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Indian Libertarians

Life, Liberty and Property

Can there be Liberty in so-called Liberal India?

admin Saturday April 6, 2013

The structural, docile and behavioral order of illiberalistic Indian mobs are psychedelically infected as well as infatuated with socialism and materialistic modernization. Thanks to the omnipotence and omnipresence of fascistic Indian State for architecturing the fragile system that guarantees collective rights over individual rights. Therefore, it is reformatory legitimate for me to stringently and rightly point out that the modernly dressed Indian mobs are obligingly in deficit or lack the possession of attitude of free-thinking, fearless skepticism against State and Socialism, and consciousness of liberty and free-market. Through this exposition, I, therefore, intent to not only infuse the concept of Liberty in the minds of so-called Social Democrats of Independent India who willfully and coercively pay taxes to their corruptible and indubitable Indian Government since 1947 but to also critically highlight the foundation behind this creative destructionism of the violent Indian state constitutionally driven by the ‘animal spirit’.

Liberty, I exposit, is the founding father of an open society. Without a free and open society, the political, social, cultural and economical progresses are not possible. I, empirically, do not think that Independent India is a nation with open society, because the status of Indian citizenship is peculiarly based on coercion than on contract. For any Individual to prosper in all ways, contract not coercion is necessary. I have developed few sharp questions that rightly and conclusively briefs out that India is a nation with closed society. They are as follows:

1) I don’t know why, in an Independent and Republic India, the Indian populace are repeatedly told or reminded about freedom and democracy?

2) I don’t know why the lengthiest written Indian constitution that succinctly talks about some handsome and beautiful political terms do not conscientally believes in panarchy, collusiveness and voluntaryism?

3) I don’t know why questioning the defense sector of India is considered as an act of indubitability, but it isn’t an act of indubitability anymore when the Indian state itself divulges her defence equipments on every 26th Jan parade?

4) I don’t know why my peculiar support to particular caste is legally called racism, but Indian Government upholding certain caste over another is heroically called reservation?

There are many other issues or questions that you and me can easily and critically ponder over, but the ultimate issue that I think I am ushering is to actually awaken the conscience of many Indian Individuals and their societies to walk the path of freedom, liberty and property than on the toll-taxed roads of tyranny, taxation, red-tapism, illiberalism, socialism, etc. In this structural context, I must unfortunately admit that India as a nation of docile disarmed voters have given birth to a government of armed wolves. Another major problem with socialist India is that the political/economic mobs, not Eccentric Individualist, are blindly obeying with the dynamics of draconian democratic system which are systematically manufacturing the matrix that abhors libertarianism. Such civil obedience will certainly doom the so-called normal and modern life of Indian citizens, sooner or later. Mark my words; ‘the true foundation of civil disobedience is liberty’. The obedient slaves must be the voters who cannot ever grasp the concept of free-trade and free-market because they are highly programmed with stockholm syndrome and cognitive dissonance by their own democratic system.

The significant questions, I pose, to the Indian constitutionalists which will certainly go unanswered:

1) If the human state of individual anarchy is the inherent plight of our common nature and choice is the inevitable dilemma we face, why is the rebel condemned as an outlaw when the crimes of the Indian State are inexorable imperative?

2) Can there be freedom of press, if the instruments of printing are under the control of Indian government?

3) Why do the democratic protestors have to legally seek permission from the police for protesting democratically?

4) Is the freedom of movement really hedonistic for the Indian passengers, if the means are simply the monopolistic public transportation?

Thence, liberty or Individual freedom, I assume, can be only guaranteed in India if the role of Indian Government is limited and also not impossible if the constitutional fabric of India resorts to cellular democracy than welfare democracy for the perfect and holistic execution of economic liberty. Liberty, in my view, isn’t only the political end, but also the economic end. This should be also noted that ‘liberty - with democracy - is socialism’ - therefore - the true moral spirit of Liberty is ‘liberty - with Individual rights’ and it can be the only best form of Liberty the Indian mankind can ever know. Government is neither the mean nor the end in the conceptual and pragmatic comprehension of Libertarianism. Government, I think, is not only a masquerading machine but also the problem to all our solutions.

In my previous article, as linked below, I comparatively and factually pointed out the plight of Anarcho-Capitalism in Somalia which is doing far better than India’s Social Welfarism.

Link :http://indianlibertarians.org/2013/03/02/praxeological-somalian-theory-for-socialist-india/

It is, therefore, morally unjust for the Indian mobs to follow conscienceless laws piled up in the legal system of India. The only way out of this matrix is to embrace liberty as it is the utmost beautiful medicine against coercion, amorality and collectivism. Without freedom, no living being, esoterically and exoterically, can be at peace.

 

Beginning with Economics: Lessons for the Young Economist by Robert P. Murphy

admin Saturday March 30, 2013

One of the frequent questions that we meet is that from where and how to start learning economics. We all know economics is a science which is we believe is essential for each one of us to know and understand as it affects our lives. Economic science consists of different schools of economic thought differing in method, approach and philosophy. Each of these schools differs in variety of approaches and their method in studying various phenomena.

