Absolute Knowledge on Governance

Your summit of January 26, 2015 should somberly recognize the precarious predicament facing mankind now: an astoundingly increasing degree of financial bondage (modern slavery) of the vast majority due to the established rules of law which allow a privileged few to usurp, surreptitiously, public and private wealth.

A dominant ancient human discovery about knowledge, stated in Sanskrit as “Eka Brahma Dwitiya Nasti,” translates to “Absolute Knowledge is Unique.” Absolute knowledge is an incontrovertible fact established by unanimous acceptance, like “2 is not equal to 3.”[1]

The existence of different political parties or multitude views within a party tells unambiguously that rulers believe in nonexistence of any absolute knowledge on how people want to be governed and presume they can make people embrace their views of governance. In other words, rulers bank on indoctrinating people to believe in nonexistence of any unanimously acceptable principle of governance.

The truth, however, is that there exists a fundamental principle of governance which is unanimously agreeable or which is absolute knowledge in governance. It is that nobody wants the government to facilitate usurpation of private or public wealth, even surreptitiously. Not even the usurpers want their loot taken away by anybody including powerful rulers. Incidentally, wealth includes “life, liberty and pursuit for happiness.”

The founding fathers of America went to war to embrace the absolute knowledge on governance in the preamble of the first-ever written constitution of mankind. They were impelled to do so after the colonists agitated over selling their sweat-filled service and merchandise for printed fiat money. The epic war of Mahabharat too was waged to recoup private wealth usurped by the rulers through a rigged but legal game. The preamble of the modern constitution is akin to Dharma of Gita, which is the message of Krishna.[2]

The American founding fathers as well as Krishna, however, made a grave mistake of not explicitly proscribing passage of laws for surreptitious usurpation of public and private wealth. Rulers have taken advantage of this mistake to design sophisticated laws for surreptitious usurpation of public and private wealth. Such laws have caused rampant financial bondage of the vast majority of mankind. The preamble of the constitution needs to be reframed to avoid passage of unconstitutional rules.[3]

The lapse on the part of the American founding fathers has led to myriad rules passed by elected political leaders in USA and other countries including India that copied the US model of governance, supported by specious academic research, to legalize usurpation of public and private wealth by individuals willing to share with lawmakers the loot in form of lavish political contributions, if not direct clandestine transfers through private hedge funds, donations to charitable trusts, or otherwise. Political leaders have even passed, brazenly, laws to let them and their family members “trade based on insider information” while they have made such trades by others illegal and punishable.

The currently established model of governance is to pass laws to legalize usurpation of public and private wealth through trusted subservient usurpers willing to share the loot with lawmakers. This model has burst into flames in 2008. To douche the flames of the 2008 market crash, rulers have resorted to printing oodles of new fiat money and given away enormous tax subsidies and bailout funds to the same colluding usurpers. They have even made the usurpers systemically important, which means printing unlimited sums of money to let them usurp by remaining afloat.

Rulers do not seem concerned about the latest published research which proves that the currently established system is unconstitutional, inefficient and unstable.[4] This research seems epochal because it challenges the rulers and embedded usurpers for breaking the constitution they have sworn in.

Humans had to abandon the rules of the jungle that used to destroy lives and properties of each other for survival of their species. They adopted constitutional democracy to avert mutual destruction. Abandoning the constitution, even surreptitiously, has essentially restored jungle raj that guarantees mutual destruction dreaded by all.

US Congress has indeed taken a remarkable first step by blaming (in the Financial Crisis Inquiry Commission Report of 2011) the established experts for causing the 2008 financial catastrophe. The Congress is, however, yet to jettison the experts from its ranks.[6] President Obama has taken a remarkable step in his recent Phoenix speech by stating that private banks guided by established punditry on governance, not home mortgage lenders Fannie Mae or Freddie Mac, caused the 2008 crisis. Yet the Obama Administration has locked up the true saviors of the crisis (Fannie and Freddie) under government conservatorship and financially crippled them by sweeping all of their profits into the Treasury. The profit sweep is truly a surreptitious transfer of wealth from the vast majority of home mortgage borrowers to privileged taxpayers who already pay the lowest rate of tax on their incomes.[7]

As a welcome change, the Modi government has introduced a transparent public auction of public wealth like minerals. This may appear to be the fairest possible method of governance. But alas, this will too cause surreptitious transfer of public wealth to even those who pay the highest price in terms of current rupee at the transparent auctions. It is because the government is deficit-financing (printing lots of rupees) and the Reserve Bank of India is forced to create rupees on fiat money printed abroad and transferred to India, while disproportionately higher portion of such fiat money is flowing to those who can afford to make the best bid for India’s public wealth. The transparent auction model, copied from USA and Europe, appears to be constitutionally fair and efficient. But it is fundamentally unfair, unconstitutional, inefficient and unstable because the system of money and finance has been proved to be unconstitutional, inefficient and unstable. India’s new ordinance to acquire farmland is likewise unconstitutional, inefficient and unfair.

The unconstitutionality, inefficiency and instability caused by the established expertise has caused massive budget deficits and forced central banks to douche the fire by newly minted money. So, should the industries be disallowed to purchase farmland or the private entrepreneurs prevented from acquiring public wealth in India until the system of money and finance becomes constitutional? No. There exists a simple constitutional and efficient mechanism for industries to purchase farmland or to get the government out of the business of running businesses: peg the transaction price to the market value, which means that the buyer will pay the current market price of mineral or whatever other resource is transacted (to the public exchequer or the farmer) and transfer in future to the seller the difference between the future market price and current transaction price. This mechanism (not the currently floated auction process) is consistent with absolute knowledge on governance.

Dr.,SankarshanAcharya
Founder, Citizens for Development & Pro-Prosperity.Com
Director, Research Center on Finance and Governance

[1] http://pro-prosperity.com/Unanimously%20Agreeable%20Rationale%20of%20Governance.html

[2]http://pro-prosperity.com/Origin%20and%20Triumph%20of%20Modern%20Constitution.html

[3]http://pro-prosperity.com/India/We%20the%20People%20Want%20Constitutional%20Raj%20Dharma.html

[4]http://pro-prosperity.com/Research/Constitutional-Monetary-Finance-System.pdf

[5]http://pro-prosperity.com/US-President-CBO%20Proposal%20to%20Eliminate%20Fannie-Freddie%20is%20Dangerous.pdf

[6]http://pro-prosperity.com/US-President-CBO%20Proposal%20to%20Eliminate%20Fannie-Freddie%20is%20Dangerous.pdf

[7]http://pro-prosperity.com/Research/Coalition%20of%20Borrowers.pdf