An “I, Pencil” moment

Banker Friend writes in:

I have been working this week on a credit limit for a customer of ours who export most of their production to Africa where its used as raw material by local FMCG industries. The application will run into trouble with Credit Acceptance because the customer’s repayment record has not been faultless.

So probe. Why hasn’t his account been faultless? Because he was late on an export bill payment.

Why was he late paying the bill? Because his export customer, a distributor in Ghana, didn’t have the cash to pay the full amount, and delayed paying our customer.

Why didn’t the customer’s customer have the cash? Because his customers, the manufacturers in Ghana had temporarily stopped manufacturing and weren’t buying raw materials any more.

And why is that? Because there have been severe power cuts in Ghana and industries have had to cease production.

Not that I like having to answer even more queries from credit, but I find the fact that a power shortage in Ghana creates extra work for me in India to be weirdly delightful.

It reminds us (me and Banker Friend) of one of our favourite essays, Leonard Read’s “I, Pencil.” If you haven’t read it, please do, it is magnificent, and illustrates the power of freedom better than whole books on the subject.

Reading about libertarianism

There’s a feast of good reading on libertarianism available at the moment: the latest issue of Cato Unbound has a lead essay by Brian Doherty mapping the growth of libertarianism through the last few decades and speaking about its prospects. In a reaction essay, “Libertarians in an Unlibertarian World,” Brink Lindsey explains why he feels optimistic despite the fact that:

As an intellectual movement, libertarianism has come a long way. As a political movement, however, we’re still pretty near square one.

Tyler Cowen’s essay, “The Paradox of Libertarianism,” takes a contrarian view, which is responded to superbly by Arnold Kling and Bryan Caplan. Also read Tom G Palmer’s essay, “Libertarianism or Liberty?” in which he explains the perils of confusing “the promotion of liberty and the promotion of libertarianism.”

The greatest insight of all, though, comes from a fine essay, “Horror and Freedom,” in which we are informed: “Cthulhu is the State.” Immense trembling ensues.

(Links via separate emails from Confused, Kuttan, Gautam Bastian and Nitin Pai.)

Free markets and democracy

Imagine you want to buy a cola. But you’re not allowed to just buy the cola you want. Instead, all cola drinkers in the country get to vote for a cola brand of their choice. Whichever brand the majority chooses, that’s the one you’re forced to drink. So if you like Coke and the majority votes for Pepsi, too bad. Coke will have to wait four years.

That’s the difference between democracy and free markets.

Now, obviously I’m not suggesting that we all have the MP we want and have separate governments for each of us. That would be absurd, if enjoyable to watch. The point I’m making is this: people who praise democracy for empowering individuals with the power of choice should like free markets even more, for offering that empowerment to a much larger degree. But too often in our country, votaries of democracy rant against free markets. Isn’t that strange?

Orkut and censorship in India

Orkut has been at the heart of many storms in India (1, 2, 3, 4). Well, no doubt facing the threat of being blocked in India, they have agreed to cooperate with the Indian government to catch people who post “objectionable material on the web.” Indian Express reports:

Following a meeting between representatives of the site and the Enforcement Directorate last month, the Mumbai Police and Orkut have entered into an agreement to seal such cooperation in matters of objectionable material on the web.

“Early February, I met three representatives from Orkut.com, including a top official from the US. The other two were from Bangalore. We reached a working agreement whereby Orkut has agreed to provide us details of the ip address from which an objectionable message or blog has been posted on the site and the Internet service provider involved,” said DCP Enforcement, Sanjay Mohite.

The big worry here is what Mr Mohite means by “objectionable message or blog.” As I’d outlined in my WSJ Op-Ed, “Fighting Against Censorship,” free speech is coming under sustained attack in India, and giving offence is too often treated as a crime. I hope the Indian government won’t misuse this to act as a cultural or moral police: India isn’t China, and should have nothing to fear from free speech.

There’s more on this subject on Slashdot and Boing Boing.

