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My Friend Sancho

My first novel, My Friend Sancho, is now on the stands across India. It is a contemporary love story set in Mumbai, and was longlisted for the Man Asian Literary Prize 2008. To learn more about the book, click here.


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Click here for more about my publisher, Hachette India.


And ah, my posts on India Uncut about My Friend Sancho can be found here.


Bastiat Prize 2007 Winner

Category Archives: Freedom

Consent Won a Battle This Week. The War Remains

This is the 11th installment of The Rationalist, my column for the Times of India.

Remember, remember, the sixth of September. In many ways, this date in 2018 is as momentous as August 15, 1947 was. On that day, India gained freedom from a foreign ruler, but Indians remained unfree, subjects of an oppressive Indian state instead of an oppressive colonial one. We were denied so many types of freedom, and took that condition for granted. This week, though, an important sliver of liberty was finally handed to us. This is also Independence Day.

The repeal of Section 377 is an emotional victory, but the tears are bittersweet. The fact remains that it took five unelected men to set this right. In this great democracy of ours, where the voice of the people is supposed to find expression in its politics, not one political party in the last 71 years tried to repeal 377. Parties don’t have principles, only incentives, and all of them behaved this way because they feared that voters would not approve. That tells you what every gay person in this country already knows from lived experience: our society is homophobic. Not just that, our society and the state do not give a damn about Consent.

The central principle of this 377 judgement was Consent: no one has the right to come between two consenting adults. Consent is the foundation of all human rights, and should be the foundation of our Republic. And yet, despite this one historic judgement on one domain of Consent, we remain a land that does not care for this principle.

Consider the arts. We are a country where films made for adults by adults are routinely censored. Books are banned. ‘Objectionable’ art exhibitions are shut down or vandalised. Artists and patrons, consenting adults all, are prevented from enriching each other.

Consider free speech. As in any other marketplace, all of us benefit when there is competition in the marketplace of ideas. And yet, we have laws in the Indian Penal Code, like 295(a) and 153(a), which allow anyone to claim offence and shut free speech down. Like 377, these laws are colonial artefacts. But they are actually validated by the most illiberal part of our Constitution, Article 19(2), which allows caveats to free speech on grounds like ‘public order’ and ‘decency and morality.’ Those are open to interpretation, and anything goes.

Consider food. The government regulates what you may or may not eat. Consider health. You cannot take cannabis for medical use, or any other medicine not approved by a government body. Consider education. You could get arrested for home-schooling your children if you find government schools inadequate, and there are so many restrictions placed on private schools that come between consenting parents and consenting teachers.

Indeed, markets are as big a battleground for Consent as bedrooms or kitchens. If we don’t interfere between consenting adults in a bedroom or kitchen, what moral justification is there for doing so in the marketplace? Every time a voluntary exchange happens between two people, it does so because both people benefit. Life and markets are a positive-sum game. And yet, governments ‘regulate’ and stop voluntary exchanges between consenting adults all the time. Often acting on behalf of entrenched interests, they restrict competition, harming consumers aka citizens, and benefiting cronies.

The most poignant victims of this are our farmers. Our entire agricultural crisis is a result of our farmers having their autonomy snatched away from them. They are the least free of Indians, and are trapped in a cycle of dependency. But this is a subject for another column, perhaps.

71 years after the British left is, we have the mentality of the colonised. We behave as if we are subjects of a mai-baap state, and not its masters. The state should exist to serve us, not the other way around. We give the state a monopoly on violence so that it can protect our rights, not so that it takes them away with the threat of violence. It is not a safeguard for our liberty, but the biggest threat to it.

We got lucky this time with the Supreme Court ruling, but we cannot rely on the court every time. There are too many freedoms to fight for, and unless the parties that run this country see political capital in it, they will not grant us those freedoms. But I have hope.

The outpouring of joy at the repeal of 377 may indicate that things are changing. Have we started caring about each other, and about freedom, a little bit more? Are we beginning to recognise that a nation cannot truly be free until all its citizens are free? Are we going to bring about more trysts with destiny?

Posted by Amit Varma on 09 September, 2018 in Essays and Op-Eds | Freedom | India | Politics | The Rationalist


Every Act of Government Is an Act of Violence

This is the 9th installment of The Rationalist, my column for the Times of India.

There was outrage on Twitter this week when it was revealed that the union government had spent Rs 4880 crores since 2014 on government advertising. The outrage is justified—but it is not enough. It is not just this amount or this use of government money that we should question, but the whole concept of government spending. And indeed, government action.

We in India seem to think of Government as the solution to all our problems. (I often argue that India’s biggest religion is not Hinduism but the Religion of Government.) We behave as if the State is a benevolent entity with unlimited resources of its own with which it should fulfil all our wishes: ban what we don’t like, build what we want built, spend on what we think are good causes. Statues, loan waivers, awards for sportspeople, ministries for cow protection, and so on.

In all this, we ignore one essential truth: Every act of government is an act of violence.

Think about what the state needs in order to exist: our taxes. Money taken from us by force. No one pays taxes willingly. Without the threat of imprisonment—basically, abduction by the one entity that has a monopoly on violence—there would be no taxpayers. There are two words that mean the act of taking someone’s property without their consent: no wonder people say that Taxation is Theft.

Indeed, it is more than that. Assume that you pay 25% of your income in taxes. That amounts to one-fourth of your time and labour. It means that, for all practical purposes, from January to March every year, you are a slave to the state. Taxation is not just theft, it is part-time slavery.

Contrary to a common canard, everybody pays taxes. Taxes are not just income tax. Your domestic help is parted from her money when she buys a bar of soap. The beggar at the traffic signal near you loses money to the government every time he buys salt. Even inflation—usually caused by the government printing money—is basically a tax on the poor.

I am not arguing that we should pay no taxes and live in anarchy. The state is a necessary evil. We need it to protect our rights, and there is no way around the paradox that by allowing it to exist, we give away some of our rights. The state has to tax us to protect us, and the violence it thus commits is necessary to protect us from greater violence.

Regardless of what your ideology may be, none of what I have said above is contestable. It is plain fact that no one pays taxes willingly, and that the threat of coercion is involved. It is plain fact, thus, that every government action involves violence and coercion. Most people would also accept that some amount of this violence is necessary, for we need the state to protect our rights. The larger question then is, what actions of the state are justified, given the violence involved at every step?

This is where ideology begins. Person One (a libertarian like me) could argue for a minimal state that only protects our rights and nothing else. (If you feel the state should do other things, give me the moral justification for your preferences being funded by money coercively taken from others.) Person Two may advocate a state looking after its less fortunate members, proving free healthcare and education. Person Three may care about national glory, and want to build grand statues. Person Four could argue that building infrastructure is necessary, and has positive externalities.

(It is beside the point, of course, that political parties are driven by imperatives beyond ideology. They need money and votes to exist and win, and when in power, use the state as a tool to reward those who gave them money and votes—always at the expense of us citizens.)

The purpose of this column is not to argue for or against any of those ideologies. I just ask that every time you advocate government action of any kind, remember that the action comes at a cost. That cost is not just a financial cost, but a moral one. That cost involves violence committed on all of us—not just rich industrialists, but also the poorest of the poor.

Can you justify that violence?

Posted by Amit Varma on 05 August, 2018 in Essays and Op-Eds | Freedom | India | Politics | The Rationalist


I am a Feminist. You should be too

This is the 8th installment of The Rationalist, my column for the Times of India.

Would Aditi Mittal have become a stand-up comedian had she not studied in a girls’ college? Appearing as a guest in the latest episode of my weekly podcast, The Seen and the Unseen, she told me that studying at Sophia College enabled her to perform in front of others with confidence. Had there been boys in her class, she said, she would not have been able to claim the space of the class jester.

This came as a revelation to me, though it should not have. No male comedian would have experienced this; but every woman knows what it is like. Aditi’s point was that even though she was so privileged—born to English-speaking, liberal parents—she began her career facing obstacles her male peers never considered. At least she made it through: there are 235 million people who did not.

One reason for India being such a poor country is that we treat half of our greatest resource—our people—as inferior to the other half. This has a huge cost, which people have recently begun to quantify. Here are some numbers: only 26% of Indian women are in the workforce, next only to Saudi Arabia among G20 countries. A story in the latest issue of the Economist reveals that if female labour participation was as much as of that of men, there would be an additional 235 million women in the workforce. (Even many of those who do work now would be more skilled and productive if treated equally with their brothers in childhood.) According to a 2015 McKinsey study, our GDP could go up by 60% by 2025 if female participation in the workforce matched that of men. (For more, read Namita Bhandare’s outstanding series in IndiaSpend.)

India’s misogyny carries much more than just an economic cost. It is a humanitarian tragedy. No other term suffices when more than half a billion people are treated as subhuman and prevented from reaching their full potential. A recent study named India as the most dangerous country in the world for women, which is no surprise given that women are essentially treated as the property of men. (These cultural attitudes are reinforced by actual laws that take this approach.) Even though we live in the 21st century, our attitudes towards women belong in the 19th. We must fix this.

Let me declare it upfront: I am a feminist. And because that particular F-word has so many shades of meaning, let me define what I mean by it: Feminism is the belief that women deserve the same respect as individuals that men do. The same moral consideration. The same legal rights. My feminism arises out of my belief in the primacy of individual rights, with ‘Consent’ as an absolute value. Indeed, I tell my fellow libertarians that to be libertarian is, by default, to be feminist. A (male) friend of mine even says, “If you are not feminist, you are not a good human being.”

Why does feminism get a bad rap then? This is because just as there are all kinds of human beings, there are all kinds of feminists. Not all stop at the principle of equal rights, and offshoots of feminism can often contradict each other. (Google “gender feminism vs equity feminism.”) Many feminists feed into an identity politics in vogue today, which can be as toxic as the ills it purports to be fighting. Also, the tactics that some feminists employ can make some uncomfortable, such as the recent ‘list’ of alleged sexual offenders in academia, who were to be deemed guilty until proven innocent.

But even that list had an important function, which is the same one that the #MeToo movement highlights: women are angry, and won’t put up with this shit any more. Men seem to be oblivious to the extent and ubiquity of this anger, as well as to the fact that it is justified. Indeed, one central cultural disconnect of our times can be summed up like this: Women are angry. Men are clueless.

This is made worse by the fact that many men who declare themselves to be feminists are just being performative. (Basically, virtue signalling to get laid, as men are hardwired to do.) I find this irritating, but I won’t turn away from declaring my feminism either because of this or because of my discomfort with the tactics of some feminists. The reason for this is twofold: One, women being treated as second-class citizens hurts us all, and diminishes us as human beings. Two, it is a sad truth that because of the power dynamics around us, men can actually make more of a difference than women can, especially when outspoken women are being constantly minimised and mocked.

Therefore, it is imperative for us men to also fight this good fight. Not because of what our ancestors did or how our fellow men behave, but because it is the right thing to do.

*  *  *

Also check out:

‘Claiming Your Space’—Episode 76 of The Seen and the Unseen

‘These Funny Times’—Episode 75 of The Seen and the Unseen

 

Posted by Amit Varma on 08 July, 2018 in Essays and Op-Eds | Freedom | India | The Rationalist


We Should Regulate the Government, Not the Other Way Around

This is the sixth installment of The Rationalist, my column for the Times of India.

From the way this government behaves, you would think that the people of India are a great danger. A few days ago, the government floated a tender asking for vendors who would build for it a “comprehensive analytics system to monitor and analyse various aspects of social media communication and World Wide Web.” Put simply, a surveillance system that will track all your online activity, and know everything about you, so that you behave. This tender came on the heels of an earlier proposal mooted by Smriti Irani, then the I&B Minister, to regulate online media.

These specific proposals were par for the course. Any government looks for ways to expand its power over its citizens. As much as we should protest these attempts, we should also consider that the real problem lies elsewhere. The biggest danger to our democracy is not one set of people lusting for power, but the mindset that all of us have.

The Indian people still behave as if we are subjects of an empire. We have no rights except those that our rulers are kind enough to grant us, and they are our mai-baap. Yes, since the British left we have a procedure to elect our own rulers – but we remain the ruled.

In a democratic republic, the people should be in charge, and the government should serve. The only legitimate role of the state is to protect the rights of its citizens – that’s what laws are for. And yet, in this inversion of roles that we have accepted, laws become the tool by which our rulers keep us in check. The mere rule of law is never enough for this, and the state always seeks to expand its power with that magic word, ‘regulation’. We accept and encourage this: whenever we see a social or economic problem of any kind, we assume that the solution must lie with government, and demand ‘regulation.’

We need to reverse our thinking. We should regulate the government, and not the other way around.

You should always be suspicious of any sentence with the phrase ‘government regulation’. Most of the time when someone proposes any kind of government regulation, it is something that will harm the common citizen, help a special interest group and expand the power of an oppressive state. Let me explain.

First of all, let’s take for granted that the fundamental role of the state is to protect the rights of its citizens. It has to maintain the rule of law. In any marketplace, whether of goods, services or ideas, this is all it needs to do. Punish cheats and thieves. Enforce contracts. Ensure that all interactions are voluntary and there is no coercion. It needs to do no more than this.

Now, consider what happens when the government decides to ‘regulate’ something in the ‘public interest’. The state is not a benevolent godlike force that works in society’s best interests. Politics is an interplay of power and money, and those in power have always been captured by special interests. There is already a power imbalance in favour of these special interests. To grant the government more power is to increase that imbalance.

Usually, in any market, competition is the best regulation. A common form of government regulation is to increase entry barriers in a marketplace, thus reducing competition. This hurts the consumers – or us common citizens. It helps entrenched special interests.

This is as true of the marketplace of ideas as it is of the marketplace for goods and services. Social and online media are already subject to laws that fight criminal activity—including many laws against free speech that should not exist. Further regulation is an attempt to protect one set of ideas and intimidate another. This reduces the possibility of dissent. This is bad for democracy.

The issue here is not which party happens to be in power at a given time. Whenever you concede a certain set of powers to a government, imagine the worst possible person in charge. It could be Yogi Adityanath or Sonia Gandhi or Arvind Kejriwal—whoever you dislike most. The state should have so little power, and such strong checks and balances, that the worst person imaginable being in charge will not be a threat to the nation.

So the next time someone proposes government regulation of any kind, with the most noble rhetoric behind it, raise your voice. It is the natural tendency of the state to try to grab as much power as possible. It is the duty of the citizen to resist.

Posted by Amit Varma on 03 June, 2018 in Essays and Op-Eds | Freedom | India | Media | News | Politics | The Rationalist


Zuckerberg’s Reply

This is the 74th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

THE DIFFERENCE

I told Mark Zuckerberg, “I’m not sure
That my data is super secure.”
He said, “Bro, it’s your call.
You can just uninstall.
But what about Aadhaar? What’s your cure?”

THE SECRET

Modiji said to his friend, Putin,
“Bro, tell me, how do you always win?”
Putin said, with a smile,
“My old friend, use your guile.
Once you get power, never give in.”

Posted by Amit Varma on 25 March, 2018 in Freedom | India | Politics | Rhyme and Reason | Rhymes


It is Daft to Worry About Inequality

This is the 46th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

Inequality and poverty are different problems, requiring different, even opposite, solutions. India’s problem is poverty.

Let me begin this column with a question, dear reader, which I urge you to read carefully and answer before reading on:

In which of these two countries would you rather be poor: the USA or Bangladesh?

Most people I ask this to go, Duh, of course I’d rather be poor in the US than in Bangladesh. Well, here’s something I’d like you to consider: the USA has far greater inequality than Bangladesh does. A measure called the Gini Index measures inequality across the world, and the USA, Hong Kong, Singapore and the United Kingdom all have greater inequality than Bangladesh, Liberia, Pakistan and Sierra Leone. And yet, that second group of countries is by far poorer than the first group

It has become fashionable these days, especially in elite, privileged circles, to agitate about inequality. But as my question and the data above make clear, inequality and poverty are very different things. Some of the poorest countries in the world are among the most equal. (Some Communist countries of the last century came close to achieving equality in poverty.)

So here’s my contention, in three propositions:

One: India’s big problem is poverty.

Two: The more we reduce poverty, the more we are likely to increase inequality.

Three: It is perverse, therefore, to worry about inequality. We should only keep our eye on poverty, and not worry if inequality goes up.

There is a fundamental fallacy at the root of the obsession with inequality. We think of the world in zero-sum ways. That is, we behave as if there is a fixed pie, and the rich can only become richer if the poor become poorer. In this vision of the world, the more inequality increases, the more abject the suffering of the poor. Redistribution is the only solution.

And yet, this narrative is wrong. The world is not zero-sum but positive-sum. The size of the pie increases with every voluntary transaction. Every time I buy a cup of coffee from a café, both the café and I are better off – otherwise we would not have transacted to begin with. The amount of value in the world has gone up.

The more you allow and enable such voluntary exchange, the more people trade to mutual benefit, and we all become better off. And the larger these economic networks of voluntary exchange, the greater the scope for such mutual enrichment. That is why people migrate to cities from villages, and rarely the other way around.

In fact, within a country, cities are far more unequal than villages are. If inequality was such a bad thing, why would so many poor people vote with their feet by migrating to cities? They embrace this greater inequality because they want to escape poverty.

The reason India remained a poor country for so many decades after Independence is that, with the zero-sum vision of our leaders, we frowned upon free markets. While the rest of Asia shot ahead, we restrained the natural ingenuity and enterprise of our people with our mai-baap vision of politics. We did reform a bit in 1991, but too little and too late. Our poverty levels did go down a bit, though, even as we grew more unequal, illustrating the fact that there is no correlation at all between poverty and inequality.

I don’t want to talk only in terms of abstract ideas, so let me illustrate one way in which reducing poverty would raise inequality. There is consensus among economists today, even left-wing ones, that we have crippled our manufacturing sector for decades with a series of bad laws, such as our labour laws, which don’t allow small businesses to grow, and force much of our nation into the informal sector. These regulations stopped us from becoming a manufacturing superpower like China. What would happen if these restrictions were to magically disappear one day?

You would have growth in the manufacturing industry. There is no question that there would be far more employment generated, which would reduce poverty. You would also have some of these businesses achieving scale and becoming behemoths. Poverty would go down and our per-capita income would go up; but because of the winners at the top, inequality would also go up. Would this be a bad thing? I don’t think so.