 

The term "economics" which we use implicitly refers to the present economic theories and practices of the Keynesian school of economic thought. It is also called as Keynesian Economics. The Keynesian theories are based on the work of British economist John Maynard Keynes.  The Keynesian methods are based on extensive use of mathematical and statistical models. These models are explained using Keynesian economic terms, technical jargon and complex models which are beyond the understanding of the most men. The Keynesian economists try to study and explain economic phenomenon using a term called as aggregate demand (total spending in the economy). The other popular economists whose views we often hear in the mainstream media are from the Chicago School of Economic thought. The Chicago School Economists again uses mathematical models and statistics models extensively just like their Keynesian counterpart. The Chicago School theories are based on the concept of rational expectations. They emphasis that it is necessary to judge the results of specific actions would yield and not judging them simply on basis of their intention. The Chicago School economists majorly concentrate on what will be the optimum money supply in the economy. Once again for the average uninitiated people; who has little idea about economic science; the theories of Chicago School may sound highly technical and difficult to comprehend just like that of the Keynesians.

The oldest, smallest, most precise and now the fastest growing school of economic thought is the Austrian School of economic thought. Unlike the Keynesian and Chicago School economists; the Austrian School bases its study of economic phenomena on the interpretation and analysis of the purposeful actions of individuals. Thus it easily avoids complex mathematical models to explain what exactly is going on. Hence it becomes pretty easy for us to comprehend what exactly is going on with the economy. More over unlike the Keynesian and Chicago School, the Austrian economic theories can be applied to most aspects of our lives beside money and market. Ludwig Von Mises explains:

 

"Economics is not about goods and services; it is about human choice and action."

Another famed Austrian Economist and philosopher Dr. Murray N. Rothbard says:

 

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

For those seeking bare minimum understanding of economics as well as those who wish to build a strong foundation of economic understanding and reasoning we suggest starting with Lessons for the Young Economist by Robert P. Murphy.

Out of the various books on economics for beginners; we find this book written precisely keeping the audience in mind. Robert P. Murphy did extremely well to keep the language as simple as possible. The simplicity in presentation of the content itself is praise worthy for it's not an easy task to do so. Robert Murphy in this book says:

 

The ability to think like an economist is a crucial component of your education. Only with sound economic thinking will you be able to make sense of how the world works. To make responsible decisions regarding grand political ideas as well as your occupation and mundane household finances, you must first decide to learn basic economics.

You may download the (free) ebook (.epub file format) from this page:

http://mises.org/document/5706/Lessons-for-the-Young-Economist

or you may visit the Ludwig Von Mises Institute website for further information on Austrian Economics.

http://www.mises.org

You may also read this book online in html format here:

http://www.vforvoluntary.com/young-economist/

Here is another recommended list of reading materials for those who wish to pursue Austrian Economics: http://www.libertyclassroom.com/learn-austrian-economics/

Its better to be informed than remain ignorant.

 

Praxeological Somalian theory for Socialist India

admin Sunday March 3, 2013

Unfortunately, the ‘running dogs of Occidental neo-imperialism’ constitutionally employed, in the so-called estates of Social Democratic India, have extensively and irrationally imitated the Westminster parliamentary system. It is - therefore - sickening to know the fact that the intuition of ‘human actions’, political creativity and socio-political innovations are highly discouraged, by the Indian collectivism, from the ‘Methodological Individual’ thinkers, residing in Indian society. It is to be commonly understood that the Indian Libertarians, possibly, are more philosophically and politically enlightened than the collective wisdom demonstrated by the Indian communities and the Indian Government. This trend, thus, have underestimated the prudential spirit of Anarcho-Capitalism and Austrian Economics - hence - conceptualizing the character of ‘animal spirit’ in the socioeconomic behavior of omnipresent Indian State and omnipotent Indian Government.

Like the propaganda settings manufactured by the Western Nation-States, the Indian Government also have resorted to act as a ‘masquerading machine’ by incesting with its own populace by defaming, disregarding and disrespecting the political economy of Somalia since the break-up of Soviet Russia. Post-Soviet era, the International system strategized ‘New World Order’ that esoterically dictates ‘be with us or against us’. The political balls demonstrated by Anarchic Somalia to not side with the draconian crony capitalism and ponzi-schemed global financial institutions is/are a very first lesson yet to be learnt by Socialist India, because Somalia is undeniably experiencing progress despite of Anarchy.

The unnecessary Cold War episode, between ‘Burger Socialist’ and ‘Vodka Socialist’, formulated Marxian-Fascism under Siad Barre regime, in Somalia, by late 1960’s till early 1990’s. Before 1960’s, the land of Somalia was imperialized by the European power(s) which later saw secessionism, in the early post-Soviet era, leading to immediate neo-imperialization of newly formed two states, like Somaliland and Puntland, ‘huntingtonially’ punched out of the tribal clashes in Somalia. Moreover, the early 1990’s, Somalia also saw the so-called humanitarian interventionism expectedly organized by debtocratic USA and banana-republic India which fuelled more predicament to the fire. The splendid anarchic revolutionary struggle and self-determinationism by Somalis kicked out the ‘irresponsibly responsible nations’ like USA and India from the geographical constitution of Somalia who now joined by other Western states indirectly confront and harass Somalis by dumping nuclear wastes, etc. The, as usual, state-controlled-media in the so-called open societies of USA, EU and India, etc. have extensively reported on ‘Somali pirates’. These so-called valiant journalists have tremendously failed to think about the trespassing or exploratory exploitation done by the commercialized Western naval forces in the aqua territories of Somalia. I, therefore, believe that not even apodicticity can now justify so-called mentality erupted by Thalassocracy.

