Sanjeev Sabhlok's blog

Thoughts on economics and liberty

Greek thought, the harbinger of world liberty, has its direct source in INDIA

While revising my manuscript The Discovery of Freedom‘ (DOF) I could not but help noting how similar the view of Indian sceptics including Buddha, and Socrates were. And that Indians came earlier in historical time than the Greeks. So yesterday I had this question: did India influence Greece? A bit of reading from books at home and a bit of research on Google seems to have ‘solved’ the puzzle.

When, upon reading A Critical History of Greek Philosophy by W.T. Stace (MacMillan,1965) I came across his rather niggardly view on Indian philosophy, arguing that Indian thought doesn’t arise from ‘pure thought’ and that it is ‘poetic rather than scientific’ (p.15), I decided to investigate further. I have now found a recent American PhD dissertation (2000) that uses the most recent sources to firmly demonstrate that it was INDIAN scepticism that traveled to Greece through Persia and brought out the temperament of questioning that finally led to Socrates. I’ve extracted a short section from the dissertation below (the dissertation is publicly available). I encourage everyone to read the entire dissertation, if for nothing else but to learn more about the sophists and to understand the importance of Protagoras who may ultimately turn out to be more important in world history than even Socrates.

Does it matter to me whether humanity has benefited in the areas of mathematics (number system) and philosophy more from India than from, say, Greece? I’m not particularly fussed where the source is, India or Greece. These ideas belong to all of us. Humanity. No country owns them, at least not today. What I do want, though, is accurate attribution of sources. It won’t do to attribute the first seeds of rational thought in the world to Greece when these ideas arose in India, and were transmitted by Indians to the Greeks. I’m not a specialist in history so I won’t finalise my opinion on this issue, but I will note in DOF the strong possibility of Rahula’s research findings being true.


Extract from The Untold Story about Greek Rational Thought: Buddhist and Other Indian Rationalist Influences on Sophist Rhetoric, PhD dissertation by BASNAGODA RAHULA, found as PDF on the internet. [Copy on my server] [This is a conversion from PDF to text – a painful process with a lot of errors. A lot of manual editing, and references have been removed. They are all available in the original PDF].

General Signs of Indian Influence on Protagoras and Gorgias

Three factors may justify the possibility that the unusual resemblance of Indian rationalist thoughts to Greek sophist thinking was caused by a connection between the two societies. First, Protagoras, the alleged father of Greek sophistry, was given Persian education, an easy route to the access of Indian wisdom. During Xerxes’ invasion of Greece, Protagoras’ father, an extremely rich person in Abdera, entertained Xerxes and received the emperor’s permission to educate Protagoras under Magi. This report was supported by Herodotus’ notes that Xerxes, during his return journey, “stopped at Abdera and made a fact of friendship with them [people in Abdera].” As Untersteiner noted, Protagoras was a young child when Xerxes’ visit to Abdera took place, and Protagoras education under Magi could have been arranged for a later date (2). Based on the traditional practice of the pupil’s visiting the master, one may conclude that Protagoras later went to Susa and studied under Magi. This visit would have been more profitable for Protagoras since he would hardly miss Indian wisdom those days in the central part of the Persian empire. On the other hand, wherever Protagoras was educated, knowledge coming from Persia could have included Indian thinking since Darius had already accommodated, as the next chapter will elucidate, Indian wisdom in the Persian empire. Protagoras’ Persian education seems to be a strong support for his possible acquisition of Indian concepts in epistemology and other fields.

Second, Protagoras was the pupil of Democritus who was presumably benefited by a multitude of Indian concepts, including Buddhist concepts as his major source of influence. Philostratus was the first informant of Protagoras’ learning from Democritus,’ and this information can also be true, “concerning the intellectual development of Protagoras” (Untersteiner 2). Particularly, Democritus’ theory of knowledge seems to have enkindled a new interest in epistemological inquires among his followers, and Protagoras’ directions in the same field may have been guided by Democritus. Protagoras’ closeness in his epistemological studies to the Indian counterparts will be discussed later, but here it should be briefly stated that Democritus’ possible Indian influence could hardly leave no marks on his pupil Protagoras.

