Thoughts on economics and liberty

Tag: Freedom First articles

Unbridled capitalism?

The following article was published in Freedom First, October 2008.

Sanjeev Sabhlok

This month I want to focus on a topic on which great confusion prevails in India: the issue of capitalism. I wrote to an eminent Indian economist seeking comment on my draft manuscript of The Discovery of Freedom ( Without yet reading the manuscript, he wrote to me that “completely unbridled capitalism has rarely been followed. I am not sure whether it should be followed. It needs an overarching architecture based on local culture, traditions, history and legal system, among other things.”

I though this response was unwarranted. My manuscript already discusses the institutions of freedom at great length. So that couldn’t possibly be an issue. We both agree that good institutions like tolerance, democracy and justice are crucial. Thomas Hobbes showed why we need a strong state to defend our life and liberty; capitalism is therefore founded on the rule of law and the enforcement of justice. But I find unwarranted and gratuitous the suggestion about not following “completely unbridled capitalism”. Since this perspective reflects widely held misconceptions, I thought it might be worthwhile to examine it more closely.

Whatever else is true about capitalism, this much is clear that never did John Locke, David Hume, Adam Smith, J.S. Mill, Ayn Rand, F.A. Hayek, or Milton Friedman advocate unbridled capitalism or freedom. It seems that socialists like Marx and Nehru have badly sullied the reputation of liberty. The socialists have repeatedly alleged that capitalism caters to so-called ‘capitalists’ and gives them unbridled powers to exploit the weak. But that is totally false. Philosophers of liberty have always insisted that freedom comes with responsibility and justice. Adam Smith opposed mercantilism and monopolistic industrial interests. David Ricardo wanted more competition and free trade. Adam Smith and J.S. Mill advocated labour unions to face the economic power of the owners of industry.

By repeating lies against liberty long enough, socialists have made it appear that the system of natural liberty encourages corruption and things like the sub-prime crisis. But what are the actual facts? Capitalism begins by looking at human nature. The fathers of capitalism, Hobbes and Locke, pointed out that since human nature is far from perfect, some people will always try to cheat, mislead, and misuse their powers. So if anyone cheats, then systems of justice should catch and punish the cheats. Thus everyone must be held equally to account and no one is to be above the law. In this manner, by ensuring all crimes are punished, capitalist societies are today among the most ethical on this planet.

Capitalism is also a system of continuous improvement. Lessons from events like the sub-prime crisis are quickly learned and such events prevented from happening again. Some events are complex and finding their causes can take time; but overall, capitalism is a political and economic system founded on democratic choice, law and order, and continuous improvement. And since the governance of capitalist societies is built on the system of checks and balances advocated by Montesquieu and Thomas Jefferson, the concept of capitalism being unbridled simply does not arise!

We know from history that the rulers of the West did not like capitalism one bit since it insisted on equal freedom for all. Many people like Locke, Voltaire, Burke and Mill had to fight the vested feudal interests to win freedom for ordinary peoples everywhere.

And so our quarrel cannot possibly be with capitalism. Our quarrel must be with socialism. In socialist societies, based as the spurious concept of economic equality, state-sanctioned corruption is the norm. After having worked in the Indian and Australian bureaucracies for a total of 26 years I can say with confidence that there is almost no corruption in the West today. On the other hand, corruption is endemic in socialist India, where not one politician is completely honest and few bureaucrats completely so. For very fundamental reasons, no society can run ethically on the ideas of socialism. But did this eminent economist express concerns about ‘unbridled’ socialism? No! For capitalism has become the customary whipping boy. Protect the criminal and point fingers at the saint: that seems to be the norm.

Consider and compare, for a moment, how life is defended in India and in the West. Employers in India are, for all practical purposes, unaccountable for the safety of their workers. Hundreds, if not thousands of lives are lost in India every year in preventable workplaces ‘accidents’, even as capitalist societies like Australia have astonishing low rates of worker injury. While working for the safety regulator in the state of Victoria I found that not only are safety laws in the West strongly focused on employer accountability, but negligence is punished severely. If I was a mine worker I would be scared to work in socialist India but would happily work in capitalist Australia where my life is well protected.