Other things being equal, life of Somalis is gradually enriching, in Anarchic Somalia. ‘Facts speak louder than Positivism’:

Parameters                  1992                  2012

Literacy                        25%                   40%

Drinking Water              26%                   24%

Birth Rate                      47                      46

Death Rate                    20                      19

GDP per capita            $220                    $700

Life expectancy          47years                50years

The numbers, as above, obviously, can-not speak the same of that of ‘developing’ Indians, but it is cheering to also note that the Individual freedom or civil liberties enjoyed by Somalis is/are comparatively better than Indians. The economic modernization is also guarding the gun ownership in Somalia, whereas Hitler, Stalin, Obama and Indian Government favour-ed ‘gun control’. You know what I mean.

Comprehensive views of the data that allow pre-anarchy and post-anarchy welfare comparisons suggest that anarchy has improved overall development. Contrary to the typical case, in Somalia social welfare has improved because of, rather than despite, the absence of a central state. Somalia’s government was oppressive, exploitative, and brutal. The extent of this predation created a situation in which social welfare was depressed below the level it could achieve without any government at all. The emergence of anarchy in 1991 opened up opportunities for advancement not possible before government’s collapse. In particular, economic progress and improved public goods provision in critical areas flourished in the absence of a monopolistic and corrupt state. Recognition of this is not to deny that Somalia could be doing much better. It clearly could. Nor is this to say that Somalia is better off stateless than it would be under any government. A constitutionally-constrained state with limited powers to do harm but strong enough to support the private sector may very well do more for Somalia than statelessness.…The relevant question for Somalia’s future is thus whether or not a government, were a stable one to emerge, would be more like the constrained variety we observe in the West, or more like the purely predatory variety that systematically exploited Somalis between 1969 and the emergence of anarchy in 1991.” – Peter Leeson, 2007.

Development Indicators between 1990 and 2005 of Anarchic Somalia and its Centrally Governed Neighbors:

Parameters                                          Djibouti        Ethiopia       Kenya     Somalia

Life expectancy (years)                          -15.4              +9          -15.6      +5.4

Adult literacy (%)                                      -                  -          +3.7       -20

Infant mortality rate (per 1,000)              +16              +28.5       +7.4      +24.4

Telephone mainlines (per 1,000)            +40                ---         +28.6    +1,150

The above indicators are more than enough to empirically convince the assertive arguments generally commented against Anarchism. This spirit of Anarchism and Capitalism have enabled the absence of draconian red-tapism which further strengthened the economic foundationalism of Anarchic Somalia, whereas the existence of bureaucracy and red-tapism are siphoning off the investment and entrepreneurial environment from Socialist India, thus, the ponzi-debt scheme is escalating in Indian economy making the Indian Government richer and the ‘aam aadmi’ (common-man) poorer.

Moreover, the ‘primacy of Individual rights’ and conscience of eccentricism are laughed upon in Socialist India – thus – now shelling out Somalia a great comparative advantage over centralized and nationalized Indian economy.

Despite of the LPG initiative, in 1991, in India, the economy of India has a long way to go to achieve super-power status. Albeit the standard of living of Indian populace is gradually enriching, but still the income inequality and improper business management are lynching the roots of Indian constitutionality. Therefore, it is advisable for the Socialist India to denounce Social Democracy and structurally adopt Cellular Democracy to anticipatory functionalize either Minarchy or Panarchy for the holistic development of Indian individuals. The great societal delusion over seeking pride in India’s so-called diversified-integrated culture and empathetic altruism must be radically and reasonably questioned, as they are hampering the establishment of Individualism as well as lynching the growth of Indian economy.

 

The Drama of Union Budget

admin Saturday March 2, 2013

The 82nd Union Budget of India for the fiscal year of 2013/2014 announcement was made a couple of days back. The union budget is one of the most important event which almost every citizen eagerly awaits. Soon after the budget announcement we find all kinds of discussions over it. Normally the Minister of Finance will claim that they did the best to balance the budget in keeping the poor in mind and above all in the best interest of the nation. The opposition party will religiously oppose this view of the Minister. The media will rope in a bunch of intellectual experts especially those with many awards and degrees from prestigious institutions of economics along with some public personalities with zero understanding of economics to tell the average person what was the budgetary exercise all about. This drama lasts for a week in which every person is a fiscal expert. So what is this union budget all about and how does it serve us?

Simply put the Union budget is all about how much the government is expecting to rob us of our wealth, how much they will keep in their pocket and how much are they going to waste. Questioning the results of the previous budgets breaks the myth of any constructive purpose the government budget serves or if budget planning ever been effective to meet the purpose which it promised to meet. Did the government not project to cut the fiscal deficit in the last budget? The account deficit was at 3.6 per cent of GDP for 2011-12 and now it stands at 4.7 per cent of GDP. Exactly the opposite of what the budget told us it would do. If we take a look into the amount of money the government claims to have spent on welfare of the poor and do a reality check, one can only ask why is poverty still there? This is not just about the Government of India but every government across the globe. Each one of them has failed to carry out what they promise in their budgets. So what is this budgetary drama all about?