Third, Gorgias was the student of Empedocles, whose philosophical theories reflect his possible familiarity with Indian idealistic and rationalistic views. Laertius and Quintillian and some others reported that Gorgias studied under Empedocles, and there is no reason to doubt these reports. As Untersteiner indicated, Empedocles’ influence on Gorgias is “generally recognized by scholars” (92), and Gorgias’ particular interest in epistemology is a possible sign of this influence. It is probable that both Protagoras and Gorgias exhibited a similar interest in epistemology and both maintained skepticism towards metaphysical concepts since the teachers of the two sophists retained a particular interest in the same field.

The major aspects of sophist rational thought and their similarity with the Indian counterpart will be discussed in separate sections, but it seems apt to highlight here a unique flavor in argumentation entertained by Protagoras-the flavor for arguing for or/and against any topic-as a possible Indian derivation. Perhaps this hypothesis appears to be an overstatement since argument on probabilities is said to be of Greek origin. Nevertheless, a careful examination of the practices in Indian debating during the sixth century B.C.E. and comparison of those practices with Protagoras’ attitude towards argumentation justify the possibility of this hypothesis.

Interestingly, there was a group of Indian debaters namely Vitandavadins who roamed among all sorts of thinkers and challenged other views. “He [a Vitandavadin] had no views of his own but merely indulged in eristic for the purpose of securing victory in argument” (Jayatilleke 217). Even though the word Vitandavadin did not occur in the Sutta Pitaka, one finds numerous examples that during the sixth century B.C.E. these debaters frequented debating halls, parks, and other meeting places, challenging all sorts of views of other traditions, without maintaining any particular philosophy or theory of their own:

There are recluses and Brahmins who are clever, subtle, experienced in controversy, hair-splitters, who go about breaking to pieces by their intelligence [pannagatena] the speculations of others. Were I to pronounce this to be good, or that to be evil, these men might join issue with me, call upon me for my reasons, and point out my errors.’

These remarks suggest that those “recluses and Brahmins” were not those who held any particular view or theory but those who were indulged in debating rarely for the sake of defeating the opponents and establishing rhetorical power. Whatever concept or theory one held, those debaters opposed one’s position using their intelligence and verbal skill. This practice is farther confirmed by the sentence, “Some recluse or Brahmin is addicted to logic and reasoning.” Saccaka, who earned the description of “one who indulged in debate, a learned controversialist, who was held in high esteem by the common people” was, undoubtedly, one of them. The Majjima Nikaya has preserved a very important sentence that reflects his theoretical practice and skill:

If I attacked a lifeless pillar with my language, it [the pillar] would totter, tremble, quake; how much more a human being!’ Saccaka was more a demonstration of his verbal power than a theorist. Here, he has presented no theory, but simply boasts about his invincible rhetorical power. ‘Whoever he argued with, he defeated the opponent’s theory without insisting on a particular view of his own but only using his verbal skill (eristic) and argumentation (antilogic) that would suit to the occasion. The Samyutta Nikaya has provided “an eye-witness’s account of these recluses and Brahmins in action” (Jayatilleke 221). Kundaliya, a visitor to the Buddha’s monastery, told the Buddha that he (Kundaliya) would visit parks and frequent assemblies as a regular habit because he had found interest in seeing some recluses and Brahmins having being engaged in debates. The purpose of those debates was only to emphasize their own argumentation (itivadapa mokkhanisamsam) and to disparage that of others.” All this evidence indicates that debating for the mere sake of reflecting the opposition had become a prevalent practice, as well as a crowd-gathering entertainment, during the time of the Buddha. The topics reportedly argued about by those controversialists speak a volume of this peculiar practice of debating. Most of the topics were in pairs, representing the thesis and the antithesis of the same subject. The following is the first list of such topics given in Pali texts:

