Power and Water Riots India

Power and water riots in India erupt every year and this year is no different. The intensity and frequency increases every year. With monsoon showing no signs of appearing and the temperature averaging 43 C/110 F and peaking at 45 C it is particularly bad this year.

Today I got stuck on the highway near the farm due to the locals blocking the road with buses and tractors because there has been negligible electricity in the whole area since the heat wave started. It took me almost twice as long as normal to reach my home and it left me totally drained. I don't have air-conditioning and I had to drench my head with cold water twice.

I have talked about the problems we face every year during summers on my post "The Unearthly Earth Hour." The government seems to be no hurry to relinquish control over the power and water sectors and instead preaches the virtues of conservation. The governments all over routinely force businesses to shut down to save power.

It doesn't strike people as odd that in sectors where there is free-competition there is no such talk and consumers are exhorted to consume more and get better prices as more competition arrives. It has happened in telecom which previously was a government monopoly and people had to wait for as long as ten years to get a phone connection.

Today you can get a cell phone connection in minutes and even people earning less then $2 a day have a phone. In Delhi call rates are as low as 20 paise (half a cent) a minute. The same has been seen in all the sectors which have been liberated from the slimy paws of the bureaucrats.

Rationing and Capitalism

In this article Chuck tells us about this The New York Times article which claims that socialized medicine will lead to health care rationing which according to NYT is "an inescapable part of economic life." It confuses rationing in our daily lives with the government mandated one. How is my buying stuff with my own money the same as a bureaucrat doing that with my money; and supposedly knowing what is best for me. It all starts with this one statement "access to medical care is a fundamental right."

How do we reach this point of deciding that anybody has a right to a good or a service being offered by another person. Right in this context means that the goods/services can be had forcibly and that the person who thinks that he has the right will decide if he wants to pay anything for it. Now, how is that person supposed to indulge in that long honored American tradition of "making money?" Well he can't - he is forced to accept whatever is offered to him. Pretty much like slaves who live on whatever the master deems acceptable. How did the bastion of freedom, individual rights, and the land of pursuit of happiness reach this point where enslaving another person is considered - in fact advocated openly in so called respectable media?

The mainstream media plays an important role in mobilizing the public opinion against Capitalism. The freedom to work, private property, money, division of labor, are all denounced and are blamed for all the problems of the society. These are the very things missing under Socialism and that has been the cause of the collapse of various Socialist countries in recent times. The environmentalism, animal-rights, are nothing but attacks on Capitalism in various forms.

Profit which indicates to what extent a person has succeeded in creating surplus over and above the resources with which he started to begin with, has become a dirty word. What is a businessman supposed to do? Feel ashamed that he created a profitable business? It's not a coincidence that the most profitable companies in America like Coca-cola, Microsoft, Walmart, are some of the most hated ones. They have consistently been the target of anti-trust regulators. The very concept of anti-trust is that if you are very successful you become a target. This very immoral law is undefined and it is up to the government to decide based on unknown parameters if you have broken the law.

I remember reading in Fortune magazine about a decade ago an article where the author suggested taking over Microsoft's patents. I was flabbergasted. Penalizing a company for it's success? In effect nationalizing the company. I was furious and wrote a letter to the magazine. I suggested the author be sent to India to see the result of his suggestion that had already been implemented. The patent system in India was in a primitive state then and the effects of nationalization had rotted the system to it's core. Fortune printed that letter but it was the last time I read that magazine.

In fact everything from inflation, depression, monopolies, just about everything which can be is blamed on Capitalism. It is another matter that in a perfect Capitalist system none of these things would exist. This where government steps in to protect the society from the evil, profiteering, greedy, businessmen. This where the "planned" society begins. It starts the avalanche of laws, regulations, codes, rules, to manage every aspect of the lives of people - supposedly to liberate them from the clutches of the Capitalists. Thus begins the task of freeing people from the free-markets.