The zero-sum instinct is ingrained in us: we evolved in prehistoric times when we lived in small tribes amid scarcity, and the positive-sum view of the world would have been unintuitive. It is also natural to resent the super-rich among us, especially when they behave in ostentatious, obnoxious ways, and game the system with their money, which happens a lot in our crony socialist state. Maybe a country that has eliminated poverty can have the luxury to think about Inequality. But not us.

It is a moral shame that seven decades after Independence, we still have millions of people living in poverty. We need to fight this. We should not be distracted by false metrics.

Posted by Amit Varma on 09 February, 2018 in Economics | Essays and Op-Eds | Freedom | India | Lighthouse | Politics


A Special Cess

This is the 68th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

BUDGET

My finances were in such a mess.
I said, “I demand an Amit cess.”
A gentleman named Shah
Said, “Arre bhaiyya, wah.
Super idea, I must confess.”

FIRST PRINCIPLE

Tom Friedman has defended Aadhaar.
He said, “Facebook has your data, yaar.”
Oh, what a clueless gent.
Facebook has our consent,
And consent must be our guiding star.

Posted by Amit Varma on 04 February, 2018 in Economics | Freedom | India | Politics | Rhyme and Reason | Rhymes


A Special Cess

This is the 68th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

BUDGET

My finances were in such a mess.
I said, “I demand an Amit cess.”
A gentleman named Shah
Said, “Arre bhaiyya, wah.
Super idea, I must confess.”

FIRST PRINCIPLE

Tom Friedman has defended Aadhaar.
He said, “Facebook has your data, yaar.”
Oh, what a clueless gent.
Facebook has our consent,
And consent must be our guiding star.

Posted by Amit Varma on 04 February, 2018 in Economics | Freedom | India | Politics | Rhyme and Reason | Rhymes


Death of a Writer

This is the 49th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

THE KILLERS

What is the difference between ISIS
And home-grown terrorists? It is this:
ISIS takes full credit
For the crimes they commit.
Our boys are cowards in the abyss.

IMMORTAL

It’s not easy to kill a writer.
Get dry wood, fuel, cigarette lighter.
Flick a switch, set a fire.
She will merely perspire.
Words live forever, you can’t fight her.

Posted by Amit Varma on 10 September, 2017 in Freedom | India | Rhyme and Reason | Rhymes


Rights and Riots

This is the 48th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

PRIVACY

The Supreme Court upheld our birthright.
I jumped with joy. I screamed with delight,
“Governments, leave us alone!
We are fine on our own!
You are nothing but a parasite.”

RIOTS

There are mobs out there on the rampage.
We must not give in to their outrage.
To crush them is our task,
But we must also ask,
What is the deeper cause of their rage?

Posted by Amit Varma on 27 August, 2017 in Freedom | India | Rhyme and Reason | Rhymes


Notes and Jokes

This is the 42nd installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

DEMON NOTES

Urjit Patel let out a big groan.
I said, “Urjit Bhai, why do you moan?”
He replied, with a sigh,
“Amit, I will not lie.
I’ve been counting the notes on my own.”

DEAR MR MODI

I know that there’s nothing that you abhor
Like being made fun of. Well, just ignore.
Do not try to suppress.
Be a sport. Show finesse,
Or else the world will laugh even more.

Posted by Amit Varma on 16 July, 2017 in Freedom | India | Politics | Rhyme and Reason | Rhymes


Legalise Prostitution to Fight Trafficking

This essay, which I co-wrote with Manasa Venkataraman, was published in Pragati, the online magazine I edit, on May 24.

It would be amazing if prostitution was legal in India. Over here, we use the law as an enforcer of morality, and prostitution is considered deeply immoral. The word itself is a pejorative. ‘Whore’ and ‘randi’ are used as terms of abuse, and the choice cuss word for our age is ‘presstitute’, implying that the press is prostituting itself, as if we are not all prostitutes.

All of us trade on our skills or assets to make a living. Writers sell their writing skills. Lawyers get paid for legal expertise and experience. You could be a construction worker or a fashion model or a software engineer or a banker, and you’d be doing the same thing that a prostitute does: trading on a part of yourself to the mutual benefit of both parties involved. Why, then, is prostitution effectively banned in India? (Strictly speaking, it is soliciting in public which is banned, which in practical terms renders prostitution itself effectively illegal.)

Also, what is the impact of this on our society?

The Moral Dimension of Banning Prostitution

A few years ago in a talk show, Kiran Bedi insisted that all prostitution involved coercion. No woman would want to be a prostitute of her own volition, she argued. On the show with her were actual members of the flesh trade, who laughingly told her she was wrong, and that they had joined the profession of their own free will. Bedi refused to engage with them, and just blocked them out. The dissonance was too much.

There are other jobs as well that one would hate to do. (Working crazy hours in a sweatshop or toiling in a farm as a labourer under the hot sun or spending one’s best years underground in a toxic mine.) Why do people willingly do them, then? It is because, of the options open to them, they feel that this is the best. If they had a better option, they’d go for it. They don’t. It’s sad, but it is what it is.

To deny them of their No. 1 choice, therefore, is to condemn them to alternatives they consider worse. This is repugnant and immoral. If there are women who would willingly become prostitutes, then to ban prostitution is to rob them of choice. It is an attack on their personal autonomy. It strips them of dignity, far more so than any customer could by having consensual sex with them.

‘Consensual’, of course, is the key word there, and the nub of the confusion. What implications does criminalising prostitution have for consent?

The Practical Impact of Banning Prostitution

Prostitution, per se, is a victimless crime. What happens when you criminalise it is identical to what happens when any other victimless crime is banned. (Such as drinking alcohol, gambling or inhaling cannabis.) The underworld gets involved, and that’s when the shady business starts.

In the context of gambling, you will note that matchfixing happens wherever gambling is illegal. Spurious liquor thrives when bootleggers are the sole source of alcohol. An unholy nexus springs up between the underworld and local politicians (The Bootlegger and the Baptist, basically), and everyone else suffers.

In the context of prostitution, this means that the business is all underground, and therefore not regulated. No safeguards can be instituted by either industry organisations or the government. Most importantly, the rights of the women working in the business cannot be protected. They can be coerced into the business, and exploited while in it.

Everything that is appalling and unwholesome about prostitution is actually true of trafficking. There is a difference between prostitution and trafficking, and criminalising the former enables and abets the latter. But Indian law seems not to understand that difference.

Prostitution vs Trafficking

The Oxford Dictionary defines prostitution thus: “The practice or occupation of engaging in sexual activity with someone for payment.”

India’s Immoral Traffic (Prevention) Act defines prostitution as “the sexual exploitation or abuse of persons for commercial purposes.” The italics are ours.

In other words, Indian law, like Kiran Bedi, assumes that coercion is a given. According to the law, prostitution and trafficking are the same thing. If we accept this definition, it would seem natural that prostitution should be banned. But the definition is wrong!

Why is our law like this? Is this some kind of patriarchal virtue-signalling? Is this Victorian morality at play, part of a weird colonial hangover? These questions are moot. Whatever the reasons are, for both our law and our social attitudes towards prostitution, we must move forward. And there is hope.

The famous Justice Verma Committee report categorically stated that voluntary sex work does not equal exploitation, contrary to our penal code. And the Gujarat High Court gave a great judgement recently when it ruled that a transaction between a sex worker and her customer is purely commercial, and when both parties have consented to it, the law has no business interfering.

What does legal prostitution look like?

What would happen if prostitution was legal? Take a look at Amsterdam, famous for its red light areas, and where the law’s approach to it is based on the simple yet sophisticated model of consent. Under Dutch criminal law, there are specific protections covering coercion and violence against prostitutes, and the whole business is above-ground and relatively respectable. Social attitudes towards prostitutes are similarly enlightened. (The causation probably goes both ways.) We do not think that ‘presstitute’ would be a pejorative term over there.

India will not turn into Holland overnight if prostitution is legalised. But there is both a strong moral and practical reason for decriminalising it. The moral reason is that the law would then cease to prevent women from making decisions about their own bodies. The practical reason is that it will get the underworld out of the business, and make trafficking less likely. It is a no-brainer. It is about time.

Posted by Amit Varma on 25 June, 2017 in Economics | Essays and Op-Eds | Freedom


Here’s What It Means To Not Own Your Body

This is the fourth installment of The Rationalist, my column for the Times of India.

A century ago, when India was still a British colony, some of our most prominent freedom fighters were lawyers: Gandhi, Ambedkar, Nehru, Rajagopalachari, Mookerjee and Patel, among others. It is fitting, then, that a few days ago, it was a lawyer who made an eloquent plea for freedom against a government that is arguably as oppressive, and certainly more powerful, than the British were. Remember the name: Shyam Divan.

Divan was arguing against the government’s recent decision to make Aadhaar mandatory for filing income tax returns. Previous challenges to this act, on the basis of the Right to Privacy, were held up in court, and Divan could not make that argument for technical reasons. Instead, he based his argument on a person’s ownership of his own body.

“My fingerprints and iris are my own,” he said. “As far as I am concerned, the State cannot take away my body. Others cannot act in a way that subjects my body to their interests.” Divan argued that the imposition of Aadhaar “completely takes away your political and personal choices. You are a dog on an electronic leash, tagged and tracked, your progress hobbled.”

A person’s body, Divan pointed out, could not be “nationalised.”

This is not a new argument. Divan cited both Enlightenment and modern-day philosophers during his masterful submission, and John Locke was among them. It should be intuitive that all humans own their own bodies, but it was Locke, in the 17th century, who gave the first clear articulation of this: “Every man has a property in his own person. This no Body has any right to but himself.”

What does it mean to own yourself? Well, there are three implications of this. One, for the ‘Right to Self-Ownership’ to have any meaning, you need to respect the corresponding right of others. This leads to what libertarians call ‘The Non-Aggression Principle.’ You cannot initiate violence against another person.

Two, all legitimate rights flow from this right to self-ownership. The right to free speech – for your thoughts are yours, and you should be free to express them. The right to property, which is a result of your labours, and of voluntary exchange. The right to interact with any other consenting adult in any way you wish – economic or personal – that does not hurt anyone else.

Three, because a situation where every person has to fend for themselves is unviable, and likely to be violent, the state is a necessary evil. It commits some violence on the people – for taxes are violence – but only to the minimum extent required to protect our rights. Note that these rights are not granted to us by the state, as if they are favours. Instead, we have these rights to begin with, and we have brought the state into being to protect them. The purpose of the constitution is to limit the power of the state, and not to be, in Divan’s words, “a Charter of Servitude.”

Here, then, are the two visions of the state. The old one, where the people are mere subjects, ruled by the state, for all practical purposes owned by the state. The modern one, in which the state is an instrument of the people, tasked only with protecting their rights.

Deep inside the belly of any modern state, though, is the old one waiting to spring forth. Governments consist of humans, who are corrupted by power. The state, with its monopoly on violence, has tons of power. Thus, states tend to grow endlessly, and become an ever-present parasite on its people.

Divan’s argument was based on personal autonomy and consent, and the attorney general of India, Mukul Rohatgi, was ready with a response. Indians do not have a right over their own bodies, he said, adding that there are “various laws which put restrictions on such a right.” This made for a shocking headline, but he was stating the obvious.

India is a country where you can go to jail for what you say or what you eat. There are countless restrictions on markets, which are basically networks of voluntary exchanges. (If two consenting adults can be put behind bars for engaging in an act that infringes on no one else’s rights, can they be said to own themselves?) There are laws against victimless crimes (like gambling and alcohol). And there is an arrogant condescension by the state towards common citizens, as if it exists to rule us, and not to serve us.

Our constitution paid lip service to individual rights, but did not do enough to safeguard them. It will not save us – and thus, nor will the Supreme Court. It is up to us to snap out of our apathy and declare, as that battery of lawyers did a century ago, that we will not be ruled any more, that we own ourselves.

What is your view on this? Do you own your body?

Posted by Amit Varma on 14 May, 2017 in Economics | Essays and Op-Eds | Freedom | India | Politics | The Rationalist


Prawn + Wine

This is the 32nd installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

PRAWN

Once there was a Minister of Prawn,
Who got loosies and felt quite forlorn.
He chose to regulate
What went onto your plate.
What a great way to show off his brawn.

WINE

Once there was a judge who liked his wine.
When he drank it, he felt so divine.
One day he crashed his car
Into a highway bar,
And said, ‘The fault is the bar’s, not mine.’

Posted by Amit Varma on 16 April, 2017 in Freedom | India | Politics | Rhyme and Reason | Rhymes


Adityanath’s rise marks the end of a 100-year-old battle

This is the second installment of The Rationalist, my column for the Times of India.

There comes a moment in some lives when a sudden, unexpected event makes you look at the world with greater clarity than before. It could be a happy moment: a childhood friend proposes to you, or you stumble into parenthood. It could be a sad one: you are diagnosed with cancer and told you have six months to live. It makes you look at the world differently, and some things seem so clear that you wonder why you did not notice them before.

In the life of our nation, the rise of Yogi Adityanath to the chief ministership of Uttar Pradesh might well be one such unexpected yet clarifying moment. I was stunned when it was announced; and yet, it makes so much sense that any counterfactual now seems absurd. It was, I have come to believe, a decisive and inevitable event in a conflict that has been simmering in India for at least a century.

The great battle that took place on our peninsula was not between the natives and our colonial overlords, but between a new way of thinking and an old way of existing. While the Enlightenment swept its way across Europe and the USA in the 18th century, its influence was felt in India only in the 19th. Liberalism, however one tries to spin it, was an import from the west, and it is ironic that many of our finest freedom fighters were influenced by British thinkers. The great early figures of our resistance – heroes of mine such as Naoroji, Ranade, Agarkar and Gokhale – were essentially British liberals.

Until Mahatma Gandhi, the freedom struggle was a battle between the British empire on one hand, and Indian elites inspired by Western ideas on the other. Gandhi did catalyse it into a mass movement, but his intellectual influences weren’t Indian either. He was more influenced by Ruskin and Tolstoy than any Indian thinker, and VS Naipaul once called him “the least Indian of Indian leaders.” By the time the British finally quit India, the liberalism of the Gokhale years had been replaced by the soft socialism that was then in vogue. Do note that both these strains, the early classical liberalism and the socialism that is so antithetical to it, were Western imports.

The constitution, intended as an operating manual for this new nation, reflected this. The commentator Nitin Pai, in an essay in Pragati, a magazine I edit, wrote: “On 26th January 1950, the Enlightenment […] was injected into the veins of Indian society in the form of a written statute. We are still dealing with the shock of that moment.”

‘Into the veins of Indian society.’ It is worth reflecting here that the state and society are two different beasts. This difference is a cornerstone of conservatism, which the Encyclopaedia Britannica defines as a “political doctrine that emphasizes the value of traditional institutions and practices.” Who were the Indian conservatives who would lead the fightback of society against the state?

The biggest manifestation of conservatism in India is what we call the Hindutva right. I used to be sceptical of it, as I consider ‘Hindutva’ to be an artificial construct, an insulting caricature of a great inclusive religion. But even if that is so, Hindutva is authentically conservative because it arises out of a nativism that is inherent in human nature – and consequently, rooted in our culture. (Culture can both mitigate and reinforce human nature, which is the whole struggle right there.)

Early Indian conservatives were more interested in social rather than political battles, which is why they didn’t play much of a role in the freedom movement. After Independence, the Nehruvian big state seemed to have subdued the Hindutva social project – but this was temporary. The journalist Rishi Majumder, who is writing a biography of the conservative leader Syama Prasad Mookerjee, describes in a forthcoming essay in Pragati how “the RSS, as well as other right-wing groups, organizations and movements, have thrived and grown through many years when the BJP was not in power.”

Much modern politics is the battle between these competing visions of the state. Should the state be a superstructure that imposes certain values, decided upon by elites, upon society? Or should it be a servant to society, protecting its traditions without judging them from the prism of other value systems?

Narendra Modi’s rise to power was fascinating because he embodied the hopes of people on both sides of that spectrum. Some classical liberals dismayed by Nehruvian socialism backed him because they saw the damage Nehru’s ideas had done to India, and wanted their values imposed from above. And the whole Hindutva movement, obviously, fell in behind Modi because his ascent was the culmination of their century-long struggle.

These two strands are incompatible. And now, with the rise of Yogi Adityanath, there is no more ambiguity.

Posted by Amit Varma on 26 March, 2017 in Essays and Op-Eds | Freedom | India | News | Politics | The Rationalist


The Return of Pragati

A few days ago, the magazine Pragati relaunched under my editorship. This was the editorial I wrote to mark its return.

One of my babies on that space: a section called Brainstorm, which aims to “create a space where diverse minds can discuss big issues in a respectful way.” The first such discussion, on ‘The Future of the Indian Republic’, is underway. Here’s my intro post to kick that discussion off. You can read all the essays in that discussion here

Watch that space!.

Posted by Amit Varma on 20 March, 2017 in Economics | Freedom | India | Media | Personal | Politics


It Is Anti-National To Be Against Free Speech

This piece was published (under a different headline) in the Sunday Times of India today. It marks the start of a column for them called The Rationalist.

The other day, an internet troll sent me a love letter. “Why have you blocked me on Twitter?” he demanded to know. “You claim to believe in the freedom of expression. You are a hypocrite.” After that he said a few colourful things about my family. I think he wanted me to copulate with them.

I am an absolutist when it comes to free speech, and this friendly troll was wrong. Indeed, I find that there is no concept as deeply misunderstood today as the right to free speech. These misunderstandings exist on all sides of the political spectrum. Thus, I find myself duty-bound to write this brief primer on the philosophical origins of free speech, to illustrate what I understand it to be.

The earliest conception of individual rights came from the 17th century Enlightenment philosopher, John Locke. Locke held that the most fundamental right of all, the one from which all others emerged, was the right to self-ownership. After all, it is practically self-evident and beyond argument that, right from birth, all of us own ourselves.

All individual rights arise out of this right to self-ownership. The right to life. The right to our thoughts, and thus to our speech. The right to our actions, which also results in the right to property. And so on. Freedom, another misunderstood term, means a condition in which these rights are not infringed.

All of our rights are contingent to our respecting the corresponding rights (and thus, freedom) of others. My fist stops where your nose begins, as that old saying goes. Libertarians also call this the non-aggression principle, where aggression is defined as infringing someone’s rights. You may do anything as long as there is no coercion involved.