So who is really unbridled? Who is really immoral? Is it socialist India – where the governments are totally corrupt, where industrialists are gifted monopoly powers by the corrupt state, and where lives of workers are treated with disdain – or is it the capitalist West where governments wage a systematic battle against all forms of corruption and irresponsible behaviour? Clearly, it is not capitalism but socialism we must be afraid of.

It is time that India looks at the facts. We must not be afraid to use the system of natural liberty which was invented by the Englishman John Locke just because it was invented in England. After all, the West happily takes advantage of Indian thinking by using the number system we invented. So let us listen to what Locke said.

Freedom Team of India
Without security of life there can be no freedom. One of the strongest indicators of a free society is therefore the absence of organised killings of citizens. The endless spate of killings in India is telling us that we are not yet free. When Muslim and Maoist terrorists momentarily pause their mayhem, fascist Hindus appear on the scene to kill Christians; and so on… until it has become hard to distinguish what is happening and who is killing whom. Life and liberty are on the back foot, fighting for survival.

Our education system has clearly failed to imbibe the basic virtues of good citizenship. In a democracy those who have grievances should participate in the political process and change things they don’t like. If that doesn’t work, they can lodge their protest through non-violent civil disobedience. But there is a total absence of good leaders in India today to guide the people. In this situation, if liberals don’t unite to lead India then they or their children could well get caught in the crossfire of misgovernance. Why is it that in 1959 an old man aged eighty could start a major political party (Swatantra Party) and give battle for our liberty, but people today have given up without trying?

I would like to thank those who have written to me in support of the Freedom Team ( For those who have not yet got involved, I suggest that you to do so. Working together, we can defend life, liberty and the pursuit of happiness for everyone in India.

Contact Sanjeev at sabhlok AT yahoo DOT com

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Wake-up call for citizen-leaders

The following article was published in Freedom First, September 2008

Sanjeev Sabhlok

Last month I introduced myself to you and spoke about the need to organize politically. Not having a national liberal party in India is a major gap that must be filled, whether the party wins elections regularly or not.

Each generation has to fight for its freedoms. Gains made by previous generations can be quickly frittered away. For example, as a result of Nehruvian socialism we now have even less freedom than our 1950 Constitution said we would. In addition, our governance is in shambles; but without good governance how can anyone be free? If a business were to perform this badly, it would have been bought out by a competitor long ago, but countries depend on citizen shareholders to keep their governments on leash. If anyone was waiting patiently, so far, for Korea or Japan to bail out India, let me say that wont happen and is not desirable! The buck stops with squarely with us.

We can hark back to ancient Greece for lessons on how to become citizens. These people were natural-born leaders. Actively participating in civic affairs, they ensured that their leaders were accountable to them. Even with their small overall population, these citizen-leaders led to an outpouring of art, philosophy and science that was never to be seen again till the Renaissance. Being a citizen is therefore a very important role in a democracy.

I introduced you last month to the Freedom Team of India (FTI: see, a platform started earlier this year. FTI aims to bring together at least 1500 outstanding citizen-leaders who will, upon agreeing on a common strategy, contest elections by 2014. Only those willing to contest elections are being invited to the Team. For others, I have other activities to suggest which Ill momentarily talk about. FTIs goal is to form governments both at the centre and in the states, thus bringing good governance and freedom to India. But this will remain wishful thinking unless you, Indias citizen-leaders, take your countrys destiny into you own hands.

Why not have a Food Team?
Why care for liberty at all? Why do we need a Freedom Team and not a Food Team or even an Equality Team: alternative titles which may appeal more to the common man? While Freedom First is not the place to preach freedom to the converted, it may still be worthwhile to remind ourselves why liberty is the supreme good.

