Every actual state is corrupt. Good men must not obey laws too well.
-Ralph Waldo Emerson
CONTENTS:
0 The Rule of (Bad) Law
By John T. Wenders
0 The Consumer – Victim of Statism
By Aslam Effendi
0 Letters to FreePakistan
0 Letters from the Press
0 FreePakistan News Briefs
THE RULE OF (BAD) LAW
By John T. Wenders
I am more and more convinced that one of the major obstacles to clear thinking is the tendency of debate to slip into the obscure world of slogans and clichés--words of unexamined content. This is probably part of humans’, unfortunate, collectivist nature--the tendency to deal with concepts in a way that is inconsistent with the underlying elements that make them up.
For some time conservatives have elevated the term “The Rule of Law” to one of those feel-good phrases that is supposed to evoke approval. While originally meant to convey the idea that a framework of laws is necessary to encourage voluntary social interactions, now the phrase implies just the opposite--that government, acting through statute and administrative law, is necessary to direct human activity. This inconsistency comes down to a distinction between good and bad law--a distinction between law that encourages voluntary, productive human interaction and law that coercively regulates such behavior. To see this, let us back up a little.
How can I get someone to make me better off? There are only two ways. The first way is to offer that person something in exchange: you make me better off and I’ll make you better off. And if
both of us agree to the exchange, then we each must judge that we are each better off by the exchange. Voluntary exchanges are productive of human well being.
The second way is for me to take something from another by threat, coercion, or brute force. No matter how you package it, this is theft, or slavery, which is the same thing. Such activity is not
productive because I am made better off by making someone else worse off. This activity is involuntary and merely redistributes human well-being.
What system of law encourages productive activity? Self-production aside, since production can only result from voluntary associations among people, the key is to make sure that all human associations are indeed voluntary. Hence, one should prevent all involuntary associations, all of which are, at bottom, theft.
On the positive side, since voluntary economic associations proceed via voluntary exchanges of goods and services, such exchanges are really an exchange of the private property rights of these
goods and services by mutual agreement. Hence, productive law defines and protects private property rights. Without a clear definition and enforcement of private property rights there can be
no voluntary exchange and no economic activity.
Further, since the nature of what is being exchanged is often complicated, not immediately apparent, and not simultaneous, agreements to exchange must be well-defined and enforced.
Hence, productive law provides a mechanism for the enforcement of contractual agreements.
In summary, the definition and protection of property, including one’s person, and the enforcement of contracts between consenting and competent adults, are the subject of productive law. Further,
and for the same reasons, a law of fraud, torts, and nuisance can be productive. So can national defense, which deals with these issues internationally. Such productive law mostly coincides with
the common law that evolved in the English-speaking world.
But productive common law has been largely over-ridden, and extended, by statute law--law enacted by legislatures. Statute law usually does not enable and/or increase productive activity: it
is almost entirely redistributive. Statute Law makes some better off at the expense of others, depending on the vicissitudes of politics. What we have now is not a Rule of Good Law, law that
enhances human well-being, but a Rule of Bad Law, law that coercively makes humans worse off and/or some better off at the expense of others.
So what we need is not a Rule of Law, but a Rule of Productive Law.
[With due permission from the author.]
THE CONSUMER – VICTIM OF STATISM
By Aslam Effendi
[Exclusive to FreePakistan. Not to be reproduced in any form without prior permission from the author. Aslam Effendi has authored three books which will be published both in English and Urdu by Alternate Solutions Institute, Lahore. For Details read “Aslam Effendi – A Free Marketeer in Pakistan” in FreePakistan Newsletter # 7]
During the 20th century, 200,000,000 people became the victim of state violence and lost their precious lives. But even more people became victims of another type of state tyranny and that is
tyranny against consumers by denying them the many benefits from free trade.
It is an unchallengeable truth that free trade benefits manufacturers, buyers, sellers and consumers; but when the state controls the economy or interferes with the economy, all parties suffer except a few who control trade for their own economic benefit or the benefit of their cronies under the cover of statism. This means that 100 per cent free trade is never possible as long as the system of statism exists on this planet. However, those countries with less free trade restrictions benefit more than those countries with more trade restrictions.
