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

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

Proportionality of Crime

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

Restitution Business

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

Rape Scenario

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

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

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

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

Prostitution and ‘Rape-restitution’

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

Conclusion

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

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

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

What is Prostitution?

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

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

Sex as a Trade

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

Prohibition never helps

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

Legalization reduces crime rate

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

Legalization promotes health care

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

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

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

Legalization of Prostitution and Social Condition

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

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

http://couplewriters.blogspot.com/

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

Consumerism is the principle of Free Market, which states, “free choice of consumer should rule the market, or, the consumer decides the economic structure of the society“. Producers and providers bring their products to the market and make it certain that consumers, the public, may gain enough knowledge about their product so that, if the consumer decides that the particular product is good, they may buy it.
To spread the knowledge of their product, producers advertise and apply proper marketing strategies. The consumer remains free either to accept the product and buy it, or to reject it at certain price.
Now days, producers are delivering good attractive services, better comfortable products and advanced technologies in the market. Some people claim that all this advancement is redundant and nobody needs it.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Man is a rational being by nature; he strives for comfort, well-being, prosperity, progress, security and happiness using his intellectual and physical talents for his proper benefits. Nature created man for a social set-up. His natural necessities remained greater than his individual capacities to fulfil his wants. No one individual is capable enough to supply his own demands without the help of others. He cannot fulfil his wants without the aid of society and those wants, which acts upon every individual drives the whole of them into society. Furthermore, man is naturally selfish, as to fulfil his wants and to pursue his happiness, he is dependent on the reciprocating aid of the society, and he naturally tends to feel affection towards the social set-up, which is necessary for his pursuit of happiness and secured life. Without the aid of society, one may survive, but he cannot be happy and he cannot prosper, that is why, there is no time in a man’s life when his love for the society ceases to act. A man remains a social being throughout his life; society begins and ends with our being.
The property owner, the farmer, the technician, the plumber, the manufacturer, the merchant, the dealer and every occupation prospers by the help that each receives from the other and as a whole; they constitute a society that is regulated by the common interests of every entity. As every individual of a society is well concerned about his personal interests and rational well-being, the society itself evolves the essential sets of natural laws that obviously depends on the mutual benefit of every part, every individual of the society. In most of the cases, a society itself creates a well-arranged mutually beneficial system to avoid any coercive interference from any individual or group of individuals over others, that is, the free society itself denies any necessity of government or any governing coercive body to interfere in the social free domain. If one examines the basic nature and constitution of man, which is the basic unit of the society, he can easily notice that most of the part of the coercive regulatory system that is known as Government is very redundant.

Failure of Government

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

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

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

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

Society with an all knowing Superman

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

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

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

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

Is this society better?

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

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

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

Society with real life men

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

Conclusion

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

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

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

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

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

The skyrocketing prices of common commodities is becoming the main political issue around which, the BJP is trying to make their case against Congress lead government. It is true that government is responsible to the price rise, but can government control the prices or the price rise?
It is a common myth that producers, hoarders, speculators and dealers control the prices and tries to bring the prices as high as possible to make maximum profits at the expense of poor consumers who have no choice but to be exploited by such corrupt speculators, hoarders and dealers. It is certainly an irrational myth because to make maximum profits in a competitive market, the speculators, hoarders and dealers need to adjust selling their commodities at the minimum possible prices.

Who Decides the Prices?

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

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

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

Can Government decide and control the prices?

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

Reason of Price Rise and Consequences of Price Control

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

Solution of Price rise and Shortage

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

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