We care for freedom for many reasons, but particularly because it works. Poverty bothers us a lot. We know it is not good for anyone. Lack of education among poor children hurts our soul even more. We know that by failing to educate our children well we are effectively destroying their future. The good news, of course, is that freedom has done more for the poorest of the poor over the past 250 years than any other system of political organization. Erstwhile poor nations like England, USA, France, Australia, Japan, Taiwan, and South Korea, just to name a few, have become economic giants though free trade, free markets and good governance.

But freedom is also good because it encourages us to take responsibility for our lives. In doing so it leads unerringly to an ethical society. Capitalist countries are the most honest on the Transparency International surveys. On the other hand, socialist India and pseudo-communist China are hopelessly corrupt. Freedom also increases education and hence innovation in society. It reduces the demand for large families as parents spend time and money in educating their fewer children. And last, but not the least, freedom improves the environment.

Ideologies like socialism which put Equality on a pedestal are unnatural. Nature has designed us for great passions and deeds of competition and cooperation. No burden of attaining equality was put upon us. Our soul is built for success. If a 12-year old child were to tell me that his goal is to become only as rich as the average Indian when he grows up, Id wonder if that childs head was in the right place! We want to see great ambition in our children. We want them to aim for gold medal in every race. Even the thought of equality saps our energy.

Capitalism thus challenges us to be the best we can be. Nothing less is expected of anyone. Freedom sends a shiver of life and excitement coursing through our veins. Only if each of us aims for individual greatness will our nation collectively become great.

For all these reasons and more we must have the Freedom Team of India, not a whimpering, groveling, Food or Equality Team. Freedom is the best. It is the most basic need of our soul. And so lets have it right now! It is our birthright!

Lessons from July
Two incidents from July stand out for comment: the bomb attacks in Ahmedabad and the no-confidence motion in the Parliament. The rupees in Parliament incident brought great shame to India, confirming Indias reputation as a world leader in corruption. And we can also be sure that nothing pleased Pakistan and China more than to see India divided so badly even on a matter as important as obtaining nuclear technology.

The Ahmedabad bombings confirmed that the radicalization of youth by misguided religious fanatics of all denominations has now reached a tipping point. A group calling itself the Indian Mujahideen claimed responsibility, citing support from the Koran. Enlightened Muslims always emphasise that the Koran forbids the killing of innocents. Assuming that this is true, surely the great Muslim community of India can do more. Are all young Muslim children being taught the right things? And how about excommunicating terrorists and handing them over to the police?

At the same time, the police and justice systems in India are creaking with the weight of politicization, incompetence, and corruption. These problems are, however, readily fixable by adopting world-best models. Reforms are of the essence now. They will bring equal justice to everyone in India irrespective of religion.

For the medium and long run there is only one solution, though: to have strong, secular leaders, determined to punish those who kill or injure any Indian. That means level-headed liberals must rise and lead. Socialist and communal forces have not only destroyed our freedoms, they have brought India to the brink.

Freedom Families in each home
If you cannot contest elections, you can still do many other useful things. This effort cant go far without editors, organizers, planners, and finance and IT experts. Even the smallest contributions of time and expertise will add up into a formidable movement for freedom. Everyone must get involved.

You should start a Freedom Family by inviting a few young people for a cup of tea. Talk to them about the value of freedom and good governance. Aim to multiply these Freedom Families so each house is a node for one such family. Ask these Freedom Families to network with the larger movement for freedom through FTI and its leaders.

I look forward to hearing what you propose to do for your own country.

Contact Sanjeev at sabhlok AT yahoo DOT com

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Come on, liberals: Let’s change India!

Publications in Freedom First

I will publish my monthly article for Freedom First (published from Mumbai) on this blog to encourage wider readership. These articles are also available on the Freedom Team website at

Sanjeev Sabhlok

The following article was published in Freedom First, August 2008

Come on, liberals: Let’s change India!

Let me begin by acknowledging my gratitude to Mr S. V. Raju for offering me this valuable real estate each month to make my pitch on any subject of my choice.