The budget is simply the governments coercive decision to show who are the net tax payers and who are going to reap the benefits of the collected taxes. The curiosity and interest of the people lies with the fact how much of their wealth the government is going to steal and if the government has any provisions to ease their parasitic want of living at someone else expense. A large part of the tax extorted from people goes in as salaries and expenditure of government itself. The growing government spending is the major reason of rising taxes and prices which makes consumption goods dearer by the day. Another big chunk of cash these days goes off in the form of bail outs, subsidies and stimulus to crony friends of the government and their misadventures. Rest of the budget consists of giving relief in taxes on certain items of our daily expenditure whilst taxing other items of our daily expenditure. Every budget plan is simply an economic distortion brought about into an ordered economy which will eventually order itself naturally. Effects of such distortions leaves us with no other choice but to live with it. Hence it should be asked, is this the reason government system was formed in the first place? The role of government was supposed to offer welfare for poor, offer security to our lives from criminals, defend us from foreign aggression, maintain law and order, resolve dispute by providing resolution and justice and so-called other public goods. None of these tasks the governments anywhere in the world has been able to meet.

Let's try to understand the present budget and try to understand what does it actually say. The government plans to spend a total budget expenditure of Rs 16.65 trillion ($309 billion). This is a huge sum as most development comes from the pockets of us "the private individuals". This is a minor contribution provided to us by the government which forces us to pay a lot more for it. In a way government is an expensive evil imposed on us. The government of India like every other governments across the world is dealing with a problem called hyperinflation and stagnation. This problem is created by government alone. The steep price of such problems and mistakes committed by the governments is thrust up on us, the honest hard-working laborious man. Next the budget talks about the government trying to cut off its expenditure and adjust its borrowing. In other words it wants to attempt and control inflation. It also talks about infusing money into the state-owned banks (PSU) which means that the banking sector is shaky with lots of bad debts. These bad debts are created by the loans it had lent and now unable to recover. It is also trying to cut down on its defense spending. Military is another useless government expenditure. A huge military expenditure never solves problem nor does it deters any nation which plans to engage in war. In fact it triggers an arms race, creates mistrust and tensions between the neighbors. The cost of such foreign policy again is extorted from us. The scares resources of our planet used to manufacture weapons are simply a waste. These valuable resources should prove more fruitful to humanity if it were to be used for productive purposes. Building Bunkers and forming a militia is a better and a cheaper form of defense than having huge stock piles of weapons. Employing many of youth into armed forces who stay non productive is of no useful benefit to humanity. The other part of the budget talks of plans to sell out the state owned assets (property which it seized and stole from us in the past and calls it public property) to crony corporate partners who funds their elections and spends a lot on lobbying. These state own property is presented as a liability and sold off for petty sum via staged auctions in which only the crony friends of the government participates. The budget also plans to cut down on certain subsidies. This again is trying to control inflation by cutting off some part of the government expenditure. The only reason the government is reluctant to raise taxes and not cut down on borrowing or inflating the economy is due to political reasons. Any government which increases taxes will invite a direct retaliation from the masses and therefore lose their chances of getting re-elected.

It is clear from history that even after 82 budgets and spending crores and crores of rupees under the pretext of welfare the government has not been able to solve any of our problems. We still have infrastructural issues, sanitation issues, high poverty, energy and power crisis, increasing prices as well as dearness, healthcare issues, educational issues, internal conflicts, external conflicts, drinking water problems, agricultural problem, environmental problems and every other kind of problems which the government had promised to solve. Two brilliant minds Ludwig Von Mises and F. A. Hayek had already proved that government cannot calculate the economy, plan it or control it. All that government interference can do is destroy the economy. It is therefore essential for us to start questioning these concepts which costs us heavily and serves nothing. There should be a limit to spend time and money in our attempts to fix a problematic defunct system of government which has never worked nor will. Let's phase this system out.

 

Sources:

http://indiabudget.nic.in/ub2012-13/bh/bh1.pdf

http://articles.timesofindia.indiatimes.com/2013-02-28/union-budget/37351647_1_fiscal-deficit-petroleum-subsidy-tax-proposals

 

What is Capitalism?

admin Saturday March 2, 2013

Normally capitalism is the word in our vocabulary that we use to denote the free-market capitalism. Capitalism, in the present age, has become a dreaded word for the common. For, capitalism is not a new phenomenon.Capitalism had been, in history and, is still blamed for almost every problem of the society. The capitalists continuously have to deal with the anti-capitalist mentality of human society. In the present day with the ongoing economic slowdown, it has become difficult for pro-capitalists to present their views without expecting a stiff gruesome retaliation of taunts and allegation from the anti-capitalists of all sorts. A capitalist's dilemma to voice a support for free-market capitalism is similar to someone's wish of jumping in front of a speeding train without brakes and halt it like a superman. Most capitalists have opted for the classic approach: "silence is golden" except for a few of them.

Capitalism is not a cult or a religion which requires glorification or criticism. Capitalism is an economic system which is a part of human society. Each one of us gives and takes part in making and working of an economic system without ever knowing or realizing it. Each one of us is an actor in an economic system playing a certain role, contributing to it. We can compare an economic system to a social system where each one of us is an actor in the human society playing a certain role without ever realizing it. Each one of us has different opinions about economy just like we hold certain opinions about our society without understanding sociology. Similarly, most of us hold just opinions about capitalism without really investigating the facts in detail.

Capitalism deals with creation of capital or capital goods and employment of capital goods to produce consumer goods. Capital does not reproduce itself. Capital is always created or consumed. The characteristic feature of capitalism that distinguishes it from pre-capitalist methods of production was its new principle of marketing. Capitalism is not simply mass production, but mass production to satisfy the needs of the masses. Capitalism is essentially a system of mass production for the satisfaction of the needs of the masses. It pours a horn of plenty upon the common man. It has raised the average standard of living to a height never dreamed of in earlier ages. It has made accessible to millions of people enjoyments which a few generations ago were only within the reach of a small elite.