The fact that they were originally in pairs is confirmed by the remarks attested to one particular pair of topics:

1.The universe is eternal/The universe is not eternal.
2. The universe is finite/The universe is not finite.
3. The soul is identical with the body/The soul is different from the body.
4. The enlightened person exists after death/The enlightened person does not exist after death.
5. An enlightened person does and does not exist after death/An enlightened person neither exists nor does not exist after death.'” A more expanded list of thirty-one topics, all in pairs and each pair dealing with the opposite of the same subject as given above, is found in the Lankavatara Sutra.’ The fact that they were originally in pairs is confirmed by the remarks attested to one particular pair of topics:

The threefold world is caused by ignorance, desire, and Karma. The threefold world is not caused by ignorance, desire, and Karma. This pair too belongs to the Lokayata category of questions. (qtd. in Jayatilleke 53)

It is obvious that this development of questions in pairs echoes the practice of debating, in which the mere skill in argumentation was emphasized. Debaters such as Saccaka, whose primary interest was “displaying dialectical skill and defeating their opponents, regardless of the nature of the arguments used” (Jayatilleke 219), would probably argue one day in favor of the infiniteness of the universe and the other day against it, depending on the position of his opponents. Even though some debaters actually held some theories of their own, rhetorical skill was the main weapon that they employed to attack the opposition and defend their own views. The important point here is that in India there was a predominant and widespread debating practice in which both the proponents and opponents vehemently debated on the thesis and the antithesis of the same topic, adducing equally powerful arguments.

In Greece Protagoras was the first rhetor to introduce this kind of argumentation. Laertius said that “Protagoras was the first to say that on every issue there are two arguments opposed to each other.” Clement repeated the same statement, saying that Greeks said, “Every argument has an opposite argument,” following Protagoras.” Seneca wrote, “Protagoras says that one can argue equally well on either side of any question, including the question itself whether both sides of any question can be argued.” Not only did Protagoras introduce this “eristic argument” as remarked by Hesychius,” but he also demonstrated the truth of his theory, arguing “by the method of questioning, a practice he originated.” Protagoras also “wrote down and prepared disputations on notable subjects.” Thus it is evident that Protagoras held his two-logoi theory as one of his major concepts, having introduced it, practiced it, and written treatises on it.

This theory of argumentation seems strikingly similar to the popular Indian concept of arguing for and against the same topic. Just as the topics used by Indian debaters consisted of the direct affirmation and the direct negation of the same statement, Protagoras’ topics also consisted of pairs of two extreme opposites. Similarly, the field from which these questions were drawn seems to be exactly the same for both Protagoras and the Indian debaters:

Protagoras, when once the existence of ‘two logoi in opposition to each other’ was discovered as inherent in all reality whenever one tries to consider it abstractly, translated this properly of the metaphysical world into contradictory pairs of opposites, making of it a precept for argument; that is to say, he must have demolished by dialectical arguments and with a certain systematic severity all the principle concepts created by Reason, beginning from the problem of God in order to pass on to the others. (Untersteiner 35)

Notably, Protagoras’ “contradictory pairs of opposites,” as Untersteiner has stated above, did not originate in traditional Greek rhetoric; rather, it originated in metaphysics, the field from which the Indian debaters also selected their topics. There is the possibility that Protagoras learned this practice from Democritus, who could have been very much exposed to the Indian way of debating while he was in India. One should also wonder why Protagoras was not exposed to the same theory of argumentation while he was receiving his Persian education.

