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Category: Liberty

Hayek’s HIMALAYAN BLUNDER – his advice to Anthony Fisher. There is ZERO correlation between think tanks and liberty.

As everyone knows, I admire Hayek’s work. That doesn’t at all mean that he is any kind of “god” to me. I mostly agree with his economics, but his politics was abysmal.

It is also important to note that my agreement with his economics is post-facto, well after I had formed my own views about economics.

Hayek’s work is never taught in any economics course (I had started my economics studies at the post graduate level – which is purely mathematical: and in the three continents I studied, there was no mention of Hayek in any standard economics textbook). My understandings about economics – including about the price system – were formed in almost total ignorance about the very existence of Hayek.

Yes, one of my teachers at USC cited Hayek’s article, The Use of Knowledge in Society – to illustrate his maths. I found Hayek’s article well written and around three years later became the first to get permission from the AER to publish it on the internet (in 1998). Although I had become incidentally aware about Hayek, I never had any time till well after my PhD to read his work. Even the formal course that I took to study classical economists did not include any consideration of either Mises or Hayek.

Despite all this, I hold Hayek in great esteem for his excellent understandings about law and economics.

But Hayek has proved to be a dismal failure and, indeed, a nuisance when it comes to the spread of liberty across the world. (Yes, I later came to know about Mont Pelerin, etc. but its influence on the real world is grossly over-rated).

The discovery and spread of liberty across the world for the past 330 years or so had little or nothing to do with Hayek. There are hundreds of illustrious names that contributed. ALL the real contributors to liberty have always been POLITICALLY active – e.g. Hobbes, Locke, Jefferson, Maddison, Franklin, Burke, Macaulay, JS Mill. See The Discovery of Freedom.

Hayek’s contributions to actual human liberty are next to minimal. When a person like me had not even heard about him (and I note that not a single professionally trained economics graduate from an average university in the West has heard about him) it is hard to conceive of Hayek as having advanced liberty in any meaningful way.


Hayek’s advice to Fisher has set back liberty across the world by decades. It has given a short cut to lazy “liberals” in countries like India to avoid engaging in the political process.

What was this advice? You can read about it here. I’ve also uploaded Hayek’s letter to Fisher here.

I first heard about this advice from Parth Shah when I first met him (in San Francisco) in 1999.

Now, since February 1998, I had unambiguously (and without any prompting from anyone – nor any awareness of others in India who might support liberty) chosen the path of political action. I wanted a party that is founded on the principles of liberty and good economics. I had no doubt whatsoever in my mind that this was an urgent necessity in India.

Parth said that, in accordance with Hayek’s views, he believed that there needs to be a think tank in India to promote liberty. We agreed to disagree on this. In my view then (and today) there can be NO change in India without political action, and think tanks are not the vehicle for political action.

Indeed, it puzzled me that Hayek (or anyone in his right senses) thought that Thatcher was in any way “CREATED” by Fisher. Thatcher would have mocked this utterly preposterous idea. Thatcher was a creation of her own understandings and beliefs – let this basic fact never be even remotely confused by anyone. It is fundamentally wrong to imagine any chain of causality between the IEA and Thatcher.

ALL change is ALWAYS political. And politics is about beliefs, commitment, social engagement and persuasion. It is extremely personal and human. No one can be a politician without fire in their belly, and that fire is not let by some random think tank article/s.

If Fisher had any real calibre, he would have transformed England politically in the 1960s itself. Of course, he chose the easy way out and started IEA. Running think tanks is a short cut, and can NEVER work.

Time and again I’ve been proven right on this fundamental point. The USA has tens of liberty-oriented think tanks, yet we get some really hopeless politicians (and policies) in the USA. That’s because doing politics is hard, and doing think tanks is easy. I find that a lot of self-aggrandising think tanks and academics run down American politicians in their writings, but these “better than thou” writers don’t understand how hard and complicated real politics is. They are therefore always unpleasantly surprised with real life. They are nuts to imagine that they can EVER influence American politics.

All the think tanks of the world, together, can’t put Humpty Dumpty together again. Doing that requires BEING in politics.

Empirically, there is ZERO correlation between think tanks and liberty. All ADVANCE IN LIBERTY HAS BEEN (AND WILL BE) POLITICAL. PERIOD.