(Links via separate emails from Neha Viswanathan and Kunal.)

Update: Brazilian authorities also get special access to censor Orkut. Details on Boing Boing.

Update 2: Google responds. (Scroll down.)

Singur: Media bias or media ignorance?

ATimes of India report begins:

Protests against Bengal’s industrial revitalisation could receive a new fillip after the suicide of a 62-year-old cultivator, an organiser of the Krishi Jami Raksha Committee (KJRC) in Singur, who lost nearly an acre of land to the Tata Motors project.

This is either dishonest reporting or shoddy journalism, and I shall give the benefit of the doubt to the reporter and assume that it is the latter. The protests at Singur are not against “Bengal’s industrial revitalisation” but against the forceful appropriation of land by the government. As I wrote in an earlier post on eminent domain and Singur, it really does not matter if the farmers got compensation: if they did not want to sell, it is theft.

Now, eminent domain might be justifiable as a last resort for matters of public use, such as building roads, but it is outrageous when it is applied to take land from poor farmers and give it to a rich industrial house. The irony here is that Tata would probably have been willing to negotiate with the farmers for the land directly, but by law, farmers aren’t allowed to sell their agricultural land for non-agricultural purposes. Yes, that’s right: even if Tata was willing to talk to the farmers and negotiate with them, and farmers were willing to sell, it would have been an illegal transaction. So Tata had no choice but to go to the government, which, of course, is not into negotiating, and simply took the land by force.

I entirely agree with Shruti Rajagopalan when she writes here that the fundamental right to property, revoked in 1978, should be reinstated in our constitution. An “industrial revitalisation” is only sustainable when property rights are sacrosanct. Otherwise it’s a mockery.

On rave parties, victimless crimes and shooting the messenger

All the newspapers today are full of the “rave party” that was busted by cops near Pune yesterday. It is a party that I might well have gone to in my youth (I never did drugs, but I did like to rebel), and I feel sorry for the kids who’ve been arrested for activities that harmed no one. It is a pity that so many victimless acts are treated as crimes in our country. If I want to snort a little of whatever it is kids these days snort, what business is it of anyone else? Unlike cigarettes, where bystanders can be hurt by passive smoking, most recreational drugs don’t even harm anyone else.

But then, who cares about individual freedom in this country?

An aside: And do check out the following line in Categories FreedomIndiaNews

Newspapers and regulation

I spend the whole day at the Kitab festival, hanging out with pals like Jai, Chandrahas and Manish, meeting the litty sorts and bitching about them like bloggy sorts should. I was also part of a session on journalism in India, and found some eminent people expressing the view that journalism needs to be regulated in India. The logic: The Times of India is indulging in monopolistic practices, and, in Delhi, forming a cartel with the Hindustan Times. To ensure competition, there should be government regulation.

I couldn’t think of a worse solution to the problem. (Leave aside the issue of whether there really is a monopoly emerging; Mumbai alone has HT, DNA and IE on the stands, among daily broadsheets.) The industry actually needs fewer controls, not more. If foreign capital was allowed to pour into that sector, and foreign ownership of media was enabled, there would be more competition, and monopolies and cartels would be less likely. Consumers would be empowered with more choices. Competition is the best regulation.

Government regulation, no matter how well-intentioned to begin with, always ends up favouring the entrenched players, and making it harder for newer players to enter. The protectionist lobbying that some of the top media houses in the country have done to keep foreign media out is a good example of this.

In my clumsy, inarticulate way, I did try and make this point, but I’m a better blogger than speaker. Anyway, the high point of the evening was the presence of Bhaskar Das, the executive president of the Times Group, who rightly got assailed about how the Times of India sells editorial space. “We don’t do it on all the pages,” he argued. “Only some of them.”

The best moment came when someone asked Das why the ToI didn’t have the basic decency to indicate which articles were paid for. His reply:

“The clients wouldn’t like that.”

Joy. It reminded me of Devi Lal, in that it was honest, and shamelessly so.