A controversial situation might arise from this disclosure since the argument about probabilities has long been accepted as an essential, inherent characteristic in traditional Greek rhetoric. It should be repeated, however, that the origin of systematic persuasion in Sicily was a little over two decades old when Protagoras came to Athens, and whatever arguments on probabilities that might have existed in Sicily before Protagoras began his rational persuasion in Athens was probably in legal discourses. Contradictory references to the existence of argument about probabilities in Sicily would make this second assumption even more doubtful. Plato, referring to the example of a weakling’s assault on a strong man, indicated that Tisias argued about probabilities in legal discourses. However, Aristotle cited the same example to suggest that Corax, not Tisias, argued on probabilities in legal speeches. In contrast to both, Cicero, relying on another Aristotelian source that is now lost, remarked that Corax and Tisias prepared only a handbook for the civilians to regain their (civilians’) lost property from the fallen tyrants.” Another alleged reference is that Corax “developed a tripartite scheme of oratory to help the citizens speak in the assembly” (Kennedy, Art of Persuasion in Greece 59). However, no argument about probabilities was ever mentioned in this scheme of oratory that was invented at least a decade after the origin of judiciary discourses. If whatever persuasion on probabilities ever achieved any importance in Sicily before Protagoras entered upon rational argumentation in Athens, that would probably be only in legal speeches.

As noted in the introduction, when Gorgias and Tisias visited Athens about three decades after Corax and Tisias prepared the earliest handbook on legal discourses, Protagoras had already enkindled an interest in debates, eristic, and antilogic, using his two-logoi theory. He introduced “the method of attacking any thesis,” conducted debates, and earned the nickname “master of wrangling.”‘ His two books—The Art of Debating and Contradictory Arguments in Two Books—may further authenticate his intention and interest in this field. This rhetorical situation, which apparently had no roots in Greek culture, connects, both in appearance and content, only to the debating habits practiced by the Indian debaters during the late sixth century and the early fifth century B.C.E.

The difference between Protagoras and Sicilian Gorgias may be marked by the latter’s overemphasis on the invincible power of language, ft is apparent that Gorgias had developed this attitude towards language before he visited Athens in 427 B.C.E, as an ambassador to Leontini since his sensational speech in Athens against the impending attack on Leontini by Syracuse bears witness to his confidence in the power of language and his demonstration of that power, “Encomium on Helen” farther clarifies his attitude towards language, “Speech is a powerful lord,” which affects the mentality of all sort of people,” Words are like magic and drags that cause unbelievable changes in individuals,’ While Protagoras maintained that antilogic and eristic would empower the opposing argument, Gorgias mainly held that the power of the language itself might determine the skill in persuasion.

One may observe a close similarity between Gorgias’ emphasis on the power of words and the Indian debater Saccaka’s assertion of the same, Saccaka, as quoted above, maintained the invincible power of words, giving his own exaggerated skill of frightening a lifeless pillar with his words. Based on the awareness of the highly competitive debating background during this time, it may be assumed that there were a host of Saccakas in India, maintaining the same power of words with some variations. This widespread emphasis on the power of language might invite one to investigate a possible Indian influence on Gorgias, who also asserted the same power of words. Overemphasis of language as a tool to beat the opposition in India and to convince the opposition in Sicily was determined by the demands in each society, but the invincible, almost magical power of words might have originated from the same source.

One important clue available to suggest a transmission of this concept to Gorgias is the possibility that Gorgias’ teacher Empedocles had known about the debating practices of Saccaka and of similar Indian debaters. The discussion in the previous chapter revealed that at least two contemporaries of the Buddha-Ajita and Kacchayana­ had held the theory of elements exactly in the same form as Empedocles held it, providing strong support for Empedocles’ possible borrowing of that theory from the Indian sources. Both Ajita and Kacchayana were themselves debaters, but the vital point is that they both were engaged in debates with Saccaka:

Saccaka is made to say that when he joined them [the six famous debaters including Ajita and Kacchayana] in debates, they evaded in one way or other, shifted the topic of discussion, and showed signs of irritation, anger, and displeasure. These are among the recognized ‘occasions for censure,’ and their mention here implies that Saccaka was victorious in these debates. (Jayatilleke 219)

So the probable assumption should be that, if Ajita’s and Kacchayana’s theories of elements reached Empedocles exactly in the same form, the Greek thinker should also have heard about the debating power and practices of Saccaka, the more famous figure than the two theorists of elements. The rest is understandable. Even though one may not hear Gorgias say anything about Empedocles, it is probable that Gorgias came to know about the invincible power of words from Empedocles. This assumption will be farther justified in the next section of the present chapters when Gorgias’ theory of knowledge is evaluated in the light of Indian skepticism.