Statism has divided trade into two sections – one section is domestic trade and the other section is international trade: this is indeed unfortunate, for in trade there is no such thing as domestic trade or international trade, all trade is one because the whole world is one market. And when the whole world is treated as one market, the consumer has a big choice to buy the quality items at the price that suits him from any country that could meet his requirement. Similarly, manufacturers could import those items that they need for production, thus enabling them to make good quality items at the most attractive rates. Free trade could also benefit manufacturers by enabling them not only to import good material for manufacturing good things but also inviting labor from those countries where labor is cheap. This would not only help to reduce the price of the products they produce but also provide jobs for millions.
Free trade doesn’t mean bilateral trade or trade between two countries with the blessings of the state. Genuine free trade means free trade with all the countries on this planet without any political and economic restrictions. There is so much talk about the world being a “global village” but in reality industrialists and businessmen are imprisoned within the artificial walls of so many states scattered like cancer cells throughout the planet.
Let me give a few examples of how statism raises the price of various items artificially making the consumers the worst victims of economic exploitation. States protect those domestic industries that
are producing substandard items and thus deny consumers to buy similar items, far cheaper and of better quality, from other countries. The state protection of inefficient industries has the blessings of those in power and who have their own economic interest in protecting such dying industries.
So many industries die even before they start because of bureaucratic restrictions: for example, in Pakistan an industrialist has to deal with over 50 different unproductive government departments run by bureaucrats who are no better than parasites. So many industries are killed by the tax department; and those that survive are taxed heavily, the burden ultimately falling on the shoulders of the unfortunate consumers. The customs check posts charge custom duty on certain items that raise the price of imported items ten times above the market rates.
Those businessmen who, at great risk of their lives, provide consumers with certain banned items are dubbed as “smugglers”; their goods seized and many are imprisoned, although in trade there is
no such thing as “smuggling”, because when God created this planet He did not mark it with artificial frontiers. Denying the consumer the right to buy certain items, with his own money, is the worst form of state tyranny.
Politicians and bureaucrats, under the umbrella of statism, talk about world peace, brotherhood of mankind; about the world having become a global village; about poverty alleviation; but all this is
empty talk as long as consumers become victims of state tyranny; all this is empty talk as long as consumers are denied the benefits of free trade and a one world market.
Letters to FreePakistan
Your newsletter is so good, I hope that it is getting wide circulation. There are many organizations in the US that would be interested in supporting your activities. I am sending this
to Louis James in hopes that he will use the free market net to give your organization more exposure, if he isn't already.
Ken Schoolland [Hawaii, USA]
As always, I enjoy reading your "Free Pakistan "Newsletters. You doing a great job,
Best
Franklin Cudjoe [Ghana]
Letters from the Press
THE CAR SCAM
[Editorial Daily The News Lahore]
Minister for Industries faced stinging criticism in the National Assembly on Tuesday
over the inflated prices and delayed delivery of locally assembled vehicles which is allowing a
middlemen mafia to further rip-off the buyers. The issue was raised by the treasury back-benchers,
the opposition having walked out as usual, and included charges of a collusive protection of the manufacturers at the cost of the consumers. The minister vehemently denied any wrongdoing and hid
behind an unconvincing supply-demand mantra and the job-creation benefit of local manufacturing.
A task force had been created, he said, to report to the cabinet.
The allegations and the explanation notwithstanding, the fact of the matter is that the issue is
being agitated in the media for a long time without any apparent action by the ministry. In fact,
Prime Minister had recently issued a public direction for the price of locally assembled vehicles
to be lowered. Almost instantly, the minister found it fit to declare that this
could not be done. Nothing was heard thereafter from the government until the furore in the
national assembly.
There are three main aspects of the problem: the pricing of the locally assembled vehicles, their
quality and the delivery period. If it is a simple supply and demand issue, it can be solved by
opening the market to imports. If the local manufacturers are not over-charging or selling shoddy
products, they should not only have no objection but ought actually to enjoy an advantage over
the imported vehicles. If they have an objection, as they obviously do, then all is not well. In that
case, even job-creation cannot be an excuse for allowing an unchecked consumer rip-off. In any
case, if the middlemen can give instant delivery then the supply is obviously there and only a
collusion somewhere is ripping off the buyers.
