Indian Libertarians

War for Corruption

smehra Friday October 3, 2014

“If only everyone followed the rules laid down by the government we would be living in a utopia.” This seems to be the general conception of what is wrong with our country.

This stems from the idea that Constitution, laws and by-laws are on the whole perfect and need only be slightly reformed (either to a minimum or maximum regulatory form) with good leaders elected into office. This has been by and large the central theme of the Anti-Corruption movement in India. The idea is that it is the corrupt politician that is slowing down the development of India and that by electing honest individuals into office we can trigger a drastic change.

However, Corruption is not a simple issue. To understand corruption we must ask ourselves what exactly is being corrupted: Corruption of what? I contend that there are three types of Corruption that are usually talked about:


  1. Corruption of implementation
  2. Corruption of law
  3. Corruption of purpose

Corruption of Implementation

Through a “democratic” process the government comes up with an open plan, which is largely known by everyone in advance. This planning may be done at national, state or constituent level but what is common in all governmental planning is the act of making plans with someone else’s property that has either been confiscated or probably will be confiscated according to the plan (at least in theory). As Mencken says: “Every election is a sort of advance auction sale of stolen goods.”

Stealing of private property might seem theft if done by a private institution, but government has largely enjoyed ideological, religious and intellectual support for this theft. People who usually talk about Corruption in this layer largely accept the ideological, religious or intellectual reasons for the theft and even promote it if they are able to convince themselves of the plan’s utility to the society. After all there are many “intellectual” reasons as to why we must allocate resources that are deemed scarce, like spectrum and coal, through the central government. It is not easy for people mystified with central planning to imagine any other alternative.

With this in mind it becomes common to blame the implementation. If the intellectual arguments promoted by court intellectuals seem logical in theory, then it must be the practice which is creating the problem. Although it can be, and has been, argued that central planning cannot reach its advertised goals; it becomes important to emphasize that central planning cannot even be implemented according to the laid out plans.

Central planning makes certain assumptions about the implementation of its plan which are not always true. First assumption is that the societal order will accept the plan without a fuss. A lot of governmental acts require individuals to behave in a certain way or to give up certain properties. Laws against murder, theft and assault are widely accepted and therefore draw full cooperation from the majority of the public. Majority of the public will not only accept these laws but also consider it immoral to break them personally. But a lot of government laws and regulations are not widely accepted at personal level. The general population might condemn individuals when they are caught breaking laws such as gold smuggling, but they themselves will try their very best to not pay “import duty” on that flat screen television set they are attempting to bring in the country. These individuals will harp on about why import duties must be paid by everyone (except them apparently) and that these smugglers are stealing from the “nation”.

Which means that the criticism that “the general population is concerned about corruption but would at the same time bribe the traffic policeman” is not only correct but also expected. To quote Bastiat: “Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone”. Tendency therefore forms within the citizens to collectively advocate theft (or taxes) but individually hoping that they are able to escape the claws of the government.

Second assumption is largely about the honesty of the enforcers, which includes the watchers (like lokpal). The idea that those holding power to exploit will exploit according to the plan is preposterous. As Rothbard notes:


The common law makes a vital distinction between a crime that is a malum in se and one that is merely a malum prohibitum. A malum in se is an act which the mass of the people instinctively feel is a reprehensible crime which should be punished. This coincides roughly with the libertarian's definition of a crime as an invasion of person or property: assault, theft, and murder. Other crimes are activities made into crimes by government edict: it is in this far more widely tolerated area that police corruption occurs.

It is interesting to note that government edicts not only impose official licenses but also unofficial licenses. The enforcers often not only take bribes to permit certain outlawed activity but also to inhibit competition in the name of the law. Drug cartels usually fall under this category. When the government has outlawed sale of drugs the act of giving out licenses is done by the police either by selective enforcement of their law or by their inability to catch “big players” in the market while simultaneously killing out the smaller competition:


In short, whether consciously or not, the government proceeds as follows: first it outlaws a certain activity — drugs, gambling, construction, or whatever — then the governmental police sell to would-be entrepreneurs in the field the privilege of entering and continuing in business.

Corruption is therefore better understood as a knee jerk response to governmental planning. When the government has the power to dole out licenses, deciding who can and cannot be part of the legitimate market, it becomes necessary to commit acts of corruption to survive in the market. Those committing acts of corruption don’t speak out against governmental planning because they become the beneficiary of the unofficial license - and those cheated of their official license too would like the same privilege of being free from competition, albeit legally. Either way this becomes something akin to the game of license.