By this reckoning, all voluntary interactions between consenting adults are kosher, as long as they do not infringe on anyone else’s rights. This holds true, as I often point out, whether those interactions happen in the marketplace or in the bedroom. Both the left and the right are thus incoherent when they support one kind of voluntary exchange but not the other.

In accordance with the non-aggression principle, the core question I ask myself in any situation is: Where is the coercion? Looked at this way, many of the questions that keep getting raised about free speech answer themselves. Am I infringing on the rights of the troll I block? No, because there is no coercion involved. He is still free to say whatever he wants, but he is not entitled to my time and attention. Is a college within its rights to withdraw an invitation to a speaker? Yes, it’s their property, and the speaker can still express himself elsewhere.

If people have a right to free speech, though, it doesn’t mean that all free speech is right. Virender Sehwag had a right to mock Gurmehar Kaur for her courageous video earlier this week, just as I have a right to find his mockery tasteless, and my friendly troll has a right to call me names for it. We all have a right to be wrong, including the trolls who try to have a chilling effect on free speech with their constant abuse. The truth is, only the government can shut down free speech, and even trolls have a right to abuse. (Do note that Twitter would also be within its rights to ban trolls, who are using their property after agreeing to certain terms of use.)

When it comes to our actions, there is much that we can do that can harm others. But it is very hard to breach the non-aggression principle with words alone. As that old adage goes, “Sticks and stones may break my bones, but words will never harm me.” Recognising this, the first amendment of the US constitution protects free speech in absolute terms. Obviously, words can be used to incite physical violence, and that is a reasonable limit of free speech. The US Supreme Court, in a famous case (Brandeburg vs Ohio, 1969) set the standard as “imminent lawless action.”

The Indian constitution, sadly, does not protect free speech. Article 19(2) lays out caveats such as “public order” and “decency and morality”, which are open to misinterpretation and, thus, misuse. This is a pity, but our democracy is a work in progress, and is made healthier by a free exchange of ideas.

For that reason, I was alarmed when I read Arun Jaitley’s quote last week about free speech being “subordinate to the needs of the sovereign state”. That is the wrong way around, and I would argue that a healthy nation needs an open exchange of ideas, for which free speech is indispensable. That is why, if I were asked to compare Arun Jaitley and Umar Khalid, I would say that it is Jaitley who is anti-national, and a threat to our great republic.

Posted by Amit Varma on 05 March, 2017 in Essays and Op-Eds | Freedom | India | Politics | The Rationalist


The Landscape of Freedom in India

Here’s the video and transcript of a keynote speech I gave at the Asia Liberty Forum on January 11, 2017 in Mumbai.

Note: In this conference, the word ‘liberal’ was used in its classical, European sense, not in the American one. I’ve used it in the same sense in this speech, almost interchangable with ‘libertarian’, though I usually prefer not to use the word as it means so many things to so many people.

Before I start, I want to congratulate Parth Shah for 20 years of CCS. Parth, I’ve lost count of the number of young people I have met to whom you’ve been a teacher and a guide, and there is one thing common to all of them: not only do they respect you enormously, but they also love and adore you even more than they respect you. That’s remarkable. Thank you for existing!

I’ve started on a happy note, but I’m afraid that the rest of my speech will contain both sadness and anger, and maybe a little hope. The topic of my keynote speech today is “Freedom in India.” Now, I’m not going to talk about the history of what I call this ongoing freedom struggle in India: most of you know that story too well. Instead, I want to share my personal feelings about where we stand today.

I think the quest for freedom in India that all of us care about so much is at an important crossroads. We face challenges we did not face before. We have opportunities we did not have before. And to understand the road ahead, I think there are two things we have to do. One, we must come to terms with Narendra Modi.

Let me first lay the context for why Modi became such an attractive figure for many freedom-loving people before 2014. Eric Hoffer writes in his book The True Believer, which is a book about the rise of mass movements, that they are driven by frustration. Modi tapped into different kinds of frustrations during his rise to power. Among them were classical liberals who cared for freedom – both personal freedom and economic freedom – and were frustrated by nearly seven decades of state oppression that had kept hundreds of millions of people in poverty for much longer than they should have. The reforms of 1991, we must remember, were a product of circumstances, and were not driven by political will. They did lift millions of people out of poverty, but they were limited and half-hearted, and once the balance-of-payments crisis was over, they more or less stopped. We still remain largely an unfree country. In the 2016 Index of Economic Freedom, India was still at a miserable 128 – eight places lower than 2014, by the way. This is trivial – most of you know this.

Modi appeared, to many of my friends, as a beacon of hope. The Congress was – and is – feudal party ruled by a repugnant family that has harmed India immeasurably, and most regional parties were focussed on narrow identity politics. Modi is a master of optics, and as he built himself up as a national leader, he became a bit like a Rorschach Inkblot Test – you could see in him what you wanted to.

No wonder many classical liberals fell in behind him. They were willing to give him the benefit of the doubt for the Gujarat Riots of 2002, and put that down to incompetence rather than collusion. They were sick of the status quo, and he represented a hope for change. As my friend Rajesh Jain put it, he was “a lighter shade of gray.” At least he made the right noises – his slogan ‘Minimum Government, Maximum Governance’ was music to my ears.

Now, a party on the campaign trail is like a young man wooing a woman: he’s on his best behaviour, and he’ll tell her just what she wants to hear. But governance is like what happens after marriage: the girl find out the truth about the guy: he farts all the time, he snores like a hippopotamus getting dental surgery without anaesthetic, he surfs porn all night, he beats her up, indeed, he beats her up day after day after day – and very often, she rationalises this, because she made this choice, and there seems to be no alternative.

Let’s take a brief look at how the Modi government has performed. The first thing we learned about Modi is that he is no reformer. Under him, government has grown bigger and more authoritarian. The welfare schemes he once criticized have grown, and some of them have been renamed and he has pretended that they are his ideas. He has not carried out any of the reforms he promised to, including low-hanging fruit like privatising non-performing public sector units that no one would have fought for. Indeed, he has shown us that he is actually a true heir of the Congress party: he has the economic vision of Nehru, and the political instincts of Indira Gandhi. And I mean both of those as a criticism.

Like Nehru, Modi has a top-down, command-and-control vision of the economy. To him, society is a machine to be engineered: he considers himself a better engineer than his predecessors, but he is an engineer nonetheless. And like Indira, he uses power as a tool to oppress and harass his opponents, and to clamp down on dissent, and to reward his cronies.

For two years between 2014 and 2016, Modi carried out almost no reforms, despite making some noises in the right directions: remember, he is a master of optics. But then, in November last year, he showed his true colours as an authoritarian social engineer. There is a thought experiment that I sometimes throw to my friends: It’s the morning of November 8, 2016, and you are the prime minister of India for exactly one day. In that day, you have to enact exactly one policy which, without breaking the law or going against the constitution, harms the people of India the most. The maximum damage to the maximum people. What are you going to do?

Think about this and let me know if you come up with an answer better than what Narendra Modi actually did. Allow me to break down for you what Demonetisation actually did. Modi essentially took all 1000 and 500 rupee notes out of circulation. Now, a 1000 rupees is equal to around 15 dollars. It is not really a high-denomination note. Modi had perhaps not bought anything from a store in two decades, so he didn’t realise that these notes are not used mainly for as unit of storage, as high denomination notes are in some other countries, but as a medium of exchange. Common people use these notes. So much so that 86% of the currency in use consisted of these notes. 86%!

Let me share some more figures with you. Before November 8, 97% of the transactions in this country were cash transactions. Contrary to the blatant lies of the government, only 53% of all Indians had bank accounts. That’s 600 million people without bank accounts. How do you think they stored their money? Yes, you could notionally go to a bank anyway and exchange this money for new notes, but you need a government ID for this, and again, despite the lies spread by the government, 300 million people in India had no form of government ID at all. And even those who did have bank accounts could deposit their money after standing in a queue for hours, but had limits placed on withdrawals. Get this, they were not being allowed to withdraw their own money!

I wrote at the time that it was the largest assault on property rights in the history of mankind, a point that my friend Barun Mitra reiterated in his excellent speech yesterday. The opportunity costs were huge – people spent hours in queues begging for their own money, and could not use either their time or the money they had productively. Much of the economy is informal, because of structural failures of the state itself, and it came crashing down. Migrant workers across the country were laid off because there was no cash to pay them, and they went back home. Farmers could not sell their produce or buy seeds for the next harvest. Truckers lined up on roads with nowhere to go and nothing to carry. Thousands of businesses across the country shut down.

In all this, the rich got away. The government kept changing the goalposts for why they did this. First, they said it was to counter black money. But a finance ministry estimate, based on thousands of income tax raids in the past, shows that only 6% of black money is kept in the form of cash: the other 94% is in gold, real estate and foreign accounts. Even that 6% was laundered. You see a reflection of this in automobile sales. They have plummeted for two-wheelers and three-wheelers, but SUV sales are steady. The rich got away.

The government also said that Demonetisation would kill fake currency. Well, their own estimate showed that only one in 4000 notes was fake, a perfectly acceptable figure, and the usual way of tackling this, practised across the world, is to phase out old notes. The government also said that terrorist activity would be hurt by this, but cross-border attacks have actually gone up in this time. Yes, criminal activity has been affected, but that’s because ALL business has been affected. You do not cure a cold by cutting someone’s head off.

So there was no benefit, and the cost is incalculable. Some more figures: According to the All India Manufacturer’s Association, in a report released last month, employment is expected to fall 60% by March, and revenues will come down by 55%. And the IMF released a forecast that said that India’s GDP will grow by only 6.6% this year, a full percentage point lower than last year. Let me tell you what that number means. My friend Nitin Pai of the Takshashila Institution recently estimated that with every 1% rise in the GDP, 2 million people come out of poverty. Two million people. That is the opportunity cost of Demonetisation in just the short term: those two million people trapped below the poverty line because of one man named Narendra Modi. This is both a humanitarian disaster and a moral outrage.

Now, the question here is, all these classical liberals who supported Modi in 2014, have they seen the light now? This is a man who doesn’t give a damn about liberal principles, and is taking the country backwards. Friends of mine who are here tonight have invoked The Road to Serfdom to describe what is happening, and some talk of creeping fascism. But what do our classical liberals have to say?

My friend the economist Suyash Rai said an interesting thing to me a few days ago. He said, “Mujhe communist se dar nahin lagta, mujhe classical liberal se dar lagta hai.” (“I am not scared of communists, I am scared of classical liberals.”) There are too many people who pay lip service to freedom but support this oppressive regime. There are a number of reasons for this: Some of them invested too much emotionally in Modi, and will rationalise anything he does. Others have been co-opted into the establishment, with Padma awards or seats on the Niti Aayog or Prasar Bharti or the RBI Board of directors, and now that they are finally establishment intellectuals, they ain’t gonna give it up.

I met one of them the other day and said to him, “Isn’t modern technology wonderful?” He said, “Why?” I said, “Bro, this is the first time I’ve seen a man without a spine stand up straight.”

But leave aside the narrow compulsions of weak men without principles. What are the lessons I draw from all of this? Lesson number one: You can never depend on politicians to advance your principles. David Boaz once said, “There are only two political philosophies: liberty and power.” These are necessarily opposed to each other. Those who enter politics lust for power. If your ideas or your support seems useful to them, they will pretend to be on your side, but when they’ve gotten what they wanted, they will spit you out. Their incentives come firstly, from the special interests that fund them, and secondly from the people who elect them. And that brings me to lesson number two.

Lesson Number Two is that policy advocacy is mostly useless. If you want to make an impact on the political marketplace, you need to attack the demand side, not the supply side. You need to go to the people!

I said earlier in this talk that there are two things that people who care about freedom have to take into account today. One, we have to come to terms with Narendra Modi. Two, we have to understand this political marketplace. And the most important thing to understand about India is its changing demographics.

India is rapidly growing younger and younger. The average age in India today is 27, and 60% of the country is born after the liberalisation of 1991. This is both a problem and an opportunity.

Here’s the problem. These young people are growing up in an India that needs 1 million jobs every month – 12 million jobs a year – to accommodate this new workforce. These jobs aren’t there. One of the reasons Modi won in 2014 was that he promised to create these jobs. He hasn’t delivered; he can’t deliver The government can’t create jobs, it can only enable job creation. But the reforms that would make this happen – labour reforms, ease of doing business reforms – simply aren’t happening.

It’s no surprise then all the recent agitations in India have been centred around reservation in government jobs: The Jat agitation in Haryana, the Patidars under Hardik Patel in Gujarat, and so on. And this will get worse. Artificial intelligence will now decimate jobs in the service industry, where we’ve done relatively well recently. And automation will mean that the window for becoming a manufacturing superpower because of cheap labour will be closed to us forever. So there is a coming crisis.

Now, how are we to sell our ideas in times such as these. Classical liberal notions like spontaneous order and the positive-sumness of things are unintuitive and hard to sell in the best of times, but even more so in times of scarcity. I used to think that rising prosperity will end identity politics in India, but no, identity politics is on the rise, and we are becoming tribal again. No wonder populism is winning.

But there is also an opportunity here. These young people are not bound up in the dogmas of the past. They are not necessarily believers in the religion of government. If we manage to get out there in the marketplace of ideas, they will be more receptive than any generation before them. And that is the principle challenge before us. How can we get into the culture? How can our ideas be part of the discourse? Understand this: the prime minister of India in the year 2050 could be a 15-year-old girl who is sitting in a small town in India somewhere at this very moment, doing her boring homework. How can we reach her with our liberal ideas? Can we shape the way she thinks about the world? Can we package our ideas in an empathetic way that appeals to her emotions? Can we get her off Snapchat? Can we reach her on Snapchat?

In another two or three decades, this demographic tide will reverse itself, and we will become a rapidly ageing country. Will we still be poor or illiberal then, or will we be a beacon of freedom for the world? I can’t answer that – and I don’t even have any specific answers as to how we can get there from here, but I thought it important to highlight the challenges we face. Things are not rosy, freedom is not on the march. But we have to try, and I know this: just by the size of the battlefield alone, this battle for freedom in India will be the most significant freedom struggle in the history of humankind. And we can only win it on a full stomach. It’s time for dinner, guys, thank you for listening to me.

Posted by Amit Varma on 13 February, 2017 in Economics | Freedom | India | Personal | Politics


Why Both Modi and Trump are Textbook Populists

This is a guest column published today in the Sunday Times of India edit page.

As Donald Trump raised his tiny paw and took the presidential oath this Friday, I had just finished reading an outstanding book that, I thought, explained Trump as well as many other leaders on the world stage today. In ‘What is Populism?’ Jan-Werner Müller, a Princeton professor, lays out all the ingredients from which you can cook up a populist movement. I was struck by how closely our own prime minister, Narendra Modi, matched Müller’s definition. Consider the following characteristics that characterise populists, as defined by Müller.

One, they claim that not only do they represent the people, but that whoever does not support them is, by definition, not part of ‘the people’. Müller says this is “the core claim of populism: only some of the people are really the people.” As Trump put it in May last year, “the only important thing is the unification of the people— because the other people don’t mean anything.” Think of how the BJP treats Muslims and Dalits as second-class citizens.

Two, populists are not just anti-pluralism, but they’re also anti-elite. Müller writes, “Populists pit the pure, innocent, always hardworking people against a corrupt elite who do not really work (…) and, in right-wing populism, also against the very bottom of society.” Think of Modi’s railings against the “Lutyens elite” as an example.

Three, they portray themselves as victims even when they are in power. As Müller puts it, “majorities act like mistreated minorities.” Modi still rants against the elite even though he is now their leader, and paid BPJ trolls still call journalists ‘presstitutes’ even though they control much of the media. Trump, who has been a crony capitalist insider all his life, is a classic example of a pig calling the pigsty dirty.

Four, populist parties tend to become monolithic, “with the rank-and-file clearly subordinated to a single leader.” Trump decimated the Republican Party on the way up, just as Modi is now the Supreme Leader within the BJP, which once had multiple leaders of stature.

Five, populists pride themselves on their “proximity to the people.” Modi being a ‘chaiwalla’ is a key part of his narrative, and as that famous photoshopped picture of him sweeping a floor shows, the common-man element is important to him. As it is, indeed, to other populists. Hungary’s Viktor Orbán and Venezuela’s Hugo Chávez both hosted shows similar to Modi’s Mann Ki Baat.

Six, populism is simplistic, so populists can only think in simplistic terms, which leads to “an oversimplification of policy challenges.” Modi’s Demonetisation is an example of this, as is Trump’s attribution of America’s job losses to immigration and outsourcing.

Seven, they populists tend to believe in conspiracy theories, which “are rooted in and emerge from the very logic of populism itself.” Indeed, the RSS’s view of history is itself a sort of giant conspiracy theory.

How do populists behave once in power? Müller outlines three things that they tend to do.

One, they “colonize or occupy the state”. They fill up all the institutions with their own people, co-opt those that are independent, and reshape the system to their will. Think of Modi’s appointment of incompetent cronies to the Censor Board and FTII, the replacement of the Planning Commission with Niti Aayog, and the recent virtual demotion of the RBI to an arm of the finance ministry.

Two, they “engage in mass clientelism: the exchange of material and immaterial favors by elites for mass political support.” Think of the sops Modi offered before the Bihar elections, or the ones expected in the next couple of budgets leading up to important elections.

Three, they shut down dissent in civil society, starting with NGOs. Müller writes, “rulers like Vladimir Putin in Russia, Viktor Orbán in Hungary, and PiS in Poland have gone out of their way to try to discredit NGOs as being controlled by outside powers (and declare them ‘foreign agents’).” Sounds familiar?

Modi fits Müller’s populist template so precisely that he seems like a bot generated by a populism machine, and not an actual person. It made me wonder: if a near-identical form of populism persists through vast stretches of time and geography, does it then reflect something innate in human nature?

I’ll leave you with a pleasant thought, though. Here’s why I think both Modi’s and Trump’s populism will ultimately fail. The narratives of populism, based on some of the people being all of the people, only work in broadly homogenous societies. The USA will be a minority-majority country by the middle of the century (ie, whites will be less than 50% of the population), and a Trump won’t be possible then. As for India, our diversity is our greatest defence against creeping fascism. Populism might work at the state level, but nationally, we are too diverse. That puts a ceiling on how much support Modi can get, which I believe already peaked in 2014, when he could be all things to all people. I think he already senses this. How will he respond?