As for the minister’s precious task-force, the treasury legislators questioned its bureaucratic
composition and the absence from it of representatives of the public and the consumers. Unless
this very valid objection is addressed immediately, the minister is more likely to be saddled with a
wishy-washy report. While the debate in the National Assembly was specific to the vehicle
manufacturers, other cartels are also manipulating the market to reap undue profits. This was
admitted by federal finance minister in a recent seminar and a promise made to combat
the menace by strengthening the Monopoly Control Authority. When this might actually be
done, is unknown. In the meantime, the consumers will continue to be ripped-off.
One reason such issues of immediate public importance are being neglected is the failure of the
opposition to take the government to task. Its anti-LFO (legal framework order) strategy of
desk-thumping and walking out is making life easier for the government and difficult for the
people. Quite clearly, the government and the opposition both need to spare some time from
their game-playing to defend the public interest.
CAR PRICE SCAM
[Shakeel Akhtar, Rawalpindi]
Never before in the history of Pakistan daylight robbing of the customers with impunity has been
seen as is now happening in case of the new cars — over-priced by the car assemblers and sold by
their dealers on hefty premium. Much less a serious problem of this nature was created by scooter
dealers in 1961. Instead of constituting a task force to give more time to the dealers to make black
money, President General Ayub Khan immediately reduced duty/taxes on scooters and introduced
an Open General Licence (OGL) scheme which permitted a common citizen to order the import of
a scooter through the concerned importer. The problem was not only solved within no time but the
scooter hoarders and black marketers were seen almost begging the prospective customers to buy
scooters from their stock at reduced prices.
So far, an impression exists that the new cars sale racket cannot go on for almost a year now
without connivance of the government. This impression needs to be removed at the earliest.
I hope the worthy president and the prime minister will immediately order examination of the
aforesaid OGL scheme, and decide a remedy instead of waiting for a report of the task force
comprising federal secretaries who should have recommended a remedy long before if they were
honestly performing their assigned duties to serve the people of Pakistan. [The News Lahore]
MATTER OF SUPREMACY
[Syed Amer Ali Shah, Abbottabad, Pakistan]
In some countries of the world the constitution reigns supreme in others the parliament. In Pakistan
the Supreme Court reigns supreme as it can declare unconstitutional acts constitutional and it has
also delegated the power to make amendments in the constitution to a person not otherwise
authorised to do so. [The News Lahore Edition]
ONE BRAVE MAN!
[Lt Col (r) M Afzal Sadiq, Attock, Pakistan]
An MNA has moved a privilege motion in the National Assembly against an SHO for
misbehaviour. The MNA decided to go to the police station at midnight for some urgent piece of
work (nature not specified in the newspaper). What had made the MNA to knock the doors at the
police station at midnight? Was the matter so urgent that it could not wait for the next day. The
MNA should have phoned IG Police rather than visiting the police station. The possibility is that
some pressure may have been exerted which the SHO may have resisted. We should not forget
that the VIP culture still exists and our politicians have been misusing their authority and meddling
in the affairs of the state machinery. Let the inquiry go into the depth of the incident. The high ups
in the police must protect the interest of the subordinates if they are right. In the meantime one
must admire the courage of the SHO not to yield to undue pressure (if any).
[The News Lahore Edition]
PROFESSIONAL TAX
[Waqar Ahmad Khan, Abbottabad]
As per my poor knowledge professional means engaged in some profession and according to comprehension only living beings can be engaged in some profession. But in wisdom of excise and
taxation department of NWFP, vehicles can also be professional as they are collecting professional
tax with annual token tax of private vehicles. I do not question their connotation of professional tax
but may I dare ask them why authorities at Abbottabad are collecting R 200 per vehicle and in the neighbouring district of Haripur Rs100 per vehicle. Any wise reason or justification the honourable minister of excise and taxation NWFP you have learnt in the holy book of taxation?
[The News Lahore]
LET CHANNELS COMPETE
[Liaquat Khattak, Peshawar]
Pakistan seems to be projecting its hypocrisy by banning Indian TV channels on cable. On the one
hand it is entertaining delegations of goodwill and trying to restore relations with India under US
pressure and on the other it bans the air-waves. If Pakistan TV channels cannot compete with
Indians, they should better pack up. Look at the ban on imported cars. Our Suzuki-Toyota Mazda assemblers are enjoying the ban and the higher ups fattening their balances. Pakistan government
should not get involved in a double policy which will lead it nowhere.