My great regret is that although I’ve been involved in trying to get a liberal party up and running in India since the past 20 years, not ONE person from (or trained by) ANY Indian think tank has stepped forward to fight for political liberty in India. Most of these people have, instead, licked the boots of socialists and foreign donors for their survival. Foreign funding in matters related to liberty is particularly obnoxious.

Nonetheless, Parth seemed to be reasonably willing to try out a liberal political party idea – at least at first. In 2000, Parth let me hold a small meeting in his place where I discussed the prospect of India’s first liberal party being established (no, Swatantra was not a truly liberal party: let me make that clear once again).

Then in May 2002 he published an article saying that India does need a liberal political party. It appears he had realised by then that running a think tank was not going to work.

To a small extent he provided some assistance when, in 2004, the liberals (whom I’d invited to a 5 day workshop) supported Sharad Joshi’s Swatantra Bharat Party. But since then there has been close to zero contribution of CCS to any liberal political work. Parth’s write-up on a liberal party was clearly the typical hot air that such think tank “intellectuals” spout: meaningless nonsense. Lazy words.

For 20 years I have come across an abundance of “liberals” in India who have cited Hayek’s advice to Fisher as a reason to do NOTHING about liberty in India. Apparently, India doesn’t need a liberal political party and some random think tanks (that have ZERO impact on politics) can do the work.

That’s pure tripe.

Let this remain on public record – that HAYEK WAS FUNDAMENTALLY WRONG on this matter. Anyone who cites Hayek on this issue is fooling himself/herself and is NOT a supporter of liberty or doesn’t understand what it means. He/she should stay away fro me. Much appreciated.

Btw, I had written about what classical liberalism really means here – and it is ALL political.

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The fraudulent “liberals” of India who lick the boots of socialists and foreign donors for their survival

I’m keeping this for the record – and won’t add names here, but one day I will.

I’m sick to the bone of these FRAUDULENT LIBERALS of India who spend their entire life soliciting funds from foreign agencies or currying favours from socialist Indian political parties.

And they have the audacity to tell me they are following Hayek’s advice! What bogus nonsense. These bootlickers ought to be ashamed of themselves.

I condemn them outright – as enemies of India. Traitors to the cause of liberty.

See this:

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The struggle of Indian liberals to agree to a common political strategy

In 2000 I organised a meeting of five Indian liberals to consider a political option. That failed since there was no agreement on what should be done.

In 2004 I organised a 5 day meeting of around 25 Indian liberals to thrash out this issue. The topic was “India’s liberal political strategy”. The group decided to support Sharad Joshi’s Swatantra Bharat Party. Swatantra Bharat Party’s manifesto was genuinely liberal. And yet, Swantantra Bharat didn’t work out due to too many fundamental shortcomings – won’t go into detail (I’ve done that elsewhere).

In 2006, JP of Lok Satta the NGO (who enthusiastically prodded Sharad Joshi on, at the January 2004 conference to contest 300 seats but did not want to join at that stage) pulled out a separate political party from his hat, called Lok Satta Party. I had assumed its manifesto would be liberal but in due course I was to find it was essentially social democratic (again, refer to analysis on this blog) – i.e. with significant involvement of government in the affairs of the people. Nevertheless, given the failure of Swantatra Bharat, I thought the liberals should support JP. That ended when JP turned out to be an uncritical supporter of Modi.

Of the other liberals who attended the January 2004 meeting, one (Madhu Kishwar) became a fanatic defender of Modi – claiming that he was innocent in the killings of a 1000 innocent people in Godhra. I watched her later on TV and could not distinguish her from the standard rabid RSS fanatics.

One, Bibek Debroy joined Modi government’s Niti Ayog – and was recently found aggressively claiming that the Modi government is not stupid (in relation to demonetisation). Basically, he’s lost his liberal credentials and independence and effectively become a BJP member.

There were others, as well, at that meeting. Won’t go into details, but not one has actually supported any liberal political effort in their life after that initial enthusiasm of early 2004.

In the meanwhile, allegedly liberal outfits like Bharat Uday Mission, Jago Party and Navbharat Party came on the scene. I supported collaboration with each of these parties, but their manifestos were grievously lacking, and the latter two were merely one man shows. All these parties are now defunct. (Btw, Navbharat was essentially the reclaimed Professional Party- which had not the slightest liberal credentials).