The laws range from progressive income taxes, wealth taxes, labor laws, sales taxes (in India), licensing norms, public schooling, public transportation, and the list goes on. To manage all this - hordes of bureaucrats are needed along with hordes of inspectors and other state employees. Laws to regulate food, water, air, open spaces, closed spaces, vacant properties, occupied properties, laws to create laws, are constantly written and re-written even before people get used to the previous ones. I am talking mostly about India but in last few years I have realised distressingly a lot of these laws exist in America. In last decade India has moved closer towards free-markets and America away from it.

One of the key aspects of Capitalism has always been under attack, it's the capital or the money. One of the champions of this policy has been Krugman of NYT. The inflation of money supply as propagated by Keynes has been a consistent feature of governmental control. The removal of gold standard led to removing any restraints on politicians and the beginning of boom and bust economies across the world. In 2002 Paul Krugman advocated the creation of housing bubble and once the economy suffered from it, guess who is around to give advice to governments on how to tackle it - Paul Krugman. America did very well before the creation of Federal reserve, in fact prospered at unprecedented rates.

Here is what Reisman said in his book:

The ability to create money has also been demanded because it is vital in enabling additional government expenditures to be financed by means of budget deficits and thus in fostering the delusion that the government can provide benefits for which citizens do not pay. And when, as is inevitable, the policy of inflation results in rising prices, capital decumulation, and the destruction of credit, people demand price and wage controls, and then, in response to the shortages and chaos that result, the government's total control over the economic system, in the form of rationing and allocation.

We have seen the above result in country after country and yet in this conflict of economics versus altruism and self-interest versus self-sacrifice - it is altruism and self-sacrifice which keep coming out on top. Here in India rationing has been a way of life for a long time. Even though a ration card has lost some of its importance, it has been kept relevant for majority of the masses. The ration card is supposed to be the visa to the Socialist paradise. In reality a lot of food-stuff meant to be distributed through the government controlled fair-price shops is diverted to the black-markets. The corruption is rampant and all public officials and the shop owners associated with the scheme benefit from it.

Last year under right to information law, a major scam was uncovered when one women was discovered to have 901 cards in her name. Everything which is rationed is scarce and is available in the black market at a premium. Kerosene oil is one of the items and majority of it's supply is diverted and used by government licensed gas stations to adulterate petrol and diesel. This causes huge damage to the engines and ends up with vehicles producing far more pollution. So, for people interested in environment I would suggest backing the free-market system.

Capitalism has resulted in rising productivity and improved standards of living and Socialism has caused nothing but economic chaos and totalitarian dictatorship. I'll end by quoting Ayn Rand:

Capitalism has created the highest standard of living ever known on earth. The evidence is incontrovertible. The contrast between West and East Berlin is the latest demonstration, like a laboratory experiment for all to see. Yet those who are loudest in proclaiming their desire to eliminate poverty are loudest in denouncing capitalism. Man’s well-being is not their goal.

“Theory and Practice,” Capitalism: The Unknown Ideal

Amtrak and GM

Let’s learn from history and save free enterprise, before it’s too late!

In 1970, Congress partially nationalized and bailed out America’s passenger rail system for $340 million, forecasting that Amtrak would become profitable by 1975. But government officials, with zero transit experience, got involved in all decision-making. Unable to get tough on unions, they failed to rein in labor costs.
Since its creation 39 years ago, Amtrak has drained $30 billion from U.S. taxpayers. Last year Amtrak lost $1 billion on $2.5 billion in revenues.
So what did Congress do? Our representatives committed another $13 billion in taxpayer bailouts for Amtrak, suggesting that this new “stimulus” will finally “rebuild” Amtrak.
Ignoring this history, the U.S. government has basically nationalized General Motors — astonishingly reminiscent of the Amtrak debacle. The government’s Auto Task Force has zero auto experience, like the federal government’s 1970s Amtrak gang.
But this time we’re spending $50 billion in six months, more than we did in four decades with Amtrak. And the United Auto Workers union owns 17 percent of this new GM (Government Motors)!