Posted by Amit Varma on 22 January, 2017 in Essays and Op-Eds | Freedom | India | Politics


Three Reasons Why A Cashless Society Would Be A Disaster

This is a guest column published today in the Sunday Times of India edit page.

I am a great admirer of Mahatma Gandhi, but the man had some strange views. In Hind Swaraj, written shortly after he turned 40 in 1909, Gandhi tore into some of the symbols of the modern age. “Hospitals are institutions for propagating sin,” he wrote. “To study European medicine is to deepen our slavery.” He railed against the railways, saying “it is beyond dispute that they propagate evil.” He argued against lawyers, despite being one himself, saying they had “impoverished the country.” But here’s a thing to note: despite these personal views, he never once suggested that railways, hospitals and lawyers should be banned.

There is a notion being spread these days that is as absurd as the ideas above: it is the notion that there is something wrong with using cash, and that we should head towards being a cashless society.  This is nonsense. A cashless society would be a disaster for India. Here’s why.

One, a fully cashless society would mean the end of privacy. There would be a digital trail of every action you take through your purchases and transfers. If you buy AIDS medication or a porn magazine or book a hotel room for a romantic alliance, this information can be accessed by the government – or any hacker with the requisite skills – and used against you. India has no privacy laws, and data protection is also a big worry – every week we hear stories of some some big hacking or the other, from the Congress in India to the Democratic Party in the US.

Two, a fully cashless society could mean the end of dissent. The government can use any data it gathers against you. (Even if you commit no crime, there is much you may be embarrassed by.) What’s more, they could make any opponent a pauper with one keystroke, freezing your bank account while they investigate alleged misdeeds. Just the fact that they have this power could have a chilling effect on dissent. Those in government now may well salivate over this, but tables turn fast, and when they are in opposition, would they want their opponents to have such power over them?

Three, a fully cashless society endangers freedom. Cash is empowerment: ask the young wife who saves spare cash from her alcoholic husband; or the old mother who stuffs spare notes under her mattress for years because it gives her a sense of autonomy. Indeed, in a misogynist country like India, cashlessness would hit women the hardest.

It is a myth that an advanced society must necessarily be cashless. In Germany, a country which knows the perils of authoritarianism, more than 80% of transactions are in cash, as citizens safeguard their privacy and freedom. Even in the USA, 45% of transactions are in cash. Note that Germany and the USA actually have the banking and technological infrastructure to enable cashlessness. In India, 600 million people have no bank account, and less than 20% of all Indians have a smartphone. Internet penetration is iffy, as is power. (By ‘power’, I mean electricity, not the government’s control over you.) Trying to make India cashless is akin to putting a bullock cart in an F1 race, and whipping the driver because he’s too slow.

It is true that many technologies imperil our privacy, like any app we download on our phones, for example. But those actions are voluntary, and we can choose to avoid them. That is the crux of the matter. My objection here is not to cashlessness per se, but to the coercion implicit in the currency swap of November 8 and its aftermath. A cashless society would only be good if we evolve towards it, not if we are forced into it.

At the moment, the common Indian is wary, for good reason. Digital payments involve transaction costs, are unreliable because of infrastructure issues, and hey, who would trust an Indian bank after what the RBI just did? The beneficiaries of forced cashlessness are not consumers, but vested interests like banks and payment companies. Indeed, this might even be the largest redistribution of wealth from poor to rich in the history of humanity.

The BJP itself continues to take cash donations and shift goalposts. When the demonetisation was announced, they said it was meant to attack black money and counterfeit currency. Once it became apparent that those reasons were nonsense, the government tried to change the narrative into one about a cashless society. Within a fortnight of that, they are already backtracking and saying they meant ‘less cash’ when they said ‘cashless’. The truth is this: demonetisation was a humanitarian disaster that is crippling our economy, and no matter how many times Modi and gang try to rationalise it, it cannot be done. One day, these men will stop trying. When they cannot justify any more, they will distract.

Posted by Amit Varma on 18 December, 2016 in Economics | Essays and Op-Eds | Freedom | India | Politics | Science and Technology


There Is Nothing As Unpatriotic In A Free Country As Coercion

This is a guest column published today in the Sunday Times of India edit page.

Last Tuesday, I went to watch ‘Dear Zindagi’ at a movie theatre near me. Before the film started, two old men came and sat in front of me. One was a short bald man with John Lennon glasses who looked like Ben Kingsley, and was wearing a hoodie over what appeared to be a dhoti. The other was a white-haired man with a flowing white beard and a flowing white robe. The bearded man nodded to me as he sat down, and then turned and said to his companion, “Mohan, I’m really looking forward to seeing Alia today. Such a good actress. Almost as if she was trained in Shantiniketan.”

“Yes, Robida,” said Mohan. “I can think of all kinds of non-violent acts she and I could do together.” Both men chuckled.

Just then, the national anthem started playing. I stood up, as did everyone else in the hall – except these two men.

It was the morning show and the hall was half empty, which I suppose was good, otherwise some macho self-righteous fool would have wanted to display his patriotism by asking these two men to stand up. But no one said anything. The anthem got over and the screen went blank. As I sat down, the bearded man turned around and caught my eye. I couldn’t help asking him, “Hey, I don’t mean to intrude, but why didn’t you guys stand for the anthem? Aren’t you proud of being Indian?”

Mohan turned around and gave me a kindly look through his Lennon glasses. “It was an act of civil disobedience,” he said. “And we were showing our love for this country, and our patriotism, by sitting.”

“I’m sorry?” I said. “The patriotic thing to do is to stand. We must honour our country.”

“And what does it mean to honour our country, young man? First of all, ask yourself, what is our country? Is India equal to the national anthem? Or the national flag? Or are there certain values that our country stands for that are more important than these symbols?”

I didn’t know what to say, so like any young person in these times, I said something random. “Freedom. We would never had the chance to stand for a national anthem before 1947. So I stand today to celebrate freedom.”

Mohan giggled, as if the gorgeous Alia had just landed up beside him in a slinky leotard and started tickling him. “Freedom! And how do you define freedom? We did not become a free country when the British left. Yes, we got political independence, but that isn’t freedom. Oh no, the freedom we fought for was the freedom of individuals to live their lives without oppression. Basically, to not be forced to do anything. The Supreme Court has made it compulsory to stand, which is why Robida and I kept sitting just now. There is nothing as unpatriotic in a free country as coercion.”

I gaped at him as he continued: “All we did in 1947 was replace a British empire with an Indian empire. We retained most of the laws in the archaic Indian Penal Code which the British had framed to subjugate us, including laws against free speech, homosexuality and even women’s rights. The state censors films, bans books, as if we are infants and not adults. I have a friend who started a university in British times without needing a license,” – he glanced at Robida – “and today, to start or run a business, we need to beg or bribe brown babus. Robida once told me that the British occupation of India was the ‘political symptom of our social disease’. That disease is now terminal.”

“What is that disease?” I asked.

Robida gave me a sad smile. “That disease is having the mentality of subjects. What does a democracy mean? It means that the people are the rulers, and the government is there to serve us. But our governments rule us instead of serving us, and we are happy to be ruled. If we are going to play ‘choose your ruler’, what is the point of being free?”

“Look around you,” said Mohan, “and think of all the different kinds of coercion in your life. These days, I am told, you even have to queue up to withdraw your own money. You are even being forced into a cashless society, which will be the end of freedom, for the government will control all your money and can shut you down anytime. That would have been such a wet dream for the British.”

“Ouch” said Robida, “here comes the part of the film I really hate.” The censor certificate flashed on the screen.

“Alia!” exclaimed Mohan, and turned around. The film began, and I lost myself in the anaesthetic comfort of everyday pleasures.

*

Also read these earlier pieces by me:

The Anthem and the Flag (April 26, 2007)
The Real Issue Regarding The National Anthem (November 30, 2015)
The Republic of Apathy (August 11, 2007)

Posted by Amit Varma on 04 December, 2016 in Essays and Op-Eds | Freedom | India | Politics


The Rise and Fall of Emperor Modi

This is the 33rd installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

November 2017. This is an excerpt from a screenplay of a musical play performed recently at the Kala Natak Academy, inaugurated by the prime minister Shri LK Advani. It stars Narendra Modi, Arun Jaitley and a chorus of 30 cows. While reading it, please sing it in your head with a grand dramatic voice.

[Silhouette of Narendra Modi sleeping on a bed. Loud snores emanate. At the foot of the bed, a minion sits. Loud footsteps are heard. Arun Jaitley enters the room.]

AJ: Modiji, Modiji!

Chorus of thirty cows: Modiji, Modiji!

Minion, thrusting his arms out towards Jaitley: Do not wake him, Do not shake him. He is sleeping, he spent all of last evening weeping, for this nation, the creation of a Hindu god in a Himalayan location. Do not wake him! Please forsake him!

AJ: He must be woken! My spirit is broken! Forget the nation, I’m out of ration. I have no cash. The supreme leader has obliterated my stash, it’s all trash. He could have let me know at least. Oh, the beast!

[There is a loud grunt, and Modi rises, and then gets out of bed. He is wearing only his Modi kurta.]

Modi:  Oh here you are, my little one. I am lohpurush, you’re a brittle one. As for your notes, why don’t you… write on them? As for your notes… a blight on them! You have been rather slow, lately. Don’t you see the plan, Jaitley? Like me, you must learn to see far. What happened to my churidar?

30 Cows: Churidar! Churidar!

[Minion scurries off to fetch churidar.]

AJ: You say you want to attack black money. Are you being funny? This won’t hurt black money, truth be told. Hoarders keep their wealth in real estate and gold. In benaami investments and banks that are offshore. Why did you let go of the panama chors? The IT department found only 6 percent of black money is held in cash. So stop talking trash.

30 cows: Talking trash! Talking trash!

[A minion brings a churidar. Two burly bearded bare-chested men wearing harem pants appear and lift Modi by the armpits as he tries to peel on his churidar. Jaitley continues:]

AJ: More than 90% of the cash out there is white! Those who have earned it feel it is their right. Their right to spend as they please, to save as they please. It’s their money, not yours to seize! 600 million people have no bank accounts! 300 million have no ID, and this is tantamount to theft from the poor, into the pockets of the rich. A reverse Robin Hood displaying a kleptomanic itch.

[Modi has put on his churidar, and the burly bearded bare-chested men in harem pants disappear under the bed. Modi is tying the naada of the churidar. Jaitley continues:]

AJ: Modiji, I have to tell you, this will cost you votes. As much as 86% of the money in use was 500 and 1000 notes. Cash was used in more than 90% of all transactions. This has set off a series of destructive chain reactions. Farmers are screwed, workers are screwed, small businesses are shutting down. A recession is a best-case outcome, the worst is a meltdown. And after all this, you accuse me of not looking far. Modiji, how long does it take you to wear your churidar?

30 Cows: Churidar! Churidar!

Modi: Jaitley, you must understand, my churidar is tight. And you’ve missed the point completely, clearly you’re not bright. The poor do not matter: Let their blood splatter, let the economy shatter, ignore the presstitute chatter. I am the ruler of this nation, this is my domain, with a treasury to fill, an army of bhakts to maintain. This move is genius, such a lovely redistribution. The people’s wealth is now the government’s, a perfect solution. I don’t really care about a little collateral damage. If there are riots, well I’m sure, the army will manage. Besides, my PR is quite superlative. I happen to have complete control of the narrative!

30 Cows: Narrative! Narrative!

AJ: Modiji, you must remember, India is democratic. Right now the BJP feels much like the Titanic. We’re sinking sinking sinking! What on earth were you thinking? Optics has its limits, and no matter what you call it, the narrative won’t work when you hit people on their wallet. It’s clear that all this power has gone to your head. If we don’t get rid of you, this party will be dead!

[Rajnath and Sushma walk in, holding a chair on which Advani is sitting.]

Modi: What do you mean? What is this crap? I am the Supreme Leader. I’ll declare an Emergency, and put you all in a feeder. Forget the aam junta, they are all kambakhts. I’ll drown out their voices through my sweatshop of trolling bhakts. The people are an instrument, a way to feed my pride. I don’t give a damn how many poor folks have died.

Sushma: And that is why, Modiji, you have got to leave. Politicians should serve the people, not rule them till they grieve. You made a big mistake demonetising those notes. Now we have to dethrone you to somehow save our votes.

[The burly bearded bare-chested men in harem pants emerge from under the bed, put a bag around Modi’s head that says ‘Garbage Disposal’ and carry him off. Rajnath and Sushma lower the chair, and Jaitley helps Advani on to the bed.]

Advani: I’m so glad to be on top, this is my rightful place. Because of that fool Modi, I am now a moderate face! I saved his ass once, and that led to my downfall. The moral of the story: The higher you rise, the harder you fall.

30 Cows: Moo! Moo!

*

My other pieces on this subject:

Narendra Modi takes a Great Leap Backwards

Modi Goes to Daulatabad

The Humanitarian Cost Trumps Any Economic Argument

Posted by Amit Varma on 25 November, 2016 in Economics | Essays and Op-Eds | Freedom | India | Lighthouse | Politics


The Humanitarian Cost Trumps Any Economic Argument

So I put up the tweet above yesterday to illustrate a point I’ve had to make repeatedly about the demonetisation: When the humanitarian costs of a particular move are so huge, it is pointless to even discuss the economic impact. I often quip, if Modi killed the poorer half of the country, some ‘respectable’ economist in his pay would publish a sober, reasoned argument that hey, India’s GDP per capita just went up, this is good for the economy. (And they wouldn’t disclose their affiliation while doing so, but leave that aside for the moment.)

Similarly, if Modi was just to announce that all money in everyone’s bank account was to be confiscated by the government, no doubt certain economists would pop up to point out the long-term economic benefit of this: the fiscal deficit wiped out, more money available for infrastructure spending, and of course, an end to black money. But such a rationale would not just be besides the point, it would be immoral—for obvious reasons.

The thought experiments above are not very far from what is happening. The legitimately earned wealth of tens of millions of people has been eroded, businesses have shut down, the economy’s come to a standstill and the death toll is rising every day. It’s heartbreaking—and yet, we have sober economic arguments going this way or that way.

Frankly, I believe that a recession is inevitable, and that the economic costs of this will far outweigh any economic benefits, as is always the case with such social engineering. But that argument of mine is besides the point, because the moral costs make it moot. Lives are being lost, livelihoods are being destroyed, and taking a neutral stance, or making ‘balanced’ arguments, is, in my view, is as odious as actively supporting the butchery that is underway.

Some links:

My guest column in the Times of India last Sunday: Narendra Modi takes a Great Leap backwards

And Peri Maheshwar’s excellent FB post on this yesterday.

Posted by Amit Varma on 24 November, 2016 in Economics | Freedom | India | Politics


The Loneliness of the Long-Distance Libertarian

Exactly one year ago, on November 17 2015, I sat opposite Steve Bannon in his NYC office as he asked me if I’d be interested in starting Breitbart India. I had won the Bastiat Prize (for the second time) a few days before, and a lady who was one of the funders of Brietbart, and of certain leaders in the Republican Party, got in touch with the organisers to ask if she could meet me. (It’s not fair of me to name her because she’s not really a public figure.) She’d been impressed by my speech, and thus this meeting.

I didn’t know much about Breitbart, though I’d glanced at it. I did not know they were alt-right—I didn’t even know the term then. All I knew was that they were a conservative site, and that was enough for me to say no. I was a libertarian, I said, pro-immigration, pro-gay rights, and it didn’t fit. Furthermore, I advised them that there was no point in Breitbart setting up in India.

‘It’s incongruent,’ I said. ‘There is no analog of American conservatism in India. The Indian right is driven by bigotry and nativism, with no deeper guiding philosophy behind it. [Consider the irony of these words.] You will not find any Burkean conservatives here. Don’t come.’

‘Well, we think that Modi is India’s Reagan,’ said Bannon.

I laughed, and told them that Modi was no Reagan. I explained why he was a statist, top-down thinker, someone who would only expand the power of government over common citizens, more like the Leftist Indira Gandhi than Reagan. They nodded. The thrust of my decision to not consider the option they were offering me, though, was that I was libertarian, not conservative.

The lady did try her hardest to convince. ‘I’m actually a libertarian,’ she said, and then launched into a diatribe on gay marriage, saying, ‘I don’t understand why they ask for marriage. We gave them so much. What’s wrong with civil unions?’

A little later she said again, ‘I’m actually a libertarian.’ And then launched into a diatribe against immigrants in America, and how the cultural fabric of Europe was being torn apart by their immigrants. It was kind of funny, though at the time I was more flattered than amused. Still, I had to say no.

Bannon is now the right-hand man of someone who has really small hands and will be the most powerful man in the world starting January. Now that I know more about the alt-right, that thought is scary. I’m still glad that I didn’t explore their offer further. I could have been somewhat richer, maybe even influential, if I’d taken it up—but I sleep well at night now, and that’s what matters.

I must point out here that my meeting with them was very pleasant, and they were warm and courteous despite my not coming on board. Also, unlike many from across their aisle (whom I deplore quite as much), they were intellectually honest. They had their priors and their first principles, and everything they said and did stemmed from there. One may disagree with those ideas, even find them repulsive, but they’re not hypocrites.

In another context, I also believe that no matter what happens, I’ll always be anti-establishment. There have always been but two political philosophies, David Boaz once wrote, liberty and power. Everyone in politics fights for power; every libertarian must fight for individual freedom. Until Modi became PM, I was the fiercest critic of the Congress and their ruling family, who kept India poor for decades longer than they should have. When Modi took over, I expressed cautious optimism at first, but get threatened almost daily now for my vehement opposition to Modi. (He is right-wing on social issues, left-wing on economics, and thus an enemy of freedom in every respect.) Whoever is next, I know, with a sigh, that I shall be against them too.

Sometimes, this makes me feel crushingly alone. I often joke that there are only three true libertarians in India, a number I have modified to two because one of them is not unequivocally against the social engineering of Modi’s demonetisation. (My friend Barun Mitra is the other true libertarian, my fellow holder of the flame!) If I am to be true to myself, I will always remain on the outside, ridiculed by everyone else, condemned to the eternal vigilance that Jefferson spoke of, which will always be the cross of libertarians to bear.