The average people’s opinion towards capitalism swings along with the business cycles of booms and bust. Most of us generally do not understand what suddenly made everything go wrong when there were no drastic changes in our actions or in environment. "How could the economy crash when I have not reduced my daily efforts or productive capacity? Surely someone else is responsible for it" is thus the conclusion that every productive man will arrive at. In easy times when most of were enjoying the luxuries of life, capitalism is glorified. The general topic of conversation during the boom period is about the future prospects, how fast the growth rate is, how better our standard of living was getting, etc. Of course, the fruits of capitalism and its benefits didn't die-off all of a sudden but something else happens when the economy goes bust. Tough times are frustrating for all of us. Our natural tendency is to make a very strong opinions about certain views without really understanding what is going on. Its not the case that most people are not rational or reasonable or are stupid but the fact remains that the general public is not expert of economic theories. Even most of the mainstream experts fails to understand certain economic phenomenon. We can easily make out this fact about them from the articles we read in the economic sections of our newspapers. Do we not see that our economic experts own views on the same economic phenomenon that are contrasting and contradicting to each other?

It is the art of the "intellects of stature" to wisely put the blame across to something else. It is not at all surprising that these so-called intellectuals had to simply put the blame on free-market capitalist system, sometimes on consumerism, sometimes on greed, sometimes the rain gods, heavy snowfall, laziness and everything else, but themselves. Now, it should cross your mind that if economics is such a complex science then how can the people ever interpret it? Its a myth that economics is so complex that it lies beyond the understanding or intellectual capacity of an average person. In fact, economics is a science of human actions. There are different schools of economic thought. The methodology of studying and explaining an economic phenomenon differs from one school to another. The present day economic system runs not on free-market capitalism but exactly the opposite. The economic system is under regulations and mostly called a mixed-market economy or a planned economy with the government as its planner.

If there are no free markets then why do we blame free markets? It seems that we failed to shift the common terminology of capitalism from free-market capitalism to mixed-market capitalism. Lets investigate further and try to understand why capitalism is still related to free-market capitalism theories?

Let us see how capitalism is defined by different sources:

Oxford Dictionaries:

 

an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state: an era of free-market capitalism, private ownership is a key feature of capitalism

Investopedia:

 

An economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism encourages private investment and business, compared to a government-controlled economy. Investors in these private companies (i.e. shareholders) also own the firms and are known as capitalists.

Merriam Webster:

 

an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decisions, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market

It is clear from these definitions that capitalism is attributed by most sources to free-market capitalism and the belief that free-market capitalism exists in practice. Capitalism, in general, is an economic system based on the concepts of private ownerships, free markets, production of goods, and distribution of goods, profit motive and competition. There should be no doubt in a rational man’s mind that these elements are harmless and are resulting phenomenon of human nature. Lets explore these elements a bit one by one.

Private ownership: Without going into the legalities, we can say that "private ownership" of property means the ways of owning or obtaining, having complete authority and control over it, be able to use the property, dispose-off the property by sale or consumption or by destruction, etc.Ownership of any type of property by any person cannot be held inappropriate by any reasonable man. For example: A farmer claiming ownership to the produce of his harvest, A monk claiming ownership of alms he has received, A taxi driver claiming ownership of his taxi and asking the passenger not to dirty it etc. are display of private property ownership rights. Private property can be jointly owned by more than one individual under a contract with the terms and conditions of ownership between the owners clearly stated.

Production, distribution and consumption of goods: Our survival depends on these elements. The early man needed wood to produce fire or to make tools and weapons to hunt and survive. Man also needed distribution of the produce from place of production to their villages or for trading the goods with other villages to procure other goods they needed, in exchange. Invention of wheel and building of carts and boats are proofs enough to show the necessity of distribution of goods. Consumption of produced goods is equally necessary. We cannot survive without consumption of food and water. We need to consume wood, mud to make bricks, stones etc. to build houses and the likes.

Profit Motive: Capitalism and capitalists are blamed for their profit motive. It is absurd to say that a man who seeks betterment of himself by appropriate means is wrong. A capitalist also carries the risk of loss and therefore his survival is always at stake. In fact, all human actions are purposeful and profit seeking. A man will trade apples for bread only when that man feels that it is profitable for him to part with certain amount of apples that he possesses, in exchange for a certain amount of bread. A man will donate if he feels, that parting with his money, in return for the good feeling he gets by his noble action, is profitable.

Competition: Man is competitive by nature. Man had to contest his territory, food and water against other species to rise above, in the food chain and survive the present day. It is the competitive spirit in sports, arts, science or any other aspect of life that yield out the best of us. The competition is not always of one individual against the other but mostly the competition is with the self. Competition always results in betterment of mankind. For example: I want to be a better player than before so that I can win more games, I must make better goods than before so that my goods will be demanded by customer, the X drugs used in cancer cure is expensive and has many dangerous side-effects, therefore, I must make better drug than X, etc.

Free Markets: Markets are basically places where trade takes place between buyers and sellers. But, when we talk about market in terms of economy like free-market economy or market-socialism or laissez faire, etc., we are basically referring to the price and decision-making mechanism which plays an important role in the system. For example, in free market, prices are results that are solely based on supply-and-demand mechanism. In socialist-markets, the prices are fixed by a regulating authority as the government by different means of price-fixing mechanisms like tax, duties, tariffs, subsidies, prohibitions, bans, price barriers, etc . In laissez-faire market, the government cannot interfere with prices in form of price settings, tariffs or duties but is free to impose regulations, to protect the consumer and also as a justice provider to ensure that contracts are honored and enforced.