Auto Atlas Has Shrugged

Mike from The New Clarion in this article talks about the state of the auto industry in America being discussed at the National Summit on the economy in Detroit. He talks about Nolan Finley, editor of the Detroit News who laments the fact that nobody seems to care about business and industry any more. In reponse to his charge that no one in charge is much interested in hearing their ideas for fixing things, Mike highlights the role of media:

Could it be all those past editorials claiming that some taxes, some emission regulations, some fuel economy regulations, some labor regulations and other government mandates were noble and virtuous goals, but we mustn’t over do it by trying to be too noble and virtuous. Could it be that people no longer believe that it’s virtuous to take poison with their food?

Some of the media morons might be having some doubts but the majority still thinks that a little bit of poison will act like a digestive and be good for you. The conference had a CEO wanting reviving business by making it "cool." So it's not the principles involved but the cool factor which is important. In response to this appealing to "feelings", Mike say:

Never mind appealing to anyone’s mind, their reason, or their own moral and constitutional right to make the cars they want to make with the kind of fuel efficiency and emissions people are willing to pay for. No. We must figure out a way to make life, liberty and the pursuit of happiness and the prosperity it brings, ‘cool’. In a culture where sacrificial emotions take precedence over reason, the more consistent emotionalists will prevail. That’s why Obama, Pelosi and Reid are now in charge.

Mr. Finely also talks of the free market lesson one of the Senators got from a CEO who just ended up extolling the Senator to fine tune his powers to distribute the resources. This is a classic case of "sanction of the victim." Instead of standing up to these leeches, businessmen all over the world are convinced about their mortal sin of being producers, originators of that horrible word, dare I say it - profit. They should listen to Yaron Brook, who said in his keynote speech to the Virginia Republicans," businessmen are the heroes."

I see Industrialists coming on TV every year after the broadcast of that marvel of Socialism - budget, the annual exercise of allocation of resources in India by the Finance Minister. Their companies are in hands of one man and I have yet to see even one business federation give the budget a thumbs down. They just make polite noises (could have been better.) The business schools need to make Ayn Rand's Capitalism: The Unknown Ideal mandatory reading.

Will America learn from Argentina?

Mary O'Grady gives a dire warning in this WSJ.com article "Kirchner vs. The Press" saying "give government 'crisis' power and you won't get it back." She gives the example of Argentina:

In the wake of the country's 2002 economic collapse, the Argentine Congress gave the executive immense powers on the grounds that the circumstances called for extraordinary government action.
Seven years later those powers have not been rescinded and the state dominates the economy as an owner and regulator. Argentina now faces the threat of a further consolidation of control by President Cristina Kirchner through means similar to those employed by Hugo Chávez. As in Venezuela, free speech and the free press are being targeted for increased repression.
Let this be a lesson to any modern democracy that cedes broad power to government in a time of crisis: Granting power to the executive is easy; getting it back isn't.

Today in America there are similarities which should alarm anybody not wanting America to go follow Argentina's authoritarian path. A little bit more from WSJ on Argentina:

Argentina has moved from democratic capitalism -- no matter how weak -- to an increasingly repressive and isolated state-controlled economic system. Property-rights protection has been eviscerated. Entrepreneurs have been cowed into silence by state threats of tax investigations and regulatory harassment. State-sponsored street thugs target businesses that resist the presidency's agenda.

We have already seen the shape of things to come with Banking sector and now with Auto sector. The way Chrysler's secured debt holders were treated can only be called fascist tactics. One of the debt holders was threatened by the White House to back off. WSJ further reports:

From his earliest days as president, Mr. Kirchner tried to keep media critics quiet by using the government's publicity budget to reward supporters and starve those outlets that dared to print criticism.

