Well done Yazad. The sad truth that reality has little to do with Hayek, Mises and the Free Market has finally struck home. They’re good reading, intellectually stimulating but have nothing to do with the ‘real’ world as you are no doubt discovering.

Kudos to you for NOT trying to blame the ‘government’s misguided policies’ for upper-caste violence against Dalits for it is nothing but base hatred that does not respond to any free-market incentives no matter how lucrative.

First I must make it clear that the views I present are my own, and Yazad to the best of my knowledge does not prescribe to everything that I believe in, and neither do I believe in everything that he believes in.

If you observe there is a strong correlation between caste issues and rural to transitional nature of the context of much caste violence. I think that though caste has been a problem for a very long time it is not one that will be able to stand up to the changing nature of the world. The particular question I wanted to set, and which I have evidently not framed well, is “How can the libertarian approach be used to extinguish such utter hatred, and in some sense free the unfree minds of both the aggrieved and the aggressors?”

In some sense the vocal and misguided policy of the government which tries and still fails to keep people in the countryside, could be prolonging the pains of Dalit discrimination. I say “could” in all humility because as Hayek prescribes in his Nobel Memorial Speech - “Pretence of Knowledge”, we can’t make any prediction about the future that will always hold beyond a shadow of a doubt. I think that is a far more realistic position than that taken by many Econometricians, and even more so by Policy Makers using Economic Methods in a rather slipshod manner.

> The assumption that you make is that all people belong to the species
> Homo Economicus - ie their decisions and actions are bound by rational
> economic thinking (or even irrational thinking) but with an economic
> undertone. In India and say Palestine you are dealing with a completely
> different species which for lack of a better word will label Homo
> Theocraticus - religious and cultural mores over ride all other
> motives and influence every decision and action.
>
> Racism in America did not end because of economic incentives to whites
> to treat blacks as equals but because of laws passed that forbid
> discrimination. Libertarians argue that a private restaurant owner has
> every right to post a sign saying “Dogs and Blacks not allowed” - they
> would argue that it s his restaurant and he has a right to decide who
> he wants to serve. They then argue the restaurant owner would
> eventually take down the sign because he would lose the business of
> blacks who would go to another restaurant that served them. Again they
> make the assumption that the restaurant owner is Homo Economicus -
> that economic incentives would force him to treat all his customers
> the same irrespective of their skin color. Reality tells us that this
> is far from the case. In fact the racist restaurant owner would rather
> go broke than serve a black person. You can tell this is true all over
> the world - the Indian news is full of stories of Hindu families that
> would rather kill their daughter than see her married to a Muslim.
>
> The only solution I see is to impose strict regulation. Force the
> restaurant owner to serve all his customers (even though he may not
> like it and may try to find some way to dodge out of it)It may not be
> very successful initially but his son will be less predisposed to
> racism (at least as far as business goes) and with each succeeding
> generation there will be less and less racism. America is a good
> example of that. Force integration of blacks into all white schools -
> mixing of all white and all black housing colonies - all heavy handed
> at the time but look at the result today. Black and whites live in
> relative piece - school kids have largely forgotten racial differences
> and no longer care if their friends are black or brown or white. They
> may still pick up some racial tendencies from their parents but
> because they are forced into an environment which puts them in close
> contact with other races - by the time they are 18, they make up their
> own minds. For e.g. a kid may continuously hear from his parents that
> blacks are not as bright as whites. But in school he will notice that
> the black kids get better grades then him. IF we were to adopt the
> libertarian policy that it is the schools choice to admit whoever they
> wish - you will have all white schools and all black schools and the
> fear and distrust will just propagate itself generation after
> generation.
>
> The libertarian argument that economics will eventually force the
> school to accept students of all colors is just not true. The school
> board is not concerned about economics - their primary concern is that
> their white kids not mix with blacks no matter what the cost.
>
> - Ck.

Dear CK,

As a matter of modality first, the racial mixing in schools in America, can be drawn down to the funding model of the Public School System. I think schools are funded partially by local taxes and subsidised by the state and the federal governments, so in that sense they are by definition public property to be run in line with public policy. It is still not clear to me how exactly public property should be treated, but I am guessing that since the power of attorney as it were is given by the public to the government, the government can act with certain proprietary rights over such public property.

I am not entirely sure that forcing people into situations is the only possible way of solving these problems, for instance there remains a major problem of urban inner city unemployment and crime and a subtle racism that persists. Inner city schools are mostly black since the populations in the area are largely black. I am certainly not aware of all the details of the problem, but crime I think is a major problem in inner city areas and more likely than not it is perpetrated by unemployed black youth. Also notice that the Black Movement in America developed and succeeded not because many whites including Presidents Eisenhower, Kennedy and Johnson were forced to believe in racial equality. But more so because they chose to believe in it. Possibly as a political expedient but I would not rule out the fact that many of their white supporters believed in the de-segregation policy quite possibly of their own free will. Of course their could well be some truth in the conspiracy theory that the acceptance of the Civil Rights manifesto was because of the Vietnam War and blacks make as good cannon fodder as whites and there are far more poor blacks willing to join the army.

I understand your argument against the use of the notional Homo Economicus or the Reasonable Man as is done in Law. But the question in Palestine for the large proportion of the population seems at least vaguely to be one of a threat to their jobs, and land, traditionally land has been viewed as the prime store of wealth, and in agrarian economies it continues to carry at least some of that weight. Notice, that despite the construction of the wall to separate the Jewish and Palestinian areas, people continue to pour across the border everyday for their jobs in Israel, which means that Israelis seem at least willing to give them jobs, though maybe the Israelis need them as well to do work. There is a disaster in the making here, because the state is doing the reverse of what you prescribe it should be doing, it is actually segregating the two sides.