The lives of the other sophist thinkers except of Critias are surprisingly obscure; little is known other than the reports that several of them were the pupils of either Protagoras or Gorgias. Nothing is known about Thrasymachus other than that he came from Chalcedon in Bithynia and lived in the second half of the fifth century B.C.E. Hippias was a contemporary of Socrates, but his life is unknown except Suidas’ report that Hippias learned from virtually unknown Hegesidamus.’ Antiphon the Sophist was mixed up with two other Antiphons, and, despite having a certain collection of his writings, his early life remains unknown.

Despite the unavailability of biographical details about these sophist thinkers, strong similarities exist between their thinking and Indian thought. Particularly, the common Indian theory of knowledge and the Buddhist theories of sociology and ethics bear an undeniable resemblance with the thoughts of Prodicus, Antiphon, and Critias. Perhaps, Protagoras’ and Gorgias’ inquiry into epistemology paved the way for the rest of the sophists to continue with the same investigation. All sophist thinkers generally maintained a close relationship with other sophists. Several of Platonic dialogues have shown that sophists gathered together and held conversations together. It is possible that the younger sophist thinkers learned from more honorable Protagoras and Gorgias, whose teachers were the possible borrowers from Indian sources.

Addendum: I made the following entry on Wikipedia on 23 March 2010, but my experience with them is very poor and it is that they will likely delete it. So be it. Let this information stay on my web page.

Indian thought as direct precursor of the Sophists

Basnagoda Rahula, in his PhD dissertation (December 2000) entitled, ‘The Untold Story about Greek Rational Thought: Buddhist and Other Indian Rationalist Influences on Sophist Rhetoric’ (Texas Tech University), provides evidence on the influence of Indian philosophy on Protagoras, the founder of sophistry. In particular, “a careful examination of the practices in Indian debating during the sixth century B.C.E. and comparison of those practices with Protagoras’ attitude towards argumentation justify the possibility of this hypothesis.”

Further readings

Accidental compilations of references that may be useful to me for further investigations if time permits:

1) India in early Greek literature: by Klaus Karttunen: here and here

2) India and the Greek World; A study in the transmission of culture by Sedlar, Jean W.



3) Early maritime linksIndian Economic & Social History Review, Vol. 31, No. 1, 65-88 (1994)

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A liberal policy position on higher education

This article was published in the September 2009 issue of Freedom First.

Liberals generally agree that a government has little justification to deal with matters beyond its (first-order) core functions of defence, police and justice. However, most liberals do make a provision for a government to provide infrastructure and reasonable equal opportunity (second-order core functions), subject to the government doing only to the minimal extent necessary to achieve basic objectives in these areas.

If we agree that these areas establish the boundaries of the role of a government, then there is no scope for government funding of higher education, apart from regulating the sector to prevent fraud. Indeed, tertiary education institutions are fishing nets to ‘catch’ the society’s most talented. Students attending these institutions will, almost invariably, become wealthier than the average taxpayer. Subsidising them would amount to deliberately increasing inequality in society. And there are no natural rights for anyone to be provided higher education by the state, just as no one can demand that every tennis player should be given an ‘equal opportunity’ to play in the Wimbledon.

Privatisation, but good regulation

The government must therefore completely exit higher education. Institutions owned by government should be sold off broadly on the pattern of school privatisation discussed in the July 2009 issue of Freedom First, and converted into for-profit corporations with their shares traded on the stock market. With that, the tax revenues saved from higher education could be diverted to the maintenance of law and order and provision of good school education: areas which are in deplorable condition in India today.

