup of this kind he’d muscle in on the profits of the men abler than himself. There wasn’t a man rich and smart enough but that he didn’t think that somebody was richer and smarter, and this plan would give him a share of his betters’ wealth and brain. “

It might not be true that all who hold wrong ideas are evil. Barbara Branden rightly asks “We shouldn’t denounce someone who does not understand what we learned only yesterday. Were we evil the day before yesterday?” While some of the people hold wrong ideas mistakenly, there is overwhelming evidence to say that a lot many of them are motivated by evil intentions. It is evident from the fact that most of the innovators were opposed by the majority of the masses.
Great businessmen were called robber barons. It is also interesting to note that most people who hate big businessmen, inventors and innovators love and admire dictators. So many publications in my state shed crocodile tears when Saddam was murdered. Those publications criticize Bush, but it seems that they criticize him only because they think America to be a leading capitalist country. Another striking fact is that though a lot many people are sympathetic towards socialism, and in the days of Soviet Union praised the stupendous achievements of Soviet Union, there was no brain drain to Soviet Russia. Today a lot many people praise the achievements of Cuba in health care and other aspects, but still there is no brain drain to Cuba. Why is that so?
It is also worth noting that the greatest supporters of Socialism and totalitarianism are intellectuals. It is not surprising when we consider the fact that intellectuals are dependent on the state for their survival! How could some one evade the glaringly obvious fact that the freest nations are the most prosperous and the poorest ones are the most controlled?

His studies were predominantly based on sexual frustrations which as per his studies certain people known as neurotics cannot tolerate and thus leading to various behavioral abnormalities. Later as psychology evolved into its present form of cognitive psychology, human needs and development of consciousness were studied with respect to not some quantifiable needs and desires but as a result of continuous interaction of the mind with its surrounding environment and experiences it gathers from it. What changed basically is that the process of human psychological development became very dynamic and role society and environment per say increased multi folds.

To out the subject in perspective, human beings have tangible needs but intangible desires. There may be a society which has all the resources in plenty, but there will be still discontent within the society. Many of the readers would be prompted to attribute all the evils and problems that we face to these desires. There is nothing wrong for it is what most of us have been conditioned to think from our very childhood. Truth is we are very instinctively like that, nature has designed us thus to struggle and thrive and leave no stone unturned to get better off than our peers. In the process improve upon our self, each generation as a great iteration filtering out the undeserving and promoting the deserving to inherit the earth. We have evolved this far only due to the presence of this desire. More so all our inventions and discoveries, progress of human kind can be attributed to this one intrinsic nature of man. To be never satisfied with what he has, to continuously struggle and compete, if he has gone past every one, then against himself, but never stop.

This incredible and unquantifiable energy, has however been seen as an evil, a problem by the societies and civilization across the world. Attempt was always been to somehow subdue these desire so that they fit into the social models better. Across the world many control mechanisms evolved to reign in this so called evil within the man. Almost every law structure we see, studies of ethics, more importantly religions are mechanism designed to regulate this intrinsic aggressiveness and reign of desires within a man. You would have invariably all religious doctrine dictating men what to do and what not to, invoking strong sense of fear and sense of guilt with in an individual. Everything that you hear about taboos, sins are more or less based on this concept. Idea is simple man is born an animal, a sinner (the original sin) but he can be trained to become a man.

There are even political systems that have derived some of its thinking from such control mechanism. Communism being the most coercive of them needs a special mention. The attitude of communism in fact finds reference in Freud’s thesis on this subject.

The communist believe that they have found the path to deliverance from our evils. According to them man is wholly good and well disposed to his neighbor; but the institution of private property has corrupted his nature. The owner ship of private wealth gives individual power and with it temptations to ill treat his neighbor; while the man who is excluded from the possession is bound to rebel in hostility against his oppressor. If private property were abolished, all wealth is held in common and everyone is allowed to share in the enjoyment of it.

He being a doctor adds at the end rather benignly that he has no concern with any economic criticisms of the communist system, but he is unable to recognize that the psychological premise on which the system is based is untenable. We however today know not only through theory but by practical experience that nothing can be more absurd. There theory of removing the bone of contention to solve the problem is akin of the story we all would have come across in our childhood. There are two cats that are fighting for a piece of cake, a monkey comes and volunteers to mediate. He divides the cake into two halves and then keeps hogging on the bigger piece to make them equal and slowly gobbles away the entire cake. It’s true that monkey has left cats with nothing to fight for, but also hungry and deprived of what legitimately belonged to them. I am sure most would agree that communist monkey business is not the solution to the problem in hand.

If so what is solution to the problem in hand, can this problem be resolved in a legitimate rational way, or is it that we have to resort to mysticism or cynical or rather sinister ploys to resolve this issue? Do we have an option at all, or is it some chronic disease that we have to live with? Well I have had earlier in the article brought forth two important issues, firstly that it is intrinsic to human beings and thus cannot be dispensed with, secondly that almost all (or rather each and every) achievement of our society has come through individuals. They are results of the constructive and channelized venting of the same energy that tend to create this discontent. If we develop a society with higher level of freedom more sources of enterprise, more options for men to constructively compete and vent out this energy in a more productive way, wont our society be better? Will it not bring down the level of this discontentment drastically down?
It means that more freedom can indeed lead to a society with lesser crimes, swifter progress and growth and happier individuals. While most other political philosophies are centered on egalitarian ethics, Libertarianism is perhaps the only political philosophy which assumes this very much required freedom as the most indispensable requirement for building a stable and happy society. We have got so used to living in the controlled conditioned environment that the moment we hear of freedom, we tend to imagine some jungle with no law, with no control and no security. It is a widespread misconception that has been carefully doctored and fed into our mind from our very childhood. Truth is that all the laws and regulation that we are subjected to are unwarranted. Most can be dispensed with, and if we ever want human societies to evolve into more stable, progressive and happy entity, this is what we finally need to do. I believe that the world that we live in is far better than the one our ancestors lived in, it is the same responsibility that we owe to our next generation. We need to look into our world rather critically and change what we can. It is said that changes comes in quantum in civilizations, for centuries there is stagnation and then a revolution that changes the course of the history. We may or may not be on the brink of one, but we need continuously prepare for one, endeavor to change what is wrong with our present even if we are not there to see that future dawn.

Is it the high promiscuity in our society which the left liberals are trying to point out?

“I see no harm in drawing the picture of a society in which each individual is supposed strictly to fulfill his duties The happiness of the whole is to be the result of the happiness of individuals, and to begin first with them. No co-operation is required. Every step tells. He who performs his duty faithfully will reap the full fruits of it, whatever be the number of others who fail. This duty is intelligible to the humblest capacity. It is
merely that he is not to bring beings into the world for whom he cannot find the means of support.”8
If each of us adhered to this principle, no overpopulation problem would exist. Thomas R. Malthus