The Nature of Extremism

At our most recent Atlas Sunday Meet in Bombay, I was asked the following question--in somewhat similar words:
"Your view seems very extremist to me. Why do we have to look at extremes--Communism or Capitalism; free markets or government control? Can we not strike a balance between full and unregulated economy and some amount of legitimate control?"

My response was:
In popular parlance, extremism has a negative connotation. Any extremist position is considered immature at best and evil at worst.
However, extremism really is an invalid package deal. Nothing in the concept permits your mind to evaluate the content of the extremist position. It simply demands--without offering any evidence to your rational faculty--that any position labeled "extreme" must be rejected ipso facto.
In one of my blogposts on Leitmotif, I had said:
Anything regarded as "extreme," "radical," "ideal," "fundamental," or "principled" is viewed negatively or with suspicion.
In contrast, concepts like "open-minded" have come to refer to the attribute of someone who is unsure or uncertain of every idea and belief, of someone who is open to any and every kind of persuasion, of someone who is unwilling or incapable of committing to any point of view even if it is true to the best of his knowledge.
To me, this modern connotation of "open-mindedness" is more akin to intellectual promiscuity.

Whenever one is confronted with the package deal of "extremism," one has to unravel the contents of the position to properly evaluate the merits of the idea. For instance, being an extremist or an absolutist about human rights--the right of every human being to life, liberty, property, and pursuit of happiness--cannot conceivably be wrong.
And that is what capitalism is: it is an extremist position in the political and economic context about human rights.

The Road To Economic Security

The Indian Government is hatching one welfare scheme after another. What is being forgotten is that we can’t legislate economic security into existence. If it were possible to do so, we would have been in a Garden of Eden long time back. Government plans have never lacked ambition. Yet, the history of India is full of government policies which failed miserably.

Rashmee Roshan Lall writes in The Times of India: “Nearly half a century ago, Ayn Rand would rail about the promise of an impossible "right" to economic security for all. This Russian Jewess, who fiercely held to the individualist and laissez faire capitalist beliefs of her adopted American homeland, denounced the "right to economic security" as an infamous attempt to abrogate the concept of rights. She argued that it could mean only one thing: a promise to enslave the men who produce, for the benefit of those who don't. In Capitalism: The Unknown Ideal, she wrote, "If some men are entitled by right to the products of the work of others, it means that those others are deprived of rights and condemned to slave labour."

What is being forgotten is that if economic security means anything, freedom is its foundation. It is ridiculous to think that security means granting the Government to initiate force against us. A man is free and secure when no one initiates force against him. All this might seem too simplistic to collectivized mentalities, but this insight involves a profound truth. When people are free from coercion by the Government they are free in the pursuit of economic security. It is not a sufficient condition, but it is a necessary condition to economic security. Whether a man achieves it depends on his efforts and capabilities. Freedom provides him with a way to achieve his goals. It also guarantees that the people who deal with him are free to act on their own judgment. Economic security needs competition in the economic sphere, and it is possible only under capitalism. Statism hampers competition through anti trust laws, taxation and various other regulations.

Man doesn’t need “Food Security Bill”, “Health Care Bill”, “NREGA” or “Right to Education Act” for economic security. All such legislations would only prevent men from achieving security, as these involve initiation of physical force. This can’t be done without taxing innocent citizens. Taxation hampers capital accumulation. It is capital accumulation which leads to high invested capital and in turn higher wages and economic security. All this is counterintuitive, but these are the facts we should understand it we are to achieve anything close to economic security.

Fall of the Berlin Wall, 1989

November 9, 2009, is the 20th anniversary of the fall of the Berlin Wall. The 150 km long Wall divided Germany, both physically and ideologically, for four decades. The fall of the Wall, triggered a political earthquake that signaling the demise of the communist tyranny in eastern Europe, and beyond. Following is my contribution on the occasion.

Communism was characterized by its contempt for private property, by the complete control of the state over the economy, and consequently, by its disregard for price as a signal of scarcity and guide for investment. Over the past two years, the foundation of global finance has been shaken, not because of any Marxian foresight, but because of the failure on the part of the capitalist world to appreciate the relationship between property ownership and valuation of that property.
To read, please visit In Defence of Liberty, "Berlin Wall 1989: Collapse of Communism - Lesson for Capitalism"

A version of the same article is published in the Financial Express newspaper, titled "Writing on the Wall", on Nov 10, 2009