If Indian channels provide vulgarity (which I am a witness they do not) what about HBO and Star
films and games channels. Kissing and love making are learnt by the youth and children. Can our
PTV commentators, comment on this when they say that children ask their parents about ÒNo
phairays’ in a marriage in Pakistan. I think it is better to learn the Hindu culture than to get your
children trained in the art of kissing and love making through western TV channels. Please shun
hypocrisy, compete and allow everyone to work. Only competition will lead you to success
closing your eyes like a pigeon when it sees a cat will lead you to death. [The News Lahore]
DOUBLE STANDARDS
[Hassan A. Qureshi, Islamabad]
Federal Minister for Information recently appeared on programme on Geo
TV called "Capital Talk". He along with the Chairman of PEMRA were very strict in talking
about the lifting of the ban on some Indian entertainment channels. However, in another
programme of the same channel called "Aik din Geo kay saath", when the minister was asked
about who his favourite actor or actress was, his immediate reply was "Rekha" and according to
my knowledge he was talking about the Indian actress.
I would like to tell the minister that since very few people watch Pakistani movies due to their
low standard, therefore, many people also have their favourite actors and actresses belonging to
the neighbouring country. So I demand that if the federal minister can watch his favourite
showbiz personality then why not the general public? The ban on the entertainment channels
should be lifted, because our entertainment channels are also running in India. The ban should only
be on the state run channels which in both countries are unable to provide quality entertainment.
[The News Lahore]
VISIT TO PTCL HQ
[Syed Shabi ul Hassan Shah Kazmi]
PTCL is supposed to be a Facilitator working on Behalf of PTA and sorting out problems of the
Investors and business associates but it was shocking to see the attitude to people over there. All
the employees from clerks to executives not only showed a cold shoulder to our requests but there
attitude was also humiliating. Lunch break is supposed to be of 2 hours over there whereas, we
were not able to find people on their seats till 4:30 PM.
In addition we were made to find our case files as all the filing system is in disarray. One has to
pursue his case personally as customer services person did not know about the processes of
PTCL. The director finance was unable to decide the exact financial position of the case forwarded
by SECP. If the affairs of most profitable Industry are run in this manner we should not
complain about other Industrial units of Pakistan. [The News Lahore]
THREE STEPS TO RICHES
[Shahryar Khan Baseer, Peshawar]
"Three easy steps of making extra money for WAPDA employees.
Step 1. Find a simple home with one or two air conditioners running.
Step 2. Take out the ground wires of the newly installed meters, having no outside shell or cover
for protection against such acts.
Step 3. Ring the bell and threaten the house owner of dire consequences for this "power theft", if
the owner doesn’t pay up some ‘compensation’ right away."
Extracted from the latest "How to...” manual for employees. [The News Lahore]
STARING MEN!
[Shahzia Said, Islamabad]
I would really like to know whether staring at women is a national past time of Pakistani men? The
women can be dressed in sleeveless shalwar kameez, jeans and a t-shirt or a shuttlecock burqa, but
the men stare at the women from head to toe as if they have never seen a woman before in their
life! I always wonder that don’t these men have mothers, sisters and daughters at home ? How
would they like it if the tables were reversed? Of course the Pathans just murder such men and
that’s that for them, but what about the other population? What in the world are women
supposed to do? Just stay at home or bear the lecherous stares of these lecherous men? You tell
me, dear readers! [The News Lahore]
FreePakistan News-Briefs
THE FIRST EVER PRIVATE SECTOR AIRPORT
The work on the Sialkot International Airport is expected to be completed by the next year and
the private sector hopes that this Rs.1420 million project will help enhance the $600 million
exports from this city to over $2 billion besides saving more than a couple of billion rupees
annually through traffic and cargo handling.
GRAFT CASES INCREASE BY 770 %
According to the official figures, the registration of graft cases has been increased by 770% across
the Punjab province during the last 17 years, i.e. from 1985 to 2002.
CHECKING THE TAX EVASION
The government is considering beating the tax frauds by acquiring large-amount electricity and
gas gill from the relevant authorities to detect understatement of sales by big businessmen.
PAPAAM CLAMORS FOR PROTECTIONISM
An ad in the newspapers reads thus: ‘Let us not become a nation that snatches defeat from the jaws
of victory! The members of PAPAAM are deeply concerned about recent news items
recommending the import of built-up cars into Pakistan. As the best performing industrial sector
of Pakistan, we provide direct or indirect livelihood to over a million people. During the last fiscal
year, we helped achieve an unprecedented growth in exports of auto parts, saved over US$700
million in foreign exchange and contributed over Rs.30 billion to the national exchequer. Are we
going to let unscrupulous vested interests snatch the fruits of our enterprise and emerge victorious?’