Of course, I also have my other passion, writing fiction, to sustain my spirit. I hope you didn’t read my shitty first novel. I hope you will read the one I’m writing now.

Posted by Amit Varma on 17 November, 2016 in Freedom | Personal


The God Delusion of Arvind Kejriwal

A slightly shorter version of this was published as the 30th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

In theory, a devout politician is a good thing. A politician who believes in God seems to accept the existence of an entity more powerful than himself, and that should be a reassuring thought to Indian voters. We have plenty of devout politicians here, and while the ones in the ruling party are most vocal about it, opposition politicians aren’t far behind. Take Delhi chief minister Arvind Kejriwal, for example.

When he was sworn in as chief minister at the Ramlila Maidan, Kejriwal repeatedly thanked God for his newfound status. “I thank the Supreme Father, Ishwar, Allah, Waheguru,” he breathlessly proclaimed, trying to cover all bases. And in case the concerned gods missed it, he later said, “This victory is not because of us. It is a miracle, and I thank Bhagwan, Ishwar and Allah.” (At this point, I can imagine Bhagwan turning to Allah and saying, “Dude, any idea what he’s talking about? I thought I was Ishwar!” And Allah replies, “Dunno, man. I’m just a party worker.”)

Kejriwal’s stated piety isn’t restricted to the major religions. He recently came out in support of the Jain monk Tarun Sagar after the musician Vishal Dadlani made fun of him. Kejriwal tweeted: “Tarun Sagar ji Maharaj is a very revered saint, not just for Jains but everyone. Those showing disrespect is unfortunate and should stop.” (The last sentence is stunningly convoluted, and we all know what Orwell said about clarity in speech correlating with clarity in thinking.)

Now, Kejriwal was reportedly an atheist before he came to politics, and it is natural to suspect that this new-found piety is part of the populism he’s embraced. But let that pass. In this column I will argue that there is one religion that he truly, deeply, madly does believe in, and it is the most dangerous religion of all. It is the religion of government.

Contrary to popular belief, the majority religion in India is not Hinduism but the religion of government. We have been brought up believing that if there is any problem in this world, government can solve it. If there is a social ill, ban it. If prices are too high, pass a law demanding that they be kept low. If there aren’t enough jobs out there, create jobs by legislation so that people can earn an honest living. And so on.

I call this, with apologies to Richard Dawkins, the God Delusion of Government. Devotees of this particular religion believe, like devotees of any other, that reality is subject to the whims and fancies of their God. To change the state of the world, God needs to merely decree it, or government needs to pass a law, and boom, reality changes. Water turns to amrut, copper to gold.

This kind of God delusion isn’t restricted to India. A recent example of a country ruined by it is Venezuela, which has been ravaged by the socialist policies of Hugo Chavez. Venezuela was lucky to be oil-rich, but unlucky to have Chavez as a leader, who tried social engineering on a vast scale. One of his pet schemes: price controls on all essential commodities. (If something should be cheaper, let’s make a law mandating it.) This led, as econ 101 would predict, to shortages, so much so that Venezuela’s queues became legendary. The current government, perturbed that these queues were embarrassing the country, hit upon an innovative solution. It banned queues.

I’m not kidding. They really banned queues, and when I read that news, I thought of Kejriwal, because that’s exactly what he would do.
Kejriwal thrives on finding the simplest possible solution to every problem through the Godlike intervention of government. He has no grasp on reality, though, and no understanding of how such interventions typically play out. Most tellingly, like Chavez and other socialists, he simply doesn’t understand how the price system works.

Left to themselves, prices are determined by supply and demand. If the demand for a product or service outstrips supply, the price goes up. This rising price acts as a signal to potential suppliers, and they are incentivised to fill the gap. Similarly, if demand goes down, the price goes down, and suppliers start moving their efforts to where they would be more valued. We can only make a living by fulfilling the needs of others, and the price system gives us the information and the incentives to do this most efficiently. But for this, it has to be left to itself. If these signals are distorted, the system falls apart.

Now, Uber’s surge pricing is a fantastic mechanism to speed up the process of price discovery. But Kejriwal decided that people were being fleeced by high prices, and decided to ban surge pricing. The ban didn’t last long, because there was an immediate shortage of cabs, just as econ 101 would predict.

What happens when you put a price cap on something is that it becomes first-come-first-serve, and after the first lucky bunch get it, it doesn’t matter how urgent your need is, it’s not available at all. More crucially, the rising price that would act as both information and incentive now no longer does so, and other suppliers don’t rush to fit the shortfall.

While that experiment didn’t last long, Kejriwal moved from price ceiling to price floor. He announced an increase in the minimum wage in Delhi, to Rs 14k a month. Now, this sounds most compassionate, but is a government diktat enough? If it was, why not, say, make the minimum wage in Delhi Rs 10 lakhs a month? Wouldn’t Delhi instantly become the richest city in the world?

The answer is obvious. Such a law would merely put everyone whose work was worth less than 10 lakhs out of a job, and most businesses would shut down. Similarly, if the minimum wage set is Rs 14k, it effectively renders everyone whose labour is worth less than that unemployable by decree. Businesses are forced to discriminate against anyone they’d pay 13k a month or less, and it is the poorest of the poor who would bear the brunt of this. The law would hurt those it purported to help. (Being the country of jugaad, all workers below the minimum wage level will simply be shifted to the informal sector, and government inspectors will get a higher hafta than before. But it is no defence of a bad law to say that peeps will find a way to work around it.)

For anyone who isn’t economically illiterate, these effects are predictable. A price cap (or ceiling) inflates demand relative to supply, and a shortage in supply is inevitable. A price floor inevitably decreases demand and leads to excess supply—or, in this case, more unemployment.

The laws of economics, such as that of prices, and supply and demand, are as immutable as those of physics. So why are such interventions so popular then? A key reason is that the laws of physics can be tested and proved in controlled environments, but you can’t do that with the laws of economics. Data is noisy, other variables abound, and all sides can point to ‘evidence’ with spurious correlations. So those who believe in such simplistic interventions continue with them, because it makes them feel (and seem) compassionate.

Kejriwal has a record of taking the high moral ground with self-righteous positions, and strikes a chord with common people by identifying many problems correctly. But his suggested solutions usually make the problems worse, as in the case of his anti-corruption crusade, or the different price controls he has championed. A good question to ask here is, Does he actually believe that such interventions work, or does he not give a damn about that, only wanting to take a position that gets him most votes from the economically illiterate masses? In other words, is he a devout fool or a devout scoundrel? Hanlon’s Razor states, “Never attribute to malice that which can be adequately explained by stupidity.” In Kejriwal’s case, I’m not so sure. But he’s devout all right, so God help us.

*  *  *

For more on minimum wages in general, I find this explanation by Milton Friedman to be particularly lucid. Linda Gorman’s piece on it at Econlib is also a decent short primer on the subject.

Posted by Amit Varma on 02 September, 2016 in Economics | Essays and Op-Eds | Freedom | India | Lighthouse | Politics


Two States

This is the 9th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page

UTTAR PRADESH

Once the Congress seemed rather smug.
‘Gandhi’ was their designer drug.
Do they now realise
That the Gandhi franchise
Is not a feature but a bug?


KASHMIR

A wise man said, ‘An eye for an eye
Makes the whole world blind.’ Those who decry
This circle of violence
Must speak through the silence.
We’ll fall too far if we don’t aim high.

Posted by Amit Varma on 17 July, 2016 in Freedom | India | Politics | Rhyme and Reason | Rhymes


Politics and Money

This is the second of two limericks from the 7th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India edit page.

POLITICS

A neta who loves currency notes
Told me what his line of work denotes.
‘It is kind of funny.
We steal people’s money
And use some of it to buy their votes.’

Posted by Amit Varma on 03 July, 2016 in Freedom | India | Politics | Rhyme and Reason | Rhymes


In Defence of Tanmay Bhat

I have four quick comments to make on the Tanmay Bhat controversy. (The first two are trivial but need to be repeated, I think.)

One: Our laws are still screwed up. The repeal of 66(a) of the IT Act was rightly celebrated as a win for freedom, but there are already laws in the IPC, like 295(a) and 153(a), which can also be used to strike out against Free Speech. (Here’s an ancient piece of mine on the subject: Don’t Insult Pasta.) The last I heard, people were planning to file a case against Bhat using those laws. I hope they don’t. And those laws should really not exist. As long as he is not directly inciting violence, Bhat should have the right to say whatever he wants, however offensive, however obnoxious.

Two: By the same token, others have a right to react to his comedy in whatever way they please, as long as they’re not trying to force him to shut up. So someone who says his comedy is disgusting is not attacking Bhat’s right to free speech unless he follows up by filing a case or trying to get him banned or whatever. And we can react to their reactions in the same way, and so on recursively. That’s what social media is for, isn’t it?

Three: The quality of Tanmay’s humour is less important to me than the context of it. Standup comedy in India is relatively young. (We have a great, centuries old tradition of humour, actually, but not this specific form, so don’t hit me with history and tradition, please.) And we are too quick to get offended. So it’s important to keep pushing the envelope, to keep stretching those boundaries. Nothing should be sacred. No holy cows.

Now, because our standup ecosystem is nascent, all the stuff that floats to the top won’t be of the highest quality. But that doesn’t matter. I didn’t enjoy all the humour in the AIB Roast, but boy, am I glad they did it. These guys are putting themselves out there, unlike many of us armchair observers. That is admirable in itself. And while doing it, they’re also taking giant steps forward for Indian standup comedy. (In these early days, all steps are giant steps.) That, in itself, deserves applause.

Four: Sit back and think for a moment about the nature of comedy itself. When Bhat says that Mangeshkar’s face looks like it has been kept in water for eight days, or he invokes the bitterness of a notional Sachin Tendulkar, is he really talking about just them? I don’t know Bhat personally, but I’m pretty sure he is under no illusion about his own good looks, or his mortality, or his importance to this world. Very few comedians are. If anything, comedians are people who’ve realised the essential tragic nature of the world, and certain fundamental truths about the human condition, such as a) our mortality, b) the huge role of dumb luck in our lives and c) the self-delusions which we need to survive, and with which we convince ourselves of our own importance. (I’m sure Bhat doesn’t think about it in these precise terms, but you get the drift.) Once you figure this out, the only appropriate reaction is laughter.

So when Bhat subverts the notion of Sachin and Lata as hallowed figures who cannot be made fun of, he is really just telling us to laugh at ourselves. ‘Look at us, we’re so funny and pathetic. Hahaha.’ I think he does it really well—that Mangeshkar ‘face in water’ joke is observational genius—but even if you don’t, it should not matter. More power to him regardless.

I just hope, after all this, he doesn’t end up apologizing.

Posted by Amit Varma on 31 May, 2016 in Arts and entertainment | Freedom | India | News


Uber and the Auto-Driver

As readers of this blog would know, I’ve long argued in favour of Uber’s surge pricing as an excellent mechanism for matching supply and demand. In a column from last year, I warned against the perils of banning surge pricing:

The most efficient way of allocating resources is to let things find their own equilibrium, their own prices. Price controls are foolish and never work. And the demand for them is based on a sort of a fantasy. Fixing the price of a product at a base price below what the market would pay does not mean that everyone gets it at this price—it just means that a lucky few get it and the others don’t. The fundamental truth about the universe is this: everything is scarce. You can’t wish this scarcity away by agitating or legislating against it.

Now, these fundamental laws of economics apply to everything, not just to Uber. And so Mukul Kesavan, in a column for NDTV, makes the pertinent point:

[S]etting aside Kejriwal’s motives and rationality, the larger question is this: should Uber or Ola be allowed to vary their per kilometre rate at will when yellow cabs and auto-rickshaws are stuck with fixed rates? If, as Uber’s defenders never tire of saying, the app’s algorithms represent the invisible hand of the market, frictionlessly matching supply and demand, why should the individual auto-driver be punished and maligned for asking for more than the metered price?

Shoaib Daniyal makes the same point on Twitter:

Both Mukul and Shoaib are right, though it seems to me that they might both be indulging in whataboutery and creating a straw man at the same time. No one who defends Uber’s surge pricing could possibly support the way the government regulates taxis and autorickshaws. And some of us have written about it in the past—I found this 11-year-old post by me ranting about the licensing of cycle rickshaws in Delhi, citing Parth Shah and Naveen Mandava’s excellent book, ‘Law, Liberty and Livelihood.’ Rather than search for more old posts, though, let me sum up my position here.

In a nutshell, here is how the market for taxis and autos works in Indian cities. The government gives out a limited number of licenses for taxis and autos. This quota does not increase in response to demand. Thus, as demand goes up in relation to supply, you would expect either prices to rise or the supply to rise. The supply is artificially constrained. And the government imposes price controls, so the prices can’t rise either. In other words, if the auto and taxi drivers stick to government-mandated prices, you should expect scarcities. Or you should expect an informal system to develop, where drivers don’t charge the meter rate and instead negotiate with their clients. Both of these are true, to varying degrees, and each of our own cities has developed our informal cultures in terms of dealing with this.

So when an auto guy demands Rs. 400 for a journey that the government mandates should cost Rs. 80, what is the appropriate response? I know some people who will argue that the auto driver, in exchange for his license to drive an auto, has signed a contract with the government that includes those price controls, so he should abide by them. This is a short-sighted argument. I would argue that both the licensing and those price controls are wrong. And I sympathise with the auto driver’s lament that ‘Hey, I’m not allowed to charge a surge price, why should Uber have that privilege?’ How can that not be a valid complaint?

The best way to create a level playing field, though, is to remove those restrictions from all parties, not to impose them on everyone.

Part of the reason Uber and Ola have thrived in India is that they benefited from a need that was created partly by the controls imposed by the government on taxi and auto drivers. The solution is to remove those controls. But removing government controls on the taxi-and-auto industry is higher hanging fruit because of the interest groups involved, and it’s easier to target Uber and Ola, which is what the governments of Delhi and Karnataka are doing. Who suffers in all this? The consumers do. We’re the fish at the table.

The bottomline: Kesavan is right that if we support surge pricing by Uber, we cannot in the same breath curse the local auto-driver for charging ‘extra’. That doesn’t compute.

Posted by Amit Varma on 20 April, 2016 in Economics | Freedom | India | News | Politics


Once There Was A Mini-Skirt

Once there was a mini-skirt.
A playful child that liked to flirt.
One day it got banned,
A measure that was planned
By a group of petticoats that felt hurt.

Posted by Amit Varma on 20 April, 2016 in Freedom | India | News | Rhymes | WTF


Once There Was A Beautiful Cow

So I wrote some limericks for Twitter, and I suppose they’re fun enough to share here:

1
Once there was a beautiful cow
Whose tastes were kinda highbrow
And then one day
Bharat Mata ki jai
She became a dog and said ‘bow-wow.’

2
Once there was a man of God
Who was ever so suitably awed
by a) the divine
And b) the bovine
When he saw a holy cow, he’d applaud.

3
Once there was a wife-beater
Who was a cad, a scoundrel, a cheater
He mastered the arc
of the venomous snark
Now he’s a famous Tweeter.

4
Once there was a central banker
Who seemed solid as an anchor
He lowered interest rates
opened the floodgates
To inflation. What a wanker!

5
Once there was a central minister
Who developed a desh bhakti blister
On his big fat palm
& the only balm
was some grease. How sinister!

*

(Previous posts on cows: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31 , 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117.)

Posted by Amit Varma on 05 April, 2016 in Economics | Freedom | India | Old memes | Cows | Politics | Rhymes


The Manner of Their Hanging

The Times of India reports:

In an incident reminiscent of the Dadri lynching, two Muslim men herding eight buffaloes on their way to a Friday market were beaten up and hanged to death from a tree by suspected cattle-protection vigilantes in Balumath forests in Latehar district, 100km from the state capital, early on Friday.

The deceased, Muhammad Majloom, 35, and Azad Khan alias Ibrahim, 15, were cattle traders and related to each other. Their bodies were strung up with their hands tried behind their backs and their mouths stuffed with cloth.

“The manner of their hanging showed that the assailants were led by extreme hatred,” said Latehar SP Anoop Birthary.

This feels like a nightmare, the use of the term ‘cattle-protection vigilantes’ in a news story about a lynching. What has been unleashed here? Who is responsible for this?

The people in power make responsible noises about reforming the economy and increased federalism and blah blah blah. That is all nonsense. Government is just getting bigger and more oppressive, and stealing more from us by way of taxes and cesses. This government is, in every substantive way, left-wing on economics. Many of my friends, who supported them in opposition to the family firm that ravaged our country for decades, are still in denial about this. On economics, on progress, on growth, these guys are as bad as the previous lot.

And in the social domain, they are worse.

It is natural for mass political leaders to draw on baser instincts of identity and tribalism for their popularity. Reason gets you only so far, so you appeal to the reptile brain. Behind the optics of ‘achhe din’, that is the double game the BJP is playing. But it has a cost. That cost includes ‘cattle-protection vigilantes.’

As Prem Panicker writes with regard to this incident:

This is what happens when you let the genie out of the bottle. People die.

For a proximate lesson from the neighbourhood, look at what Zia-ul-Haq unleashed in Pakistan.

Arun Shourie once memorably called this government ‘Congress plus a cow.’ He was almost right.I would call it ‘Congress plus cattle-protection vigilante.’

There is a difference; and it is a horrifying difference.

*  *  *

Also read: My column from yesterday speculating on the commonalities between the Trump wave and the Modi wave: ‘It’s Cascading Trump, It’s Cascading Modi!’

Posted by Amit Varma on 19 March, 2016 in Freedom | India | News | Politics


It’s Cascading Trump, It’s Cascading Modi!

This is the 25th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

We live in strange times. A few days ago, my friend and fellow libertarian, the writer Shikha Sood Dalmia, posted on Facebook: ‘Am I going mad or is the world? In America, I’m rooting for a Democrat and in India I’m defending a bloody communist!’

I was doing the same. In America, the bigoted, nativist, protectionist Donald Trump was dominating the Republican primaries, unleashing invective of the sort that usually only anonymous online trolls dare to express. In India, Narendra Modi’s government carried out a venal persecution of a few university students, based on doctored videos and a fake tweet. They arrested one of them for sedition, who was then beaten up by lawyers in the courthouse as the police looked on passively. My support, instinctively, went to the Democrats in the US; and to the beleaguered communist students in India.