We have seen the reports of selective closing down of GM dealerships who had supported the Republicans in the elections. With bailouts in fashion and its arbitrary distribution, one financial institution is rescued and other is not. The financial regulations cause the chaos in the markets and then those very regulators decide who stays and who goes. The article also talks about Argentinian government's drafting of a new radio and television law that, if approved, seems sure to quash media freedom. With Obama having made his position clear on media consolidation it's not going to be long before he makes his move in this direction.

FT.com- Judge defends US code of commerce

Union of Keynes and Kant

Updated
In his article "The Nuttiness of Negative Interest Rates" Robert P. Murphy on Mises Institute web-site wrote that
"In his April 18 New York Times op-ed, Harvard professor (and Bush adviser) Greg Mankiw calls on the Federal Reserve to promise future inflation, in order to fix the economy. Mankiw's article beautifully illustrates what is wrong with today's economics profession: it consists of very sharp guys (and gals) who can develop interesting models that spit out policy recommendations that would destroy the economy. It is no coincidence that Mankiw's worldview leads him to literally propose destroying the currency in order to fix the economy."

It is not surprising that the proposal of literally destroying currency comes from an American professor of one of the leading universities. An economics professor is the ultimate union of Kant and Keynes. Kant laid the foundation for the destruction of human mind and Keynes followed closely with his own recipe for the destruction of the capitalism.

The collectivist view that the economies resources are somehow their responsibility, to be managed and disposed off as they like is the dominant theme of the article. So what if the problems were caused during this management as pointed out by the author which Mankiw conveniently refuses to address. Though I am no great authority on economics, even with my basic knowledge, I can recognise the ugly mishmash of non-reason and anti-capitalism coming together in this call to destroy what Rand said was "the ultimate barometer of a society's virtue"- the money.

Read a part of the speech made by Francisco d'Anconia, Galt's friend on the meaning of money:
"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence...
To the glory of mankind, there was, for the first and only time in history, a country of money: a country of reason, justice, freedom, production, achievement. For the first time, man's mind and money were set free, and there were no fortunes-by-conquest, but only fortune-by-work, and instead of swordsmen and slaves, there appeared the real maker of wealth, the greatest worker, the highest type of human being-the self-made man-the American industrialist.
If you ask me to name the proudest distinction of Americans, I would choose-because it contains all the others-the fact that they were the people who created the phrase "to make money.""
"The Atlas Shrugged" by Ayn Rand.

In America today, the phrase "to make money" is losing it's shine. The strangled free-market system is under a renewed and a more vigorous assault. The solutions which are proposed by the current administration are going to push the existing mixed-economic system dangerously close to Socialism. It is the system which is depressingly familiar to those Objectivists living in third-world countries. My overwhelming concern is that when I come to America, I hope it doesn't resemble the place I have left behind.

The proposed solution to solve the current crisis, of encouraging households and businesses to borrow and spend with the helpful dose of inflationary currency as proposed by the Harvard economist is not a new one. Ayn Rand wrote in her "Capitalism: The Unknown Ideal" in October 65 that "there are economist who proclaim that the essence (and the moral justification) of capitalism is "service to others-to the consumers," that the consumers wishes are the absolute edicts ruling the free market, etc. (...what all such theorists fail to mention is the fact that capitalism grants economic recognition to only one kind of consumer: the producer-that only traders, i.e., producers who have something to offer, are recognized on a free market, not "consumers" as such-that, in a capitalist economy, as in reason, in justice, and in reality, production is the pre-condition of consumption.)"

Green, mean and anti-capitalist

What Ayn Rand said is so true that " Within every category of goods and
services offered on a free market, it is the purveyor of the best
product at the cheapest price who wins the greatest financial rewards
in that field-not automatically nor immediately nor by fiat.."(Capitalism: The Unknown Ideal).
---------------------------------------------------------------------
Green Trade Wars
Forbes Magazine dated April 27, 2009

While the world has had its eye on tariffs and quotas, another trade
war has been simmering, over dumping. This month, U.S. Steel and other
American manufacturers filed suit against China, alleging the dumping
of $2.6 billion worth of welded and seamless steel pipes...

