God, governments and taxes

The last few days have seen a huge outpouring of words for and against demonetisation. But no one has talked about the real reason behind it, which is the sense of entitlement governments feel to take your money when they want to.

Indeed, this is one of the main ideas that drive modern societies. This is because all societies entertain a central idea that is accepted without question.

God is a good example in the field of religion, although it is possible to have a religion without God, namely, Marxism, which merely replaces God with the State. The underlying justifying principle is omniscience.

But both God and the State need agents — priests in one case and politicians in the other, along with their enforcers, the bureaucrats. And that’s where the principle comes unstuck. 

Omniscience gives way to omnipotence and the people/citizens get sc***ed because just like the religious institutions, the State also needs money. But there is a crucial difference: Whereas the former keep the picking of pockets low and voluntary, the latter keep them high and compulsory.

Also, religions invoke compassion for asking for your money, while the State used to invoke order and defence, and now invokes development as well. But just as these three things do not inform religion, compassion should not inform the State’s actions. When it does, the result is moral justification not just for high taxes but also the need and sense of entitlement mentioned above. 

As long as this need is confined to the provision of public goods like law, order, defence, justice, currency, policing, environmental protection — and no more — the sense of entitlement is fine. But, the world over, by appropriating the compassionate role of religion, governments have added private goods to the list of things they must provide. That’s why they are all broke.

The result is high taxation, and when they can’t collect, severe penalties — and when even that fails, demonetisation. Priests, by the way, used to do the same thing in a different way. They made you outcastes, apostates, etc. 

The outcome, however, is the same whether you give your income to God or the government. You only get half of what you have paid for.

The other half vanishes, perchance to surface in the Paradise Papers.

Demonetisation

The BJP’s moral fervour in support of demonetisation — black money as an evil or paap — should be seen in this overall context, that is, the government’s sense of entitlement. All governments have it but there is a difference in approach.

The BJP thinks it is entitled to take your money. The rest of them think they are entitled to give it away via MGNREGS, etc. 

None of them, however, envisions a diminished role for the government in economic activity because that would be like taking God out of religion. Intervention in microeconomic activity is now a matter of faith.

New Enlightenment

Time was when the priests determined what you could do — when and how. That role has now been taken over by the government and its army of bureaucrats. 

And just as you could bribe God via donations to His agents, you can do the same with the agents of the government. Or, as they say in Punjabi, illkoi gal hai baadshaho. 

Speed money and special dispensations are par for the course for both God and the government. The priest can be bribed to shorten a wedding ceremony and there are differentially priced tickets for darshan in temples.

The European Enlightenment movement slowly stopped intrusion by the Church into the daily lives of the people. The Indian Enlightenment must remove the government from the daily lives of the people.  

It got into our lives because of the Victorian priests, who arrived in large numbers from 1865 onwards and influenced legislation. It was they who introduced the idea that you could not do anything unless permitted by the government. They thought Indians were a shifty, dishonest, and untrustworthy lot.

This view has so suited our governments that they have clung desperately on to the discretionary power inherent in it. If we are in such a poor shape today, it is because the agents of the government — politicians and bureaucrats — have got in the way of economic progress for the last 70 years.