What is going on here? How can a man like Trump be on the verge of leading the party of Abraham Lincoln? Why is Indian politics slipping back into crude tribalism just when India should finally be marching towards modernity? Could there be one answer to both these questions?

A few days ago, the American columnist Glenn Reynolds wrote a piece titled ‘A Trump wave is on the way.’ To explain the Trump phenomenon, Reynolds cited a book by sociologist Timur Kuran, Private Truths, Public Lies: The Social Consequences of Preference Falsification.

Say you are at a dinner party at your boss’s place. The food is terrible: the dal makhni has no salt, the butter chicken has too much tomato puree. Your boss asks how you like the food. You murmur your appreciation, as you’ve seen others on the table do. You are hiding your actual preference in order to fit in or avoid social awkwardness. This is ‘preference falsification’. Everyone at the table may have hated the food—but everyone may think that everyone else loved it.

Preference falsification can have grave consequences. Kuran cites the Soviet Union as an example. The Soviets used the strong arm of the state to clamp down on free speech, which made it hard for people to express their preferences. Even if 99% of the people hated Communism and wanted the government to fall, it would not do so because of preference falsification: these people would not know that so many others thought just as they did. Until suddenly, one day, the public expression of that preference reached a critical mass, and a phenomenon that Kuran called a ‘preference cascade’ took place. From the outside, it might seem that a regime toppled suddenly, overnight, without warning—as we saw throughout the former Soviet Bloc. But while the preference cascade may have been sudden, the preferences themselves were not new.

Reynolds invokes Kuran in the American context, and speculates that Trump’s surge could be the result of a preference cascade. Maybe Trump is articulating views that other would never do themselves in public. (‘I hate foreigners.’ ‘Mexicans are rapists.’ ‘All Muslims should be deported.’ Whatever.) Once they see a prominent man like him say these things, and others rush out in support, they are emboldened to vote for him. Now that they know there are others like them, they join the Trump wave.

Now, shift your attention to India. My view of the last elections until recently was basically this: the BJP got its highest voteshare ever because not only did it mobilize its traditional base – the Hindutva voters – they also attracted other voters who were sick of the UPA’s corruption, who wanted economic reforms, and so on. And now that the BJP was bound to disappoint some of them, it would lose voteshare, compunded by the opposition consolidating against it (as in Bihar). So a desperate party would double down on Hindutva to mobilise its core Hindutva vote.

But what if this is all wrong?

What if the rise of Modi is a result of sudden preference cascades following decades of preference falsification. In Gujarat, for example, what if the majority Hindus bear an unspoken antipathy towards the minority community? They may not express it openly because it’s awkward to do so. Then the 2002 riots happen, and Muslims are ‘put in their place.’ Modi, then chief minister, never openly takes credit for it, but he doesn’t deny his culpability either, and you can read between the lines. Boom, Modi wins the next elections in a landslide—and every state election after that.

Similarly, what if many Indians silently share notions of cultural or religious superiority that are not polite or politically correct to express publicly? (I am attempting dispassionate political analysis here, and this is not meant to be judgmental.) The rise of Modi at a national level could have led to a preference cascade, and though these voters might have come up with many policy reasons for voting for him—‘He will make GST happen’ etc—those may have been rationalisations more than reasons. (Note: I am not implying that all BJP supporters are like this.)

But why now? What suddenly enabled this preference cascade? I have an answer : social media.

Social media exploded in India over the last six years, just as Modi’s national ascent began. Social media lets you express your preferences far more freely than in real life, because you’re either anonymous, or you’re at a physical remove from whoever you’re talking to. So more true preferences get expressed—and more and more people see more and more opinions validating their own preferences. Cascade!

If this is true, then in both America and India, beneath the veneer of sophisticated political discourse, there lies a primal core that cares about more basic things, like race and identity and so on. In fact, maybe the exact same impulse explains both Trump and Modi: the instinctive attraction for a strong leader who will lead our tribe well and shit on all others.

But these are just theories, and they could be wrong, or merely partly right. And there could be other silent preferences out there waiting for their cascade. What could those be? Who will make it happen?

Posted by Amit Varma on 18 March, 2016 in Freedom | India | Lighthouse | Politics


Rising Divorce Rates are a Feature, Not a Bug

The Times of India has an intriguing headline up today: ‘Marriages last the longest in north India, Maharashtra; least in NE.’

At first glance, you might think that is good news for North India. It is not. In my view, it shows how socially backward the North still is.

A few years ago, I’d written a column called We Should Celebrate Rising Divorce Rates In it, I’d expressed the opinion that divorce rates were “the single best statistical indicator we have of the empowerment of women.” If I may quote myself:

Rising divorce rates tell us one thing for sure: that more and more women are finding the means, and the independence, to walk out of bad marriages and live life on their own terms. If we judge ourselves as a society on the state of our women – and surely that must be a parameter – then this is good news.

So the ToI report seems to indicate that women are more empowered in the North-East than and North India. I’d love to see if data backs this up. What statistical indicators can stand as a proxy for women’s welfare? Do they show a geographical correlation with divorce rates? These are good questions to ask, though I don’t think ToI will do a follow-up report on this anytime soon.

Posted by Amit Varma on 18 January, 2016 in Economics | Freedom | India | News


Looking Beyond Left and Right

This is the 23rd installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

One of the things that most exasperates me about Indian political discourse these days is that we often speak in terms of ‘left-wing’ and ‘right-wing’. This is wrong for two reasons. Firstly, this is not how politicians themselves actually speak (unless they’re humouring the English-speaking media). Voters in India vote for a myriad of reasons, mostly local, and they don’t frame issues in terms of left or right. Therefore, neither do politicians when they speak to their constituencies, or when they strategise among each other. There is, thus, a disconnect between politics and political discourse. Many political commentators, unable or unwilling to engage with the complexities of the political economy, insist on imposing simplistic narratives.

But this would not matter if a left-right prism was useful in evaluating the desirability of policies, or provided a compass to gauge the moral or instrumental value of the actions of politicians. But it does not, which brings me to my second reason, which is not a local one. Across the world, framing issues in terms of left or right misses the central principle at stake in any modern society: that of individual rights, and of freedom. I view the world through a classical liberal (or libertarian, if you will) prism, and my liberalism boils down to a respect for individual freedom. On moral grounds alone, if we come from first principles, we should respect individual freedom above all else. From a consequentialist perspective, also, we should defend freedom, for economic freedom leads to material prosperity, and personal freedoms, such as freedom of speech, enrich our culture.

As a true liberal, I see no difference between economic and social freedoms. As I am fond of saying, once we accept that two consenting adults may do whatever they want with each other provided they infringe the rights of no one else, it should not matter whether they are fucking in a bedroom or trading in a marketplace. Interfering with either is wrong. And here’s the thing: parties on both the left and right sides of the political spectrum support infringements on individual freedom all the time.

Parties on the right tend to want to impose their cultural values on others, and are suspicious of those they view as ‘outsiders’. They don’t care much for free speech or other personal freedoms. Parties on the left tend to oppose economic freedom. They do so stating noble reasons, but all infringements of economic freedom amount to a redistribution of wealth from poor consumers to a rich interest group, so they’re either hypocrites or delusional. They also tend to favour big government, which means more taxation, and therefore more coercion.

If you believe, as I do, that coercion is wrong, then it won’t make a difference whether you look left or right, you’ll see coercion everywhere. A classical liberal opposes both Donald Trump and Bernie Sanders, both Prakash Karat and Mohan Bhagwat. (I would give credit to those guys for at least stating their positions clearly, though. Politicians down the ostensible middle, slaves to special interests as they mostly are, tend to be equally coercive and far more hypocritical.) Looking at the political marketplace, you will find that the options available to you aren’t all that different from each other. And why should they be? Even when they cater to different segments of the population, they’re still reacting to the same inevitably corrupting incentives at work in the political economy.

Here’s the funny thing about India in particular. We have conveniently classified the BJP as a right-wing party and the Congress as a left-wing party—but they’re both practically the same party. In terms of economics, both are left-wing, and oppose economic freedom. It might surprise you to hear me say this about the BJP, but forget their campaign rhetoric and consider their actual policies: Modi I is basically UPA III. Modi has the same top-down way of looking at the economy as any Congress leader before him, and he’s trigger-happy when it comes to imposing new taxes and cesses.

Equally, on social issues, the Congress was as right-wing as the BJP allegedly is. They have a stellar record when it comes to banning books, and it was a Congress government that effectively banned The Satanic Verses. Censorship flourished under their watch, as did attempts at social engineering, which weren’t restricted to the Emergency: odious policies on sterilisation still exist, decades after the emergency was called off. Even in terms of attacking other communities, the Congress set the standards: more people died in the 1984 riots than in the 2002 riots. My friend, the political commentator Nitin Pai, once coined a term that describes this jostling between the parties perfectly: ‘Competitive Intolerance’. This is quite the kind of competition that makes the poor ol’ free-marketer in me cringe!

To sum it up, India’s political parties tend to be left-wing on economics and right-wing on social issues. In other words, they oppose freedom in every sphere. I would be no more disheartened by this than India’s freedom fighters were in the first half on the last century, when they gazed up at the monolithic British empire. They gritted their teeth, and hurled themselves into the battle for our political freedom. Likewise, we must keep fighting till we win these other freedoms, and emerge as a free country at last. Not a left country, or a right country, but a free country.

Posted by Amit Varma on 11 December, 2015 in Economics | Freedom | India | Lighthouse | Politics


Arvind Kejriwal vs Santa and Banta

First Post has a headline right now that says: “Kejriwal speaks out against ‘Santa-Banta’, supports plea to ban jokes on Sikh community.”

Kejriwal is doing this, no doubt, because AAP intends to stand for elections in Punjab, and he’s taking what he hopes will be a popular line there. This illustrates what I’ve said all along about the man: he only cares about power, not principle, and will take whatever populist line gets him votes. His opposition to FDI in retail was one example of how he’s against economic freedom. (Such opposition amounts to redistributing wealth from poor consumers to a specific rich interest group, as I pointed out here.) And now we find that he doesn’t believe in free speech either. He’ll do whatever it takes to get votes.

In this, he is no different from any other politician. But he projects himself as being different, which is why pointing out this aspect of his character is important. The politician Kejriwal reminds me of most is the vile Indira Gandhi. And as I wrote recently, Narendra Modi also reminds me of Indira in some ways. Talk about picking a bipartisan role model!

Posted by Amit Varma on 03 December, 2015 in Freedom | India | Politics


Uber and Governance

Anant Rangaswami tweets:

I love Uber, as much for what it is as what it represents. But here’s the thing: Uber functions because its marketplace is competitive. When it comes to most of the services the government provides, though, the government has a monopoly. The greatest incentive for any organisation to function well comes from competition, and the need to excel in order to survive. In areas that the government has a monopoly, I predict, it will fail—as indeed ours has for 68 years. You cannot change the level of service until you change the incentives.

Posted by Amit Varma on 30 November, 2015 in Economics | Freedom | India


The Real Issue Regarding The National Anthem

There’s an interesting video that seems to have gone viral on social media showing a bunch of hooligans in a film theatre haranguing (and eventually ejecting) a couple who did not stand when the national anthem was played. Some people on Twitter appear to think that this is an issue of patriotism. Well, no it isn’t. It’s an issue of individual freedom and coercion.

In some jurisdictions in the country, it is compulsory to stand when the national anthem is played. This compulsion by the government is something I object to. People should be free to stand if they feel like; and to not stand if they don’t want to. Your patriotism should not be measured by your empty allegiance to a mere symbol; and in fact, it should be nobody’s business whether you are patriotic or not.

Also, when you watch the video linked to above, consider that the people being unpatriotic are not the ones who didn’t stand for the anthem, but the ones insisting that they should have. The idea of India that I subscribe to is one in which India being a free country means that all its citizens are free from the kind of coercion and goondagardi that we see in that video. The mob in that video pretending to be patriotic—they are traitors in my eyes. Whether they stood for the anthem or not.

In fact, it is a travesty that the theatre management did not intervene on behalf of the two ticket-paying patrons who were forced out of that hall. As for those hooligans, they should have been arrested for creating such a disturbance on someone else’s property.

*

By and by, I was a panelist on We The People, Barkha Dutt’s show, at the start of 2008 in which the topic for discussion was exactly this: national symbols, and whether there should be any holy cows. Towards the end of the show, Barkha asked each of her panelists for a response on whether India should have holy cows. My response, about 47:50 into the show:

The only kind of holy cow I believe in is one from which you get a divine steak.

My co-panelist Smriti Irani met me backstage after the show and told me that I’d better be careful about making such jokes about an animal that is the object of reverence for Hindus. I think she was educating me about the dangers of blaspheming publicly, and as such, her post as education minister in a BJP government seems quite apt.

Posted by Amit Varma on 30 November, 2015 in Freedom | India | Politics


On Winning the Bastiat Prize for Journalism

I was fortunate a few days ago to win the Bastiat Prize for Journalism for the second time. The prize is given annually to a writer whose work serves to “explain, promote and defend the principles of the free society.” I had also won it in 2007, and became the first person to win it twice.

Here’s the speech I delivered on receiving the award:

These are the pieces I won the award for:

The Kim Kardashian Liberals
The Great Redistribution
An Economic Message From God

Posted by Amit Varma on 26 November, 2015 in Freedom | Media | Personal


Your Father Too

So Anupam Kher gets booed at a literary event and calls the audience a “paid audience.” He follows it up by saying that “people have an agenda and cannot handle a chaiwala becoming a PM.”

This is the precise problem with our discourse. Anytime people disagree with you or oppose you, you attack them instead of their argument or their viewpoint. So they are a “paid audience” or they “have an agenda” or they are “ISI/CIA agents” or they are “sickulars” or “bhakts” or “libtards” or aaptards”. And they say, “your father too,” and we all get caught in an endless cycle of abuse and snark, egged on by the echo chambers we build around us. Messy.

As for Kher, he lost his credibility the day he accepted the chairmanship of the censor board all these years ago. If you’re against free expression, you’re against art. Shame on him.

Posted by Amit Varma on 30 October, 2015 in Freedom | India | News | Small thoughts


Ban on the Menu Card

Rediff reports:

The Modi government, under fire for rising intolerance and violence related to eating beef, has allegedly disallowed permission for the airing of a documentary on beef-eating practices made by students of Tata Institute of Social Sciences.

The film titled “Caste on the Menu Card”, about the beef eating practices in Maharashtra, was to be screened on Saturday at the Jeevika Asia Livelihood Documentary Festival 2015, in Delhi. However, the makers of the movie say that they were informed by the organisers that they would need a censor certificate.

Firstly, you should note that this is not a protest by some ‘fringe elements’ within the RSS fold, but a decision by the government. So that whole approach of saying ‘Hey, we’re focusing on development, these are fringe elements, nothing to do with us’ won’t work here.

Secondly, you should also note that it was a Congress government that first introduced censorship in India, and over the years have been quite happy to ban books, films, plays and even music albums. So the fault really lies with us. We’ve been tolerating these assaults on free speech for way too long.

It’s never too late to start being intolerant of intolerance.

Oh, and here’s the trailer of the film in question. I don’t know if watching the full film will make me angry, but it is guaranteed to make me hungry.

Posted by Amit Varma on 30 October, 2015 in Arts and entertainment | Freedom | India | Politics


On Children

I have good news and I have bad news.

Good news: China has ended its one-child policy.

Bad news: Instead, China will now have a two-child policy.

This is surreal. Just when you thought, ‘Okay, maybe China gets it,’ you find that China doesn’t get it at all. If a one-child policy was bad, a two-child policy is also bad, because the thinking behind it is wrong. Firstly, contrary to what we taught in school, population is not something you need to control. People are a resource, not a problem. Putting an upper limit on people is literally like putting an upper limit on prosperity. We live in a positive-sum world, and on balance, every person brings more value to the world than they consume.

For more on this, read my essay, ‘The Evil of Family Planning’.

Secondly, the state doesn’t own the people that it decides what it should ‘allow’ them to do. But hey, am I so naive as to lecture China on individual rights? I have a better shot at provoking World Peace by singing bhajans at Wagah.

Posted by Amit Varma on 29 October, 2015 in Freedom | Politics


Uber Regulation

Abhinav Singh has a good post up about how the Government of Maharashtra is proposing to regulate Uber. As you’d expect, there are vested interests behind this: the existing taxi industry, which feels threatened by the new operators, as indeed they should, because the new operators are proving more value to consumers. So they go to the government.

As I’d written here, all interventions in the free market amount to a redistribution of wealth from the poor to the rich. Any regulations here will end up as exactly that. The value that consumers would have gained from the unhindered operation of Uber and Ola will be redistributed away to the older taxi operators. You really don’t need to ask what’s in this for the government, do you?

If this makes you angry, do go sign Uber’s petition. I’m usually skeptical of online petitions and candlelight vigils and so on, but this is a petition directly from one of the affected parties, and there is a non-zero probability that it will make a difference.

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An earlier piece on Uber: The Price is Right.

Posted by Amit Varma on 29 October, 2015 in Economics | Freedom | India | News | Politics


The Fatal Conceit of the Indian Politician

A shorter version of this was published as the 22nd installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

‘I’m not conceited. Conceit is a fault and I have no faults.’ Imagine this quote on an internet meme, alongside a picture of Narendra Modi, looking dapper in that famous pinstripe suit, or maybe a trademark Modi kurta. It would surely get thousands of shares on social media, many from bhakts impressed by the prime minister’s modesty. Don’t rush to share it, though: as one tends to do on the internet, I just misattributed. Those words were not uttered by Modi, or even Oscar Wilde or GB Shaw. The man who said them is former Van Halen singer Dave Lee Roth, with his back against a record machine. But Modi could have said them, could he not?

Please don’t think I am picking on Narendrabhai alone. All politicians are vain. Indeed, one could argue that in politics, vanity is a feature and not a bug. Politicians come to power by selling specific narratives about their excellence; and they can sell it most effectively if they believe it themselves. Success in many fields often begins, comically and ironically, with self-delusion. But politicians have consequences, and there’s nothing comic about that.