What makes this fight different is that steelmakers have a curious
ally: the environmental crowd. Steel is a polluting industry, slurping
up lots of coal for smelting and spitting carbon dioxide into the
atmosphere. If the U.S. puts a cost on domestic CO2 (in the form of a
tax or an expensive emission permit), and if China doesn't impose a
similar burden on its smokestacks, then Chinese steel companies have
an unfair advantage. The enviros propose to make the contest fair by
imposing a pollution equalization tax at the border. This tariff idea
gets a loud "amen" from the U.S. steel industry.
----------------------------------------------------------------------

Growth of corruption equals decline in freedom

Forbes in its article "The Most Corrupt Countries" says

Corruption is on the march. In 2008, the number of countries sinking deeper into the clutches of influence peddling, bribery and scandalous business dealings outpaced improvements by a 2 to 1 margin. Countries falling by more than 10 spots outnumbered risers 8.5 to 1....
Nations with the highest risk of corruption are often the desperately poor, where foreign aid and assistance can easily be transferred through back channels of oppressive regimes. As a result, the impact of corruption can extend well beyond any economic detraction to affect the quality of life for millions of citizens.

It is clear from the article that the growth of corruption is directly related to decline in freedom. One can clearly see that the discretionary powers given to government officials which violate the basic tenets of Capitalism have increasingly resulted in the chaotic economic mess the world finds itself in.The blaming of the mess on the free markets is laughable since even in America in the last hundred years the markets have been heavily regulated and burdened with unsound polices.

The obvious solution for this problem of corruption as George Reisman in his epic work "Capitalism- A Treatise on Economics" said:
"The solution is, of course, the restoration of the businessman's freedom and his security from the destructive actions of the government officials. When the businessman can once again act for his profit by right rather than permission, when the government has lost the power both to harm him and to harm others for his benefit, the problem of such bribery and corruption will shrivel to insignificance."

Go green, just don't do it here

The title of the post is from one of the comments posted on foxnews in response to article Feinstein: Don't Spoil Our Desert With Solar Panels
California's Mojave Desert may seem ideally suited for solar energy production, but concern over what several proposed projects might do to the aesthetics of the region and its tortoise population is setting up a potential clash between conservationists and companies seeking to develop renewable energy.

Aesthetics of a barren desert? Tortoise population is more important then human population? Although I am no fan of solar energy -which would be not exist in a free market- the point is that this story shows us that for environmentalists and their ilk it's not really about clean energy, environment or anything else. It's really about being anti-man in the sense that everything else (a tortoise, spotted owl, some fish, insect, tree or an insect) is preferable over human beings. Ayn Rand said almost 40 years ago:
"The worst fears of land conservationists concern not the accidental spoilage of land by waste. but its exploitation by man to build mines, roads and cities. In time he may encroach so far on his greenery that he reduces the amount of air he has breathe."
The New Left: The Anti-Industrial Revolution

Feinstein said Friday she intends to push legislation that would turn the land into a national monument, which would allow for existing uses to continue while preventing future development.

An empty barren desert as a national monument for America? You've got to be kidding me. Lets declare New York skyline as a national monument and restore it to it's pre-9/11 glory. Even better, let people build a new city in the desert. Allow people to flourish in it without hindrance and then declare it a national monument. Lets tell the good senator that there is no place in American politics for people who want to prevent future development.

The Wildlands Conservancy orchestrated the government's purchase of the land between 1999-2004. It negotiated a discount sale from the real estate arm of the former Santa Fe and Southern Pacific Railroad and then contributed $40 million to help pay for the purchase.

During early days the government saw wisdom in letting people stake claims to newly discovered lands and let them flourish. Now it is buying it back to prevent development. When will majority of Americans see through these people? When will development not be a dirty word? They are using money taken as taxes from productive people to help finance there anti-productive ventures. The irony is that the land was bought from Santa Fe Railroad which built its railway over the legendary Santa Fe trail ruts. It was Santa Fe trail which conquered the prairie with its commerce. The story of the Santa Fe Trail is a story of trade and the railroad further enhanced that story.