SHOULD CARS BE IMPORTED?
The federal finance minister has invited proposal from Pakistan Association of Automotive Parts
and Accessories Manufacturers (PAPAAM), deadly against the import of cars, to examine the
possibility of allowing import of Completely Built Up vehicles.
CONSUMER ASSOCIATION FORMED
A Consumer Association of Pakistan (CAP) has been formed by prominent citizens of Karachi to
protect the rights of Pakistani consumers.
SUPREME COURT DISSATISFIED WITH VAGUE LEGISLATIONS
The Supreme Court has observed that our legislators sit in the most comfortable air-conditioned
offices and make ambiguous legislation which cannot redress the problems of a common man.
EMPLOYERS’ RIGHT TO SACK EMPLOYEES
The Lahore High Court has ruled that there were no check on the rights of an employer to terminate
the services of his employee on the basis of his personal evaluation, decision and wisdom.
GOVERNMENT AND COMMON LITIGANT EQUAL BEFORE LAW?!
The Lahore High Court has observed that the government and the ordinary litigants were equal in
the eye of law.
FOREIGN INVESTMENT HALVED
Foreign investment in Pakistan halved during the first quarter of the financial year 2003-04 as
against the same period last year.
PEMRA REVISES TARIFF
Pakistan Electronic Media Regulatory Authority (PEMRA) has announced revised tariff for cable
TV operators for distribution of satellite TV channels.
TAX NOTICE SYSTEM COMES TO AN END
Doing away with the decades old extortion by tax bureaucracy, the Income Tax department will
not send notices or tax officials to people’s homes or business places from the newly starting
income year 2003.
SUBSIDY ON FLOUR
The Punjab Cabinet has approved increase in the wheat supply to flour mills from 8,000 to 11,000
metric tons daily besides giving Rs.105 million subsidy for the provision of cheap flour during the
fasting month.
SUBSIDY ON KITCHEN ITEMS
Punjab government will provide subsidy of Rs.1.5 million for the availability of kitchen items at
cheaper rates to the common man.
KITE FLYING BAN BE LIFTED
Parks and Horticulture Authority has requested the city district government of Lahore to lift ban
on kite flying on the eve of Spring Festival in February next year.
CHECK THE TAX EVASION, PLEASE!
Despite the recent raids by the tax authorities to catch tax evaders, cigarette industrialists have
urged the government to come out with a proper mechanism to check these massive evasions in the
sector on regular basis.
PARLIAMENTARIANS LIKE TO VISIT ‘ATTRACTIVE’ STATES
Parliamentarians are reluctant to visit “less attractive” countries as a part of parliamentary
delegations and are using their links to get their names included in delegations visiting “attractive” countries like Singapore and Bangkok.
PAK PARLIAMENTARIANS ENJOY EXPENSIVE US HOTELS
Pakistani parliamentarians visiting New York are staying in the New York’s expensive hotels
instead of Pakistan International Airlines owned Hotel Roosevelt.
LAWMAKERS SALARY, ALLOWANCES INCREASED
Criticizing the increase in salary and traveling allowances of the parliamentarians, All Pakistan
Trade Union Federation said that lawmakers belonging to treasury and opposition were concerned
only with their own interests and well-being.
IGP ASKED TO CLARIFY COP’S SUSPENSION
Human Rights Commission of Pakistan has asked the Inspector General of Police Punjab to give a
public explanation of the action taken against police personnel in connection with the checking of
a tinted glass vehicle of a military official.
LAHORITES TO BE PREFERRED IN LAHORE
The district assembly of Lahore city has decided that there should be ban on the non-residents of
Lahore to be recruited as work charge employees.
LAWS AGAINST DANCE
The Government of Punjab is considering enactment of new laws and removal of flaws from the
old ones for curbing objectionable dances and dialogues in theatrical performances.
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Edited and prepared by
Khalil Ahmad
Email: khalilkf -at- hotmail.com
khalilkf -at- yahoo.com
[No opinion expressed here should be taken as reflecting the view of the FreePakistan Newsletter.]