It is also important that we understand what capital is. The mises wiki explains

 

Capital are the goods that were produced in previous stages of production, but do not directly satisfy consumer's needs; they are used in production to eventually produce consumer goods;.

Capital goods can be a bar of metal, a piece of land, fish, intellect and physical strength of man, skills, natural god-gifted talents, attractiveness, spiritual wisdom, etc. We use capital goods to produce consumption goods. For example, a piece of land mixed with physical strength of man can be used to build bricks; spiritual wisdom can be converted into books and consumed by those who are seeking spirituality; attractiveness of a person can be used for marketing of products like our fashion models do etc.

Capital has a value. The mises wiki says

 

All actions employ scarce means to attain the most valued ends. Man has the choice of using the scarce means for various alternative ends, and the ends that he chooses are the ones he values most highly. The less urgent wants are those that remain unsatisfied.
 

Value is the importance that acting man attaches to ultimate ends. Only to ultimate ends, is primary and original value assigned. Means are valued derivatively, according to their usefulness to the attainment of ultimate ends. Their evaluation is derived from the evaluation of the respective ends. They are important for man only as far as they make it possible for him to attain some ends.

Capitalism is the only philosophy which allows man to value things independently according to his valuation. For example, a person might hold diamonds to be priceless and for some other person, it might be just pieces of glittering stones. The value, therefore, is subjective to the person and capitalists gracefully accept that it is so.

Hence, we see that there is nothing evil with capitalism in itself. So, what are we really blaming? What is it that is really affecting us in a bad way? Is it free-market capitalism? The term capitalism is attributed to a lot of things like greed, currencies that we use now a days, destruction of environment, exploitation of workers, class warfare, etc. We must examine few of these elements to understand where the problem lies exactly.

The mises wiki says

 

Greed is the excessive or rapacious desire, especially for wealth or possessions.
 

Joseph Sobran writes, "'Need' now means wanting someone else's money. 'Greed' means wanting to keep your own. And 'Compassion' is when a politician arranges the transfer.

Greed is not bad in itself. Its another of our human desires. However, if a person uses fraud or force to fulfill this desire of his, then it becomes immoral. We cannot complain why a person is earning or saving or consuming more than others. It is only their capacity to put honest actions into play to attend their greedy means. Such greedy persons do not violate any of the rights of another person and therefore, their actions cannot be held wrong or immoral.

The reason why greed is considered evil, is due to the fact that certain individuals have used immoral means to acquire wealth. They have generally used aggression of some form or fraudulent methods to violate rights of other men. This is not the philosophy of capitalism and capitalists do not support such methods. In fact, capitalists are highly vociferous and critical of such men and their corrupt practices. Feudalism, slavery, mercantilism, corporatism, wars, monopoly rights, communism, socialism, fascism, fractional reserve banking, etc. are certain means employed by certain people to amass wealth by corrupt means, which, we know has resulted into mass wealth redistribution and disparities in our society. The kingly class, priestly class, bureaucrats, the elite oligarchs, etc. have always acquired and safe guarded their wealth that are not the ways of capitalism or actual economics. Because, they have the wealth to invest in economic activities, most people tend to confuse them as capitalists. In a free-market economy, the only way to earn and safeguard wealth is by serving the consumers with goods. In free-market economy, the capitalist is subjected to the risk of failing to serve the consumers better than their competitors and lose their investments. Therefore, under the pretext of welfare and protection of those, who do not possess capital, a series of regulations and control was devised cleverly by the ruling class to channelize more wealth and safeguard their investments from free market competition. If you see an entrepreneur lobbying with the government or monarch for special privileges, that's the sign that, that entrepreneur is seeking non-capitalist means of safeguarding his wealth by eliminating competition. In time, they have perfected this system of systematic exploitation. The governments have complete control over the economies today. They are powerful enough to suck-off the entire wealth of the population. The introduction of Fiat Currencies which allowed it to keep inflating (to reduce the value, devalue) at will and play around with interest rates has created a cycle of boom and bust. They promote consumption by lowering the interest rates. With easy money flow, people tend to spend higher than they normally would. This results into consumerism and its the capitalist's brainwashing methods via advertisements which is responsible for it. As soon as the easy money flow is reduced, the advertisement fails to drive-up consumption. This is something which most of us fail to see. This is when we start focussing on our spending and the debts that we have incurred by the thrust of easy money. When interest rates and taxes, both rises, its then that we feel the miserable effects of the economic slowdown. The market always tends to keep the return on investment rates above the rate of interest that is paid on savings. These are the reasons that our savings never seem to grow or become a meaningful instrument to serve us as useful capital, as we had planned our savings for. Hence, we are always in the pursuit of earning more and more money. This is why we find the rat's race in our society. These methods have made almost each one of us helpless and totally dependent on the government's wills and whims. The government is not in the control of the people but only of certain individuals in the business of politics. The Corporate-Government partnership via subsidies, tariff controls, duty control, quality regulation standards, imports permits, special zones etc. are not real partnerships but, a mean to facilitate the politicians to milk the wealthy. The continuous devaluation of the currency destroys our savings.