My message is going to remain extremely simple, though. I want you! I want you to change the bad policy and corruption rampant in India. I want you to join politics. But I don’t want you to join politics alone. There is no point in doing that. We need a well-orchestrated and well-coordinated strategy.

India is fast becoming ungovernable as a result of six decades of bad policies and corruption. Corrupt Nehruvian socialists who have ruined India for sixty years are now besieged by rabid communal forces from within and without. The BJP, an offspring of Jan Sangh, which was an offshoot of the Hindu Mahasabha, is determined to impose an intolerant Hindutva upon us and take us back 2000 years. We are getting sick and tired of this corruption and hatred. We want peace and prosperity. We want to live as plain vanilla Indians, not as Brahmins, Christians, or Maharashtrians.

The full expression of India's potential needs a strong liberal voice at its helm. But liberals have remained in the political wilderness after the Swatantra Party disbanded in 1973. Today, the concept of freedom has no proponent at the national level even as the policies of the erstwhile Swatantra Party are being stolen by both major political groups. But these political groups aren't liberals; they don't understand freedom. Economic liberalization is not going to work without a suite of liberal policies. We need law and order, infrastructure, and equality of opportunity. Without these we will only get increased corruption and continuing poverty.

India was lucky to get a liberal Constitution. Subsequently, Nehru's advocacy of democracy – even as he dismantled significant parts of the Constitution – built for us the semblance of a liberal democracy. But we are fast becoming an illiberal democracy. Liberal democracies need liberals but Indian liberals are missing from the scene! We must challenge this drift into chaos. We must gain the people's mandate to govern India.

I appreciate that it has been a hard grind for liberalism in the last sixty years, given Nehru's advocacy of socialism. As a result, liberals today are a disheartened lot and can't seem to summon the will-power even to try to lead. But freedom never came to anyone on a silver platter. It has always had to be fought for and won by each generation. Today it is our turn to fight, irrespective of whether we win or lose.

I'd like to introduce myself at this stage. I was an Indian bureaucrat from 1982 to January 2001. Now I am an Australian bureaucrat. I had a science background before joining public administration which means I had no understanding of economics, political science or political philosophy. I therefore faced a steep learning curve when I started working. Corruption and decadence, inefficiency and waste, sloth and incompetence met me everywhere. I found that governments in India are designed to burn public money and destroy entrepreneurship.

It dawned on me that reform had to start from the top; it had to be political. It also dawned on me that I had to stop pointing fingers at my corrupt bosses and start taking responsibility for myself. The shame of living in a totally corrupt India and not doing my best to change things would haunt my ghost for eternity! Therefore, I, a layman of limited ability, had to try to do uncommon things, irrespective of whether I succeeded or not. Leading the nation, it struck me, is actually an ordinary duty of each citizen in a democracy. We must all become leaders if we are not to become dung beetles, fit only to bury our faces in cow-dung at the end of our lives.

But political reform was not a task to be attempted alone. I began looking into medium-term strategies. I moved to Australia in December 2000 and resigned from the IAS a month later. In 2004 I facilitated a week-long workshop of eminent liberals in Delhi. We agreed to support Sharad Joshi's Swatantra Bharat Party. I joined this party but left it in mid-2005 due to strategic differences. And so I started looking at the longer term, not in years but decades. We have to find hundreds of excellent people, else nothing will change. I started writing books. The first of these, Breaking Free of Nehru, will reach bookshops in a few months. The other one, The Discovery of Freedom, is an early draft. Please go to

To help these leaders assemble, I have started the Freedom Team of India at a temporary website: To join this team you must be a team player and possess infinite patience and regard for others. After the leaders assemble, we will work out a common platform, action plan, and leadership team. We won't organize before that. No point in making half-baked attempts.

In the coming months I will discuss a range of issues and respond to questions and comments. I look forward to working with you.

<span ;"="">Contact Sanjeev at sabhlok AT yahoo DOT com

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