So who are the Anti-Corruption crusaders really arguing for in case of scams like 2G and coalgate? Wittingly or unwittingly the Anti-Corruption crusaders become the pawns of the official order (official license holders) trying to gain back their legitimate privilege which was sold off in an act of ‘corruption’ by those with power to exploit (state officials). Scams like 2G and Coalgate are not theft from the nation just because proper procedure was not followed in their allocation. These scams are theft from the producers of the nation because the very act of government allocation requires exploitation of these producers. In the absence of governmental allocation and in the presence of a propertarian order, the coal mines would properly belong to those extracting coal and spectrum would belong to those using it - giving incentive for their proper use.

One criticism of this analysis can be that the Anti-Corruption crusaders are demanding complete transparency as well. But no matter how transparent the allocation of the license is, it doesn’t change the fact that privilege is being conferred upon those whom the government deems most fit - which most of the time turns out to be big business because they appear to be most technically efficient.

What the Joker says in the movie Dark Knight, ‘Nobody panics when things go "according to plan." Even if the plan is horrifying!’, could easily be said about anti-corruption movement by and large.


Corruption of Law

Only Agorism explains why the food vendor paying the cop to get him off his back is not acting unethically just like a man being mugged is not acting unethically when he complies with the demands of the mugger. Clearly laws contradict themselves. Acts deemed illegal when done by private citizens are deemed perfectly legal when done by appointed individuals. Bastiat considered this “legal plunder”. His thumb rule to identify legal plunder was:


“See if the law takes from some persons what belongs to them and gives it to the other persons to whom it doesn’t belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish that law without delay.”

Acts such as robbery and murder are illegal by law. Yet it is perfectly legal for the state to impose taxation which the state considers its right. Similarly land grabbing is a mafia act and is deemed illegal by the law yet the state considers this act to be its right by calling it “land acquisition”. Punishing for sedition too is an illegal act when one considers the “Right to free speech” as a fundamental right. Everyday the state commits acts which it deems illegal. “Practice what you preach” or “lead by example” is something the state never does.

Clearly we cannot ground our understanding of corruption on the basis of implementation if the implementation itself requires violation of the natural rights of the citizens, which are interestingly part of the law by popular demand. Very few anti-corruption crusaders get this far. Arvind Kejriwal, in having recognized the Ambanis as the plutocrats of this nation, seems to beginning to understand this.

Soon after the corruption movement gained steam we saw a demand for honesty among the citizens. We started to hear cries about acts of ‘corruption’ committed by ordinary citizens who are just trying to protect their natural rights. If corruption of implementation is the only kind of corruption that needs to be talked about, then there is no basis to hold the plutocrats accountable as they themselves are direct beneficiaries of the state’s plan. If everything goes according to the plan these plutocrats would get their privilege unhindered by corruption. It hardly seems fit to deem the street food vendor (who bribes to carry on his business) as a morally unfit citizen - yet a consistent treatment of “corruption of implementation” would demand this.

To a libertarian it matters little as to how the state allocates spectrum, coal, oil etc. when in fact these have been stolen from the taxpayers and labourers. Just like how it matters little to the victim how loot is divided among the gang of thieves.

If state’s own actions are against basic ethics, how did law come to be this corrupted? Libertarians have a tradition of pointing out laws which are inconsistent with basic ethics and those which confer privilege upon a certain class of people. I myself have criticized SEZ, APMC, Spectrum Allocation, Internet Regulations and land laws. So is there an objective law that can be constructed that could be considered as an uncorrupted version of law?

Libertarian understanding of the law comes from their adherence to the Non-Aggression Principle which states that:


Initiatory violence or its threat (coercion) is wrong (immoral, evil, bad, supremely impractical, etc) and is forbidden; nothing else is.

To a libertarian, any construct of law must adhere to this principle otherwise the law itself will become a means of legal plunder and create a net plundering class and the net plundered class. Such a law will become corruption of law itself.

Even if you do not adhere to this principle, let us suppose that you do have a consistent document of objective law which does not grant privilege to one citizen at the expense of another. Would that satisfy the libertarian’s demand for justice? No. Law, being written by legislative body and interpreted by the court system cannot remain objective.

John Hasnas explains in his publication “The myth of the rule of law” that we are living in times where people generally believe that we are being ruled not by certain individuals but by a given set of objective laws. But as he breaks that myth later on, it becomes clear that laws are a bunch of inconsistent notions that can be cherry picked and interpreted to come to almost any conclusion - it becomes the judge’s interpretation and understanding of the case that dictates the results. As it should be, because as the laws and their applicability become objective it becomes less capable to provide justice:


Let us assume that I have failed to convince you of the impossibility of reforming the law into a body of definite, consistent rules that produces determinate results. Even if the law could be reformed in this way, it clearly should not be. There is nothing perverse in the fact that the law is indeterminate. Society is not the victim of some nefarious conspiracy to undermine legal certainty to further ulterior motives. As long as law remains a state monopoly, as long as it is created and enforced exclusively through governmental bodies, it must remain indeterminate if it is to serve its purpose. Its indeterminacy gives the law its flexibility. And since, as a monopoly product, the law must apply to all members of society in a one-size-fits-all manner, flexibility is its most essential feature.