But selling off IITs, IIMs, medical colleges and other government-owned tertiary institutes (including vocational) does not mean de-regulation. Apart from accreditation to prevent fraud, some steps must be taken to assure standards (but not to set standards – a task that must be left to the sector to resolve). Such accredited tertiary education institutions would have full operational independence, with the ability to set their own salary and scholarship structures to attract distinguished academics and talented students. They would set their own fees and determine the type, quality and mix of courses to offer. As a result, only that much higher education will be provided as the market needs and is willing to bear.

What about meritorious but poor students?

The issue of funding poor, meritorious students to attend these courses can be easily managed on the pattern of the HECS scheme in Australia (noting that HECS has imperfections that will need to be overcome). Under this model, any Indian citizen admitted to an accredited institution could apply for and get a low interest loan from the government for an amount sufficient to pay their fees as well as cost of living and books. This low interest rate loan (at a rate about one per cent higher than the variable Reserve Bank rate to meet transaction costs) would be repayable over, say, 15 years. Repayment would be through the income tax system after the concerned student gets a job and starts earning an amount greater than, say, three times the poverty line.

As a result, all meritorious students in India could easily pursue higher education and repay the fees when they start earning a sufficient income. Much of this can be outsourced to the private sector, and private competition in the loans market can be encouraged, thus ultimately allowing the government to exit this area completely.

Preventing non-repayment of loans

What if upon completing their studies some students leave India permanently, not repaying the loan? (In a way this has already happened with engineering and medical students who have simply left India. A comparable education in USA would have cost $100,000 at least). The way out of this would be two fold. One, agreements could be made with countries with similar schemes, to ensure that these educational loans are repaid.

At the least, a system to monitor departing students can be established whereby students leaving India even temporarily would need to furnish a bank guarantee equivalent to the amount of their outstanding loan plus the present value of costs incurred by taxpayers on their school education. Such a bank guarantee would be forfeited should they fail to return within a stipulated time. Students not carrying proof of such a guarantee would be turned back at the immigration check. Of course, this will require linking the loan system with the tax and immigration systems through a well-organised national ID and database.

Raising funds for these loans

How should the government raise the funds needed to issue these student loans? In brief, from the market. This is not as hard as it may sound, since most tertiary-educated workers will earn well, making it relatively easy to recover loans through the tax system. A rolling debt model would be followed. Government-guaranteed bonds (underpinned by these future tax system repayments) can be issued for the amount of student loans expected to be made. Prudent investors and banks will readily buy these risk-free bonds.

These bonds can be retired after ten years using repayments from students most of whom would by then have started working. Not all bond repayments will be met from student loan repayments alone, given potential mismatches of timing between student earnings and the redemption of the bonds and so some fine-tuning of the loan cycles would be needed. In addition, the residual costs of administering this programme, including the difference in interest costs between the effective rate of bonds and the

Bank rate, and a write-off for defaults, will need to be charged to the taxpayer, amounting to a (small) subsidy for higher education. This subsidy can be arguably justified as an unavoidable cost to fund meritorious poor to study as well as – for those who take a utilitarian approach and believe that higher education generates positive externalities – to facilitate innovation in society. But these arguments are vague and problematic, and the government should endeavour to get out of this as soon as practicable.

Common objections to such a system

Won’t this system lead to astronomical fee levels? No, because of competition in the sector. Students will generally prefer quality education at the lowest possible cost, forcing the fees down. Even the best universities will need to attract high quality students to retain their reputation, and they will have to bid for them through discounts. Will the liberal arts be ousted from the teaching agenda in this free market? Not really. Good private sector corporations recognize the commercial value of a liberal education. Arts graduates often do better in modern businesses than technical graduates because innovation, entrepreneurship, leadership, people management and strategic thinking have little to do with technical skills. Therefore the market won’t kill off philosophy, noting that there will be increasing opportunities for philanthropists to fund such disciplines.