Unless you create some sort of International Police State that derives its values from a Liberal-Social-Democratic mindset, I seriously doubt that it will be able to address all the problems that exist in this world. Then again, that is calling for a non-representative benevolent authoritarian state, because representative states will tend to harbour at least part of the biases of their constituents. I think the Austrian Critique of the state should not be disposed of so lightly simply because the proposals of a more omnipotent state - that stand on the other side of the pavilion as it were - are far more dangerous.

Nonetheless, it still troubles me that Caste is such a large issue in the rural areas, though in the urban areas it seems to exist very subtly but not in your face. Religion is the new issue of Urban India, and to some extent it can be explained away by the Upheavals-during-development Theory forwarded by J. Bradford DeLong, he claims (in an article in the Economic Times a few weeks ago) that Hindutva is similar in nature to Fascism and is part of the process through which the old order reconciles itself to the new. The idea at least seems plausible, but does not in anyway take away from the brutal reality of communalism or casteism.

Here again the government has played a seemingly counterproductive role. Jaswant Singh declared when he became FM, that his goal was to keep the rural population in rural India. Either one could view this as a policy initiative that aimed at bringing home to the hinterland, the benefits of Urban concentration, or as rhetoric aimed to appease some vague interests in cities and villages, that would like to see the current situation persist. But in many ways that is running counter not only to the conventional wisdom about development, but also counter to the example of all other societies that have attempted to transit into a “developed” stage. Cities are very important and they are in fact drivers of innovation, invention and all those other nifty things. So why has state policy been running in the opposite direction for so many years, and failing even at that, as we observe the proportion of population in Urban India rising.

I have a theory, which needs some testing. The State has shown exceptional prowess at identifying the wrong variable as causative and has addressed inordinate effort at trying to alter it. The reasoning could possibly go this way, we have a large population, that is a big resource, we need to create jobs, we need money to create jobs, we don’t have enough money, we can’t create jobs, we have too many people, what should we do, let us reduce the number of people we get in the future… Whereas the primary problem is the creation of jobs, the focus has been shifted to the reduction of population growth. In the developed economies the reduction in population growth was a result of greater urbanisation, greater capital investment and greater wealth, we are trying to up the ante in the developing world somehow by reducing population before we increase incomes. The problems to be addressed must be increasing incomes - not reducing population, looking at new ways to create work - not new ways to get people to control their wishes and urges to have more children.

I think Hayek and his ilk made a very important insight. No matter what the state does, people still have the capacity to exercise choices even within constrained environments; these choices are not 100% predictable. So any system that is created without taking into consideration the fact that these choices can run in any direction, and not necessarily in line with the assumptions of the designers of that system, is bound by that one flaw to fail, sooner or later. The most (not perfect even by a long shot) adequate system dealing with choices seems to be the market which is essentially nothing but a system that intermediates between, the act of making choices and the realisation of goals.

Thanks
Gautam

Also notice that the Black Movement in America developed and succeeded not because many whites including Presidents Eisenhower, Kennedy and Johnson were forced to believe in racial equality. But more so because they chose to believe in it.

You are right Kennedy and Co. did choose to believe in racial equality but a quick persusal of the history books will reveal that the Black Movement succeeded because the government appointed Federal Marshalls at every bus depot and deployed the army to escort black children to all-white schools. There was heavy resistance at first but today there isn’t.

As a matter of modality first, the racial mixing in schools in America, can be drawn down to the funding model of the Public School System. I think schools are funded partially by local taxes and subsidised by the state and the federal governments, so in that sense they are by definition public property to be run in line with public policy. It is still not clear to me how exactly public property should be treated, but I am guessing that since the power of attorney as it were is given by the public to the government, the government can act with certain proprietary rights over such public property.

In addition I’d like to point you to Thomas Sowell’s review of a book called “Losing the Race”:

In a recently published book with the double-meaning title,Losing the Race (and the subtitle, Self-Sabotage in Black
America), Professor McWhorter argues that most black studentsdo not work as hard as white or Asian students, partly because the culture that they come from fails to give as high a priority to academic achievement and partly because many of their peers regard academic striving as acting white.McWhorters arguments are fuller and more subtle than this summary can be, but that is the gist of it.

So even though ostensible elimination of inequalities in access to education has been effected, Blacks are still not able to take full advantage of the facilities into which they were escorted two generations ago under armed guard. So then there will be demands for affirmative action in the workplace and so on.

Read more by Sowell here. He has some interesting things to say about the Civil Rights movement, including the fact that the greatest material improvement in the standard of living of blacks took place between the 1930s and the 1950s, rather than after the Civil Rights movement as is popularly presumed.

and on of his favourite quotations…

Everybody has asked the question. . .”What shall we do with the Negro?” I have had but one answer from the beginning. Do nothing with us! Your doing with us has already played the mischief with us. Do nothing with us! If the apples will not remain on the tree of their own strength, if they are wormeaten at the core, if they are early ripe and disposed to fall, let them fall! I am not for tying or fastening them on the tree in any way, except by nature’s plan, and if they will not stay there, let them fall. And if the Negro cannot stand on his own legs, let him fall also. All I ask is, give him a chance to stand on his own legs! Let him alone!

–Frederick Douglass

I am getting the feeling, that reservations and other affirmative actions are more the result of some guilt carried by the better off, than any real requirement or demand of the downtrodden and disadvantaged. As the saying goes two wrongs don’t make a Right.