One reason that India is still a poor country is the ‘fatal conceit’ of our founding fathers. Jawaharlal Nehru, and his minions and successors, believed that economies were best planned from the top down. An economy is a complex thing, the poor and ignorant masses of India surely could not be trusted to perform this task by themselves, and needed to be directed by wise and benevolent planners. Those who have studied economics or paid attention to history know that this was foolish and wrong.

Economies, like languages, are products of “human action but not human design,” in the words of Adam Ferguson. They function brilliantly on their own, with millions of individuals pursuing their self-interest, and thus increasing the value in the lives of others, for that is the only path to profit. Planning is not only not required, it is an impediment. A central planner can never get a grasp on the huge amount of dispersed knowledge in an economy, and any intervention is bound to lead to a loss in efficiency. This hurts the poor the most: as I illustrated in a previous column, every intervention in a free market amounts to a distribution of wealth from the poor to the rich.

Nehru suffered from a disease that Friedrich Hayek called the Fatal Conceit. His coining of that term was inspired by the following passage in Adam Smith’s The Theory of Moral Sentiments: “The man of system […] is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board.”

People are not chess pieces, of course, and Nehru and his successors ravaged the economy with their well-intentioned interventions. I won’t recite the litany, but here’s the thing: 68 years after we became independent, 24 after the Soviet Union collapsed, we are still enslaved by a failed philosophy. And we’re still suffering because of the fatal conceit of flawed individuals.

It amuses me sometimes that Modi is considered a right-wing politician. He actually embodies the worst of both left and right. Like his party, and the ecosystem of religious nutjobs that sustains it, he is right-wing on social issues; and left on economic ones. Basically, he is against individual freedom in every domain possible, and thus the exact opposite of me. If you put Modi and me in a test tube, the resultant explosion could blow the earth off its orbit, or at least result in a good rap album. But that is a digression, and it is possible that you have your mouth open because I called him an economic leftist. Well, if a man is to be known by his actions and not his public image, what else can we call him?

I know many economic liberals, bald because of six decades of tearing their hair out, who thought Modi would be a free-market messiah. My ass. Tell me this: exactly what reforms has he carried out that increase our economic freedom? When Modi took over, India was ranked 140 out of 189 countries in the World Bank’s Ease of Doing Business Index: it has since slipped to 142. He has not reformed the labour laws that, for decades, have prevented us from being a manufacturing superpower. The license and inspector raj remains what it was under his predecessors. A litany of what he has not changed would be the same as a litany of what was wrong with our country before he took over.

I have friends in high places who tell me that the system doesn’t allow him to act. But the truth is that Modi suffers from the same fatal conceit that Nehru displayed. He believes the economy needs a top-down manager. He would rather reform a public sector unit than sell it off. When he talks of ‘minimum government and maximum governance,’ as that catchy slogan went, he is speaking of making government more efficient and not at eliminating it entirely from areas where it has no business existing.

His conceit isn’t limited to his economic thinking, though. Look at how the man struts! He may not walk the walk in the sense of governance, but he certainly does in a catwalk sense. Once he was denied a US Visa; now he travels the world meeting the high and mighty. I wonder if he realises, though, that these global leaders give him importance because of the position he occupies, and not the man he is. I suspect he has actually drunk his Kool Aid, and believes the Modi Wave narrative of the last elections. He may be headed for a fall if so.

Look at the numbers from the 2014 general elections again. Our first-past-the-post system made it seem like a wipeout, as the BJP got 6.4 times the seats that Congress did. But they got just 1.6 the vote share of the Congress. It was 31% to 19%, and a 4% swing away from them next time could easily result in a hung parliament. They delivered outlier performances in states like UP, MP and Gujarat, which seem statistically impossible to repeat. And the following things are certain: Since the election, they have not won more supporters than they have lost; the turnout of their supporters is bound to be less the next time around; other parties, clear about what they are up against, will make smarter coalitions to consolidate the non-BJP vote; anti-incumbency will be a factor now that some of the Modi sheen is gone.

Modi behaves like the prime ministership was his destiny and he will win again easily in 2019. But if he doesn’t get his act together, reforming the economy and constraining the lunatic fringe in his party, he could be in for a surprise. India could choose another delusional politician over him, and 2014-2019 could be remembered as The Selfie Years.

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Also read: ‘Lessons From 1975.’

Posted by Amit Varma on 16 October, 2015 in Economics | Essays and Op-Eds | Freedom | India | Lighthouse | Politics


Lessons From 1975

A shorter version of this was published as the 21st installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

In 1975, a Tamilian dressed as a sardar landed up in Ahmedabad Railway Station, in disguise to escape the might of the central government, for whom he was a wanted man. He was met there, and escorted to a safe house, by a 25-year-old who had once sold tea on the platform of that station. Freeze that moment in history – Narendra Modi escorting Subramanian Swamy to his safe house – and contrast it to today. What a long way we have come.

Or have we?

I got the above trivia from Coomi Kapoor’s excellent book, The Emergency: A Personal History. Kapoor was a journalist living in Delhi in those days, and though her book was timed to coincide with the 40th anniversary of the Emergency, it is anyway a timely reminder of the damage that people drunk on power can do, and the threat that such untrammelled power can pose to a nation.

The Emergency began with the filling up of jails. “The number of those in Indira Gandhi’s prisons during the Emergency,” writes Kapoor, “far exceeded the total number jailed during the 1942 Quit India Movement.” This included not just opponents in the opposition parties but also potential ones within her own party plus whoever they damn well felt like. (“The entire Sanskrit department of Delhi University was sent to prison.”) Personal vendettas were quickly settled, and torture was common in the jails. Those close to power were more like despotic rulers than public servants. For example, Kapoor writes, “When an old and respected lawyer of Panipat denounced [Bansi] Lal’s corrupt rule, he was arrested and stripped naked, his face was tarred, and he was dragged all through the streets of the town.” Such behaviour was more rule than exception.

The exploits of Sanjay Gandhi and his coterie were particularly shameful. He wrongly believed that India’s population was a problem rather than a resource, and even more wrongly set about solving it through forced sterilisations. Millions of those took place, and the story of the village of Pipli is particularly illustrative of how they functioned. Hawa Singh, a widower, died there after a botched forced sterilisation, and the villagers refused to have anything more to do with family planning. On hearing that, the government sent “several hundred policemen” who “took up positions around the village.” Shots were fired, and “two women making cowdung cakes outside their huts were mowed down by the bullets.” The men surrendered, and hundreds of them were sterilized.

The press was silenced. Loren Jenkins of Newsweek wrote, “In 10 years of covering the world from Franco’s Spain to Mao’s China, I have never encountered such stringent and all encompassing censorship.” One of the leaders of the opposition, LK Advani, later said that the press “was asked to bend and it chose to crawl.” A permanent (and brutal) dictatorship seemed likely, and we owe much gratitude to the fact that power had made Indira delusional, for she actually called for elections only because she thought she would win. Had she not thought so, she would not have called for them. (Indeed, Sanjay was opposed to the decision.)

To be honest, a political leader does not need to suspend democracy to devastate a country. Even without the Emergency, the vile Indira Gandhi would count as one of the worst leaders in our history. Through a series of disastrous economic policies, many of which her deluded partymen still support, she kept tens of millions of people in poverty, and adversely affected all our lives. There are no counterfactuals, of course, and abstract economic arguments do not have the visceral impact of the kind of stories that Coomi Kapoor’s excellent book is filled with.

Let’s get back to the present. To many, the general elections of last year felt like a landmark event because Modi’s win seemed to mark a final, clean break from everything that post-Independence Congress stood for. However, Modi was not brought to power by a monolithic votebank, but by a collection of disparate groups, all of whom were desperate for change for different reasons. Modi was like a Rorschach test – he stood for whatever you wanted him to stand for, and what you saw in him revealed more about you than about him. Hindutva bhakts saw him as the former RSS pracharak who would finally make India a great Hindu nation; economic liberals saw him as the leader who would finally liberate India from the Leftist policies that had kept us backward all these years; and so on. Some of the expectations from him were contradictory; most were impractical, given the constraints of the way our political economy is structured. But Modi encouraged all of them by discouraging none of them. He didn’t say much on policy issues, stuck to safe bromides, and you never really knew to what extent he supported Hindutva or free markets or yada yada yada. He was strong and silent, and he remained strong partly because he remained silent. You could believe whatever you wanted about him – and because the existing government was so incompetent, you wanted to believe.

If campaigning was like courtship, governance is like marriage. You can’t be delusional about the object of your affection any more: you’re living with the fellow. And while it’s okay if he burps and farts in your presence, it is simply not okay if he beats you up just like the previous guy used to. So a year down the line, how is the Modi government doing?

If you’re an economic liberal like me, Modi has been a disappointment. It is with good reason that people are beginning to refer to this government as UPA 3. Modi has not instituted any far reaching reforms, and the rhetoric of ‘incremental reforms’ does not cut it for me. If a man has gangrene in his legs or cancer in his liver, you do not give him an aspirin and call it incremental reform. ‘Gangrene’ and ‘cancer’ do not need to be managed efficiently, but eliminated brutally. Anyway, this is a subject I’ll elaborate on a future column. For now, I will concede this: Modi’s government is no worse than UPA 2 was. And it’s fair enough to wait out the five years they have been given before passing judgement.

It is in the domain of personal freedoms, though, that Modi has let the country down. Much of this is due to petty vindinctiveness, straight out of the Indira Gandhi playbook. Consider how Teesta Setalvad has been harassed after Modi came to power, with the latest salvo being the cancellation of the license of her NGO. (Why should any organisation need a license from the government anyway? Wasn’t Modi the Messiah supposed to do away with this kind of nonsense?)  Consider the government’s harassment of NGOs like Greenpeace, and the offloading of Greenpeace campaigner Priya Pillai when she was on her way to England because officials felt she would give India a “negative image” there. Go online, search for videos of the recent Patel uprising in Ahmedabad, and see the brutality with which the police crack down on common citizens. (The Gujarat government also banned the mobile internet during this time, as well as Facebook, Twitter and WhatsApp.) Consider all the nonsense the fringe elements on the Hindu right are getting up to, and the silence of the government on these issues – the same silence you would get from Indira very time she was confronted about the antics of her psychopathic son Sanjay.

Modi has not declared Emergency or jailed his opponents, but this approach to power does remind me of 1975, and make me wonder. Many of the prominent political actors of today played small roles in that particular production. Arun Jaitley spent the years of the Emergency in jail. In the hundreds of hours of solitary contemplation that he no doubt had, what did he think about? When the young party worker Narendra Modi guided Subramanian Swamy to his safe house, what did they talk about? Was it about how power always corrupts, the necessity to impose limits on it and the tragedy that politicians in India sought to rule rather than serve? Or did they simply say to each other, “Just wait. Just wait till we are on the other side, and we are the ones in charge.”

I suspect it was the latter. And what a loss that is.

Posted by Amit Varma on 18 September, 2015 in Essays and Op-Eds | Freedom | India | Lighthouse | Politics


Profit = Philanthropy

This is the 20th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

Never talk to me about profit,’ Jawaharlal Nehru once said to an industrialist friend of his. ‘It is a dirty word.’

Nehru’s sentiments were understandable in those times, and his sentiments were noble. India had just rid itself of the British, who had come to India ostensibly to do business and had left it impoverished. Nehru, who had played a notable role in the freedom struggle, had spent his formative years in England learning from the Fabian Socialists, as well as from Howard Laski, the Marxist professor at LSE who had a greater influence on modern India than Mahatma Gandhi, through students such as Nehru and VK Krishna Menon. The Soviet Union seemed to be a model to admire, America itself vastly expanded the role of the state after the Great Depression, and the top-down command-and-control economy must have seemed incredibly attractive to Nehru. The center had to hold. The profit motive was evil. Those exploitative capitalists had to be kept in check.

It is not fair to judge Nehru in hindsight, and he was right about other things that mattered. But he was wrong about this. Profit is the secret behind all prosperity. And it is a distrust of the profit motive that has kept this country poor.

The fundamental fallacy that Nehru committed was of looking at the economy as a zero-sum game. By that thinking, if someone is winning, someone else must be losing. If the industrialist makes a profit, someone else is getting exploited. But this is not the way the world works. All trade is a positive-sum game; and indeed, it is not possible for one person alone to make a profit in a transaction.

I am fond of illustrating this by citing what the writer John Stossel calls the Double Thank-You Moment. When you buy a cup of coffee at a Cafe Coffee Day, you say ‘thank you’ when you are handed your cup of coffee. And the cashier says ‘thank you’ when you hand over your money. This double ‘thank-you’ illustrates that both of you benefited from the transaction. Both of you profited.

This is, simply put, the root cause of prosperity. Every single voluntary transaction that takes place makes both parties better off, and increases the sum total of value in the world. Equally, every impediment that anyone places on the ability of consenting adults to trade freely with each other reduces the notional value in the world, and is an impediment to growth. It stands to reason, then, that trade should lead to prosperity, and that economic freedom should be correlated with a nation’s wealth. Does the data bear this out? You bet it does.

First up, I urge you to consider this chart. (Here’s the source.) It shows the wealth of the world as a flat line for centuries, until 1800. And then, boom, the world economy takes off in a spurt that economists call the Hockey Stick of Human Prosperity. It correlates perfectly with the explosion of markets across the world, of double-thank-you moments.

But it doesn’t take off uniformly across countries. Free markets are a necessary condition for prosperity, so let me now draw your attention to another chart. This one, from the Index of Economic Freedom 2015 brought out by the Heritage Foundations, shows a clear correlation between economic freedom and the wealth of nations. The freer you are, the wealthier you tend to be. (Also, the freer you are, the faster you grow.)

Forget the data, you say. Capitalists are exploitative. What about the low wages paid by Walmart? What about sweat shops run by large multinationals in third world countries like Bangladesh, where workers toil jn inhumane conditions? Isn’t that the profit motive at work?

Yes, it is. And I deeply admire Walmart and every company that runs a sweatshop in a poor country. That is because the people who work in Walmart and in those sweatshops do so because it is the best option open to them. They are not fools. They are choosing to work where they do because they deem all other alternatives to be worse, and those evil capitalist behemoths should actually be thanked for actually providing them an option that is better than the best option otherwise available to them. We condescend to those workers when we say they are being exploited. (Indeed, it is possible that we are exploiting them by using them to feed our sanctimony.)

This doesn’t apply to slavery and trafficking, of course, for by free markets I mean markets where consenting adults trade freely under the rule of law. Also, let us not conflate rent-seeking and profit-seeking. Many large companies get together with government to put restrictions on markets so that their market share is protected from competition. Such protectionism hurts the common consumer, and amounts to a redistribution of wealth from the poor at large to rich special-interest groups. Big companies are often the biggest enemies of free markets, and capitalism often unfairly gets a bad name because it is confused with crony capitalism – or ‘crapitalism’ as some call it.

To sum up, the profit motive is not something nefarious, but is actually noble. You can only profit in a free market by improving someone else’s life. And the more you profit, the greater the good you do in the world, the more the value you create. Profit, indeed, is the purest form of philanthropy.

I must admit here the very slight, teeny-weeny possibility that I am being unjust to Nehru. Maybe he had a mischievous glint in his eye when he said that profit was a ‘dirty word’. I can imagine him sidling up to Edwina Mountbatten at a party, gently putting his hand on her waist, and whispering to her, ‘Edwina, my dear, would you like to, ahem, profit with me?’ That certainly could have led to a double thank-you moment.

Posted by Amit Varma on 28 August, 2015 in Economics | Freedom | India | Lighthouse | Politics


The Great Redistribution

This is the 19th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

India is a poor country. We were poor when we became Independent in 1947, and while other countries have lifted themselves to wealth in that much time, we’re still poor. And government policies are the reason for our continuing poverty. For the last 68 years, since a group of white-skinned rulers handed over power to a bunch of brown-skinned rulers, all the governments that have run India have done one thing incredibly effectively: they have redistributed wealth from the poor to the rich.

Yes, you read that right: I’m not talking about redistribution from the rich to the poor, which itself would be an ineffective way of fighting poverty, but from the poor to the rich. They have taken money from the poor in our country and given it to the rich, and, as if to troll us, they have done this in the name of fighting poverty. For that reason, while there are some very rich people in our country, on average, as our GDP-per-capita indicates, we’re still a third-world country.

Let me take a recent event to illustrate what I mean. A few weeks ago, the central government announced that it would not allow foreign direct investment in retail e-commerce. Business Standard reported: ‘Minister of State for Commerce and Industry Nirmala Sitharaman last month met executives of Flipkart and Snapdeal and representatives from the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (Ficci) to assess the impact of FDI on Indian e-commerce companies.’ The government then decided that it needed to protect the local players, and therefore did not allow FDI.

Do you see what happened here? Who benefits from competition? The consumers do. The greater the competition, the more value for money the common consumer gets. This is axiomatic. Our local retailers—all the people consulted by the ministers—were scared that their bottomline would be affected by this competition, so they successfully petitioned the government to block it. The result: the consumers will get less value than they otherwise would; the local retailers will make more money than if competition was allowed. In effect, it is a transfer of wealth from a large, dispersed group of consumers to a small, relatively wealthy interest group.

All tariffs have exactly this effect. Let’s say I like to buy widgets. Local manufacturers sell me widgets for Rs 100 each. Foreign manufacturers, for a variety of reasons from technology to labour, can sell me widgets for Rs 80. But the local manufacturers petition the government to put a tariff on imports, and the government puts a Rs. 30-per-widget tariff on the foreigners, so they don’t bother coming over. The net result: each of us loses a notional Rs 20. Who gets that money? The local manufacturers. What just happened? The government redistributed wealth from the relatively poor masses to a specific relatively rich interest group.

Governments that impose or continue tariffs will do so in the name of protecting the domestic industry. But at whose cost? The French economist Frédéric Bastiat once wrote a great essay called ‘What is Seen and What is Not Seen’, which speaks of the hidden effects of such actions. What is seen here is the good done to one specific group of people (with money usurped from a poorer group, which by itself is surely morally wrong). What is not seen is what the consumers would have done with that money. They would have spent it or invested it, and it would have gone back into the economy, creating growth and employment. But the potential beneficiaries of that are not even aware of what didn’t happen.

