INDIA IS COLLAPSING INTO A POLICE STATE: the ban on currency has inflicted tyranny on society and threatens future progress

Allahabad, India - Photos - Chaos erupts as currency is abruptly ...

Every single indication is that India is on an inevitable path to becoming a full-scale police state.  But the Indian police state will not be a Nazi-kind of system. Being inherently disorganized, undisciplined and lacking the capacity to plan and having no commitment to values, India will go the way of autocracies in Africa, the Middle East, Pakistan and Bangladesh. With GDP per capita of USD 1,604, India is already drenched in poverty, and wallowing in suffering and disease. Its potential is being destroyed by a tyrannical government. 

India’s Prime Minister announced on 8th November 2016 that Rs 500 and Rs 1,000 banknotes will no longer be legal tender. Linked are Part-IPart-IIPart-III, and Part-IV , which provide updates on the rapidly encroaching police state

Expect a continuation of new social engineering notifications, each sabotaging wealth-creation, confiscating people’s wealth, and tyrannizing those who refuse to be a part of the herd, in the process destroying the very backbone of the economy and civilization.

There are clear signs that in a very convoluted way, possession of gold for investment purposes will be made illegal. Expect capital controls to follow.   Chaos from people’s inability to access the money in their bank accounts is now spreading to the people who have so far been unaffected: the middle class.

This is a completely unnecessary man-made disaster, with the single aim of glorifying  Narendra Modi. 

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Indian prime minister Narendra Modi

Photo credit: Reuters 

Fracturing Institutions

Several petitions in various courts across India were immediately filed against the central bank, the Reserve Bank of India (RBI), for repudiating its IOU obligation which the currency bills represent, after Modi’s announcement on 8th November.

Several postponements later, the first hearing at the Supreme Court will likely take place on 5th December 2016, almost a month after the announcement of the ban. That does not mean that the court did not deliberate over “more important issues” affecting this wretched poor country.

It inter alia heard a petition and passed a judgment that makes playing the national anthem compulsory at cinema halls before the start of every movie, to promote nationalism. It also decreed that people have to stand up while the anthem is played. Henceforth one can be charged with sedition for not actively showing proper respect to the flag and the anthem.

Only someone very numb can avoid being horrified by this.

By law, the national anthem must henceforth be played in Indian cinemas before the start of a movie (as an aside, the anthem sounds actually interesting from a musical standpoint). Per the court’s order, everyone present muststand up while it is playing, so as to show proper respect. A failure to stand up can lead to an indictment for sedition, and sometimes it leads to offenders being berated and getting beaten up on the spot by irate nationalists. Happily, it is not yet mandatory to shout “Sieg Heil”. [PT]

Salaried middle class Indians — lacking moral instincts and incapable of imagining the concept of individual liberty in this extremely irrational society — are happy with the court’s decision. Insecure in their own skin, they prefer the comfort of the collective. They are the true source of this collectivist poison.

Indian courts are often referred to as “honorable court” and they very actively taking steps against anyone who shows the slightest of disrespect or challenges their judgments. So any direct challenge to their “authority” would be unwise.

Indian institutions have continued to deteriorate and mutate since the British left India. They are now merely hollowed out structures, devoid of any meaning or essence. We are in the final phase in which these institutions are crumbling, but in the meantime pomp and show are amped up to fool the gullible.

Indian culture in its immense irrationality does not provide the glue to even maintain these institutions, let alone improve on them. That glue could only have come from reason and moral instincts.

Anyone with a sense of history also realizes that India produced its finest leaders while it was still under the control of the British. It was during British rule that a cultural renaissance was happening in India, which ended with the emergence of the politicized, so-called independence movement.

Britain had set up institutions that allowed the ablest and the best to rise up. Not only is this no longer happening, but Indian institutions today actively suppress the ablest and the finest, as the recent judgment of the Supreme Court on the anthem exemplifies. This happens because most Indians euphorically support suppression of the individual both in theory and practice.

Institutions of liberty have mutated into institutions of slavery.  It is this inversion that is hastening the rapid decay of Indian society. India must eventually end up with institutions that reflect its underlying culture: a hugely fractured, tribal set-up, and very likely a disintegrated India. 

ruins

Without reason, institutions are destroyed by entropy

Photo via indiaspend.com 

The Forgotten Ones

Modi’s policies on demonetization are changing on a daily basis, sometimes more than once a day. This had to happen, for once you take up a mindless social engineering project of this enormity — killing 88% of monetary value in circulation overnight in a country where most people depend on cash — massive patch-up jobs have to be undertaken for the foreseeable future, helping India to degrade and sprint toward becoming a police state.

Alas, there are simply not enough patches available. India’s economy and society will are facing massive problems.  So far, it has been the poorest citizens who have suffered the most.

The horrendous struggles of more than 50% of the population, whose situation is worse than that of the average African on virtually every metric – who have no toilets, no electricity, no water supply, no access to even primary health care or basic education – will go unrecorded.

These poorest of India’s people are seen as nobodies. International organizations only have an interest in them in terms of aggregate headline figures — Gini coefficient, poverty level, population growth, etc. India’s middle class, while it might claim to be against the caste system, does not really see these people or account for them, as they are widely perceived as mere servants.