Hence, we can see the culprit is not free-market capitalism, but other factors unrelated to capitalism and its philosophies. We can only interpret and understand when we investigate and acquire the right information. The Austrian School of Economic Thought explains economics phenomenon far consistently than any other school of economic thought. The Austrian School has precisely predicted as well as provided the accurate causes of what is going on with our economic system. As Murray Rothbard says

 

“It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”

Lets not keep paying huge price for our ignorance of economic system, which all of us are a part of.

 

Why is India So Persistently Poor?

admin Monday February 25, 2013

India’s poverty is a topic that has over the ages generated many illusory debates and equally mind boggling reasons which in no way reaches anywhere near the actual underlying fact. Some say it is because of the huge population coupled with illiteracy, caste problems and a slothful attitude. Others argue it is because of corruption. And yet another group blames it on reasons like colonial past and neo-liberalization.

With 1.22 billion people living in India, population has often been regarded as a growth retardant. The key here is not the absolute population, but rather, population density. No one would deny that a room filled with 10 people is more crammed than a playground with the same amount of people. India with a population density of 382 persons/sq. km. has a per capita income of $1,592, while Hong Kong with a population density of 6482 persons/sq. km has a per capita income of $35,961. Same is the case with Singapore with a population density of 7546 persons/sq. km. and a per capita income of $49,936. One of the interesting cases is South Korea with a population density of 503 persons/sq. km., and as recently as 1960, was at comparable economic levels with India. Today, South Korea has a per capita income 14 times higher than India. So the notion that population is a growth retardant is nothing more than a fallacy. In reality labour is the one of the scarcest and precious of resources.

Illiteracy is often blamed along with population for India’s squalor and poor economic situation. If illiteracy is to blame, then one must wonder how the states of Haryana, Gujarat, Maharashtra and Tamil Nadu with 76.6%, 79.3%, 80.1% and 80.3% literacy rate, have a higher per capita income than Kerala, Mizoram and Tripura with 93.9%, 91.6% and 87.8% literacy rate, respectively! Clearly education is not as decisive a factor in terms of India’s economic growth as it is often perceived.

When it comes to shattering the sophism of explaining poverty with respect to caste divisions and a slothful attitude, the best comparison that we can make is between that of Japan of 1867 (after the Meiji restoration) and independent India of 1947. Absent the lapse of 8 decades, almost everything is the same. Both countries have ancient civilizations and a sophisticated culture. As a counterpart to India’s caste system, Japan had a feudal structure with daimyos and serfs. Both the nations experienced huge political change, which allowed their respective leaders to alter the economic situation. Almost all differences favored India instead of Japan. Japan at that time was completely isolated from rest of the world with international trade and contact just limited to one visit from one Dutch ship each year. Three or more centuries of enforced isolation had left Japan ignorant of the outside world, far behind the West in science and technology, and with almost no citizens able to speak any foreign language other than Chinese. India was far more fortunate, as Britons had left India with a highly skilled civil service, modern factories, universities and an excellent railroad system. India even had more physical resources than Japan. Additionally, Japan had no foreign capital or countries to help when it achieved freedom.

In spite of all these social similarities and the economic advantages that India had, it is worth noting what the two countries achieved in the three decades following the political change. Japan by the end of 19th Century had progressed to become an economic giant and global power. Its social structure of daimyos, samurais and serfs decreased significantly. India, however, remains trapped in 1947, with almost no change in its poverty level and caste structure.

Japan’s success is an overt example that social structure is really not a hindrance prosperity, but rather, rigid social structures break down when economic growth knocks at the door of society.

Some others blame India’s lackadaisical economic situation on the slothful attitude of Indians. If such a claim is true then how come Indians immigrating to foreign lands are the most productive and entrepreneurial set of people in those countries! USA, UK, Australia, UAE, Singapore, Fiji and the list goes on where Indians have made a mark. This proves that tagging Indians as lazy is in it-self a fatuous claim let alone blaming it for India’s poverty.

The most consistent and widespread among all fallacies is that the Britons impoverished India. They looted India of its wealth and that is how this great nation became so painfully poor. Some even claim that India was very rich before colonialism spread to India. But that is not true. Francois Bernier, a French physician and traveler who visited India during the times of Aurangzeb, describes India’s level of poverty and desperateness very vividly in his travelogue. India for sure was poor during the British Raj when compared to the rest of the world but if the Britons impoverished India then why India didn't became rich after they left? On the contrary, India’s share of world trade declined from 2.4% in 1947 to measly 0.4% in 1990. If it was colonialism that made India poor then how come USA and Hong Kong, which were once British colonies, became rich!

In the leftist circle neo-liberalization is regarded as the root cause of India’s poverty. Nothing can be farther from truth than such a bogus claim. In 1947, India’s per capita income was near to Rs. 200 which rose to just Rs. 5000 in a span of four and a half decades till 1991. Compare that to India’s present per capita income which is more than Rs. 50000. Four and a half decades of inward looking, import substituting economy created an additional Rs. 4800 per capita whereas two decades of export oriented and liberalized economy created an additional Rs. 45000 per capita.

Recently corruption has caught the imagination of most of the Indians following an active protest against corrupt practices by people like Anna Hazare and Arvind Kejriwal. It is worth noticing that India ranks 94th in the list of least corrupted countries according to the Corruption Perceptions Index. And which countries top that index? New Zealand, Hong Kong, Singapore, Finland, Denmark.