I believe that if such a system is implemented, India will get at least a hundred universities of the standard of Harvard University in a few decades.

Freedom Team of India

The Freedom Team of India (, now registered as a Trust, would have opened its bank account by the time this article is published, allowing you to contribute to its efforts even if you can’t join it as a member. [Note: this bank account has not yet been opened] In a few months the member category called Freedom Partner will be operationalised. Watch this space!


Barun Mitra's article on education First.


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Eliminating poverty – a liberal solution

(This article was published in the August 2009 issue of Freedom First.)

Sanjeev Sabhlok

The number of people living below the poverty line declines dramatically when even a few policies of freedom are introduced in a society. This has also been India's experience, post-liberalisation. The number is reduced considerably but there will still be some who continue to be below the poverty line. Such cases, some people argue, can be taken care of by private charities because of their belief that there can be no role for a government in directly doing anything about poverty. However, such is not the liberal view.

The liberal understands that poverty will continue to arise through random bad luck, bad decision-making, and a combination of both. The liberal realises that markets treats those who can't contribute economic value as outcasts, and charities have no capacity to reach out to the remotest corners of a vast country like India. Therefore, the liberal calls for an ongoing role for government in this area as part of equal opportunity. We need a social insurance program to identify the poor protect them from starvation.

It is important to emphasise that this 'social minimum', the product of the social insurance scheme, does not amount to coercive charity or redistribution of wealth, but is a safety net available to everyone should things go wrong. There are many other good reasons for having the social minimum which I have discussed in my draft manuscript of The Discovery of Freedom[1] (I invite your thoughts on this manuscript). Suffice it to note that while the liberal society vigorously protects us from coercive socialist redistribution, it also leads us to a humane society with its commitment to reasonable equal opportunity.

Need to top up the incomes of the poor

Milton Friedman proposed a solution to poverty through a negative income tax (NIT) model This is a direct solution where incomes of those living below the poverty line are topped up to reach the poverty line. (It is worth noting here that the poverty line must include an amount for private health insurance: l will outline in a separate article how free markets can provide health in the free society). The NIT must, of course, be linked to a requirement to work condition so that able-bodied persons do not get paid if they avoid work. The best way to ensure that no frauds take place is to keep the poverty line extremely low, barely sufficient to ensure extremely frugal dignity; no more.

But instead of this simple system, for decades our socialist model has churned out one poverty 'alleviation' programme after the other, purportedly to reduce poverty but, taken together with a range of subsidies, intended to steal taxpayer wealth and transfer it to corrupt politicians, bureaucrats, and even the middle classes and rich farmers. Very little of that money has ever gone to the poor.

While exploring the NIT idea in the year 2000, I made many rounds of the Finance Ministry and Planning Commission to collect data and talk to senior people there about it. My preliminary calculations suggested that if the money spent on subsidies and poverty alleviation programmes was directly transferred to the poor, there would be no poverty left in India. (Here I may add that even if, upon further analysis, it is found that NIT is not cost-neutral, relevant funds must still be found since banishing poverty is vital for a free society.)

Thus there has never been a shortage of funds for poverty elimination in India. What has prevented that from happening is the keen desire of Indian socialists to line their pockets and pay off particular constituents such as rich farmers. Socialism has thus sustained (and at least partially created) poverty in India for six decades.

How the NIT would work

The NIT would be implemented in seven simple steps:

1. Identify those who may need assistance during a given year, preferably in advance of the actual requirement, such as on estimated income based on previous year's income tax returns (all families would need to lodge returns).

2. Find how much is needed to meet the gap between expected income of those identified in step 1, and the poverty line. This gap should be small, for even the poor earn above acute starvation.