Which is why consistent libertarians demand Private law or polycentric law. They realize that the need for law arises from arbitration and the need for order - which can very well be provided by the citizens themselves in the free market.

With this understanding, there is no uncorrupted version of the law because law can’t be objective at all. Sure the law benefits some people at the expense of others but as soon as you try to make a state’s law objective you are unable to apply them in a one-size-fits-all manner and do justice. Which means that the well connected will always be able to become the beneficiaries of the law as long as the law itself is a monopoly of the state.


Corruption of Purpose

Did the state lose its way? Has it corrupted its purpose? To answer that we must ask what is the purpose of the state - a question that is rarely asked.

The most common reply of this question is that it’s purpose is law and order. But this is a circular logic. Laws are made by the state and implemented by the chosen enforcers. Think of all the oppressive regimes that have existed, like those of Stalin or Hitler, they all had their laws which were implemented to their fullest possible extent. Almost all of the atrocities were committed not by the dictators directly but by the law enforcers who were just following orders in accordance with law. Clearly that would be an example of the state which has lost its purpose.

Maybe the purpose of the state is to provide for the general welfare of its citizens. But to guarantee this the state takes control of certain sectors of the market and assign licenses to certain individuals to provide welfare. But on a deeper analysis we find that the state doesn’t own anything it has itself produced. State is but an idea - it is the individuals in the economy that produce the goods. It is a body of forceful monopoly rather than a provider of service, even the service of protection is provided by individuals otherwise identified as the police. Statism is the idea that only certain individuals have the right to provide those service on the market. Those with these special rights are identified as the part of the state and whatever the state has it has stolen (Nietzsche). It is this understanding of the state, that it is a provider of welfare or any service in general, that libertarians aim to break. (Read more on Why government is detrimental to human well being)

The general population is largely unconcerned with the laws and their implementation. Firstly because the laws are numerous and inconsistent. It becomes an exercise of intellect to wade through them to form a case, people who provide this service are referred to as lawyers. Secondly, it is the end result of the society which they are mostly concerned with. If the purpose of state is misunderstood to be “welfare”, what most people therefore mean by corruption is the corruption of purpose. They try find the reason behind this corruption by blaming it on bad laws and bad implementation, failing to acknowledge that the purpose of the state might be opposite to what it claims to be.

If the purpose of the state is correctly understood to be a “gang of thieves, writ large” then it all falls into place. State has therefore not “lost its way” but is acting exactly as it should, performing redistribution of wealth from the producers to parasites; from working class to the ruling class.


No one, for example, is surprised or horrified to learn that businessmen are seeking higher profits. No one is horrified if workers leave lower-paying for higher-paying jobs. All this is considered proper and normal behavior. But if anyone should dare assert that politicians and bureaucrats are motivated by the desire to maximize their incomes, the hue and cry of "conspiracy theorist" or "economic determinist" spreads throughout the land. - Rothbard


Almost all revolutions have materialized when a class of people recognized that they are being oppressed and exploited. However there is no guarantee of that class analysis to be accurate. Marx had a “plutocracy only” position when it came to the state. (Read Roderick Long’s analysis of class theories Part 1 and Part 2) With this consciousness spreading among the masses it became easier for another exploiting class to show itself - the Red bureaucracy, which consisted of the state officials. Such a class consciousness allowed the proletariats to accept “one of their own” as their ruler, hoping they would look out for their class interest. Indian independence movement had a “nationalistic” class consciousness. It was focused on expelling the Britishers from India. Such a consciousness allowed the masses to accept rulers supposedly of their own class - Indian elite. It seems the Anti-Corruption movement has its own class consciousness that they want to promote: the corrupt and the honest.

It is not surprising that the politicians are doing their best to promote their clean image, trying to show to the “uncorrupt” masses that they are one of their own and that their rule will benefit their class interest. However as class analyses go, this is a very poor one. The masses are not the uncorrupt working towards a common goal, they are being oppressed even by the most honest politicians framing the most well intentioned policies implemented by state’s enforcers. Worse, such a rhetoric allows the politicians to distract the citizens from exploitation by an ‘honest’ state official. If the purpose of the state is welfare of society then the existence of the state is antithetical to that purpose.


In a deep sense, getting rid of the socialist state requires that state to perform one final, swift, glorious act of self-immolation, after which it vanishes from the scene. - Rothbard, How and how not to desocialize