It is again worth noticing another index, The Index of Economic Freedom. In that ranking, India falls at 119th position. And which countries top that list? The same countries that are noted above. And it is here that the actual reason for India’s poverty and high level of corruption overlaps. And that reason is economic freedom. The lack of economic freedom is what pulls down India. High economic freedom is the reason why countries with even greater population densities than ours are much wealthier. It is the same reason as to why states having lower literacy rates are still richer than states that have high literacy rates. Again, the reason for Japan’s tremendous success after three decades of Meiji restoration is the high economic freedom they had and laissez faire policies that the imperial government adopted, which to our dismay, India didn’t adopt after our independence.

It is beyond doubt that the absence of laissez faire economic policies is the root cause of India’s poverty. It is the excessive governmental regulations that make it difficult for a poor man to escape poverty.


Government strangulation is present in every sector of India’s economy, but the two most glaring ones are in the agriculture and education sectors. Land regulations in India mandate that agricultural land cannot be sold for any other purpose except agrarian functions. This makes it difficult for a poor farmer who wants to sell his land to a real estate firm or an industrialist, forcing him to stick to his land even if it is barren. With laws like Essential Commodities Act and APMC Act, the government even dictates at what price and where a farmer can sell his crops.

On education, according to the existing norms, a school should be established only as a non-profit organization, and to establish a school, one has to acquire a number of licenses. Indians are well aware of how the ‘non-profit’ government schools are operating in the country. The Delhi government requires a person to acquire 32 licenses (some as absurd as stipulating the length and breadth of toilets, corridors and playground) to open up a school. I wonder how many schools never opened up in Delhi because people lacked the political muscle or financial power to get through this license mela.

India should have a greater degree of economic freedom (which is by now a long forgotten set of human rights) by repealing regulatory legislation and ceasing to establish more burdensome regulations. The parliament passed the MRTP Act in 1969 and repealed it in 1991 in the name of reform. Similarly parliament established the Capital Issues Control Act in the late forties, and then repealed it in 1991, finding the law made little sense. Same is the case with Air Corporation Act, which was formulated in 1953 and repealed in 1994. It is high time that India’s government ceases to institute such backwards regulations and laissez faire is accepted as the motto going forward, thus bringing prosperity to the whole of society by enabling every Indian to escape the clutches of poverty.

 

Schools of Thought in Classical Liberalism by Nigel Ashford

admin Saturday February 16, 2013

Professor Nigel Ashford elaborating more on Classical Liberalism and the different school of thought in Classical Liberalism.

Part 1

What is "classical liberalism?" Is it a specific set of beliefs, a philosophy, an economic theory, or something else? In this series, Dr. Nigel Ashford explores what classical liberalism — sometimes called "libertarianism" — actually means. Dr. Ashford looks at 5 different schools of classical liberalism/ libertarianism, and examines how they are similar and how they are different. Dr. Ashford hopes that as you explore this series, you will think deeply about your own beliefs and political philosophy, and draw your own conclusions.

Part 2

How should we assess the merits of a law or government program? According to Milton Friedman and the members of the "Chicago School," we need to look at empirical evidence and see the consequences of laws. Many laws are well-intended, but do they actually have good outcomes? The Chicago School admits that markets do fail sometimes fails. But, they contend that government also fails, and that usually government failure is far greater than market failure. Dr. Ashford takes a close look at the Chicago school.

Part 3

Government grows and grows. Why? Is there any way to limit government? Dr. Ashford explores the intellectual school known as "public choice." Public choice theorists believe that politicians are self-interested, meaning they have a vested interest in growing government beyond its proper, limited size. This means that small, concentrated groups (like industry lobbying associations) yield tremendous power over the politics. This leads to subsidies and tax breaks for politically favored industries.

Part 4

What is the "Austrian School" of economics? When people refer to the Austrians, they are usually referring to the ideas of Friedrich Hayek and Ludwig von Mises. In this video, Professor Nigel Ashford outlines the basic beliefs of these two prominent economists. While the two agree that government should be limited, they also disagree on many points.

Part 5

Do all people have natural rights? Philosophers Ayn Rand and Robert Nozick think so. Dr. Nigel Ashford examines the "natural rights" school of thought, in particular the theories of Rand and Nozick. Nozick and Rand both argue that government should never infringe upon our natural rights, and that government exists only to protect these natural rights. They also find that capitalism is the only moral economic system because it is based on voluntary exchange, not coercion.

Part 6

Do we even need a government? Some anarchist philosophers and economists don't think so. Dr. Nigel Ashford takes a look at two anarcho-capitalist thinkers, Murray Rothbard and David Friedman. Rothbard criticizes the state for its use of coercion, and Friedman criticizes it for its inefficiency. Both argue that there are free-market alternatives to all government services.

 

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What is Classical Liberalism by Professor Nigel Ashford

admin Saturday February 16, 2013

The wise professor Nigel Ashford explains what is classical liberalism in very short well made video.

I suggest this one as a must watch for those who have no idea about classical liberalism as well as those who are well versed. I must also point out that there are classical liberals who believe that there are no role for government at all. However it will be covered in our later posts.

Dr. Nigel Ashford explains the 10 core principles of the classical liberal & libertarian view of society and the proper role of government:

1) Liberty as the primary political value
2) Individualism
3) Skepticism about power
4) Rule of Law
5) Civil Society
6) Spontaneous Order
7) Free Markets
8) Toleration
9) Peace
10) Limited Government

 

Student opportunities: http://lrnlbty.co/A7y5Dt
Dr. Ashford is Senior Program Officer at the Institute for Humane Studies (IHS) at George Mason University.

Source: http://youtu.be/iU-8Uz_nMaQ