The western media, the IMF and many international economists — if they are paying attention to the current demonetization at all — are siding with the Indian government. It is as if the forces in favor of one-world government and their craving to control people’s cash and private lives have become their sole aim in life.

Obsessed with Keynesian economics, they think that all one has to do to increase wealth is to finely adjust the currency-printing machine. Most of these people have never studied philosophy, watched or understood human psychology, investigated society in its complexity outside of econometrics and statistics, or participated in running a business.

In their eyes, India is on the path of progress and institutional reform. From their perspective — colored by a rather simplistic, socialistic indoctrination — they are completely failing to see the situation in its entirety, particularly the massive suffering the ban on currency has inflicted on society and the inevitable systemic risks it has imposed on India’s future. 

Residents of Sanjay Colony, a residential neighbourhood, crowd around a water tanker provided by the state-run Delhi Jal (water) Board to fill their containers in New Delhi June 30, 2009. Delhi Chief Minister Sheila Dikshit has given directives to tackle the burgeoning water crisis caused by uneven distribution of water in the city according to local media. The board is responsible for supplying water in the capital

This is the water supply for the lucky ones. Many do not have even this.

Photo credit: Adnan Abidi / Reuters 

A Banana Republic in the Making

Our interest here is in exploring deeper undercurrents and what they mean for the future of India. Every single indication is that India is on an inevitable path to becoming a full-scale police state.  But the Indian police state will not be a Nazi-kind of system.

Being inherently disorganized, undisciplined and lacking the capacity to plan and having no commitment to values, India will go the way of autocracies in Africa, the Middle East, Pakistan and Bangladesh. With GDP per capita of USD 1,604, India is already drenched in poverty, and wallowing in suffering and disease.

In India, suffering and violence — not reason or moral instincts — bring stability. The concept of reason is conspicuous by its absence in Indian society. Such societies — as in the Middle East, Africa, and elsewhere in the backward part of the world — tend to go through a phase of violence before stability arises. If they could reason, they would be able to bypass the phase of violence.

The last thing anyone should do is to transplant such people into a different setting or to change the structure of their societies, as Modi has tried with the demonetization edict. People with tribal mindsets do not flourish, assimilate or evolve when transplanted or destabilized.

This has been the consistent experience from trying to enforce institutional changes in these countries through top-down mechanisms. In what way have Iraq or Libya become any better after their ruthless rulers were forcibly removed?

Societies lacking in reason also lack moral instincts. They are mostly oblivious to the pain of other people. In India, those from the lower castes — even though the formal caste system is crumbling  — do not register as human beings in the minds of members of the richer classes.

Scores of people have died because of lack of treatment, having to queue for too long in their old age, etc., but in the imagination of the salaried middle class they are mere numbers, all somehow contributing to the greater good.

But now, with the month of November having ended, salaried people are starting to get hit as well. The money that they thought was safe in the banks is no longer available. It is now their turn to join the queues and return home empty-handed, as the banks have mostly run out of cash. 

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The middle class is now starting to suffer as well, as cash in the banking system has been depleted

Photo credit: PTI 

inside-the-banks

Pensioners and salary earners will likely change their view about the demonetization policy as they increasingly realize that their pensions and salaries are now stuck in the banks 

Gold Bullion Is Now Effectively Illegal

Assaults on people’s private property and the integrity of their homes through tax-raids continue.  In a recent notification, government has made it clear that any ownership of jewelry above 500 grams of gold per married woman will be put under the microscopic scrutiny of tax authorities.

Steep taxes and penalties will be imposed on those who cannot prove the source of their gold. In India’s Orwellian new-speak this means that because bullion has not been explicitly mentioned, its ownership will be deemed to be illegal. Courts will do what Modi wants. Huge bribes will have to be paid.

Sane people are of course cleaning up their bank lockers. The secondary consequence of this will be a steep increase in unreported crimes, for people will be afraid of going to the police after a theft, fearing that the tax authorities will then ask questions. At the same time, the gold market has mostly gone underground, and apparently the volume of gold buying has gone up.

The salaried middle class is the consumption class, often heavily indebted. Poor people have limited amounts of gold. The government is merely doing what pleases the majority and their sense of envy, to the detriment of small businesses and savers. Now, the middle class is starting to face problems as well. This will worsen once the the impact of the destruction of small businesses becomes obvious.

India has always had a negative-yielding economy. It has suddenly become even more negative-yielding. Business risk has gone through the roof. Savers will be victimized. It is because of negative yields that Indian savers buy gold. They will buy more going forward.

Sane Indians should stay a step ahead of their rapacious government and the evolving totalitarian society, which are less and less inhibited by any institutions or values in support of liberty. 

Conclusion

India will become a police state, likely with the full support of most Indians. Nationalism will be the thread that weaves them together. But it is a fake thread, devoid of any value. Eventually, there will be far too many stresses in the system, whose institutions are already in an advance stage of decay.

India as it exists today is a British creation. With the British now gone for 69 years, it is an entity has less and less reason to exist in its current form. The glue of reason that the British have applied is flaking, and it is doing so rapidly under the catalyst by name of Narendra Modi. 

Jayant Bhandari grew up in India. He advises institutional investors on investing in the junior mining industry. He
writes on political, economic and cultural issues for several publications. He is a contributing editor of the Liberty magazine. He runs a yearly seminar in Vancouver titled Capitalism & Morality.

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