"If we cannot put solar power plants in the Mojave desert, I don't know where the hell we can put it," Schwarzenegger said at Yale University.

Even the Governor who became green in effort to fulfill his political goals is going green in the face with frustration.

"The opportunity we see in the Feinstein bill is to jump-start our own efforts to find the best sites for development and to come up with a broader conservation plan that mitigates the impact of the development," Douglas said.

Ayn Rand said in the "The New Left: The Anti-Industrial Revolution" that there is no such thing as a "restrained progress". Mitigated development is a contradiction in terms. As for the conservation, it is clear that they want to conserve anything, except man.

"There's plenty of room in America's deserts for the bold expansion of renewable energy projects," Duran said.

I hope there is room in America's mind for the bold expansion of reason and enlightment else we are headed for the new dark ages.

Living under Socialism

It was the summer of 89 and I was in my second year of college doing my B.Com. I was working for my father in New Delhi. He had a factory where we made cast iron machine parts. A few years ago the government had set quota's for the pig iron used for casting. The criteria for quota was whatever quantity had been bought during the previous months. It was the start of the shortages, black market and bureaucratic interference in the business which was already very difficult to conduct. There were dozens of inspectors from various departments and they had be paid-off or you could forget about doing any business. There were so many ridiculous laws that it was impossible to comply with them even if you wanted to.

One of my jobs was to check with the local govt. office if our quota of pig iron had come. I had to go to the office which was on the outskirts of the city on my puny scooter between rashly driven trucks since nobody would tell you anything on the phone even if you somehow got through. One time I went their consecutively for three days , stood outside the office (no place to sit and during summer it can reach 44 deg. C/111 F.) and still had no news of our iron. Since there were no mobile phones at that time and no payphones around I had to beg some official to let me use his phone to make a call.

The staff was indifferent at best of times and outright hostile at other times. All the offices were dull, dusty, drab, dreary and every time you entered one your heart sank a little at the prospect of dealing with people who didn't even bother to look at you and were deliberately dismissive. If you persisted they would snap at you like a rabid dog and it was almost physically painful when you had be very polite and use deferential tone even when you wanted scream at them and ask them if they were human before grinding there faces in the pile of dusty files in front of him.

Sometimes I wish I could have made a virtual tour of the whole experience for the benefit of those people who want more regulation, more interference and remind them of those days. As such we are hardly out of the license and inspector raj and some people want to drag us back to those evil times.

I wish I could tell people in America that I had lived through the worst case scenarios portrayed in "Atlas shrugged" by Ayn Rand. A society which mocks and denigrates the achievements of it's producers is not a pleasant place to live in. I dreaded the days when some new teacher would ask kids about their fathers profession and I kid you not when I say that after saying my father was a businessman I would see contempt and in one particular case downright hostility. This one teacher got on my case and constantly taunted me by saying why did I have study since my father was a big businessman I didn't have to worry about making a living anyway.

I wonder about America's capacity for more abuse. Is Obama going to be the last straw? Is he going to turn people away from socialist idea's by proving their futility and failure. With Santelli's rant on CNBC getting widespread support and a lot of resistance to the bailout I would say Americans are not ready to throw in the towel and surrender meekly. With core of objectivist activists leading the way their is still hope for the greatest country in the world. And don't forget people like me who are American at heart (born in the wrong place) who will do there best to keep it that way.

Delhi government's anti-business ban on plastic bags

Couple of days back I saw a notice posted at our local grocery store saying "please get your own bags" beginning the start of the plastic bag ban. It will make things very difficult for retailers and will have a negative effect on the sales.

The environmentalist win another round in their battle at the local level against progress, business, lively hoods, families, children' pocket money, happiness and mankind in general.
Read the post on a similar ban in a US city. http://sparkasynapse.blogspot.com/2009/02/plastic-bags-illegal.html