Subsidies are also redistribution of the reverse-Robin Hood kind, if in a more obvious way. The wealth taken from the poor is not in terms of marketplace prices or value for money, but is taken directly from your taxes. And while the poor may not file income tax returns, they pay taxes too. Every time your maidservant buys a bag of salt or the beggar at the nearby traffic signal buys soap, they are contributing to the Rich Interest Group Benefit Fund. This is not just poor economics –  it is morally wrong.

Here’s the upshot: All interventions in free markets amount to a redistribution of wealth from the poor to the rich. Anything that reduces competition or artificially raises costs for the consumers amounts to just this. Restrictions on FDI, tariffs, licensing processes or regulations that make it harder to open a business or to run it, subsidies; and so on. The interest groups to benefit may differ in each case, and will often include rent-seeking forces within the government, but always, without exception, the wealth will flow, in relative terms, from the poor to the rich.

So why don’t we protest, you ask, given that we are a democracy? Well, think about the winners and the losers here. The costs of such redistribution are dispersed among more than a billion of us, and the benefits are concentrated to a few. If Rs 2 from the taxes you paid last year went as a subsidy to the widget industry, you won’t even know or care. The widget industry, making millions from the accumulated Rs 2s, will care, and will lobby aggressively, contribute to party coffers, buy off politicians and bureaucrats – whatever it takes. That is why government policy is not dictated by the people at large, but by the aggressive lobbying of hundreds of interest groups, out to make a killing at the expense of the poor. That is why government grows and grows, and so many constraints are placed on the only force that can make us wealthy: economic freedom.

Posted by Amit Varma on 17 July, 2015 in Economics | Essays and Op-Eds | Freedom | India | Lighthouse | Politics


The Price is Right

This is the 18th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line.

A few days ago, I got ready for a meeting, switched on my Uber app, saw that there were no taxis available in my area, and remembered an earthquake.

More than two decades ago, when I was in college in Pune, an earthquake ravaged the region of Latur. I got together with some friends to collect money for relief efforts. We decided that we would go to the affected areas ourselves to figure out the most efficient way of using the money. We hitched a ride on an ambulance of paramedics headed there with medical supplies. While in the affected district, we stopped at a village where around half the houses had been destroyed, and only one grocery store was still standing. “They are the only place one can buy groceries from,” a resident complained to us bitterly, “and they have tripled their prices.” That made me very angry. “Exploitative bastards,” I thought to myself, “feeding off the misery of others.”

Today, I know that my reaction was misplaced – just like the complaints of everyone who’s taken issue with Uber’s dynamic pricing. In case you missed the controversy, cabs and autos in Mumbai recently went on strike to protest against the competition they got from the likes of Uber and Ola. Since people had to get to work, the ironic short-term beneficiaries of this were the very parties they were protesting against. So when demand for a particular product or service goes up and supply can’t keep pace, what happens? That’s right, the prices go up, and Uber uses a mechanism called dynamic pricing which is an incredibly efficient way of arriving at an appropriate price for their service based on demand and supply. So commuters who switched on their Uber apps in the morning were informed that the base price had gone up by as much as 5x. Naturally there was much outrage and shouts of ‘exploitation’ and ‘predatory pricing’, and Uber, rattled by the bad press, announced that they would suspend dynamic pricing for the duration of the strike, and operate at their usual base fare. They put this into effect, and I woke up the next day, switched on my app, and found that no Uber cab was available.

Do you see what happened here? When demand goes up relative to supply, two things can happen. The price can go up to reflect the growth in demand; or, if the price is fixed, there is inevitably a shortage of the product or service in question. In Uber’s case, with their dynamic pricing disabled, all their cars quickly got booked, and whichever customers switched on their apps after that found that there were no cars available. Their need could have been urgent: they may have needed to rush to the airport to catch a flight they couldn’t afford to miss; or take an aging relative to hospital; or head to town for a make-or-break meeting. But even if they were willing to pay more, too bad.

The most efficient way of allocating resources is to let things find their own equilibrium, their own prices. Price controls are foolish and never work. And the demand for them is based on a sort of a fantasy. Fixing the price of a product at a base price below what the market would pay does not mean that everyone gets it at this price—it just means that a lucky few get it and the others don’t. The fundamental truth about the universe is this: everything is scarce. You can’t wish this scarcity away by agitating or legislating against it.


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Speaking of prices, another company that disrupted an industry, Amazon, has announced that it will pay authors on its Kindle direct publishing program according to pages read, not units moved. This is an opt-in program, applying only to self-published authors on their DP platform, but authors on my Facebook timeline have already reacted with horror. Their instinctive aversion to the idea is understandable: commoditization of art and all that. As in the movies, they can imagine a publishing executive in a suit telling them to clip their novel by 30% and have only one 8-letter-word-per-100,000 because more than that diminishes page-turning rate. The horror! But those fears are overblown. I think this development, like almost everything Amazon has done with regard to books, is visionary and good for authors.

Look, there isn’t, and shouldn’t be, a central politburo that decides how much authors get paid according to some high-falutin notions of literary merit. Authors get paid, quite simply, based on copies sold, and how many people want to read them. Literary authors accept that they will not make remotely as much as those who write airport potboilers. That’s just fine, because if they’re good at what they do, they’ll find an audience that appreciates their work anyway.

Amazon’s new system achieves the same end—paying writers according to the demand for their writing—with greater granularity. Good literary writers will still make money – I devour every word Alice Munro or Anne Tyler write—because their work is compelling. But if I get bored with a writer after reading ten pages of his work, I don’t see why he deserves any more of my money than those ten pages represent.

It’s somewhat silly for an author to have a sense of entitlement, and believe that other people should pay him money even if he can’t produce work they want to read. As silly, indeed, as for an Uber user to feel entitled to the service at a lower price than others are willing to pay, at the expense, therefore, of the service provider. Such arrogance is priceless.

Posted by Amit Varma on 03 July, 2015 in Economics | Essays and Op-Eds | Freedom | India | Lighthouse


Free Speech Does Not Mean Disruptive Heckling

This comment of mine was published a couple of days ago on Scroll.

Imagine Jerry Seinfeld is performing in India. A packed house is in attendance, getting rapturous as Seinfeld gets into his flow. And then, a bunch of hecklers from the Bajrang Dal disrupt the show. Seinfeld takes the interruption gracefully, but the hecklers won’t let him finish, and he eventually makes one last joke and then leaves the stage. What would your reaction be to this incident?

I would be aghast, and very clear on who was in the wrong: the hecklers. If the Bajrang Dal chaps protested that Seinfeld’s content was offensive to them, I’d say, “Ok, leave the premises then. And protest elsewhere by all means.” If they argued that they were expressing their right to free speech, and that protesting at their heckling was akin to censorship, it would be mildly ridiculous. To me, there would only be one guilty party here, the Bajrang Dal, and three wronged parties: the organisers, whose property rights were infringed upon by the hecklers; Seinfeld, who was not allowed to finish; and the audience, which did not get their money’s worth.

If you agree with my argument above, you would also agree, I suppose, that the principles involved hold regardless of the parties involved. So if I was at a Baba Ramdev show, and he expressed views repugnant to me, such as an attack on homosexuality, I would be disgusted, and the appropriate response to that would be to walk out and express my disgust elsewhere. But I would not have the right to disrupt his speech, and the organisers of that show would not have an obligation to offer me their platform for my views. In terms of principles, my heckling Ramdev off the stage would be exactly as wrong as the Bajrang Dal forcing Seinfeld to stop performing.

I write this, as you’d have guessed, in the context of the comedian Abish Mathew being booed off stage while performing at a Delhi college, and the subsequent defence of the hecklers in some quarters. Mathew is not Seinfeld or Ramdev, but the same principles that applied to their hypothetical hecklers apply to his. The hecklers in question were not expressing their right to free speech by disrupting the show. Free speech applies to one’s own space and to public spaces: I cannot enter someone’s house, abuse him, and protest when I am being thrown out that he is infringing upon my right to free speech. He is not; on the contrary, I am infringing upon his property. (In fact, as I argue here, the right to free speech is a property right.)

The hecklers should have protested outside the venue, or after the performance. To disturb the performance was graceless. To use another example, if I am at a Kishori Amonkar concert and am getting bored, I will quietly walk out. It would be incredibly boorish if I heckled her and made her stop. To argue that Mathew is not Kishori Amonkar, or that Seinfeld is classy and Ramdev is a bigot, is missing the point. The same principles apply.

Posted by Amit Varma on 29 March, 2015 in Essays and Op-Eds | Freedom | India | News


Marching For Salt

March 12 is a special day in India’s history. On this day 85 years ago Mohandas Gandhi set off on a walk from Sabarmati Ashram near Ahmedabad. His destination was 390km away: Dandi,  a coastal village near Navsari in Gujarat, where he intended to produce salt from the sea, in defiance of the salt tax levied by the British empire in India. Both the man and the cause were extraordinary.

I am writing a book that examines, in part, India’s intellectual history from 1857 to today. And Gandhi causes severe cognitive dissonance. The prominent 19th century figures in India’s freedom movement were all influenced by British liberalism, their ideas were shaped by Mill, Bentham, Morley, even Adam Smith. One can draw a straight line from Dadabhai Naoroji through Mahadev Govind Ranade and Gopal Ganesh Agarkar to the great Gopal Krishna Gokhale, who called himself “an intellectual grandson of Dadabhai Naoroji.”  These were the famed Moderates of the Congress party, aiming at incrementalism when it came to policy, seeking not to fight the empire but to be equal subjects within it. The Moderates dominated the Congress until the mid-1910s, despite skirmishes with the Extremists within the party, men like Bal Gangadhar Tilak and Bipin Chandra Pal, whose preferred methods may have been different but whose aims weren’t all that different from that of the moderates. The Scottish statesman James Keir Hardie once described the Moderates as ‘extreme in moderation’ and the Extremists as ‘moderate in extremism’, and indeed, they weren’t really all that far apart.

Uptil this point, the narrative is coherent. Then comes Gandhi. It seems to me that Gandhi was a black swan event in the Indian independence movement: nothing that came before could explain his arrival; nothing that then existed seemed to demand his ascendance. Gandhi called Gokhale his political mentor, but ideologically the two men were poles apart.

Gandhi was not influenced by the British liberals who shaped Gokhale’s thinking, nor did his thinking have Indian antecedents. He arrived at non-violent non-cooperation through Tolstoy’s writings, later finding backup in Thoreau and the sermon on the mount. His luddite distrust of machinery and the idealisation of village life came from John Ruskin. He claimed the Bhagavad Gita as an influence, but some of this comes from finding post-facto validation of his prior beliefs in Indian texts. VS Naipaul once called him ‘the least Indian of Indian leaders’ – but his ideas weren’t part of the Western mainstream either. When a critic complained, in his South African years, that he was poorly read in modern philosophy, Gandhi responded, in the historian Ramachandra Guha’s words, that he “saw no reason to read more glosses of modern civilisation when he saw the thing itself unfold before his eyes.”

Shortly after Gandhi came back to India, his political patron Gokhale died, to be followed a few months later by another Moderate stalwart Pherozeshah Mehta. There was a tussle in the Congress between the Extremists, led by Tilak and Annie Besant, and the remaining moderates, men such as Motilal Nehru and Mohammad Ali Jinnah. Gandhi was a peripheral figure, considered somewhat eccentric by other Congress leaders, still on the margins and not yet a Mahatma. Indeed, in 1918 he spent some time trying to recruit soldiers to fight for the British in WW1, writing to the viceroy, Lord Chemsford, “I love the English nation, and I wish to evoke in every Indian the loyalty of the Englishman.” In this sentiment, he echoed the Moderates, and hardly presaged the uncompromising freedom fighter he would go on to become. A year later, as that decade came to an end, he shifted from the margins of the freedom struggle to its centre.

Gandhi’s first tactical masterstroke in domestic Indian politics was making common cause with the Khilafat movement. Muslim thinkers in India were often torn between loyalty to the qaum, the larger Muslim nation, and Indian nationalism. The Khilafat movement was an expression of the former, and was aimed at maintaining the supremacy of the caliph in Turkey in the aftermath of WW1, where Turkey was on the losing side and the British were the victors. Your enemy’s enemy must be your friend, and for Gandhi, this was as an opportunity in two ways: to reconcile the sometimes conflicting loyalties of the Muslims; and to widen the base of the somewhat elitist Congress.

Gandhi threw himself into the thick of things, turning the nominally transnational Khilafat movement into a nationalistic enterprise. “It is the duty of every non-Moslem Indian in every legitimate manner to assist his Mussulman brother, in his attempt to remove the religious calamity that has overtaken him,” he wrote in a resolution adapted by the Congress in a special session in Calcutta in 1920. His program of noncooperation was adopted by the Congress session later that year in Nagpur, from which Jinnah stormed out, never to return to the party he had expected to lead. “I part company with the Congress and Gandhi,” he said in an interview that year. “I do not believe in working up mass hysteria. Politics is a gentleman’s game.”

The coupling of Khilafat and Swaraj made no ideological sense – severe dissonance, again – but it was tactical genius. At a personal level, this support from a new constituency made Gandhi the undisputed leader of the Congress, and thus the Independence movement. At a national level, it helped make the Independence struggle a true mass movement. With the Congress under his sway, Gandhi launched a movement of noncooperation that animated the entire country. Satyagraha – the force of truth – was underway. The British had never seen anything like this in India – though Gandhi called it off in 1922 when protesters turned violent in the town of Chauri Chaura and killed 23 policemen, reportedly while shouting “Mahatma Gandhi ki jai!” He even went on a fast, as penance for the crimes committed in his name. 30,000 people had already been imprisoned in the course of the movement, and the Khilafat leaders as well as his Congress colleagues did not take kindly to Gandhi’s unilateral decision to call off the Satyagraha. Soon, Gandhi was also arrested and sentenced to six years of prison – though he served only two, and the Khilafat movement wound up because, well, the Caliphate did. Swaraj was on hold.

Gandhi was on a hiatus for the middle years of that decade. “I am biding my time,” he wrote in a letter in 1928, “and you will find me leading the country in the field of politics when the country is ready. […] I have a plan for the country’s freedom.” When the Congress was next convened, it gave a deadline of a year to the British to grant India dominion status – failing which it would declare Independence. The year ended, the British ignored the demands of the natives, and on January 26, 1930, the Congress declared India’s Independence. But this alone was not enough. Another noncooperation movement, another satyagraha was required. What would be the focal point of this one?

*

In Salt: A World History, Mark Kurlansky relates a French folktale in which a princess tells her father “I love you like salt,” and is promptly banished by her father for insufficient adoration. But later, when he is denied salt, he realises “the depth of his daughter’s love” and repents. Salt is essential to humanity. Our bodies contain about 250gms of salt, but too many essential bodily functions rely on salt. “From the beginning of civilisation until about 100 years ago,” Kurlansky writes, “salt was one of the most sought-after commodities in human history.”

The first war over salt was fought by Huangdi, the Yellow Emperor of China, around 2600 BC. Salt had geopolitical significance, and even gave impetus to empire building. The first of the great roads built by the Romans, the Via Salaria, was constructed for the express purpose of transporting salt. Mediaval trade routes were shaped by salt. Salt was even currency; Roman soldiers were sometimes paid in salt, and the worlds ‘salary’ and ‘soldier’ both evolved from sal, the Latin word for salt. Indeed, consider the origin of the phrase you must have heard in countless Hindi films, “Maine aapka namak khaaya hai.”

The first mention of a tax on salt dates back to the 20th century BC, in China. “During the Tang Dynasty, which lasted from 618 to 907,” Kurlansky tells us, “half the revenue of the Chinese state was derived from salt.” Salt taxes were a certain way for any state to raise revenue, for even the poorest could not do without it. Salt was taxed in India from as far back as the reign of Chandragupta Maurya (340-298 BC), and the Mughals even charged differential salt taxes depending on religion. (Muslims paid 2.5%, Hindus paid 5%.) The British, starting with Robert Clive, the governor-general in 1765, raised it to unprecedented levels. To further compound matters, they killed off the domestic industry, and built a monopoly to the benefit of British salt manufacturers in Cheshire. By the early 1800s, only the British government could legally manufacture salt in India. A rebellion around salt in 1817 was quickly crushed, and by 1858, 10% of the British government’s revenues came from salt.

Gandhi wasn’t the first nationalist leader to protest about the tax on salt. SA Swaminath Iyer protested against it in the inaugural session of the Congress in 1885, as did Gopal Krishna Gokhale in 1890, and Dadabhai Naoroji called it “the most cruel Revenue imposed in any civilised country” in the House of Commons in 1894. The issue festered; the British ignored Indian fulminations; the salt tax was, in fact, doubled in 1923.

And so, Mohandas Gandhi’s Satyagraha hammer found a suitable nail in the salt tax.

*

Before the Satyagraha, Gandhi wrote in a letter to the Indian viceroy, Lord Irwin: “I regard this tax [on salt] to be the most iniquitous of all from the poor man’s standpoint. As the Independence movement is essentially for the poorest in the land, the beginning will be made with this evil. The wonder is that we have submitted to the cruel monopoly for so long.”

What happened in the Salt Satyagraha is common knowledge. Gandhi marched for 24 days and reached the coast of Dandi on April 6. C Rajagopalachari went on a similar march in Tamil Nadu. Vallabhbhai Patel and Jawaharlal Nehru had been arrested by the British, as was Gandhi shortly after the satyagraha. The British government made some minor concessions, but the salt tax remained in place until 1946. Gandhi had said that he would not return to Sabarmati Ashram until the tax was repealed. After March 12, when he set off on his walk, he never saw the Ashram again.

But here’s a thought, 85 years after that famous march to Dandi. There is a point of view that in 1947, all we did was replace a set of colonial rulers with a set of local rulers. We continued to be ruled; and we continued to be exploited. We gained political independence and the right to vote, but other freedoms, both in the economic and personal spheres, continue to be denied to us, just as the British denied them. Many of the laws that the British framed to suppress us, in the form of the Indian Penal Code, remain in place. If our freedom fighters, men like Naoroji and Gokhale and Rajaji and Patel were alive today, would they feel fulfilled at the India they saw around them? Would Gandhi?

When he reached Dandi, Gandhi picked up a fistful of salt in his hand as Sarojini Naidu, carried away by the moment, shouted “Hail deliverer!” She was right – and she was wrong: India still awaits deliverance.

Posted by Amit Varma on 12 March, 2015 in Essays and Op-Eds | Freedom | India


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