Freedom and Free Markets

November 3, 2008

Sankarshan Acharya
Pro-Prosperity.Com and Citizens for Development

November 3, 2008

Written to Leaders around the world

Sub: Freedom and Free Markets

Success of a democracy depends on rules of governance that serve the best interest of the vast majority.  The governance which helps enrichment of a few by financially bonding the vast majority is economic dictatorship, which is antithesis of democratic freedom. 

If the vast majority of households have piled up net debts, then the society is being governed, effectively, by economic dictatorship.  In this case, even the cherished principles like “we the people are created equal” and “one vote for each individual” cannot maintain social stability. 

Simply put, economic dictatorship cannot be perpetuated in a democracy.  Optimal democratic governance of a society is possible only by repealing all lopsided laws that (directly or indirectly) enrich a few by financially bonding the vast majority. 

Lopsided rules of governance are prevalent everywhere in most democratic nations:

1.      To grant subsidies to enrich a few by burdening the vast majority.

2.      To protect patent right that hampers efficient production needed for prosperity of the vast majority but enriches a few.

3.      To allow short selling of financial securities to enrich mega hedge funds like the investment banks by continually nibbling away pension savings and retail investments.

4.      To permit market making in a way that facilitates enrichment of a few mega hedge funds through trading ahead of the vast majority of true investors.

5.      To enrich a few hedge funds by permitting them to borrow taxpayer insured deposits for systematic speculation that (a) pushes up the prices of necessities of life needed by the vast majority, (b) upsets capital markets eroding the savings of the vast majority, and (c) forces the government to use taxpayer funds to absorb losses of the same hedge funds. 

The lopsided rules of governance have effectively suppressed free markets and whittled away economic freedom.  They have merely enriched a few who have sponsored such rules.  They have continually depressed economies and financially bonded the vast majority.  A democracy cannot afford to be governed by lopsided rules. Optimal rules beget efficient production, savings and competitiveness.

With profound regards,

Sankarshan Acharya