3. Impose a tax (insurance premium) on the community sufficient to meet this gap. In early stages, money can be borrowed against future revenues since poverty will d rop significantly after policies of freedom are introduced. This way, the tax burden can be evenly distributed over a number of years.

4. Transfer the precise amount identified in step 2 directly to those identified in step 1 through an automated, fortnightly payment into their bank account (with women in a family getting half the amount).

5. At the end of the year, use the income tax return to automatically adjust what was paid out. For overpayments a refund could be obtained or future payments reduced.

6. Audit those receiving NIT funds to ensure they have been participating in the market to the best of their ability.

7. Once implemented, stop all poverty alleviation programmes and abolish all policies that try to equalise people's incomes or subsidise anyone.

I have provided more details on this system in my book, Breaking Free of Nehru and elsewhere. Many of the above steps can be outsourced to the private sector, with checks and balances ensured through independent government regulators who would be responsible directly to Parliament for the integrity of this process. Basically, we'll need to use independent systems and not our existing bureaucracy. Also, for every one per cent permanent reduction in poverty, MPs and MLAs should get a permanent one per cent increase in their base salary. That would get them involved in this process and also link their pay with performance. Similar programmes have been working in the USA (earned income tax credit) and Australia (family benefits scheme) for decades. We can use the lessons learnt in these countries to avoid their excesses and pitfalls.

When I discussed this idea with Swaminathan S Anklesaria Aiyar and others in 2000, I found myself facing numerous objections in response to which I wrote a 14-page paper (available on the internet[2]). I'll just touch upon one issue here, related to the difficulty of delivering steps 1 and 2. During 1986-88 I created a fully computerised and validated survey of household income of all registered voters in selected villages in Assam. I believe that by using the technology available today (e.g. photographs of villagers' houses), it should be possible to identify the poor and estimate their incomes with far greater accuracy today. Therefore I am convinced that it is feasible to determine incomes for each poor household in India with a fair degree of accuracy (particularly since the concerned person would, be personally liable for the veracity of their income declarations).

Freedom Team of India

Finally, a quick update on the Freedom Team (FTI, On 1 July 2009 FTI became a legal entity, as a Trust created in Indore. An outreach effort was thereafter launched with a number of talks and discussion. These received extensive media coverage.[3] FTI is thus now well established as a forum for liberal leaders. I invite you to consider joining or otherwise supporting the team.




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A list of internet material not posted by me

This blog post contains things I chance upon on the internet that purport to have been written by me but are not. Also, my warnings and actions taken against impersonators, from time to time. 

1) Blatant impersonation on The Economist website

See this (latest).

Someone is impersonating me on The Economist's website, e.g: and (more problematically):

This is identity theft with likely criminal intent to harm my reputation. I've reported to The Economist both times. No action so far. This identity thief is using a name similar to mine ("Sanjiv Sabhlok" – note the spelling error) but gives  MY ACTUAL home page as his home page! THAT'S SHEER FRAUD. To this identity thief let me say only this: "I WARN YOU THAT YOUR ACTIONS ARE 100% CRIMINAL. DESIST AT ONCE."

From now on (21 January 2011) I've set up a Google alert to let me know if such fraud occurs again.

2) Impersonation/ possible namesake on The Indian Express website

FM MUST BE KIDDING By: sanjeev sabhlok | 07-Aug-2009 Reply |Forward The two day strike of bankers has been successfully concluded today ? FM is expected to be more aware than this. Let us advise him that if the demands of striking bankers are not met, there will be indefinite strike very soon for which FM will be fully responsible. The IBA has gone back from its earlier offer only due to FM's instructions. Please do not misguide the Parliament and the people of India. Give the bankers what they rightly deserve.

NOTEMy warning against impersonators does not apply if your name is GENUINELY the same as mine: (I didn't realise that there was another Sanjeev Sabhlok in the world [Addendum June 2010: There is actually another Sanjeev Sabhlok – I found him on Facebook I think]

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