In 2013, through series of freak events, I helped form Swarna Bharat Party. This party got registered in 2014. Having failed to see any genuine liberal leadership from Swatantra Bharat Party, Lok Satta Party, Bharat Uday Mission, Jago Party or Navbharat Party, it was appropriate that we finally had a liberal party that was genuinely liberal – the Swarna Bharat Party.

Since SBP was essentially very weak in 2014, I had supported RK Misra’s Navbharat Party – but Misra not only lost his seat badly, he was no liberal; and there is not the slightest evidence of the party’s existence now.

In the meanwhile, one Prodyut Bora left BJP a couple of years ago and formed the Liberal Democratic Party in Assam. I spoke with him at length last year: he is focused entirely on Assam. In the recent past he is considering the idea of a national liberal party. Unfortunately, his party has no clear manifesto and whatever little exists, is more in the space of social democracy – an interventionist state. Nevertheless, I have some hope from Prodyut Bora.

Well, 19 years after I first resolved that India should have a liberal party, there is effectively ONE such party in existence today – and that is Swarna Bharat Party (SBP).

SBP is an open platform for genuine liberals who can work together in a team.

I will talk more about the struggle (that is ongoing) – in a later post. Now got to go.

JUST ONE POINT, THOUGH: That all the failed efforts had one of the following in common: one-man shows, lack of clarity of ideology, inability to work as a team and foster open debate and discussion that is followed by voting.

My prediction remains this: that any effort apart from Swarna Bharat Party is guaranteed to fail.

SBP will remain the masthead of Indian liberalism well into the future. That, too, is guaranteed, given its approach, style and ideological clarity.

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Inheritance tax as a litmus test to distinguish socialists from liberals

I’ve written on inheritance tax earlier, but the topic came up again. My comments:


The only justification for any inheritance tax is based on the concept of equality. Only socialists worry about equality. Liberals worry only about poverty. It doesn’t matter how unequal a society is so long as there is absence of poverty and there is equal opportunity.

I won’t go into too much details regarding this ultra-socialist idea of appropriation, but note:

a) Inheritance tax is a tax on already taxed income. Except in the rarest of cases, such a tax is fundamentally untenable.

b) We live through our children, and while we may not work only for their sake, we have in mind the continuity of life that our children represent. Our children are us. Why would anyone labour if they can’t pass on the fruits of their labour to their children? This amounts to the destruction of the entire system of nature, and imposing values that are totally inconsistent with the way nature has progressed to date. If parents can’t look after their children and therefore ensure that their genes are passed on successfully into the future, then we are essentially saying that we disagree with life itself.

c) This idea is inequitous, because different people consume/save differently, and the incidence of this tax will fall on those the more prudent; and families that tend to die at an average age of 50 would be taxed more heavily than those that die at age 90.

Inheritance tax is a very good test of liberalism. I’d now classify your worldview as social liberal, willing to let people produce through the market but thereafter keen to confiscate their wealth at the earliest opportunity. This is actually a form of socialism, not liberalism.The liberal doesn’t ever talk about equality for that is none of his business. He also talks about tax only to the extent that it is required to fund government; not as a means to “equalise”/ “redistribute”. Any redistribution is anathema to the liberal.

I guess the general principle of the liberal is that he works with human nature, not against it (for that’s guaranteed to fail – and cause some severely perverse consequences). What is the most prominent thing we observe throughout history? That republics have repeatedly degenerated into kingdoms (based on the principle of inheritance), that a non-heritable varna system degenerated into a heritable caste system (with rationalisations of the sort given in the Upanishads), that there is vast and disproportionate effect of family on the prospects of someone in politics (one such family has continued unbroken since independence – 70 years! in an alleged “democracy”).

Any attempt to violate the laws of nature will be met with failure. This raw truth is something socialists dislike and will often (like Piketty) cook up bogus “facts” to excite us to support their continued attempts to violate our biology. As a species, we are very easy to excite, and particularly susceptible to envy. But envy can’t be the driving force for any mature public policy.

And once again I remind people about this short video in which Milton Friedman raises some serious issues with inheritance tax. It will, as Friedman says, destroy society itself.

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